BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2332
                                                                  Page  1

          Date of Hearing:   April 21, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                  AB 2332 (Eng) - As Introduced:  February 19, 2010 

          Policy Committee:                              B, P, and  
          C.P.Vote:    7 - 2 

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill authorizes the Board of Equalization (BOE) to request  
          that the Contractors State License Board (CSLB) suspend or deny  
          a contractor's license to a licensee who has outstanding tax  
          liabilities.

           FISCAL EFFECT  

          1)Costs associated with this legislation would be minor and  
            absorbable within the CSLB and BOE budgets. 

          2)Unknown revenue increases to the extent this authority allows  
            BOE to collect a portion of the $68 million in outstanding tax  
            liabilities. 

           COMMENTS  

           1)Rationale  . According to the BOE, the sponsors of this bill,  
            there is $68 million in outstanding taxes and penalties owed  
            by construction contractors to the state of California.  
            Current law does not give the BOE the authority to request  
            that the CSLB suspend the license of a contractor who has  
            outstanding tax liabilities. The Department of Industrial  
            Relations (DIR), the Franchise Tax Board (FTB) and the  
            Employment Development Department (EDD) have this authority.   
            This legislation would give the BOE the same tools as DIR, FTB  
            and EDD for collecting money owed to the state. 

            According to CSLB, "[The Business and Professions Code]  
            authorizes CSLB to suspend the license of a licensee who has  
            not paid specified taxes or penalties (final liabilities).   








                                                                  AB 2332
                                                                  Page  2

            This section of law clearly provides efficiencies relative to  
            such final liabilities since, subsequent to the exhaustion of  
            appeal rights, the regulatory agencies listed in the law can  
            effectuate a license suspension to encourage payment by a  
            recalcitrant license.  During the month of February 2010, CSLB  
            sent suspension letters to 103 licensed entities for  
            unsatisfied liabilities owed to EDD, DIR, and FTB.  The  
            combined liabilities underlying the license suspensions for  
            [February] are more than $2.5 million."

           2)Prior Legislation  .  AB 2282 (Eastin; Chapter 1386, Statutes of  
            1990) authorized CSLB to suspend or deny a contractor's  
            license for failure to resolve tax liabilities imposed by DIR,  
            EDD, or FTB.

           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)  
          319-2081