Existing law provides for the licensure and regulation of various professions and vocations by boards within the Department of Consumer Affairs. Existing law authorizes a board, as defined, to suspend a license on certain bases, including if the licensee is not in compliance with a child support order or judgment. Under the Contractors State License Law, the Contractors State License Board is responsible for the licensure, regulation, and discipline of contractors, as defined.

This bill would require the Contractors State License Board, by January 1, 2025, to adopt regulations to provide for withholding issuance or renewal of a license application if the qualifying individual, responsible managing officer, or responsible managing employee is not in compliance with a child support order or judgment, as provided. The bill would require the boards regulations to provide for the suspension of licenses if the Department of Child Support Services provides the board with a list of delinquent child support obligors and the qualifying individual, responsible managing officer, or responsible managing employee for the license is not in compliance with a child support order.

This bill would require licensees to notify the registrar of the board in writing of any earnings assignment order for child support issued by a court that includes an amount ordered to be paid toward the liquidation of an arrearage owed, unless the arrearage has been paid or the order has been suspended. The bill would require a license to be automatically suspended if the licensee fails to notify the registrar in writing within 120 days of the issuance of the earnings assignment order, as provided. The bill would require the board to adopt regulations providing procedures for the suspension of the license of a licensee who is out of compliance with a judgment or order of support that requires payment of unsatisfied arrearages.

Date of Hearing:

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Marc Berman, Chair

ABPCA Bill Id:AB 1383

Author:(Ortega) – As Introduced Ver:February 17, 2023

SUBJECT: Contractors: discipline: noncompliance with child support obligations.

SUMMARY: Requires the Contractors State License Board (CSLB or board) to adopt regulations by January 1, 2025, to suspend or withhold the issuance of a license if an applicant or the qualifying individual, responsible managing officer, or responsible managing employee for the license, is not in compliance with a child support order, and requires licensees to notify CSLB within 120 days of any court ordered earnings assignment for child support.

EXISTING LAW:

1. Establishes the Department of Consumer Affairs (DCA) within the Business, Consumer Services, and Housing Agency. (Business and Professions Code (BPC) § 100)
2. Specifies that “board,” as used in any provision of the Business and Professions Code, refers to the board in which the administration of the provision is vested, and unless otherwise expressly provided, shall include “bureau,” “commission,” “committee,” “department,” “division,” “examining committee,” “program,” and “agency.” (BPC § 22)
3. Authorizes a board to suspend a license if a licensee is not in compliance with a child support order or judgment. (BPC § 490.5)
4. Requires a local child support agency to maintain of list of those persons who are not in compliance with a child support court order or judgement. Requires a local child support agency to verify, under penalty of perjury that the persons listed are subject to an order or judgement for the payment of support and that these persons are not in compliance with the order or judgement. (Family Code (FAM) § 17520(b))
5. Requires a child support agency to submit monthly a certified list with the names, social security numbers, individual taxpayer identification numbers, or other uniform identification numbers, and last known addresses of these persons and the name, address, and telephone number of the local child support agency who certified the list to the Department of Child Support Services (DCSS). (FAM § 17520(b))
6. Requires the DCSS to consolidate the certified lists received from the local child support agencies and, within 30 calendar days of receipt, provide a copy of the consolidated list to each board that is responsible for the regulation of licenses. (FAM § 17520(c))
7. Requires all DCA boards to implement procedures to accept and process the list provided by the DCSS, including collecting social security numbers or individual taxpayer identification numbers from all applicants for the purposes of matching the names of the certified list provided by the department to applicants and licensees and of responding to requests for this information made by child support agencies. (FAM § 17520(d))
8. Requires each board, promptly after receiving the certified consolidated list from DCSS, and prior to the issuance or renewal of a license, to determine whether an applicant is on the most recent certified consolidated list provided by DCSS. (FAM § 17520(e)(1))
9. Authorized each board to withhold issuance or renewal of the license of an applicant on the certified consolidated list provided by DCSS. (FAM § 17520(e)(1))
10. Specifies that if an applicant is on the list, boards shall immediately serve notice, as specified, to the applicant of the board’s intent to withhold issuance or renewal of the license. (FAM § 17520(e)(2))
11. Requires boards to issue a temporary license valid for 150 days to any applicant whose name is on the certified list if the applicant is otherwise eligible for a license. (FAM § 17520(e)(2)(A))
12. Specifies that DCSS may, when it is economically feasible for DCSS and the boards to do so as determined by DCSS, in cases where DCSS is aware that certain child support obligors listed on the certified lists have been out of compliance with a judgement or order for support for more than four months, provide a supplemental list of these obligors to each board with which DCSS has an interagency agreement. (FAM § 17520(e)(3)(A))
13. Specifies that upon the request by DCSS, the license of these obligors shall be subject to suspension, provided that the licenses would not otherwise be eligible for renewal within six months from the date of the request by DCSS. (FAM § 17520(e)(3)(A))
14. Authorizes the boards to suspense the license of any licensee on a supplemental list. (FAM § 17520(e)(3)(A))
15. Requires the boards to immediately serve notice, as specified, to any licensee on a supplemental list informing them that the license will be automatically suspended 150 days after notice is served, unless they come into compliance. (FAM § 17520(e)(3)(B))
16. Prohibits the 150-day notice period from being extended. (FAM § 17520(e)(3)(C))
17. Requires a local child support agency to immediately send a release to the appropriate board and the applicant if any of the following conditions are met:
    1. The applicant is found to be in compliance or negotiates an agreement with the local child support agency for a payment schedule on arrearages or reimbursement.
    2. The applicant has submitted a request for review, but the local child support agency will be unable to complete the review and send notice of its findings to the applicant within the allowable time, as specified.
    3. The applicant has filed and served a request for judicial review, but a resolution of that review will not be made within 150 days of the date of applicant being served notice that their license will be suspended, unless the delay is caused by the applicant’s failure to act in a reasonable, timely, and diligent manner.
    4. The applicant has obtained a judicial finding of compliance. (FAM § 17520(h))
18. Requires a board that has received a release from a local child support agency to process the release within five business days of its receipt. (FAM § 17520(l)(1))
19. Specifies that when a local child support agency determined, subsequent to the issuance of a release, that the applicant is once again not in compliance with a judgement or order for support, or with the terms of repayments, the local child support agency may notify the board, the obligor, and DSCC that the obligor is not in compliance. (FAM § 17520(l)(2))
20. Specifies that DCSS may, when it is economically feasible for DCSS and the boards to develop an automated process for complying, notify the boards that the obligor is once again not in compliance and requires the board to immediately notify the obligor that the obligor’s license will be suspended on a specific date no longer than 30 days from the date the form is mailed to the obligor. (FAM § 17520(l)(3))
21. Authorizes DCSS to enter into interagency agreements with the state agencies that have responsibility for the administration of the boards. (FAM § 17520(m))
22. Requires a court to include in any order to pay an amount for child support or modification of the amount to be paid an earnings assignment order that requires the employer of the obligor to pay to the obligee the portion of the earnings that would cover (1) the amount ordered and (2) an amount ordered by the court to be paid toward the liquidation of any arrearage (FAM § 5230)

THIS BILL:

1. Requires the CSLB to adopt regulations to provide for withholding issuance or renewal of a license application if the qualifying individual, responsible managing officer, or responsible managing employee is not in compliance with a child support order or judgment.
2. Specifies that the regulations shall also provide for the suspension of licenses if the DCSS provides the board with a list of delinquent child support obligors and the qualifying individual, responsible managing officer, or responsible managing employee for the license is not in compliance with a child support order.
3. Requires all licensees to notify the registrar in writing of any earnings assignment order for child support issued by a court that includes an amount ordered to be paid toward the liquidation of an arrearage owed by the qualifying individual, responsible managing officer, or responsible managing employee, unless the arrearage has been paid or the order has been suspended.
4. Specifies that if the licensee fails to notify the registrar in writing within 120 days of the issuance of the earnings assignment order, the license shall be automatically suspended if the registrar is informed or is made aware of the order including an unsatisfied arrearage owed and the licensee fails to provide proof that the arrearage has been satisfied within 10 days of notice from the registrar. Delays implementation of this provision until the board adopts the necessary regulations.
5. Requires the board to adopt regulations providing procedures for the suspension of the license of a licensee who is out of compliance with a judgment or order of support that requires payment of unsatisfied arrearages. Requires the regulations to include provisions for the board to take action upon notification by any party having knowledge of the judicial determination of arrearages and proof of the order and unpaid arrearages.
6. Requires the board to adopt the regulations required under this bill by by January 1, 2025.

FISCAL EFFECT: Unknown. This bill is keyed fiscal by Legislative Counsel.

COMMENTS:

Purpose.

This bill is sponsored by the State Building and Construction Trades Council. According to the author:

Current law is unclear regarding the suspension of occupational licenses when a licensee is out of compliance with a child support order. Family Code Section 17520 states, “[t]he department may, when it is economically feasible,” provide licensing boards with a list of licensees that are four or more months behind on child support. This leaves room for the Department of Child Support Services to potentially not provide these lists of licensees who are not paying their child support, leaving these unscrupulous contractors to continue operating with no punishment. Even more importantly, this leaves the custodial parent without their desperately needed child support payments.

These custodial parents may be doing everything they can to stay off public assistance by working two jobs or living with relatives while their child’s other parent is four or more months behind on court ordered support. If the parent eventually has to rely on public assistance because they are not receiving payments, the taxpayers of the State of California would then be responsible for supplementing their income. To avoid this situation and ensure that contractors who are out of compliance with their child support order are given ample chances to come into compliance, [this bill] will strengthen current law by requiring that a clear process is in place for when a contractor is behind on their child support payments.

Background.

Contractors and CSLB. The board was established in 1929 to regulate the construction industry in California and to protect consumers from unscrupulous contractors.^[1] It is responsible for implementing and enforcing the Contractors State License Law and related regulations pertaining to the licensure, practice, and discipline of the construction industry in California. The law requires, in part, that any person or business that constructs or alters, or offers to construct or alter, any building, highway, road, parking facility, railroad, excavation, or other structure in California be licensed by CSLB if the total cost of labor and materials for one or more contracts on the project is $500 or more.^[2]

CSLB issues licenses to sole proprietors and legal business entities such as a partnership, corporation, limited liability company, or joint venture.^[3] Every license is required to have a qualifying individual (also referred to as a “qualifier”) who is the person listed in CSLB records that satisfies the experience and examination requirements for a license.^[4]

CSLB issues four (4) license types: “A” General Engineering Contractor; “B” General Building Contractor; “B-2” Residential Remodeling Contractor; and “C” Specialty Contractor of which there are 42 specialty contractor classifications (e.g., electrical, drywall, painting, plumbing, roofing, and fencing).^[5] Certain license holders are eligible to additionally obtain an asbestos or hazardous substance removal certification issued by CSLB.^[6] As of March 1, 2023, there were 285,179 licensed contractors and 27,904 registered home improvement salespersons.

Child Support Order. A child support order is a legal court order, enforceable by suspension of one’s driver’s license, passport, professional or occupational licenses, and recreational (e.g., fishing and hunting) licenses; bank and property liens; interception of tax refunds and lottery winnings; and civil contempt charges. Parents who refuse or delay paying child support are charged 10 percent interest.^[7]

License Suspension. Pursuant to existing law, DCSS and DCA have an Inter-Agency Agreement to effectuate the suspension of licenses. On a monthly basis, DCSS provides DCA with two lists: one list identifies individuals who are not in compliance with a child support order or judgement and the second list identifies individuals whose licenses have been suspended previously for failure to pay child support and who are non-compliant with a child support order or judgement again. Upon receipt, DCA processes the lists to identify matches between the individuals listed and CSLB licensees. If a match is found, CSLB will notify the individual of the following within five days:

• CSLB’s intent to withhold the issuance of a new license or the renewal of a license, and issue a temporary license instead, valid for 150 calendar days, if the individual is more than 30 days in arrears on child support payments but has never had their license suspended for failure to pay child support.
• CSLB’s intent to automatically suspend the license in 150 calendar days if the individual has been out of compliance for more than four months, but the license has not been suspended previously for failure to pay child support.
• CSLB’s intent to automatically suspend the license in 30 days if the license has previously been suspended for failure to pay child support and the individual is out of compliance again.

Licenses are suspended indefinitely until the expiration of the license or until compliance with the support order is achieved and the applicable LCSA initiates the release of a license, whichever occurs first. If the applicable LCSA initiates a release, CSLB will issue a new license, renew a prior license, or reinstate a suspended license within five business days if the applicant or the qualifying individual, responsible managing officer, or responsible managing employee for the license is otherwise eligible for a license.

The process outlined above is highly automated without much involvement from CSLB staff. Upon receipt of the certified lists provided by DCSS, DCA’s Office of Information Services’ Family Support Unit automatically runs the list for all licensing entities under DCA. When matches are identified, notification letters are automatically generated. CSLB staff print and mail those letters to licensees.

This bill would require CSLB to adopt through regulations a new process for withholding the issuance or renewal of a license or suspending of a license if the qualifying individual, responsible managing officer, or responsible managing employee is not in compliance with a child support order or judgment. The bill would also require a qualifying individual, responsible managing officer, or responsible managing employee to notify the board in writing of any earnings assignment order for child support issued by a court and would require CSLB to automatically suspend a license if the licensee fails to inform the board of the order within 120 days. The author and sponsor contend that existing law is unclear and affords DCSS and licensing entities too much discretion in regard to whether to follow the suspension process outlined above.

Current Related Legislation.

SB 618 (Rubio) would prohibit DCSS or a local child support agency from collecting interest that has accrued on child support owed or assigned to the state or the county and prohibit child support owed or assigned to the state or the county from accruing interest. Pending in the Senate Judiciary Committee.

AB 1148 (Bonta) would require an individual’s child support obligation to resume on the first day of the 18^th month after release from incarceration or involuntary institutionalization in the amount ordered following a required modification hearing. Pending in the Assembly Judiciary Committee.

AB 1324 (Bryan) would require DCSS, on or before January 1, 2025, to identify all child support referrals made prior to January 1, 2023 for a child is specified circumstances and direct local child support agencies to rescind those referrals and cease enforcement of those child support orders. The bill additionally requires DCSS to direct local child support agencies to seek modification of these orders when necessary to eliminate ongoing obligations, including the cancellation of all arrears owed to the state and any accrued interest. Pending in the Assembly Human Services Committee.

Prior Related Legislation.

AB 923 (Speier), Chapter 906, Statutes of 1994, authorized boards to suspend a license if a licensee is not in compliance with a child support order or judgement. This bill also required district attorneys to maintain lists of individuals not in compliance with a child support court order or judgement and to submit those lists with specified information to the State Department of Social Services. The bill further required the State Department of Social Services to consolidate the lists received from the district attorneys, and within 30 calendar days of receipt, provide a copy of the consolidated list to each board which is responsible for the regulation of licenses. The bill also required the boards to implement procedures to accept and process the consolidated lists provided by the State Department of Social Services. Additionally, the bill required boards to notify an applicant of the board’s intent to withhold issuance or renewal of the license.

AB 196 (Kuehl), Chapter 478, Statutes of 1999, restructured the state's child support enforcement program to significantly increase accountability and responsibility for the program and maximize collection and delivery of child support to the children and families to whom it owed. Specifically, the bill, in part, created a new Department of Child Support Services (DCSS), effective January 1, 2000, to replace the Department of Social Services (DSS) as the single state agency responsible for the oversight and management of the state's child support enforcement program; requires that local child support programs located in the district attorneys' offices be transferred to new county departments of child support services, separate and independent from any other county department; provided the director of DCSS with direct oversight, management and control of the local child support agency; and struck out sections of the Welfare and Institutions Code which had become inoperative by their terms, been incorporated in the reorganization of child support statutes accomplished by the bill, or had become inapplicable as a result of the restructuring of program functions and responsibilities set forth in the bill.

SB 542 (Burton and Schiff), Chapter 480, Statutes of 1999, enacted necessary clean-up to AB 196 (Kuehl), Chapter 478, Statutes of 1999.

SB 240 (Speier), Chapter 652, Statutes of 1999, as it relates to this bill, mandated that any board regulating a professional license, the State Bar, and the Department of Real Estate, require every licensee, at the time of issuance or renewal of a license, to provide the social security number of each individual listed on the license and any person who qualifies the license and specified that licenses subject to revocation, suspension, or denial of a renewal application for nonpayment of child support, including licenses issued to an entity if the delinquent obligor is listed on the license or the individual who qualifies the license.

AB 370 (Wright), Chapter 654, Statutes of 1999, required that delinquency notices issued by a state or local government agency state the date upon which the delinquency was calculated and notify the support obligor that the amount calculated may or may not include accrued interest, and provided that the notice requirement shall not be imposed until the local child support agency has instituted the California Child Support Automation System, as defined. The bill also required that the support obligor be notified of his or her right to an administrative determination of arrears. Additionally, the bill prohibited a state agency from suspending enforcement of any arrearages as a result of the obligor’s request for an administrative determination of arrears, except under specified circumstances. Moreover, the bill required boards that have received a release to process that release within five business days of its receipt, and incorporated changes made by AB 196 (Kuehl), Chapter 478, Statutes of 1999, SB 542 (Burton and Schiff), Chapter 480, Statutes of 1999, and SB 240 (Speier), Chapter 652, Statutes of 1999.

ARGUMENTS IN SUPPORT:

According to the State Building and Construction Trades Council of California, the bill’s sponsor, “[This bill] provides simple clean-up language to ensure that the lists are distributed and disciplinary actions are taken against licensees who are not in compliance with a child support order or judgment. We believe this measure will clarify that those substantially behind in child support will be held accountable, thereby helping to remove bad actors from holding licenses.”

ARGUMENTS IN OPPOSITION:

None on file.

POLICY ISSUE(S) FOR CONSIDERATION:

Unclear Need for the bill. This bill would require CSLB to develop through regulations a duplicative and conflicting process for suspending a contractor license if the qualifying individual, responsible managing officer, or responsible managing employee is behind on child support payments. Existing law provides a detailed process for occupational licensing entities, including CSLB, to become aware of a licensee’s failure to pay, to issue a licensee a warning letter, and to ultimately suspend a license for failure to comply. The committee is not aware of any evidence demonstrating the insufficiency of the existing law and processes.

IMPLEMENTATION ISSUES:

Enforcement. This bill requires contractors to notify CSLB within 120 days of receiving a child support order and CSLB to automatically suspend a licensee for failure to notify the board in writing within 120 days of the issuance of a child support order. However, contractors may not be forthcoming with that information knowing that their license is at risk. In addition, this bill would require CSLB staff to “take action” if notified by any party that a qualifying individual, responsible managing officer, or responsible managing employee is in arrears on child support payments and has proof of the child support order. However, CSLB does not have the capacity, staff expertise, or legal authority to investigate and adjudicate child support matters.

AMENDMENTS:

1) To delete the contents of the bill, strike lines 1-24, inclusive, on page 2 and lines 1-14, inclusive, on page 3.

2) To require DCSS to provide supplemental lists to licensing entities identifying child support obligors who have been out of compliance with a child support order or judgement for more than four months and to notify licensing entities when a child support obligor has become non-compliant again, consistent with DCSS’s existing processes, amend the following provisions of Family Code §17520 as follows:

FAM § 17520(e)(3)(A). The department shall may, when it is economically feasible for the department and the boards to do so as determined by the department, in cases where the department is aware that certain child support obligors listed on the certified lists have been out of compliance with a judgment or order for support for more than four months, provide a supplemental list of these obligors to each board with which the department has an interagency agreement to implement this paragraph. Upon request by the department, the licenses of these obligors shall be subject to suspension, provided that the licenses would not otherwise be eligible for renewal within six months from the date of the request by the department. The board shall have the authority to suspend the license of any licensee on this supplemental list.

FAM § 17520(l)(3). The department shall may, when it is economically feasible for the department and the boards to develop an automated process for complying with this subdivision, notify the boards in a manner prescribed by the department, that the obligor is once again not in compliance. Upon receipt of this notice, the board shall immediately notify the obligor on a form prescribed by the department that the obligor’s license will be suspended on a specific date, and this date shall be no longer than 30 days from the date the form is mailed. The obligor shall be further notified that the license will remain suspended until a new release is issued in accordance with subdivision (h). This section does not limit the obligor from seeking judicial review of suspension pursuant to the procedures described in subdivision (k).

3) To require licensing entities to suspend the license of someone who is not in compliance with a child support order or judgement, consistent with licensing entities under DCA’s existing practices, amend BPC § 490.5 as follows:

BPC § 490.5. A board may shall suspend a license pursuant to Section 17520 of the Family Code if a licensee is not in compliance with a child support order or judgment.

REGISTERED SUPPORT:

State Building and Construction Trades Council of California (sponsor)

REGISTERED OPPOSITION:

None on file.

Analysis Prepared by: Kaitlin Curry / B. & P. / (916) 319-3301

1. Contractors State License Board. (n.d.). History and Background. Contractors State License Board. Retrieved April 2, 2023, from https://www.cslb.ca.gov/About_Us/History_and_BackGround.aspx ↑

2. BPC § 7027.2 ↑

3. Contractors State License Board. (2018, December). Contractors State License Board Sunset Review. Contractors State License Board. Retrieved April 2, 2023, from https://www.cslb.ca.gov/Resources/Reports/Sunset/SunsetReviewReport2018.pdf ↑

4. Ibid. ↑

5. Contractors State License Board. (n.d.). CSLB Licensing Classifications. Contractors State License Board. Retrieved April 2, 2023, from https://www.cslb.ca.gov/About_Us/Library/Licensing_Classifications/ ↑

6. Ibid. ↑

7. California Child Support Services. (n.d.). How A Child Support Case Works. California Child Support Services. Retrieved April 6, 2023, from https://childsupport.ca.gov/about-us/about-california-child-support-services/ ↑