The Section Council's key legislative effort in the 2010 Maryland General Assembly met with success, when on May 20 Governor Martin O'Malley signed Senate Bill 248 into law. The new law, effective July 1, 2010, increases the surcharges on civil court filing fees to address the funding crisis caused by historically low interest rates on Interest on Lawyer Trust Accounts (IOLTA). Projections indicate that the bill as adopted, which contains a 3-year sunset provision, would generate approximately $6.1 million annually to address the shortfall in IOLTA revenue and help fund civil legal aid to low-income Marylanders.
The filing fee surcharges will be increased $30 in Circuit Court, $8 in District Court and $3 in summary ejectment cases. The legislation also requires the Maryland Legal Services Corporation (MLSC), which administers the MLSC Fund of IOLTA and filing fee surcharge revenue, to submit detailed revenue and expenditure budgets along with performance measurement data to the legislature "for informational purposes only."
Recognizing the need to address the IOLTA funding crisis, the Section Council enacted a resolution in January in favor of a reasonable increase in the current filing fee surcharge to help fill the gap in the budgets of many vital legal services organizations. Section Council Chair Suzanne Sangree represented the Section at the MSBA Board of Governors Committee on Laws meeting to advocate for MSBA's support. Also, Section Council member Ed Fee drafted written testimony that was submitted to House and Senate committees considering the legislation. MSBA President Elect Thomas Murphy testified on behalf of the bill at the House Judiciary Committee hearing, and Suzanne Sangree testified at the Senate Judicial Proceedings Committee hearing.
Of particular note among the many legislators who supported the bills are the lead sponsors, Senator Brian Frosh and Delegate Kathleen Dumais. MLSC Executive Director Susan Erlichman noted, "This was a tough session and a hard-fought victory. We were able to accomplish this through the hard work and coordinated efforts of the legal services community – every call, letter, e-mail, oral and written testimony, endorsement, resolution and other support contributed to this success."
MLSC funds 35 legal services organizations in Maryland. From its inception, MLSC has made grants totaling over $138 million to help provide services in more than 1.7 million legal matters for Maryland's families in areas of family, housing, consumer, employment, health care and other civil legal matters. With interest rates dropping to historic lows, IOLTA revenue plummeted from $6.7 million in fiscal 2008 to $2 million projected in fiscal 2010. At the same time clients' requests for services increased and more clients had to be turned away.
Details of the bill's journey through the legislature as well as links to copies of the bill and amendments can be found at: http://mlis.state.md.us/2010rs/billfile/sb0248.htm.
View Senate Bill 248 (PDF)