BILL ANALYSIS                                                                                                                                                                                                    



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          SENATE THIRD READING
          SB 641 (Corbett)
          As Amended May 20, 2009
          Majority vote 

           SENATE VOTE  :39-0  
           
           JUDICIARY           10-0                                        
           
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          |Ayes:|Feuer, Tran, Brownley,    |     |                          |
          |     |Evans, Jones, Knight,     |     |                          |
          |     |Krekorian, Lieu, Monning, |     |                          |
          |     |Silva                     |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
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           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: 1)  
            the projects that previously would have been required to  








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            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, 2)  
            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 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.



           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:  $40 for  
            the Client Security Fund; $25 for disciplinary activities; $10  
            to fund the Lawyer Assistance Program; $10 special assessment  
            to fund information technology upgrades (expires January 1,  
            2011); and, $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  








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            statutory authorization to assess annually the following fees:  
             $10 for the Client Security Fund; $25 for disciplinary  
            activities; $5 to fund the Lawyer Assistance Program; and, $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 LLPs and law 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.  

           FISCAL EFFECT  :  None
           
          COMMENTS  :  Authorizes 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 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. 








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          As of May 1, 2009, the State Bar had 164,392 active members and  
          46,589 inactive members, which represents a slight annual  
          increase in both active members and inactive members.  Total  
          State Bar membership is listed at 222,146, which includes 2,015  
          Judge members and 9,150 members who are "Not Eligible to  
          Practice Law."  
           
           Existing law 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 are 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 (Keller). Current law also  
          allows members to deduct $5 from their current dues if they do  
          not want their dues used by the State Bar to lobby on  
          legislation outside the limits of Keller, and limits the State  
          Bar's expenditures on non-Keller lobbying and related activities  
          to an amount raised by members paying the "$5 voluntary dues,"  
          as specified by a formula.  Thus, consistent with existing law,  
          the membership dues authorized by this bill will fund only  
          mandatory programs of the State Bar, and any member may deduct  
          $5 from dues if the member does not wish to fund "non-Keller"  
          activities of the State Bar.

          This bill would maintain the current $410 annual membership dues  
          level for active members for 2009.  For several reasons, the  
          author believes that a flat dues bill for 2010 appears  
          appropriate.  

          Active member dues levels have increased slightly over the years  
          as follows:  $250 (1999); $395 (2000); $345 (2001); $390 (2002);  
          $395 (2006); $400 (2007); and, $410 (2009) (the 2009 amount  
          includes a $10 building fund assessment to be used for the  
          construction, purchase, or lease of a facility in southern  
          California).  

          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  








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          increasing in future years); and, 3) end the print edition of  
          the CalBar Journal in 2010 (saves approximately $1.1 million  
          annually).  


           Analysis Prepared by  :   Drew Liebert / JUD. / (916) 319-2334 

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