BILL ANALYSIS Ó
AB 2878
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ASSEMBLY THIRD READING
AB
2878 (Committee on Judiciary)
As Amended April 18, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Judiciary |10-0 |Mark Stone, Wagner, | |
| | |Alejo, Chau, Chiu, | |
| | |Gallagher, | |
| | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Holden, Maienschein, | |
| | |Ting | |
| | | | |
| | | | |
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SUMMARY: Reauthorizes attorney license fees at the same level
as the current year. Specifically, this bill:
1)Reauthorizes the State Bar to collect up to $390 for active
membership dues for 2017.
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2)Eliminates the ability of the State Bar to prevent future
Legislatures from reducing future membership dues by securing
all or any portion of an obligation of the State Bar on future
dues.
3)Makes various findings concerning events at the State Bar and
states the intent of the Legislature that this bill serves as
a vehicle to implement possible recommendations for
substantially improving the operations, effectiveness and
efficiency of the State Bar, based in part on reports to be
submitted to the Legislature in the coming months.
EXISTING LAW:
1)Requires all attorneys who practice law in California to be
members of the State Bar and establishes the State Bar for the
purpose of regulating the legal profession. Pursuant to the
State Bar Act, requires the annual mandatory membership fee
set by the State Bar's Board of Trustees (Board) to pay for
discipline and other functions to be ratified by the
Legislature. (Business and Professions Code Section 6000 et
seq. Unless stated otherwise, all further statutory
references refer to that code.)
2)Authorizes the State Bar to collect $315 in annual membership
fees from active members for a total annual dues bill of $390
for the year 2016. Provides that the other $75 is pursuant to
statutory authorization to assess annually the following fees:
$40 for the Client Security Fund; $25 for the disciplinary
system; and $10 for the Lawyer Assistance Program. (Sections
6140, 6140.55, 6140.6, 6140.9.)
3)Authorizes the State Bar to collect $75 in annual membership
fees from inactive members for a total annual dues bill of
$115. Provides that the other $40 is pursuant to statutory
authorization to assess annually the following fees: $10 for
the Client Security Fund; $25 for the disciplinary system; and
$5 for the Lawyer Assistance Program. (Sections 6141,
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6140.55, 6140.6, 6140.9.)
4)Directs $40 of membership dues to legal services purposes
unless a member elects not to support those activities.
(Section 6140.03.)
5)Provides that protection of the public is the highest priority
of the State Bar and its Board in exercising their licensing,
regulatory and disciplinary functions. Whenever the
protection of the public is inconsistent with other interests
sought to be promoted, provides that the protection of the
public shall be paramount. (Section 6001.1.)
6)Creates the Governance in the Public Interest Task Force,
effective February 1, 2013, and requires that the task force
report to the Supreme Court, the Governor and the Assembly and
Senate Judiciary Committees by May 15, 2014, and every three
years thereafter, its recommendations for enhancing public
protection and ensuring that public protection is the State
Bar's highest priority. (The task force has yet to submit its
first report.) (Section 6001.2.)
7)Permits the State Bar, for purpose of carrying into effect and
promoting its objectives (of which public protection is its
highest priority), to sell, lease, exchange, convey, transfer,
assign, encumber, pledge, dispose of any of its real or
personal property or any interest therein, including without
limitation all or any portion of its income or revenues from
membership fees paid or payable by members. (Section 6001.)
8)Provides, pursuant to a 1950's statute, that whenever the
Board secures an obligation of the State Bar on all or any
portion of the fees from membership dues the Legislature may
not, until the obligation is repaid in full, reduce membership
dues below the maximum amount in effect when the obligation
was created and provides that this constitutes a covenant to
the holder of the obligation. (Section 6008.5.)
9)Requires the State Bar to annually report on the performance
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and condition of its discipline system, including the backlog
of discipline cases that are six months old and case
processing times, as provided. (Section 6086.15.)
10)Requires the State Bar to develop and implement a workforce
plan for its discipline system and conduct a public sector
compensation and benefits study, including a recommendation
for an appropriate backlog goal and an assessment of staffing
needed to achieve that goal. Requires the State Bar to
conduct a thorough analysis of its operating costs and develop
a spending plan to determine a reasonable amount for its
annual dues. Requires that the workforce plan and the
spending plan be submitted to the Legislature by May 15, 2016,
and be implemented by December 31, 2016. (Section 6140.16.)
11)Requires the State Bar's Board to contract with the
California State Auditor to conduct a financial audit of the
State Bar, including an audit of its financial statement,
internal controls and practices, and requires that the audit
be submitted to the Board, the Chief Justice of the California
Supreme Court, and the Assembly and Senate Judiciary
Committees by May 15, 2016. Requires the audit to examine
revenues, expenditures, reserves and fund transfers. (Section
6145 (c).)
12)Subjects the State Bar to the Public Records Act, with
specified exceptions. Provides that identifying information
submitted by applicants to the State Bar for admission to
practice law and State Bar admissions records, as specified,
are confidential and may not be disclosed pursuant to any
state law including the Public Records Act. (Sections 6001,
6026.11.)
13)Effective April 1, 2016, subjects the State Bar to the
Bagley-Keene Open Meeting Act, as provided, with exemptions
for the Judicial Nominees Evaluation Commission and the
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Committee of Bar Examiners. (Sections 6001 6026.7; Government
Code Section 11121.)
FISCAL EFFECT: None
COMMENTS: This bill continues the decades-long tradition of
oversight of the Bar by the Assembly and Senate Judiciary
Committees via review of the annual dues authorization bill, as
part of general oversight role of the Legislature over the
agencies in the executive and judicial branches of government.
Last year, in response to significant and troubling audit
findings and other concerns, the Legislature required the State
Auditor to perform an in-depth financial audit of the Bar, due
May 15, 2016. Last year's bar dues bill also required the State
Bar to comply with important government transparency and
accountability laws by way of the Bagley-Keene Open Meeting Act
and the California Public Records Act. (SB 387 (Jackson),
Chapter 537, Statutes of 2015.) This bill comes to this
Committee after another year of extensive and publically
reported turmoil involving the State Bar, some of which has come
to light because of new open government laws.
At this point, this bill merely authorizes the State Bar to
collect active membership dues of up to $390 for 2017, the same
rate as this year. The State Bar's programs are financed almost
exclusively by annual membership dues paid by attorneys, as well
as other fees paid by applicants who are seeking to practice
law. The State Bar also uses its name and membership lists to
sell items such as malpractice insurance and car rentals, and
receives payment for those activities. The State Bar currently
has complete discretion over how funds from this latter
activity, which amount to approximately $2 million per year, are
used. The State Bar's total revenue for 2016 is $118 million,
excluding funds from interest on lawyer trust accounts that
pass-through the State Bar and fund legal services, with $74.3
million coming from mandatory dues.
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As required by last year's State Bar dues bill, the State Bar is
conducting an analysis of its operating costs and developing a
spending plan to determine a proposed amount to report to the
Legislature for its annual dues. The spending plan must be
submitted to the Legislature by May 15, 2016. Once that report
is submitted, along with an audit from the State Auditor on the
State Bar's finances that was also mandated in last year's dues
bill and is also due by May 15, 2016, and the Legislature has
thoroughly reviewed both reports, the State Bar dues amount in
this bill could either increase or decrease, as the Legislature
deems appropriate, based on the actual needs of the State Bar to
effectively and efficiently protect the public.
The bill also eliminates an anachronistic 1950's era statute
that prohibits future Legislatures, if the State Bar uses any
portion of membership dues as security for an obligation, from
reducing membership dues below the amount in effect when the
obligation was created by the State Bar, until the obligation is
paid in full. While it is highly questionable whether this
provision is constitutional, it is clear that it reduces the
important oversight role of the Legislature over the State Bar
which is needed to ensure that public protection is and remains
the paramount concern of the State Bar. Therefore, this bill
rightly deletes that provision.
This bill in its current form does not address any other
governance or oversight issues, including whether the Board of
Trustees, which is comprised of a supermajority of active market
participants, can legally regulate attorneys and still avoid
antitrust liability. Nor does it address whether the State
Bar's primary regulatory and public protection functions should
be de-coupled from its professional association functions, as
some including current State Bar trustees have suggested. These
additional issues will be considered along with the State Bar's
Governance in the Public Interest Task Force report, which was
due May 15, 2014, and which is supposed to offer its
recommendations for enhancing public protection and ensuring
that public protection is the State Bar's highest priority
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Analysis Prepared by:
Leora Gershenzon / JUD. / (916) 319-2334 FN:
0002793