BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 134 (Hertzberg) - State Bar of California: voluntary fee
collection: loan repayment program
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|Version: May 13, 2015 |Policy Vote: JUD. 7 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 26, 2015 |Consultant: Jolie Onodera |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 134 would authorize the State Bar to collect
voluntary fees on behalf of, and for the purpose of funding, the
Public Interest Attorney Loan Repayment Program. This bill would
repeal the limit on the number of warrants the Student Aid
Commission (Commission) may issue each fiscal year, which is
currently restricted to the number authorized in the annual
Budget Act.
Fiscal
Impact: Potentially significant one-time and ongoing state
costs of about $200,000 (General Fund) for the Commission to
establish and administer the program. To date, the program has
not been funded, and therefore, no resources have been dedicated
for program activities. The loan repayment awards would be
funded with the voluntary fee revenue, but the mechanism by
which the Commission would access the funds and whether the
funds are intended to support the Commission's workload as well
SB 134 (Hertzberg) Page 1 of
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as the awards, are unclear.
Further, as the number of warrants issued would no longer be
restricted by the number authorized in the annual Budget Act, to
the extent the Commission chooses to issue a number of warrants
that require funding in excess of the amount collected by the
State Bar, additional costs from the General Fund could be
required.
Background: Existing law provides for the Public Interest Attorney Loan
Repayment Program, established for licensed attorneys who
practice or agree to practice in public interest areas of the
law in this State. Existing law specifies that the program is to
be administered by the Student Aid Commission. (Education Code
(EC) § 69741.)
Existing law specifies that participants are eligible for a
maximum of $11,000 in loan assistance for four years: $2,000 in
loan repayment assistance for the first year, and $3,000 in loan
repayment assistance for each of the second, third, and fourth
years. Under existing law, in any fiscal year, the Commission is
limited to awarding no more than the number of warrants that are
authorized in the annual Budget Act for that fiscal year for the
assumption of loans. (EC § 69741.5.)
Under existing law, the Commission is required to establish
eligibility criteria for participation in the Program based upon
need and merit. Further, the Commission is required to adopt
initial regulations for the Program within one year of the
effective date of the initial appropriation funding the Program.
Existing law provides that the Commission may use the funds
appropriated for the Program for the purpose of loan repayments
and to defray reasonable administrative costs. Existing law
additionally requires the Commission to annually establish the
total amount of funding to be awarded for loan repayments, and
requires the Commission to submit an annual written report to
the Legislature, as specified. (EC §§ 69742-69746.5.),
In 2001, AB 935 (Hertzberg) Chapter 881/2001 created the Public
Interest Attorney Loan Repayment. Initial regulations were to be
adopted within one year of the effective date of the initial
SB 134 (Hertzberg) Page 2 of
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appropriation funding the program. While the program was never
funded, the Legislative Analyst's Office (LAO) analysis of the
2007-08 Budget noted the following:
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. (LAO, California Spending
Plan 2007-08, The Budget Act and Related Legislation,
October 2007)
Proposed Law:
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, which provides
loan assistance to licensed attorneys who practice or agree to
practice in public interest areas of the law in this state.
Additionally, this bill deletes the existing provision of law
restricting the Commission to awarding no more than the number
of warrants that are authorized in the annual Budget Act for
that fiscal year for the assumption of loans.
Prior
Legislation: AB 935 (Hertzberg) Chapter 881/2001 created the
Public Interest Attorney Loan Repayment Program.
Staff
Comments: The Commission has indicated the provisions of this
bill will result in new workload that cannot be absorbed within
existing resources. First-year and ongoing costs of $207,000
representing two positions for development and administration of
the program are estimated. In the absence of other specified
provisions, the Commission has indicated the administrative
costs would be funded out of the General Fund. While the loan
repayment awards are intended to be funded with the voluntary
fee revenue, the mechanism by which the Commission would access
the funds from the State Bar, and whether the funds are intended
to support the Commission's workload as well as the awards, are
SB 134 (Hertzberg) Page 3 of
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unclear.
Staff notes that in addition to mandatory membership dues, the
State Bar 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. While the number
and amount of donations that the program would receive from its
184,000 active members through this collection method is
unknown, the additional option could result in either a net
increase in donations or potentially an offsetting decrease in
donations to other existing options.
Recommended
Amendments: To contain potential costs, staff recommends an
amendment to reinsert the language deleted in EC § 69741.5(b).
Additionally, to the extent the intent of the author is to fund
Commission workload with the voluntary fee revenues collected,
staff recommends an amendment to specify fee revenues collected
are for the purposes of supporting both the administration of
the program and the provision of loan assistance.
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