BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 1508|
          |Office of Senate Floor Analyses   |                              |
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                                   THIRD READING 


          Bill No:  AB 1508
          Author:   Roger Hernández (D)
          Amended:  3/26/15 in Assembly
          Vote:     21  

           SENATE BUS, PROF. & ECON. DEV. COMMITTEE:  9-0, 6/22/15
           AYES:  Hill, Bates, Berryhill, Block, Galgiani, Hernandez,  
            Jackson, Mendoza, Wieckowski

           SENATE APPROPRIATIONS COMMITTEE:  5-2, 8/27/15
           AYES:  Lara, Beall, Hill, Leyva, Mendoza
           NOES:  Bates, Nielsen

           ASSEMBLY FLOOR:  77-2, 6/1/15 - See last page for vote

           SUBJECT:   Underground economy: policy adviser


          SOURCE:    Author

          DIGEST:   This bill requires the Governor to designate an  
          independent policy adviser for the underground economy.

          ANALYSIS: 
          
          Existing law:

          1)Establishes an enforcement division in the Contractors State  
            License Board (CSLB) and requires the unit to rigorously  
            enforce the Contractors Law prohibiting all forms of  
            unlicensed activity.  (Business and Professions Code (BPC) §  
            7011.4 (a))









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          2)Authorizes the CSLB enforcement division to have free access  
            to all places of labor when participating in the enforcement  
            activities of the Joint Enforcement Strike Force on the  
            Underground Economy (JESF).  (BPC § 7011.4 (c))

          3)Authorizes an unlicensed contractor to advertise for  
            construction work only if the advertisement states that he or  
            she is not licensed.  (BPC § 7027.2)

          4)Makes it a misdemeanor for an unlicensed contractor to  
            advertise for construction or work of improvements or act in  
            the capacity of a contractor.  Imposes specified civil  
            penalties, including fines and imprisonment against the  
            unlicensed contractor and authorizes CSLB to cite the  
            unlicensed contractor.  (BPC § 7028) 

          5)Establishes the JESF to coordinate efforts in targeting tax  
            evasion and cash-pay violations, and authorizes the sharing of  
            investigative and enforcement capabilities between JESF  
            participants.  (Unemployment Insurance Code § 329)

          This bill:

          1)Requires the Governor to designate an independent chief policy  
            adviser for the underground economy.  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  







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               prevent task forces and partnerships from being fully  
               effective.

             f)   Leading a strategic planning process to develop  
               performance outcomes for combating the underground economy.
          1)Requires the adviser, 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.

          Background

          In March 2015, the Little Hoover 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.

          This bill aims to implement the Commission's recommendations.

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Senate Appropriations Committee, this bill will  
          result in General Fund costs, likely in the low hundreds of  
          thousands of dollars annually, to establish a chief policy  
          adviser, evaluate the various task forces and partnerships, and  







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          submit a report to the Legislature.




          SUPPORT:   (Verified8/29/15)


          California Pool and Spa Association
          California Professional Association of Specialty Contractors
          Pacific Association of Building Service Contractors 
          Plumbing-Heating-Cooling Contractors Association of California 
          State of California Auto Dismantlers Association 
          The Little Hoover Commission


          OPPOSITION:   (Verified8/29/15)


          None received


          ARGUMENTS IN SUPPORT:     Supporters state that an unfair  
          playing field undermines state laws that protects consumers and  
          workers, harms law-abiding businesses, and defrauds the state of  
          significant tax revenue. 

          ASSEMBLY FLOOR:  77-2, 6/1/15
          AYES:  Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,  
            Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd,  
            Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia,  
            Eduardo Garcia, Gipson, Gomez, Gonzalez, Gray, Grove, Hadley,  
            Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer,  
            Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,  
            Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon,  
            Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark  
            Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,  
            Wood, Atkins
          NOES:  Chávez, Gatto
          NO VOTE RECORDED:  Gordon

          Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-4104







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