BILL ANALYSIS Ó AB 1159 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1159 (Gonzalez) As Amended September 11, 2013 2/3 vote. Urgency ----------------------------------------------------------------- |ASSEMBLY: | |(May 9, 2013) |SENATE: |38-0 |(September 12, | | | | | | |2013) | ----------------------------------------------------------------- (vote not relevant) Original Committee Reference: ED. SUMMARY : Imposes various restrictions and obligations on persons who would offer services related to comprehensive immigration reform. The Senate amendments delete the Assembly version of this bill, and instead: 1)Provide 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 promptly refunded to the client, as specified. 2)Provide that: a) 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 promptly provide the client with a statement of accounting describing services rendered; and b) Any funds received before the effective date of this bill for which immigration reform act services were not rendered prior to the effective date, shall be either 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 specified written notice to the client, in English and the client's native language. AB 1159 Page 2 3)Provide that when a contract for legal services is required to be in writing, as specified, an attorney providing immigration reform act services shall provide a written notice informing the client where he or she may report complaints. 4)Require that notice to be attached or incorporated into any written contract for immigration reform act services, and, require the notice to be signed by both the attorney and client if it is attached to a written contract. This bill would require the notice to be in English and in one of the languages translated by the State Bar, if the contract for immigration reform act services was negotiated in one of those languages. 5)Require the State Bar to provide the form of the notice, post the form and translations of the form on its Internet Web site, and to translate the form into Spanish, Chinese, Tagalog, Vietnamese, Korean, Armenian, Persian, Japanese, Russian, Hindi, Arabic, French, Punjabi, Portuguese, Mon-Khmer, Hmong, Thai, and Gujarati. This bill would specify that an attorney who meets specified criteria shall be responsible for adding and translating the name of, toll-free number of, and information on the Internet Web site for, the bar or court in which he or she is admitted to practice law. 6)Provide that failure to comply with the notice and translation requirement renders the contract voidable at the option of the client, and the attorney shall, upon the contract being voided, be entitled to collect a reasonable fee. 7)Make the above notice and translation provision operative when the State Bar posts on its Internet Web site the required form and translations, and, require the State Bar to post the form and translations as soon as practicable but no later than 45 days after the effective date of the bill. 8)Define "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. This bill would require the State Bar to announce and post on its Internet Web site when an immigration reform act has been enacted. AB 1159 Page 3 9)Define immigration reform act services as 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, as specified, to attain lawful status under the immigration reform act. 10)Provide 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. 11)Provide that, in a civil action brought by the State Bar, the civil penalty collected shall be paid to the State Bar and allocated to provide free legal services related to immigration reform act services to clients of limited means or to a fund for the purposes of mitigating unpaid claims of injured immigrant clients. 12)Require the Board of Trustees of the State Bar to annually report any collection and expenditure of funds for the preceding calendar year to the Assembly and Senate Committees on Judiciary, as specified. 13)With respect to immigration consultants: a) Increases the amount of the bond to $100,000, effective July 1, 2014; b) Requires each service to be performed to be itemized with an explanation of the purpose and process of the service, and make corresponding changes; c) Revises the existing exemptions for non-profit tax exempt corporations who help client complete application forms by clarifying that only a nominal fee may be charged; d) Requires an immigration consultant who provides immigration reform act services to establish and deposit into a client trust account any funds received from a AB 1159 Page 4 client prior to performing those services; e) Allows an immigration consultant providing immigration reform act services for the client to withdraw funds received from that client: i) after completing one or more of the itemized services, as specified; or ii) after completing one or more of the documents listed, as specified; f) 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; g) 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; h) Provides that for funds received before the effective date of the bill: i) the consultant must provide the client with an accounting for services that were rendered; and ii) any funds received for which services have not yet been rendered must be refunded or deposited into a client trust account, as specified; i) 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; and j) Expressly prohibits the literal translation of the phrase "notary public" into Spanish as "notario public" or "notario." 14)State 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-attorney's holding themselves out to be authorized to practice law. In addition to the remedies and penalties under the Immigration Consultants Act (ICA), this bill provides that a person who violates the translation prohibition would be subject to a civil penalty of up to $1,000 per day for each violation, as specified. AB 1159 Page 5 FISCAL EFFECT : According to the Senate Appropriations Committee: 1)Minor costs in fiscal year (FY) 2013-14 of less than $20,000 (Special Fund*) to the Secretary of State (SOS) for form and Web site 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 and orders in response to the surety bond increase for immigration consultants. 2)Minor, absorbable one-time costs to the Department of Consumer Affairs (DCA) to revise regulations related to written contract requirements for immigration consultants. 3)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. 4)Non-reimbursable local costs for enforcement offset to a degree by fine revenue for violations of various prohibitions specified in the bill. 5)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 COMMENTS : In support of the bill, the author states: AB 1159 is an important consumer protection measure that will immediately assist in helping to protect the vulnerable community that will be seeking assistance under comprehensive immigration reform. Immigration fraud has already begun. A few bad actors are already making guarantees they cannot fulfill, and are already taking fees for services they cannot possibly provide until the federal government has acted. If immigration reform passes, it is estimated that 11 million nationwide will be impacted. Of that 11 million, approximately 2.55 million live in AB 1159 Page 6 California. No one knows how many of the 2.55 million will be victimized by fraud, but we do know the risk of fraud is very high since the fraud is already occurring. . . AB 1159 is designed to significantly help reduce fraud and to provide appropriate enforcement tools to recover against those individuals who do engage in fraudulent behavior. AB 1159 is a reasonable approach to ensure consumer protection for immigrants. By putting in place these safeguards now, the bill will help prevent the fraud at the front end, avoiding more significant repercussions down the road. Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334 FN: 0002759