Bill Text: CA SB211 | 2021-2022 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: State Bar: board of trustees: reports: complaints: attorneys’ annual license fees: California Lawyers Association: Legal Services Trust Fund Commission: expenditure of funds.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2021-10-08 - Chaptered by Secretary of State. Chapter 723, Statutes of 2021. [SB211 Detail]

Download: California-2021-SB211-Amended.html

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Amended  IN  Assembly  July 14, 2021

Amended  IN  Senate  May 05, 2021

Amended  IN  Senate  April 21, 2021

Amended  IN  Senate  April 14, 2021

Amended  IN  Senate  March 09, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill

No. 211

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Introduced by Senator Umberg

January 12, 2021

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An act to amend Sections 6056, 6140, and 6141 6141, and 6145 of, to add Section 6210.5 to, and to repeal Sections 6011 and 6069.5 of, the Business and Professions Code, relating to attorneys.

LEGISLATIVE COUNSEL'S DIGEST

SB 211, as amended, Umberg. State Bar: board of trustees: report: attorneys’ annual license fees: California Lawyers Association. Association: Legal Services Trust Fund Commission.

Existing law, the State Bar Act, provides for the licensure and regulation of attorneys by the State Bar of California, a public corporation. The State Bar is governed by a board of trustees, to consist under the act of no more than 19 members and no fewer than 13 members. The act states that it is the intent of the Legislature that the board transition to a 13-member board, as specified, with the goal of instituting such a board by October 31, 2020.

This bill would delete these provisions on the size of the board of trustees.

Existing law requires the State Bar to assist in the establishment of a private, nonprofit corporation, named the California Lawyers Association. Existing law requires the California Lawyers Association to be governed in accordance with its bylaws and sets forth requirements for the bylaws, including membership of its governing board.

This bill would delete the provision requiring the California Lawyers Association to be governed in accordance with its bylaws and setting forth requirements for its bylaws.

The act requires the State Bar to conduct a review and study regarding errors and omissions insurance for attorneys licensed in this state, including determinations on prescribed topics, and to report its findings to the Supreme Court and the Legislature no later than March 31, 2019.

This bill would delete that study and report requirement.

Existing law requires the board to appoint a lawyer admitted to practice in California to serve as chief trial counsel, and makes the appointment subject to confirmation by the Senate. Existing law authorizes the chief trial counsel to, among other things, initiate and conduct investigations of all matters affecting or relating to the discipline of the licensees, unlawful practice of law, or unlawful solicitation of business for an attorney at law or law firm.

Existing law, until January 1, 2022, requires the board to charge an annual license fee for active licensees of up to $395 for 2021. The act also requires the board to charge an annual license fee for inactive licensees of up to $97.40 for inactive licensees on and after January 1, 2021.

This bill would prohibit the board from charging the annual license fee for active licensees for 2022 and the annual license fee for inactive licensees for 2022 and thereafter unless and until the Senate confirms the appointment of the chief trial counsel, in which case the bill would require the board to charge those annual license fees up to unspecified amounts.

Existing law requires the board to contract with the California State Auditor’s Office to conduct a performance audit of the State Bar’s operations every 2 years, as prescribed.

This bill would require the California State Auditor’s Office to conduct an independent audit to determine whether the State Bar’s attorney complaint and discipline process adequately protects the public from misconduct by licensed attorneys or those who wrongfully hold themselves out as licensed attorneys, as prescribed. The bill would require the audit to be submitted by no later than April 15, 2022, to specified entities. The bill would require the State Bar to use existing resources to reimburse the California State Auditor’s Office for the costs of conducting the audit. The bill would also remove obsolete provisions.

Existing law requires an attorney or law firm receiving or disbursing trust funds to establish and maintain an Interest On Lawyers’ Trust Accounts (IOLTA) account in which the attorney or law firm is required to deposit or invest all specified client deposits or funds. Existing law directs IOLTA account interest and dividends to be paid to the State Bar of California to be distributed for the provision of civil legal services to indigent persons in a prescribed order, including, after payment of administrative costs, 85% of remaining funds to qualified legal services projects.

This bill would create within the State Bar a Legal Services Trust Fund Commission to administer IOLTA accounts, Equal Access Funds, or similar funds or grant monies intended for the support of qualified legal services projects and support centers. The bill would establish the composition and duties of the commission, including, but not limited to, requiring the commission to establish rules to determine an applicant’s eligibility and grant-making decisions. The bill would provide that the provisions relating to the commission supersede any conflicting State Bar rules regarding the commission or its responsibilities or oversight by the board of trustees.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 6011 of the Business and Professions Code is repealed.

SEC. 2.

 Section 6056 of the Business and Professions Code is amended to read:

6056.

 (a) The State Bar, acting pursuant to Section 6001, shall assist the Sections of the State Bar to incorporate as a private, nonprofit corporation organized under Section 501(c)(6) of the Internal Revenue Code and shall transfer the functions and activities of the 16 State Bar Sections and the California Young Lawyers Association to the new private, nonprofit corporation, to be called the California Lawyers Association. The California Lawyers Association shall be a voluntary association, shall not be a part of the State Bar, and shall not be funded in any way through mandatory fees collected by the State Bar. The California Lawyers Association shall have independent contracting authority and full control of its resources. The California Lawyers Association shall not be considered a state, local, or other public body for any purpose, including, but not limited to, the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code) and the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).

(b) The California Lawyers Association shall establish the criteria for membership in the California Young Lawyers Association. The California Lawyers Association may change the name of the California Young Lawyers Association to another name consistent with the criteria for membership and its mission.

(c) The State Bar may assist the California Lawyers Association in gaining appointment to the American Bar Association (ABA) House of Delegates, consistent with the California Lawyers Association’s mission and subject to the consent of the ABA.

(d) The State Bar shall support the California Lawyers Association’s efforts to partner with the Continuing Education of the Bar (CEB), subject to agreement by the University of California.

(e) The State Bar of California shall ensure that State Bar staff who support the sections, as of September 15, 2017, are reassigned to other comparable positions within the State Bar.

(f) The Sections of the State Bar or the California Lawyers Association and the State Bar shall enter into a memorandum of understanding regarding the terms of separation of the Sections of the State Bar from the State Bar and mandatory duties of the California Lawyers Association, including a requirement to provide all of the following:

(1) Low- and no-cost mandatory continuing legal education (MCLE).

(2) Expertise and information to the State Bar, as requested.

(3) Educational programs and materials to the licensees of the State Bar and the public.

(g) The State Bar of California shall assist the California Lawyers Association in meeting the association’s requirement to provide low- and no-cost MCLE by the inclusion on the State Bar’s internet website of easily accessible links to the low- and no-cost MCLE provided by the California Lawyers Association.

SEC. 3.

 Section 6069.5 of the Business and Professions Code is repealed.

SEC. 4.

 Section 6140 of the Business and Professions Code is amended to read:

6140.

 (a) The board shall not charge an annual license fee for active licensees for 2022 unless and until the Senate confirms the appointment of the chief trial counsel, in which case the board shall fix the annual license fee for active licensees for 2022 at a sum not exceeding ____.

(b) The annual license fee for active licensees is payable on or before the first day of February of each year or 30 days after the date the Senate confirms the appointment of the chief trial counsel, whichever is later. If the board finds it appropriate and feasible, it may provide by rule for payment of fees on an installment basis with interest, by credit card, or other means, and may charge licensees choosing any alternative method of payment an additional fee to defray costs incurred by that election.

(c) This section shall remain in effect only until January 1, 2023, and as of that date is repealed.

SEC. 5.

 Section 6141 of the Business and Professions Code is amended to read:

6141.

 (a) On January 1, 2022, and thereafter, the board shall not charge an annual license fee for inactive licensees unless and until the Senate confirms the appointment of the chief trial counsel, in which case the board shall fix the annual license fee for inactive licensees at a sum not exceeding ____. The annual license fee for inactive licensees is payable on or before the first day of February of each year or 30 days after the date the Senate confirms the appointment of the chief trial counsel, whichever is later.

(b) An inactive licensee shall not be required to pay the annual license fee for inactive licensees for any calendar year following the calendar year in which the licensee attains 70 years of age.

SEC. 6.

 Section 6145 of the Business and Professions Code is amended to read:

6145.

 (a) The board shall engage the services of an independent national or regional public accounting firm with at least five years of experience in governmental auditing for an audit of its financial statement for each fiscal year. The financial statement shall be promptly certified under oath by the chief financial officer of the State Bar, and a copy of the audit and financial statement shall be submitted within 120 days of the close of the fiscal year to the board, to the Chief Justice of the Supreme Court, and to the Assembly and Senate Committees on Judiciary.

The audit also shall examine the receipts and expenditures of the State Bar to ensure that the funds collected on behalf of the Conference of Delegates of California Bar Associations as the independent successor entity to the former Conference of Delegates of the State Bar are conveyed to that entity, that the State Bar has been paid or reimbursed for the full cost of any administrative and support services provided to the successor entity, including the collection of fees or donations on its behalf, and that no mandatory fees are being used to fund the activities of the successor entity.

In selecting the accounting firm, the board shall consider the value of continuity, along with the risk that continued long-term engagements of an accounting firm may affect the independence of that firm.

(b) The board shall contract with the California State Auditor’s Office to conduct a performance audit of the State Bar’s operations from July 1, 2000, to December 31, 2000, inclusive. A copy of the performance audit shall be submitted by May 1, 2001, to the board, to the Chief Justice of the Supreme Court, and to the Assembly and Senate Committees on Judiciary.

Every two years thereafter, the board shall contract with the California State Auditor’s Office to conduct a performance audit of the State Bar’s operations for the respective fiscal year, commencing with January 1, 2002, to December 31, 2002, inclusive. A copy of the performance audit shall be submitted within 120 days of the close of the fiscal year for which the audit was performed to the board, to the Chief Justice of the Supreme Court, and to the Assembly and Senate Committees on Judiciary.

For the purposes of this subdivision, the California State Auditor’s Office may contract with a third party to conduct the performance audit. This subdivision is not intended to reduce the number of audits the California State Auditor’s Office may otherwise be able to conduct.

(c)(1)For the 2019 audit required pursuant to subdivision (b), the California State Auditor’s Office shall conduct a performance audit of the State Bar as set forth in this subdivision. The State Bar shall provide technical assistance, data, or information as requested by the California State Auditor. It is the intent of the Legislature that this audit can be reviewed in conjunction with the legislation that authorizes the State Bar’s licensing fee in 2020.

(2)The audit shall evaluate each program or division of the State Bar receiving support from the annual State Bar licensing fees and other fees required of active and inactive licensees.

(3)The audit shall, at minimum, include the following for each program or division:

(A)An assessment of how much fee revenue, staff, and resources are currently budgeted and subsequently expended to perform existing tasks and responsibilities.

(B)An assessment of whether the State Bar has appropriate program performance measures in place and how these measures are used for budgeting purposes.

(C)An assessment of the usage of real property owned by the State Bar.

(D)A review of the State Bar’s cost allocation plan used to allocate administrative costs.

(E)A review of any proposals for additional funding or resources requested by the State Bar to determine whether these proposals are necessary to meet the State Bar’s public protection function, as well as the accuracy of identified associated funding needs, after reviewing how existing resources are used.

(F)A calculation of how much fee revenue would be needed from each State Bar active and inactive licensee to fully offset State Bar costs to perform existing tasks and responsibilities and to support additional proposed expenditures determined to be necessary to meet the State Bar’s public protection function. This calculation shall take into account any proposed business process reengineering, reallocations, or efficiencies identified by the California State Auditor.

(c) (1) The California State Auditor’s Office shall conduct an independent audit to determine whether the State Bar’s attorney complaint and discipline process adequately protects the public from misconduct by licensed attorneys or those who wrongfully hold themselves out as licensed attorneys. Specifically, this audit should analyze whether the State Bar takes reasonable steps to determine the existence and extent of alleged misconduct, if the State Bar has sufficient management controls, including conflict of interest policies, to ensure complaint investigations are not compromised by undue influence, and examine any data trends that could suggest racial or gender inequities in outcomes from the discipline process. The audit shall include consideration of possible options for the State Bar to more proactively protect the public, including, to the extent possible, the appropriateness of an independent discipline monitor to more closely review the State Bar’s discipline process, an independent ombudsperson to assist the public, and other options to protect the public. Notwithstanding subdivision (b) of Section 6086.1, case-related findings may be included in the auditor’s report, except that the names of the attorney investigated, the complaining witness or witnesses, and the names of other members of the public associated with a complaint shall not be included in the report.

(4)

(2) The 2019 audit required by this subdivision shall be submitted by May 1, 2019, no later than April 15, 2022, to the board of trustees, the Chief Justice of the Supreme Court, and to the Assembly and Senate Committees on Judiciary.

(5)

(3) The State Bar shall use existing resources to reimburse the California State Auditor’s Office for the costs of conducting the 2019 audit. audit required by this subdivision.

(d)For each program or division assessed by the California State Auditor in accordance with paragraph (2) of subdivision (c), the Legislative Analyst’s Office shall assess whether the State Bar effectively utilizes licensing fee revenues to maximize efficiencies. The State Bar shall provide technical assistance, data, or information as requested by the Legislative Analyst’s Office. The Legislative Analyst’s Office shall submit this report to the Legislature and to the Chief Justice of the Supreme Court by July 1, 2019.

SEC. 7.

 Section 6210.5 is added to the Business and Professions Code, to read:

6210.5.

 (a) There shall be created, within the State Bar, a Legal Services Trust Fund Commission to administer IOLTA accounts, Equal Access Funds, or similar funds or grant monies intended for the support of qualified legal services projects and qualified support centers, as those terms are defined in Section 6213.

(b) (1) The Legal Services Trust Fund Commission shall be comprised of 24 members as follows:

(A) Six members shall be appointed by the State Bar Board of Trustees.

(B) Two members shall be appointed by the Senate Committee on Rules.

(C) Two members shall be appointed by the Speaker of the Assembly.

(D) Ten members shall be appointed by the Chair of the Judicial Council, of which three shall be nonvoting judicial advisors. The three nonvoting judicial advisors shall be comprised of two superior court judges and one appellate justice.

(E) Four members shall be appointed by the Legal Services Trust Fund Commission, of which at least two shall be, or have been within five years of appointment, indigent persons as defined by Section 6213.

(2) No employee or independent contractor acting as a consultant to a potential recipient of Legal Services Trust Fund grants shall be appointed to the Legal Services Trust Fund Commission.

(3) Each member shall serve for a term of three years that begins upon appointment. Upon completion of an initial term, a Commissioner may be reappointed for a second three-year term and extend an initial or second term by one or two years to allow a member to serve as chair or vice chair.

(4) Each member shall serve at the pleasure of the appointing entity.

(c) The chair and the vice chair of the Legal Services Trust Fund Commission shall be selected by the voting members of the Legal Services Trust Fund Commission. The chair shall preside over its meetings.

(d) The Legal Services Trust Fund Commission shall be subject to the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) and the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).

(e) The Legal Services Trust Fund Commission shall, subject to this article, establish rules to determine an applicant’s eligibility and grant-making decisions, monitor and evaluate a recipient’s compliance with Legal Services Trust Fund requirements and grant terms based on criteria established by the Legal Services Trust Fund Commission.

(f) At the conclusion of each fiscal year, the Legal Services Trust Fund Commission shall include a report of receipts of funds under this article, expenditures for administrative costs, and disbursements of the funds on a county-by-county basis, in the annual report of the State Bar’s receipts and expenditures required pursuant to Section 6145.

(g) This section supersedes any conflicting State Bar rules regarding the Legal Services Trust Fund Commission or its responsibilities or oversight by the State Bar’s board of trustees.