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STATE OF OKLAHOMA
2nd Session of the 59th Legislature (2024)
HOUSE BILL 3547 By: Sterling
AS INTRODUCED
An Act relating to state government; amending 74 O.S.
2021, Section 20i, as amended by Section 1, Chapter
308, O.S.L. 2022 (74 O.S. Sup p. 2023, Section 20i),
which relates to the collection of information by
Attorney General; modifying reporting on certain
contracts to fiscal year; adding information to be
included in report; and providing an effecti ve date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 74 O.S. 2021, Section 20i, as
amended by Section 1, Chapter 308, O.S.L. 2022 (74 O.S. Supp. 2023,
Section 20i), is amended to read as follows:
Section 20i. A. An agency or official of the exec utive branch
may obtain legal representation by one or mor e attorneys by means of
one of the following:
1. Employing an attorney as such if otherwise authorized by
law;
2. Contracting with the Office of the Attorney General; or
3. If the Attorney Genera l is unable to represent the agency,
or official due to a conflict of interest, or the Office of the
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Attorney General is unable or lacks t he personnel or expertise to
provide the specific representation required by su ch agency or
official, contracting with a private attorney or attorneys pursuant
to this section.
B. When entering into a contract for legal representation by
one or more private attorneys or law firms, an agency or official of
the executive branch shall select an attorney or attorneys or a law
firm or law firms from a list of attorneys and firms maintained by
the Attorney General. An agency may contract for legal
representation with one or more attorneys who are not on the list
only when there is no atto rney or firm on the list capable of
providing the specific representation and only with the a pproval of
the Attorney General. The list shall include any attorney or firm
who desires to furnish services to an agency or official of the
executive branch and who has filed a s chedule of fees for se rvices
with and on a form approved by the Attorney Gen eral. The list of
attorneys and firms desiring to furnish services and a schedule of
fees for each attorney and firm shall be maintained and made
available to the public.
C. An agency or official may agree to deviate from the schedule
of fees only with the approval of the Attorney General and if the
new schedule of fees would not violate the fee schedules set forth
in subsections D and E of this section.
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D. An agency or official of the executive branc h shall not
enter into a contingency fee contract that provides for the private
attorney or firm to receive an aggregate contingency fee that
exceeds:
1. Twenty-five percent (25%) of that portion of any amount
recovered that is Ten Million Dollars ($10,000,000.00) or less;
2. Twenty percent (20%) of that portion of any amount recovered
that is more than Ten Million Dollars ($10,000,000.00) but less than
or equal to Fifteen Million Dollars ($15,000,000.00) ;
3. Fifteen percent (15%) of that portion of any amount
recovered that is more than Fifteen Million Dollars ($15,000,000.00)
but less than or equal to Twenty Million Dollars ($20,000,000.00);
4. Ten percent (10%) of that portion of any amount recovered
that is more than Twenty Million Dollars ($20,000,000.00) but less
than or equal to Twenty -five Million Dollars ($25,000,000.00); and
5. Five percent (5%) of that portion of any amount recovered
that is more than Twenty-five Million Dollars ($25,000 ,000.00).
E. Notwithstanding subsection D of this section, the total fee
payable to all retained pr ivate attorneys in any contingency fee
contract shall not exceed Fifty Million Dollars ($50,000,000.00),
exclusive of any costs and expenses provided by the contract and
actually incurred by the retained private attorneys, regardless of
the number of actions or proceedings or the number of retained
private attorneys involved in the matter.
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F. The Attorney General shall develop a standard clause for
inclusion in every contract for contingent f ee attorney services
that shall be used in all cases, describing in detail what is
expected of both the contracted private attorney and the state
including, but not limited to, the requirements as provided in this
subsection. The state shall not enter into a contract for
contingency fee attorney services t hat does not incorporate such
requirements:
1. The government attorneys shall retain complete control over
the course and conduct of the case;
2. A government attorney with supervisory authority shall b e
personally involved in oversight of the case;
3. The government attorneys shall retain veto power over any
decision made by outside counsel related to the case;
4. Any defendant in the case may contact the lead government
attorneys directly, without having to confer with outside counsel;
5. A government attorney with supervisory authority for the
case shall attend all settlement conferences; and
6. Decisions regarding settlement of the case shall be reserved
exclusively to the discretion of the govern ment attorneys and the
state.
G. Copies of any executed contingency fee contract with the
private attorney shall be posted on the Attorney General's website
for public inspection within five (5) business days after the date
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the contract is executed and shall remain posted on t he website for
the duration of the contingency fee contract including any
extensions or amendments to the contract. Any payment of
contingency fees shall be posted on the Attorney General's website
within fifteen (15) days after the payment of the conting ency fees
to the private attorney or law firm and shall remain posted on the
website for at least three hundred sixty-five (365) days after the
payment is made.
H. Any private attorney or law firm under contract to provide
services to the state on a conti ngency fee basis shall from the
inception of the contract unt il at least four (4) years after the
contract expires or is terminated, maintain de tailed current records
including documentation of all expenses, disbursements, charges,
credits, underlying rece ipts and invoices and other financial
transactions related to the attorney services. The private attorney
or law firm shall make all such records available for inspection and
copying upon request of the Attorney Gene ral. In addition, the
private attorney or law firm shall maintain detail ed contemporaneous
time records for the attorneys and paralegals work ing on the matter
in increments of no greate r than one-tenth (1/10) of an hour and
shall promptly provide such records to the Attorney General upon
request.
I. Before entering into a co ntract for legal representat ion by
one or more private attorneys, an agency or official of the
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executive branch shall furnish a copy of the proposed contract to
the Attorney General an d notify the Attorney General of the
following:
1. The nature and scope of the representation including, but
not limited to, a description of any pending or anticipated
litigation or of the transaction requiring repre sentation;
2. The reason or reasons for not obtaining the representation
from an attorney employ ed by the agency or official, if an attorney
is employed by the agency or official;
3. The reason or reasons for not obtaining the representation
from the Attorney General by contract;
4. The anticipated cost of the representation including the
following:
a. the basis for or method of calculation of the fee
including, when applicable, the h ourly rate for each
attorney, paralegal, legal assistant, or other pers on
who will perform services under th e contract, and
b. the basis for and method of calculation o f any
expenses which will be reimbursed by the agency or
official under the contract;
5. An estimate of the anticipated duration of the contract;
6. The past or present relationship, if any, betw een such
attorney, law firm or any part ner or other principal in such law
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firm and the state agency or state agent proposing to enter into the
contract;
7. If the contract contemplates that all or part of the fee is
contingent on the outcome of the legal proceeding, the r easons the
contingent fee arrangement is believed to be in the state's interest
and any efforts undertaken to obtain private cou nsel on a
noncontingent fee basis; and
8. The justification for the determination that the selection
of a contract for legal representation by one or more private
attorneys or firms was made based on the ability of the private
attorney or firm to provide th e most economical and most competent
service which furthers the bes t interest of the state.
J. After the approval of the con tract by the Attorney G eneral
for legal representation by one or more private att orneys or law
firms, the Attorney General shall make available to the public on
the Attorney General's website the information required pursuant to
paragraphs 1 through 8 of subsection I of this section.
K. 1. Before entering into a contract for legal representation
by one or more private attorneys or firms where the agency has
reason to believe that the case, transaction or mat ter will equal or
exceed Twenty Thousand Dol lars ($20,000.00) or after employment when
it becomes apparent that the case, tran saction or matter will equal
or exceeds Twenty Thousand Dollars ($20,000.00), an agency or
official of the executive branch shall obtain the approval of the
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Attorney General when the total cost including fees and expenses, of
all contracts relating to the same case, transaction, or matter will
equal or exceed Twenty Thousand Dollars ($20,000.00).
2. Before entering into a contract for legal representation by
one or more private attorneys or firms to initiate a legal action on
behalf of the state where the agency has reason to believe that the
total cost of the case, transaction or matter including fees and
expenses will equal or exceed One Million Dollars ( $1,000,000.00),
an agency or official of the executive branch shall initiate a
request for proposal from at least three qualified private attorneys
or firms, when possible, engaged in providing such services. Notice
of the request for proposal shall be published on the Att orney
General's website. The request for proposal shall solicit a
billable hourly rate, regardless of whether a contingency fee is
ultimately agreed upon, and shall specify the importance of price,
quality, ability and experience. The selection of a contract for
legal representation by one or more private attorneys or firms shall
be made using the criteria established in the request for proposal
and shall be based on the response to the request which is the most
economical and provides the most competent service which furthers
the best interests of the state. Most economical and most competent
shall not be construed to mean the least exp ensive proposal.
3. Any amendment, modification or extension of a contract
which, had it been a part of the o riginal contract would have
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required approval by the Attorney General, shall also require
approval by the Attorney General.
L. After entering into a contract for legal representation by
one or more private attorneys or firms where the agency has reason
to believe that the case, transaction or matter will equal or exceed
One Million Dollars ($1,000,000.00), an agency or official of the
executive branch shall submit a copy of the contract to the
Legislative Oversight Committee overseeing the operations of the
Legislative Office of Fiscal Transparency (LOFT) along with the
following:
1. A description of the litigation or of the transaction
requiring representation;
2. The reason or reasons for not obtaining the representation
from an attorney employed by the agen cy or official;
3. The justification for selecting an attorney or firm
contracted to represent the state; and
4. An estimate of the antici pated duration of the contract.
M. A settlement agreement shall not contemplate the ultimate
use and destination of recovered funds unless done in accordance
with paragraphs 11 and 12 of Sec tion 18b of this title.
N. Within ten (10) days of an agency or official of the
executive branch entering into a settlement agreement where a
private attorney or firm was hired on a contingency fee contract and
the settlement was equal to or greater than One Million Dollars
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($1,000,000.00), the agency or official of the executive branch
shall present the settlement agreement to the Legislative Oversight
Committee with oversight of the operations of the Legislative Office
of Fiscal Transparency (LOFT), unless otherwise postponed by LOFT.
O. When an agency or official of the executive branch enters
into a contract for professional leg al services pursuant to this
section, the agency shall also com ply with the applicable provisions
of Section 85.41 of this title.
P. The provisions of this section shall not apply to the
Oklahoma Indigent Defense Syste m created pursuant to Section 1355 et
seq. of Title 22 of the Oklahoma S tatutes.
Q. Upon request of an agency or official of the executive
branch, the Governor, the President Pro Tempore of the Oklahoma
State Senate and the Speaker of the Oklahoma House of
Representatives may exempt a legal matter from the requirements of
this section if an exempti on is deemed to be in the best interest of
the state. Such exemption shall be issued at t heir discretion, in
writing and by unanimous consent, and shall be submitted to LOFT.
R. By February 1 of each year, the Attorney General shall
submit a report to t he Governor, the President Pro Tempore of the
Senate, the Speaker of the House of Re presentatives, the Chair of
the Appropriations and Budget Committee of th e House of
Representatives and the Chair of the Appropriations Committee of the
Senate, that describes the use of contracts with private attorneys
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or law firms in the preceding calendar fiscal year. At a minimum,
the report shall identify all new contracts enter ed into during the
calendar fiscal year being reported and all previously executed
contracts that remain current during any part of the calendar fiscal
year. For each contract, the report shall contain:
1. The name of the private attorney with whom the agency has
contracted including the name of the attorney's law firm;
2. The nature and status of the legal matter;
3. The name of the parties to the legal matter;
4. The amount of any recovery;
5. The amount of any hourly rate; and
6. The amount of any contingency fee paid, if applicable; and
7. The amount paid under the contract for the fiscal ye ar.
S. The provisions of subsections B through R of this section
shall not apply to any age ncy that invests funds on behalf of its
beneficiaries and, as part of its fiduciary duty, retains one or
more private attorneys or law firms to pur sue individual, derivative
or class litigation concerning its investments or assets.
T. The provisions of this section shall not apply to any entity
exempted from Article I of the Administrat ive Procedures Act
pursuant to paragraphs 6 and 7 of subsection A of Section 250.4 of
Title 75 of the Oklahoma Statutes.
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SECTION 2. This act shall beco me effective November 1, 2024.
59-2-9540 LRB 01/02/24