BILL ANALYSIS                                                                                                                                                                                                    







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        |Hearing Date:August 29, 2014       |Bill No:SB                         |
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                      SENATE COMMITTEE ON BUSINESS, PROFESSIONS 
                               AND ECONOMIC DEVELOPMENT
                              Senator Ted W. Lieu, Chair
                                           

                          Bill No:        SB 1159Author:Lara
                         As Amended:August 22, 2014Fiscal: Yes

        
        SUBJECT:  Professions and vocations: license applicants: individual  
        tax identification number. 
        
        SUMMARY:  Prohibits licensing boards under the Department of Consumer  
        Affairs (DCA) from denying licensure to an applicant based on his or  
        her citizenship or immigration status, and requires a licensing board  
        and the State Bar to require, by January 1, 2016, that an applicant  
        for licensure provide his or her individual taxpayer identification  
        number (ITIN) or a social security number (SSN) for an initial or  
        renewal license.  

         NOTE  :  The Assembly amendments are considered as a  rewrite  of this  
        bill and this measure has been referred to the Committee pursuant to  
        Senate Rule 29.10 (d) for consideration.  The Committee may, by a  
        vote of the majority, either:  (1) hold the bill, or (2) return the  
        bill to the Senate floor for consideration of the bill as amended in  
        the Assembly.

        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  





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          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  
           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)) 

        9) Authorizes the FTB to require any board, the State Bar, the Bureau  
           of Real Estate, and the Insurance Commissioner to provide to the  





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           FTB specified information, including the licensee's federal  
           employer identification number or SSN; to send a notice to any  
           licensee failing to provide those 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.  (Revenue and Tax Code (RTC)  19528)

        10)Prohibits, under the federal Personal Responsibility and Work  
           Opportunity Reconciliation Act (P.L. 104-193), certain categories  
           of individuals not lawfully present in the United States from  
           receiving specified public benefits, including "any grant,  
           contract, loan, professional license, or commercial license  
           provided by an agency of a State or local government or by  
           appropriated funds of a State or local government."  (8 USC Sec.  
           1621(c))

        11)Authorizes states to provide that "an alien who is not lawfully  
           present in the United States is eligible for any State or local  
           public benefit for which such alien would otherwise be  
           ineligible?through the enactment of a State law after August 22,  
           1996, which affirmatively provides for such eligibility."  (8 USC  
           Sec. 1621(d))

        This bill:

       1)Requires a board, as defined, the State Bar, and the Bureau of Real  
          Estate to require, by January 1, 2016, that an individual applicant  
          for licensure provide either an ITIN or SSN.  

       2)Prohibits any entity within DCA from denying licensure to an  
          applicant based on his or her citizenship or immigration status.

       3)Requires every board to implement all required regulatory or  
          procedural changes by January 1, 2016, and authorizes a board to  
          implement these provisions prior to that date.

        4) 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  
           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.






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       5)In addition to that penalty, prohibits a board from processing an  
          application for an initial license unless the applicant provides his  
          or her ITIN, where requested on the application. 

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

       7)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. 

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

       9)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.   

       10)Authorizes 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. 

       11)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 failure to  
          provide that information within 30 days will result in the  
          assessment of a penalty of $100.  

       12)Makes conforming statutory changes to remove the requirement of  
          citizenship, or legal admission or documentary evidence requirements  
          thereof, for the following authorizations to practice or other  
          licensure actions: 

           a)   Allow a foreign medical graduate to be eligible for a  
             physician's and surgeon's certificate;

           b)   Allow a foreign medical graduate to participate in  
             professional activities in a medical school as a "visiting  





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             fellow," and to participate in a fellowship program in specified  
             hospitals or clinics; 

           c)   Allow a foreign medical graduate who does not immediately  
             qualify for a physician and surgeon's certificate of registration  
             to practice medicine and who is offered a full-time faculty  
             position at a medical school to be granted a certificate in  
             connection with his or her position; 

           d)   Allow the Naturopathic Medicine Committee under the  
             Osteopathic Medical Board to grant a certificate to practice  
             naturopathic medicine to a person who does not hold a  
             naturopathic doctor's license, but who is offered a faculty  
             position in a naturopathic medical education program; and, 

           e)   Allow an individual to be licensed as a professional  
             fiduciary. 
            
       13)Finds and declares that it is in the best interests of the state to  
          provide persons who are not lawfully present in the United States  
          with the state benefits provided by all licensing acts of entities  
          within DCA.

       14)Makes other conforming and technical amendments.

        
        FISCAL EFFECT:  According to the Assembly Appropriations Committee: 

        1)One-time costs to the DCA of up to $130,000 (various special funds)  
          to update forms, publications, and information technology.

        2)Unknown potential costs, likely minor, to DCA's boards and bureaus  
          to ensure that new applicants using ITINs are complying with child  
          support judgments.  DCA's boards and bureau's currently perform this  
          function using applicants' social security numbers.

        3)The bill would likely result 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.

        
        COMMENTS:
        
        1. Purpose.  According to the Author, "Many immigrants come to the  
           [US] as children and attend California's public elementary and  





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           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 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.

        "The provisions of SB 1159 are consistent with current law and in  
           compliance with federal law.  Additionally, recent amendments  
           provide for a delayed implementation of the measure, allowing  
           boards and bureaus sufficient time to comply with the provisions of  
           the bill."    

           The Author states that the "recent amendments, crafted in  
           consultation with the Department of Consumer Affairs, simply  
           provide guidance for the boards and ensure that the bill can be  
           implemented effectively.  Specifically, these amendments clarify  
           that otherwise eligible individuals will not be denied a license  
           based solely on their immigration status, and provide sufficient  
           time for successful implementation."

        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  
           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  





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           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. Federal Personal Responsibility and Work Opportunity Reconciliation  
           Act.  Federal law, the Personal Responsibility and Work Opportunity  
           Reconciliation Act (PRWORA), P.L 104-193, prohibits certain  
           categories of individuals not lawfully present in the United States  
           from receiving certain public benefits, including "any grant,  
           contract, loan, professional license, or commercial license  
           provided by an agency of a State or local government or by  
           appropriated funds of a State or local government."  (8 USC Section  
           1621) (emphasis added)  However, the PRWORA also authorizes a state  
           to make those individuals eligible for any state or local public  
           benefit for which he or she would not otherwise be eligible by  
           affirmatively providing for those benefits through an enactment of  
           state law.  

        Professional licenses issued by licensing boards under DCA constitute  
           a public benefit, as defined under federal law, and licensing  
           boards under DCA are considered agencies of the state, thereby  
           triggering the federal requirement in the PRWORA for an enactment  
           of state law to provide those benefits.  Accordingly, this bill  
           seeks to affirmatively provide this eligibility to obtain a  
           professional license to individuals who are not lawfully present in  
           the United States.  

        4. FTB and DCSS's Ability to Identify Licensees.  The purpose of  
           requiring an SSN or federal employer identification number 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.         





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        5. Arguments in Support.  The  Los Angeles Area Chamber of Commerce   
           writes in support, and states:  "[This bill] would ensure that  
           otherwise eligible applicants are not denied a professional license  
           based solely on their immigration status?Many immigrants come to  
           California as children and are educated in elementary and secondary  
           schools in the state.  Despite the high cost of higher education  
           and limited resources, many of them continue on to higher  
           education, availing themselves of state laws that offer access to  
           in-state tuition rates and state financial aid.  These young people  
           have worked hard and overcome many obstacles to succeed.  Now, they  
           are educated and ready to contribute as professionals.  Without  
           access to a professional license, many individuals will be limited  
           in their ability to contribute to our state."

        The  California Immigrant Policy Center  writes in support and states:  
           "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."

        6. 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 State Bar that the applicant has fulfilled  
           those requirements for admission, as specified.

            SB 1822  (Berryhill, Chapter 317, Statutes of 2012) authorized  
           submission of an individual tax identification number or another  
           identification number, as determined by the California Architects  
           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  





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           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 applicant's social security  
           number.

        


        SUPPORT AND OPPOSITION:
        
         Support: 
         
        American Civil Liberties Union of California
        California Immigrant Policy Center
        California Pan-Ethnic Health Network
        Central American Resource Center - Los Angeles 
        Coalition for Humane Immigrant Rights of Los Angeles
        Councilwoman Cristina N. Carrizosa, City of Pomona
        Friends Committee on Legislation 
        The Latino and Latina Roundtable of the San Gabriel and Pomona Valley
        Los Angeles Area Chamber of Commerce
        Mexican American Legal Defense and Educational Fund
        National Association of Social Workers - California Chapter 
        Our Family Coalition
        Pre-Health Dreamers
        United Farm Workers (UFW)

         Opposition:  None on file as of August 29, 2014.



        Consultant:Bill Gage and Mark Mendoza