BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 163
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        SENATE THIRD READING
        SB 163 (Evans)
        As Amended  July 13, 2011
        Majority vote 

         SENATE VOTE  :39-0  
         
         JUDICIARY           8-1                                          
         
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        |Ayes:|Feuer, Wagner, Atkins,    |     |                          |
        |     |Dickinson, Beth Gaines,   |     |                          |
        |     |Huber, Monning,           |     |                          |
        |     |Wieckowski                |     |                          |
        |     |                          |     |                          |
        |-----+--------------------------+-----+--------------------------|
        |Nays:|Jones                     |     |                          |
        |     |                          |     |                          |
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         SUMMARY  :  Implements major changes to the governance structure of 
        the State Bar (Bar) to maximize the Bar's prioritization of public 
        protection in all of its activities and makes other reforms to the 
        Bar's governance structure.  In addition, the measure provides a $10 
        reduction in dues for all Bar members in 2012 and increases the 
        amount Bar members may voluntarily chose to contribute to help 
        address the ongoing crisis in legal services for the next two years 
        only.  Specifically,  this bill  , among other things:

        1)Provides a $10 reduction in dues for all Bar members in 2012 only.

        2)Provides that protection of the public shall be the highest 
          priority of the State Bar and the board of trustees in exercising 
          their licensing, regulatory, and disciplinary functions, and 
          specifies that whenever the protection of the public is 
          inconsistent with other interests sought to be promoted, the 
          protection of the public shall be paramount.

        3)Revises the composition and size of the board of trustees to be 
          made up of six public members appointed by the Governor and the 
          Legislature, as provided under existing law, and 13 attorney 
          members consisting of the following:  six attorney members elected 
          from newly created State Bar districts, based on the six court of 
          appeal districts in California; five new attorney members 
          appointed by the California Supreme Court; and, two new attorney 








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          members appointed by the Senate Rules Committee and the Speaker of 
          the Assembly, for a reduced total number of 19 board trustees.
         
         4)Phases in the transition to the smaller board, requiring the Bar 
          to determine and ensure that the transition from 23 members to 19 
          members is achieved by October 31, 2014.    

        5)Requires the board to ensure that its open meeting requirements 
          are consistent with, and conform to, the Bagley-Keene Open Meeting 
          Act. 
         
         6)Requires the board to complete and implement a five-year strategic 
          plan, to be updated every two years, and requires the board 
          president to report annually to the Supreme Court, Governor, and 
          the Senate and Assembly Judiciary Committees on the steps that the 
          board has undertaken to implement the strategic plan, as well as 
          indicate any measures that the board intends to undertake in the 
          upcoming years to address the projected needs contained in the 
          plan. 
        7)Increases from the current $10 to $20 for the next two years the 
          amount that Bar members may voluntarily (but need not) choose to 
          allocate to address the ongoing crisis in legal services for 
          Californians of lesser means, unless any Bar member chooses not to 
          support those activities.

        8)Acknowledges that the Bar has also voluntarily committed to 
          transferring $2 million in 2012 and $2 million in 2013 from 
          non-mandatory dues monies to nonprofit legal services 
          organizations regulated by the Bar to similarly help ensure that 
          all Californians have equal access to justice.  

        9)Clarifies that specified conflict of interest provisions apply to 
          new public members appointed to the board after the enactment of 
          this measure.  
         
        FISCAL EFFECT  :  None

         COMMENTS  :  According to the current president of the State Bar, who 
        supports this bill, this measure implements the most sweeping 
        changes to the governance structure of the State Bar in decades.  
        Among other reforms, the bill revises the composition and reduces 
        the size of the Bar's governance board, adding for the first time a 
        substantial component of attorney members selected by the Supreme 
        Court.  The bill reduces the size of the board from 23 to 19 members 








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        over a three-year period.  The bill also, consistent with other 
        professional statutes, specifies for the first time that the 
        protection of the public is the highest priority for the Bar and its 
        board of trustees (the new name for the members of the board).  

        The measure also reduces member dues by $10 for 2012 by granting all 
        Bar members a $10 rebate next year due to a continuing substantial 
        surplus in the Bar's General Fund.  In addition, the measure 
        increases from the current $10 to $20 for the next two years the 
        amount that Bar members may voluntarily contribute to help address 
        the ongoing crisis in legal services for Californians of lesser 
        means.  In the event they choose not to make this voluntary 
        contribution the dues statement will simply reflect that the normal 
        allocation to the Bar's General Fund will remain.

        The bill will also acknowledge that the Bar has also committed to 
        transferring $2 million in 2012 and $2 million in 2013 from its 
        non-mandatory funds to nonprofit legal services organizations that 
        provide free legal aid to low-income Californians in light of the 
        extreme funding shortfall that imperils the ability of these 
        organizations to help ensure justice for all Californians without 
        regard to income, though this commitment may be interrupted in 2013 
        if the Bar's General Fund faces extraordinary circumstances as 
        defined in the measure.

        As of February 2011, the Bar had 170,986 active members and 49,034 
        inactive members.  The Bar's programs are financed mostly by annual 
        mandatory membership dues paid by attorneys as well as other fees 
        paid by applicants seeking to practice law.  The Bar has many 
        committed and hard-working staff who work diligently to ensure that 
        the legal profession's admissions system is properly administered to 
        protect the public, and its discipline system maximizes public 
        protection. 

        Last year, AB 2764 (Assembly Judiciary Committee, Chapter 476, 
        Statutes of 2010) created within the Bar the Governance in the 
        Public Interest Task Force.  The Task Force was created in response 
        to concerns that actions by the State Bar Board of Governors did not 
        sufficiently take into account the protection of the public.  
        Several examples demonstrating the concern were included in 
        committee analyses of AB 2764.   The Task Force consisted of 11 
        members, who were tasked with submitting a report to the Supreme 
        Court, the Governor, and the Senate and Assembly Judiciary 
        Committees containing recommendations for enhancing the protection 








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        of the public and ensuring that protection of the public is the 
        highest priority in the licensing, regulation, and discipline of 
        attorneys.  This report was reviewed by the Senate and Assembly 
        Judiciary Committees in their regular consideration of the annual 
        bar dues bill.  

        The Task Force began meeting in September 2010 and, after regularly 
        and diligently holding a number of meetings around the state, the 
        Task Force voted on May 5, 2011, to submit its reports and 
        recommendations to the Supreme Court, Governor, and Legislature.  On 
        May 11, 2011, the Task Force presented its work product to the 
        Supreme Court, Governor, and Legislature in the form of both a 
        majority report, largely supported by the attorney members of the 
        Task Force, and a minority report, largely supported by the public 
        members of the Task Force.  

        Drawing from both the majority and minority reports, received by the 
        Legislature on May 11, 2011, the author amended this measure on May 
        27, 2011, to benefit from the governance insights and 
        recommendations of both reports.  The author writes in support of 
        the bill:

             Over the last nine months, the State Bar's Governance in 
             the Public Interest Task Force spent considerable time 
             and effort discussing its charge to make recommendations 
             to enhance the protection of the public.  These efforts 
             are well reflected in the majority and minority reports 
             issued by the Task Force Ýlast month.]  SB 163 is a 
             well-thought out compromise proposal that draws from both 
             of these reports.  

             The bill will help to address the issues identified by 
             the Legislature in creating the Task Force while at the 
             same time implementing changes in a gradual phased-in 
             manner.  In transitioning to a smaller board, no sitting 
             board member (including those elected this year) will be 
             forced to resign or have their term reduced or shortened. 
              At the same time, the changes proposed by this bill will 
             sufficiently revise the make-up of the board to allow for 
             appointments-in addition to elections-of lawyer members.  


             As a result, attorneys will have three different ways to 
             become members of the State Bar's board of trustees:  








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             they can be elected, appointed by the Supreme Court, or 
             appointed by the Legislature.  At the same time, the bill 
             ensures that the ratio of professional to public members 
             is more reasonable, and includes a public protection 
             charge ensuring that protection of the public is the 
             highest priority for the State Bar. 

             The bill also ensures that the diversity of the board is 
             maintained by specifying criteria that the Supreme Court 
             should consider when making appointments to the board.  
             This includes important criteria such as attorneys who 
             represent various categories, including legal services, 
             small firm or solo practitioners, and historically 
             underrepresented groups.
         
         On June 18, 2011, at a special session, the current Bar board voted 
        to support the measure.  And on Friday, June 24, 2011, the Bar's 
        Board Operations Committee, representing the full board at those 
        times when the full board is not in session, voted unanimously to 
        support this bill.  
         

        Analysis Prepared by  :    Drew Liebert / JUD. / (916) 319-2334 
                                                                 FN:  0001673