Senator Monning and Assemblymember Achadjian Introduce Bills to Combat Underground Economy

February 19, 2013

(SACRAMENTO, CA) --Senator Bill Monning (D-Carmel) and Assemblymember Katcho Achadjian (R-San Luis Obispo) have introduced a bi-partisan package of bills that will assist in the prosecution of contractors engaged in the underground economy.

Senate Bill (SB) 261, SB 262 and SB 263 will clarify that the Contractors State License Board (CSLB) has the authority to prosecute contractors who are not complying with current state regulations and laws.  SB 261 will allow CSLB to issue administrative citations against contractors who misuse or misrepresent license information whether or not these violations are pursued by the district attorney.  SB 262 would allow a contractor who fails to comply with supervision and control requirements to be administratively prosecuted and charged with a misdemeanor.  SB 263 will clarify, for purposes of criminal prosecution, the definition of an “unlicensed” contractor.   

“Law abiding businesses and the public’s safety are at risk due to the large number of unlicensed contractors supporting California’s underground economy,” stated Senator Monning.  “I am pleased to be able to partner with Assemblymember Achadjian in order to provide enforcement agencies with the tools they need to successfully prosecute flagrant violators of state law.”

Though it is not possible to know exactly how much money is uncollected by the state due to the underground economy, it is estimated that billions of General Fund dollars are lost annually based on the Employment Development Department’s analysis of IRS data estimating overall economic activity.  Additionally, non-compliant contractors and business owners have a bidding advantage between 15-20% over law-abiding business owners creating an unfair business environment.

“Senate Bills 261, 262, and 263 are prime examples of what we can accomplish when business, labor, and state regulators work together. All three measures provide CSLB with the tools necessary to identify and penalize illegal unlicensed contractors without overburdening the hardworking licensed contractors who are already complying with state law,” stated Assemblymember Achadjian.  “I am grateful to Senator Monning for authoring these measures and look forward to working with him on these important issues.”

 Contact: Kathy Smith, (916) 651-4017

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