Amended in Assembly April 18, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2878

Introduced by Committee on Judiciary (Assembly Members Mark Stone (Chair), Alejo, Chau, Chiu, Cristina Garcia, and Holden)

February 25, 2016

An act to amend Section 6140 begin delete of end delete begin insert of, and to repeal Section 6008.5 of, end insert the Business and Professions Code, relating to attorneys.

LEGISLATIVE COUNSEL’S DIGEST

AB 2878, as amended, Committee on Judiciary. Attorneys: annual membership fees.

The State Bar Act provides for the licensure and regulation of attorneys by the State Bar of California, a public corporation governed by a board of trustees. Existing law, until January 1, 2017, requires the board to charge an annual membership fee for active members of up to $315 for 2016. begin insert Existing law prohibits the Legislature, when the board of trustees places a charge upon or otherwise makes available all or any portion of the income or revenue from membership fees for the payment of security of an obligation of the State Bar and so long as any obligation remains unpaid, from reducing the maximum membership fee below the maximum in effect at the time the obligation is created or incurred and provides that this provision constitutes a covenant to the holder of such an obligation. end insert

This bill would, until January 1, 2018, require the board to charge an annual membership fee in the same amount for 2017. begin insert The bill would repeal the above provision prohibiting the Legislature from reducing the maximum membership fee and would state various findings and declarations of the Legislature. end insert

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert The Legislature finds and declares all of the
following: end insert

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(a) The protection of the public is required, by statute, to be the
highest priority of the State Bar of California and must be the
paramount focus of the State Bar, its employees, and, most
importantly, its board of trustees. All other duties and activities
of the State Bar are ancillary to its regulatory oversight of the
state’s more than 250,000 attorneys, over 185,000 of whom are
active members.

end insert begin insert

(b) Throughout its history, the State Bar has been the subject
of substantial controversies, including allegations of serious fiscal
and management improprieties, and most recently failure to
properly protect the public against the unauthorized practice of
law, including allowing hundreds of complaints to languish in a
drawer.

end insert begin insert

(c) In May 2015, the California State Auditor released its
biannual performance audit of the State Bar, reviewing the State
Bar’s backlog of discipline cases and its recent $75,000,000
purchase and renovation of a building in Los Angeles at three
times the cost originally estimated and requiring a loan against
the Public Protection Fund, which is designed to be an emergency
fund to protect the public in the event of a financial emergency.
The audit uncovered significant, questionable decisions made by
the State Bar in the handling of both matters, including that the
State Bar had not fully or consistently reported its backlog of
discipline cases and that, in order to reduce its backlog of
discipline cases, the State Bar made questionable choices,
potentially causing “significant risk to the public.”

end insert begin insert

(d) Most recently and without consultation with the Legislature,
the State Bar chose to replace the loan on the Los Angeles building,
along with a brand new loan for updating its San Francisco
building, with a securitization on future members dues, potentially
tying the hands of the Legislature in setting future dues amounts.

end insert begin insert

(e) As a result of the troubling findings of the audit, the
Legislature, as part of the 2015 State Bar dues legislation, imposed
important new preliminary reforms on the State Bar. First, the
Legislature mandated that the State Bar be subject to both the
California Public Records Act and the Bagley-Keene Open
Meetings Act. These good government reforms help ensure the
integrity, transparency, and accountability of the State Bar. Second,
the Legislature directed the California State Auditor to conduct a
full financial audit of the State Bar, which is due on May 15, 2016.
Finally, the State Bar must develop a workforce plan for its
attorney discipline system and a spending plan to determine the
level for dues to recommend to the Legislature, which are both
due on May 15, 2016. These reports should help inform the
Legislature regarding the appropriate actions to take in its
oversight responsibility of the State Bar and its own determination
of the proper dues amount.

end insert begin insert

(f) In 2011, the Legislature directed the State Bar to establish
a Governance in the Public Interest Task Force to make
recommendations to the Governor, the Supreme Court, and the
Legislature every three years, beginning May 15, 2014, for, among
other things, enhancing the protection of the public and ensuring
that protection of the public is the highest priority in the licensing,
regulation, and discipline of attorneys, to be reviewed by the
Assembly and Senate Committees on Judiciary in their regular
consideration of the annual State Bar dues measure. That first
report is now two years overdue and, although the Governance in
the Public Interest Task Force finally began holding meetings this
year, it appears that this already long overdue report will not be
completed during this legislative session.

end insert begin insert

(g) It is the intent of the Legislature, in fulfilling its important
oversight responsibility over the State Bar and the proper amount
State Bar members must pay in annual dues, that this bill serve as
the vehicle to implement possible recommendations for
substantially improving the operations, effectiveness, and efficiency
of the State Bar based on the 2016 California State Auditor’s audit
of the State Bar, along with the State Bar’s discipline workforce
and spending plans and any draft Governance Task Force report
or other information, in order to ensure that the dues are the
appropriate amount, that the State Bar becomes more accountable
to the public, and that public protection is, and remains, the State
Bar’s top priority.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 6008.5 of the end insert begin insert Business and Professions Code end insert

begin insert is repealed. end insert

begin delete

6008.5.  

Whenever the board has pledged, placed a charge upon,
or otherwise made available all or any portion of the income or
revenue from membership fees for the payment of security of an
obligation of the State Bar or any interest thereon, and so long as
any such obligation or any interest thereon remains unpaid, the
Legislature shall not reduce the maximum membership fee below
the maximum in effect at the time such obligation is created or
incurred, and the provisions of this section shall constitute a
covenant to the holder or holders of any such obligation.

end delete

begin delete SECTION 1. end delete

begin insert SEC. 3. end insert   

Section 6140 of the Business and Professions Code is
amended to read:

6140.  

(a) The board shall fix the annual membership fee for
active members for 2017 at a sum not exceeding three hundred
fifteen dollars ($315).

(b) The annual membership fee for active members is payable
on or before the first day of February of each year. If the board
finds it appropriate and feasible, it may provide by rule for payment
of fees on an installment basis with interest, by credit card, or other
means, and may charge members choosing any alternative method
of payment an additional fee to defray costs incurred by that
election.

(c) This section shall remain in effect only until January 1, 2018,
and, as of that date, is repealed, unless a later enacted statute, that
is enacted before January 1, 2018, deletes or extends that date.