Amended in Assembly June 2, 2016

Amended in Assembly May 27, 2016

Amended in Assembly April 18, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 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 Sections 6001, 6011,begin insert 6013.3, 6013.5,end insert 6015, 6016, 6019, 6021, 6022, 6026.7,begin insert 6030,end insert 6060.2, 6060.25, 6086.5, and 6140 of,begin insert to amend, repeal, and add Section 6145 of,end insert to addbegin delete Section 6140.56,end deletebegin insert Sections 6001.3, 6134, and 6140.56 to, to add and repeal Section 6075.6 of,end insert and to repeal Sections 6008.5, 6009.7, 6012, 6013.2, 6018, and 6026.5 of, the Business and Professions Code, relating to the State Bar.

LEGISLATIVE COUNSEL’S DIGEST

AB 2878, as amended, Committee on Judiciary. Attorneys: State Bar: board of trustees.

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. That act requires 6 members of the 19-member board to be attorneys elected from State Bar Districts. That act provides that the State Bar is subject to the Bagley-Keene Open Meeting Act and the California Public Records Act, as specified. That act, until January 1, 2017, requires the board to charge an annual membership fee for active members of up to $315 for 2016.begin insert The act requires the board of trustees to elect or select the president, vice president, and treasurer of the State Bar, as specified.end 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.begin insert The act requires the board of trustees to contract with the California State Auditor’s Office to conduct a performance audit of the State Bar’s operations, as specified.end insert That act establishes the State Bar Court to act in the place of the board of trustees in the determination of disciplinary proceedings, as specified. That act authorizes the State Bar to raise additional revenue by any lawful means, including, but not limited to, the creation of foundations or not-for-profit corporations. That act requires the board to establish and administer a Client Security Fund to relieve or mitigate pecuniary losses caused by dishonest conduct of active members of the State Bar, as specified.

This bill would provide that the board of trustees consist of no more than 19 members and no fewer than 13 members and would require the board to transition to a 13-member board, as specified. The bill would remove from the board attorney members elected from State Bar Districts and would make conforming changes. The bill would require each member of the board appointed after December 31, 2016, to have demonstrated educational or experience expertise, or both, in one of 5 specified areas, including public finance.begin delete Thisend deletebegin insert The bill would require that a minimum of 7 members of the board be public members, as appointed by specified entities, and would provide that no motion of the board can be approved unless a majority of the public members approve the motion. The bill would require the Supreme Court to select from its appointed members a president and vice president of the State Bar instead of the board of trustees electing a president and vice president.end insert

begin insert

This bill would create the California State Bar Governance Commission and would provide that it consists of 9 members to be appointed as specified. The bill would require the commission to evaluate all issues of governance of the State Bar, including, but not limited to, a full review of other states with attorney regulatory structures that are different than the State Bar, in order to recommend the best governance structure for the State Bar and to ensure that protection of the public is the highest priority of the State Bar in its regulatory duties. The bill would require the commission to provide a report to the Governor, the Chief Justice of the California Supreme Court, and the Senate and Assembly Committees on Judiciary by April 30, 2017. The bill would repeal these provisions as of January 1, 2018.

end insert
begin insert

This bill would require the Chief Justice of the California Supreme Court to appoint a State Bar enforcement program monitor prior to March 31, 2017, and would require the program enforcement monitor to evaluate the disciplinary system and procedures of the State Bar, as specified. The bill would require the program enforcement monitor to submit an initial report no later than October 1, 2019, and to issue a final report before March 31, 2020. The bill would make these provisions inoperative on March 31, 2020, and would repeal the provision as of January 1, 2021.

end insert
begin insert

The bill would require the board of trustees to contract with the California State Auditor’s Office for an audit of its revenues, expenditures, reserves, and its financial statements for each fiscal year and would require the California State Auditor, for the performance audit due in January 2017, to review all of the State Bar’s expenses, including, but not limited to, executive salaries.

end insert

begin insertThisend insert bill would provide that access to records of the State Bar Court is subject to the rules and laws applicable to the judiciary instead of the California Public Records Act and would exempt the State Bar Court from the Bagley-Keene Open Meeting Act.

This bill, until January 1, 2018, would require the board to charge an annual membership fee in a specified amount for 2017. The bill would repeal the provision prohibiting the Legislature from reducing the maximum membership fee and the provision authorizing the State Bar to raise additional revenue by any lawful means.begin insert The bill would specify that the State Bar is empowered to raise additional revenue by any lawful means and would prohibit the State Bar from creating any foundation or nonprofit corporations, as specified.end insert The bill would require the State Bar to conduct a thorough analysis of the Client Security Fund and to submit a report to the Legislature on its analysis of that fund by March 15, 2017, as specified. The bill would state various findings and declarations of the Legislature.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

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

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

P4    1

SECTION 1.  

The Legislature finds and declares all of the
2following:

3(a) The protection of the public is required, by statute, to be the
4highest priority of the State Bar of California and must be the
5paramount focus of the State Bar, its employees, and, most
6importantly, its board of trustees. All other duties and activities of
7the State Bar are ancillary to its regulatory oversight of the state’s
8more than 250,000 attorneys, over 185,000 of whom are active
9members.

10(b) Throughout its history, the State Bar has been the subject
11of substantial controversies, including allegations of serious fiscal
12and management improprieties, and most recently failure to
13properly protect the public against the unauthorized practice of
14law, including allowing hundreds of complaints to languish in a
15drawer.

16(c) In May 2015, the California State Auditor released its
17biannual performance audit of the State Bar, reviewing the State
18Bar’s backlog of discipline cases and its recent $75,000,000
19purchase and renovation of a building in Los Angeles at three times
20the cost originally estimated and requiring a loan against the Public
21Protection Fund, which is designed to be an emergency fund to
22protect the public in the event of a financial emergency. The audit
23uncovered significant, questionable decisions made by the State
24Bar in the handling of both matters, including that the State Bar
25had not fully or consistently reported its backlog of discipline cases
26and that, in order to reduce its backlog of discipline cases, the State
27Bar made questionable choices, potentially causing “significant
28risk to the public.”

29(d) Most recently and without consultation with the Legislature,
30the State Bar chose to replace the loan on the Los Angeles building,
31along with a brand new loan for updating its San Francisco
P5    1building, with a securitization on future members dues, potentially
2tying the hands of the Legislature in setting future dues amounts.

3(e) As a result of the troubling findings of the audit, the
4Legislature, as part of the 2015 State Bar dues legislation, imposed
5important new preliminary reforms on the State Bar. First, the
6Legislature mandated that the State Bar be subject to both the
7California Public Records Act and the Bagley-Keene Open
8Meetings Act. These good government reforms help ensure the
9integrity, transparency, and accountability of the State Bar. Second,
10the Legislature directed the California State Auditor to conduct a
11full financial audit of the State Bar, which is due on May 15, 2016.
12Finally, the State Bar must develop a workforce plan for its attorney
13discipline system and a spending plan to determine the level for
14dues to recommend to the Legislature, which are both due on May
1515, 2016. These reports should help inform the Legislature
16regarding the appropriate actions to take in its oversight
17responsibility of the State Bar and its own determination of the
18proper dues amount.

19(f) In 2011, the Legislature directed the State Bar to establish
20a Governance in the Public Interest Task Force to make
21recommendations to the Governor, the Supreme Court, and the
22Legislature every three years, beginning May 15, 2014, for, among
23other things, enhancing the protection of the public and ensuring
24that protection of the public is the highest priority in the licensing,
25regulation, and discipline of attorneys, to be reviewed by the
26Assembly and Senate Committees on Judiciary in their regular
27consideration of the annual State Bar dues measure. That first
28report is now two years overdue and, although the Governance in
29the Public Interest Task Force finally began holding meetings this
30year, it appears that this already long overdue report will not be
31completed during this legislative session.

32(g) It is the intent of the Legislature, in fulfilling its important
33oversight responsibility over the State Bar and the proper amount
34State Bar members must pay in annual dues, that this bill serve as
35the vehicle to implement possible recommendations for
36substantially improving the operations, effectiveness, and efficiency
37of the State Bar based on the 2016 California State Auditor’s audit
38of the State Bar, along with the State Bar’s discipline workforce
39and spending plans and any draft Governance Task Force report
40or other information, in order to ensure that the dues are the
P6    1appropriate amount, that the State Bar becomes more accountable
2to the public, and that public protection is, and remains, the State
3Bar’s top priority.

4

SEC. 2.  

Section 6001 of the Business and Professions Code is
5amended to read:

6

6001.  

The State Bar of California is a public corporation. It is
7hereinafter designated as the State Bar.

8The State Bar has perpetual succession and a seal and it may sue
9and be sued. It may, for the purpose of carrying into effect and
10promoting its objectives:

11(a) Make contracts.

12(b) Borrow money, contract debts, issue bonds, notes and
13debentures and secure the payment or performance of its
14obligations.

15(c) Own, hold, use, manage and deal in and with real and
16personal property.

17(d) Construct, alter, maintain and repair buildings and other
18improvements to real property.

19(e) Purchase, lease, obtain options upon, acquire by gift, bequest,
20devise or otherwise, any real or personal property or any interest
21therein.

22(f) Sell, lease, exchange, convey, transfer, assign, encumber,
23pledge, dispose of any of its real or personal property or any
24interest therein, including without limitation all or any portion of
25its income or revenues from membership fees paid or payable by
26members.

27(g) Do all other acts incidental to the foregoing or necessary or
28expedient for the administration of its affairs and the attainment
29of its purposes.

30Pursuant to those powers enumerated in subdivisions (a) to (g),
31inclusive, it is recognized that the State Bar has authority to raise
32revenue in addition to that provided for in Section 6140 and other
33 statutory provisions.begin insert The State Bar is empowered to raise that
34additional revenue by any lawful means. However, as of December
3531, 2016, the State Bar shall not create any foundations or
36nonprofit corporations.end insert

37The State Bar shall conspicuously publicize to its members in
38the annual dues statement and other appropriate communications,
39including its Web site and electronic communications, that its
40members have the right to limit the sale or disclosure of member
P7    1information not reasonably related to regulatory purposes. In those
2communications the State Bar shall note the location of the State
3Bar’s privacy policy, and shall also note the simple procedure by
4which a member may exercise his or her right to prohibit or restrict,
5at the member’s option, the sale or disclosure of member
6information not reasonably related to regulatory purposes. On or
7before May 1, 2005, the State Bar shall report to the Assembly
8and Senate Committees on Judiciary regarding the procedures that
9it has in place to ensure that members can appropriately limit the
10use of their member information not reasonably related to
11regulatory purposes, and the number of members choosing to
12utilize these procedures.

13No law of this state restricting, or prescribing a mode of
14procedure for the exercise of powers of state public bodies or state
15agencies, or classes thereof, including, but not by way of limitation,
16the provisions contained in Division 3 (commencing with Section
1711000), Division 4 (commencing with Section 16100), and Part 1
18(commencing with Section 18000) and Part 2 (commencing with
19Section 18500) of Division 5, of Title 2 of the Government Code,
20shall be applicable to the State Bar, unless the Legislature expressly
21so declares. Notwithstanding the foregoing or any other law,
22pursuant to Sections 6026.7 and 6026.11, the State Bar is subject
23to the California Public Records Act (Chapter 3.5 (commencing
24with Section 6250) of Division 7 of Title 1 of the Government
25Code) and, commencing April 1, 2016, the Bagley-Keene Open
26Meeting Act (Article 9 (commencing with Section 11120) of
27Chapter 1 of Part 1 of Division 3 of Title 2 of the Government
28Code).

29begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 6001.3 is added to the end insertbegin insertBusiness and Professions
30Code
end insert
begin insert, to read:end insert

begin insert
31

begin insert6001.3.end insert  

(a) There is hereby created, as of January 1, 2017,
32the California State Bar Governance Commission, consisting of
33nine members, who shall be appointed by February 1, 2017, and
34selected as follows:

35
(1) Two members appointed by the Governor.

36
(2) Three members appointed by the Chief Justice of the
37California Supreme Court.

38
(3) Two members appointed by the Speaker of the Assembly.

39
(4) Two members appointed by the Senate Committee on Rules.

P8    1
(b) The chairperson of the commission shall be elected by the
2members of the commission and shall preside at meetings of the
3commission.

4
(c) Appointed members of the commission shall not receive a
5salary, but shall be entitled to a per diem allowance of fifty dollars
6($50) for each day’s attendance at a meeting of the commission,
7not to exceed three hundred dollars ($300) in any month, and
8reimbursement for expenses incurred in the performance of their
9duties under this chapter, including travel and other necessary
10expenses.

11
(d) The commission may adopt bylaws for the regulation of its
12affairs and the conduct of its business.

13
(e) The commission shall meet on the call of the chairperson,
14at the request of a majority of the members, or at the request of
15the California Chief Justice of the Supreme Court. A majority of
16all members of the commission constitutes a quorum for the
17transaction of business.

18
(f) The State Bar shall furnish all administrative assistance
19required by the commission.

20
(g) The commission shall evaluate all issues of governance of
21the State Bar, including, but not limited to, a full review of other
22states with attorney regulatory structures that are different than
23the State Bar and a possible separation of the State Bar’s
24regulatory and trade association functions, in order to recommend
25the best governance structure for the State Bar to ensure that the
26protection of the public is the highest priority in the licensing,
27regulation, and discipline of attorneys and that the State Bar
28appropriately functions as a government agency subject to laws
29that apply to similar regulatory bodies. The commission shall, by
30April 30, 2017, provide a report to the Governor, the Chief Justice
31of the California Supreme Court, and the Senate and Assembly
32Committees on Judiciary on its recommendations, along with an
33implementation plan for those recommendations. If the commission
34does not reach a consensus on all of the recommendations in its
35report, the dissenting members of the commission may prepare
36and submit a dissenting report to the same entities described in
37this subdivision.

end insert
38

begin deleteSEC. 3.end delete
39
begin insertSEC. 4.end insert  

Section 6008.5 of the Business and Professions Code
40 is repealed.

P9    1

begin deleteSEC. 4.end delete
2
begin insertSEC. 5.end insert  

Section 6009.7 of the Business and Professions Code
3 is repealed.

4

begin deleteSEC. 5.end delete
5
begin insertSEC. 6.end insert  

Section 6011 of the Business and Professions Code is
6amended to read:

7

6011.  

(a) The board shall consist of no more than 19 members
8and no fewer than 13 members.

9(b) It is the intent of the Legislature that the board consist of no
10more than 19 members and no fewer than 13 members during the
11period of transition from a 19-member board to a 13-member
12board. It is the intent of the Legislature that the board decrease its
13size without shortening, lengthening, or abolishing terms
14commencing prior to December 31, 2016, with the ultimate goal
15of instituting a 13-member board no later than October 31, 2019.
16It is the intent of the Legislature that this transition occur by the
17expiration of the terms of the elected members who are serving
18on the board as of December 31, 2016.

19(c) Each member appointed after December 31, 2016, shall have
20demonstrated educational or experience expertise, or both, in at
21least one of the following:

22(1) Public finance.

23(2) Public administration.

24(3) Business or financial management.

25(4) State government, particularly prior regulatory experience.

26(5) Legal ethics.

27

begin deleteSEC. 6.end delete
28
begin insertSEC. 7.end insert  

Section 6012 of the Business and Professions Code is
29repealed.

30

begin deleteSEC. 7.end delete
31
begin insertSEC. 8.end insert  

Section 6013.2 of the Business and Professions Code
32 is repealed.

33begin insert

begin insertSEC. 9.end insert  

end insert

begin insertSection 6013.3 of the end insertbegin insertBusiness and Professions Codeend insert
34
begin insert is amended to read:end insert

35

6013.3.  

(a) One attorney member of the board shall be
36appointed by the Senate Committee onbegin delete Rules and one attorney
37member shall be appointed by the Speaker of the Assembly.end delete
begin insert Rules.end insert

38(b) An attorney member appointed pursuant to this section shall
39serve for a term of three years. An appointed attorney member
40may be reappointed pursuant to this section.

P10   1begin insert

begin insertSEC. 10.end insert  

end insert

begin insertSection 6013.5 of the end insertbegin insertBusiness and Professions Codeend insert
2
begin insert is amended to read:end insert

3

6013.5.  

begin deleteNotwithstanding any other provision of law, six end delete
4begin insert(a)end insertbegin insertend insertbegin insertEffective January 1, 2017, a minimum of seven end insertmembers of
5the board shall be members of the public who have never been
6members of the State Bar or admitted to practice before any court
7in the United States.begin delete They shall be appointed through 1982 by the
8Governor, subject to the confirmation of the Senate.end delete

begin delete

9Each

end delete

10begin insert(b)end insertbegin insertend insertbegin insertEachend insert ofbegin delete suchend deletebegin insert theseend insert members shall serve for a term of three
11years, commencing at the conclusion of the annual meeting next
12succeeding hisbegin delete appointment, except that for the initial term after
13enactment of this section, two shall serve for one year, two for two
14years, and the other two for three years, as determined by lot.end delete
begin insert or
15her appointment.end insert

begin delete

16In 1983

end delete

17begin insert (c)end insertbegin insertend insertbegin insertEffective January 1, 2017,end insert one public member shall be
18appointed by the Senate Committee on Rules andbegin delete oneend deletebegin insert twoend insert public
19begin delete memberend deletebegin insert membersend insert shall be appointed by the Speaker of the
20Assembly.

begin delete

21For each of the years, 1984 and 1985, two

end delete

22begin insert(d)end insertbegin insertend insertbegin insertFourend insert public members shall be appointed by the Governor,
23subject to the confirmation of the Senate.

begin delete

24Each

end delete

25begin insert(e)end insertbegin insertend insertbegin insertEach respectiveend insert appointing authority shall fill any vacancy
26in and make any reappointment to each respective office.

begin insert

27
(f) It is the intent of the Legislature that the increase of public
28members appointed by the Speaker of the Assembly, from one to
29two, as required by this measure adding this subdivision, occur
30at the expiration of the terms of the attorney members who are
31appointed by the Speaker of the Assembly and serving on the board
32as of December 31, 2016.

end insert
33

begin deleteSEC. 8.end delete
34
begin insertSEC. 11.end insert  

Section 6015 of the Business and Professions Code
35 is amended to read:

36

6015.  

No person is eligible for attorney membership on the
37board unless all of the following conditions are satisfied:

38(a) He or she is an active member of the State Bar.

39(b) Either:

P11   1(1) Prior to October 31, 2019, if elected, he or she maintains
2his or her principal office for the practice of law within the State
3Bar district from which he or she is elected.

4(2) If appointed by the Supreme Court or the Legislature, he or
5she maintains his or her principal office for the practice of law
6within the State of California.

7(c) If newly appointed after December 31, 2016, he or she
8satisfies the requirements of subdivision (c) of Section 6011.

9

begin deleteSEC. 9.end delete
10
begin insertSEC. 12.end insert  

Section 6016 of the Business and Professions Code
11 is amended to read:

12

6016.  

The term of office of each attorney member of the board
13shall commence at the conclusion of the annual meeting next
14succeeding his or her election or appointment, and he or she shall
15hold office until his or her successor is elected or appointed and
16qualified. For the purposes of this section, the time intervening
17between any two successive annual meetings shall be deemed to
18be one year.

19The board of trustees may provide by rule for an interim board
20to act in the place and stead of the board when because of vacancies
21during terms of office there is less than a quorum of the board.

22

begin deleteSEC. 10.end delete
23
begin insertSEC. 13.end insert  

Section 6018 of the Business and Professions Code
24 is repealed.

25

begin deleteSEC. 11.end delete
26
begin insertSEC. 14.end insert  

Section 6019 of the Business and Professions Code
27 is amended to read:

28

6019.  

Each place upon the board for which a member is to be
29appointed shall for the purposes of the appointment be deemed a
30separate office.

31

begin deleteSEC. 12.end delete
32
begin insertSEC. 15.end insert  

Section 6021 of the Business and Professions Code
33 is amended to read:

34

6021.  

(a) (1) begin deleteWithin end deletebegin insertThe Supreme Court shall select from its
35appointed members a president and a vice president to serve in
36the absence of the president.end insert

37begin insert(2)end insertbegin insertend insertbegin insertWithinend insert the period of 90 days next preceding the annual
38meeting, the board, at a meeting called for that purpose, shallbegin delete elect
39the president, vice president, andend delete
begin insert select theend insert treasurer for the ensuing
P12   1year.begin delete The president, the vice president, and the treasurer shall be
2elected from among all members of the board.end delete

begin delete

3(2)

end delete

4begin insert(3)end insert Thebegin delete newly electedend delete president, vice president, and treasurer
5shall assume the duties of their respective offices at the conclusion
6of the annual meeting following theirbegin delete election.end deletebegin insert appointment or
7selection.end insert

8(b) The term of the board president shall be one year, except
9that he or she may bebegin delete reelectedend deletebegin insert reappointedend insert to a second one-year
10term as the board president.

11(c) Notwithstanding the provisions of Section 6011 regarding
12a 13-member board, if the president is elected from among those
13members of the board whose terms on the board expire by that
14year and has not been reappointed to another term under Section
156013.1 or 6013.5, the president shall serve as a 14th member of
16the board during his or her one-year term, and he or she may vote.

17

begin deleteSEC. 13.end delete
18
begin insertSEC. 16.end insert  

Section 6022 of the Business and Professions Code
19 is amended to read:

20

6022.  

The officers of the State Bar shall be selected annually
21by the board and need not be a member of the State Bar.

22

begin deleteSEC. 14.end delete
23
begin insertSEC. 17.end insert  

Section 6026.5 of the Business and Professions Code,
24as added by Section 3 of Chapter 537 of the Statutes of 2015, is
25repealed.

26

begin deleteSEC. 15.end delete
27
begin insertSEC. 18.end insert  

Section 6026.7 of the Business and Professions Code,
28as added by Section 5 of Chapter 537 of the Statutes of 2015, is
29 amended to read:

30

6026.7.  

(a) The State Bar is subject to the Bagley-Keene Open
31Meeting Act (Article 9 (commencing with Section 11120) of
32Chapter 1 of Part 1 of Division 3 of Title 2 of the Government
33Code) and all meetings of the State Bar are subject to the
34Bagley-Keene Open Meeting Act.

35(b) Notwithstanding any other law, the Bagley-Keene Open
36Meeting Act shall not apply to the Judicial Nominees Evaluation
37Commission, the Committee of Bar Examiners, or the State Bar
38Court.

P13   1(c) In addition to the grounds authorized in the Bagley-Keene
2Open Meeting Act, a closed session may be held for those
3meetings, or portions thereof, relating to both of the following:

4(1) Appeals to the board from decisions of the Board of Legal
5Specialization refusing to certify or recertify an applicant or
6suspending or revoking a specialist’s certificate.

7(2) The preparation, approval, grading, or administration of
8examinations for certification of a specialist.

9begin insert

begin insertSEC. 19.end insert  

end insert

begin insertSection 6030 of the end insertbegin insertBusiness and Professions Codeend insert
10
begin insert is amended to read:end insert

11

6030.  

begin insert(a)end insertbegin insertend insertThe board shall be charged with the executive
12function of the State Bar and the enforcement of the provisions of
13this chapter.begin delete Theend delete

14begin insert(b)end insertbegin insertend insertbegin insertTheend insert violation or threatened violation of any provision of
15Articles 7 (commencing with Section 6125) and 9 (commencing
16with Section 6150) of this chapter may be enjoined in a civil action
17brought in the superior court by the State Bar and no undertaking
18shall be required of the State Bar.

begin insert

19
(c) No motion of the board can be approved unless a majority
20of the public members approve the motion.

end insert
21

begin deleteSEC. 16.end delete
22
begin insertSEC. 20.end insert  

Section 6060.2 of the Business and Professions Code
23 is amended to read:

24

6060.2.  

(a) All investigations or proceedings conducted by
25the State Bar concerning the moral character of an applicant shall
26be confidential and shall not be disclosed pursuant to any state
27law, including, but not limited to, the California Public Records
28Act (Chapter 3.5 (commencing with Section 6250) of Division 7
29of Title 1 of the Government Code) unless the applicant, in writing,
30waives the confidentiality.

31(b) Notwithstanding subdivision (a), the records of the
32proceeding may be disclosed in response to either of the following:

33(1) A lawfully issued subpoena.

34(2) A written request from a government agency responsible
35for either the enforcement of civil or criminal laws or the
36professional licensing of individuals that is conducting an
37investigation about the applicant.

38

begin deleteSEC. 17.end delete
39
begin insertSEC. 21.end insert  

Section 6060.25 of the Business and Professions Code
40 is amended to read:

P14   1

6060.25.  

(a) Notwithstanding any other law, any identifying
2information submitted by an applicant to the State Bar for
3admission and a license to practice law and all State Bar admission
4records, including, but not limited to, bar examination scores, law
5school grade point average (GPA), undergraduate GPA, Law
6School Admission Test scores, race or ethnicity, and any
7information contained within the State Bar Admissions database
8or any file or other data created by the State Bar with information
9submitted by the applicant that may identify an individual
10applicant, other than information described in subdivision (b), shall
11be confidential and shall not be disclosed pursuant to any state
12law, including, but not limited to, the California Public Records
13 Act (Chapter 3.5 (commencing with Section 6250) of Division 7
14of Title 1 of the Government Code).

15(b) This section does not prohibit the disclosure of any of the
16following:

17(1) The names of applicants who have passed any examination
18administered, given, or prescribed by the Committee of Bar
19Examiners.

20(2) Information that is provided at the request of an applicant
21to another jurisdiction where the applicant is seeking admission
22to the practice of law.

23(3) Information provided to a law school that is necessary for
24the purpose of the law school’s compliance with accreditation or
25regulatory requirements.

26(4) Information provided to the National Conference of Bar
27Examiners or a successor nonprofit organization in connection to
28the State Bar’s administration of any examination.

29(c) Disclosure of any of the information in paragraphs (2) to
30(4), inclusive, of subdivision (b) shall not constitute a waiver under
31Section 6254.5 of the Government Code of the exemption from
32disclosure provided for in subdivision (a) of this section.

33begin insert

begin insertSEC. 22.end insert  

end insert

begin insertSection 6075.6 is added to the end insertbegin insertBusiness and
34Professions Code
end insert
begin insert, to read:end insert

begin insert
35

begin insert6075.6.end insert  

(a) (1) The Chief Justice of the California Supreme
36Court shall appoint a State Bar enforcement program monitor
37prior to March 31, 2017. The Chief Justice of the California
38Supreme Court shall advertise the availability of the position and
39conduct interviews of candidates for the position. The applicant
40for the position shall have investigative experience, shall be
P15   1familiar with California laws and procedures, and, preferably,
2shall be familiar with the rules and procedures of the State Bar
3lawyer discipline system and relevant administrative procedures.
4The monitor may be a state employee or his or her services may
5be provided pursuant to contract.

6
(2) The Chief Justice of the California Supreme Court shall
7supervise the monitor and may terminate or dismiss him or her
8from this position.

9
(b) (1) The enforcement program monitor shall monitor and
10evaluate the disciplinary system and procedures of the State Bar.
11The enforcement program monitor shall make his or her highest
12priority the reform and reengineering of the State Bar’s
13enforcement program and operations and the improvement of the
14overall efficiency of the State Bar’s disciplinary system so that the
15State Bar is successfully and consistently protecting the public.

16
(2) This monitoring duty shall include, but not be limited to, the
17prioritization of cases most impacting public protection, improving
18the timeframe for the handling of complaints and in the rendering
19of initial decisions on complaints, the efficiency of the system, the
20fairness and courtesy given to complainants, the adequacy of the
21staffing and the budget allocated to the discipline section of the
22State Bar, the reduction of the complaint backlog, the consistency
23in the application of sanctions or discipline imposed, the
24implementation of laws affecting discipline and the State Bar’s
25operations, disciplinary standards and rules, staff concerns
26regarding disciplinary matters or procedures, and the State Bar’s
27cooperation with other governmental entities charged with
28enforcing related laws and regulations that affect members of the
29State Bar.

30
(3) The monitor shall exercise no authority over the State Bar’s
31discipline operations or staff, however, the State Bar and its staff
32shall cooperate with the program enforcement monitor, and the
33Bar shall provide data, information, and case files as requested
34by the enforcement program monitor to perform all of his or her
35duties. The enforcement program monitor shall have the same
36access to documents as the Chief Justice of the California Supreme
37 Court.

38
(c) The enforcement program monitor shall submit an initial
39written report of his or her findings and conclusions to the State
40Bar, the Supreme Court, and the Legislature no later than October
P16   11, 2019, and be available to make oral reports to each if requested
2to do so. The initial report shall include an analysis of the sources
3of information that resulted in each disciplinary action imposed
4since January 1, 2016. The monitor may also provide additional
5information to either the Supreme Court, the State Bar, or the
6Legislature at his or her discretion or at the request of the Supreme
7Court, the State Bar, or the Legislature. The program enforcement
8monitor shall make his or her reports available to the public or
9the media. The monitor shall make every effort to provide the State
10Bar with an opportunity to reply to any facts, findings, issues, or
11conclusions in his or her reports with which the State Bar may
12disagree.

13
(d) The enforcement program monitor shall issue a final report
14prior to March 31, 2020.

15
(e) This section shall become inoperative on March 31, 2020,
16and as of January 1, 2020, shall be repealed.

end insert
17

begin deleteSEC. 18.end delete
18
begin insertSEC. 23.end insert  

Section 6086.5 of the Business and Professions Code
19 is amended to read:

20

6086.5.  

The board of trustees shall establish a State Bar Court,
21to act in its place and stead in the determination of disciplinary
22and reinstatement proceedings and proceedings pursuant to
23subdivisions (b) and (c) of Section 6007 to the extent provided by
24rules adopted by the board of trustees pursuant to this chapter. In
25these proceedings the State Bar Court may exercise the powers
26and authority vested in the board of trustees by this chapter,
27including those powers and that authority vested in committees
28of, or established by, the board, except as limited by rules of the
29board of trustees within the scope of this chapter.

30Access to records of the State Bar Court shall be governed by
31court rules and laws applicable to records of the judiciary and not
32the California Public Records Act (Chapter 3.5 (commencing with
33Section 6250) of Division 7 of Title 1 of the Government Code).

34For the purposes of Sections 6007, 6043, 6049, 6049.2, 6050,
356051, 6052, 6077 (excluding the first sentence), 6078, 6080, 6081,
36and 6082, “board” includes the State Bar Court.

37Nothing in this section shall authorize the State Bar Court to
38adopt rules of professional conduct or rules of procedure.

39The Executive Committee of the State Bar Court may adopt
40rules of practice for the conduct of all proceedings within its
P17   1jurisdiction. These rules may not conflict with the rules of
2procedure adopted by the board, unless approved by the Supreme
3Court.

4begin insert

begin insertSEC. 24.end insert  

end insert

begin insertSection 6134 is added to the end insertbegin insertBusiness and Professions
5Code
end insert
begin insert, to read:end insert

begin insert
6

begin insert6134.end insert  

(a) When the Office of the Chief Trial Counsel becomes
7aware of an allegation that a person not licensed to practice law
8in California has practiced or held himself or herself out as
9practicing law or entitled to practice law in the state, the office’s
10intake unit shall open a nonattorney complaint against that person
11for evaluation and processing.

12
(b) The intake unit shall open a case record in the office’s case
13management system with the complaint form received date. The
14complaint form received date shall be the date the State Bar first
15received the complaint. Evaluation and processing of the
16nonattorney complaint shall include, but not be limited to, all of
17the following:

18
(1) Creation of a summary of the allegation or allegations in
19the case record and assignment to staff, including inputting staff
20assignment codes into the case management system.

21
(2) Identifying the source of the complaint.

22
(3) Identifying the relevant practice area of law, such as
23immigration, loan modification, or debt resolution, and recording
24the relevant practice area of law in the case record.

25
(4) Identifying whether the allegations include potential identity
26theft of a licensed attorney’s identity and, if so, contacting the
27potential victim attorney to verify whether the attorney is aware
28of the potential identify theft and whether he or she has notified
29law enforcement.

30
(5) Evaluating the nonattorney complaint for unauthorized
31 practice of law allegations, which includes opening a
32corresponding attorney complaint case record, if appropriate,
33such as in the case in which the nonattorney complaint also
34identifies a licensed California attorney potentially aiding or
35abetting the person in the unauthorized practice of law.

36
(6) Seeking additional information from the complainant or
37other sources, such as the Internet, when the nonattorney complaint
38does not provide specific or sufficient facts to establish that the
39unauthorized practice of law may have occurred.

P18   1
(7) Determining whether to forward the complaint to the
2enforcement unit for investigation.

3
(c) If the nonattorney complaint sufficiently alleges an
4unauthorized practice of law violation, the intake unit shall do
5both of the following:

6
(1) Forward the nonattorney complaint to the enforcement unit
7for further action.

8
(2) Refer the matter to law enforcement or other appropriate
9agency for consideration of criminal or other enforcement action,
10as specified in subdivisions (f) and (g).

11
(d) If the nonattorney complaint sufficiently alleges the use of
12“notario,” “notario publico,” or other words or phrases in
13violation of Section 6126.7 or there is other evidence of a violation
14of Section 6126.7, the intake unit shall forward the complaint to
15the enforcement unit for further action.

16
(e) If the nonattorney complaint does not sufficiently allege an
17unauthorized practice of law violation or a violation of Section
186126.7, the intake unit shall do all of the following:

19
(1) Notify the complainant in writing of the determination.

20
(2) Advise the complainant in writing of the opportunity to seek
21reconsideration of the determination.

22
(3) Process the case for closure, including updating the case
23record.

24
(f) The intake unit’s staff shall resolve nonattorney complaints
25by either:

26
(1) Forwarding the nonattorney complaint to the office’s
27enforcement unit.

28
(2) Closing the nonattorney complaint in the intake unit.

29
(g) (1) A nonattorney complaint alleging the unauthorized
30practice of law shall be presumed to warrant a law enforcement
31referral to federal, state, or local authorities, such as the United
32States Attorney, the Attorney General, the local district attorney,
33local county counsel, or local city attorney, for criminal or other
34enforcement action.

35
(2) After the intake unit forwards a nonattorney complaint, the
36office’s enforcement unit shall make the referral required under
37paragraph (1), where appropriate, and shall coordinate with law
38enforcement, as appropriate, throughout the office’s investigation
39of the nonattorney complaint.

P19   1
(3) The intake unit may, where warranted, refer nonattorney
2complaints that do not allege the unauthorized practice of law to
3another regulatory agency, such as the Bureau of Real Estate, the
4Department of Consumer Affairs, the United States Securities and
5Exchange Commission, the Federal Trade Commission, and the
6United States Patent and Trademark Office.

7
(h) Staff of the intake unit shall evaluate nonattorney complaints
8and strive to meet all of the following in at least 90 percent of
9nonattorney complaints filed:

10
(1) Open a nonattorney complaint case record within five days
11from the complaint form received date, as defined in subdivision
12(b).

13
(2) Complete the initial legal review of the nonattorney
14complaint within 20 days from the complaint form received date.

15
(3) Process the nonattorney complaint to resolution, which
16means closing the case or forwarding the case for investigation,
17within 60 days from the complaint form received date.

18
(i) Staff of the intake unit shall maintain processing activities
19in the nonattorney complaint case record, including the recording
20and tracking of other regulatory agency referrals made in
21connection with a nonattorney complaint.

22
(j) All nonattorney complaints forwarded by the intake unit to
23the office’s enforcement unit shall be investigated to determine
24whether there is evidence of the unauthorized practice of law or
25any violation of Section 6126.7. There shall be an appropriate law
26enforcement referral upon assignment to a staff member of the
27enforcement unit. Assigned enforcement unit staff shall update any
28law enforcement agency to which the complaint was referred with
29the status and findings of the investigation as it proceeds. Upon
30completion of an investigation, the assigned staff of the enforcement
31unit shall analyze the evidence to determine whether the evidence
32is sufficient to support formal proceedings in superior court.

33
(k) Enforcement unit staff shall complete nonattorney complaint
34investigations to resolution by one of the following:

35
(1) Filing enforcement proceedings in superior court.

36
(2) Issuing a cease and desist letter. Enforcement unit staff may
37issue a cease and desist letter where the unauthorized practice of
38law activity appears isolated in nature and unlikely to recur or
39where it otherwise appears that a cease and desist warning will
40sufficiently address and stop the activity at issue.

P20   1
(3) Closing the complaint with no further action.

2
(l) Enforcement unit staff shall investigate nonattorney
3complaints adhering to the same backlog time standard applicable
4to attorney discipline complaints and shall resolve the complaint
5within six months from the complaint form received date.

6
(m) Intake unit staff and enforcement unit staff shall, as
7appropriate, maintain and update processing activities in the
8nonattorney case record, as follows:

9
(1) Record and track the number of superior court proceedings
10initiated pursuant to Section 6126.3.

11
(2) Record and track the number of superior court proceedings
12initiated pursuant to Section 6126.4.

13
(3) Record and track the number of superior court proceedings
14initiated pursuant to Section 6126.7.

15
(4) Record and track the number of superior court proceedings
16initiated pursuant to Section 6127.

17
(5) Record and track the number of law enforcement referrals
18made in connection with nonattorney complaints.

19
(6) Record and track the number of other agency referrals made
20in connection with nonattorney complaints.

21
(7) Record and track the number of cease and desist letters
22issued in connection with nonattorney complaints.

end insert
23

begin deleteSEC. 19.end delete
24
begin insertSEC. 25.end insert  

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

26

6140.  

(a) The board shall fix the annual membership fee for
27active members for 2017 at a sum not exceeding three hundred
28fifteen dollars ($315).

29(b) The annual membership fee for active members is payable
30on or before the first day of February of each year. If the board
31finds it appropriate and feasible, it may provide by rule for payment
32of fees on an installment basis with interest, by credit card, or other
33means, and may charge members choosing any alternative method
34of payment an additional fee to defray costs incurred by that
35election.

36(c) This section shall remain in effect only until January 1, 2018,
37and, as of that date, is repealed, unless a later enacted statute, that
38is enacted before January 1, 2018, deletes or extends that date.

P21   1

begin deleteSEC. 20.end delete
2
begin insertSEC. 26.end insert  

Section 6140.56 is added to the Business and
3Professions Code
, to read:

4

6140.56.  

(a) To ensure that the Client Security Fund can
5adequately protect the public and relieve or mitigate financial
6losses caused by the dishonest conduct of members of the State
7Bar by paying claims in a timely manner, the State Bar shall
8conduct a thorough analysis of the Client Security Fund, including
9a determination of the ongoing needs of the fund to satisfy claims
10in a timely manner, a review of additional efforts that can be taken
11to increase the collection of payments from the responsible
12attorneys, and a review of other State Bar expenditures to determine
13whether other expenditures that do not directly impact the State
14Bar’s public protection functions, including, but not limited to,
15executive salaries and benefits, can be reduced or redirected in
16order to better fund the Client Security Fund through existing
17revenue, and, whether, after all other options have been fully and
18thoroughly exhausted, an increase in membership dues is necessary
19to ensure that the Client Security Fund can timely pay claims.

20(b) The State Bar shall submit a report on its analysis of the
21Client Security Fund to the Legislature by March 15, 2017, so that
22the plans can be reviewed in conjunction with the bill that would
23authorize the imposition of the State Bar’s membership fee. The
24report shall be submitted in compliance with Section 9795 of the
25Government Code.

26(c) For purposes of this section, “timely manner” means within
2712 months from the time the claim is received by the State Bar.

28begin insert

begin insertSEC. 27.end insert  

end insert

begin insertSection 6145 of the end insertbegin insertBusiness and Professions Codeend insert
29
begin insert is amended to read:end insert

30

6145.  

(a) The board shallbegin delete engage the services of an independent
31national or regional public accounting firm with at least five years
32of experience in governmental auditingend delete
begin insert contract with the California
33State Auditor’s Officeend insert
for an audit of itsbegin insert revenues, expenditures,
34reserves, and itsend insert
financial statement for each fiscal year. The
35financial statement shall be promptly certified under oath by the
36Treasurer of the State Bar, and a copy of the audit and financial
37statement shall be submitted within 120 days of the close of the
38fiscal year to the board, to the Chief Justice of the Supreme Court,
39and to the Assembly and Senate Committees on Judiciary.

P22   1The audit shall examine the receipts and expenditures of the
2State Bar and the State Bar sections to ensure that the receipts of
3the sections are being applied, and their expenditures are being
4made, in compliance with subdivision (a) of Section 6031.5, and
5that the receipts of the sections are applied only to the work of the
6sections.

7The audit also shall examine the receipts and expenditures of
8the State Bar to ensure that the funds collected on behalf of the
9Conference of Delegates of California Bar Associations as the
10independent successor entity to the former Conference of Delegates
11of the State Bar are conveyed to that entity, that the State Bar has
12been paid or reimbursed for the full cost of any administrative and
13support services provided to the successor entity, including the
14collection of fees or donations on its behalf, and that no mandatory
15dues are being used to fund the activities of the successor entity.

begin delete

16In selecting the accounting firm, the board shall consider the
17value of continuity, along with the risk that continued long-term
18engagements of an accounting firm may affect the independence
19of that firm.

end delete
begin insert

20
This subdivision is not intended to reduce the number of audits
21the California State Auditor’s Office may otherwise be able to
22conduct.

end insert

23(b) The board shall contract with the California State Auditor’s
24Office to conduct a performance audit of the State Bar’s operations
25from July 1, 2000, to December 31, 2000, inclusive. A copy of the
26performance audit shall be submitted by May 1, 2001, to the board,
27to the Chief Justice of the Supreme Court, and to the Assembly
28and Senate Committees on Judiciary.

29Every two years thereafter, the board shall contract with the
30California State Auditor’s Office to conduct a performance audit
31of the State Bar’s operations for the respective fiscal year,
32commencing with January 1, 2002, to December 31, 2002,
33inclusive. A copy of the performance audit shall be submitted
34within 120 days of the close of the fiscal year for which the audit
35was performed to the board, to the Chief Justice of the Supreme
36Court, and to the Assembly and Senate Committees on Judiciary.

begin insert

37
For the performance audit due to the board, to the Chief Justice
38of the California Supreme Court, and to the Assembly and Senate
39Committees on Judiciary in 2017, the California State Auditor
40shall review all of the State Bar’s expenses, including, but not
P23   1limited to, executive salaries and benefits, outside contracts, and
2real estate holdings, to determine the expenses that are appropriate
3and necessary to protect the public and what the appropriate level
4of member dues should be.

end insert

5For the purposes of this subdivision, the California State
6Auditor’s Office may contract with a third party to conduct the
7performance audit. This subdivision is not intended to reduce the
8number of audits the California State Auditor’s Office may
9otherwise be able to conduct.

begin delete

10(c) Effective January 1, 2016, the board shall contract with the
11California State Auditor’s Office to conduct an in-depth financial
12audit of the State Bar, including an audit of its financial statement,
13internal controls, and relevant management practices. The contract
14shall include reimbursement for the California State Auditor’s
15Office for the costs of conducting the audit. The audit shall, at a
16minimum, examine the revenues, expenditures, and reserves of
17the State Bar, including all fund transfers. The California State
18Auditor’s Office shall commence the audit no later than January
191, 2016, and a copy of the audit shall be submitted by May 15,
202016, to the board, the Chief Justice of the Supreme Court, and to
21the Assembly and Senate Committees on Judiciary. The audit shall
22be submitted in compliance with Section 9795 of the Government
23Code. This subdivision shall cease to be operative January 1, 2017.

end delete
begin insert

24
(c) This section shall become inoperative on January 1, 2021,
25and as of that date is repealed.

end insert
26begin insert

begin insertSEC. 28.end insert  

end insert

begin insertSection 6145 is added to the end insertbegin insertBusiness and Professions
27Code
end insert
begin insert, to read:end insert

begin insert
28

begin insert6145.end insert  

(a) The board shall engage the services of an
29independent national or regional public accounting firm with at
30least five years of experience in governmental auditing for an audit
31of its financial statement for each fiscal year. The financial
32statement shall be promptly certified under oath by the Treasurer
33of the State Bar, and a copy of the audit and financial statement
34shall be submitted within 120 days of the close of the fiscal year
35to the board, to the Chief Justice of the California Supreme Court,
36and to the Assembly and Senate Committees on Judiciary.

37
The audit shall examine the receipts and expenditures of the
38State Bar and the State Bar sections to ensure that the receipts of
39the sections are being applied, and their expenditures are being
40made, in compliance with subdivision (a) of Section 6031.5, and
P24   1that the receipts of the sections are applied only to the work of the
2sections.

3
The audit also shall examine the receipts and expenditures of
4the State Bar to ensure that the funds collected on behalf of the
5Conference of Delegates of California Bar Associations as the
6independent successor entity to the former Conference of Delegates
7of the State Bar are conveyed to that entity, that the State Bar has
8been paid or reimbursed for the full cost of any administrative and
9support services provided to the successor entity, including the
10collection of fees or donations on its behalf, and that no mandatory
11dues are being used to fund the activities of the successor entity.

12
In selecting the accounting firm, the board shall consider the
13value of continuity, along with the risk that continued long-term
14engagements of an accounting firm may affect the independence
15of that firm.

16
(b) The board shall contract with the California State Auditor’s
17Office to conduct a performance audit of the State Bar’s operations
18from July 1, 2000, to December 31, 2000, inclusive. A copy of the
19performance audit shall be submitted by May 1, 2001, to the board,
20to the Chief Justice of the California Supreme Court, and to the
21Assembly and Senate Committees on Judiciary.

22
Every two years thereafter, the board shall contract with the
23California State Auditor’s Office to conduct a performance audit
24of the State Bar’s operations for the respective fiscal year,
25commencing with January 1, 2002, to December 31, 2002,
26inclusive. A copy of the performance audit shall be submitted within
27120 days of the close of the fiscal year for which the audit was
28performed to the board, to the Chief Justice of the Supreme Court,
29and to the Assembly and Senate Committees on Judiciary.

30
For the purposes of this subdivision, the California State
31Auditor’s Office may contract with a third party to conduct the
32performance audit. This subdivision is not intended to reduce the
33number of audits the California State Auditor’s Office may
34otherwise be able to conduct.

end insert
35

begin deleteSEC. 21.end delete
36
begin insertSEC. 29.end insert  

The Legislature finds and declares that Sections 17
37and 20 of this act, which amend Sections 6026.7 and 6086.5 of
38the Business and Professions Code, impose a limitation on the
39public’s right of access to the meetings of public bodies or the
40writings of public officials and agencies within the meaning of
P25   1Section 3 of Article I of the California Constitution. Pursuant to
2that constitutional provision, the Legislature makes the following
3findings to demonstrate the interest protected by this limitation
4and the need for protecting that interest:

5In order to protect the decisionmaking process of the State Bar
6Court in a manner that is similar to the deliberative functions of
7other courts and in order to ensure that personal or sensitive
8information regarding discipline by the State Bar Court is kept
9confidential, including for persons participating in discussions and
10offers of settlement pursuant to arbitration or mediation, it is
11necessary to exempt the State Bar Court from the provision of the
12Bagley-Keene Open Meeting Act and the California Public Records
13Act.



O

    96