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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