BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 560| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 560 Author: Monning (D) Amended: 8/17/15 Vote: 21 SENATE BUS, PROF. & ECON. DEV. COMMITTEE: 9-0, 4/13/15 AYES: Hill, Bates, Berryhill, Block, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 SENATE FLOOR: 35-0, 4/30/15 AYES: Allen, Anderson, Bates, Beall, Berryhill, Block, Cannella, De León, Fuller, Gaines, Galgiani, Hall, Hancock, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Moorlach, Nguyen, Nielsen, Pan, Pavley, Roth, Stone, Wieckowski, Wolk NO VOTE RECORDED: Hernandez, Morrell, Runner, Vidak ASSEMBLY FLOOR: 78-0, 8/27/15 (Consent) - See last page for vote SUBJECT: Licensing boards: unemployment insurance SOURCE: Contractors State License Board DIGEST: This bill requires a licensing board, including the State Bar and the Bureau of Real Estate, to provide personal information regarding licensees to the Employment Development Department (EDD) upon request. This bill also authorizes the Contractors State License Board's enforcement representatives to issue a written notice to appear before a court to unlicensed individuals who fail to secure workers' compensation insurance. SB 560 Page 2 Assembly Amendments add the provisions related to personal information about licensees being provided to EDD and make other technical changes. ANALYSIS: Existing law: 1)Establishes an enforcement division in the Contractor's State License Board (CSLB) and requires the unit to rigorously enforce the Contractors Law prohibiting all forms of unlicensed activity. (BPC § 7011.4 (a)) 2)Authorizes an unlicensed contractor to advertise for construction work only if the advertisement states that he or she is not licensed. (BPC § 7027.2) 3)Makes it a misdemeanor for an unlicensed contractor to advertise for construction or work or 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) 4)Requires CSLB to initiate a disciplinary action against a licensee within 180 days of receipt of a certified copy of the Labor Commissioner's finding of a willful or deliberate violation of the Labor Code by a licensee. (BPC § 7110.5) 5)Authorizes 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)) 6)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 a licensing board, including the State Bar and the SB 560 Page 3 Bureau of Real Estate, to provide personal information regarding licensees to the EDD upon request. 2)Authorizes the CSLB Enforcement Division to additionally issue written notices to unlicensed contractors to appear in court for failure to secure workers' compensation insurance. 3)Makes other technical changes. Background Statewide Investigative Fraud Team (SWIFT). Unlicensed contractor activity comprises part of an estimated $60 to $140 billion annual underground economy that takes money away from healthcare, roads, and schools. To combat unlicensed activity, CSLB developed SWIFT. This team seeks to identify and shut down unlicensed operators in the construction industry by setting up stings throughout the state. The unit has the authority to visit any job site without evidence, and ask contractors to produce proof of licensure in good standing, citing those who are not properly licensed. While SWIFT enforcement representatives are able to issue written notices to appear when it is found that a contractor is operating without a license, they do not have the authority to issue one when it is discovered that the unlicensed contractor does not have workers' compensation insurance. This bill seeks to ensure that CSLB can issue a notice to appear for this violation. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Assembly Appropriations Committee, this bill results in minor and absorbable costs to the licensing boards to provide information to EDD and minor and absorbable costs to CSLB to enhance their enforcement activities. SUPPORT: (Verified8/30/15) Contractors' State License Board (source) SB 560 Page 4 Air Conditioning Sheet Metal Association Air-Conditioning & Refrigeration Contractors Association California Chapters of the National Electrical Contractors Association California Legislative Conference of the Plumbing, Heating, and Piping Industry California Pool and Spa Association California Professional Association of Specialty Contractors Construction Employers' Association Finishing Contractors Association of Southern California United Contractors Western Line Constructers OPPOSITION: (Verified8/28/15) None received ARGUMENTS IN SUPPORT: CSLB supports this bill, noting that it will allow CSLB to additionally cite for not having Workers Compensation insurance to allow that violation of law to become part of the case that is forwarded to the local district attorney for prosecution. The CSLB believes that failure to adequately insure employees against work-related injuries is a significant component of the underground economy and this bill provides an additional tool to help address this problem. ASSEMBLY FLOOR: 78-0, 8/27/15 AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, 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, Wood, Atkins SB 560 Page 5 NO VOTE RECORDED: Frazier, Williams Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-4104 8/30/15 15:12:05 **** END ****