BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 1404
                                                                  Page 1

          Date of Hearing:  May 10, 2011

                           ASSEMBLY COMMITTEE ON JUDICIARY
                                  Mike Feuer, Chair
                  AB 1404 (Judiciary) - As Introduced: March 7, 2011

                                  PROPOSED CONSENT
                                           
          SUBJECT  :  ATTORNEYS: TRUST ACCOUNTS

           KEY ISSUE  :  SHOULD AN ERROR IN THE TRUST ACCOUNTS LAW BE 
          CORRECTED?

           FISCAL EFFECT  :  As currently in print this bill is keyed 
          non-fiscal.

                                      SYNOPSIS
          
          This non-controversial bill corrects a technical error in the 
          Committee's AB 940 (Judiciary) of 2009 in order to avoid 
          potential confusion.  Attorneys are required to hold certain 
          client funds in trust accounts.  AB 940 was adopted unanimously 
          in both houses to clarify and update those rules.  Unfortunately 
          that bill was codified with a typographical error, using the 
          word "in" where the word "on" was intended.  As with the 2009 
          measure, this bill has no opposition. 

           SUMMARY  :  Corrects an error regarding lawyer trust accounts.  
          Specifically,  this bill  substitutes the word "on" for the word 
          "in" with respect to interest-bearing lawyer trust funds.

           EXISTING LAW  requires attorneys to establish trust accounts for 
          specified client funds in the manner specified by the State Bar. 
           (Bus. & Prof. Code section 6213.)

           COMMENTS  :  AB 940 (Judiciary) of 2009, sponsored by the State 
          Bar to codify existing rules and practices, passed both houses 
          unanimously and was signed by the Governor.  Unfortunately, that 
          bill was inadvertently chaptered with a typographical error, 
          using the word "in" when the word "on" was intended with respect 
          to interest rates and dividends.  Because interest and dividends 
          are correctly paid "on" an account, not "in" an account, it 
          would be prudent to correct this error in order to promote 
          compliance and avoid unnecessary confusion.









                                                                  AB 1404
                                                                  Page 2

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          None on file

           Opposition 
           
          None on file
           

          Analysis Prepared by  :  Kevin G. Baker / JUD. / (916) 319-2334