BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1159|
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THIRD READING
Bill No: SB 1159
Author: Lara (D)
Amended: 4/7/14
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 8-1, 4/21/14
AYES: Lieu, Berryhill, Block, Corbett, Galgiani, Hernandez,
Hill, Padilla
NOES: Wyland
SENATE APPROPRIATIONS COMMITTEE : 5-0, 5/5/14
AYES: De León, Gaines, Hill, Lara, Steinberg
NO VOTE RECORDED: Walters, Padilla
SUBJECT : Professions and vocations: license applicants:
federal tax
identification number
SOURCE : Author
DIGEST : This bill authorizes a board, as defined, and the
State Bar of California and the Bureau of Real Estate (BRE) to
accept an application from an individual containing a federal
taxpayer identification number (TIN) for an initial or renewal
license in lieu of a social security number (SSN).
ANALYSIS :
Existing law:
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1.Provides that each board under the Department of Consumer
Affairs (DCA), as well as the State Bar and BRE shall, at the
time of issuance of the license, require that the licensee
provide their federal employer identification number (EIN), if
the licensee is a partnership, or SSN for all others.
2.Specifies that any licensee who does not provide the federal
EIN or SSN shall be reported by the licensing board to the
Franchise Tax Board (FTB) and is 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 EIN
or SSN where requested on the application.
4.Requires a licensing board, upon request of FTB, to furnish to
FTB specified information including the federal EIN if the
entity is a partnership, or SSN, for all others.
5.States legislative intent to utilize the SSN or federal EIN
for the purpose of establishing the identification of persons
affected by state tax laws and for purposes of compliance with
Family Code (FAM) Section 17520 and, to that end, the
information furnished pursuant to this section shall be used
exclusively for those purposes.
6.Requires the Department of Child Support Services (DCSS) to
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.
7.Requires DCSS to provide the certified list to each board that
is responsible for the regulation of licenses, as specified,
and that all boards shall collect SSNs 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.
8.Requires that promptly after receiving the certified list from
DCSS, 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 DCSS and provides that the
board shall have the authority to withhold issuance or renewal
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of the license of any applicant on the list.
This bill:
1.Provides that each board under DCA, as well as the State Bar
and BRE shall at the time of issuance of an initial or renewal
license require that the applicant provide its federal EIN,
if the applicant is a partnership, or the applicant's federal
TIN or SSN, if one has been issued, for all other applicants.
2.Requires that any applicant failing to provide the federal EIN
or the federal TIN or SSN, if one has been issued to the
individual, to be reported by the licensing board to 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 EIN,
or federal TIN or SSN, if one has been issued to the
individual, where requested on the application.
4.Requires a licensing board, upon request of FTB, to furnish to
FTB specified information including the federal EIN if the
entity is a partnership, or the licensee's federal TIN or SSN,
if one has been issued to the individual, for all other
licensees.
5.States legislative intent to utilize the federal EIN, federal
TIN, or SSN for the purpose of establishing the identification
of persons affected by state tax laws and for purposes of
compliance with FAM Section 17520 and, to that end, the
information furnished pursuant to this section shall be used
exclusively for those purposes.
Background
TINs . A TIN is an identification number used by the Internal
Revenue Service (IRS) in the administration of tax laws. It is
issued by the Social Security Administration (SSA) or by the
IRS. An SSN is issued by the SSA whereas all other TINs are
issued by the IRS.
The Individual TIN, or ITIN, is a tax processing number only
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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.
Comments
According to the author's office, Business and Professions Code
(BPC) Section 30 currently requires professional licensing
boards to request, and applicants to provide, SSNs for the
issuance of a professional license; thereby limiting who may
apply and obtain a professional license in California. The
author's office argues that this section is now inconsistent
with sections of the BPC recently amended by AB 1024 (Gonzalez,
Chapter 573, Statutes of 2013) and AB 1822 (Berryhill, Chapter
317, Statutes of 2012).
As indicated by the author's office, 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 an SSN, 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 FAM Section 17520.
The author states that while the requirement for a SSN 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
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a professional license, regardless of immigration status, in
another section we still require that same individual to provide
a SSN 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. This bill
authorizes an applicant to provide a licensing board a federal
identification number, if one has been issued, in lieu of a SSN,
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."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
DCA indicates that it would incur one-time costs of up to
$130,000 (special funds) to update forms, publications, and
information technology.
This bill could result in potential costs to DCA's boards and
bureaus to ensure that new applicants using TINs are complying
with child support judgments. The extent of these costs is
unknown.
This bill results in an increase in individuals applying for
licenses at the various boards and bureaus within DCA, leading
to increased licensing revenues. The amount of the increase
is unknown.
SUPPORT : (Verified 5/7/14)
ACLU
California Immigrant Policy Center
Coalition for Humane Immigrant Rights of Los Angeles
Educators for Fair Consideration
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Pre-Health Dreamers
ARGUMENTS IN SUPPORT : Proponents write, "SB 1159 recognizes
the continued importance of investment in young immigrants in
California. It will remove a barrier in the law that prevents
young people who complete their education from obtaining a
license to practice in their field."
MW:e 5/7/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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