BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1159| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1159 Author: Gonzalez (D), et al. Amended: 9/11/13 in Senate Vote: 27 - Urgency PRIOR VOTES NOT RELEVANT SENATE BUSINESS, PROF. & ECON. DEV. COMM .: 9-0, 8/19/13 AYES: Lieu, Block, Corbett, Galgiani, Hernandez, Hill, Padilla, Wyland, Yee NO VOTE RECORDED: Emmerson SENATE JUDICIARY COMMITTEE : 7-0, 8/26/13 AYES: Evans, Anderson, Corbett, Jackson, Leno, Monning, Vidak SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/30/13 AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg SENATE JUDICIARY COMM. : 7-0, 9/10/13 (pursuant to Senate Rule 29.10) AYES: Evans, Anderson, Corbett, Jackson, Leno, Monning, Vidak SUBJECT : Immigration services SOURCE : State Bar of California DIGEST : This bill provides that it is the unlicensed practice of law for an immigration consultant, or any person who is not an attorney, to literally translate, from English into another language, in written documents or advertisements, the term CONTINUED AB 1159 Page 2 "notary public," or any other term that implies that the person is an attorney; requires attorneys who provide immigration reform act services to use a written contract in English and in the client's native language which contains specified elements; prohibits an attorney or an immigration consultant from demanding or accepting the advance payment of any funds from a person for immigration reform act services before the enactment of any immigration reform act; requires immigration consultants to place client funds into a trust account; and increases the bond required by an immigration consultant to $100,000. Senate Floor Amendments of 9/11/13 make a technical change. Senate Floor Amendments of 9/6/13 insert notice and posting requirements; clarify that civil penalties, as specified, are to be directed by the State Bar to provide free legal services or mitigate unpaid claims of injured immigrant clients; and make other clarifying changes. ANALYSIS : Existing law: 1.Prohibits the practice of law in California by any person who is not an active member of the State Bar of California. Further provides that any person advertising or holding out as practicing, entitled to, or otherwise practicing law, who is not an active member of the State Bar, or otherwise authorized pursuant to statute or court rule to practice law, is guilty of a misdemeanor punishable by up to one year imprisonment or by a fine of up to $1,000, or by both. A second or subsequent conviction requires a sentence of not less than 90 days in jail, except as provided. 2.Regulates a person engaged in the business or acting in the capacity of an immigration consultant, and provides that a violation of these provisions is a crime. 3.Defines "immigration consultant" as a person giving non-legal assistance or advice on an immigration matter, such as completing forms, translating answers, securing forms, making referrals, or submitting forms. 4.Requires an immigration consultant to satisfactorily pass a AB 1159 Page 3 background check conducted by the Secretary of State (SOS), and requires the SOS to disqualify an individual from acting as an immigration consultant who does not meet certain specified requirements. 5.Requires immigration consultants to provide a client, in the client's native language, a written contract with certain contract language requirements and restrictions prescribed by the Department of Consumer Affairs (DCA) regulations, and exempts from this requirement employees of a nonprofit, tax-exempt corporation who provide certain free or low-cost services. 6.Requires immigration consultants to provide a client with payment receipts, as well as statements of services and payments every two months. 7.Requires immigration consultants to visibly display certain information, such as evidence of compliance with the bonding requirement, a statement that the immigration consultant is not an attorney, fee information, and to provide similar written information to clients prior to providing services. 8.Requires an immigration consultant to clearly identify that he/she is not an attorney. 9.Prohibits an immigration consultant from literally translating, with the intent to mislead, from English into another language, words or titles including, but not limited to, "notary public," "notary," "licensed," "attorney," "lawyer," or any term that might imply that the person is an attorney in any document, including an advertisement, stationery, letterhead, business card, or other comparable written material describing the immigration consultant. 10.Requires all immigration consultants to file a $50,000 surety bond, related disclosure form, and other specified information with the SOS, and to file and routinely update additional business information with the SOS, and allows the SOS to charge a fee to cover the costs of filing and maintaining the bond. 11.Makes a violation of the immigration consultant requirements subject to a civil penalty not to exceed $100,000 for each violation and a misdemeanor punishable by a fine of $2,000 to AB 1159 Page 4 $10,000 per client and/or up to one year imprisonment. Makes a second or subsequent violation for certain provisions a felony. 12.Prohibits a notary public (who is not an attorney) from making the literal translation of the phrase "notary public" into Spanish "notario publico" or "notario" and provides for suspension or revocation of the commission of any notary public who fails to comply with that prohibition. This bill: 1.Makes it a violation of the laws prohibiting the unauthorized practice of law for any person who is not an attorney to "literally translate from English into another language, in any document, including an advertisement, stationery, letterhead, business card, or other comparable written material, any words or titles, including, but not limited to, "notary public," "notary," "licensed," "attorney," or "lawyer," that imply that the person is an attorney, and expressly prohibits the literal translation of the phrase "notary public" into Spanish as "notario publico" or "notario." 2.Establishes, in addition to any other remedy, a civil penalty of up to $1,000 per day for each violation of the provisions specified in #1 above. Requires the penalties collected be allocated to a specified fund to provide free legal services related to immigration reform act services to clients of limited means or to a fund to mitigate unpaid claims of injured immigrant clients, as directed by the Board of Trustees (Board) of the State Bar. Requires the Board to annually report any collection and expenditure of these moneys to the Assembly and Senate Judiciary Committees. 3.Adds a specified body of law to the State Bar Act relating to "Attorneys Providing Immigration Services," which: A. Defines the following terms: (1) "Immigration reform act" means any pending or future act of Congress that is enacted after the effective date of this bill but before January 1, 2017, including but not limited to, the federal act known as AB 1159 Page 5 the "Border Security, Economic Opportunity, and Immigration Modernization Act," which authorizes an undocumented immigrant, who either entered the United States without inspection or who did not depart after expiration of a nonimmigrant visa, to attain a lawful status under federal law. Requires the State Bar to announce and post on its Internet Web site when an immigration reform act is enacted. (2) "Immigration reform act services" means the 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, who either entered the United States without inspection or who did not depart after expiration of a nonimmigrant visa, to attain a lawful status under an immigration reform act. A. Specifies that these provisions apply to: (1) An attorney who is an active member of the State Bar who provides immigration reform act services. (2) An attorney who is not a member of the State Bar, but who is authorized by federal law to practice law and to represent persons before the Board of Immigration Appeals or the United States Citizenship and Immigration Services, and who is providing immigration reform act services in an office or business in California. A. Prohibits an attorney from demanding or accepting the advance payment of any funds from a person for immigration reform act services before the enactment of an immigration reform act, and provides that any funds received after the effective date of the bill, but before the enactment of an immigration reform act, shall be refunded to the client promptly, but no later than 30 days after the receipt of the funds.. B. States that if an attorney providing immigration reform act services accepted funds for immigration reform act services prior to the effective date of these provisions, and the services to be performed in connection with payment of those funds were rendered, the attorney shall promptly, but no later than 30 days after the effective date of this AB 1159 Page 6 bill, provide the client with a statement of accounting describing the services rendered. Any funds received before the effective date of this bill, for which immigration reform act services were not rendered prior to the effective date of this bill, will be either refunded to the client or deposited into a client trust account. An attorney that deposits funds into a client trust account will provide a written notice in English and in the client's native language, informing the client that no benefits or relief are available, and that an application may not be processed until the enactment of an immigration reform act, as specified, and that he/she may report complaints to specified entities. The notice must include toll-free numbers and Internet Web sites of those entities. C. Requires an attorney providing immigration reform act services, when a contract for legal services is required in writing pursuant to specified provisions of law, to provide a written notice informing the client that the client may report complaints to specified entities. Makes these provisions operative when the State Bar posts the form and specified translations of the form on its Internet Web site, but no later than 45 days after the effective date of the bill. 1.Requires that the written contract of an immigration consultant contain additional information, including an itemization of each service to be performed; an explanation of the purpose and process of each service; the cost of preparing each document specified in the contract; and a provision informing the client that he/she may report complaints to the Executive Office for Immigration Review of the United States Department of Justice. 2.Specifies that an immigration consultant who literally translates, from English into another language, any words or titles, including, but not limited to, "notary public," "notary," "licensed," "attorney," or "lawyer," that imply that the person is an attorney, shall constitute the unlicensed practice of law, as specified. Expressly prohibits the literal translation of "notary public" into Spanish as "notario publico" or "notario." Establishes, in addition to any other remedy, a civil penalty of up to $1,000 per day for each violation of this provision, as specified. AB 1159 Page 7 3.Requires an immigration consultant, who provides immigration reform act services to a client, to establish and deposit into a client trust account any funds received from the client prior to performing services for that client, and imposes certain requirements relating to the expenditure of funds from the trust account. 4.Defines terms relating to immigration consultants who perform immigration reform act services: A. "Immigration reform act" means any pending or future act of Congress that is enacted after the effective date of the bill but before January 1, 2017, including but not limited to the federal act known as the "Border Security, Economic Opportunity, and Immigration Modernization Act" (S. 744, 2013), that authorizes an undocumented immigrant who either entered the United States without inspection or who did not depart after expiration of a nonimmigrant visa, to attain a lawful status under federal law. Requires the State Bar to announce and post on its Internet Web site when an immigration reform act is enacted. B. "Immigration reform act services" means the services of an immigration consultant, as described, that are provided in connection with an immigration reform act. 1.Prohibits an immigration consultant from demanding or accepting the advance payment of any funds from a person for immigration reform act services before the enactment of an immigration reform act, as defined, and requires any funds received after the effective date of the bill, but before the enactment of an immigration reform act, to be refunded to the client promptly, but no later than 30 days after the receipt of the funds. Any funds received before the effective date of the bill, for which immigration reform act services were not rendered prior to the effective date of this bill, shall be deposited into a client trust account or refunded to the client. 2.Provides that if an immigration consultant providing immigration reform act services accepted funds prior to the effective date of these provisions, and the services provided in connection with payment of those funds were rendered, the AB 1159 Page 8 consultant shall promptly, but no later than 30 days after the effective date of this bill, provide the client with a statement of accounting describing the services rendered. Any funds received before the effective date of the bill, for which immigration reform act services were not rendered prior to the effective date of this bill, shall either be refunded to the client or deposited into a client trust account. An immigration consultant who deposits funds into a client trust account shall comply with all applicable provisions of this bill and provide the client a written notice in English and in the client's native language, that no benefits or relief are available, and that no application may be processed until the enactment of an immigration reform act, as specified, and that it is unlawful for an immigration consultant to demand or accept advance payment of any funds for immigration reform act services before enactment of an immigration reform act. Establishes, in addition to any other remedy, a civil penalty of up to $1,000 per day for each violation of this provision, as specified. 3.Increases the amount of the required bond from $50,000 to $100,000 for all immigration consultants, effective July 1, 2014. Comments According to the author's office, this bill is a consumer protection measure that establishes minimum statutory requirements and regulations through the State Bar for attorneys and non-lawyer document preparers who offer immigration services under comprehensive immigration reform. The goal of this bill is to protect individuals seeking a path to citizenship from fraud and abuse. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes According to the Senate Appropriations Committee: Minor costs in Fiscal Year (FY) 2013-14 of less than $20,000 (Business Fees Fund) to the SOS for form and Internet Web site changes, noticing, and postage. Additional costs in FY 2014-15 of approximately $35,000 (Business Fees Fund) to accommodate the increased workload associated with bond AB 1159 Page 9 processing and cease and desist notices/orders in response to the surety bond increase for immigration consultants. Minor, absorbable one-time costs to 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 this bill. Potential minor revenue increases (General Fund) for civil penalty collections to the extent additional civil actions are brought by the Attorney General. SUPPORT : (Verified 9/9/13) (reflects prior version of bill) State Bar of California (source) AFSCME, AFL-CIO California Catholic Conference California Labor Federation Los Angeles County Sheriff, Leroy D. Baca San Diego Volunteer Lawyer Program, Inc. UNITE HERE Local 30 Western Center on Law and Poverty OPPOSITION : (Verified 9/9/13) (reflects prior version of bill) AIDS Legal Referral Panel American Immigration Lawyers Association Asian American Bar Association of the Greater Bay Area Asian Law Alliance Asian Pacific Islander Legal Outreach Central American Resource Center Justice for Our Neighbors - Bay Area Immigration Taskforce National Center for Lesbian Rights National Lawyers Guild Bay Area Chapter Northern California Chapter of the American Immigration Lawyers Association AB 1159 Page 10 Northern California Chapter of the Iranian American Bar Association Omid Advocates Pangea Legal Services San Diego Chapter of the American Immigration Lawyers Association San Diego Chapter of the Iranian American Bar Association Southern California Chapter of the American Immigration Lawyers Association ARGUMENTS IN SUPPORT : According to the author and the bill's sponsor, the State Bar of California, this bill is proposed in anticipation of federal immigration reform legislation that is currently pending in Congress, and is intended to proactively head off problems in implementing immigration reform measures in California. The San Diego Volunteer Lawyer Program, Inc. (SDVLP) believes this bill is a reasonable approach to ensure consumer protection for immigrants who are seeking relief under the impending federal immigration reform bill, and argues that by putting in place these safeguards now, the state can protect the more than 2.5 million Californians who seek immigration reform act services from the potential fraud and abuse that has already created undue hardships for clients of immigration legal services. SDVLP states that oftentimes lawyers and consultants make guarantees to clients that they cannot fulfill, demand fees for services that they cannot possibly provide at this time, and even prey upon members of a community whose language barriers or unfamiliarity with the American legal system leave them susceptible to this fraud. ARGUMENTS IN OPPOSITION : The American Immigration Lawyers Association (AILA) argues that this bill places unusual burdens on a single group of attorneys which could have the effect of limiting access to legal services for the state's immigrants. AILA believes this bill should be made a two-year bill in order to allow all stakeholders to further discuss and develop precise protections. AILA argues that there is no demonstrated need for this bill stating that the State Bar's own reports show that immigration fraud accounts for a miniscule percentage of draws on the Client Security Fund, and that instead of being the problem, immigration lawyers are the ones who expose fraud and pick up the pieces when things go wrong. AB 1159 Page 11 AILA argues that there has not been an explanation why current statutes and State Bar rules are insufficient to redress any inappropriate behavior by a California attorney, and that some issues addressed by this bill are already subject to redress under existing law and State Bar rules. AILA states, "It is unprecedented and unwarranted for a state legislature to interfere in the attorney/client relationship at this level, and the one-size-fits all micromanagement of that agreement neither benefits clients nor protects immigrants from victimization." MW:ej 9/12/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****