Existing law authorizes the legislative body of an incorporated city and the county board of supervisors to license businesses carried on within their respective jurisdictions and to set license fees as specified.

This bill would require a city, including a charter city, county, and city and county that licenses businesses carried on within its jurisdiction to accept a California drivers license or identification number, individual taxpayer identification number, or municipal identification number in lieu of a social security number if the city, county, or city and county otherwise requires a social security number for the issuance of a business license. The bill would require these jurisdictions to require the applicant to provide an address where the individual consents to receive service of process, and would require the jurisdictions to accept a post office box or private mailbox that meets certain requirements. The bill would prohibit personal information, as defined to include these identification numbers, collected for purposes of issuing the business license from being disclosed, except as specified. By increasing the duties of local officials, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The California Constitution authorizes cities and counties to make and enforce within their limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws, and further authorizes cities organized under a charter to make and enforce all ordinances and regulations in respect to municipal affairs, which supersede inconsistent general laws.

The bill would declare that its provisions constitute a matter of statewide concern.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

Existing law authorizes the legislative body of an incorporated city and the county board of supervisors to license businesses carried on within their respective jurisdictions and to set license fees as specified.

This bill would require a city, including a charter city, county, and city and county that licenses businesses carried on within its jurisdiction to accept a California drivers license or identification number, individual taxpayer identification number, or municipal identification number in lieu of a social security number if the city, county, or city and county otherwise requires a social security number for the issuance of a business license. The bill would require these jurisdictions to require the applicant to provide an address where the individual consents to receive service of process, and would require the jurisdictions to accept a post office box or private mailbox that meets certain requirements. The bill would prohibit personal information, as defined to include these identification numbers, collected for purposes of issuing the business license from being disclosed, except as specified. By increasing the duties of local officials, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The California Constitution authorizes cities and counties to make and enforce within their limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws, and further authorizes cities organized under a charter to make and enforce all ordinances and regulations in respect to municipal affairs, which supersede inconsistent general laws.

The bill would declare that its provisions constitute a matter of statewide concern.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

Existing law authorizes the legislative body of an incorporated city and the county board of supervisors to license businesses carried on within their respective jurisdictions and to set license fees as specified.

This bill would require a city, including a charter city, county, and city and county that licenses businesses carried on within their respective jurisdictions its jurisdiction to accept a California drivers license or identification number, individual taxpayer identification number, or municipal identification number in lieu of a social security number if the city, county, or city and county otherwise requires a social security number for the issuance of a business license. The bill would require these jurisdictions to require the applicant to provide an address where the individual consents to receive service of process, which may include and would require the jurisdictions to accept a post office box or private mailbox that meets certain requirements. The bill would prohibit personal information, as defined to include these numbers, collected for purposes of issuing the business license from being disclosed, except as specified. By increasing the duties of local officials, this bill would impose a state-mandated local program.

The California Constitution authorizes cities and counties to make and enforce within their limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws, and further authorizes cities organized under a charter to make and enforce all ordinances and regulations in respect to municipal affairs, which supersede inconsistent general laws.

The bill would declare that its provisions constitute a matter of statewide concern.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

Existing law authorizes the legislative body of an incorporated city and the county board of supervisors to license businesses carried on within their respective jurisdictions and to set license fees as specified.

This bill would require a city, including a charter city, county, and city and county that licenses businesses carried on within their respective jurisdictions to accept a California drivers license or identification number, individual taxpayer identification number, or municipal identification number in lieu of a social security number if the city, county, or city and county otherwise requires a social security number for the issuance of a business license. The bill would require these jurisdictions to require the applicant to provide an address where the individual consents to receive service of process, which may include a post office box or private mailbox that meets certain requirements. The bill would prohibit this number personal information, as defined to include these numbers, collected for purposes of issuing the business license from being disclosed, except as specified. The bill would also prohibit the city and the county from disclosing on an Internet Web site a residential address collected on an application for a business license issued by the city or the county. By increasing the duties of local officials, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

The California Constitution authorizes cities and counties to make and enforce within their limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws, and further authorizes cities organized under a charter to make and enforce all ordinances and regulations in respect to municipal affairs, which supersede inconsistent general laws.

The bill would declare that its provisions constitute a matter of statewide concern.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

Existing law authorizes the legislative body of an incorporated city and the county board of supervisors to license businesses carried on within their respective jurisdictions and to set license fees as specified.

This bill would require a city, including a charter city, county, and city and county that licenses businesses carried on within their respective jurisdictions to accept a California drivers license or identification number, individual taxpayer identification number, or municipal identification number in lieu of a social security number if the city, county, or city and county otherwise requires a social security number for the issuance of a business license. The bill would prohibit this number from being disclosed, except as specified. The bill would also prohibit the city and the county from disclosing on an Internet Web site a residential address collected on an application for a business license issued by the city or the county. By increasing the duties of local officials, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

The California Constitution authorizes cities and counties to make and enforce within their limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws, and further authorizes cities organized under a charter to make and enforce all ordinances and regulations in respect to municipal affairs, which supersede inconsistent general laws.

The bill would declare that its provisions constitute a matter of statewide concern.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

Existing law authorizes the legislative body of an incorporated city and the county board of supervisors to license businesses carried on within their respective jurisdictions and to set license fees as specified.

This bill would require a city, including a charter city, county, and city and county that licenses businesses carried on within their respective jurisdictions to accept a California drivers license or identification number, individual taxpayer identification number, or municipal identification number in lieu of a social security number if the city, county, or city and county otherwise requires a social security number for the issuance of a business license. The bill would prohibit this number from being disclosed, except as specified. By increasing the duties of local officials, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law authorizes the legislative body of an incorporated city and the county board of supervisors to license businesses carried on within their respective jurisdictions and to set license fees as specified.

This bill would require a city, including a charter city, county, and city and county that licenses businesses carried on within their respective jurisdictions to accept a California drivers license or identification number, individual taxpayer identification number, or municipal identification number in lieu of a social security number if the city, county, or city and county otherwise requires a social security number for the issuance of a business license. The bill would prohibit this number from being disclosed, except as specified. By increasing the duties of local officials, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2184

Author:(Chiu)

As Amended Ver:August 6, 2018

Majority vote

Original Committee Reference: L. GOV.

SUMMARY: Requires a local agency that licenses businesses to accept a driver's license or certain identification numbers in lieu of a social security number (SSN) if the municipality otherwise requires an SSN for the issuance of a business license.

The Senate amendments:

1. Specify that a city or county that licenses a business carried on within in its jurisdiction shall require the applicant to provide an address where the individual consents to receive service of process. An acceptable address for this purpose shall include a post office box or private mailbox. The address shall be available for public inspection.
2. Clarify that personal information collected for the purposes of issuing a business license shall be confidential, shall not be available for public inspection, and shall not be disclosed as required to administer the licensure program or comply with a judicial warrant, subpoena, or court order.
3. Delete the requirement prohibiting a city or county from disclosing a residential address collected on the application for a business license on an Internet Web site.
4. Add a definition for "personal information" to mean the following:
5. An applicant's residential address if the applicant provides a different address where the individual consents to receive service of process;
6. A California driver's license or identification number, an individual taxpayer identification number, a municipal identification number, and a social security number; and,
7. Income and tax information.
8. Specify that no state reimbursement is required because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act.

EXISTING LAW:

1. Allows a city or county to make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws, known as the police power of cities.
2. Allows a city or county to require businesses operating in their jurisdictions to obtain a license and impose related licensing fees.

AS PASSED BY THE ASSEMBLY, this bill:

1. Required a city, including a charter city, county, and city and county that licenses businesses carried on within their respective jurisdictions to accept a California driver's license or identification number, an individual taxpayer identification number (ITIN), or a municipal identification number in lieu of an SSN if the city or county otherwise requires an SSN for the issuance of a business license.
2. Specified that a home address submitted to a city, including a charter city, county, and a city and county on a business license application shall not be disclosed on a publicly accessible Internet Web site.
3. Provided that a number collected pursuant to 1), above, shall not be available to the public for inspection, is confidential, and shall not be disclosed, except as required to administer the licensure program or comply with a state law or a state or federal court order.
4. Specified that if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made.
5. Provided findings and declarations that Sections 2 and 3 of this measure impose a limitation on the public's right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of the California Constitution, Article I, Section 3.
6. Made additional findings and declarations to support its purposes.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.

COMMENTS:

1. Local Business Licensing. The California Constitution allows a city or county to "make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws," known as police powers. It is from this fundamental power that local governments derive their authority to regulate behaviors, business operations, and land uses. Local agencies also use this "police power" to abate nuisances and protect public health, safety, and welfare.

As an extension of the police power, state law allows local governments to require businesses operating in their jurisdictions to obtain a license and impose related licensing fees. If a business operates in multiple jurisdictions, the fees imposed by any one jurisdiction are supposed to fairly reflect the amount of business that goes on in that jurisdiction.

Local governments license businesses for lots of reasons: to identify individuals operating businesses in their jurisdictions, to ensure compliance with other local laws, to facilitate contact in case a problem arises, and to raise money to support public services that support those businesses.

1. Individual Tax Identification Number. In 2014, the Legislature enacted SB 1159 (Lara), Chapter 752, Statutes of 2014, which prohibited, among other things, licensing boards under the Department of Consumer Affairs (DCA) from denying licensure to an applicant based on his or her citizenship or immigration status and required that DCA's licensing boards accept either an SSN or an ITIN number on business license applications or renewals. That bill was widely supported and received no opposition. An ITIN is a tax processing identification number issued by the United States Internal Revenue Service (IRS) for the administration of tax laws. Since 1996, the IRS has issued ITINs to taxpayers and their dependents who are not eligible to obtain an SSN. The IRS issues ITINs because all wage earners, regardless of their immigration status, are required to pay federal taxes. Accordingly, ITINs allow people who are ineligible for an SSN to comply with tax laws, and are issued regardless of immigration status.
2. Bill Summary. In order to ensure that persons without an SSN may apply for local business licenses, this bill would require local governments that license businesses to accept alternative numbers or a driver's license in lieu of an SSN. This bill is co-sponsored by the California Immigrant Policy Center and the Lawyers' Committee for Civil Rights of the San Francisco Bay Area.
3. Author's statement: According to the author, "In a 2012 study from the Fiscal Policy Institute reported that one-third of small business owners in California are immigrants. There are still systemic barriers to immigrant Californians seeking opportunity through business ownership. This bill enables the integration of immigrant business owners into the state economy and protects their personal information. It reduces barriers for immigrant business owners to apply for local business licenses and aligns the business license process with efforts to advance the social and economic interests of our state."
4. Prior legislation: AB 1822 (Berryhill), Chapter 317, Statutes of 2012, allowed the California Architects Board to accept an ITIN or another identification number in lieu of an SSN from an individual seeking licensure.

AB 1024 (Gonzalez), Chapter 573, Statutes of 2013, authorized the Supreme Court of California to admit an applicant, who is not lawfully present in the United States, to the practice of law upon certification by the committee that the application fulfilled the requirements for admission.

SB 1159 prohibited licensing boards under the DCA from denying licensure to an applicant based on his or her citizenship or immigration status, and required a licensing board and the State Bar to require, by January 1, 2016, that an applicant for licensure provide his or her ITIN or an SSN for an initial or renewal license.

1. Arguments in Support. Supporters argue that immigrant households represent a substantial share of spending power in the state, currently making up 28% of the total household income in California. In addition to contributing about 32% of California's gross domestic product, immigrants bring innovation and cultural diversity to our state through entrepreneurship. A 2012 study found that one in three small business owners in California are immigrants. Meanwhile, another study found that from 2007 to 2001, immigrants in the state founded an estimated 45% of all new businesses. However, immigrants in California face systemic barriers to seeking economic opportunity through business ownership, including the requirement the individual provide an SSN. By allowing a driver's license or other identifying number to be used instead, this bill reduces barriers for immigrant business owners to apply for local business licenses.
2. Arguments in Opposition. None on file.

Analysis Prepared by: Jimmy MacDonald / L. GOV. / (916) 319-3958 FN: 0003803

 THIRD READING  

Bill No: AB 2184

Author:

:

Vote:

SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 6/20/18

AYES: McGuire, Nguyen, Beall, Hernandez, Hertzberg, Lara

NO VOTE RECORDED: Moorlach

SENATE JUDICIARY COMMITTEE: 5-1, 6/26/18

AYES: Jackson, Hertzberg, Monning, Stern, Wieckowski

NOES: Anderson

NO VOTE RECORDED: Moorlach

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 58-10, 5/29/18 - See last page for vote

SUBJECT:

SOURCE: California Immigrant Policy Center

DIGEST:

This bill requires any city, county, or city and county to accept a California driver’s license or identification number, an individual taxpayer identification number, or a municipal identification number.

ANALYSIS:

Existing law:

1. Allows a city or county to "make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws, known as the police power of cities."
2. Permits local governments to require businesses operating in their jurisdictions to obtain a license and impose related licensing.
3. Allows cities and counties to fix the rates of the license fee, also known as the Business License Tax or “BLT,” and provide for its collection.
4. Prohibits licensing boards under the Department of Consumer Affairs (DCA) from denying licensure to an applicant based on his or her citizenship or immigration status, and requires that DCA’s licensing boards accept either an Social Security Number (SSN) or an Individual Tax Identification Number (ITIN) on business license applications or renewals (SB 1159, Lara, Chapter 752, Statutes of 2014).

This bill:

1. Requires cities and counties to accept a California driver’s license or identification number, an individual taxpayer identification number, or a municipal identification number, instead of a SSN if the county or city otherwise requires a SSN for the issuance of a business license.
2. Directs cities and counties that license businesses to require an applicant to provide an address where the individual agrees to receive service of process, which can include a post office box or private mailbox. This bill provides that this address is not subject to public inspection.
3. Provides that personal information collected by a city or county for purposes of licensing a business is not available to the public for inspection, is confidential, and shall not be disclosed except as required to administer the licensure program or comply with a judicial warrant, subpoena, or court order.
4. Defines “personal information.”
5. Makes legislative findings and declarations supporting its purposes.

Background

Because the Social Security Administration only issues SSNs to U.S. citizens, permanent residents, and eligible nonimmigrant workers in the United States, the Internal Revenue Service (IRS) has issued ITINs since 1996. ITINs ensure all wage earners, regardless of their immigration status, can pay federal taxes, and IRS issues them regardless of immigration status. An ITIN is a nine-digit number, beginning with the number “9” and is formatted like a SSN. To obtain an ITIN, an individual must complete an IRS form. The form requires documentation substantiating foreign/alien status and true identity for the individual. The person may either mail the documentation, along with the required form, present it at the IRS office, or process the application through an acceptable agent authorized by the IRS.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/7/18)

California Immigrant Policy Center (source)

ACLU Center for Advocacy & Policy – California

Asian Americans Advancing Justice

Brightline Defense

California Asian Chamber of Commerce

California Landscape Contractors Association

California Reinvestment Coalition

California Rural Legal Assistance Foundation

Coalition for Humane Immigrant Rights

East Bay Community Law Center

Educators for Fair Consideration

Hispanas Organized for Political Equality

Housing for all Burlingame

Lawyers’ Committee for Civil Rights of the San Francisco Bay Area

Long Beach Immigrant Rights Coalition

Mission Asset Fund

Public Counsel

Sustainable Economies Law Center

OPPOSITION: (Verified 8/7/18)

None received

ARGUMENTS IN SUPPORT: According to the author, “California has led the nation in advancing policies that recognize the contributions of immigrants and the value of integrating all state residents, regardless of immigration status, into the state economy. However, there are still systemic barriers to immigrant Californians seeking opportunity through business ownership. This bill enables the integration of immigrant business owners into the state economy and protects their personal information. It reduces barriers for immigrant business owners to apply for local business licenses and aligns the business license process with efforts to advance the social and economic interests of our state.”

ASSEMBLY FLOOR: 58-10, 5/29/18

AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bloom, Bonta, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chiu, Chu, Cooley, Cooper, Cunningham, Eggman, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Lackey, Levine, Limón, Low, Maienschein, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Weber, Wood, Rendon

NOES: Travis Allen, Bigelow, Brough, Dahle, Harper, Mathis, Melendez, Obernolte, Voepel, Waldron

NO VOTE RECORDED: Chávez, Chen, Choi, Daly, Flora, Fong, Frazier, Kiley, Mayes, Patterson

Prepared by:

8/7/18 17:11:35

**** END ****

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2017-2018 Regular Session

Bill No: AB 2184 (Author:Chiu)

Version: April 19, 2018

Hearing Date: June 26, 2018

Fiscal: Yes

Urgency: No

Consultant: TSG

SUBJECT

Business licenses

DESCRIPTION

Some California cities and counties require anyone applying for a business license within their jurisdiction to provide a social security number. This bill would require any such city or county to also accept a California driver’s license or identification number, an individual taxpayer identification number, or a municipal identification number in lieu of the social security number.

BACKGROUND

Businesses owned and operated by immigrants are an important component of the California economy. According to a 2012 study by the Fiscal Policy Institute, 33 percent of small businesses in California are immigrant-owned, the highest such percentage in the nation.^[1] Nationwide, immigrant-owned businesses hired an average of 11 employees each.^[2]

To support this entrepreneurial activity and the key contribution it makes to the success of the California economy, over the past several years, the Legislature has enacted a number of legal reforms intended to support small business ownership and operation among all Californians, regardless of immigration status. For example, because of those changes, Californians do not need a social security number in order to obtain a professional license to provide services as a dentist, contractor, accountant, or any other trade regulated by the California Department of Consumer Affairs. (SB 1159, Lara, Ch. 752, Stats. 2014) Similarly, people are free to obtain a license to practice law in California regardless of their immigration status. (AB 1024, Gonzalez, Ch. 573, Stats. 2013.) Likewise, applicants for a California architect’s license can use an individual taxpayer identification number instead of a social security number. (AB 1822, Berryhill, Ch. 317, Stats. 2012.)

That effort has now taken on renewed urgency because of recent federal immigration policy changes. More aggressive and far more indiscriminate federal enforcement of immigration laws appears to have reduced formal employment opportunities for individuals who lack work authorization. Even more alarmingly, the Trump administration’s decision to cancel the Deferred Action for Childhood Arrivals (DACA) program, though currently enjoined by the federal courts, means that thousands of Californians may soon lose formal work authorization. The affected Californians will need to find alternative ways of supporting themselves and their families.

This bill would make it easier for all Californians, regardless of immigration status, to obtain local business licenses by instructing local licensing agencies to allow applicants to obtain a business license using a California driver’s license or identification number, an individual taxpayer identification number, or a municipal identification number. In this way, Californians who do not possess a social security number or do not want to share that number with the licensing agencies, would still be able to obtain a business license, and local licensing agencies would still have reliable ways of identifying and tracking the licensees.

This bill passed out of the Senate Committee on Governance and Finance by a 6-0 vote.

CHANGES TO EXISTING LAW

Existing state law provides that an incorporated body may license any kind of business not prohibited by law and carried on within the limits of its jurisdiction. (Bus. & Prof. Sec. 16000 et seq.)

Existing federal law, under the Personal Responsibility and Work Opportunity Reconciliation Act, prohibits certain categories of individuals not lawfully present in the United States from receiving specified public benefits, including “any grant, contract, loan, professional license, or commercial license provided by an agency of a State or local government or by appropriated funds of a State or local government.” (8 U.S.C. Sec. 1621(c).)

Existing federal law, authorizes states to provide that “an alien who is not lawfully present in the United States is eligible for any State or local public benefit for which such alien would otherwise be ineligible… through the enactment of a State law after August 22, 1996, which affirmatively provides for such eligibility.” (8 U.S.C. Sec. 1621(d).)

Existing state law provides that an incorporated body may license any kind of business not prohibited by law and carried on within the limits of its jurisdiction. (Bus. & Prof. Sec. 16000 et seq.)

This bill would make findings and declarations regarding the positive entrepreneurial contributions of immigrants to the California economy.

This bill would require any city, charter city, county, or city and county that licenses businesses operating within their respective jurisdictions to accept a California driver’s license or identification number, an individual taxpayer identification number (ITIN), or a municipal identification number in lieu of a social security number if a social security number would otherwise be required to obtain the business license.

This bill would specify that a home address submitted to a city, including a charter city, county, and a city and county on a business license application shall not be disclosed on a publicly accessible Internet web site.

This bill would provide that an identification number collected pursuant to a local business licensing agency shall not be available to the public for inspection, is confidential, and shall not be disclosed, except as required to administer the licensure program or comply with a state law or a state or federal court order.

This bill would make findings and declarations justifying its limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of the California Constitution, Article I, Section 3.

COMMENT

1. Stated need for the bill

According to the author:

California has led the nation in advancing policies that recognize the contributions of immigrants and the value of integrating all state residents, regardless of immigration status, into the state economy. However, there are still systemic barriers to immigrant Californians seeking opportunity through business ownership. This bill enables the integration of immigrant business owners into the state economy and protects their personal information. It also reduces barriers for immigrant business owners to apply for local business licenses and aligns the business license process with efforts to advance the social and economic interests of our state. Clarifying that other forms of identification are acceptable for local business license applications is consistent with California’s goals to fully integrate immigrants into the state’s economy and public life.

As co-sponsor of the bill, the California Immigrant Policy Center writes:

California has led the nation in advancing bold policies that recognize the value of integrating all state residents. As a result, our economy strongly benefits from the contributions and cultural innovation of our immigrant residents. Following the Great Recession in 2008, the entrepreneurial spirit of immigrants contributed to our state’s economic recovery. Immigrants founded around 45 percent of all new businesses in California from 2007 to 2011, and immigrant owned businesses contributed approximately $20.2 billion in revenue in 2014. Despite this profound economic benefit that immigrants provide to our state, many immigrants are unable to pursue entrepreneurship, depriving our state of the benefit of full integration and participation of all our would-be small business owners. (Internal citations omitted.)

2. Local Business Licensing

The California Constitution allows a city or county to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws,” known as police powers. (Cal. Const., art. XI, Sec. 7.) It is from this fundamental power that local governments derive their authority to regulate behaviors, business operations, and land uses. Local agencies also use this “police power” to abate nuisances and protect public health, safety, and welfare.

As an extension of the police power, state law allows local governments to require businesses operating in their jurisdictions to obtain a license and impose related licensing fees. (Bus. & Prof. Sec. 16000 et seq.) If a business operates in multiple jurisdictions, the fees imposed by any one jurisdiction are supposed to fairly reflect the amount of business that goes on in that jurisdiction.

Local governments license businesses for lots of reasons: to identify individuals operating businesses in their jurisdictions, to ensure compliance with other local laws, to facilitate contact in case a problem arises, and to raise money to support public services that support those businesses.

3. Examples of the problem the bill is intended to address

According to the proponents of the bill, almost half of the cities in the Central Valley, encompassing Amador, Fresno, Kern, Kings, Merced, Sacramento, San Bernardino, San Joaquin, Stanislaus, and Tulare counties, currently require applicants for business licenses to provide a social security number. These are, the proponents assert, parts of California where a high number of immigrant business owners reside.

4. Individual Tax Identification Numbers

An “Individual Taxpayers Identification Number,” or ITIN, is a tax processing identification number issued by the U.S. Internal Revenue Service (IRS) for the administration of tax laws. Since 1996, the IRS has issued ITINs to taxpayers and their dependents who are not eligible to obtain an SSN. The IRS issues ITINs because all wage earners, regardless of their immigration status, are required to pay federal taxes. Accordingly, ITINs allow people who are ineligible for an SSN to comply with tax laws, and are issued regardless of immigration status.

5. Balancing privacy interests against consumer protections

Business licensing programs create some tension between two public policy concerns: individual privacy rights and consumer protection. On the one hand, it is important for businesses to be accountable for the goods and services they introduce into the economy. For that reason, it is important that consumers have a way of tracking down the business to seek redress when problems arise. Publicly accessible licensing data promotes that public policy purpose. On the other hand, making business licensing information public has implications for privacy. That is especially true for people who operate businesses out of their homes. The question, then, is how to balance these two interests.

The bill in print would prohibit public disclosure of the business licensee’s identification number and restrict the licensing agencies from posting a residential address on the agency’s Web site. This would still leave people’s residential addresses and other personally identifying information open to in-person public inspection, raising privacy concerns. In order to address these concerns without preventing consumers from being able to hold businesses accountable for their activities, the author proposes to offer amendments in Committee that would both place greater restrictions on what information in a business license application would be available to the public, while also requiring business license applicants to provide an address at which they consent to receive service of process.

6. Proposed Amendments

In order to address the issues set forth in the analysis, above, the author has offered to incorporate amendments into the bill that would:

• require business license applicants to provide an address at which they consent to be served with process; and
• prohibit the public disclosure of certain personally identifying information in a business license application.

The specific amendments are as follows:

Amendment 1

On page 3, in lined 22 and 23, strike out “their respective jurisdictions” and insert:

its jurisdiction

Amendment 2

On page 3, in line 26, strike out “or city and county”

Amendment 3

On page 3, in line 29, strike out “(2) A number” and insert:

(2) A city that licenses a business carried on within its jurisdiction shall require the applicant to provide an address where the individual consents to receive service of process, which may include a post office box or private mailbox that complies with paragraph (2) of subdivision (b) of Section 17538.5. This address shall be available for public inspection.

(3) Personal information

Amendment 4

On page 3, in lines 29 and 30, strike out “pursuant to paragraph (1)” and insert:

for purposes of issuing a business license by a city

Amendment 5

On page 3, in line 30, strike out “not” and insert:

be confidential, shall not

Amendment 6

On page 3, in lines 30 and 31, strike out “is confidential,”

Amendment 7

On page 3, in lines 32 and 33, strike out “state law or federal” and insert:

judicial warrant, subpoena, or

Amendment 8

On page 3, strike out lines 34 to 36, inclusive, in line 37, strike out “(c)” and insert:

(b)

Amendment 9

On page 3, in line 37, strike out “city” and insert:

the following definitions shall apply:

1. “City”

Amendment 10

On page 3, between lines 38 and 39, insert:

1. “Personal information” means all of the following:
2. An applicant’s residential address if the applicant provides a different address pursuant to paragraph (2) of subdivision (a).
3. A California driver’s license or identification number, an individual taxpayer identification number, a municipal identification number, and a social security number.
4. Income and tax information.

Amendment 11

On page 4, in line 2, strike out “their respective jurisdictions” and insert:

its jurisdiction

Amendment 12

On page 4, in line 8, strike out “(2) A number” and insert:

(2) A county that licenses a business carried on within its jurisdiction shall require the applicant to provide an address where the individual consents to receive service of process, which may include a post office box or private mailbox that complies with paragraph (2) of subdivision (b) of Section 17538.5. This address shall be available for public inspection.

(3) Personal information

Amendment 13

On page 4, in lines 8 and 9, strike out “pursuant to paragraph (1)” and insert:

for purposes of issuing a business license by a county

Amendment 14

On page 4, in line 9, strike out “not” and insert:

be confidential, shall not

Amendment 15

On page 4, in lines 9 and 10, strike out “is confidential”

Amendment 16

On page 4, in lines 11 and 12, strike out “state law or state or federal” and insert:

judicial warrant, subpoena, or

Amendment 17

On page 4, strike out lines 13 to 15, inclusive and insert:

(b) For purposes of this section, “personal information” means all of the following:

(1) An applicant’s residential address if the applicant provides a different address pursuant to paragraph (2) of subdivision (a).

(2) A California driver’s license or identification number, an individual taxpayer identification number, a municipal identification number, and a social security number.

(3) Income and tax information.

Support: American Civil Liberties Union of California Center for Advocacy and Policy; Asian Americans Advancing Justice; Brightline Defense Project; California Asian Pacific Chamber of Commerce; California Landscape Contractors Association; California Reinvestment Coalition; California Rural Legal Assistance Foundation; Coalition for Humane Immigrant Rights; East Bay Community Law Center; Educators for Fair Consideration; Hispanas Organized for Political Equality; Housing for All Burlingame; Long Beach Immigrant Rights Coalition; Mission Asset Fund; National Association of Social Workers; Public Counsel; Sustainable Economies Law Center

Opposition: None known

HISTORY

Source: California Immigrant Policy Center; Lawyer’s Committee for Civil Rights of the San Francisco Bay Area

Related Pending Legislation: None known

Prior Legislation:

SB 1159 (Lara, Ch. 752, Stats. 2014) prohibited various licensing boards under the Department of Consumer Affairs from denying licensure to an applicant based on the applicant’s citizenship or immigration status, and required a licensing board and the State Bar to require, by January 1, 2016, that an applicant for licensure provide his or her ITIN or an SSN for an initial or renewal license.

AB 1024 (Gonzalez, Ch. 573, Stats. 2013) authorized the Supreme Court of California to admit an applicant, who is not lawfully present in the United States, to the practice of law upon certification by the committee that the application fulfilled the requirements for admission.

AB 1822 (Berryhill, Ch. 317, Stats. 2012) allowed the California Architects Board to accept an ITIN or another identification number in lieu of an SSN from an individual seeking licensure.

Prior Vote:

Senate Governance and Finance Committee (Ayes 6, Noes 0)

Assembly Floor (Ayes 58, Noes 10)

Assembly Appropriations Committee (Ayes 12, Noes 2)

Assembly Local Government Committee (Ayes 7, Noes 0)

Assembly Privacy and Consumer Protection Committee (Ayes 8, Noes 1)

**************

1. Immigrant Small Business Owners: A Significant and Growing Part of the Economy (June 2012) Fiscal Policy Institute <http://www.fiscalpolicy.org/immigrant-small-business-owners-FPI-20120614.pdf> (as of June 18, 2018) p. 34. ↑

2. Id. at p. 1. ↑

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Mike McGuire, Chair

2017 - 2018 Regular

Business licenses

Requires any city, county, or city and county to accept a California driver’s license or identification number, an individual taxpayer identification number, or a municipal identification number.

Background

The California Constitution allows a city or county to "make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws, known as the police power of cities." It is from this fundamental power that local governments derive their authority to regulate land uses through planning, zoning ordinances, and use permits. Local agencies also use this police power to abate nuisances and protect public health, safety and welfare.

As an extension of the police power, state law lets local governments require businesses operating in their jurisdictions to obtain a license and impose related licensing fees. Local governments license businesses for lots of reasons: to identify individuals operating businesses in their jurisdictions, to ensure compliance with other local laws, to facilitate contact in case a problem arises, and to raise money to support public services that support those businesses.

The Business and Professions Code provides that cities and counties can license any kind of business not prohibited by law. The Code allows cities and counties to fix the rates of the license fee, also known as the Business License Tax or “BLT,” and provide for its collection. California’s business permit website, CalGold, details permit requirements and BLT rates: http://www.calgold.ca.gov/.

Because the Social Security Administration only issues social security numbers to U.S. citizens, permanent resident,s and eligible nonimmigrant workers in the United States, the Internal Revenue Service (IRS) has issued Individual Tax Identification Numbers (ITINs) since 1996. ITINs ensure all wage earners, regardless of their immigration status, can pay federal taxes, and IRS issues them regardless of immigration status.

In 2014, the Legislature prohibited licensing boards under the Department of Consumer Affairs from denying licensure to an applicant based on his or her citizenship or immigration status, and required that DCA’s licensing boards accept either an SSN or an ITIN on business license applications or renewals (SB 1159, Lara). Advocates for immigrants want to require cities and counties licensing businesses to do the same.

Proposed Law

Assembly Bill 2184 requires any city, county, or city and county to accept a California driver’s license or identification number, an individual taxpayer identification number, or a municipal identification number, instead of a social security number if the county or city otherwise requires a social security number for the issuance of a business license. The bill provides that any number provided is not available to the public for inspection, is confidential, and shall not be disclosed except as required to administer the licensure program or comply with a state law or state or federal court order.

The measure prohibits a city, county, or city and county from disclosing on its Internet Web site a residential address collected on an application for a business license issued by the city. The bill also makes legislative findings and declarations supporting its purposes.

State Revenue Impact

No estimate.

Comments

1. Purpose of the bill. According to the author, “California has led the nation in advancing policies that recognize the contributions of immigrants and the value of integrating all state residents, regardless of immigration status, into the state economy. However, there are still systemic barriers to immigrant Californians seeking opportunity through business ownership. This bill enables the integration of immigrant business owners into the state economy and protects their personal information. It reduces barriers for immigrant business owners to apply for local business licenses and aligns the business license process with efforts to advance the social and economic interests of our state.”

2. Scope. Currently, some cities and counties accept ITINs instead of SSNs for purposes of business licenses, while others do not. The author states that cities where many immigrant business owners reside, including Los Angeles, and almost half of the cities in the Central Valley (across the counties of Fresno, Tulare, Kings, Stanislaus, San Joaquin, Merced, Amador, Kern, San Bernardino and Sacramento), currently require individual applicants for business licenses to provide a Social Security Number (SSN) in their application, which precludes business owners who lack SSNs from formalizing their businesses and filing local taxes.

3. Federal law. In 1996, Congress enacted the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), which prohibits certain categories of individuals not lawfully present in the United States from receiving certain public benefits, including and professional or commercial license provided by a State or local agency PRWORA provides that a state may render “an alien who is not lawfully present in the United States . . . eligible for any State or local public benefit for which such alien would otherwise be ineligible . . . through the enactment of a State law after the date of the enactment of this Act which affirmatively provides for such eligibility.” Consistent with that provision, this bill contains legislative intent stating it is in the best interests of the state to provide persons who are not lawfully present in the United States with the benefit of eligibility to obtain a local business license, therefore providing a benefit that qualifies under PRWORA.

4. ITINs. An ITIN is a tax processing identification number issued by IRS only available for certain nonresident and resident aliens, their spouses, and dependents who cannot get a SSN. It is a 9-digit number, beginning with the number “9” and is formatted like a SSN. To obtain an ITIN, an individual must complete an IRS form. The form requires documentation substantiating foreign/alien status and true identity for the individual. The person may either mail the documentation, along with the required form, present it at the IRS office, or process the application through an acceptable agent authorized by the IRS.

5. Mandate. The California Constitution generally requires the state to reimburse local agencies for their costs when the state imposes new programs or additional duties on them. Because the measure adds responsibilities to cities and counties, AB 2184 creates a new state-mandated local program. The bill states that any mandate reimbursement must be made using existing statutory procedures.

6. Double-referred. The Senate Rules Committee ordered a double referral of AB 2184, first to this Committee because of its changes to business license tax requirements, and second to the Committee on Judiciary to consider its implications on the Public Records Act, among others.

Assembly Actions

Assembly Privacy and Consumer Protection Committee: 8-1

Assembly Local Government Committee 7-0

Assembly Appropriations Committee: 12-2

Assembly Floor: 58-10

Support and Opposition

(6/15/18)

Support: California Immigrant Policy Center , ACLU Center for Advocacy & Policy – California, Asian Americans Advancing Justice, Brightline Defense, California Asian Chamber of Commerce, California Landscape Contractors Association, California Reinvestment Coalition, California Rural Legal Assistance Foundation, Coalition for Humane Immigrant Rights, East Bay Community Law Center, Educators for Fair Consideration, Lawyers’ Committee for Civil Rights of the San Francisco Bay Area, Mission Asset Fund, Public Counsel, Sustainable Economies Law Center.

Opposition: Unknown.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2184

Author:(Chiu)

As Amended Ver:April 19, 2018

Majority vote

SUMMARY: Requires a local agency that licenses businesses to accept a driver's license or certain identification numbers in lieu of a social security number (SSN) if the municipality otherwise requires an SSN for the issuance of a business license. Specifically, this bill would:

1. Requires a city, including a charter city, county, and city and county that licenses businesses carried on within their respective jurisdictions to accept a California driver's license or identification number, an individual taxpayer identification number (ITIN), or a municipal identification number in lieu of an SSN if the city or county otherwise requires an SSN for the issuance of a business license.
2. Specifies that a home address submitted to a city, including a charter city, county, and a city and county on a business license application shall not be disclosed on a publicly accessible Internet web site.
3. Provides that a number collected pursuant to 1), above, shall not be available to the public for inspection, is confidential, and shall not be disclosed, except as required to administer the licensure program or comply with a state law or a state or federal court order.
4. Specifies that if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made.
5. Provides findings and declarations that Sections 2 and 3 of this measure impose a limitation on the public's right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of the California Constitution, Article I, Section 3.
6. Makes additional findings and declarations to support its purposes.

EXISTING LAW:

1. Allows a city or county to make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws, known as the police power of cities.
2. Allows a city or county to require businesses operating in their jurisdictions to obtain a license and impose related licensing fees.

FISCAL EFFECT: According to the Assembly Appropriations Committee, there are potentially significant reimbursable state-mandated costs, potentially in the hundreds of thousands of dollars, for local jurisdictions to modify forms, publications, and potentially information technology systems to accept driver's license, identification card, or ITIN numbers. Reimbursable costs are most likely for cities, rather than counties, because roughly half of cities require an SSN when issuing a business license. For example, if 100 cities submitted claims for $3,000 each, total reimbursable state costs will be $300,000.

COMMENTS:

1. Local Business Licensing. The California Constitution allows a city or county to "make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws," known as police powers. It is from this fundamental power that local governments derive their authority to regulate behaviors, business operations, and land uses. Local agencies also use this "police power" to abate nuisances and protect public health, safety, and welfare.

As an extension of the police power, state law allows local governments to require businesses operating in their jurisdictions to obtain a license and impose related licensing fees. If a business operates in multiple jurisdictions, the fees imposed by any one jurisdiction are supposed to fairly reflect the amount of business that goes on in that jurisdiction.

Local governments license businesses for lots of reasons: to identify individuals operating businesses in their jurisdictions, to ensure compliance with other local laws, to facilitate contact in case a problem arises, and to raise money to support public services that support those businesses.

1. Individual Tax Identification Number. In 2014, the Legislature enacted SB 1159 (Lara), Chapter 752, Statutes of 2014, which prohibited, among other things, licensing boards under the Department of Consumer Affairs (DCA) from denying licensure to an applicant based on his or her citizenship or immigration status and required that DCA's licensing boards accept either an SSN or an ITIN number on business license applications or renewals. That bill was widely supported and received no opposition. An ITIN is a tax processing identification number issued by the U.S. Internal Revenue Service (IRS) for the administration of tax laws. Since 1996, the IRS has issued ITINs to taxpayers and their dependents who are not eligible to obtain an SSN. The IRS issues ITINs because all wage earners, regardless of their immigration status, are required to pay federal taxes. Accordingly, ITINs allow people who are ineligible for an SSN to comply with tax laws, and are issued regardless of immigration status.
2. Bill Summary. In order to ensure that persons without an SSN may apply for local business licenses, this bill would require local governments that license businesses to accept alternative numbers or a driver's license in lieu of an SSN. This bill is co-sponsored by the California Immigrant Policy Center and the Lawyers' Committee for Civil Rights of the San Francisco Bay Area.
3. Author's statement: According to the author, "In a 2012 study from the Fiscal Policy Institute reported that one-third of small business owners in California are immigrants. There are still systemic barriers to immigrant Californians seeking opportunity through business ownership. This bill enables the integration of immigrant business owners into the state economy and protects their personal information. It reduces barriers for immigrant business owners to apply for local business licenses and aligns the business license process with efforts to advance the social and economic interests of our state."
4. Prior legislation: AB 1822 (Berryhill), Chapter 317, Statutes of 2012, allowed the California Architects Board to accept an ITIN or another identification number in lieu of an SSN from an individual seeking licensure.

AB 1024 (Gonzalez), Chapter 573, Statutes of 2013, authorized the Supreme Court of California to admit an applicant, who is not lawfully present in the United States, to the practice of law upon certification by the committee that the application fulfilled the requirements for admission.

SB 1159 prohibited licensing boards under the DCA from denying licensure to an applicant based on his or her citizenship or immigration status, and required a licensing board and the State Bar to require, by January 1, 2016, that an applicant for licensure provide his or her ITIN or an SSN for an initial or renewal license.

1. Arguments in Support. Supporters argue that immigrant households represent a substantial share of spending power in the state, currently making up 28% of the total household income in California. In addition to contributing about 32% of California's gross domestic product, immigrants bring innovation and cultural diversity to our state through entrepreneurship. A 2012 study found that one in three small business owners in California are immigrants. Meanwhile, another study found that from 2007 to 2001, immigrants in the state founded an estimated 45% of all new businesses. However, immigrants in California face systemic barriers to seeking economic opportunity through business ownership, including the requirement the individual provide an SSN. By allowing a driver's license or other identifying number to be used instead, this bill reduces barriers for immigrant business owners to apply for local business licenses.
2. Arguments in Opposition. None on file.

Analysis Prepared by: Jimmy MacDonald / L. GOV. / (916) 319-3958 FN: 0003037

Date of Hearing: May 9, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2184

Author:(Chiu) – As Amended Ver:April 19, 2018

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill requires a local agency that licenses businesses to accept certain identification in lieu of a social security number (SSN) if the municipality otherwise requires an SSN for the issuance of a business license. Specifically, this bill:

1. Requires a city, including a charter city, county, and city and county that licenses businesses to accept a California driver’s license or identification number, an individual taxpayer identification number (ITIN), or a municipal identification number in lieu of an SSN if the city or county otherwise requires an SSN for the issuance of a business license.
2. Provides that a number collected in lieu of an SSN is confidential and may not be disclosed, except as required by state law or a court order.
3. Specifies that a home address submitted to a city, including a charter city, county, and a city and county on a business license application shall not be disclosed on a publicly accessible internet web site.

FISCAL EFFECT:

Potentially significant reimbursable state-mandated costs, potentially in the hundreds of thousands of dollars, for local jurisdictions to modify forms, publications, and potentially information technology systems to accept driver’s license, identification card, or ITIN numbers. Reimbursable costs are most likely for cities, rather than counties, because roughly half of cities require an SSN when issuing a business license. For example, if 100 cities submitted claims for $3,000 each, total reimbursable state costs will be $300,000.

COMMENTS:

1. Background. In 2014, the Legislature enacted SB 1159 (Lara), Chapter 752, Statutes of 2014, which prohibits, among other things, licensing boards under the Department of Consumer Affairs (DCA) from denying licensure to an applicant based on the applicant’s citizenship or immigration status and requires that DCA’s licensing boards accept either an SSN or an ITIN number on business license applications or renewals. An ITIN is a tax processing identification number issued by the U.S. Internal Revenue Service for the administration of tax laws. However, no such requirement to accept alternative identification numbers exists for local agencies when issuing a business license.
2. Purpose. In order to ensure that persons without an SSN may apply for local business licenses, this bill would require local governments that license businesses to accept alternative numbers or a driver’s license in lieu of an SSN. This bill is co-sponsored by the California Immigrant Policy Center and the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area. According to the author:

A 2012 study from the Fiscal Policy Institute reported that one-third of small business owners in California are immigrants. There are still systemic barriers to immigrant Californians seeking opportunity through business ownership. This bill enables the integration of immigrant business owners into the state economy and protects their personal information. It reduces barriers for immigrant business owners to apply for local business licenses and aligns the business license process with efforts to advance the social and economic interests of our state.

1. Prior legislation.

SB 1159 (Lara), Chapter 752, Statutes of 2014, prohibits licensing boards under the DCA from denying licensure to an applicant based on the applicant’s citizenship or immigration status, and requires a licensing board and the State Bar to require, by January 1, 2016, that an applicant for licensure provide the applicant’s ITIN or an SSN for an initial or renewal license.

AB 1822 (Berryhill), Chapter 317, Statutes of 2012, allowed the California Architects Board to accept an ITIN or another identification number in lieu of an SSN from an individual seeking licensure.

Analysis Prepared by: Jessica Peters / APPR. / (916) 319-2081

Date of Hearing: April 25, 2018

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Cecilia Aguiar-Curry, Chair

ABPCA Bill Id:AB 2184 (

Author:Chiu) – As Amended Ver:April 19, 2018

SUBJECT: Business licenses.

SUMMARY: Requires a local agency that licenses businesses to accept a driver’s license or certain identification numbers in lieu of a social security number (SSN) if the municipality otherwise requires an SSN for the issuance of a business license. Specifically, this bill would:

1. Requires a city, including a charter city, county, and city and county that licenses businesses carried on within their respective jurisdictions to accept a California driver’s license or identification number, an individual taxpayer identification number (ITIN), or a municipal identification number in lieu of an SSN if the city or county otherwise requires an SSN for the issuance of a business license.
2. Specifies that a home address submitted to a city, including a charter city, county, and a city and county on a business license application shall not be disclosed on a publicly accessible Internet web site.
3. Provides that a number collected pursuant to 1), above, shall not be available to the public
   for inspection, is confidential, and shall not be disclosed, except as required to administer the licensure program or comply with a state law or a state or federal court order.
4. Specifies that if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made.
5. Provides findings and declarations that Sections 2 and 3 of this measure impose a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution.
6. Makes additional findings and declarations to support its purposes.
   

EXISTING LAW:

1. Allows a city or county to make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws, known as the police power of cities.
2. Allows a city or county to require businesses operating in their jurisdictions to obtain a license and impose related licensing fees.

FISCAL EFFECT: This bill is keyed fiscal and contains a state-mandated local program.

COMMENTS:

1. Local Business Licensing. The California Constitution allows a city or county to “make and enforce within its limits, all local, police, sanitary and other ordinances and regulations not in conflict with general laws,” known as police powers. It is from this fundamental power that local governments derive their authority to regulate behaviors, business operations, and land uses. Local agencies also use this “police power” to abate nuisances and protect public health, safety, and welfare.

As an extension of the police power, state law allows local governments to require businesses operating in their jurisdictions to obtain a license and impose related licensing fees. If a business operates in multiple jurisdictions, the fees imposed by any one jurisdiction are supposed to fairly reflect the amount of business that goes on in that jurisdiction.

Local governments license businesses for lots of reasons: to identify individuals operating businesses in their jurisdictions, to ensure compliance with other local laws, to facilitate contact in case a problem arises, and to raise money to support public services that support those businesses.

1. Individual Tax Identification Number. In 2014, the Legislature enacted SB 1159 (Lara), Chapter 752, Statutes of 2014, which prohibited, among other things, licensing boards under the Department of Consumer Affairs (DCA) from denying licensure to an applicant based on his or her citizenship or immigration status and required that DCA’s licensing boards accept either an SSN or an ITIN number on business license applications or renewals. That bill was widely supported and received no opposition. An ITIN is a tax processing identification number issued by the U.S. Internal Revenue Service (IRS) for the administration of tax laws. Since 1996, the IRS has issued ITINs to taxpayers and their dependents who are not eligible to obtain an SSN. The IRS issues ITINs because all wage earners, regardless of their immigration status, are required to pay federal taxes. Accordingly, ITINs allow people who are ineligible for an SSN to comply with tax laws, and are issued regardless of immigration status.
   
2. Bill Summary. In order to ensure that persons without an SSN may apply for local business licenses, this bill would require local governments that license businesses to accept alternative numbers or a driver’s license in lieu of an SSN. This bill is co-sponsored by the California Immigrant Policy Center and the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area.
3. Author’s statement: According to the author, “In a 2012 study from the Fiscal Policy Institute reported that one-third of small business owners in California are immigrants. There are still systemic barriers to immigrant Californians seeking opportunity through business ownership. This bill enables the integration of immigrant business owners into the state economy and protects their personal information. It reduces barriers for immigrant business owners to apply for local business licenses and aligns the business license process with efforts to advance the social and economic interests of our state.”
4. Prior legislation: AB 1822 (Berryhill), Chapter 317, Statutes of 2012, allowed the California Architects Board to accept an ITIN or another identification number in lieu of an SSN from an individual seeking licensure.

AB 1024 (Gonzalez), Chapter 573, Statutes of 2013, authorized the Supreme Court of California to admit an applicant, who is not lawfully present in the United States, to the practice of law upon certification by the committee that the application fulfilled the requirements for admission.

SB 1159 prohibited licensing boards under the DCA from denying licensure to an applicant based on his or her citizenship or immigration status, and required a licensing board and the State Bar to require, by January 1, 2016, that an applicant for licensure provide his or her ITIN or an SSN for an initial or renewal license.

1. Arguments in Support. Supporters argue that immigrant households represent a substantial share of spending power in the state, currently making up 28% of the total household income in California. In addition to contributing about 32% of California’s gross domestic product, immigrants bring innovation and cultural diversity to our state through entrepreneurship.
   A 2012 study found that one in three small business owners in California are immigrants. Meanwhile, another study found that from 2007 to 2001, immigrants in the state founded an estimated 45% of all new businesses. However, immigrants in California face systemic barriers to seeking economic opportunity through business ownership, including the requirement the individual provide an SSN. By allowing a driver’s license or other identifying number to be used instead, AB 2184 reduces barriers for immigrant business owners to apply for local business licenses.
   
2. Arguments in Opposition. None on file.
   
3. Double-referral: This bill was heard by the Privacy and Consumer Protection Committee on April 17, 2018, and passed with an 8-1 vote.

REGISTERED SUPPORT / OPPOSITION:

Support

California Immigrant Policy Center [CO-SPONSOR]

Lawyer’s Committee for Civil Rights of the San Francisco Bay Area [CO-SPONSOR]

American Civil Liberties Union of California Center for Advocacy and Policy

Asian Americans Advancing Justice

Brightline Defense Project

California Reinvestment Coalition

California Rural Legal Assistance Foundation

East Bay Community Law Center

Educators for Fair Consideration

Mission Asset Fund

Public Counsel

Sustainable Economies Law Center

Opposition

None on file

Analysis Prepared by: Jimmy MacDonald / L. GOV. / (916) 319-3958

Date of Hearing: April 17, 2018

ASSEMBLY COMMITTEE ON PRIVACY AND CONSUMER PROTECTION

Ed Chau, Chair

ABPCA Bill Id:AB 2184 (

Author:Chiu) – As Amended Ver:April 9, 2018

SUBJECT: Business licenses

SUMMARY: This bill would require a city or county that licenses businesses to accept a certain identification numbers in lieu of a Social Security number (SSN) if the municipality otherwise requires a (SSN) for the issuance of a business license. The bill would prohibit this number from being disclosed, except as specified. Specifically, this bill would:

1. Require a city, including a charter city, and city and county that licenses businesses carried on within their respective jurisdictions to accept a California driver’s license or identification number, an individual taxpayer identification number, or a municipal identification number in lieu of a social security number if the city or county otherwise requires a social security number for the issuance of a business license.
2. Provide that a number collected pursuant to the provision above shall not be available to the public for inspection, is confidential, and shall not be disclosed except as required to administer the licensure program or comply with a state law or a state or federal court order.
3. Make various declarations and findings including:

• that immigrants provide important contributions to the economic well-being of our state, as specified;
• that immigrants created around 45 percent of all new businesses from 2007 to 2011 and immigrant-owned businesses in California created approximately $20.2 billion in revenue in 2014;
• that presently, certain categories of immigrants, including individuals who have been granted Deferred Action for Childhood Arrivals or Temporary Protected Status are at risk of losing federal protection, leaving them and their families vulnerable, and many cities with large immigrant populations currently only accept a social security number from business owners, thereby hindering immigrant entrepreneurship and its accompanying revenue generation and contribution to local and state taxes; and
• that it is in the best interests of the state to provide persons who are not lawfully present in the United States with the benefit of eligibility to obtain a local business license and, by enacting this act, as specified.

EXISTING LAW:

1. Provides that an incorporated body may license any kind of business not prohibited by law and carried on within the limits of its jurisdiction. (Bus. & Prof. Sec. 16000 et seq.)

EXISTING FEDERAL LAW:

1. Prohibits, under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) (P.L. 104-193), certain categories of individuals not lawfully present in the United States from receiving specified public benefits, including “any grant, contract, loan, professional license, or commercial license provided by an agency of a State or local government or by appropriated funds of a State or local government.” (8 U.S.C. Sec. 1621(c).)
2. Authorizes states to provide that “an alien who is not lawfully present in the United States is eligible for any State or local public benefit for which such alien would otherwise be ineligible . . . through the enactment of a State law after August 22, 1996, which affirmatively provides for such eligibility.” (8 U.S.C. Sec. 1621(d).)

FISCAL EFFECT: Unknown

COMMENTS:

1. Purpose of this bill: In order to ensure that persons without a SSN may apply for local business licenses, this bill would require local governments that license businesses to accept alternative numbers in lieu of an SSN. This bill is co-sponsored by the California Immigrant Policy Center and the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area.
2. Author’s statement: According to the author, “A 2012 study from the Fiscal Policy Institute reported that one-third of small business owners in California are immigrants. There are still systemic barriers to immigrant Californians seeking opportunity through business ownership. This bill enables the integration of immigrant business owners into the state economy and protects their personal information. It reduces barriers for immigrant business owners to apply for local business licenses and aligns the business license process with efforts to advance the social and economic interests of our state.”
3. State and local authority to license businesses: Existing law provides for the licensing and regulating of any business not prohibited by law transacted and carried on within the limits of its jurisdiction. The authority for cities is laid out beginning at Business & Professions Code Section 16000 et seq., and for counties at Business & Professions Code Section et. seq. The State also has the ability to license businesses, and it is well settled that when there is a conflict between a state law and a local ordinance, state law will control and the ordinance will be invalid. (Cal. Const. art. XI, Secs. 6, 11; Gov. Code Sec. 37100.) Such a conflict is deemed to exist where a city or county legislates in a field already occupied by the state. While it is often difficult to determine when state legislation is intended to be exclusive, it is clear that state law is supreme when the legislature has expressly declared that there shall be no local regulation. (See generally, Biber Electric Co. v. San Carlos (1960) 181 Cal.App.2d 342.)

In 2014, the Legislature enacted SB 1159 (Lara, Ch. 752, Stats. 2014) which prohibited, among other things, licensing boards under the Department of Consumer Affairs (DCA) from denying licensure to an applicant based on his or her citizenship or immigration status and required that DCA’s licensing boards accept either an SSN or an individual tax identification (ITIN) number on business license applications or renewals. That bill was widely supported and received no opposition. An ITIN is a tax processing identification number issued by the U.S. Internal Revenue Service (IRS) for the administration of tax laws. Since 1996, the IRS has issued ITINs to taxpayers and their dependents who are not eligible to obtain an SSN. The IRS issues ITINs because all wage earners, regardless of their immigration status, are required to pay federal taxes. Accordingly, ITINs allow people who are ineligible for an SSN to comply with tax laws, and are issued regardless of immigration status.

Expanding on the model sets by SB 1159, this bill would similarly allow persons to apply for locally-issued business licenses with numbers other than an SSN, including a California driver’s license or identification number, ITIN, or municipal identification number. The American Civil Liberties Union of California (ACLU) writes in support:

Clarifying that other identification forms are acceptable for local business license applications is consistent with California’s goals to fully integrate immigrants into the state’s economy and public life, while also supporting regulatory compliance. Immigrant households represent a substantial share of all spending power in the state, currently making up 28 [percent] of the total household income in California. In addition to contributing about 32 [percent] of California’s [gross domestic product] GDP, immigrants bring innovation and cultural diversity to our state through entrepreneurship. […] Yet systemic barriers remain for immigrants seeking economic opportunity through business ownership. For example, the cities where many immigrant business owners reside, including Los Angeles, and almost half of the cities in the Central Valley, currently require individual applicants for business licenses to provide an [SSN] in their application. This precludes business owners who lack SSNs from formalizing their businesses and filing local taxes.

Indeed, this bill should serve to ensure that immigrant businesses are able to more fully participate in local economies. The Lawyers’ Committee for Civil Rights of the San Francisco Bay Area (co-sponsor) notes that some municipalities are already accepting alternative identification numbers in licensing applications. In support, the Lawyers’ Committee writes, “[s]ome California cities, such as San Francisco, have already affirmatively provided for alternatives to social security numbers in their business license application. AB 2184 will build upon these alternative identification options and the experience of California cities by requiring local governments that license businesses to accept alternatives in lieu of an SSN, and protect numbers collected by a local government from disclosure except as required to administer the licensure program or to comply with a state law or state or federal court order.”

1. Makes requisite findings and declarations to ensure there are no federal preemption issues: In 1996, Congress enacted the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), Pub. L. No. 104-193, 110 Stat. 2105 (Aug. 22, 1996). PRWORA, among other things, prohibits certain categories of individuals not lawfully present in the United States from receiving certain public benefits, including “any grant, contract, loan, professional license, or commercial license provided by an agency of a State or local government or by appropriated funds of a State or local government.” (8 U.S.C. Sec. 1621(c).) PRWORA provides that a state may render “an alien who is not lawfully present in the United States . . . eligible for any State or local public benefit for which such alien would otherwise be ineligible . . . through the enactment of a State law after the date of the enactment of this Act which affirmatively provides for such eligibility.” (8 U.S.C. Sec. 1621(d).)

Consistent with that provision, this bill would expressly provide that “it is in the best interests of the state to provide persons who are not lawfully present in the United States with the benefit of eligibility to obtain a local business license and, by enacting this act, affirmatively provides this benefit pursuant to Section 1621 of Title 8 of the United States Code,” thereby ensuring conformity with federal law.

1. Seeks to protect sensitive information of all applicants for business licenses: This bill would provide that any number collected for the issuance of a business license by a city or county shall not be available to the public for inspection, is confidential, and shall not be disclosed except as required to administer the licensure program or comply with a state law or state or federal court order. This provision would limit the information sharing of all applicants, and not just those that use identification numbers other than SSNs on their applications. Insomuch that this bill would allow the sharing of these identification numbers to administer the licensure program or otherwise comply with a state law, the bill arguably strikes the right balance of protecting privacy while not impeding local governments or the state in carrying out its official business.

These prohibitions on disclosure are particularly important as federal immigration efforts intensify under the current administration. In addition, this bill is drafted in a way that would seemingly not require the sharing of applicants’ information with federal immigration authorities. Specifically, federal law prohibits any government entity or official from prohibiting, or in any way restricting, any government entity or official from sending to, or receiving from, federal immigration authorities any information regarding citizenship or immigration status of any individual. (8 U.S.C. 1373.) Because this bill would allow for the collection of identification numbers that are available to Californians regardless of immigration status, it does not require the collection of information related to immigration or citizenship status. In other words, ITINs, driver’s license numbers, and state-issued identification numbers are not among the information could not be restricted above. Accordingly, this bill’s prohibition on sharing these numbers should not violate federal law.

Staff notes, however, that this bill only prohibits the sharing of the identification numbers, and is silent as to other personally identifying or otherwise sensitive information contained in applications. Last year, the Legislature considered SB 182 (Bradford, Ch. 769, Stats. 2017), which, among other things, considered the issue of what licensee information (for transportation network company drivers; hereinafter “TNC”) should be subject to public inspection. In its analysis of SB 182, this Committee wrote:

[T]he author and supporters contend that security is [] a concern for TNC drivers – for example, an ill-intentioned customer could theoretically use the name of a TNC driver licensed in a city like San Francisco to look up that driver’s business license, look up the business address and find it’s a home, and then show up at the home of the driver unbidden. It should be noted that the major TNC platforms generally disclose only the driver’s first name to passengers, which could make finding a driver with a common name in a large city difficult. Nevertheless, name and address information could also be used for other purposes, such as commercial or political solicitations, or other communications to drivers.

The rejoinder from opponents is that business licenses have traditionally been public records and that privacy-conscious drivers could simply use a PO Box instead of a home address. This may be a feasible option for some drivers (one Financial District packaging and mail store put the entry-level price for a business PO Box price at $40 a month), although there is no clear data about availability or waiting lists. However, it is equally unclear whether or not San Francisco has thousands of spare PO Boxes available. Opponents contend that access to such records are necessary to the reporting of accidents or other acts of liability, although it is not clear why a license plate or a legal discovery request to the TNC or the local jurisdiction itself wouldn’t accomplish the same goal.

As revealed during the debate surrounding SB 182, many local governments simply upload documents that are subject to the California Public Records Act (CPRA) to their websites, thus increasing transparency and reducing the number of local man-hours needed to respond to CPRA requests. While this is without a doubt an efficient model, uploading these documents also eliminates the human aspect of CPRA requests, whereby a city or county employee could redact information that was included on a public document if such disclosure might somehow be harmful to the public interest. Indeed the PRA gives government agencies the ability to withhold otherwise disclosable information if “on the facts of the particular case the public interest served by not disclosing the record clearly outweighs the public interest served by disclosure of the record.” (Gov. Code. Sec. 6255(a).) That being said, it is important to note that it is not only the privacy of individual applicants that must be considered. It cannot be forgotten that the PRA serves a number of important consumer protection functions as well, one being that aggrieved parties know where, because of the address on a business license, to serve potential defendants.

As introduced, SB 182 would have prohibited disclosure of any personally identifying information included on TNC business license applications. Ultimately that bill was amended to only prevent public disclosure of personally identifying information on a local government’s website, thereby still allowing a non-redacted TNC business licenses and applications to be subject to a traditional CPRA request at the local government office.  

With regard to the bill at hand, depending on the local ordinance, AB 2184 would arguably allow the sharing of an entire business license and/or application, so long as the identification number of the applicant was redacted. Accordingly, the author may wish to consider how frequently local business applicants are required to use a home address on business license applications, and whether public disclosure of that information could have negative and unintended consequences for the population the author seeks to protect with this bill. The following amendment would require that such personally identifying information be redacted from online postings of applications/licenses, but would still allow for that information to be disclosed pursuant to a traditional PRA request. Arguably this should strike the right balance of ensuring that information is subject to public disclosure, while at the same time, not making it so accessible that it easily misused.

Author’s amendment:

On page 3, after line 28, insert “(b) A home address submitted to city, including a charter city, and city and county on a business license application pursuant to subdivision (a) shall not be disclosed on a publicly accessible Internet Web site.”

On page 3, line 29, strike “(b)” and insert “(c)”

On page 5, after line 4, insert “(b) A home address submitted to city, including a charter city, and city and county on a business license application pursuant to subdivision (a) shall not be disclosed on a publicly accessible Internet Web site.”

On page 5, line 5, strike “(b)” and insert “(c)”

1. Prior legislation: SB 1159 (Lara, Ch. 752, Stats. 2014) Prohibited licensing boards under the Department of Consumer Affairs from denying licensure to an applicant based on his or her citizenship or immigration status, and required a licensing board and the State Bar to require, by January 1, 2016, that an applicant for licensure provide his or her individual taxpayer identification number or an SSN for an initial or renewal license

AB 1024 (Gonzalez, Ch. 573, Stats. 2013) authorized the Supreme Court of California to admit an applicant, who is not lawfully present in the United States, to the practice of law upon certification by the committee that the application fulfilled the requirements for admission.

AB 1822 (Berryhill, Ch. 317, Stats. 2012) allowed for an individual seeking licensure from the California Architects Board to submit another tax identification number or another identification number in lieu of an SSN.

1. Double-referral: This bill is double-referred to the Assembly Local Government Committee, where it will be heard if passed by this Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

California Immigrant Policy Center (co-sponsor)

Lawyers’ Committee for Civil Rights of the San Francisco Bay Area (co-sponsor)

American Civil Liberties Union of California Center for Advocacy and Policy

Asian Americans Advancing Justice

Brightline Defense

California Reinvestment Coalition

California Rural Legal Assistance Foundation

East Bay Community Law Center

Educators for Fair Consideration – Immigrants Rising

Mission Asset Fund

Sustainable Economies Law Center

Opposition

None on file

Analysis Prepared by: Nichole Rapier / P. & C.P. / (916) 319-2200