The State Bar seeks to change the deadline for submission of the Transfer to Inactive Status form and the effective date of the transfer.
Deadline: September 20, 2024, 12:01 a.m.
Comments should be submitted using the online Public Comment Form. The online form allows you to input your comments directly.
Current State Bar rules provide that licensees can transfer to inactive status by submitting the Transfer to Inactive Status Form by February 1, the deadline to pay licensing fees for the calendar year. Because the last day to transfer to inactive status and still pay the annual fees of an inactive licensee is February 1, many licensees choose to submit their Transfer to Inactive Status Form in late January or on February 1.
The large number of requests to transfer to inactive submitted in late January and on February 1 are burdensome for staff because staff must review and process the request before the deadline, adjust the active rate fee previously assessed, and communicate to the licensee that they can pay the reduced fee prior to the deadline. The work required is all the more difficult because these requests come during the renewal cycle, the busiest time of year for the Division of Regulation.
Given that the annual licensing fee covers a calendar year (e.g., 2025, 2026), it makes sense that to be eligible to pay the inactive rate, the licensee must transfer to inactive status with an effective date on or before by December 31 of the year prior. To allow staff time to process all the requests that come in, staff also proposes that, to be eligible to pay the inactive rate for the following year, the transfer to inactive form must be submitted on or before December 1 of the year prior.
This rule change will also avoid confusion related to the Client Trust Account Protection Program (CTAPP). CTAPP required both active and inactive licensees who were active at any point during the reporting period to comply. The CTAPP reporting periods are calendar years (e.g., 1/1/24–12/31/24). When licensees transfer to inactive status in January or February, they are obligated to comply with CTAPP reporting the following year. Many inactive licensees forget that the CTAPP reporting obligation applies to them and staff must repeatedly reach out to ensure the reporting is completed. Encouraging licensees transfer to inactive with an effective date in December will reduce the need for licensees who have been inactive for 11 months to comply with CTAPP.
None.
Background material
Board of Trustees, sitting as the Regulation and Discipline Committee
September 20, 2024, 12:01 a.m.