BILL ANALYSIS Ó SB 345 Page 1 Date of Hearing: August 30, 2013 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair SB 345 (Evans) - As Amended: August 21, 2013 Policy Committee: JudiciaryVote:10-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill establishes attorney licensing fees for 2014. Specifically, this bill: 1) Continues the annual State Bar membership fee at $315 for 2014. (When combined with other existing statutory fees, the total annual dues next year for active membership will be $390; reduced from $410 in 2013.) 2) Increases, from $20 to $30, the portion of the membership fee that a licensee may voluntarily contribute to support legal aid programs. 3) Authorizes and directs the State Bar to participate in the Franchise Tax Board's (FTB's) interagency intercept collections program for unpaid fines and penalties, with any potential receipts to be for the support of legal aid programs. FISCAL EFFECT No net state costs. All administrative costs to the FTB and the State Controller for the interagency intercept collections are paid from a small portion of funds recovered for the agencies. COMMENTS Background and Purpose . Attorneys who wish to practice law in California generally must be admitted and licensed in this state and must be members of the State Bar. As of May 2013, the State Bar had 178,050 active members and 51,985 inactive members. The SB 345 Page 2 Bar's programs are financed almost exclusively by annual membership dues paid by attorneys as well as other fees paid by applicants seeking to practice law. This bill authorizes the State Bar to collect active membership dues that would total $390 for the year 2014. This amount reflects a $20 reduction from the current year due to the sunset of both a $10 assessment to fund information technology upgrades and a $10 assessment that was used to fund the purchase of a building in Los Angeles. The optional legal aid fee continues the existing mechanism by which members who choose to do so can help support nonprofit legal aid organizations that make free legal services available to poor Californians. Attorneys who elect not to make this contribution, which would increase from $20 to $30, may deduct this amount from their dues. The increased revenue from this assessment will partially offset a reduction of $2 million annually that the Legislature has required the Bar to contribute in recent years, but is not being continued. Overall funding for legal aid services has declined in recent years and will continue to decline as the demand for such services is increasing. Federal funding to California from the Legal Services Corporation declined by $2 million from 2012 to 2013. Further reductions are expected due to federal sequestration and a reallocation of state grant amounts based on the 2010 census. In addition, the main source of state funding for legal services-interest on lawyer trust accounts (IOLTA)-has declined precipitously in recent years due to historically low interest rates. In order to provide some offset to these reductions, this bill directs the Bar to participate in the FTB's Interagency Intercept Collections (IIC) program in an effort to see if uncollected fines and penalties against members can be collected. Because many of these outstanding assessments are quite old, the potential for collection is speculative, however. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081