Amended in Assembly August 19, 2015

Amended in Assembly June 24, 2015

Amended in Senate June 2, 2015

Amended in Senate May 13, 2015

Senate Bill No. 134

Introduced by Senator Hertzberg

(Principal coauthor: Assembly Member Alejo)

(Coauthors: Senators Allen, Jackson, Leno, Pavley, and Wieckowski)

(Coauthors: Assembly Members begin delete Cristina Garcia, Santiago, and Steinorth end delete begin insert Cristina  end insert begin insert Garcia and Santiago end insert )

January 22, 2015

An act to add Section 6032.5 to the Business and Professions Code, and to add Section 1564.5 to the Code of Civil Procedure, relating to attorneys.

LEGISLATIVE COUNSEL’S DIGEST

SB 134, as amended, Hertzberg. State Bar of California: Interest on begin delete Lawyer end delete begin insert Lawyers’ end insert Trust Accounts: escheated funds: begin delete public interest attorney loan repayment program. end delete begin insert Public Interest Attorney Loan Repayment Program. end insert

begin delete

(1) Existing

end delete

begin insert Existing end insert law, the State Bar Act, provides for the licensure and regulation of attorneys by the State Bar of California, a public corporation. Existing law requires an attorney or law firm that receives or disburses trust funds to establish an interest-bearing demand trust account and to deposit in the account all client deposits that are nominal in amount or are on deposit for a short period of begin delete time. end delete

begin delete (2) end delete begin delete   end delete begin delete Existing end delete begin insert time. Existing end insert law creates the Public Interest Attorney Loan Repayment Program, which is administered by the Student Aid Commission, to provide loan repayment assistance for licensed attorneys who practice or agree to practice in public interest areas of the law in California.

begin delete

(3) Existing

end delete

begin insert Existing end insert law provides for the escheat of property to the state. Existing law requires all property that escheats to the state to be deposited into the Abandoned Property Account in the Unclaimed Property Fund, which is continuously appropriated for specified purposes. Existing law establishes procedures for submitting a claim for property that has escheated.

This bill would require begin delete unclaimed property end delete begin insert funds end insert in Interest on Lawyers’ Trust Accounts (IOLTA) begin delete to, instead, end delete begin insert that escheat to the state to end insert be deposited into the begin insert Abandoned IOLTA Property Account, which would be established within the Unclaimed Property Fund. The bill would establish the IOLTA Claims Reserve Subaccount within the account and would require the Controller to determine and transfer for deposit into the subaccount an amount that is sufficient to pay refunds, claims, and costs associated with escheated IOLTA funds, to be available upon appropriation by the Legislature. The bill would require the balance of the escheated IOLTA funds to be transferred annually into the end insert Public Interest Attorney Loan Repayment Account begin insert to be end insert established by this bill begin delete in end delete begin insert within end insert the State Treasury for the purposes of providing, upon appropriation by the Legislature, additional funding begin insert to the Student Aid Commission end insert for the begin insert administration of, and provision of loan assistance pursuant to, the end insert Public Interest Attorney Loan Repayment Program.

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

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

SECTION 1.  

Section 6032.5 is added to the Business and
Professions Code, to read:

6032.5.  

(a)  begin delete Notwithstanding any law, including, but not limited
to, Section 1564 of the Code of Civil Procedure, any escheated
property held in an IOLTA account shall be deposited into the end delete begin insert The end insert
Public Interest Attorney Loan Repayment Account begin delete which end delete is hereby
established within the State Treasury.

(b)  begin delete Escheated property in end delete begin insert Funds from an IOLTA account that
escheat to the state and are deposited into end insert the Public Interest
Attorney Loan Repayment Account begin insert pursuant to subdivision (c) of
Section 1564.5 of the Code of Civil Procedure end insert shall be used, upon
appropriation by the Legislature, by the Student Aid Commission
for the purpose of providing increased funding for, both the
administration of and the provision of loan assistance pursuant to,
the Public Interest Attorney Loan Repayment Program pursuant
to Article 12 (commencing with Section 69740) of Chapter 2 of
Part 42 of Division 5 of Title 3 of the Education Code.

begin delete

(c) For the purposes of this section, “escheated property” has
the same meaning as set forth in subdivision (c) of Section 1561
of the Code of Civil Procedure.

end delete

SEC. 2.  

Section 1564.5 is added to the Code of Civil Procedure,
to read:

1564.5.  

begin insert (a) end insert begin insert   end insert Notwithstanding begin insert any law, including, but not limited
to, end insert Section 1564, begin delete escheated property held in an Interest on Lawyers’
Trust Account (IOLTA) shall be deposited into the Public Interest
Attorney Loan Repayment Account, as set forth in Section 6032.5
of the Business and Professions Code. end delete begin insert all money received under
this chapter from funds held in an Interest on Lawyers’ Trust
Account (IOLTA) that escheat to the state shall be administered
as set forth in this section. The money shall be deposited into the
Abandoned IOLTA Property Account, which is hereby established
within the Unclaimed Property Fund. end insert

begin insert

(b) From all money deposited into the Abandoned IOLTA
Property Account, the Controller shall determine and transfer for
deposit into the IOLTA Claims Reserve Subaccount, which is
hereby established within the Abandoned IOLTA Property Account,
an amount that is sufficient to pay all refunds, claims, and costs
pursuant to this chapter related to the escheated IOLTA funds.
Funds in the subaccount shall, upon appropriation by the
Legislature, be available to the Controller for these payments.

end insert begin insert

(c) The balance of the funds deposited into the Abandoned
IOLTA Property Account in excess of the funds in the subaccount,
shall be transferred on an annual basis to the Public Interest
Attorney Loan Repayment Account established pursuant to Section
6032.5 of the Business and Professions Code. Before making this
transfer, the Controller shall record the name and last known
address of each person appearing from the holders’ report to be
entitled to the escheated property. The record shall be available
for public inspection at all reasonable business hours.

end insert