WASHINGTON (Map, News) - The District government’s plan to charge outside organizations for transaction-related legal fees is ripe for abuse and could suffocate struggling nonprofits, a key business group told the D.C. Council Tuesday.

The D.C. Chamber of Commerce expressed strong opposition to Mayor Adrian Fenty’s Commercial Transactions Cost Recovery proposal during a hearing on the Fiscal Year 2008 Budget Support Act. Under the act, the Office of the Attorney General would be authorized to bill private groups for time spent negotiating and reviewing financial and real estate transactions that the District undertakes on their behalf.

“The imposition of the government’s legal fees on business and nonprofits, such as charter schools and community-based organizations, could impair their abilities to expand operations and services because they would be required to pay for their own attorney’s fees, and the government’s as well,” Chamber President Barbara Lang said in her written testimony.

Council Chairman Vincent Gray, long a member of the nonprofit community, expressed similar concern.

“It troubles me personally to see that nonprofits could be faced with yet another cost of doing business that could be facilitated by the government,” he said.

The staff time spent on commercial deals, including revenue bonds, loans and tax increment financing, totals about $700,000 annually, Attorney General Linda Singer told the council. The figure, she said, is “based on our sense of the hours that are involved in those transactions,” and recouping those dollars will ensure her staff is able to continue the work.

But Lang argued that too many questions still must be answered — how the fees would be calculated and charged, for example, or a private party ensures the costs aren’t inflated. Lang called for a public hearing and for safeguards “to protect against abuse and provide transparency.”

mneibauer@dcexaminer.com