Does the CA state franchise tax board have any legal recourse to force non residents with no assets in the state of CA to pay CA state tax on income not earned in the state by non residents. This income was paid by a state agency on a 1099 but none of the work was conducted in the state.

You need to get this misunderstanding resolved, because California probably has a reciprocity agreement your state tax authority.

If the California Franchise Tax Board thinks the tax is valid, they will petition your state tax department to collect the tax for them, and your state, under the reciprocity agreement, would be obligated to do so.

If you were not present in CA to earn the income, then you do not owe CA tax.

Send a properly drafted reply to CA. Also attach tax return of the state where you reported the income.