BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1159
                                                                  Page  1

          Date of Hearing:   June 24, 2014

              ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER  
                                     PROTECTION
                               Susan A. Bonilla, Chair
                     SB 1159 (Lara) - As Amended:  June 18, 2014

           SENATE VOTE  :   32-0
           
          SUBJECT  :   Professions and vocations: license applicants:  
          individual tax identification number.

           SUMMARY  :   Authorizes a board, as defined, the State Bar and the  
          Bureau of Real Estate to accept an application containing an  
          individual's taxpayer identification number (ITIN) in lieu of a  
          social security number (SSN) for an initial or renewal license.   
          Specifically,  this bill  :   

          1)Authorizes an applicant to provide his or her ITIN instead of  
            his or her SSN for purposes of existing law that requires each  
            board under the Department of Consumer Affairs (DCA), the  
            State Bar, and Bureau of Real Estate, at the time of issuance  
            of an initial or renewal license, to require that an  
            individual applicant to provide his or her SSN.

          2)Requires a licensing board to report a licensee who fails to  
            provide his or her ITIN to be reported by the licensing board  
            to the Franchise Tax Board (FTB), and makes a licensee who  
            fails to provide that information after notification to be  
            subject to a penalty, as specified. 

          3)Authorizes, in addition to that penalty, a licensing board to  
            not process an application for an initial license unless the  
            applicant provides his or her ITIN, where requested on the  
            application. 

          4)Requires a licensing board, upon request of the FTB, to  
            furnish to the FTB specified information, including the  
            licensee's ITIN. 

          5)Provides that an ITIN furnished pursuant to this bill is not  
            deemed a public record and shall not be open to the public for  
            inspection. 

          6)Provides that if the board uses a national examination to  








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            issue a license, and if a reciprocity agreement or comity  
            exists between the California and the state requesting release  
            of the ITIN, the licensing board may release the ITIN to an  
            examination or licensing entity, only for the purpose of  
            verification of licensure or examination status.

          7)For purposes of enforcing child support payment provisions,  
            requires any board, the State Bar, and the Bureau of Real  
            Estate to require that each licensee provide the ITIN of each  
            individual licensed on the license and any person who  
            qualifies for the license.   

          8)Authorizes all boards, as specified, to collect an ITIN  
            instead of a SSN for purposes of existing law that requires  
            all boards, as specified, to collect SSNs from applicants for  
            the purposes of matching the names on a certified list,  
            provided by the Department of Child Support Services (DCSS),  
            of persons who are found to be out of compliance with a  
            judgment or order for support, as specified. 

          9)Authorizes the FTB to require any board, the State Bar, the  
            Bureau of Real Estate, and the Insurance Commissioner to  
            provide to the FTB the licensee's ITIN, and to send a notice  
            to any licensee failing to provide that number that describes  
            the information that was missing, the penalty associated with  
            not providing it, and that the failure to provide that  
            information within 30 days will result in the assessment of a  
            penalty of $100.  

          10)Declares Legislative intent and makes other conforming and  
            technical amendments.

           EXISTING STATE LAW:  

         1)Requires each board under DCA, as well as the State Bar and  
            Bureau of Real Estate to, 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 SSN for all others.  (Business and Professions  
            Code (BPC) Section 30 (a))

         2)Requires that any licensee who does not provide the federal  
            identification number or SSN be reported by the licensing  
            board to the FTB and is subject to a penalty.  (BPC 30 (b))









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         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 SSN where requested on the  
            application.  (BPC 30 (c)) 

          4) Requires a licensing board, upon request of the FTB, to  
             furnish to the FTB specified information including the  
             federal employer identification number if the entity is a  
             partnership, or SSN, for all others. (BPC 30(d); Revenue and  
             Taxation Code (RTC) 19528)

          5) Provides that it is the intent of the Legislature to utilize  
             the SSN 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 current law, as specified and, to that end, the  
             information furnished pursuant to this section shall be used  
             exclusively for those purposes.  (BPC 30 (j))

          6) Provides that DCSS 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 the Social Security Act.  (Family Code  
             (FAM) Section  17520(a)(3))

          7) Provides that DCSS shall 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 and of  
             responding to requests for this information made by DCSS.   
             (FAM 17520(d))

          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.  The board shall  
             have the authority to withhold issuance or renewal of the  
             license of any applicant on the list.  (FAM 17520(e)) 

          9) Authorizes the FTB to require any board, the State Bar, the  
             Bureau of Real Estate, and the Insurance Commissioner to  
             provide to the FTB specified information, including the  
             licensee's federal employer identification number or SSN; to  
             send a notice to any licensee failing to provide those  








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             numbers that describes the information that was missing; the  
             penalty associated with not providing it; that the failure to  
             provide that information within 30 days will result in the  
             assessment of a penalty of $100; and to assess a $100 penalty  
             for any licensee failing to provide its federal employer  
             identification number or his or her social security number.   
             (RTC 19528)

           EXISTING FEDERAL LAW  : 

          10)Authorizes states to affirmatively provide eligibility for  
             certain public benefits, such as professional licenses, to  
             certain categories of individuals not lawfully present in the  
             United States who would otherwise be prohibited from  
             receiving those benefits.  (8 USC 1621)  

           FISCAL EFFECT  :   Unknown 

           COMMENTS  :   

           1)Purpose of the bill  .   This bill allows applicants or  
            licensees to provide an ITIN in lieu of a SSN to a licensing  
            board.  This bill resolves inconsistencies throughout the code  
            and provides additional identification options to applicants  
            and licensees, thereby increasing access to California  
            professional licenses.  This bill is author-sponsored.   
          
           2)Author's statement  .  According to the author, "Many immigrants  
            come to the [US] as children and attend California's public  
            elementary and secondary schools, as well as public and  
            private colleges and universities.  Despite the high cost of  
            higher education and limited resources, with hard work, a  
            strong spirit of determination, and the assistance of state  
            laws that provide access to nonresident tuition exemptions,  
            state financial aid, and graduate school admissions tests,  
            these students are now able to attend, participate in, and  
            graduate from California colleges and universities.

          "Recently, the Legislature has begun to recognize the need to  
            address arbitrary restrictions on professional licenses with  
            the passage of SB 1822 (Bill Berryhill) in 2012 and AB 1024  
            (Gonzalez) in 2013.  However, ambiguity in other sections of  
            state law, in particular [BPC] 30 pertaining to the issuance  
            of professional licenses has created barriers to access, and  
            created an artificial wall that deprives many Californians of  








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            their only effective means of economic mobility and  
            self-sufficiency.

          "Authorizing the use of a social security number or ITIN, if one  
            has been issued, for the application of a professional license  
            would ensure the collection and reporting of information to  
            the [FTB] while clarifying inconsistent laws and removing  
            arbitrary barriers to professional licenses."     
           
           3)Individual Taxpayer Identification Numbers  .  An ITIN is a tax  
            processing identification number issued by the US Internal  
            Revenue Service (IRS) in the administration of tax laws.  An  
            ITIN consists of nine digits, beginning with the number nine  
            (i.e. 9XX-XX-XXX).  Since 1996, the IRS has issued ITINs to  
            taxpayers and their dependents that are not eligible to obtain  
            a SSN.  The IRS issues ITINs because all wage earners,  
            regardless of their immigration status, are required to pay  
            federal taxes.  ITINs allow people who are ineligible for a  
            SSN to comply with tax laws, and are issued regardless of  
            immigration status.  Examples of individuals who need ITINs  
            include nonresident aliens, a US resident alien, and  
            dependents or spouses of US citizens or resident aliens, or of  
            nonresident alien visa holders.  To obtain an ITIN, an  
            individual must complete an IRS form which requires  
            documentation substantiating an individual's foreign or alien  
            status and the true identity of the individual.  

           4)This bill does not affect FTB or DCSS's ability to track  
            licensees  .  The purpose of requiring SSN or federal employer  
            identification numbers is to identify persons with outstanding  
            tax liabilities or who are out of compliance with child  
            support orders.  Existing law authorizes the suspension of a  
            delinquent taxpayer's occupational or professional license  
            once a delinquency is at least five months old, and specified  
            notices have been issued by the FTB.  Existing law also  
            authorizes license denials and suspensions for failure to pay  
            court-ordered child support debt.  According to both the FTB  
            and DCSS, this bill would not affect the ability of the FTB or  
            DCSS to identify persons with outstanding tax liabilities or  
            child support payments because both entities have the  
            capability to identify those persons using their ITIN.          
             
                
            5)Suggested technical amendment  .  This bill amends all relevant  
            provisions of that law to allow for substitution of the ITIN,  








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            and amends RTC 19528 to authorize the FTB to require the board  
            to provide the licensee's ITIN and to send notice that failure  
            to provide the ITIN will result in a $100 penalty.  However,  
            this bill did not amend paragraph (2) of subdivision (b) of  
            RTC 19528 to also authorize FTB to assess the $100 penalty for  
            failing to provide an ITIN.  As a result, the author may wish  
            to ensure all conforming changes are made. 

           6)Arguments in support  .  The California Immigrant Policy Center  
            writes in support, "Without access to a professional license,  
            many individuals will be limited in their ability to  
            participate in the workforce or start a business and thereby  
            limit their economic contributions to the State.  It is  
            estimated that California's labor force includes 1.85 million  
            undocumented workers and that households headed by  
            undocumented workers contribute an estimated $2.7 billion in  
            state taxes.  As such, we expect SB 1159 to make an impact on  
            the economic opportunity of otherwise eligible immigrants."   

           The National Association of Social Workers, California Chapter,  
            also writes in support, "It is in the best 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."

           7)Related legislation  .  AB 1024 (Gonzalez), Chapter 573,  
            Statutes of 2013, authorized the Supreme Court to admit to the  
            practice of law an applicant who is not lawfully present in  
            the United States, upon certification by the committee that  
            the applicant has fulfilled those requirements for admission,  
            as specified.

           8)Prior legislation  .  SB 1822 (Bill Berryhill), Chapter 317,  
            Statutes of 2012, authorized submission of an individual tax  
            identification number or another identification number, as  
            determined by the board, in place of a social security number  
            where the applicant is not eligible for a social security  
            number and is not out of compliance with a child support  
            judgment or order, as specified.

          AB 664 (Jones), Chapter 610, Statutes of 2005, authorized, in  
            specified circumstances, submission of a federal tax  
            identification number or another identification number, as  
            determined by the State Bar of California, in place of the  








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            applicant's social security number.

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          American Civil Liberties Union of California
          California Immigrant Policy Center
          California Pan-Ethnic Health Network
          Mexican American Legal Defense and Educational Fund (MALDEF)
          National Association of Social Workers - California Chapter 
          Pre-Health Dreamers
          United Farm Workers (UFW)
           
            Opposition 
           
          None on file.

           Analysis Prepared by  :    Eunie Linden / B.,P. & C.P. / (916)  
          319-3301