BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                    SB 55|
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                              UNFINISHED BUSINESS


          Bill No:  SB 55
          Author:   Corbett (D), et al
          Amended:  12/19/09
          Vote:     27 - Urgency

           
          PRIOR VOTES NOT RELEVANT
           
          ASSEMBLY FLOOR  :  59-0, 1/4/10 - See last page for vote

          VOTES ON SB 641 (Corbett):
          
           SENATE JUDICIARY COMMITTEE :  5-0, 5/12/09
          AYES:  Corbett, Harman, Florez, Leno, Walters

           SENATE FLOOR  :  39-0, 5/26/09
          AYES:  Aanestad, Alquist, Ashburn, Benoit, Calderon,  
            Cedillo, Cogdill, Corbett, Correa, Cox, Denham,  
            DeSaulnier, Ducheny, Dutton, Florez, Hancock, Harman,  
            Hollingsworth, Huff, Kehoe, Leno, Liu, Lowenthal,  
            Maldonado, Negrete McLeod, Oropeza, Padilla, Pavley,  
            Romero, Runner, Simitian, Steinberg, Strickland, Walters,  
            Wiggins, Wolk, Wright, Wyland, Yee
          NO VOTE RECORDED:  Vacancy

           ASSEMBLY FLOOR  :  75-1, 8/31/09 
          AYES:  Adams, Ammiano, Arambula, Beall, Bill Berryhill, Tom  
            Berryhill, Blakeslee, Block, Blumenfield, Brownley,  
            Buchanan, Caballero, Charles Calderon, Carter, Chesbro,  
            Cook, Coto, De La Torre, De Leon, DeVore, Duvall,  
            Emmerson, Eng, Evans, Feuer, Fletcher, Fong, Fuentes,  
            Fuller, Furutani, Gaines, Galgiani, Garrick, Gilmore,  
            Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Huber,  
                                                           CONTINUED





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            Huffman, Jeffries, Jones, Knight, Krekorian, Lieu, Logue,  
            Bonnie Lowenthal, Ma, Mendoza, Miller, Monning, Nava,  
            Nestande, Niello, Nielsen, John A. Perez, V. Manuel  
            Perez, Ruskin, Salas, Saldana, Silva, Skinner, Smyth,  
            Solorio, Audra Strickland, Swanson, Torlakson, Torres,  
            Torrico, Tran, Villines, Yamada, Bass
          NOES:  Anderson
          NO VOTE RECORDED:  Conway, Davis, Portantino, Vacancy


           SUBJECT  :    The State Bar Act

           SOURCE  :     State Bar of California


           DIGEST  :     Assembly Amendments  delete the prior version of  
          the bill deleting the provisions of existing law that  
          require the Department of Conservation (DOC) to establish  
          reporting periods for redemption rates that require DOC to  
          determine redemption rates for specified types of beverage  
          containers.  

          As amended, this bill continues the State Bar's authority  
          to assess and collect dues form licensed attorneys in  
          California in order to support the State Bar's operations,  
          including discipline.  This bill is the same bill as SB 641  
          (Corbett), which was vetoed, with two exceptions -- it  
          contains an urgency clause and the due date for the State  
          Bar dues changed from February 1 to March 1.

           ANALYSIS  :    

           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  







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            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 actions.

             B.    $10 to Fund the Lawyer Assistance Program.

             C.    $10 special assessment to fund information  
                technology upgrades (expires January 1, 2011).

             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 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.

             D.    $10 for the Building Fund (expires January 1,  
                2014).

          4.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.)

          5.Requires limited liability partnerships (LLPs) and law  







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            corporations to register with the State Bar.

          6.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.  
           
          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 $100,0000.

             B.    Whether the changes have improved the efficiency  
                of the contracting process.  This provision sunsets  
                on January 1, 2014.

          5.Provides that the fees paid by LLPs and law corporations  
            to the State Bar shall be used for its regulatory and  







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            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 LLP 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.

           Background
           
          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 also  
          clarifies 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 its non-dues revenue adjustments to help  
          ensure that it can fulfill its public protection and member  
          services roles.  This bill 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 nine percent  
            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  







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            increasing in future years).

          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), 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 will 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.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No    
          Local:  No

           SUPPORT  :   (Verified  1/4/10)

          State Bar of California (source)

           ARGUMENTS IN SUPPORT  :    According to the author's office,  
          this bill 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.  The bill also clarifies 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 its non-dues revenue  
          adjustments to help ensure that it can fulfill its public  
          protection and member services roles.  This bill 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.








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           SB 641 VETO MESSAGE
          
           The Governor vetoed SB 641, stating:

            "I am returning Senate Bill 641 without my signature. 

            "This bill would, among other provisions, authorize the  
            State Bar to collect annual bar dues from its members  
            for 2010. 

            "In 1997, Governor Pete Wilson vetoed the annual State  
            Bar dues bill, citing numerous concerns that the State  
            Bar had become overly political, unresponsive to its  
            membership, and inefficient.  Unfortunately, twelve  
            years later, inefficiencies remain unaddressed and  
            questions about the State Bar's role in the evaluation  
            of judicial nominees suggest that the State Bar's  
            political agenda continues. 

             "In July, the State Auditor released a report critical  
             of the State Bar.  Among the problems noted by the  
             report:  salaries for staff have risen significantly  
             over the past five years; the costs of its  
             disciplinary system have escalated by $12 million from  
             2004 to 2008 while the number of disciplinary  
             inquiries opened has declined; and a lack of internal  
             controls allowed the embezzlement of nearly $676,000  
             by a former employee.  As the organization charged  
             with regulating the professional conduct of its  
             members, the conduct of the State Bar itself must be  
             above reproach.  Regrettably, it is not. 

             "In addition, recent actions by the State Bar's  
             Judicial Nominees Evaluation Commission (JNE) also  
             call into question the State Bar's impartiality in  
             considering judicial appointments.  All JNE Commission  
             proceedings are required by law to be confidential and  
             qualification ratings are not to be released to the  
             public prior to the Governor considering an  
             appointment.  Unfortunately, recent events have  
             required the State Bar to launch an official inquiry  
             into the confidentiality of such proceedings.   
             Moreover, the Chief Justice of the Supreme Court has  
             recently questioned the reliability of the  







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             Commission's recommendations by noting its failure to  
             follow statutory guidelines when considering judicial  
             nominees.  By failing to follow the law, the JNE  
             Commission has damaged its reputation for impartiality  
             and, in turn, the State Bar's. 

            "There is no question the State Bar has an essential  
            role in the state's justice system and must continue to  
            oversee the licensing, education, and discipline of  
            California's lawyers.  However, I am returning this  
            bill without my signature because the State Bar cannot  
            continue with business as usual.  It must take the time  
            to reexamine the problems noted by the State Auditor  
            and continue its investigation into the JNE Commission.  
             I urge the State Bar to resolve these issues as soon  
            as possible so the Legislature can reintroduce this  
            measure early next year."


           ASSEMBLY FLOOR  : 
          AYES:  Ammiano, Arambula, Beall, Blakeslee, Block,  
            Blumenfield, Bradford, Brownley, Buchanan, Caballero,  
            Chesbro, Cook, Coto, Davis, De La Torre, De Leon,  
            Emmerson, Eng, Evans, Feuer, Fong, Fuentes, Fuller,  
            Furutani, Galgiani, Gilmore, Hall, Hayashi, Hill, Huber,  
            Huffman, Jones, Knight, Krekorian, Lieu, Logue, Bonnie  
            Lowenthal, Ma, Mendoza, Monning, Nava, Niello, Nielsen,  
            John A. Perez, V. Manuel Perez, Portantino, Ruskin,  
            Salas, Skinner, Smyth, Solorio, Audra Strickland,  
            Swanson, Torlakson, Torres, Torrico, Tran, Yamada, Bass
          NO VOTE RECORDED:  Adams, Anderson, Bill Berryhill, Tom  
            Berryhill, Charles Calderon, Carter, Conway, DeVore,  
            Fletcher, Gaines, Garrick, Hagman, Harkey, Hernandez,  
            Jeffries, Miller, Nestande, Saldana, Silva, Villines


          RJG:cm  1/5/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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