Code Section Group

Business and Professions Code - BPC

DIVISION 3. PROFESSIONS AND VOCATIONS GENERALLY [5000 - 9998.11]

  ( Heading of Division 3 added by Stats. 1939, Ch. 30. )

CHAPTER 4. Attorneys [6000 - 6243]

  ( Chapter 4 added by Stats. 1939, Ch. 34. )

ARTICLE 8. Revenue [6140 - 6145]
  ( Article 8 added by Stats. 1939, Ch. 34. )

6140.
  

(a) The board shall fix the annual license fee for active licensees for 2019 at a sum not exceeding three hundred fifteen dollars ($315).

(b) The annual license fee for active licensees is payable on or before the first day of February of each year. 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(c) This section shall remain in effect only until January 1, 2020, and as of that date is repealed.

(Amended by Stats. 2018, Ch. 659, Sec. 93. (AB 3249) Effective January 1, 2019. Repealed as of January 1, 2020, by its own provisions.)

6140.02.
  

(a) The California Lawyers Association shall adopt a dues schedule for membership and shall provide that schedule to the State Bar by October 1 of each year.

(b) Payment of dues for membership in the California Lawyers Association and individual sections of the California Lawyers Association is voluntary. Each licensee of the State Bar shall have the option of joining the California Lawyers Association and one or more individual sections by including the dues set by the schedule established pursuant to subdivision (a) with that State Bar licensee’s annual license fees. Any contribution or membership option included with a State Bar of California mandatory fees billing statement shall include a statement that the California Lawyers Association is not a part of the State Bar and that membership in that organization is voluntary.

(c) The State Bar shall collect, in conjunction with the collection of its annual license fees under Section 6140, membership fees for the California Lawyers Association as provided by subdivision (b) of Section 6031.5.

(d) This section is not intended to limit the California Lawyers Association membership to licensees of the State Bar or restrict the California Lawyers Association from collecting membership dues or donations by other means.

(Amended by Stats. 2018, Ch. 659, Sec. 94. (AB 3249) Effective January 1, 2019.)

6140.03.
  

(a) The board shall increase each of the annual license fees fixed by Sections 6140 and 6141 by an additional forty dollars ($40), to be allocated only for the purposes established pursuant to Section 6033, except to the extent that a licensee elects not to support those activities.

(b) The invoice provided to licensees for payment of the annual license fee shall provide each licensee the option of deducting forty dollars ($40) from the annual license fee if the licensee elects not to have this amount allocated for the purposes established pursuant to Section 6033.

(Amended by Stats. 2018, Ch. 659, Sec. 95. (AB 3249) Effective January 1, 2019.)

6140.05.
  

(a) The invoice provided to licensees for payment of the annual license fee shall provide each licensee the option of deducting five dollars ($5) from the annual fee if the licensee elects not to support lobbying and related activities by the State Bar outside of the parameters established by the United States Supreme Court in Keller v. State Bar of California (1990) 496 U.S. 1.

(b) For the support or defense of lobbying and related activities conducted by the State Bar on or after January 1, 2000, outside of the parameters of Keller v. State Bar of California, and in support or defense of any litigation arising therefrom, the Board of Trustees of the State Bar shall not expend a sum exceeding the following: the product of the number of licensees paying their annual fees who did not elect the optional deduction multiplied by five dollars ($5).

Moneys collected pursuant to this section shall not be deemed voluntary fees or funds for the purpose of subdivision (c) of Section 6031.5.

(c) As used in this section, “lobbying and related activities by the State Bar” includes the consideration of measures by the Board of Trustees of the State Bar that are deemed outside the parameters established in Keller v. State Bar, the purview determination, lobbying and the preparation for lobbying of the measures, and any litigation in support or defense of that lobbying. The determination of these costs shall include, but not be limited to, overhead and administrative costs.

(Amended by Stats. 2018, Ch. 659, Sec. 96. (AB 3249) Effective January 1, 2019.)

6140.1.
  

(a) The State Bar annually shall submit its adopted final budget by February 28, so that the budget can be reviewed and approved in conjunction with any bill that would authorize the imposition of license fees. Each budget shall include the estimated revenues, expenditures, and staffing levels for all of the programs and funds administered by the State Bar. In addition to the final budget, the submission shall also include the proposed budget for the following year. Any bill that authorizes the imposition of license fees shall be a fiscal bill and shall be referred to the appropriate fiscal committees; provided, however, that the bill may be approved by a majority vote.

(b) The State Bar shall submit the budget documents in a form comparable to the documents prepared by state departments for inclusion in the Governor’s Budget and the salaries and wages supplement. In addition, the bar shall provide supplementary schedules detailing operating expenses and equipment, all revenue sources, any reimbursements or interfund transfers, fund balances, and other related supporting documentation. The bar shall submit budget change proposals with its final budget, explaining the need for any differences between the current and proposed budgets.

(Amended by Stats. 2018, Ch. 659, Sec. 97. (AB 3249) Effective January 1, 2019.)

6140.12.
  

The board shall complete and implement a five-year strategic plan to be updated every two years. In conjunction with the submission of the board’s adopted final budget as required by Section 6140.1, the chair shall report to the Supreme Court, the Governor, and the Senate and Assembly Committees on Judiciary on the measures the board has taken to implement the strategic plan and shall indicate the measures the board will need to take in the remaining years of the strategic plan to address the projected needs contained in the plan.

(Amended by Stats. 2018, Ch. 659, Sec. 98. (AB 3249) Effective January 1, 2019.)

6140.16.
  

(a) To align its staffing with its mission to protect the public as provided in Section 6001.1 and to provide guidance to the State Bar and the Legislature in allocating resources, the State Bar shall develop and implement a workforce plan for its discipline system and conduct a public sector compensation and benefits study. The workforce plan and compensation study shall be used to reassess the numbers and classifications of staff required to conduct the activities of the State Bar’s disciplinary activities.

(b) The workforce planning shall include the development and recommendation of an appropriate backlog goal, an assessment of the staffing needed to achieve that goal while ensuring that the discipline process is not compromised, and the creation of policies and procedures sufficient to provide adequate guidance to the staff of each unit within the discipline system.

(c) In addition to the requirements in subdivisions (a) and (b), the State Bar shall conduct a thorough analysis of its priorities and necessary operating costs and develop a spending plan, which includes its fund balances, to determine a reasonable amount for the annual license fee that reflects its actual or known costs and those to implement its workforce plan.

(d) The State Bar shall submit a report on its workforce plan and spending plan to the Legislature by May 15, 2016, so that the plans can be reviewed in conjunction with the bill that would authorize the imposition of the State Bar’s license fee. The report shall be submitted in compliance with Section 9795 of the Government Code. The State Bar shall complete and implement its workforce plan by December 31, 2016.

(Amended by Stats. 2018, Ch. 659, Sec. 99. (AB 3249) Effective January 1, 2019.)

6140.2.
  

The State Bar shall set as a goal the improvement of its disciplinary system so that no more than six months will elapse from the receipt of complaints to the time of dismissal, admonishment of the attorney involved, or the filing of formal charges by the State Bar Office of Trial Counsel.

(Amended by Stats. 2004, Ch. 193, Sec. 6. Effective January 1, 2005.)

6140.37.
  

The State Bar shall have a preference for using in-house employees for information technology projects, whenever possible. Nothing in this section shall be read to be inconsistent with any memorandum of understanding between the State Bar and the recognized employee organizations or any relevant principles of labor law.

(Added by Stats. 2010, Ch. 2, Sec. 3. (SB 55) Effective January 25, 2010.)

6140.5.
  

(a) The board shall establish and administer a Client Security Fund to relieve or mitigate pecuniary losses caused by the dishonest conduct of active licensees of the State Bar, Foreign Legal Consultants registered with the State Bar, and attorneys registered with the State Bar under the Multijurisdictional Practice Program, arising from or connected with the practice of law. Any payments from the fund shall be discretionary and shall be subject to regulation and conditions as the board shall prescribe. The board may delegate the administration of the fund to the State Bar Court, or to any board or committee created by the board of trustees.

(b) Upon making a payment to a person who has applied to the fund for payment to relieve or mitigate pecuniary losses caused by the dishonest conduct of an active licensee of the State Bar, the State Bar is subrogated, to the extent of that payment, to the rights of the applicant against any person or persons who, or entity that, caused the pecuniary loss. The State Bar may bring an action to enforce those rights within three years from the date of payment to the applicant.

(c) Any attorney whose actions have caused the payment of funds to a claimant from the Client Security Fund shall reimburse the fund for all moneys paid out as a result of his or her conduct with interest, in addition to payment of the assessment for the procedural costs of processing the claim, as a condition of continued practice. The reimbursed amount, plus applicable interest and costs, shall be added to and become a part of the license fee of a publicly reproved or suspended licensee for the next calendar year. For a licensee who resigns with disciplinary charges pending or a licensee who is suspended or disbarred, the reimbursed amount, plus applicable interest and costs, shall be paid as a condition of applying for reinstatement of his or her license to practice law or return to active license status.

(d) Any assessment against an attorney pursuant to subdivision (c) that is part of an order imposing a public reproval on a licensee or is part of an order imposing discipline or accepting a resignation with a disciplinary matter pending, may also be enforced as a money judgment. This subdivision does not limit the power of the Supreme Court to alter the amount owed or to authorize the State Bar Court, in the enforcement of a judgment under this subdivision, to approve an agreement for the compromise of that judgment.

(Amended by Stats. 2018, Ch. 659, Sec. 100. (AB 3249) Effective January 1, 2019.)

6140.55.
  

The board may increase the annual license fees fixed by it pursuant to Section 6140 by an additional amount per active licensee not to exceed forty dollars ($40), and the annual license fees fixed by it pursuant to Section 6141 by an additional amount per inactive licensee not to exceed ten dollars ($10), in any year, the additional amount to be applied only for the purposes of the Client Security Fund and the costs of its administration, including, but not limited to, the costs of processing, determining, defending, or insuring claims against the fund.

(Amended by Stats. 2018, Ch. 659, Sec. 101. (AB 3249) Effective January 1, 2019.)

6140.56.
  

(a) To ensure that the Client Security Fund can adequately protect the public and relieve or mitigate financial losses caused by the dishonest conduct of licensees of the State Bar by paying claims in a timely manner, the State Bar shall conduct a thorough analysis of the Client Security Fund, including a review of the State Bar’s oversight of the Client Security Fund, to ensure that the structure provides for the most effective and efficient operation of the fund, a determination of the ongoing needs of the fund to satisfy claims in a timely manner, a review of additional efforts that can be taken to increase the collection of payments from the responsible attorneys, and a review of other State Bar expenditures to determine whether other expenditures that do not directly impact the State Bar’s public protection functions, including, but not limited to, executive salaries and benefits, can be reduced or redirected in order to better fund the Client Security Fund through existing revenue, and, whether, after all other options have been fully and thoroughly exhausted, an increase in license fees is necessary to ensure that the Client Security Fund can timely pay claims.

(b) The State Bar shall submit a report on its analysis of the Client Security Fund to the Legislature by March 15, 2018, so that the plans can be reviewed in conjunction with the bill that would authorize the imposition of the State Bar’s license fee. The report shall be submitted in compliance with Section 9795 of the Government Code.

(c) For purposes of this section, “timely manner” means within 12 months from either the time the claim is received by the State Bar or the resolution of the underlying discipline case involving an attorney licensee that is a prerequisite to paying the claim, whichever is later.

(Amended by Stats. 2018, Ch. 659, Sec. 102. (AB 3249) Effective January 1, 2019.)

6140.6.
  

The board may increase the annual license fees fixed by Sections 6140 and 6141 by an additional amount not to exceed twenty-five dollars ($25) to be applied to the costs of the disciplinary system.

(Amended by Stats. 2018, Ch. 659, Sec. 103. (AB 3249) Effective January 1, 2019.)

6140.7.
  

Costs assessed against a licensee publicly reproved or suspended, where suspension is stayed and the licensee is not actually suspended, shall be added to and become a part of the license fee of the licensee, for the next calendar year. Unless time for payment of discipline costs is extended pursuant to subdivision (c) of Section 6086.10, costs assessed against a licensee who resigns with disciplinary charges pending or by a licensee who is actually suspended or disbarred shall be paid as a condition of applying for reinstatement of his or her license to practice law or return to active license status.

(Amended by Stats. 2018, Ch. 659, Sec. 104. (AB 3249) Effective January 1, 2019.)

6140.9.
  

(a) Moneys for the support of the program established pursuant to Article 15 (commencing with Section 6230), treatment services for those who cannot afford to pay, and related programs approved by the committee established pursuant to Section 6231 shall be paid in whole or part by a fee of ten dollars ($10) per active licensee per year, and by a fee of five dollars ($5) per inactive licensee per year. The State Bar is not required to expend any additional funds to either support those programs or to provide treatment services for those who cannot afford to pay.

(b) On and after January 1, 2019, one dollar ($1) of the ten-dollar ($10) fee paid by each active licensee pursuant to subdivision (a) shall be transferred by the State Bar to a statewide nonprofit corporation, established by attorneys that has, for the last 25 years or more, provided peer support to attorneys recovering from alcohol and substance abuse in a confidential and anonymous manner, to fund the support of recovery efforts of the nonprofit corporation.

(c) Any nonprofit corporation that receives funds pursuant to subdivision (b) shall submit an annual report to the State Bar accounting for the use of the funds. The report shall be submitted to the State Bar no later than March 1, 2020, and no later than March 1 of each year thereafter. The report shall include, but not be limited to, the following:

(1) An accounting of all receipts and expenditures of the funds.

(2) The balance of the funds as of the end of the previous calendar year.

(3) A brief narrative describing the goals of the work supported by the expenditures.

(4) A summary of the number of clients served, the modality of treatment, and any outcome data on the impact of the treatment.

(d) The board may seek alternative sources for funding the program. Any excess funds not needed to support the program, including reserve funds, may be transferred to fund the Client Security Fund established pursuant to Section 6140.5, provided there are sufficient funds available to fully support the program.

(Amended by Stats. 2018, Ch. 659, Sec. 105. (AB 3249) Effective January 1, 2019.)

6141.
  

(a)  Until December 31, 2006, the board shall fix the annual license fee for inactive licensees at a sum not exceeding sixty-five dollars ($65). On January 1, 2007, and thereafter, the board shall fix the annual license fee for inactive licensees at a sum not exceeding seventy-five dollars ($75). The annual license fee for inactive licensees is payable on or before the first day of February of each year.

(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 the age of 70 years.

(Amended by Stats. 2018, Ch. 659, Sec. 106. (AB 3249) Effective January 1, 2019.)

6141.1.
  

(a) The payment by any licensee of the annual license fee, any portion thereof, or any penalty thereon, may be waived by the board as it may provide by rule. The board may require submission of recent federal and state income tax returns and other proof of financial condition as to those licensees seeking waiver of all or a portion of their fee or penalties on the ground of financial hardship.

(b) The board shall adopt a rule or rules providing that an active licensee who can demonstrate total gross annual individual income from all sources of less than forty thousand dollars ($40,000) shall presumptively qualify for a waiver of 25 percent of the annual license fee.

(Amended by Stats. 2018, Ch. 659, Sec. 107. (AB 3249) Effective January 1, 2019.)

6141.3.
  

(a) Except as provided in subdivision (b), the State Bar shall provide offers of discounts and other benefits to active and inactive licensees of the State Bar, including, but not limited to, insurance and affinity programs. Any revenue generated by these programs shall be used as follows:

(1) The revenue received from the affinity programs shall support the programs of the California Bar Foundation.

(2) (A) For all other revenue received from January 1, 2018, until December 31, 2018, 50 percent of the revenue shall be used to assist the California Lawyers Association in transitioning to an independent entity, 25 percent of the revenue shall be distributed to qualified legal services projects and support centers as provided in Section 6216, and 25 percent shall be used to support the discipline functions of the State Bar or to support the Client Security Fund.

(B) For all other revenue received after December 31, 2018, 50 percent of the revenue shall be distributed to qualified legal services projects and support centers as provided in Section 6216, and 50 percent of the revenue shall be used to support the discipline functions of the State Bar or to support the Client Security Fund.

(b) Notwithstanding subdivision (a), if approved by the board of trustees and the California Bar Foundation, the State Bar may transfer administration of the programs offering discounts and other benefits to active and inactive licensees of the State Bar under subdivision (a) to the California Bar Foundation provided that any revenue received, less the administrative costs of the California Bar Foundation in operating the program, shall be distributed as follows on and after January 1, 2019:

(1) All of the revenue received from the affinity programs shall be kept by the California Bar Foundation, which shall distribute 50 percent of that revenue to support the programs of the California Bar Foundation and 50 percent of that revenue to qualified legal services projects and support centers as provided in Section 6216.

(2) For all other revenue received, 50 percent of the revenue shall be kept by the California Bar Foundation, which shall distribute 50 percent of that revenue to support the programs of the California Bar Foundation and 50 percent of that revenue to qualified legal services projects and support centers in accordance with the formula provided in Section 6216, and 50 percent of the revenue shall be used to support the discipline functions of the State Bar or to support the Client Security Fund.

(c) Given the public protection mission of the State Bar, the Legislature finds that it would be inappropriate for the State Bar to administer the program on a long-term basis. Therefore, should the program continue to operate after December 31, 2018, it is the intent of the Legislature that the program be administered by an entity other than the State Bar.

(Amended by Stats. 2018, Ch. 659, Sec. 108. (AB 3249) Effective January 1, 2019.)

6142.
  

Upon the payment of the annual license fees, including any costs imposed pursuant to Section 6140.7, and penalties imposed pursuant to Section 6143, each licensee shall receive a certificate issued under the direction of the board evidencing the payment.

(Amended by Stats. 2018, Ch. 659, Sec. 109. (AB 3249) Effective January 1, 2019.)

6143.
  

Any licensee, active or inactive, failing to pay any fees, penalties, or costs after they become due, and after two months written notice of his or her delinquency, shall have his or her license suspended.

The licensee may be reinstated upon the payment of accrued fees or costs and such penalties as may be imposed by the board, not exceeding double the amount of delinquent fees, penalties, or costs.

(Amended by Stats. 2018, Ch. 659, Sec. 110. (AB 3249) Effective January 1, 2019.)

6143.5.
  

Any licensee, active or inactive, failing to pay any child support after it becomes due shall be subject to Section 17520 of the Family Code.

(Amended by Stats. 2018, Ch. 659, Sec. 111. (AB 3249) Effective January 1, 2019.)

6144.
  

(a) All fees shall be paid into the treasury of the State Bar, and, when so paid, shall become part of its funds.

(b) Notwithstanding subdivision (a) and consistent with the reimbursement requirement under Section 6031.5, all fees paid pursuant to Section 6140.02 shall be paid by the State Bar to the Association, and, when paid, shall become part of the funds of the Association.

(Amended by Stats. 2017, Ch. 422, Sec. 34. (SB 36) Effective January 1, 2018.)

6144.1.
  

The net proceeds from the sale of real property, after payment of obligations and encumbrances and reasonable costs of acquiring and relocating its facilities, if any, shall be held by the State Bar without expenditure or commitment for any purpose until approved by the Legislature by statute. The net proceeds from the lease of real property, after payment of obligations and encumbrances and reasonable costs of acquiring and relocating its facilities, if any, shall be used by the State Bar for the protection of the public.

(Amended by Stats. 2017, Ch. 422, Sec. 35. (SB 36) Effective January 1, 2018.)

6144.5.
  

It is the intent of the Legislature to confirm, validate, and declare effective the annual license fees, and all augmentations, including, but not limited to, those made under Sections 6140.3 and 6140.6, fixed and collected by the board for 1990, and all other acts arising from and related thereto.

(Amended by Stats. 2018, Ch. 659, Sec. 112. (AB 3249) Effective January 1, 2019.)

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.

(4) The 2019 audit shall be submitted by May 1, 2019, to the board of trustees, the Chief Justice of the Supreme Court, and to the Assembly and Senate Committees on Judiciary.

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

(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.

(Amended by Stats. 2018, Ch. 659, Sec. 113. (AB 3249) Effective January 1, 2019.)

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