Tuesday, October 25, 2005
State Bar Governors StreamlineFee Waiver Process
By DAVID WATSON, Staff Writer
The State Bar Board of Governors has streamlined the process for granting membership fee waivers, delegating to its staff new authority to approve requests that amount to less than $1,000.
The requests for waivers, usually based on financial hardship or an attorney’s failure to make payments on time, have occasionally proven controversial in the past. The merits of individual requests have sometimes been extensively debated by the board’s Membership Oversight Committee only to become again the subject of dispute among members at meetings of the full board.
Such disputes over the past several years have provoked comments from board members that the State Bar’s governing body should not be spending its time discussing whether a particular member should or should not have to pay a few hundred dollars in fees or penalties. In a memorandum outlining the new process, two staff members said it could result in more waivers being granted, but would reduce the time spent by the board and the MOC panel on the issue.
The board unanimously approved the streamlined process at its meeting in Los Angeles on Saturday.
The new procedure gives State Bar staff the power to approve waivers of fees and penalties up to $1,000 for members upon request if they, or their legal representative, spouse or designee, demonstrate that they:
•Are prevented by physical or mental condition, family emergency, or natural disaster from earning a livelihood for a substantial portion of the year for which the fees are due;
•Have less than $20,000 in income for the year;
•Are full-time state or federal magistrates, commissioners or referees, or retired judges serving on assignment for 90 percent of the year;
•Are inactive and over 70 years old;
•Lack the capacity to execute the forms required to change to inactive status or to resign their membership, but do not have a conservator or anyone acting on their behalf pursuant to a power of attorney;
•Are presumed deceased; or
•Were assessed the fee or penalty in error.
The revised Sec. 7 of Art. I of the Rules and Regulations of the State Bar of California also contains a new “catch-all” exception permitting staff to grant a waiver up to $1,000 for “any other reason, on a one-time-only basis, if the member has no previous record of discipline, administrative suspension, or late payment.” The State Bar staff will also have the power to accept late applications for “scaling,” or reduction, of dues based on low income ń though under the dues authorization bill passed by the Legislature and signed into law this year far fewer lawyers will qualify for such reductions.
The old version of Sec. 7 permitted staff to approve waivers for most of the specific reasons listed in the new version, though in some cases only for inactive members, but did not contain the catch-all provision and permitted waivers of penalties only up to $100 without board approval. The rules also contained a definition of “excusable inadvertence” and limited waivers to applications that met that definition.
The change approved Saturday eliminated Sec. 9 of Art. I, which contained that definition, and the new Sec. 7 makes no reference to excusable inadvertence.
Board member Demetrius D. Shelton, an Oakland deputy city attorney who chairs the MOC panel, said State Bar Deputy Executive Director Starr Babcock will be designated to handle the waiver requests. Under the new rule, any member whose request is denied by Babcock will have the right to appeal the decision to MOC, Shelton said.
Shelton also suggested that in the future waiver requests that require board action be made a part of the board’s consent agenda, instead of being listed as a separate action item. The board usually approves most of the items listed on the consent agenda unanimously without discussion, though any member can have an item removed for debate.
Board member Paul S. Hokokian, a Fresno attorney, urged the board to “streamline the process as much as possible,” and State Bar President James O. Heiting said he saw no reason for all 23 governors to debate cases already reviewed by Shelton’s panel.
“To do that again in the board seems like it would just be redundant,” Heiting commented.
At its meeting Saturday the board approved nearly 60 individual waiver requests, all but about a dozen of them involving sums under $1,000. Board agendas often include action on 20 or more waiver requests.
The requests on Saturday’s agenda ranged from several made by new admittees, who objected to paying an additional half-year’s dues because they elected to be sworn in a few days before June 1, to one from a lawyer who claimed she sent her payment in to the wrong organization, which cashed her check and never notified her of the mistake.
In their memorandum explaining the rule change, Elyse Cotant of the State Bar’s Member Services Center and Phyllis J. Culp, the director of the State Bar’s Office of Certification, noted that state law allows the board to delegate fact-finding and ministerial acts, such as applying specific guidelines, to its staff, but requires it act on its own where an exercise of discretion is required.
They noted that the rules changes were circulated for public comment. The only comment received, they explained, was from an individual who objected that it should be left to the board to decide when the “catch-all” waiver category should be applied.
“We considered these comments, but staff believes the rule has been drafted with enough particularity to allow greater flexibility for staff to waive fees while maintaining ultimate discretionary authority with the board,” Cotant and Culp wrote.
Babcock told board that under the new scaling rules about three-quarters of the attorneys who previously qualified for a dues reduction will no longer be eligible. He said the State Bar plans a special mailing to lawyers who scaled their dues last year explaining the changes.
About 20,000 attorneys will be affected, Babcock said.
Under the two-year dues bill signed by Gov. Arnold Schwarzenegger last month, members with income of more than $40,000 annually from all sources will have to pay the full amount of dues even if none of that income was derived from the practice of law.
Prior law permitted lawyers who earned less than $40,000 from law practice, including dispute resolution services, to qualify for a 25 percent dues reduction. Those with a total income of less than $30,000 qualified for a 50 percent reduction.
AB 1529 amended Business and Professions Code Sec. 6141.1 to eliminate the 50 percent waiver completely and to limit the 25 percent waiver to lawyers whose total income is less than $40,000.
The board on Saturday adopted the rules changes required to conform to the new law. The scaling changes were enacted at the State Bar’s request.
Copyright 2005, Metropolitan News Company