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The State Bar of Texas board of directors has an opportunity this month to lay to rest a long-running controversy over the use of a trust fund established to finance the publication of continuing legal education materials for lawyers. A resolution approved by the Bar’s Executive Committee on Aug. 2 dedicates the Book Fund to continuing legal education publications. Under that resolution, materials published electronically would be considered publications. Some Bar leaders sought the resolution to prevent future raids on the fund to support Bar operations and to assure funding for materials available on the Internet, computer disks, videotapes or other electronic media. “This is an old fight,” says Tom Watkins, chairman of the Bar’s CLE Committee. Watkins, with Austin, Texas’ Hilgers & Watkins, says past Bar boards have used the Book Fund money to cover the Bar’s expenses. San Antonio, Texas, solo Richard Orsinger, immediate past chairman of the CLE Committee, says money was transferred from the Book Fund, which was supposed to be dedicated. David Keltner, a former Bar board chairman, says the fund was created in 1960 after the Bar received two grants totaling $20,000 from the M.D. Anderson Foundation and Houston Endowment Inc. The Bar board passed a resolution to accept the donations and, in the same resolution, dedicated the money to funding publications for CLE programs, says Keltner, a partner in Fort Worth, Texas’ Jose, Henry, Brantley & Keltner. The resolution also stated the board’s intent was to return proceeds from the sale of Bar-published books to the fund so that the Bar could continue publishing books, he says. According to Keltner, the Bar began publishing a series of books that became known as the Texas Practice Series. Other books developed by lawyers who volunteered their time later were added to the Bar’s list of publications, he says. SPARKING A FIRESTORM Keltner says $3 million was in the Book Fund by 1990, when the Bar needed to supplement its operating budget. At the time, the Bar was about to go through the “sunset” process to determine whether it should continue to exist, and Bar leaders were reluctant to submit a referendum to members for a dues increase, he says. Faced with the possibility of a deficit in the general fund, the Bar board transferred about $2 million from the Book Fund to the general fund in 1990, Keltner says. “That started a firestorm of controversy,” Orsinger says. The Family Law and Appellate Law Sections objected and tried to pass a resolution that would make the Professional Development Program a separate entity, leaving the Bar unable to use PDP-generated revenues, he says. Orsinger says the controversy heated up again in 2000 when the Bar board tapped the Book Fund for $425,995 to fund PDP projects. One of the concerns, he says, was whether there would be enough money in the fund to support publication of the “Family Law Practice Manual.” Another step taken by the Bar in 2000 helped ease his concerns. Orsinger says the board amended the Bar’s policy manual to require that money taken from the fund had to be repaid from the PDP’s excess profits, he says. The Book Fund again has a surplus. Bar spokeswoman Kimberly Schmitt says the fund contains more than $2.6 million. Keltner says the proposed resolution — scheduled for consideration by the Bar board on Sept. 20 at the quarterly meeting in Fort Worth — would prevent the type of funds transfer that occurred in 1990. The resolution also restricts the amount of administrative fee that the Bar can collect from the Book Fund to the estimated actual cost of administering the fund, Orsinger says. A 25 percent fee has been levied against the fund since 1990, generating about $450,000 in 2001, he says. Bar President Guy Harrison downplays reports that the Book Fund has been embroiled in controversy. Harrison, a Longview, Texas, solo, says it’s constructive to review the Book Fund policy and make changes in the language to clarify that the money can be used for materials published electronically. “I think the resolution will be adopted without much discussion,” Harrison says. “I think it’s a great move forward.”

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