BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 1159 (Gonzalez) - Immigration services.
Amended: August 22, 2013 Policy Vote: BP&ED 9-0, JUD 7-0
Urgency: Yes Mandate: Yes
Hearing Date: August 30, 2013
Consultant: Jolie Onodera
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 1159, an urgency measure, would establish
minimum statutory requirements and regulations through the State
Bar and Secretary of State (SOS) for attorneys and immigration
consultants who offer immigration reform act services, as
defined.
Fiscal Impact:
Minor costs in Fiscal Year (FY) 2013-14 of less than
$20,000 (Special Fund*) to the SOS for form and website
changes, noticing, and postage. Additional costs in FY
2014-15 of approximately $35,000 (Special Fund*) to
accommodate the increased workload associated with bond
processing and cease and desist notices/orders in response
to the surety bond increase for immigration consultants.
Minor, absorbable one-time costs to the Department of
Consumer Affairs (DCA) to revise regulations related to
written contract requirements for immigration consultants.
One-time costs to the State Bar to create a template
contract form and necessary language translations. All costs
to be offset by existing fee revenue.
Non-reimbursable local costs for enforcement offset to a
degree by fine revenue for violations of various
prohibitions specified in the bill.
Potential minor revenue increases (General Fund) for civil
penalty collections to the extent additional civil actions
are brought by the Attorney General.
*Business Fees Fund
Background: Federal legislation, the Border Security, Economic
Opportunity, and Immigration Modernization Act of 2013 (S.744)
was introduced in April of this year and passed out of the
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United States (U.S.) Senate on June 27, 2013. S.744 is currently
awaiting consideration in the House of Representatives. One of
the key components of S.744 creates a pathway to citizenship to
assist the estimated 11 million undocumented immigrants in the
U.S. obtain legal status. S.744 would also make changes to the
existing system of legal immigration, attempting to make the
system more responsive to economic needs and make provisions for
efforts to secure the border of the country.
Immigration reform is expected to increase the need for
qualified legal counsel to represent individuals in immigration
proceedings. This bill is intended to protect consumers and
proactively address potential fraudulent and abusive activities
associated with implementation of pending and/or future
immigration reform. This bill contains an urgency clause,
stating, "In order to implement measures as quickly as possible
and as necessary to prevent fraud on immigrants by attorneys and
other persons by making promises of benefits and relief under
pending and proposed federal immigration reform acts before
their enactment, it is necessary that this act take effect
immediately."
Proposed Law: This bill:
Provides that it is unlawful for an attorney to demand or
accept advance payment of any funds from a person for
immigration reform act services before the enactment of an
immigration reform act. Any funds received after the effective
date of this bill, but before the enactment of an immigration
reform act must be refunded to the client.
Provides that if an attorney providing immigration reform act
services accepted funds prior to the effective date of this
bill, and the services provided in connection with payment of
those funds were rendered, the attorney shall provide the
client with a statement of accounting describing services
rendered.
Provides that any funds received before the effective date of
this bill, and before the enactment of an immigration reform
act, for which immigration reform act services have not yet
been rendered, shall either be refunded to the client or shall
be deposited in a client trust account. If the attorney elects
to deposit funds in a client trust account, he or she shall
provide a written notice to the client, in English and the
client's native language, that there are no benefits or relief
that are available and that no application may be processed
AB 1159 (Gonzalez)
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until enactment of an immigration reform act and the related
necessary federal regulations and forms.
Requires an attorney providing immigration reform act services
to, prior to providing those services, provide the client with
a written contract that is to include specified information,
at a minimum.
Requires the provisions of the written contract to be stated
both in English and the client's native language, with
specified exceptions.
States that a written contract is void if it does not comply
with the above requirements.
Requires the State Bar to work with the necessary professional
association for lawyers practicing immigration law to prepare
and provide forms for contracts, which the State Bar shall
translate into the languages specified in Civil Code Section
1632.
Does not apply the above written contract and translation
requirements to attorneys who provide immigration reform act
services in accordance with any of the following: 1)
qualified legal services project or support center; 2) a
nonprofit, tax-exempt corporation that helps clients complete
application forms in immigration matters free of charge or for
a nominal fee; or 3) for free, at no cost to the client, as
pro bono legal services.
Provides that the above exempted attorneys must, instead,
provide a written notice to the client containing a
description of the services, basis for compensation, and where
he or she may report complaints. This bill would state that
the notice is not a contract.
Applies the above provisions to 1) an attorney who is an
active member of the State Bar who provides immigration reform
act services; and 2) an attorney who is not an active member
but: (1) is authorized by federal law to practice law and to
represent persons before the Board of Immigration Appeals of
the United States Citizenship and Immigration Services; and
(2) is providing immigration reform act services in an office
or business in California.
Defines "immigration reform act" as any pending or future act
of Congress that is enacted after the effective date of this
section but before January 1, 2017, including but not limited
to the "Border Security, Economic Opportunity, and Immigration
Modernization Act" (S. 744, 2013), as specified.
Defines "immigration reform act services" as services
necessary in the preparation of an application and other
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related initial processes in order for an undocumented
immigrant, as specified, to attain lawful status under the
immigration reform act.
Provides that it is a violation of the existing prohibition on
non-attorneys advertising or holding themselves out as
entitled to practice law for any person who is not an attorney
to literally translate from English into another language, in
any document, any words or titles, including "notary public,"
"notary," "licensed," "attorney," or "lawyer" that imply the
person is an attorney, as specified. This bill would provide
that a person who violates the translation prohibition is
liable for a civil penalty not to exceed $1,000, as specified.
Requires an immigration consultant who provides immigration
reform act services to establish and deposit into a client
trust account any funds received from a client prior to
performing those services.
Allows an immigration consultant providing immigration reform
act services for the client to withdraw funds received from
that client: 1) after completing one or more of itemized
services, as specified; or 2) after completing one or more of
specified documents.
Prohibits an immigration consultant from demanding or
accepting advance payment of any funds from a person for
immigration reform act services before the enactment of an
immigration reform act.
Provides that funds received after the effective date of this
bill but before enactment of an immigration reform act must be
refunded to the client.
Provides that for funds received before the effective date of
the bill: 1) the consultant must provide the client with an
accounting for services that were rendered; and 2) any funds
received for which services have not yet been rendered must be
refunded or deposited into a client trust account, as
specified.
States that a person who violates the above restrictions on
advance fees shall be subject to a civil penalty not to exceed
$1,000, as specified, and require a court to grant a
prevailing plaintiff reasonable attorney's fees and costs.
States that a violation of the existing prohibition on
translating terms that imply the person is an attorney is a
violation of the State Bar Act's prohibition on non-attorneys
holding themselves out to be authorized to practice law. In
addition to the remedies and penalties under the ICA law, this
bill would provide that a person who violates the translation
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prohibition would be subject to a civil penalty of up to
$1,000 per day for each violation, as specified.
Effective July 1, 2014, increases the amount of the required
bond from $50,000 to $100,000 for all immigration consultants.
Provides that the bill shall take effect immediately as an
urgency measure.
Related Legislation: AB 888 (Dickinson) 2013 would require the
State Bar to disclose, in confidence, the information in its
investigation of an unauthorized practice of law to the agency
responsible for criminal enforcement, and would allow the State
Bar to request the AG or other public prosecutor to bring an
enforcement action. This bill allows the State Bar to bring a
civil action for any violation of the existing prohibitions on
the unauthorized practice of law, as specified. This bill is
currently pending action on the Senate Floor.
Prior Legislation: SB 1194 (Romero) Chapter 304/2001 made
it unlawful for any person to hold out to be an immigration
consultant unless he or she has on file with the SOS the
required bond. This bill repealed the January 1, 2002,
sunset date of the bond requirement for immigration
consultants.
AB 1999 (Correa) Chapter 705/2002 authorized the Attorney
General, district attorney, or city attorney to seek civil
penalties of up to $100,000 in prosecuting immigration
consultant cases, as well as injunctive relief,
restitution, or other equitable relief on behalf of the
general public. It also authorized courts to order relief
for benefit of the injured parties to be paid from the bond
that an immigration consultant is required to post with the
SOS.
AB 630 (Chu) Chapter 605/2006 required fingerprinting and
background checks for immigration consultants; authorized
the SOS to issue cease and desist orders; required the SOS
to post information on its website about bond compliance,
filing disclosure statements, and passing of background
checks, and to post photographs of immigration consultants.
Staff Comments: The SOS administers the State's immigration
consultant registration program. Under existing law, prior to
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engaging in the business or acting in the capacity of an
immigration consultant, a person must obtain a $50,000 bond from
a corporate surety and file a copy of the bond with the SOS
along with the Immigration Consultant Disclosure form. In
addition, a person engaging in the business or acting in the
capacity of an immigration consultant must satisfactorily pass a
background check conducted by the SOS.
Increasing the bond amount from $50,000 to $100,000 will require
the SOS Business Programs Division to revise forms and web pages
and obtain required approval from the Attorney General (AG).
Also required by law is the submittal of the new surety bond
form to the Office of Administrative Law in the form of a
regulation package for review and approval. After form approval
and availability for use, the SOS will send informational
notices to immigration consultants to provide adequate time for
the immigration consultants to obtain a new bond, and on the
effective date of the bond requirement, initiate a notice of
cease and desist followed 30 days later by a cease and desist
order. New surety bonds will be evaluated and immigration
consultants unable to afford the higher bond requirement will be
taken through the cease and desist notice and order process.
Based on a caseload of approximately 750 immigration
consultants, the SOS has indicated the additional workload is
not estimated to require new resources and could be accomplished
using staff overtime. Due to the delayed effective date of July
1, 2014, for the higher bond amount, this workload is not
estimated to add to the existing backlog of business filings
that has been addressed through recent legislation. AB 113
(Committee on Budget) Chapter 3/2013, the Budget Act of 2012,
appropriated an additional $1.6 million to use for costs
associating with reducing the processing time of business
filings.
The SOS has indicated minor costs in FY 2013-14 of less than
$20,000 for form and website changes, noticing, and postage.
Additional one-time costs of $35,000 in FY 2014-15 are estimated
to accommodate the increased workload associated with bond
processing and issuing cease and desist notices/orders.
Recommended Amendments: As submitted by the Senate Committee on
Judiciary:
Clarify that "immigration reform act services" are those
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services offered in connection with an immigration reform
act that are necessary in the preparation of an application
and other related initial processes in order for an
undocumented immigrant to attain a lawful status under an
immigration reform act.
Delete the proposed Section 6243 of the Business and
Professions Code that would have required attorneys who are
providing immigration reform act services to provide
clients with a written contract, as specified.