SB 134, as amended, Hertzberg. State Bar of California: Interest on Lawyers’ Trust Accounts: escheated funds: Public Interest Attorney Loan Repayment Program.
Existing 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 time. Existing 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.
Existing 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 funds in Interest on Lawyers’ Trust Accounts (IOLTA) that escheat to the state to be deposited into the 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 requirebegin insert that 25% of IOLTA escheated funds be deposited into the subaccount to be used byend insert thebegin delete 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.end deletebegin insert
Controller, upon appropriation by the Legislature, for the purposes of paying refunds, claims, and costs associated with escheated IOLTA funds.end insert
The bill would require the balance of the escheated IOLTA funds to be transferred annually into the Public Interest Attorney Loan Repayment Account to be established by this bill within the State Treasury for the purposes of providing, upon appropriation by the Legislature, additional funding to the Student Aid Commission for the administration of, and provision of loan assistance pursuant to, the 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 6032.5 is added to the Business and
2Professions Code, to read:
(a) The Public Interest Attorney Loan Repayment
4Account is hereby established within the State Treasury.
5(b) Funds from an IOLTA account that escheat to the state and
6are deposited into the Public Interest Attorney Loan Repayment
7Account pursuant to subdivision (c) of Section 1564.5 of the Code
8of Civil Procedure shall be used, upon appropriation by the
P3 1Legislature, by the Student Aid Commission for the purpose of
2providing increased funding for, both the administration of and
3the provision of loan assistance pursuant to, the Public Interest
4Attorney Loan Repayment Program pursuant to Article 12
5(commencing with Section 69740) of Chapter 2 of Part 42
of
6Division 5 of Title 3 of the Education Code.
Section 1564.5 is added to the Code of Civil Procedure,
8to read:
(a) Notwithstanding any law, including, but not limited
10to, Section 1564,
all money received under this chapter from funds
11held in an Interest on Lawyers’ Trust Account (IOLTA) that
12escheat to the state shall be administered as set forth in this section.
13The money shall be deposited into the Abandoned IOLTA Property
14Account, which is hereby established within the Unclaimed
15Property Fund.
16(b) begin deleteFrom all money deposited into end deletebegin insertTwenty-five percent of the
17money in end insertthe Abandoned IOLTA Propertybegin delete Account, the Controllerend delete
18begin insert Accountend insert shallbegin delete determine and transfer for depositend deletebegin insert
be depositedend insert into
19the IOLTA Claims Reserve Subaccount, which is hereby
20established within the Abandoned IOLTA Propertybegin delete Account, an
21amount that is sufficient to pay all refunds, claims, and costs
22pursuant to this chapter related to the escheated IOLTA funds.end delete
23begin insert
Account.end insert Funds in the subaccount shall, upon appropriation by the
24Legislature, be available to the Controller forbegin delete these payments.end deletebegin insert the
25payment of all refunds, claims, and costs pursuant to this chapter
26related to escheated IOLTA funds.end insert
27(c) The balance of the fundsbegin delete deposited intoend deletebegin insert inend insert the Abandoned
28IOLTA Propertybegin delete Account in excess of theend deletebegin insert
Account, excludingend insert
29
funds in the subaccount, shall be transferred on an annual basis to
30the Public Interest Attorney Loan Repayment Account established
31pursuant to Section 6032.5 of the Business and Professions Code.
32Before making this transfer, the Controller shall record the name
33and last known address of each person appearing from the holders’
34report to be entitled to the escheated property. The record shall be
35available for public inspection at all reasonable business hours.
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