BILL ANALYSIS �
AB 2685
Page 1
Date of Hearing: May 8, 2012
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 2685 (Committee on Judiciary) - As Introduced: March 12,
2012
SUBJECT : STATE BAR DUES: ANNUAL AUTHORIZATION OF MEMBER DUES
AND LEGISLATIVE OVERSIGHT
KEY ISSUES :
1)SHOULD THE LEGISLATURE AUTHORIZE THE STATE BAR TO assess
MEMBERSHIP dues for active bar members in 2013 AT $410?
2)as part of ITS annual oversight process, should the
legislature AND THE BAR consider additional measures to
further strengthen bar procedures, accountability and
openness, CONSISTENT WITH THE BAR'S PARAMOUNT DUTY TO MAXIMIZE
PUBLIC PROTECTION?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
Last year the Legislature enacted, in SB 163 (Evans), Chap. 417,
Stats., 2011, the most sweeping changes to the governance
structure of the State Bar in many decades. Among other
reforms, the Legislature reduced the size and revised the
composition of the Bar board, and specified for the first time
that the protection of the public is the highest priority for
the Bar and its board of trustees (the new name for the members
of the board). In addition, the measure reduced member dues by
$10 for the current year by granting all Bar members a $10
rebate due to a substantial surplus at the time in the Bar's
General Fund. The measure also increased from $10 to $20 for
this year and next the amount that Bar members may voluntarily
contribute to the Bar's legal services fund to address the
ongoing crisis in legal services for Californians of lesser
means, though any Bar member continues to be free to choose not
to have his or her dues used for this purpose. In addition, SB
163 acknowledged that the Bar, working collaboratively with the
chairs of the two Judiciary Committees, also would be
transferring $2 million this year and another $2 million in 2013
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from its Insurance Affinity program account (non-mandatory dues
monies) to the Bar's legal services fund to similarly help
address the decimated funds available to the state's indigent
legal services programs. Through these collaborative actions
between the Bar and the Assembly and Senate Judiciary
Committees, Bar members thus had reduced dues this year, and
California's struggling legal service programs are receiving
critically-needed help this and next year, while at the same
time ensuring surpluses remain in the Bar's General Fund and its
"rainy day" fund.
This year's measure returns active member dues to $410.
Consistent with the Committee's annual oversight
responsibilities of the Bar, the analysis notes the impressive
progress the Bar and its new leaders have made in addressing
problems with its discipline system and it also notes a few
issue areas the Legislature may wish to review with the Bar and
other interested parties in the Bar's and Legislature's
continuing efforts to further strengthen Bar procedures,
accountability and openness.
SUMMARY : Authorizes the State Bar to assess active member dues
of $410 for 2013 only.
EXISTING LAW :
1)Requires all attorneys who practice law in California to be
members of the State Bar and establishes the Bar for the
purpose of regulating the legal profession. Pursuant to the
State Bar Act, the annual mandatory membership fee set by the
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.)
2)Authorizes the Bar to collect $315 in annual membership fees
from active members, with a one year only $10 rebate in 2012,
for a total annual dues bill of $400 in 2012 only. (Bus. &
Prof. Code Sec. 6140.) The other $95 is pursuant to statutory
authorization to assess annually the following fees: $40 for
the Client Security Fund (Bus. & Prof. Code Sec. 6140.55); $25
for disciplinary activities (Bus. & Prof. Code Sec. 6140.6);
$10 to fund the Lawyer Assistance Program ("LAP") (Bus. &
Prof. Code Sec. 6140.9); $10 special assessment to fund
information technology upgrades (expires January 1, 2014)
(Bus. & Prof. Code Sec. 6140.35); and $10 for the Building
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Fund (expires January 1, 2014) (Bus. & Prof. Code Sec.
6140.3).
3)Authorizes the Bar to collect $75 in annual membership fees
from inactive members, with a one year only $10 rebate in
2012, for a total annual dues bill of $115 in 2012 only.
(Bus. & Prof. Code Sec. 6141.) The other $50 is pursuant to
statutory authorization to assess annually the following fees:
$10 for the Client Security Fund (Bus. & Prof. Code Sec.
6140.55); $25 for disciplinary activities (Bus. & Prof. Code
Sec. 6140.6); $5 to fund the Lawyer Assistance Program (Bus. &
Prof. Code Sec. 6140.9); and $10 for the Building Fund
(expires January 1, 2014) (Bus. & Prof. Code Sec. 6140.3).
4)Allows Bar members this year and next to voluntarily allocate
$20 to the Bar's legal services fund to address the ongoing
crisis in legal services for Californians of lesser means,
unless any Bar member chooses not to support those activities.
5)Acknowledges the Bar's commitment to transfer $2 million this
year and $2 million in 2013 from non-mandatory dues monies to
the Bar's legal services fund to help address the state's
decimated legal services programs.
6)Amongst other things, provides that protection of the public
shall be the highest priority of the State Bar and the board
of trustees (the new name for the members of the Bar board) in
exercising their licensing, regulatory, and disciplinary
functions, and specifies that whenever the protection of the
public is inconsistent with other interests sought to be
promoted, the protection of the public shall be paramount.
(Bus. & Prof. Code Sec. 6001.1. All further declarations of
existing may be found in this code as part of the reforms
contained in SB 163 (Evans) last year, Chap. 417, Stats.,
2011.)
7)Requires the board to ensure that its open meeting
requirements are "consistent with, and conform to," the
Bagley-Keene Open Meeting Act.
8)Requires the board to complete and implement a five-year
strategic plan.
COMMENTS : The State Bar of California is the largest state bar
in the country. As of February 2011, the Bar had 170,986 active
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members and 49,034 inactive members. The Bar's programs are
financed mostly by annual mandatory membership dues paid by
attorneys as well as other fees paid by applicants seeking to
practice law. The Bar has many committed and hard-working staff
and new Bar leaders who work diligently to ensure that the legal
profession's admissions system is properly administered to
protect the public, and its discipline system maximizes public
protection.
Last Year's Major Governance Reforms: Last year the Legislature
enacted, in SB 163 (Evans), Chap. 417, Stats., 2011, the most
sweeping changes to the governance structure of the State Bar in
many decades. Among other reforms, the Legislature reduced the
size and revised the composition of the Bar board, and specified
for the first time that the protection of the public is the
highest priority for the Bar and its board of trustees (the new
name for the members of the board). In addition, the measure
reduced member dues by $10 for the current year by granting all
Bar members a $10 rebate due to a substantial surplus at the
time in the Bar's General Fund. The measure also increased from
$10 to $20 for this year and next the amount that Bar members
may voluntarily contribute to the Bar's legal services fund to
address the ongoing crisis in legal services for Californians of
lesser means, though any Bar member continues to be free to
choose not to have his or her dues used for this purpose. In
addition, SB 163 acknowledged that the Bar, working
collaboratively with the chairs of the two Judiciary Committees,
also would be transferring $2 million this year and another $2
million in 2013 from its Insurance Affinity program account
(non-mandatory dues monies) to the Bar's legal services fund to
similarly help address the decimated funds available to the
state's indigent legal services programs.
Through these collaborative actions between the Bar and the
Assembly and Senate Judiciary Committees, Bar members thus had
reduced dues this year, and California's struggling legal
service programs are receiving critically-needed help this and
next year, while at the same time ensuring healthy surpluses
remain in the Bar's General Fund and its emergency "rainy day"
fund. This year's measure reflects the termination of the one
year only rebate, returning active member dues to $410 for 2013
only. The analysis briefly notes the very impressive progress
this past year under the Bar's new leadership in dramatically
reducing its decades-old backlog of discipline cases, and,
consistent with the Committee's annual oversight
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responsibilities of the Bar as well as with the Bar's continuing
efforts, and duty, to protect the public, notes some key issue
areas the Legislature may wish to review with the Bar and other
interested parties to further strengthen Bar procedures,
accountability and openness.
Successful Recent Implementation Efforts: Since the enactment
of SB 163 (Evans), the three branches of state government have
been working smoothly in the transition process called for in
that landmark legislation. The Bar has met all of the required
deadlines for informing the Legislature about the process for
transition to a smaller board as well as in developing its new 5
year strategic plan. It has also made very impressive progress
this past year under new leadership in dramatically reducing its
decades-old backlog of discipline cases. Just since this past
July, the Bar reportedly has cleared away thousands of
backlogged cases and also dramatically cut the number of fully
investigated backlog cases awaiting formal charges. Thus 2012
has proved to be a year of substantial reported progress by the
Bar on the discipline system reform and repair front, as well as
on the road to governance reform.
Thus as the Legislature strives as part of its annual oversight
responsibility to continue to assist the Bar and the public in
further strengthening the nation's largest Bar, it is timely for
the Legislature to continue to review with the Bar and other
interested parties other additional ways in which the Bar can
potentially improve its procedures to maximize transparency,
accountability and openness, and maximize its paramount duty of
public protection. In this regard, the following issue areas
may benefit from this Bar and legislative review as this measure
moves forward.
The Bar's Judicial Branch Location Has Historically Thus Far
Left It Out From Some Important Consumer Protection,
Transparency and Openness Laws . Unlike other state licensing
agencies that operate under the executive branch of government,
the Bar is located within the judicial branch. ("The State Bar
of California is a public corporation." (Cal. Const. Art IV,
Sec. 9).) Even though an important part of the Bar function as
an administrative arm of the court for purposes of admission and
discipline of attorneys, the Bar has many other non-court
related functions. Thus the Bar has long been subject to
legislative oversight and direction. For example, the Business
& Professions Code already addresses such topics as the
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requirements for attorney admission (Bus. & Prof. Code Sec.
6060-69), the composition and duties of the Committee of Bar
Examiners (Bus. & Prof. Code Sec. 6064.6, 64.7), and the duties
and composition of the State Bar Board of Trustees itself (Bus.
& Prof. Code Sec. 6010-33).
Because the Bar is housed within the judicial branch, it has not
yet been subject to some of the important consumer protection
and openness laws which seek to ensure the integrity,
transparency, and accountability of state government operations,
such as the Public Records Act, the Public Contract rules and
some conflict of interest requirements under the Political
Reform Act (Gov't Code Sec. 87311.5). (However there has been a
trend towards consistency with key consumer protection laws; for
example, last year in SB 163 (Evans), Chap. 417, Stats. 2011,
the Bar was essentially made subject to the terms of the
Bagley-Keene Opening Meeting Law (B-K Act) by the Legislature,
see discussion below).
Whether continuing to exclude the Bar's non-court related
functions from the benefits of such important public protection
and transparency laws make sense today, in light of the
government's increasingly vigorous commitment to transparency
and accountability to the public it serves, as well as the Bar's
express public protection duty and its recent acknowledgment of
the importance of providing maximum transparency to the public,
warrants beneficial review and consideration by the Bar and the
Legislature.
Last Year the Legislature Directed the Bar to Conform to the
Bagley-Keene Open Meeting Requirements, But the Bar Apparently
Has Not Yet Fully Conformed On Some Key Secrecy Issues: All
licensing boards in the executive branch governing such
professions as physicians and accountants have long been subject
to the B-K Act. As summarized above, SB 163 (Evans) last year
included significant reforms of the State Bar's governance. One
of those reforms specifically provides that the board "shall
ensure that its open meeting requirements, as described in
�Business & Professions Code] Section 6026.5, are consistent
with, and conform to," the B-K Act. (Bus. & Prof. Code Sec.
6026.7.) Thus, the plain language of current law requires the
Bar board to act to ensure that its open meetings requirements
are "consistent with, and conform to" the B-K open meetings law.
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Since then, the Center for Public Interest Law at the University
of San Diego School of Law (CPIL) has raised numerous concerns
to this Committee about the Bar's asserted failure to comply
with the requirements of the B-K Act in some key respects. In a
memorandum transmitted to the Committee, CPIL states
emphatically that the clear language of Business & Professions
Code section 6026.7 contains no exceptions to the B-K Act, and
thus on its face requires the Bar to comply with all of the B-K
Act, not just those parts of the Act that meet with the board's
approval. While the Bar acknowledges the importance of
providing maximum transparency to the public, CPIL contends that
the Bar erroneously believes that the language and intent of SB
163 allows it broad discretion to depart from the B-K Act in
non-trivial ways -- notwithstanding the statute's use of the
words "shall, "consistent with," and "conform to." CPIL points
to the board's unsuccessful legislative efforts to eliminate the
B-K Act requirement from SB 163 as further evidence that the
Legislature meant what it expressly stated in SB 163, namely,
that the Bar's open meetings requirements must be "consistent
with, and conform to" the B-K Act. Moreover, CPIL argues that
the board's unsuccessful effort to secure a letter in the Senate
Journal to limit its obligation under the B-K Act is additional
evidence reinforcing that the plain language of Business &
Professions Code section 6026.7 means what it says.
The Bar counters CPIL's contentions, arguing that it simply is
not covered by the B-K Act since last year's legislation did not
mandate that the Bar literally "adopt" the B-K Act and did not
eliminate the Government Code provision which exempts Article IV
entities from the definition of state entities subject to the
B-K Act. (Gov't Code Sec. 11121.1(a).) The Bar states that the
words "consistent with" and "conform to" "demonstrate that the
Legislature was not mandating that the Bar adopt" the B-K Act,
but only that the Bar's rules should be in harmony with it, "not
in rigid conformity with every detail of the Act." While the
Bar cites case law to support its position, CPIL notes that the
cases cited simply make clear that the Bar need not adopt the
precise or identical language of the B-K Act. The cases do not
imply, states CPIL, the Bar may depart from important,
substantive non-trivial provisions of the B-K Act. The Bar
insists that its rules provide "significant public access to the
Bar's business" and that its open meetings rules only differ
from those under the B-K Act in "limited ways."
CPIL notes that Bar rules apparently continue to allow for a
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secret ballot for officer elections. However the public
interest group notes the B-K Act does not allow for such
secrecy, and no other licensed professions appear to elect their
governing officers without the accountability and transparency
of doing so in public. (Citing 68 Ops. Cal. Atty. Gen. 65
(1985).)
Of particular potential concern, states CPIL, the Bar's rules
continue to allow its board to meet whenever it likes in closed
session "to receive advice of counsel." Importantly for public
transparency, however, CPIL notes that the B-K Act only permits
closed session for the very limited purpose of discussing
pending litigation. (Gov't Code Sec. 1126(e)(1).) The purpose
of this exception, according to the Attorney General, is to
permit a public agency to confer with its attorney only where an
open discussion would "prejudice the position of the agency in
the �pending] litigation" and this exception "constitutes the
exclusive expression of the attorney-client privilege" under the
B-K Act. (California Attorney General's Office, A Handy Guide
to The Bagley-Keene Open Meeting Act of 2004, 12.)
Should Bar Administrative Records Be More Accessible To the
Public? The Legislature has broadly supported transparency and
stated, in the California Public Records Act (CPRA), that
"access to information concerning the conduct of the people's
business is a fundamental and necessary right of every person in
this state." (Gov't Code Sec. 6250.) The CPRA, however,
explicitly exempts agencies under Article IV of State
Constitution, thus apparently, although not explicitly,
exempting the Bar. While courts are not subject to the CPRA,
judicial records are public records (with exceptions) and the
Legislature recently directed the judicial branch to open up its
administrative records as well. (See Gov't Code Sec. 68106.2,
directing the Judicial Council to develop a rule of court - now
Rule 10.500 - to provide public access to the administrative
records of the courts.) However, because of the Bar's status as
a judicial branch entity that is also not a court, it appears
thus far not to have been included in the broad public
protection mandate for public access to records. It is
important to note in this regard that the Supreme Court is set
to consider a common law right to access to the Bar's records
when it hears Sander v. State Bar, on appeal from a unanimous
panel of the First District which found such right of access
applicable to the Bar. Thus this appears to be an additional
and timely issue for possible consideration as part of the
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Legislature's oversight process.
Should the Bar Be Further Subject To The Conflict of Interest
Provisions Under the Political Reform Act? Legislative findings
that "�p]ublic officials, whether elected or appointed, should
perform their duties in an impartial manner, free from bias
caused by their own financial interests or the financial
interests of persons who have supported them" helped lead to the
creation of the Political Reform Act (Act). (Gov't Code Sec.
81001(b).) As a result, the Act specifically provides: "No
public official at any level of state or local government shall
make, participate in making or in any way attempt to use his
official position to influence a governmental decision in which
he knows or has reason to know he has a financial interest."
(Gov't Code Sec. 87100.) The Act requires that public entities
have conflict of interest codes that prevent officials from
acting in a way that financially benefits them. The Bar is
already subject to this Act. However, the Bar, along with the
Judicial Council and the Commission on Judicial Performance, is
not yet apparently required to comply with the requirement,
applicable to other entities, that its conflict of interest
codes must require that designated employees be disqualified
from decisions that may financially benefit them. (Gov't Code
Sec. 87302(c), 87311.5(b).) It is unclear why the Bar has
apparently thus far been excluded from this public protection
requirement, and this too is an issue area that may benefit by
further Bar and legislative consideration.
Should The Bar Follow Otherwise Applicable Contracting Rules
Under the Public Contract Code for Greater Public Protection and
Transparency of Operations? The Public Contract Code requires
that contracts for services entered into by state agencies for
$5,000 or more are generally subject to significant control
requirements, including competitive bidding, and review and
approval by the Department of General Services. However, courts
and agencies within the judicial branch are currently
specifically exempted from these requirements. (Public Contract
Code section 10335.7.) Instead, thus far the Bar has only been
required by the Legislature to use competitive bidding for
contracts that are over $50,000 in the aggregate or, in the case
of information technology, over $100,000. (Bus. & Prof. Code
Sec. 6008.6.) There is also apparently no agency, similar to
the Department of General Services, providing oversight of the
Bar's contracting processes. While there is certainly no
suggestion that the Bar may be inappropriately awarding
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contracts or otherwise misusing its resources in any way, this
apparent lack of the traditional oversight mechanisms used in
other state administrative agencies inadvertently leaves open
the risk of potential misuse of member dues. Recent,
much-publicized difficulties in the development of various state
automation systems underscore the need and benefit for all state
agencies to have independent oversight mechanisms and
competitive bidding requirements when it comes to outside
contracting, so this too may be a helpful area of potential
consideration by the Bar and the Legislature.
The Bar's Initial 5-Year Plan: As part of the governance
reforms last year, SB 163 required the Bar board of trustees to
complete and implement a five-year strategic plan to consider
ways to enhance the Bar's public protection goals. The Bar
adopted its initial 5-year strategic plan on February 10 of this
year, opening its report with the quote that "Protection of the
public shall be the highest priority for the State Bar of
California and the board of trustees in exercising their
licensing, regulatory, and disciplinary functions. Whenever the
protection of the public is inconsistent with other interests
sought to be promoted, the protection of the public shall be
paramount." (Citing Business & Professions Code � 6001.2.)
Following a discussion of the substantial efforts currently
underway to improve the culture at the Bar, the initial
strategic plan contains the following three "large-scale
initiatives" for seeking to maximize public protection:
1)Information Technology Initiative: Under this initiative, the
Bar will retire and replace all four of its core software
applications. This process is already underway. It will
transform the attorney discipline system from a largely
paper-driven system into a near-paperless one. It will improve
and expand access to Bar services and information by
delivering a user-friendly, task-driven online e-portal.
2)Physical Facilities Initiative: This initiative will transform
the physical workspace occupied by the Bar. Where possible,
operations will be centralized in the Bar's headquarters in
San Francisco. The headquarters building will be reconfigured
to accommodate the relocated functions, to provide modern
open-plan workspace consistent with a silo-free culture, and
to provide a more engaging environment for the public. In Los
Angeles, the Bar will procure workspace suitable to a reduced
operational footprint, configured with the same design goals
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as in San Francisco, to achieve the same efficiency and
increased productivity.
3)Operations Re-engineering Initiative: Each of the major
service areas of the Bar will undergo a top-to-bottom review
and re-engineering effort. This effort will focus on
leveraging technology to achieve efficiencies and service
improvements; identifying linkages (and possibly duplications)
across departments and service areas; and eliminating
processes that are redundant or otherwise unnecessary.
The Bar's 5-year plan however does not yet contain any specific
operational reform initiatives for maximizing public protection
regarding such issues as outside contracting, public access to
Bar records unrelated to court-related activities, and enhanced
conflict-of-interest efforts. In addition to the internal
operations goals of information technology and physical
workspace changes, these additional public policy issues should
be considered by the Bar and the Legislature for ensuring that
"Protection of the public shall be the highest priority for the
State Bar of California and the board of trustees in exercising
their licensing, regulatory, and disciplinary functions."
REGISTERED SUPPORT / OPPOSITION :
Support
State Bar
Opposition
None on file
Analysis Prepared by : Drew Liebert, Kevin Baker, and Leora
Gershenzon / JUD. / (916) 319-2334