Criminal procedure: indigent defense compensation.

The prohibition on flat-fee and per-case compensation contracts is narrowed from applying to all indigent defense cases to only cases involving special circumstances under Section 190.2 or charges carrying a potential sentence of death or life without the possibility of parole.

Memoranda of understanding are now explicitly covered alongside contracts, meaning informal agreements between counties and defense providers must also meet the new requirements.

The operative date for the new contract requirements is delayed from January 1, 2027 to January 1, 2028, giving counties an additional year to comply.

The state-mandated local program designation is removed (changed from 'yes' to 'no'), and the entire Section 4 providing for Commission on State Mandates reimbursement is deleted. This means the state will not reimburse counties for costs imposed by the bill.

New requirement that attorneys comply with ethical rules of representation including Rule 1.4 of the State Bar Rules of Professional Conduct, and make reasonable efforts to meet with clients outside of court appearances. Attorneys must provide a list of cases where they did not meet with the client if requested by the administrator.

New requirement that private entities or law firms managing indigent defense services maintain an internet website with contact information (working telephone number and email) for all attorneys, including a working phone number that accepts jail and prison calls and functional voicemail for confidential client use.

The contract funding allocation requirement is expanded to require identifying the specific amount allocated for attorney fees and separately specifying the amount for case-related defense services (investigators, social workers, immigration counsel). A new sentence clarifies that attorneys shall not be expected or required to use funds allocated for attorney work to pay for case-related defense services.

The contract modification provision is revised to require the process apply when costs exceed what was 'reasonably contemplated by the parties' rather than simply what was 'contemplated at the beginning of the contract period,' and adds that representation must be consistent with the section and all other relevant law.

The requirement for 'explicit language demonstrating a direct relationship between the contract amount and the total number of cases' is removed and replaced with a broader consideration framework requiring counties to weigh the California Standards, full workload of attorneys, and the RAND workload study when preparing contracts.

The bill now covers contracts for the 'provision or administration' of indigent defense services, not just provision. This explicitly brings contract defense management entities (like firms that administer a county's entire indigent defense program) under the new requirements.

The contract reporting requirement was narrowed from all counties providing indigent defense contracts to only 'counties that contract with a private entity or law firm to manage and provide indigent defense services.' Counties using public defender offices or simple panel systems without a private management entity are no longer required to submit contracts to OSPD.

New language specifies that in the absence of a formal contract, any agreement for indigent defense services must still meet the Office of the State Public Defender's California Standards for Contract and Panel Defense Systems. This closes a potential loophole where informal arrangements could avoid the standards.

The caseload determination requirement was restructured. Instead of simply being 'informed by' the 2023 RAND study, counties must now 'take into consideration, among other factors' both (i) the RAND study or a later workload study identified by OSPD and agreed upon by the California Public Defenders Association and California Attorneys for Criminal Justice, and (ii) the percentage of attorney or firm time spent on non-contract cases. This adds a formal update mechanism for the workload benchmark.

The contract amount requirements were broadened from covering 'ancillary legal services' to 'costs related to the provision of indigent legal services,' and added 'case support services' to the list of covered costs. This makes it clearer that all operational costs of running a defense practice must be funded, not just peripheral services.

The flat fee definition was narrowed by removing 'for a specific period of time.' The old definition covered a fixed dollar amount for each case OR a fixed dollar amount for a specific period of time for an unlimited number of cases. The new definition covers a fixed dollar amount for each case OR for an unlimited number of cases, potentially allowing some time-based fixed arrangements that were previously prohibited.

The fiscal note changed from 'State-mandated local program: yes' to 'yes no,' indicating the bill would no longer be classified as imposing a state-mandated local program. This likely reflects the narrowed reporting requirement and reduced obligations on counties, meaning the state would not need to reimburse counties for compliance costs.

The standards reference was made more specific, changing from 'standards for contract systems' to 'California Standards for Contract and Panel Defense Systems,' the actual title of the OSPD's published standards document.

The entire amendment to Section 19 of the Penal Code was removed. This provision would have reduced the maximum fine for misdemeanors with no specified punishment from $1,000 to $500. The bill no longer touches criminal sentencing or misdemeanor penalties.

Section 987.2(b) now states that 'in the absence of a contract, any other agreement pursuant to these provisions shall meet the requirements of Section 987.7.' This extends the indigent defense contract standards (caseload limits, no flat fees, separate ancillary funds, etc.) to cover memoranda of understanding or other agreements, not just formal contracts.

The definition of 'flat fee' in Section 987.7(a)(2)(B) was narrowed. The phrase 'for an unlimited number of cases' was added after 'a fixed dollar amount for a specific period of time.' This means a fixed-dollar contract for a set period that includes a cap on the number of cases would no longer be classified as a prohibited flat fee arrangement.

The bill now covers indigent defense contract reform under Penal Code Sections 987.2 and new Section 987.7, in addition to the original misdemeanor fine reduction.

New Section 987.7 prohibits counties and courts from entering into flat fee or per-case compensation contracts for indigent defense services, defining 'flat fee' as a fixed dollar amount per case or per period without regard to actual time and resources required.

Contracts must include compliance with the Office of the State Public Defender's standards for contract systems, explicit language linking contract amounts to total caseloads informed by the RAND Corporation National Public Defense Workload Study (2023 or later), and provisions ensuring attorneys have resources and time for competent representation.

Section 987.2 was amended to require that contracts meet the requirements of new Section 987.7, and to encourage counties using assigned private counsel systems to establish open panels, categorize attorneys by experience, rotate cases within experience levels, and provide training.

Contracts must include separate allocations of funds for ancillary defense services such as investigators, social workers, and immigration counsel, in addition to attorney compensation, with no penalty for accessing those funds.

Fiscal committee designation changed from 'no' to 'yes' and state-mandated local program designation changed from 'no' to 'yes', reflecting the new obligations imposed on local agencies.

Counties must submit all indigent defense contracts to the Office of the State Public Defender every two years beginning January 1, 2027. If a contract does not specify an hourly rate, the county must provide the anticipated hourly rate equivalent.

The new Section 987.7 applies to contracts entered into or elected on or after January 1, 2027, and becomes operative on that date.

Legislative findings declare that flat fee agreements threaten the constitutional guarantee of effective assistance of counsel by creating financial conflicts of interest, noting that similar arrangements have been outlawed in Idaho, Michigan, Nevada, South Dakota, and Washington.