BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 691
                                                                  Page  1

          Date of Hearing:   August 8, 2012 

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    SB 691 (Lieu) - As Amended:  January 4, 1012 

          Policy Committee:                              InsuranceVote:13 
          - 0 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill allows the Director of the Employment Development 
          Department (EDD) to provide any relevant information to the 
          Contractors' State License Board (CSLB) for purposes of workers' 
          compensation insurance fraud investigations. 

           FISCAL EFFECT  

          Costs associated with this legislation should be minor and 
          absorbable within existing resources. 

           COMMENTS  

           1)Purpose.   The intent of this legislation is to assist the CSLB 
            in their investigation of worker's compensation fraud by 
            permitting EDD to share employment data and information with 
            CSLB for the purposes of investigating any specific workers' 
            compensation fraud investigation.

           2)Background  . CSLB licenses and regulates California's 
            construction industry.  Anyone performing construction work in 
            California that totals $500 dollars or more in labor and 
            materials must be licensed by CSLB.  There are about 300,000 
            licensed contractors in the state, in 43 different licensing 
            classifications, including the active C-39 licenses.

          Every licensed contractor must report, in writing, the name and 
            address of the insurer carrying workers' compensation on his 
            or her employees within 90 days after any policy of insurance 
            is issued.  The contractor must send a copy of this report to 
            the insurer. If a contractor does not have employees, he or 








                                                                  SB 691
                                                                  Page  2

            she can fill out an exemption from workers' compensation.

           3)Related Legislation  . AB 1794 (Williams) would authorize a 
            memorandum of understanding between the EDD, CSLB, and the 
            State Compensation Insurance Fund to share information about 
            contractors to ensure the employer is paying adequate workers 
            compensation insurance for their employees. That bill is 
            currently pending in the Senate Appropriations Committee.

            AB 2219 (Knight) would delete the sunset date on the law 
            requiring a roofing contractor to obtain and maintain workers' 
            compensation insurance, even if he or she has no employees, 
            and removes the parallel sunset date requiring the Insurance 
            Commissioner to report on this effect. That bill is currently 
            pending in the Senate Appropriations Committee. 

            AB 878 (Bill Berryhill, Chapter 686, Statutes of 2011) 
            requires a workers' compensation insurer to report to the CSLB 
            a licensed contractor whose insurance policy it cancels.



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