The Honorable Deanell R. Tacha, Chief Judge

United States Court of Appeals for the Tenth Circuit

before the

Subcommittee on Courts, the Internet, and Intellectual Property

on

Legislative hearing on H.R. 2522, the "Federal Courts Improvement Act of 2001."

July 26, 2001

Mr. Chairman, members of the House Subcommittee on Courts, the Internet, and Intellectual Property, my name is Deanell Tacha and I am chair of the Judicial Conference Committee on the Judicial Branch. I am also the Chief Judge for the Court of Appeals for the Tenth Circuit. I am pleased to testify before the subcommittee on H.R. 2522, the "Federal Courts Improvement Act of 2001."

At the outset, I would commend this subcommittee, and Chairman Coble and Mr. Berman in particular, for the stewardship that has been shown for the judiciary's legislative requests during the recent years, including the introduction of H.R. 2522 on July 17, 2001. This subcommittee's leadership in acting promptly on the judiciary's "courts improvement bill" in the last three Congresses has been instrumental in achieving passage in two of those Congresses of a large number of improvements to the federal court system in the areas of finance, personnel management, court procedures and administration. We appreciate your efforts and those of your staffs in helping make the Judicial Branch more effective and efficient.

H.R. 2522 addresses three subject areas: court operations; personnel matters; and administration. Each proposed section represents an incremental improvement to current practices. Also, eight of the provisions in H.R. 2522 were approved by this subcommittee and passed by the House in the 106^thCongress as part of H.R. 1752. Each is identified below by an asterisk.

Court Operations

Sec. 101 Bankruptcy administrator authority

Sec. 102 (*) Establishing Plano, Texas as a place of holding court

Sec. 103 Conditions of Probation and Pretrial Release

Sec. 104 Enforcement of National Labor Relations Board orders

Sec. 107 Clarifying scope of diversity jurisdiction for resident aliens

Sec. 108 Authority of district courts regarding jurors

Sec. 109 (*) Deletion of automatic excuse for juror service

Sec. 111 (*) Supplemental juror fee

Sec. 210 Protection against malicious recording of fictitious liens

Personnel Matters

Sec. 201 (*) Disability retirement and cost of living adjustments for territorial judges

Sec. 202 (*) Lifting pay ceiling for selected FJC positions

Sec. 203 (*) Leave carryover for judicial branch executives

Sec. 204 Supplemental benefits authority

Sec. 205 Law Clerk loan deferment

Sec. 206 Inclusion of judicial branch personnel in organ donor leave program

Sec. 209 Student loan forgiveness for federal defenders

Administration

Sec. 105 Repeal of geographic location requirement for court records

Sec. 106 Reporting of wiretap orders

Sec. 110 (*) Elimination of public drawing requirement for selection of juror wheels

Sec. 207 Repeal of requirement for additional legislative action regarding judicial compensation

Sec. 208 (*) Maximum amounts of compensation for services other than counsel

Attached to this statement is a section-by-section analysis of the "Federal Courts Improvement Act." One provision, however, deserves further elaboration. It is section 204, which would give the Director of the Administrative Office of the U.S. Courts authority to expand the health benefits program for judicial branch employees.

Section 204--Supplemental Benefits Authority

At the initiative of the Judicial Conference Committee on Human Resources and the Director of the Administrative Office, the international benefits consulting firm of Towers Perrin was retained in August 1997 to evaluate the benefits program available to the 30,000 employees of the Judicial Branch. With minor exceptions, those benefits are the core benefits available to all federal government employees, i.e., health and life insurance, retirement, Thrift Savings Plan, and leave. Judiciary employee benefits were compared to a cross section of large employers, including state governments, universities, 12 mainstream U.S. industrial companies, and 3 quasi-federal government organizations.

The Towers Perrin, Judiciary Benefits Initiative, Employee Benefits Study, was issued in March 1998. The study concluded that health benefits currently available to judiciary employees were "below average" as compared with the comparison group of employers. The study also described benefits routinely provided to employees of the comparison group which are not available to judiciary employees. These "gaps" included no long-term care insurance program, no pre-tax benefit options, such as flexible spending accounts for health care and dependent care, and no comprehensive dental or vision benefits.

At the direction of the Judicial Conference, the judiciary has already undertaken the clearly needed upgrade of its health-benefits program. A supplemental benefit plan, which offers flexible spending accounts for medical and dependent care expenses has been established. Employees and judicial officers are now able to pay their health care premiums on a pre-tax basis. These new programs are "employee-pay-all" funded. The next phase of the upgrade is to provide supplemental benefits, through a "cafeteria plan" program, which is paid in whole or part with appropriated funds. This phase will be a long term effort entirely dependent on obtaining funding. However, it cannot be undertaken without the authorization contained in Section 204 of H.R. 2522.

If section 204 is enacted into law, our intent is to seek funding for a dental benefits plan. The Towers Perrin study rated dental benefits "considerably below average" because the only coverage available to judiciary employees is "very limited" coverage in the Blue Cross Blue Shield standard option and a few other HMO-style plans. As a point of comparison, 48 states offer employees dental coverage, 21 of which pay 100 percent of the cost. Nearly all large private sector employers offer the same level of coverage. The plan we intend to pursue with the Appropriations Committee would set a maximum of $1,500 for reimbursement of dental expenses for each of the 30,000 judiciary employees. Statistical analysis of identical existing plans show that the actual claim-incurred cost will be approximately $484 per employee, or $15 million per year.

Providing judiciary employees with health benefits comparable to benefits provided state government employees and a great many private sector employees is motivated by necessity. As is pointed out in the Section 204 analysis, the judiciary is at risk of losing 40 percent of our employees to retirement over the next five years. As the General Accounting Office points out, one of the key challenges of the future for the entire Federal government is securing "staffs whose size, skills, and deployment meet agency needs." Because the judiciary must compete for qualified employees in every state and territory in the United States, the Judicial Conference has concluded that improving benefits is an imperative management tool.

A copy of the executive summary of the Towers Perrin study is attached to this statement. The full study is readily available should the subcommittee have an interest in having it.

* * *

Thank you for the opportunity to testify before this subcommittee. I would be pleased to answer any questions you may have concerning the provisions of

H.R. 2522.