SB 1165, introduced by Senator Caballero, would update the Contractors State License Law to require the California Department of Tax and Fee Administration (CDTFA) to participate in outstanding liability enforcement actions alongside other state tax agencies. Specifically, it adds CDTFA to the list of authorities whose outstanding liabilities can trigger suspension or denial of contractor licenses, and it creates corresponding processes for installment payment agreements, notices, and information disclosures.
Expand trigger agencies: The registrar of contractors may suspend, refuse to issue, reinstate, or renew a license for failure to resolve outstanding final liabilities not only with the Franchise Tax Board, the State Board of Equalization, etc., but also with the California Department of Tax and Fee Administration (CDTFA).
Installment payment agreements: The CDTFA may require license suspension or denial unless the licensee has entered into a written installment payment agreement with CDTFA and is in compliance with its terms. The State Board of Equalization installment arrangement exemption currently existing would apply similarly to CDTFA.
Written notices: If CDTFA seeks to suspend or deny a license under this bill, CDTFA must provide written notice to the licensee of its intent to take action, including details of the outstanding liability.
Regulations: CDTFA is authorized to prescribe, adopt, and enforce regulations governing administration and enforcement of these provisions.
Application disclosures: The license application must include an authorization for CDTFA to disclose tax information needed for the registrar to enforce these provisions. This mirrors existing authorization language (and audits) related to the Franchise Tax Board and the State Board of Equalization.
Installment agreements reduction: The bill preserves the current structure whereby an installment agreement with CDTFA (or with the Board of Equalization, if applicable) can exempt a license from enforcement actions while in good standing under the terms of that agreement.
Writing requirement for agreements: Installment payment agreements must be in writing.
Audits: CDTFA may audit the disclosures authorizing its access to tax information, similar to the Franchise Tax Board’s audit authority over licensee tax disclosures.
SB 1165 modernizes and expands the enforcement framework for contractor licenses by incorporating the California Department of Tax and Fee Administration into the set of state authorities whose outstanding final liabilities can trigger license suspension, non-renewal, or denial. It requires CDTFA to engage in installment payment agreements, requires written disclosures and notices, authorizes CDTFA to regulate enforcement, and allows audits of the disclosure authorizations. The measure maintains consistency with existing procedures used for other tax agencies and the State Board of Equalization.
