BILL ANALYSIS SB 55 Page 1 SENATE THIRD READING SB 55 (Corbett) As Amended December 10, 2009 2/3 vote. Urgency SENATE VOTE : Vote not relevant NATURAL RESOURCES APPROPRIATION (vote not relevant) (vote not relevant) SUMMARY : Continues the State Bar's authority to assess and collect dues from licensed attorneys in California in order to support the State Bar's operations, including discipline. Specifically, this bill : 1)Authorizes the State Bar to continue to collect active membership dues of up to $410 for the year 2010, maintaining 2009 dues levels. 2)Provides that the State Bar shall have a preference for using in-house employees for information technology (IT) projects, whenever possible. Further provides that nothing in the bill shall be read to be inconsistent with any memorandum of understanding between the State Bar and the recognized employee organizations or any relevant principles of labor law. 3)Increases the State Bar's informal bid contracting authority limits from $50,000 to $100,000 for contracts for IT goods and/or services, as specified. 4)Requires the State Bar to report to the Senate and Assembly Judiciary Committees on or before April 1, 2010, and annually thereafter, on the impact of the changes made per 3) above. In addition to a description of the impact of those changes, the report shall include, with specificity, the following: a) The projects that previously would have been required to comply with Article 4 (commencing with Section 10335) of Chapter 2 of Part 2 of Division 2 of the Public Contract Code, but are no longer subject to that requirement because the contract amount is between $50,000 and $100,000; and, b) Whether the changes have improved the efficiency of the SB 55 Page 2 contracting process. This provision sunsets on January 1, 2014. 5)Provides that the fees paid by limited liability partnerships (LLPs) and law corporations to the State Bar shall be used for its regulatory and disciplinary purposes. 6)Provides that at the time of filing an Application for Issuance of a Certificate of Registration as a LLP pursuant to the Rules of the State Bar, an applicant for registration shall also file with the State Bar a separate form stating that the limited liability partnership has complied with the security requirements described in paragraph (2) of subdivision (a) of Section 16956 of the Corporations Code. 7)Adds an urgency clause. EXISTING LAW : 1) Requires all attorneys who practice law in California to be members of the State Bar and establishes the State Bar for the purpose of regulating the legal profession. Pursuant to the State Bar Act, the annual mandatory membership fee set by the State Bar's Board of Governors to pay for discipline and other functions must be ratified by the Legislature. 2) Authorizes the State Bar to collect $315 in annual membership fees from active members for a total annual dues bill of $410 for the year 2009. The other $95 is pursuant to statutory authorization to assess annually the following fees: a) $40 for the Client Security Fund; $25 for disciplinary activities; b) $10 to fund the Lawyer Assistance Program; c) $10 special assessment to fund information technology upgrades (expires January 1, 2011); and, d) $10 for the Building Fund (expires January 1, 2014). 3) Authorizes the State Bar to collect $75 in annual membership fees from inactive members for a total annual dues bill of $125 for the year 2009. The other $50 is pursuant to SB 55 Page 3 statutory authorization to assess annually the following fees: a) $10 for the Client Security Fund; b) $25 for disciplinary activities; c) $5 to fund the Lawyer Assistance Program; and, d) $10 for the Building Fund (expires January 1, 2014). 1) Prohibits the use by the State Bar of mandatory dues to fund political and ideological activities, as a violation of a member's First Amendment freedom of speech rights, where such expenditures were not necessarily or reasonably incurred for the purpose of regulating the legal profession or improving the quality of the legal services available to the people of the state. Existing law allows members to deduct up to $10 from the mandatory dues if the member does not wish to fund legislative activities and non-Keller lobbying and activities with his or her dues. (Keller v. State Bar of California (1990) 496 U.S. 1.) 2) Requires LLPs and law corporations to register with the State Bar. 3) Prohibits the State Bar from awarding a contract for goods and/or services for more than $50,000 unless it complies with specified public contracting requirements. FISCAL EFFECT : None COMMENTS : This bill reauthorizes the State Bar to collect annual membership fees for 2010, keeping with the typical approach of an annual dues authorization bill to ensure the State Bar is appropriately funded and provide helpful and appropriate legislative oversight of the State Bar's many important functions. The bill authorizes the State Bar to continue to collect active membership dues of up to $410 for the year 2010, maintaining 2009 dues levels. It would also clarify that the State Bar can deposit fees collected from law corporations and limited liability companies in the State Bar's general fund to be used for regulatory and disciplinary purposes. This change is intended to assist the State Bar in SB 55 Page 4 its non-dues revenue adjustments to help ensure that it can fulfill its public protection and member services roles. This bill would also increase the State Bar's informal bid contracting authority limits from $50,000 to $100,000 for IT contracts only. The increased threshold for these contracts is intended to help provide the State Bar with greater flexibility. The State Bar has indicated that it is planning to implement the following cost reduction measures: 1) defund 46 vacant positions totaling a 9% workforce reduction (saves $4 to $5 million annually); 2) end General Fund subsidy of the Lawyer's Assistance Fund and implement plans to reduce funding to the statutory minimum (saves approximately $300,000 in 2010 and increasing in future years); and, 3) end the print edition of the CalBar Journal in 2010 (saves approximately $1.1 million annually). This bill is identical to SB 641 (Corbett), which passed this house overwhelmingly (75-1), except that this bill includes an urgency clause and postpones the date by which dues must be submitted for one month (March 1) to reflect that dues statements will be issued later than usual because of the Governor's veto of SB 641. The author and sponsor report that the State Bar has acted responsibly to address the issues raised in the Governor's veto message. If not enacted, the State Bar would be required to begin immediately procedures for a layoff process that would result in formal layoff notices being sent in the first week of January. Supporters state that this would be crippling to the State Bar's essential mission of public protection against unethical attorneys. Analysis Prepared by : Kevin Baker / JUD. / (916) 319-2334 FN: 0003509