                    FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

In re: JOHN WILLIAM FINDLEY, III,         
                          Debtor,
                                                 No. 08-60024
                                                   BAP Nos.
THE STATE BAR OF CALIFORNIA, a
Public Corporation,                             NC-07-01187-
                                                    KJuMk
                        Appellant,                06-4180-LT
                v.                                 OPINION
JOHN WILLIAM FINDLEY, III,
                         Appellee.
                                          
              Appeal from the Ninth Circuit
                Bankruptcy Appellate Panel
   Klein, Markell, and Jury, Bankruptcy Judges, Presiding

                   Argued and Submitted
         October 7, 2009—San Francisco, California

                     Filed February 1, 2010

     Before: David R. Thompson and Sidney R. Thomas,
      Circuit Judges, and Ann Aldrich,* District Judge.

                   Opinion by Judge Thomas




   *The Honorable Ann Aldrich, Senior United States District Judge for
the Northern District of Ohio, sitting by designation.

                                1857
                       IN RE FINDLEY                     1859




                        COUNSEL

Kevin W. Coleman; San Francisco, California; Nancy Win-
kelman and Nilam A. Sanghvi; Philadelphia, Pennsylvania;
Schader Harrison Segal & Lewis LLP; Philadelphia, Pennsyl-
vania; for the appellant.

John W. Findley; Ventura, California; Pro Se appellee.


                        OPINION

THOMAS, Circuit Judge:

  In this appeal, we consider whether § 523(a)(7) of the
Bankruptcy Code protects from discharge attorney disciplin-
ary costs imposed under California law. Pursuant to the 2003
amendments to the California Business and Professions Code,
we conclude that the costs imposed are non-dischargeable.
1860                     IN RE FINDLEY
                                I

   Appellee John William Findley, III is an attorney and mem-
ber of the State Bar of California (“State Bar”). After the Cali-
fornia State Bar Court determined that Findley had violated
provisions of the California Rules of Professional Conduct
and the Business and Professions Code in his dealings with a
client, the Bar Court recommended a one-year suspension and
a two-year probationary period. The Bar Court Review
Department adopted that recommendation with minor modifi-
cations.

   The State Bar assessed Findley a $14,054.94 fee to cover
the cost of his disciplinary proceedings pursuant to
§ 6086.10(a) of the California Business and Professions Code,
which mandates such an assessment, absent proof of hardship,
when an attorney has been disciplined. The sum included
$406.80 for the cost of certifying court documents, $128.25
for the cost of Review Department transcripts, and $56.89 for
witness fees. The remaining $13,463.00 was a standard, pre-
set charge based on the procedural point at which the disci-
plinary proceeding was resolved — in Findley’s case, at the
State Bar Review Department. The California Supreme Court
adopted the disciplinary cost award order and the Review
Department’s opinion. California law requires the payment of
attorney disciplinary costs as a prerequisite to reinstatement.
Cal. Bus. & Prof. Code § 6140.7.

   While his case was pending before the Review Department,
Findley had filed for Chapter 7 Bankruptcy. Although the
disciplinary cost order became final after Findley filed for
bankruptcy, the costs were imposed because of misconduct
committed prior to his bankruptcy filing. Therefore, the dis-
charge order applies to the disciplinary cost debt unless the
debt is excepted under § 523(a)(7). See 11 U.S.C. § 727(b);
Papadakis v. Zelis (In re Zelis), 66 F.3d 205, 209 (9th Cir.
1995) (a debt arises for purposes of discharge in bankruptcy
when the act giving rise to liability occurs). Findley success-
                         IN RE FINDLEY                    1861
fully concluded his Chapter 7 proceedings and received dis-
charge of his debts. Asserting that his bankruptcy discharge
excused payment, Findley declined to pay the disciplinary
cost award and sought reinstatement to the practice of law.

   The State Bar subsequently brought this action against
Findley in Bankruptcy Court, seeking a determination that 11
U.S.C. § 523(a)(7) excepted the disciplinary cost award from
discharge. The Bankruptcy Court held Findley’s disciplinary
award non-dischargeable and granted summary judgment for
the State Bar. The Bankruptcy Appellate Panel (“BAP”)
reversed, relying on our decision in State Bar of California v.
Taggart (In re Taggart), 249 F.3d 987 (9th Cir. 2001)
(“Taggart”), which held attorney disciplinary costs imposed
under a previous version of Cal. Bus. & Prof. Code § 6086.10
eligible for discharge. This timely appeal followed.

   “Because we are in as good a position as the BAP to review
bankruptcy court rulings, we independently examine the
bankruptcy court’s decision, reviewing the bankruptcy court’s
interpretation of the Bankruptcy Code de novo and its factual
findings for clear error.” Taggart, 249 F.3d at 990 (quoting
United States v. Hatton (In re Hatton), 220 F.3d 1057, 1059
(9th Cir. 2000)) (internal quotation marks omitted).

                              II

   [1] In Taggart, we held that an attorney disciplinary cost
award imposed under prior California law was dischargeable
in bankruptcy, because the award was not a “fine, penalty, or
forfeiture payable to and for the benefit of a governmental
unit,” but rather provided “compensation for actual pecuniary
loss.” 11 U.S.C. § 523(a)(7); see 249 F.3d at 989. In response
to Taggart, California amended the California Business and
Professions Code in 2003. The central question in this case is
whether the 2003 amendments are sufficient for us to con-
clude that attorney disciplinary costs imposed under
1862                            IN RE FINDLEY
§ 6086.10 now satisfy the requirements of § 523(a)(7) and are
not subject to discharge in bankruptcy.

   In conducting this analysis, we are mindful that three judge
panels of our Circuit are bound by prior panel opinions “un-
less an en banc decision, Supreme Court decision or subse-
quent legislation undermines those decisions.” Nghiem v.
NEC Electronic, Inc., 25 F.3d 1437, 1441 (9th Cir. 1994). In
this case, however, our task is not to revisit Taggart, but to
determine whether the amendments to the statute are suffi-
cient to render the imposed costs non-dischargeable in bank-
ruptcy. See Davis v. United States, 169 F.3d 1196, 1199 (9th
Cir. 1999) (reconsidering prior precedent in light of statutory
amendments).

                                       A

   Section 523(a)(7) excepts a debt from discharge “to the
extent such debt is for a fine, penalty, or forfeiture payable to
and for the benefit of a governmental unit, and is not compen-
sation for actual pecuniary loss.”1 The parties agree that Find-
ley’s disciplinary cost debt is payable to and for the benefit
of a governmental unit, but disagree over whether it consti-
tutes a fine, penalty, or forfeiture or instead provides compen-
sation for actual pecuniary loss.

  In Taggart, we held that attorney disciplinary costs
imposed under a prior version of § 6086.10 did not meet the
  1
   The full text of § 523(a)(7) provides that a debt of an individual is
excepted from discharge:
      (7) to the extent such debt is for a fine, penalty, or forfeiture pay-
      able to and for the benefit of a governmental unit, and is not com-
      pensation for actual pecuniary loss, other than a tax penalty—
      (A) relating to a tax of a kind not specified in paragraph (1) of
      this subsection; or
      (B) imposed with respect to a transaction or event that occurred
      before three years before the date of the filing of the petition.
                        IN RE FINDLEY                         1863
requirements of § 523(a)(7). 249 F.3d at 989. At the time,
§ 6086.10 stated:

    (a) Any order imposing a public reproval on a mem-
    ber of the State Bar shall include a direction that the
    member shall pay costs. In any order imposing disci-
    pline, or accepting a resignation with a disciplinary
    matter pending, the Supreme Court shall include a
    direction that the member shall pay costs.

    (b) The costs required to be imposed pursuant to this
    section include all of the following:

        (1) The actual expense incurred by the State
        Bar for the original and copies of any
        reporter’s transcript of the State Bar pro-
        ceedings, and any fee paid for the services
        of the reporter.

        (2) All expenses paid by the State Bar
        which would qualify as taxable costs recov-
        erable in civil proceedings.

        (3) The charges determined by the State
        Bar to be “reasonable costs” of investiga-
        tion, hearing, and review. These amounts
        shall serve to defray the costs, other than
        fees for the services of attorneys or experts,
        of the State Bar in the preparation or hear-
        ing of disciplinary proceedings, and costs
        incurred in the administrative processing of
        the disciplinary proceeding and in the
        administration of the Client Security Fund.

    (c) A member may be granted relief, in whole or in
    part, from an order assessing costs under this section,
    or may be granted an extension of time to pay these
    costs, in the discretion of the State Bar, upon
1864                         IN RE FINDLEY
      grounds of hardship, special circumstances, or other
      good cause.

      (d) In the event an attorney is exonerated of all
      charges following a formal hearing, he or she is enti-
      tled to reimbursement from the State Bar in an
      amount determined by the State Bar to be the reason-
      able expenses, other than fees for attorneys or
      experts, of preparation for the hearing.

Cal. Bus. & Prof. Code § 6086.10 (2001).

   In Taggart, we identified three reasons for our conclusion
that the § 6086.10 attorney disciplinary costs served as “com-
pensation for actual pecuniary loss.” First, we analyzed the
§ 6086.10 costs in light of § 6086.13 of the California Busi-
ness and Professions Code, a separate statute authorizing dis-
cretionary “monetary sanctions” for attorney misconduct. 249
F.3d at 991. We concluded that the statutory language of
§ 6086.10 — which imposed “costs” for “actual expenses”
and “reasonable costs” — as well as the existence of a hard-
ship exemption under § 6086.10, but not § 6086.13, “sup-
port[ed] the impression that the California legislature intended
monetary sanctions under § 6086.13, but not costs awards
under § 6086.10, as punishment.” 249 F.3d at 993 (footnote
omitted). Next, we considered the legislative history of
§ 6086.13, and determined that “the section was enacted in
order to create the possibility of fines in the context of attor-
ney disciplinary proceedings, which did not exist under
§ 6086.10.” 249 F.3d at 993 (citations omitted); see also id.
at 993 n.7 (“not[ing] that the drafter of § 6086.10 . . . under-
stood that section as not imposing a fine or penalty”) (cita-
tions omitted). Finally, we observed similarities between
attorney disciplinary costs imposed under § 6086.10 and the
costs awarded to prevailing parties in civil litigation. Id. at
992-93.2 Reasoning by analogy that it was “highly unlikely”
  2
    We found the analogy apt because “[w]hile § 6086.10 requires disci-
plined attorneys to pay the costs associated with their disciplinary hear-
                             IN RE FINDLEY                          1865
that California “imposed mandatory costs in civil proceedings
in order to punish losing parties or to deter them from bring-
ing litigation,” we concluded that the legislature intended for
the § 6086.10 costs to serve compensatory ends. Id. at 993
n.6.

   We acknowledged in Taggart that all of the reported cases
to consider the issue had held attorney disciplinary costs non-
dischargeable. See 249 F.3d at 993-94 & n.8 (listing cases).
These cases, as we explained, “by and large, analogized the
costs of attorney disciplinary proceedings to the costs of crim-
inal litigation imposed on convicted defendants,” 249 F.3d at
994, relying on the Supreme Court’s decision in Kelly v. Rob-
inson, 479 U.S. 36 (1986), which held a criminal restitution
award nondischargeable under § 523(a)(7). We distinguished
these opposing precedents, however, concluding that “analogy
to the criminal context is inapt” where:

     the structure of the statutes imposing fees on disci-
     plined attorneys, the existence of mandatory fees in
     the civil context, and the legislative history of the
     statute imposing monetary sanctions on disciplined
     attorneys all indicate that California does not view
     the assessment of costs on disciplined attorneys as
     penal in nature.

249 F.3d at 994.

                                    B

   [2] In response to Taggart, the California legislature
amended § 6086.10 and added subsection (e). That subsection
states:

ings, that section also entitles exonerated attorneys to reimbursement for
the costs of defending themselves.” Taggart, 249 F.3d at 992 (citing Cal.
Bus. & Prof. Code § 6086.10(d) (2001).
1866                            IN RE FINDLEY
      In addition to other monetary sanctions as may be
      ordered by the Supreme Court pursuant to Section
      6086.13, costs imposed pursuant to this section are
      penalties, payable to and for the benefit of the State
      Bar of California, a public corporation created pursu-
      ant to Article VI of the California Constitution, to
      promote rehabilitation and to protect the public. This
      subdivision is declaratory of existing law.

Cal. Bus. & Prof. Code § 6086.10(e).

   [3] The amendment undermines the Taggart analysis in
several ways. First, § 6086.10(e) clarifies that the California
legislature’s intent in imposing attorney disciplinary costs was
“to promote rehabilitation and to protect the public,” rather
than to provide compensation, as we inferred in Taggart.3

   [4] Second, § 6086.10(e) eliminates the distinction we iden-
tified in Taggart between the “costs” imposed through
§ 6086.10 and the “sanctions” leveled through § 6086.13, by
labeling attorney disciplinary costs as “penalties” imposed
“[i]n addition to other monetary sanctions.” See Taggart, 249
F.3d at 991-93. The plain language of the amended provision
thus strongly suggests that the California legislature disagreed
with the Taggart court’s inferences about its intent in enacting
§ 6086.10.

   The legislative history of the provision supports this con-
clusion. The Enrolled Bill Report for Assembly Bill 1708, the
vehicle for adding subsection (e) of the amended § 6086.10,
stated:

      One of these [new] provisions [in Section 6086.10]
  3
    The language of the amendment tracks the Supreme Court’s proclama-
tion in Kelly that state “penal and rehabilitative interests . . . are sufficient
to place [a debt] within the meaning of § 523(a)(7),” at least with respect
to restitution orders. See Kelly, 479 U.S. at 53.
                          IN RE FINDLEY                      1867
    would clarify that orders to pay disciplinary costs,
    like the costs of prosecution imposed on criminal
    defendants, would be analogous to fines and not dis-
    chargeable in bankruptcy.

It further stated that:

    Section 6086.10 would (1) enable the Bar to pursue
    orders for disciplined attorneys to pay the costs of
    their discipline . . . as money judgments; and (2)
    specify that orders to pay disciplinary costs are pen-
    alties, as originally intended by the Legislature, and
    therefore not dischargeable in bankruptcy.

Id. Finally, Lawrence Doyle, drafter of the amendment,
explained in a declaration submitted for the record that:

    Section 6086.10(e) was added to the California Busi-
    ness and Professions Code to expressly clarify and
    re-state the intent of the California Legislature that
    disciplinary costs are monetary sanctions and are a
    part of the punishment imposed on California law-
    yers for professional misconduct by making him or
    her pay for part of the costs of the proceeding.

   These statements comport with the Supreme Court’s recog-
nition in Middlesex County Ethics Comm. v. Garden State Bar
Ass’n, 457 U.S. 423 (1982), that “[t]he ultimate objective of
[attorney disciplinary] control is the protection of the public,
the purification of the bar and the prevention of a re-
occurrence.” Id. at 434 (quotation omitted); see also Chad-
wick v. State Bar, 49 Cal. 3d 103, 111 (Cal. 1989) (observing
that the “principle concern” of disciplinary proceedings is
“the protection of the public, the preservation of confidence
in the legal profession, and the maintenance of the highest
possible professional standard for attorneys”) (quotation omit-
ted).
1868                     IN RE FINDLEY
   As the BAP noted, amended § 6086.10 did retain certain
structural elements identified In Taggart as indicative of a
compensatory purpose. Section 6086.10 costs continue to
reimburse the State Bar for “actual expenses” and “reasonable
costs” and depend on state expenditures for their imposition.
See Taggart, 249 F.3d at 992 (quoting Cal. Bus. & Prof. Code
§ 6086.10(b) (2001)). Additionally, the overall structure of
§ 6086.10 and 6086.13 — including the existence of a hard-
ship exemption for § 6086.10 cost awards, but not for
§ 6086.13 sanctions — remains unchanged.

   However, Taggart identified these features in order to dis-
cern California’s legislative intent in enacting the prior ver-
sion of § 6086.10. The California legislature’s express
statement in the 2003 amendment to § 6086.10(e) that it
enacted attorney disciplinary costs to serve penal and rehabili-
tative ends thus undermines the result in Taggart.

   Further, disciplinary costs need not vary with the nature of
the offense to be non-compensatory in nature. See, e.g.,
Thompson v. Commonwealth of Va. (In re Thompson), 16
F.3d 576, 580 (4th Cir. 1994) (holding prosecution cost
awards to be penal rather than non-compensatory despite their
relationship to the length of a trial rather than the underlying
offense). Moreover, the disciplinary costs here apply only to
misconduct that merits public reproval, suspension or disbar-
ment. Cal. Bus. & Prof. Code § 6086.10(a).

  [5] For these reasons, we conclude that the 2003 amend-
ments to Cal. Bus. & Prof. Code § 6086.10 are sufficient to
render attorney discipline costs imposed by the California
State Bar Court non-dischargeable in bankruptcy pursuant to
11 U.S.C. § 523(a)(7).

                               C

  Our decision in Gadda v. State Bar, 511 F.3d 933 (9th Cir.
2007), does not compel a contrary conclusion, as Findley sug-
                         IN RE FINDLEY                     1869
gests. In Gadda, we held that retroactive application of a pro-
vision permitting the State Bar to enforce cost orders through
a money judgment did not constitute punishment under the Ex
Post Facto Clause. Id. at 939. We recognized that the costs
imposed against the debtor in that case “were ordered pursu-
ant to existing law,” and merely considered whether “the
availability of a new mechanism to collect costs already
owed” implicates Ex Post Facto Clause concerns. Id. In hold-
ing that no Ex Post Facto problem existed, we reasoned that,
“[t]he 2003 amendments to section 6086.10 merely provide a
new avenue for the Bar to recover those costs . . . . [and] can-
not be construed as remotely punitive so as to negate Califor-
nia’s civil intentions.” Id. We did not suggest in Gadda that
the attorney disciplinary costs themselves were non-punitive.
Therefore, Gadda is inapplicable in this context.

                              III

  [6] For the foregoing reasons, we conclude that, after the
2003 statutory amendments, attorney disciplinary costs
imposed by the California State Bar Court pursuant to Cal.
Bus. & Prof. Code § 6086.10 are excepted from discharge in
bankruptcy pursuant to 11 U.S.C. § 523(a)(7). Accordingly,
we reverse the BAP and reinstate the bankruptcy court’s grant
of summary judgment for the State Bar.

  REVERSED.
