BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 134|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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UNFINISHED BUSINESS
Bill No: SB 134
Author: Hertzberg (D), et al.
Amended: 9/3/15
Vote: 21
SENATE JUDICIARY COMMITTEE: 7-0, 5/5/15
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning,
Wieckowski
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/28/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SENATE FLOOR: 37-0, 6/3/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,
Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,
Moorlach, Nielsen, Pan, Pavley, Roth, Stone, Vidak,
Wieckowski, Wolk
NO VOTE RECORDED: Morrell, Nguyen, Runner
ASSEMBLY FLOOR: 65-13, 9/8/15 - See last page for vote
SUBJECT: State Bar of California: Interest on Lawyers Trust
Accounts: escheated funds: Public Interest Attorney
Loan Repayment Program
SOURCE: Author
DIGEST: This bill requires funds in Interest on Lawyers' Trust
Accounts (IOLTA) that escheat to the state to be deposited into
the Abandoned IOLTA Property Account, which is established
within the Unclaimed Property Fund. This bill requires a portion
of the escheated IOLTA funds to be transferred annually into the
SB 134
Page 2
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 (Program).
Assembly Amendments change the source of funding for the Program
from voluntary fees collected by the State Bar to a portion of
the escheated IOLTA funds.
ANALYSIS:
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.
2)Requires an attorney or law firm that, in the course of the
practice of law, receives or disburses trust funds to
establish and maintain an IOLTA account in which the attorney
or law firm shall deposit or invest all client deposits or
funds that are nominal in amount or are on deposit or invested
for a short period of time.
3)Provides, in the Unclaimed Property Law, or UPL, for the
escheat of property to the state and 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, and
establishes procedures for submitting a claim for property
that has escheated.
4)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.
This bill:
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1)Provides that all money received from funds held in an IOLTA
that escheat to the state shall be deposited into the
Abandoned IOLTA Property Account.
2)States that 25 percent of the money in the Abandoned IOLTA
Property Account shall be deposited into the IOLTA Claims
Reserve Subaccount, and those funds shall, upon appropriation
by the Legislature, be available by the State Controller for
the payment of all refunds, claims, and costs related to
escheated IOLTA funds.
3)Provides that the balance of the funds in the Abandoned IOLTA
Property Account, excluding funds in the subaccount, shall be
annually transferred to the Public Interest Attorney Loan
Repayment Account, as specified.
4)Provides that funds in the Public Interest Attorney Loan
Repayment Account shall be used, upon appropriation by the
Legislature, by the Student Aid Commission for the purposes of
providing increased funding for, both the administration of
and the provision of loan assistance pursuant to, the Program.
Background
In 2001, AB 935 (Hertzberg, Chapter 881, Statutes of 2001)
created the 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 (CSAC),
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.
To provide funding for the Program, this bill requires unclaimed
property in IOLTA, rather than escheating to the state, to be
deposited into a separate account, a portion of which may be
used, upon appropriation by the Legislature, to provide funding
for the existing Program.
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Comments
As stated by 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. . . .
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee, the State
Controller's Office has identified a total of $255,000 in 263
IOLTA accounts that have escheated to the state over the last 10
to 20 years, or an average of about $12,000 to $25,000 annually.
This level of revenue would be sufficient to provide loan
repayment assistance for a handful of lawyers each year, but
would not cover any of CSAC's administrative costs, which are
estimated at $100,000 annually for one position. Since the
escheated monies, less any amount set aside to pay unclaimed
property claims, would otherwise go to the General Fund, all of
the program and administrative costs are essentially a General
Fund cost.
SUPPORT: (Verified9/8/15)
California Attorneys, Administrative Law Judges and Hearing
Officers in State Employment
California Public Defenders Association
California State Conference of the NAACP
California Student Aid Commission
Equal Justice Works
Legal Aid Association of California
Los Angeles County District Attorney's Office
Mexican American Legal Defense and Educational Fund
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University of California Hastings College of the Law
University of the Pacific, McGeorge School of Law
Ventura County Public Defender's Office
Worksafe
OPPOSITION: (Verified9/8/15)
None received
ASSEMBLY FLOOR: 65-13, 9/8/15
AYES: Achadjian, Alejo, Bigelow, Bloom, Bonilla, Bonta, Brown,
Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper,
Dababneh, Daly, Dodd, Eggman, Frazier, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Mathis,
McCarty, Medina, Melendez, Mullin, Nazarian, O'Donnell, Olsen,
Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas,
Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,
Weber, Wilk, Williams, Wood, Atkins
NOES: Travis Allen, Baker, Brough, Chang, Beth Gaines, Grove,
Hadley, Harper, Maienschein, Mayes, Obernolte, Patterson,
Waldron
NO VOTE RECORDED: Chávez, Dahle
Prepared by: Benjamin Palmer / JUD. / (916) 651-4113
9/8/15 21:59:38
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