BILL ANALYSIS
AB 2764
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2764 (Judiciary Committee)
As Amended August 20, 2010
Majority vote
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|ASSEMBLY: |71-1 |(May 13, 2010) |SENATE: |27-8 |(August 27, |
| | | | | |2010) |
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Original Committee Reference: JUD.
SUMMARY : Continues the State Bar's (Bar) authority to assess
and collect dues from licensed attorneys in California, and
authorizes the Bar to continue to collect active membership dues
of up to $410 for the year 2011, maintaining 2009 dues levels.
Specifically, this bill :
1)Creates, on or before February 1, 2011, within the State Bar,
a Governance in the Public Interest Task Force comprised of 11
members appointed by the President of the State Bar, seven of
whom shall be attorney members of the board and three of whom
shall be public members of the board. The president shall
also be a member of the task force and shall preside over its
meetings, all of which shall be held consistent with Section
6026.5.
2)Requires, on or before May 15, 2011, and every three years
thereafter, the task force to prepare and submit a report to
the Supreme Court, the Governor, and the Assembly and Senate
Committees on Judiciary that includes its recommendations for
enhancing the protection of the public and ensuring that
protection of the public is the highest priority in the
licensing, regulation, and discipline of attorneys, to be
reviewed by the Assembly and Senate Committees on Judiciary in
their regular consideration of the annual State Bar dues
measure. If the task force does not reach a consensus on all
of the recommendations in its report, the dissenting members
of the task force may prepare and submit a dissenting report
to the same entities described in this subdivision, to be
reviewed by the committees in the same manner.
3)Requires, commencing on or before February 1, 2011, the State
Bar to make available, upon request of a member of the public,
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the classification and total annual compensation paid to each
of its employees by name, as well as any and all rules,
policies, and agreements pertaining to the compensation and
benefits of any employees of the State Bar.
4)Authorizes $10 of the membership fee authorized pursuant to
Sections 6140 and 6141 to be allocated in the current dues
cycle for the purposes established pursuant to Section 6033,
except to the extent that a member elects not to support those
activities. The invoice provided to members for payment of
the annual membership fee shall mirror the existing approach
used with the so-called Keller deduction by providing each
member the option of deducting ten dollars ($10) from the
annual fee if the member elects not to have this amount
allocated as provided in this section. The allocation
pursuant to this section shall be known as the Temporary
Emergency Legal Services Voluntary Assistance Option. This
section shall remain in effect only until January 1, 2014, and
as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2014, deletes or extends
that date.
The Senate amendments add consistent provisions creating the new
Bar-appointed governance task force, add compensation
transparency provisions, and add an optional opportunity for Bar
members to help address the current funding crisis in the
state's legal services programs.
AS PASSED BY THE ASSEMBLY , this bill contained consistent
provisions authorizing the Bar to continue to collect active
membership dues of up to $410 for the year 2011.
FISCAL EFFECT : None
COMMENTS : In support of the bill, the author writes:
This non-controversial annual Judiciary Committee bill
was recently amended, through close collaboration
between both houses of the Legislature, to reinforce
the State Bar's commitment to ensure that our legal
profession, first and foremost, always focuses its
efforts on protecting the public. As newly amended,
the bill authorizes the Bar - with the Bar's support -
to maintain flat membership dues this coming year at
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the same levels that have been in place for several
years. Importantly and urgently, the measure will now
help to address the unprecedented funding crisis that
has hit California's legal services programs and
threatens their very existence and ability to help
thousands of low-income Californians seek access to
justice. To help address this "Justice Gap" crisis,
the bill will allow-but not require-Bar members to set
aside just 2 percent of their dues ($10 out of the
current $410 for active members) to help save legal
services programs across the state. And this
temporary option is sunsetted in three years.
The bill also contains a helpful new Task Force within
the Bar, again with the Bar's support, to take helpful
stock about what if any structural and other potential
improvements might make the Bar's public protection
efforts as vigorous as possible. And finally, the
newly amended bill contains a provision to make as
transparent as possible the compensation of Bar
employees, consistent with the Legislature's ongoing
transparency efforts -again with the Bar's full
support. Together I, and I know my partner in this
effort Chairwoman Corbett, believe these improvements
will help strengthen the Bar while urgently addressing
our current crisis in legal services funding.
This bill would create the Governance in the Public Interest
Task Force in the State Bar in response to concerns that recent
actions by the State Bar Board of Governors have not
sufficiently taken into account the protection of the public.
For example, in June 2009, the Bar Board approved a scaled-back
online "Find a Lawyer" program that critics argued left out
important helpful consumer information in response to opposition
from local bar associations. According to the California Bar
Journal, the associations "feared [the Find a Lawyer program]
would compete with their lawyer referral services," noting that
the chair of the Bar's Family Law Section stated that the
associations were simply trying to protect their own financial
interests. ("Board reaches compromise on lawyer search,"
California Bar Journal, June 2009.)
In another instance, last year the Bar Board nearly voted to
oppose two legislative efforts [SB 94 (Calderon), Chapter 630,
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Statutes of 2009 and AB 764 (Nava) of 2009] which addressed
attorney participation in foreclosure-related scams. These
important consumer protection measures were intended to assist
delinquent homeowners who had fallen victim to abusive loan
modification practices.
Finally, the effort to require attorneys to disclose to clients
whether they carry malpractice insurance was viewed by
proponents as a "public protection measure and a way to provide
important information about attorneys to prospective clients."
("Insurance disclosure rule approved," California Bar Journal,
October 2009.) Many felt that the insurance disclosure
requirements eventually approved, however, were considerably
scaled back after a three-year process.
At the same time, it should be acknowledged that the Bar has
recently taken action in the public interest against attorneys
involved in loan modification scams. In particular, as of July
2010, the Bar reports that 13 attorneys involved in loan
modification misconduct have resigned, five loan modification
trials are pending, and 2,000 related investigations are in
progress. Recently, the Bar secured orders of involuntary
inactive enrollment for three attorneys.
In addition, recently the Center for Public Interest Law called
for a number of reforms "necessary to assure the responsible
functioning of [the Bar]." Those suggestions included: 1)
changing the appointment method and composition of the Bar's
Board of Governors; 2) providing that the board nominate the
Bar's Chief Trial Counsel, subject to final selection by the
California Supreme Court and confirmation by the California
State Senate; 3) subjecting the State Bar's board to the
Bagley-Keene Open Meeting Act; and, 4) reviewing the Bar's
Lawyer Assistance Program by an independent audit or abolishing
it entirely.
It is hoped that through the Governance in the Public Interest
Task Force the Supreme Court, Governor, and Legislature will
receive helpful suggestions for ways in which public protection
may be enhanced with respect to the licensing, regulation, and
discipline of California attorneys. As a result, this bill
would provide that the task force report is to be reviewed by
the Senate and Assembly Judiciary Committees in their regular
consideration of the annual bar dues bill. In addition, if the
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task force does not reach a consensus on all recommendations,
this bill would provide that the dissenting members may prepare
and submit a dissenting report.
This bill would create the Temporary Emergency Legal Services
Voluntary Assistance Option, directing $10 of membership dues to
legal services purposes in this dues cycle, unless a member
voluntarily elects not to support those activities. This
direction of dues is optional and would expire on January 1,
2014. The bill would require that the annual membership dues
statement sent to each member provide him or her with the option
of deducting $10 from his or her membership dues if he or she
elects not to have this amount allocated to legal services
purposes.
Recent numbers indicate that the Bar has nearly $12 million in
reserves. For example, the Bar has $6.4 million in the "Public
Protection Reserve Fund" which is designed as its "rainy-day"
fund to allow the Bar to continue operations should its dues
authority not be continued. The amount in the fund represents
10% of 2009 General Fund (GF) operating expenses, 6% of total
agency-wide operating expenses, and 5% of total agency-wide
operating revenues. At the same time, figures from the Bar
indicate that currently it also has $5.5 million in its GF
reserves projected to grow to $6.1 million in 2013.
At the same time, however, funding for legal services has been
drastically reduced. California has traditionally relied on the
Interest On Lawyer Trust Accounts (IOLTA) program to fund legal
aid programs. Under that program, attorneys must deposit all
client deposits or funds that are nominal in amount or are on
deposit or invested for a short period of time into an IOLTA
account. These funds may be deposited or invested in a single
unsegregated account and the interest and dividends earned are
required to be paid to the State Bar to be used for programs
that provide civil legal services to indigent persons. Over the
last two years, however, revenues from the IOLTA program have
decreased 75% from $20.1 million in 2007-2008 to an estimated $5
million in the current year 2010-2011. In addition, donations
to the Justice Gap Fund have declined by 40% over the last three
years. As a result, funding for legal assistance programs has
been adversely impacted at the same time that demand for those
services has increased: more and more families have been
affected by job loss and foreclosures, driving them closer and
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closer to the poverty line (and therefore eligible for legal aid
services).
This bill would reduce member bar dues for the next three years
by $10 on a voluntary basis and direct those funds to the State
Bar's Legal Services Trust Fund Program for distribution to
nonprofit organizations that provide free civil legal services
to low-income Californians under the existing formula, unless a
member does not wish to fund those activities. This approach
mirrors the Keller deduction which allows members to deduct up
to $10 from the mandatory dues if the member does not wish to
fund legislative activities and non-Keller lobbying and
activities with his or her dues.
It is anticipated that providing this voluntary option for
attorneys to dedicate just 2% of their dues to assist struggling
legal service programs will not, and should not, affect the
ability of the Bar to maintain staffing levels. As noted above,
figures from the Bar indicate that the Bar currently has in
excess of $5 million in its GF reserves (projected to grow over
$6 million) in 2013, as well as very robust reserves in its
public protection reserve account.
In order to provide more transparency, this bill would require
the State Bar, on or before February 1, 2011, to make available
upon request the classification and total annual compensation
paid to employees as well as any rules, policies, or agreements
regarding compensation and benefits of State Bar employees.
This provision is consistent with the Legislature's efforts to
ensure transparency generally and with the Public Records Act
requirements imposed on state employees.
Dozens of legal services providers strongly support this measure
and the State Bar of California also supports the measure,
noting that it appreciates "the consideration and trust given
the Bar in the legislative process and the opportunity to self
examine the Board's public protection responsibilities and to
report its findings to the legislature." It also supports the
new voluntary mechanism provided Bar members to provide greater
financial support to legal services for all Californians.
Analysis Prepared by : Drew Liebert / JUD. / (916) 319-2334
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FN:
0006790