BILL ANALYSIS Ó SB 691 Page 1 Date of Hearing: August 8, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 691 (Lieu) - As Amended: January 4, 1012 Policy Committee: InsuranceVote:13 - 0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill allows the Director of the Employment Development Department (EDD) to provide any relevant information to the Contractors' State License Board (CSLB) for purposes of workers' compensation insurance fraud investigations. FISCAL EFFECT Costs associated with this legislation should be minor and absorbable within existing resources. COMMENTS 1)Purpose. The intent of this legislation is to assist the CSLB in their investigation of worker's compensation fraud by permitting EDD to share employment data and information with CSLB for the purposes of investigating any specific workers' compensation fraud investigation. 2)Background . CSLB licenses and regulates California's construction industry. Anyone performing construction work in California that totals $500 dollars or more in labor and materials must be licensed by CSLB. There are about 300,000 licensed contractors in the state, in 43 different licensing classifications, including the active C-39 licenses. Every licensed contractor must report, in writing, the name and address of the insurer carrying workers' compensation on his or her employees within 90 days after any policy of insurance is issued. The contractor must send a copy of this report to the insurer. If a contractor does not have employees, he or SB 691 Page 2 she can fill out an exemption from workers' compensation. 3)Related Legislation . AB 1794 (Williams) would authorize a memorandum of understanding between the EDD, CSLB, and the State Compensation Insurance Fund to share information about contractors to ensure the employer is paying adequate workers compensation insurance for their employees. That bill is currently pending in the Senate Appropriations Committee. AB 2219 (Knight) would delete the sunset date on the law requiring a roofing contractor to obtain and maintain workers' compensation insurance, even if he or she has no employees, and removes the parallel sunset date requiring the Insurance Commissioner to report on this effect. That bill is currently pending in the Senate Appropriations Committee. AB 878 (Bill Berryhill, Chapter 686, Statutes of 2011) requires a workers' compensation insurer to report to the CSLB a licensed contractor whose insurance policy it cancels. Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081