BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015 - 2016 Regular Session
SB 134 (Hertzberg)
Version: January 22, 2015
Hearing Date: May 5, 2015
Fiscal: No
Urgency: No
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SUBJECT
State Bar of California: voluntary fee collection
DESCRIPTION
This bill would expressly authorize the State Bar to collect
voluntary fees on behalf of, and for the purpose of funding, the
Public Interest Attorney Loan Repayment Program.
BACKGROUND
In 2001, AB 935 (Hertzberg, Chapter 881, Statutes of 2001)
created the Public Interest Attorney Loan Repayment Program to
help repay educational loans for participating California
attorneys who practice, or agree to practice, in public interest
areas of law. Participants in the program are eligible for a
maximum of $11,000 in loan assistance for four years. The
California Student Aid Commission, charged with administering
the program, was required to establish eligibility criteria for
the program based upon need and merit. Initial regulations were
to be adopted within one year of the effective date of the
initial appropriation funding the program. While the program was
never funded, the Legislative Analyst's Office's analysis of the
2007-08 budget noted that:
The Legislature also authorized 100 warrants for the Public
Interest Attorney Loan Repayment Program. While it was
created several years ago, no warrants have ever been
authorized for this program. The Governor vetoed the
language authorizing these warrants, as well as the $100,000
the Legislature had appropriated for administrative costs.
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(Legislative Analyst's Office, California Spending Plan
2007-08, The Budget Act and Related Legislation (Oct. 2007)
[as of Apr. 29, 2015].)
To provide funding for the program, this bill seeks to expressly
authorize the State Bar of California to collect, in conjunction
with its annual membership dues, voluntary fees for the support
of the Public Interest Attorney Loan Repayment Program. Those
fees would be collected as part of the annual bar dues bill.
CHANGES TO EXISTING LAW
Existing law 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, the annual mandatory membership
fee set by the State Bar's Board of Trustees to pay for
discipline and other functions must be ratified by the
Legislature. (Bus. & Prof. Code Sec. 6000 et seq.)
Existing law authorizes the State Bar to collect voluntary fees,
including amounts to support the California Supreme Court
Historical Society and the provision of legal services. (See,
e.g., Bus. & Prof. Code Secs. 6032, 6033.)
Existing law establishes the Public Interest Attorney Loan
Repayment Program for licensed attorneys who practice or agree
to practice in public interest areas of law in this state and
provides that participants are eligible for a maximum of $11,000
in loan assistance for four years. (Ed. Code Secs. 69741,
69741.5.)
This bill would expressly authorize the State Bar to collect, in
conjunction with the State Bar's collection of its annual
membership dues, voluntary fees on behalf of, and for the
purpose of funding, the Public Interest Attorney Loan Repayment
Program, which provides loan assistance to licensed attorneys
who practice or agree to practice in public interest areas of
the law in this state.
COMMENT
1. Stated need for the bill
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According to the author:
The increasingly high levels of debt accrued while obtaining
a law degree, make it difficult for attorneys to serve in
public interest areas of law, since the average pay is lower
than it is in private practice. Public interest law offices
must retain talented attorneys to ensure that their
clientele consistently receive an acceptable level of
service and equal access to justice. . . . The bill allows
for licensed attorneys to donate to the Public Interest
Attorney Loan Repayment Program when paying their annual
State Bar dues.
2. Encouraging attorneys to serve in public interest areas of law
Although never funded, California's Public Interest Attorney
Loan Repayment Program seeks to provide participants with some
relief from that debt for attorneys who elect to go into public
interest law. This bill seeks to further aid those graduates
who elect to go into public interest law by facilitating
donations to that program through the collection of State Bar
dues. As the program is currently unfunded, those amounts would
represent the sole source of funding for the program. Of those
funds received, the Student Aid Commission is currently
authorized to further deduct their administrative costs in
administering the program.
As noted by the author, salaries for those attorneys who
practice public interest law are generally lower than those in
private practice, and, despite that difference in salary, public
interest law offices must still retain talented attorneys. If
some amounts of funds are received as a result of the
contributions authorized by this bill, the resulting loan
assistance could provide further reassurance to aspiring public
interest attorneys that they can afford their loan payments
while participating in the program. As background, under
existing law, participants must be licensed attorneys who have
been admitted to the program and commenced practice in this
state in a public interest area of the law. Public interest
areas are defined to include providing direct legal service at a
legal services organization, prosecuting attorney's office,
child support agency office, or a criminal public defender's
office. Participants are eligible for a maximum of $11,000 in
loan assistance for four years as follows: $2,000 in repayment
assistance for the first year, and $3,000 in assistance for the
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second, third, and fourth years.
Given the average debt incurred by recent law school graduates,
it would appear appropriate as a matter of public policy to take
some steps to assist those students with that debt should they
go into public interest law. Absent either a change in costs
for law school, or assistance in repaying the debt, it is
unclear how it will be feasible for many graduates to both
practice public interest law and repay their student loan debt
in a reasonable amount of time. Regarding the salary paid to
those who do practice public interest law, the National
Association for Law Placement's (NALP) Public Sector & Public
Interest Salary Report for July 2014 noted:
Surveys [over a] ten-year span have consistently documented
that practice experience brings with it relatively modest
salary increases, particularly within civil legal services
organizations. For example, the median entry-level salary
for a legal services attorney is $44,600; at 11-15 years of
experience the median is $65,000. Pay for public defenders
and local prosecuting attorneys is somewhat higher, with a
median of $50,400 for entry-level public defenders and
increasing to about $84,500 for those with 11-15 years of
experience. For local prosecuting attorneys, the
corresponding figures are $51,100 and $80,000.
Moreover, for the most part, salary medians have increased
by about $1,000 per year over the decade . . . For example,
the median entry-level salary has increased from $34,000 to
$44,600 at civil legal services organizations, while for
local prosecuting attorneys the median increased from
$40,000 to $51,100. Among more experienced attorneys at
these organizations, medians have also increased by about
$10,000. Public defenders have fared a little bit better, at
least among those with more experience, where the median
increased from $65,000 to about $84,000. (NALP's Public
Sector & Public Interest Salary Report Turns 10! (July 2014)
[as of Apr. 29, 2015])
According to statistics collected by the American Bar
Association (ABA), the average amount borrowed by graduates of
public law schools in 2012 was $84,600 with graduates of private
law schools borrowing an average of $122,158. Using those
numbers as a rough estimate of average law school debt, a
graduate who elects to repay the borrowed amount over 10 years
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at an interest rate of 5 percent would have a monthly payment of
$897, or, $1,296, respectively. It should also be noted that
graduates who elect to go into public interest law may also
qualify for the federal Public Service Loan Forgiveness Program.
3. State Bar collection of fees
The State Bar of California is a public corporation. Attorneys
who wish to practice law in California generally must be
admitted and licensed in this state and must be a member of the
State Bar. (Cal. Const., art. VI, Sec. 9.) The State Bar of
California is the largest state bar in the country. As of April
2015, the State Bar had 183,952 active members and 55,282
inactive members, which represents a slight annual increase in
both active members and inactive members. Total State Bar
membership is listed at 253,200, which includes 2,150 judge
members and 11,815 members who are "Not Eligible to Practice
Law." The Bar's programs are financed mostly by annual
membership dues paid by attorneys as well as other fees paid by
applicants seeking to practice law.
In addition to mandatory membership dues, the annual fee
statement includes various optional donations that allow
individuals to contribute to, among other things, legal
services, the California Bar Foundation, and the California
Supreme Court Historical Society. Similarly, this bill would
authorize the State Bar to similarly collect voluntary fees for
the purpose of funding the Public Interest Attorney Loan
Repayment Program. While it is unclear the number and amount of
donations that the program would receive through this collection
method, as a practical matter, even if only a third of the total
183,952 active members contribute $20 each, this bill could
bring in over $1.2 million that could then be used to further
encourage talented attorneys to go into public interest law.
4. Warrant language
Under existing law, the Student Aid Commission is prohibited
from awarding "more than the number of warrants that are
authorized in the annual Budget Act for that fiscal year for the
assumption of loans pursuant to [the program]." (Ed. Code Sec.
69741.5.) That language was not part of the original
legislation establishing the program, but, was added by a
trailer bill for the 2006-07 budget. In vetoing the warrants
that would have been authorized in that budget, the Governor
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stated:
I am deleting the legislative language augmentation included
in Provision 10 that authorizes 100 new warrants for the
Public Interest Attorney Loan Repayment Program. Because
the education trailer bill would delete the provisions of
current law that authorize donations for the purpose of
funding this program, these warrants would require General
Fund repayment in future years. Therefore, this action is
necessary to limit program expansions.
To ensure that the warrant language does not inadvertently
preclude the commission from awarding loans to qualifying
individuals due to the lack of warrants authorized in the annual
Budget Act, the author should consider striking this language.
Suggested amendment :
Section 69741.5 of the Education Code is amended to read:
69741.5 (a) Participants in this program are eligible for a
maximum of eleven thousand dollars ($11,000) in loan
assistance for four years, as follows:
(1) For the first year, two thousand dollars ($2,000) in
loan repayment assistance.
(2) For the second, third, and fourth years, three
thousand dollars ($3,000) in loan repayment assistance for
each year.
(b) Notwithstanding any other provision of law, in any
fiscal year, the commission shall award no more than the
number of warrants that are authorized in the annual Budget
Act for that fiscal year for the assumption of loans
pursuant to this article.
5. Author's amendment to add coauthors
The author offers an amendment to add the following coauthors:
Senators Allen and Wieckowski and Assemblymembers Garcia,
Santiago and Steinorth
Support : California Public Defenders Association; California
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State Conference of the NAACP; Equal Justice Works; Los Angeles
County District Attorney's Office; MALDEF; University of
California Hastings College of the Law; University of the
Pacific, McGeorge School of Law; Ventura County Public
Defender's Office; Worksafe
Opposition : None Known
HISTORY
Source : Author
Related Pending Legislation : SB 387 (Jackson) would authorize
the State Bar to charge the annual membership fee for 2016.
Prior Legislation : AB 935 (Hertzberg, Chapter 881, Statutes of
2001) See Background.
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