Extreme change in the Administration of Justice caused by Act 1256 of 1995

25 years later some are still trying to figure it out

By Eddie A. Jones, AAC Consultant

Ever do a 180? The Arkansas Legislature did in 1995. In geometry we would call it a “straight angle” — not an acute angle; not a right angle; not an obtuse or reflex angle; but a 180-degree straight angle. The legislature made a radical change in the fundamental government service of administration of justice.

Every legislative session we see change in county law. For the most part, those changes are little things that are not difficult to handle or navigate. But with the passage of Act 1256 of 1995 we experienced extreme change. Sometimes it takes something drastic to accomplish what needs to be done. No doubt they got our attention with Act 1256, which started out as Senate Bill 609 by the late Sen. Wayne Dowd of Texarkana. This piece of legislation was an extreme change in the way the judicial system was funded and how we handled filing fees and court costs at the local level.

Extreme change reminds me of a young man named John. John received a parrot as a gift. Problem was, the parrot had a bad attitude and an even worse vocabulary. Every word out of the bird’s mouth was rude, obnoxious, and laced with profanity. John tried and tried to change the bird’s attitude by consistently saying only polite words, playing soft music and anything else he could think of to “clean up” the bird’s vocabulary, but to no avail.

Finally, John was fed up and he yelled at the parrot. The parrot yelled back. John shook the parrot and the parrot got angrier and ruder. In desperation, John threw up his hands, grabbed the bird and put him in the freezer. For a few minutes the parrot squawked and kicked and screamed.

Then suddenly, there was total quiet. Not a peep was heard for over a minute.

Fearing that he’d killed the parrot, John quickly opened the door to the freezer. The parrot calmly stepped out onto John’s outstretched arm and said, “I believe I may have offended you with my rude language and actions. I am sincerely remorseful for my inappropriate transgressions, and I fully intend to do everything I can to correct my rude and unforgivable behavior.”

John was stunned at the change in the bird’s attitude. As he was about to ask the parrot what had made such a dramatic change in his behavior, the bird continued. “May I ask what the chicken did?”

That’s the way we in county government felt. We wondered what we had done to deserve such “confusion” thrown on us. This legislation was wholesale change, and there are very few of us left in county government who remember the “old way” and the “new way.”

I was one of a few asked to work with the Administrative Office of the Courts (AOC) and the Department of Finance and Administration’s (DFA) Office of Administrative Services to develop an implementation plan and to go around the state trying to help city and county officials “figure it out.” The act affected county clerks, circuit clerks, district court clerks, county treasurers and city treasurers. Talk about a monumental task. Some in office at that time never got it. Some quit. That’s the truth with my hand up; they walked out never to return. It was too much change for some to handle.

So how did all this get started? It’s like a lot of other things. You start hearing talk a session or two before you ever see anything in writing. The AOC were put on the hot seat a number of times to provide information to the General Assembly and could not provide adequate answers, other than “this county charges this and another that, and we don’t have a good reporting system.”

It was generally established that the system of funding the state judicial system had created inequity in the level of judicial services available to the citizens of the state. It was further determined that the method of financing the state judicial system had become unduly complex so as to make the administration of the system impossible.

The legislature determined there was no reliable data on the cost of the state judicial system. So they deemed it necessary to do something. Act 1256 changed the system — a lot. It did not fix everything. It did not solve all the problems. It could have accomplished more than it has if it had been implemented correctly everywhere and continued to be carried out everywhere in accordance with the law. But because it was a huge shift in procedure and administration of the courts, some did not understand and simply “flew by the seat of their pants” and “hoped for the best.”

Although the 1994 base year figures were to be verified by Legislative Audit in the beginning year of the new system, we now know that some were incorrect — and that has made the numbers wrong in those jurisdictions for all these years. Some counties/cities have recalculated with the help of good records and the help of the AOC to get their original numbers changed so the local entities are getting credit for the proper funds each month.

The intent of Act 1256 of 1995 and amending legislation since was at least four-fold:

To eliminate the current system of collecting and assessing a large number of individual courts costs and filing fees. There were many separate court costs assessed — 25 cents for this; 50 cents for that; $1 for another; $3 for this; $10 for another; etc. Records were kept of each of those individual courts costs by the appropriate clerk. They were remitted to the city or county treasurer on a monthly basis, and the treasurer made proper disposition of the funds, either by crediting the funds to the proper local fund or sending the funds to the proper state agency. There were separate court costs for any number of things, such as County Law Library; City Attorney Fees; Prosecuting Attorney Fees; Public Defender Investigator; Indigent Defense; County Jail Revenue Bond; Policeman’s Pension; Municipal Judge and Clerk Retirement; DWI court cost; Intoxication Detection Equipment; Drug Abuse Fund; Victim Witness; Alcohol Treatment Program; etc. And listen to this — filing fees in the various courts varied from county to county. I know this sounds complicated, but that’s what we were accustomed to. Change is difficult for most, and the “new system” was totally different.

To replace the old system with a “uniform cost and fee schedule” to be applied statewide. Act 1256 established a uniform court cost for the various courts and types of cases and a uniform filing fee for the various divisions of the courts. Of course, the original code has been amended several times since 1995, and the court cost and filing fee amounts have changed.

To prohibit the implementation of new costs and fees for specific programs in the future. Before Act 1256, local governments had the ability to, by ordinance, assess new court costs and change filing fees. No longer. One of the reasons for Act 1256 was to make costs uniform across the state and create more equity in the judicial services across the state. With the passage of Act 1256 of 1995 and follow-up legislation in 1997, dozens of codes or parts of codes were repealed.

To create a reporting system to allow the General Assembly to obtain accurate data to determine the cost to the state for the funding of the judicial system. What the state found out, although for the most part they have not acknowledged it, is that the counties of Arkansas are subsidizing the cost of the state court system. In 2014 counties retained $18.4 million in revenue for the courts, basically from our share of the Administration of Justice Fund and circuit court fines, but we expended $64.1 million. That means the state court system cost county government $45.7 million in general funds not raised through the court system.

Talk about getting in “high gear.” This monumental change in law had an emergency clause, and most of it went into effect on July 1, 1995. So the rush was on to get everything in place. The bill was signed and became Act 1256 on April 13, 1995. There were 2 ½ months until implementation. County clerks, circuit clerks, district court clerks, county treasurers and city treasurers had to become aware of the paradigm shift in court operations almost overnight. And calculations for city and county shares had to be made quickly. I believe that’s why there has continued to be a lot of misunderstanding and problems, even though this system has now been in place for 25 years. Too many that were in office when it started never quite grasped the new law and how it worked. Be thankful if you followed officials in your county and cities that understood and implemented it correctly.

Pursuant to Act 1256 of 1995 Administration of Justice Funds were established at the state, county and municipal levels. These funds were established on the books of each entity to credit their share of uniform court costs and filing fees to fund or help fund the programs that each remained responsible for. The uniform filing fees and court costs were established in Act 1256 for the various divisions of the court system. The fees were the same all over the state, unlike under the old system. The fees set were high enough to keep almost all entities whole and provide excess for the state Administration of Justice Fund. However, the new fees set were below the fees of a few court systems.

How did each city and county know what share of the fees and costs to keep locally and what share to remit to the state? The Act established a process to determine the local government’s share. Of course, the remaining amount was to be remitted to the State Administration of Justice Fund so the state could continue to fund the agencies or programs that we had previously been remitting from the local level either to an agency or program directly from the counties and municipalities.

Since the inception of Act 1256, when there were only 15 programs or agencies funded by the state share. There are now 25 agencies or programs funded, at least in part, through the State Administration of Justice Fund. The biggies are the Public Defender Commission; Court Reporter Fund; Trial Court Administrator Fund; Dependency-Neglect Representation through AOC; Crime Victims/Reparations Fund; Legal Education — law schools at the University of Arkansas at Fayetteville and the University of Arkansas Bowen School of Law; and the Constitutional Officers Fund for the full-time District Judge salaries. There are many others, including a couple for which counties receive money: county reimbursement for jurors and court security grants. The current appropriation for the State Administration of Justice Fund is about $40 million.

So what was the process to determine the county share? It is set out in Arkansas Code § 16-10-307, which established the County Administration of Justice Fund. Counties retained an amount equal to the dollar amount collected in the base year of 1994 in court costs and filing fees for county administration of justice expense. This did not include those court costs that we collected and remitted directly to state agencies or programs, but those fees and costs we had heretofore kept locally. This affected filing fees and court costs in probate division of Circuit Court, which are handled by the county clerk in most instances; filing fees and court costs in other divisions of circuit court, which are handled by the circuit clerk; filing fees and court costs in district court, handled by the district court clerk and the city treasurer since district court collections are to run through the City Administration of Justice Fund before remitting the county its share. It took collaboration to develop the numbers to calculate proper shares for each entity.

DFA’s Office of Administrative Services sent out forms to the city and county treasurers to verify the fees and costs charged and the amounts collected in 1994. There were separate forms for probate court, chancery, Circuit Court Criminal, and Circuit Court Civil. They had to be filled out and signed by the appropriate clerk, the county treasurer and county judge. The forms already contained the various state codes that either required the assessment of certain filing fees or costs or allowed for the assessment of certain costs. The county could then include any other cost that was not on the form but was being collected by virtue of a local ordinance. After certifying the amount of filing fees and court costs collected in 1994, the county had its base number for circuit court. You simply divided that total by 12 to get the monthly share of uniform filing fees and costs. These county forms would have a place for filing fees; county law library; indigent defense; victim witness; county jail revenue bond; public defender investigator; DWI costs; Drug Abuse Fund; prosecuting attorney fees; and others that a county might add.

The Municipal Court form, as it was called then [district court as we know it since the passage of Amendment 80 in November 2000 with an effective date of July 1, 2001] was a little more complicated. It involved more courts and more people — one part was city revenue and another part was county revenue. There was a form for the criminal and traffic division of district court — one for the civil division and one for the small claims division.

The district court forms contained a column for the amount of each cost or fee charged per case, a column for the amount of money collected for each cost in 1994, and a column for the total amount actually disbursed in 1994.

Then the amounts had to be broken down to account for what fees and costs were city monies and what were county monies. Some costs were county only, others were city only, and some were shared. Costs collected for law library, indigent defense, public defender investigator, and prosecuting attorney were county-only costs. City-only costs included police pension, municipal judge and clerk retirement, alcohol treatment program costs, and city attorney fees. Counties and cities shared things like filing fees, possibly drug abuse fund costs [in some counties], possibly intoxication detection equipment fees, and DWI costs.

Once those numbers were calculated, the district court base revenue for the local Administration of Justice Fund was known. Whatever the total of those various fees and costs were for 1994, you divided it by 12 and had the monthly retainage from district court. It was also easy to calculate what percentage was city and what percentage was county. That percentage varied across the state. In my home county, for instance, the percentage was 26 percent city and 74 percent county in district court.

Except for the numerous district court fees or fines that are listed on the Miscellaneous Fee/Fine Collection Report that the district court clerk should remit directly to the State Administration of Justice Fund, the district court clerk is to remit the district court uniform filing fees/costs to the various city treasurers that are a part of the district court. The city treasurer is to forward the county share percentage to the county treasurer for credit to the County Administration of Justice Fund; retain the city share in the City Administration of Justice Fund; and remit the remainder to the State Administration of Justice Fund.

I need to remind everyone that in an amendment to this legislation in 1997, counties gave up 85 percent of their public defender base year revenue effective Jan. 1, 1998, when the state made public defenders state employees and started paying their salary. Counties retained only 15 percent of that base-year public defender revenue to help pay for the office operations of the public defender.

The County Administration of Justice Fund must be used to defray a part of the expense of the administration of justice in the county. It is from this fund that a county must continue to finance certain agencies or programs that were being funded locally prior to Act 1256 of 1995 in accordance with § 16-10-307. They are:

Prosecuting Attorney Fund [a department of County General in many counties];

Prosecutor’s Victim-Witness Program;

Public Defender/Indigent Defense/Public Defender Investigator Fund [should all be one fund called Public Defender Fund];

County Law Library;

County Jail Fund; and

Intoxication Detection Equipment Fund.

Those six programs or departments must continue to be funded by a county, if a county was funding them in 1994, “at a funding level no less than they were funded in 1994.” Any increase in Administration of Justice Funding through Cost-of-Living Adjustments (COLA) does not necessarily have to follow the programs on a prorated basis.

The County Administration of Justice funding originally was written to include a COLA each year based on the Consumer Price Index (CPI). We got that increase through 2001, although some years it was very small. Then the COLA was taken away, and we were frozen at the 2001 level for 2002, 2003, 2004 and 2005. In 2005 we got the COLA reinstated starting in 2006. And then the State Administration of Justice Fund got into trouble financially, and the COLA section was changed in 2013 legislation so that any annual adjustment in the amount retained locally is “based upon the lesser of the average percentage increase in the Consumer Price Index for the two years immediately preceding or the percentage rate of increase in collections of the State Administration of Justice Fund for the two years immediately preceding.” That change was demanded by the Gov. Mike Beebe administration to protect the state. If there’s no growth or less growth in the State Administration of Justice Fund than the national CPI, cities and counties get no increase. Since that legislative change, counties received a zero increase in 2014; a 1.8 percent increase in 2015; and a zero increase for 2016 through 2020.

Act 1256 of 1995 surely did change the way the Arkansas court system and ancillary programs or agencies were funded. It was definitely a sea change to the way we had always done it. So for those of you who were not around in 1995 and wondered how and why the Administration of Justice Fund works like it does, now you know. Too bad someone didn’t warn us.

This was one of those things that if we lived in a perfect world and everyone involved had perfect understanding of what was happening, it could have worked well. But we don’t live in a perfect world, and not everyone understood what was happening with this legislation. This was one of those occasions where “old dogs” were learning “new tricks” — and most of the time old dogs don’t learn new tricks, or at least not easily. It was too much at once for many — definitely a broad transformation. It was one of those things that just couldn’t be done in the minds of many elected officials. But it was — even if imperfectly. Our old disorganized system has been replaced by our new disorganized system, although I must admit it is a better system.

If your Administration of Justice Fund doesn’t operate like I’ve explained it, I’m not telling you to change. I have simply explained it as it was enacted and intended. I don’t want you talking about me like Calvin Coolidge did about Herbert Hoover. Coolidge served the rest of Warren Harding’s presidential term after he died and was elected to a term of his own. He declined to run for his second full term. Hoover, who had served as Secretary of Commerce under both Harding and Coolidge, succeeded Coolidge. Coolidge said of Hoover, “That man has offered me unsolicited advice for six years, all of it bad.”

At times extreme change is needed. This was probably one of those times. I don’t want to be accused of giving unsolicited advice, but if you’re still struggling with the Administration of Justice Fund after all these years, give me a call. Maybe this old dog can help you learn a new trick.

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