BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 55| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ UNFINISHED BUSINESS Bill No: SB 55 Author: Corbett (D), et al Amended: 12/10/09 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 SB 55 Page 2 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 SB 55 Page 3 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 SB 55 Page 4 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 SB 55 Page 5 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 SB 55 Page 6 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. SB 55 Page 7 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 SB 55 Page 8 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 1/6/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****