BILL ANALYSIS                                                                                                                                                                                                    







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        |Hearing Date:April 21, 2014        |Bill No:SB                         |
        |                                   |1159                               |
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                      SENATE COMMITTEE ON BUSINESS, PROFESSIONS 
                               AND ECONOMIC DEVELOPMENT
                              Senator Ted W. Lieu, Chair
                                           

                          Bill No:        SB 1159Author:Lara
                         As Amended:April 7, 2014 Fiscal: Yes

        
        SUBJECT:  Professions and vocations: license applicants: federal tax  
        identification number. 
        
        SUMMARY:  Authorizes a board, as defined, the State Bar and the Bureau  
        of Real Estate to accept an application from an individual containing  
        a  federal   taxpayer   identification   number  for an initial or renewal  
        license in lieu of a social security number. 

        Existing law:
        
       1)Provides that each board under the Department of Consumer Affairs, as  
          well as the State Bar and Bureau of Real Estate shall, at the time  
          of issuance of the license, require that the  licensee provide their  
          federal employer identification number, if the licensee is a  
          partnership, or social security number for all others.  (Business  
          and Professions Code (BPC)  30 (a))

       2)Specifies that any licensee who does not provide the federal  
          identification number or social security number shall be reported by  
          the licensing board to the Franchise Tax Board and is subject to a  
          penalty.  (BPC  30 (b))

       3)Provides that in addition to a penalty, a licensing board may elect  
          to not process any application for an original license if the  
          applicant or licensee fails to provide its federal employer  
          identification number or social security number where requested on  
          the application.  (BPC  30 (c)) 

        4) Requires a licensing board, upon request of the Franchise Tax Board  
           (FTB), to furnish to the FTB specified information including the  





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           federal employer identification number if the entity is a  
           partnership, or social security number, for all others. (BPC  30  
           (d)) (Revenue and Taxation Code  19528)

        5) Provides that it is the intent of the Legislature to utilize the  
           social security number or federal employer identification number  
           for the purpose of establishing the identification of persons  
           affected by state tax laws and for purposes of compliance with  
           Section 17520 of the Family Code and, to that end, the information  
           furnished pursuant to this section shall be used exclusively for  
           those purposes.  (BPC  30 (j))

        6) Provides that the Department of Child Support Services (Department)  
           shall maintain a "certified list" that provides names of persons  
           who are found to be out of compliance with a judgment or order for  
           support in a case being enforced under Title IV-D of the Social  
           Security Act.  (Family Code (FC)  17520 (a) (3))
        7) Provides that the Department shall provide the certified list to  
           each board that is responsible for the regulation of licenses, as  
           specified, and that all boards shall collect  social security  
           numbers  from all applicants for the purposes of matching the names  
           of the certified list to applicants and licensees and of responding  
           to requests for this information made by child support services.   
           (FC  17520 (d))

        8) Requires that promptly after receiving the certified list from the  
           Department, and prior to issuance or renewal of a license, each  
           board shall determine whether the applicant is on the most recent  
           certified list provided by the Department and provides that the  
           board shall have the authority to withhold issuance or renewal of  
           the license of any applicant on the list.  
        (FC  17520 (e)) 

        This bill:

        1) Provides that each board under the Department of Consumer Affairs,  
           as well as the State Bar and Bureau of Real Estate shall at the  
           time of issuance of an initial or renewal license  require that the  
           applicant provide its federal employer identification number, if  
           the applicant  is a partnership, or the applicant's federal  
           taxpayer identification number or social security number, if one  
           has been issued, for all other applicants. 

        2) Requires that any applicant failing to provide the federal employer  
           identification number or the federal taxpayer identification number  
           or social security number, if one has been issued to the  





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           individual, to be reported by the licensing board to the FTB and  
           provides if the applicant fails to provide that information they  
           shall be subject to a penalty.

        3) Provides that in addition to a penalty, a licensing board may elect  
           to  not  process any application for an original license if the  
           applicant or licensee fails to provide its federal employer  
           identification number, or federal taxpayer identification number or  
           social security number, if one has been issued to the individual,  
           where requested on the application.  

        4) Requires a licensing board, upon request of the Franchise Tax Board  
           (FTB), to furnish to the FTB specified information including the  
           federal employer identification number if the entity is a  
           partnership, or the licensee's federal taxpayer identification  
           number or social security number, if one has been issued to the  
           individual, for all other licensees. 

        5) Provides that it is the intent of the Legislature to utilize the  
           federal employer identification number, federal taxpayer  
           identification number, or social security number for the purpose of  
           establishing the identification of persons affected by state tax  
           laws and for purposes of compliance with Section 17520 of the  
           Family Code and, to that end, the information furnished pursuant to  
           this section shall be used exclusively for those purposes.    

        
        FISCAL EFFECT:  Unknown.  This measure has been keyed "fiscal" by  
        Legislative Counsel.

        




        COMMENTS:
        
        1. Purpose.  The Author is the sponsor of this measure.  According to  
           the Author, Business and Profession Code Section 30 currently  
           requires professional licensing boards to request, and applicants  
           to provide, social security numbers for the issuance of a  
           professional license; thereby limiting who may apply and obtain a  
           professional license in California.  The Author argues that this  
           section is now inconsistent with sections of the Business and  
           Professions Code recently amended by AB 1024 (Gonzalez) in 2013 and  
           AB 1822 (Berryhill) in 2012.





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         As indicated by the Author,  AB 1024  clarified that all applicants who  
           meet the requirements for admission to the State Bar may be  
           licensed to practice law, regardless of immigration status.  On  
           January 2, 2014, the State Supreme Court unanimously ruled to allow  
           for the admission of an applicant for licensure, an undocumented  
           immigrant who passed the bar exam, to the State Bar of California,  
           specifically citing the enactment of AB 1024.   AB 1822  authorized,  
           for purposes of processing a licensing application or a renewal  
           application, submission of an individual tax identification number,  
           or other appropriate identification number as determined by the  
           California Architects Board, in lieu of a social security number,  
           if the individual is not eligible for a social security account  
           number at the time of application and is not in noncompliance with  
           a judgment or order for support pursuant to Section 17520 of the  
           Family Code. 

        The Author states that while the requirement for a social security  
           number was intended to ensure the payment and collection of taxes  
           associated with the practice of the profession under the given  
           license, the requirement has created inconsistencies and ambiguity  
           in the law.  "While in some sections of the B&P Code (Sec. 6064 and  
           Sec. 5550.5) we authorize an individual access to a professional  
           license, regardless of immigration status, in another section we  
           still require that same individual to provide a social security  
           number in order to access the license."

        The Author further explains that it is in the best social and economic  
           interest of our state to support efforts to educate our workforce  
           and enable our residents, including immigrants to improve their  
           economic mobility and self-sufficiency, which will increase their  
           contributions back to the state.  SB 1159 would authorize an  
           applicant to provide a licensing board a federal identification  
           number, if one has been issued, in lieu of a social security  
           number, as part of the application for a professional license in  
           California.

        "Over the last decade our state has understood the importance of a  
           continued investment in immigrant children.  The natural step is to  
           ensure that as these young people complete their education a  
           professional license is accessible to them in their respective  
           fields.  SB 1159 clarifies this ambiguity in the law." 

        2. Taxpayer Identification Numbers.  A Taxpayer Identification Number  
           (TIN) is an identification number used by the Internal Revenue  
           Service (IRS) in the administration of tax laws.  It is issued by  





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           the Social Security Administration (SSA) or by the IRS.  A Social  
           Security Number is issued by the SSA whereas all other TINs are  
           issued by the IRS.

        The Individual Taxpayer Identification Number, or ITIN, is a tax  
           processing number only available for certain nonresident and  
           resident aliens, their spouses, and dependents who cannot get a  
           SSN.  It is a 9-digit number, beginning with the number "9" and is  
           formatted like a SSN.  To obtain an ITIN, an individual must  
           complete an IRS form.  The form requires documentation  
           substantiating foreign/alien status and true identity for the  
           individual.  The person may either mail the documentation, along  
           with the required form, present it at the IRS office, or process  
           the application through an acceptable agent authorized by the IRS.

        3. Policy Issue.  As earlier indicated in a description of the law  
           regarding compliance with a judgment or order for support pursuant  
           to Section 17520 of the Family Code, it appears as if there is a  
           reliance on the social security number by the Department of Child  
           Support Services in providing the "certified list" to boards to  
           compare against applicants for licensure.  The Author should  
           consider whether some corresponding changes may be necessary to  
           Section 17520 so that the boards will still be able to identify  
           those applicants who may be in noncompliance with a judgment or  
           order for support as identified by the Department of Child Support  
           Services.    

        
        SUPPORT AND OPPOSITION:
        
         Support:  None on file as of April 15, 2014.

         Opposition:  None on file as of April 15, 2014.



        Consultant:Bill Gage