BILL NUMBER: AB 484	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 20, 2009
	AMENDED IN ASSEMBLY  APRIL 2, 2009

INTRODUCED BY   Assembly Member Eng

                        FEBRUARY 24, 2009

   An act to amend  Sections 31 and 7145.5  
Section 31  of the Business and Professions Code, and to add
Sections 19265 and 19571 to the Revenue and Taxation Code, relating
to taxes.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 484, as amended, Eng. Franchise Tax Board: professional or
occupational licenses.
   The Personal Income Tax Law and the Bank and Corporation Tax Law
impose taxes on, or measured by, income. Existing law allows a tax
return or return information filed under those laws to be disclosed
in a judicial or administrative proceeding pertaining to tax
administration under certain circumstances. Existing law requires
every board, as defined under the Business and Professions Code, and
the Department of Insurance to, upon request of the Franchise Tax
Board, furnish to the Franchise Tax Board certain information with
respect to every licensee. Existing law authorizes many of these
boards to impose fees on its licensees to cover its costs in
administering its respective provisions and in some cases these funds
are deposited into continuously appropriated funds.
   This bill would require a state governmental licensing entity, as
defined, issuing professional or occupational licenses, certificates,
registrations, or permits to provide to the Franchise Tax Board the
name and social security number or federal taxpayer identification
number of each individual licensee of that entity. The bill would
require the Franchise Tax Board, if a licensee fails to pay taxes for
which a notice of state tax lien has been recorded, as specified, to
mail a preliminary notice of suspension to the licensee. The bill
would provide that the license of a licensee who fails to satisfy the
unpaid taxes by a certain date shall be automatically suspended,
except as specified, would require the Franchise Tax Board to provide
a notice of suspension to the applicable state governmental
licensing entity and to mail a notice of suspension to the licensee,
and would provide that the suspension be canceled upon compliance
with the tax obligation. The bill would require the Franchise Tax
Board to meet certain requirements and would make related changes.
The bill would authorize a state governmental licensing entity, as
specified, to impose a fee on a licensee with a suspended license in
an amount necessary to cover its administrative costs. The bill would
make implementation of its provisions contingent upon appropriation
of funds for that purpose in the annual Budget Act.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 31 of the Business and Professions Code is
amended to read:
   31.  (a) As used in this section, "board" means any entity listed
in Section 101, the entities referred to in Sections 1000 and 3600,
the State Bar, the Department of Real Estate, and any other state
agency that issues a license, certificate, or registration
authorizing a person to engage in a business or profession.
   (b) Each applicant for the issuance or renewal of a license,
certificate, registration, or other means to engage in a business or
profession regulated by a board who is not in compliance with a
judgment or order for support shall be subject to Section 17520 of
the Family Code.
   (c) "Compliance with a judgment or order for support," has the
meaning given in paragraph (4) of subdivision (a) of Section 17520 of
the Family Code.
   (d) Each licensee who has not paid any applicable state income
tax, including interest, penalties, and other fees, shall be subject
to Section 19265 of the Revenue and Taxation Code. 
  SEC. 2.    Section 7145.5 of the Business and
Professions Code is amended to read:
   7145.5.  (a) The registrar may refuse to issue, reinstate,
reactivate, or renew a license or may suspend a license for the
failure of a licensee to resolve all outstanding final liabilities,
which include taxes, additions to tax, penalties, interest, and any
fees that may be assessed by the board, the Department of Industrial
Relations, the Employment Development Department, or the Franchise
Tax Board.
   (1) Until the debts covered by this section are satisfied, the
qualifying person and any other personnel of record named on a
license that has been suspended under this section shall be
prohibited from serving in any capacity that is subject to licensure
under this chapter, but shall be permitted to act in the capacity of
a nonsupervising bona fide employee.
   (2) The license of any other renewable licensed entity with any of
the same personnel of record that have been assessed an outstanding
liability covered by this section shall be suspended until the debt
has been satisfied or until the same personnel of record disassociate
themselves from the renewable licensed entity.
   (b) The refusal to issue a license or the suspension of a license
as provided by this section shall be applicable only if the registrar
has mailed a notice preliminary to the refusal or suspension that
indicates that the license will be refused or suspended by a date
certain. This preliminary notice shall be mailed to the licensee at
least 60 days before the date certain.
   (c) (1) In the case of outstanding final liabilities assessed by
the Franchise Tax Board, this section shall be operative within 60
days after the Contractors' State License Board has provided the
Franchise Tax Board with the information required under Section 30,
relating to licensing information that includes the federal employee
identification number or social security number.
   (2) All versions of the application for contractors' licenses
shall include, as part of the application, an authorization by the
applicant, in the form and manner mutually agreeable to the Franchise
Tax Board and the board, for the Franchise Tax Board to disclose the
tax information that is required for the registrar to administer
this section. The Franchise Tax Board may from time to time audit
these authorizations.
   (d) This section shall not be interpreted to conflict with the
suspension of a license pursuant to Section 19265 of the Revenue and
Taxation Code. 
   SEC. 3.   SEC. 2.   Section 19265 is
added to the Revenue and Taxation Code, to read:
   19265.  (a) (1) (A) State governmental licensing entities, as
defined in paragraph (4) of subdivision (e), shall provide to the
Franchise Tax Board the name and social security number or federal
taxpayer identification number, as applicable, of each licensee of
that state governmental licensing entity.
   (B) State governmental licensing entities shall provide to the
Franchise Tax Board the information described in subparagraph (A) at
a time that the Franchise Tax Board may require.
   (2) If any licensee has failed to pay taxes, including any
penalties, interest, and any applicable fees, imposed under Part 10
(commencing with Section 17001), Part 11 (commencing with Section
23001), or this part, for which a notice of state tax lien has been
recorded in any county recorder's office in this state, pursuant to
Chapter 14 (commencing with Section 7150) of Division 7 of Title 1 of
the Government Code, the Franchise Tax Board shall mail a
preliminary notice of suspension to the licensee indicating that the
license will be suspended by a date certain, which shall be no
earlier than  60   150  days after the
mailing of the preliminary notice of suspension, unless prior to the
date certain the licensee pays the unpaid taxes or enters into an
installment payment agreement, as described in Section 19008, to
satisfy the unpaid taxes. The preliminary notice of suspension shall
also advise the licensee of the opportunity to request deferral or
cancellation of a suspension pursuant to subdivision (b).
   (3) If any licensee subject to paragraph (2) fails to pay the
unpaid taxes or to enter into an installment payment agreement, as
described in Section 19008, to satisfy the unpaid taxes prior to the
date certain provided in the preliminary notice of suspension, his or
her license shall be automatically suspended by operation of this
section, except as provided in subdivision (b), and the Franchise Tax
Board shall provide a notice of suspension to the applicable state
governmental licensing entity and shall mail a notice of suspension
to the licensee. The rights, powers, and privileges of any licensee
whose license has been suspended pursuant to this section shall be
subject to the same prohibitions, limitations, and restrictions as if
the license were suspended by the state governmental licensing
entity that issued the license.
   (4) Upon compliance by the licensee with the tax obligation,
either by payment of the unpaid taxes or entry into an installment
payment agreement, as described in Section 19008, to satisfy the
unpaid taxes, a suspension pursuant to this subdivision shall be
canceled. The Franchise Tax Board shall, within 10 business days of
compliance by the licensee with the tax obligation, provide a notice
of cancellation to the state governmental licensing entity and mail a
notice of cancellation to the licensee indicating that the unpaid
taxes have been paid or that an installment payment agreement, as
described in Section 19008, has been entered into to satisfy the
unpaid taxes and that the suspension has been canceled.
   (5) If a license is not suspended, or if the suspension of a
license is canceled, based on the licensee entering into an
installment payment agreement as described in Section 19008, and the
licensee fails to comply with the terms of the installment payment
agreement, that license shall be suspended as of the date that is 30
days after the date of termination of that installment payment
agreement. If a license is suspended pursuant to this paragraph, the
Franchise Tax Board shall provide notice of suspension to the
applicable state governmental licensing entity and mail a notice of
suspension to the licensee.
   (b) (1) The Franchise Tax Board may defer or cancel any suspension
authorized by this section if a licensee would experience financial
hardship. The Franchise Tax Board shall, if requested by the licensee
in writing, provide for an administrative hearing to determine if
the licensee would experience financial hardship from the suspension
of his or her license.
   (2) The request for a hearing specified in paragraph (1) shall be
made in writing within 30 days from the mailing date of the
preliminary notice described in subdivision (a).
   (3) The Franchise Tax Board shall conduct a hearing within 30 days
after receipt of a request pursuant to paragraph (1), unless the
Franchise Tax Board postpones the hearing, upon a showing of good
cause by the licensee, in which case a suspension pursuant to
subdivision (a) shall be deferred until the hearing has been
completed.
   (4) A licensee seeking relief under this subdivision shall only be
entitled to relief described in paragraph (1) if the licensee
provides the Franchise Tax Board with financial documents that
substantiate a financial hardship, and agrees to an installment
payment arrangement.
   (5) If the deferral of a suspension of a license under this
subdivision is no longer operative, that license shall be suspended
as of the date that is 30 days after the date the deferral is no
longer operative. If a license is suspended pursuant to this
paragraph, the Franchise Tax Board shall provide notice of suspension
to the applicable state governmental licensing entity and mail a
notice of suspension to the licensee.
   (c) Notwithstanding any other provision of law, a state
governmental licensing entity may, with the approval of the
appropriate department director or governing body, impose a fee on
licensees whose license has been suspended as described in
subdivision (a). The fee shall not exceed the amount necessary for
the licensing entity to cover its costs in carrying out the
provisions of this section. Fees imposed pursuant to this section
shall be deposited in the fund in which other fees imposed by the
state governmental licensing entity are deposited and shall be
available to that entity upon appropriation in the annual Budget Act.

   (d) The process described in subdivision (b) shall constitute the
sole administrative remedy for contesting the suspension of a license
under this section. The procedures in the administrative
adjudication provisions of the Administrative Procedure Act (Chapter
4.5 (commencing with Section 11400) and Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code) shall not apply to the suspension of a license pursuant to this
section.
   (e) For purposes of this section and Section 19571, the following
definitions shall apply:
   (1) "Financial hardship" means financial hardship within the
meaning of Section 19008, as determined by the Franchise Tax Board,
where suspension of a license will result in the licensee being
financially unable to pay any part of the amount described in
subdivision (a) and the licensee is unable to qualify for an
installment payment arrangement as provided for by Section 19008. In
order to establish the existence of a financial hardship, the
licensee shall submit any information, including information related
to reasonable business and personal expenses, requested by the
Franchise Tax Board for the purpose of making that determination.
   (2) "License" includes a certificate, registration, or any other
authorization to engage in a profession or occupation issued by a
state governmental licensing entity.
   (3) "Licensee" means an individual authorized by a license,
certificate, registration, or other authorization to engage in a
profession or occupation issued by a state governmental licensing
entity.
   (4) "State governmental licensing entity" means any entity listed
in Section 101, 1000, or 19420 of the Business and Professions Code,
the office of the Attorney General, the Department of Insurance, the
State Bar of California, the Department of Real Estate, and any other
state agency, board, or commission that issues a license authorizing
an individual to engage in a profession or occupation. "State
governmental licensing entity" shall not include the Department of
Motor Vehicles  or the Contractor's State License Board  .
   (f) Implementation of this section shall be contingent on the
appropriation of funds for the purposes of this section in the annual
Budget Act.
   SEC. 4.   SEC. 3.   Section 19571 is
added to the Revenue and Taxation Code, to read:
   19571.  (a) The Franchise Tax Board may disclose to state
governmental licensing entities information regarding suspension of a
license pursuant to Section 19265.
   (b) Neither the state governmental licensing entity, nor any
officer, employee, or agent, or former officer, employee, or agent of
a state governmental licensing entity, may disclose or use any
information obtained from the Franchise Tax Board, pursuant to this
section, except to inform the public of the suspension of a license
pursuant to Section 19265.
   (c) For purposes of this section, the definitions in Section 19265
shall apply.
   SEC. 5.   SEC. 4.   The Legislature
hereby finds and declares the following:
   (a) It is the intent of the Legislature that, consistent with the
decision in Gallo v. United States District Court (9th Cir. 2003) 349
F.3d 1169, cert. den. (2004) 541 U.S. 1073, the suspension of a
professional or occupational license pursuant to this act for failure
to pay delinquent taxes is a legislative act, for which due process
is satisfied by the legislative notice and hearing procedures.
   (b) To prevent financial hardship, Section 19265 of the Revenue
and Taxation Code, as added by this act, grants a delinquent taxpayer
the opportunity for an additional hearing for financial hardship
prior to the suspension of a professional or occupational license.