BILL ANALYSIS Ó AB 1508 Page 1 ASSEMBLY THIRD READING AB 1508 (Roger Hernández) As Amended March 26, 2015 Majority vote ------------------------------------------------------------------- |Committee |Votes |Ayes |Noes | |----------------+------+---------------------+---------------------| |Labor |7-0 |Roger Hernández, | | | | |Harper, Chu, Low, | | | | |McCarty, Patterson, | | | | |Thurmond | | | | | | | |----------------+------+---------------------+---------------------| |Appropriations |17-0 |Gomez, Bigelow, | | | | |Bonta, Calderon, | | | | |Chang, Daly, Eggman, | | | | |Gallagher, | | | | | | | | | | | | | | |Eduardo Garcia, | | | | |Gordon, Holden, | | | | |Jones, Quirk, | | | | |Rendon, Wagner, | | | | |Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------- SUMMARY: Requires the establishment of an independent policy AB 1508 Page 2 advisor for the underground economy, as specified. Specifically, this bill: 1)Requires the Governor to designate an independent chief policy adviser for the underground economy. 2)Specifies that the adviser's responsibilities shall include, but not be limited to, the following: a) Monitoring the state's existing underground economy task forces and interagency partnerships to ensure that they are organized efficiently. b) Evaluating whether any task forces and partnerships should be eliminated or restructured to improve effectiveness. c) Evaluating whether existing task forces and partnerships have sufficient resources and whether gaps or overlaps exist in combating the underground economy. d) Reviewing enforcement staffing and funding levels and developing recommendations to adequately fund enforcement. e) Developing recommendations to eliminate barriers that prevent task forces and partnerships from being fully effective. f) Leading a strategic planning process to develop performance outcomes for combating the underground economy. AB 1508 Page 3 3)Requires the advisor, on or before than January 1, 2017, to submit a report to the Governor and the Legislature that summarizes the adviser's findings and recommendations, with a particular emphasis on any recommended administrative or legislative changes. FISCAL EFFECT: According to the Assembly Appropriations Committee, General Fund costs in the range of $150,000 to $200,000 for the chief policy advisor to monitor and evaluate the taskforces and interagency partnerships as well as submit a report to the Legislature as specified. COMMENTS: In March 2015, the Little Hoover Commission (Commission) released a report entitled, "Level the Playing Field: Put California's Underground Economy Out of Business." That report made a number of findings and recommendations. Among these, the Commission found that although numerous government organizations focus on tackling the underground economy, no one is directly in charge. Hardworking government employees do their best to combat the problem, but often without adequate resources or the data or equipment to effectively do their jobs. There are four major state task forces focused on the underground economy, but it is not clear, overall, what the outcomes have been. The Commission recommended the Governor appoint an independent leader, in consultation with state leaders who have jurisdiction over the underground economy, with clear authority to untangle any overlaps in responsibilities, bridge silos and move efficiently toward results. The Commission recommended that this leader should report back on administrative or legislative changes needed to overcome the obstacles. The California Pool & Spa Association supports this bill, stating that their members face a competitive disadvantage to the unlicensed or non-compliant contractors who perform work for a AB 1508 Page 4 much cheaper cost as a result of skirting labor, insurance, and tax requirements. An unfair playing field undermines state laws that protect consumers and workers, harms tax-abiding businesses, and defrauds the state of significant tax revenue. There is no opposition on file to this bill. Analysis Prepared by: Ben Ebbink / L. & E. / (916) 319-2091 FN: 0000571