BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1523


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          Date of Hearing:   April 14, 2015


                           ASSEMBLY COMMITTEE ON JUDICIARY


                                  Mark Stone, Chair


          AB 1523  
          (Committee on Judiciary) - As Introduced March 10, 2015


          SUBJECT:  ATTORNEYS: TRUST ACCOUNTS 


          KEY ISSUE:  SHOULD AN ERROR IN THE LAW GOVERNING TRUST ACCOUNTS  
          BE CORRECTED?



                                      SYNOPSIS


          This non-controversial bill is identical to AB 1402 (2013,  
          Assembly Committee on Judiciary) that passed out of this  
          Committee and out of the Assembly, but was not moved in the  
          Senate.  Attorneys are required to hold certain client funds in  
          trust accounts.  The rules about attorney trust accounts were  
          updated and clarified when AB 940 (2009, Assembly Committee on  
          Judiciary) passed unanimously out of both houses.   
          Unfortunately, AB 940 contained a typographical error, using the  
          word "in" where the word "on" was intended.  This bill corrects  
          the drafting error.  Like AB 1402 and AB 940, this bill has no  
          opposition. 
          SUMMARY:  Corrects an error regarding lawyer trust accounts.   
          Specifically, this bill substitutes the word "on" for the word  
          "in" with respect to interest-bearing lawyer trust funds.









                                                                    AB 1523


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          EXISTING LAW requires attorneys to establish trust accounts for  
          specified client funds in the manner specified by the State Bar.  
           (Bus. & Prof. Code Section 6213.)




          FISCAL EFFECT:  As currently in print this bill is keyed  
          non-fiscal.


          COMMENTS:  AB 940 (Judiciary) of 2009, sponsored by the State  
          Bar, codified existing rules and practices regarding client  
          funds in trust accounts, passed both houses unanimously and was  
          signed by the Governor.  Unfortunately, that bill was  
          inadvertently chaptered with a typographical error, using the  
          word "in" when the word "on" was intended with respect to  
          interest rates and dividends.  Because interest and dividends  
          are correctly paid "on" an account, not "in" an account, it  
          would be prudent to correct this error in order to promote  
          compliance and avoid unnecessary confusion.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          None on file




          Opposition









                                                                    AB 1523


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          None on file




          Analysis Prepared by:Alison Merrilees / JUD. / (916) 319-2334