BILL NUMBER: SB 706 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 31, 2011
AMENDED IN SENATE APRIL 25, 2011
AMENDED IN SENATE MARCH 24, 2011
INTRODUCED BY Senator Price
FEBRUARY 18, 2011
An act to amend Sections 27, 10004, 10050, 10080, 11301,
11302, 11310, 11313 An act to amend Sections 27 and
10004 of, to add Sections 10002, 10002.5,
10050.1, 10054, 10055, 10056, 10057, 10058, 10060,
10100.4, 10106, 10186, 10186.1, 10186.2, 10186.3, 10186.4,
10186.5, 10186.7, 11310.1, 10186.1, 10186.2, 10186.9,
11310.1, 11313.2, 11315.7, 11315.9, 11319.1, 11319.2,
11319.3, 11319.4, 11319.5, 11319.6, and 11319.7 and
11319.3 to, and to add and repeal Section 10186.8 of, the
Business and Professions Code, relating to business and professions.
LEGISLATIVE COUNSEL'S DIGEST
SB 706, as amended, Price. Business and Professions.
(1) Existing law provides for the licensure, endorsement, and
regulation of real estate brokers, real estate salespersons, and
mortgage loan originators by the Real Estate Commissioner of the
Department of Real Estate in the Business, Transportation and Housing
Agency. The Office of Real Estate Appraisers within the Business,
Transportation and Housing Agency is under the supervision and
control of the Secretary of Business, Transportation and Housing.
Existing law provides for the licensure, certification, and
regulation of persons who engage in specified real estate appraisal
activity by the Director of the Office of Real Estate Appraisers, who
is responsible to the Secretary of Business, Transportation and
Housing. A violation of these provisions is a crime.
This bill would establish the Office of Real Estate
Appraisers (office) within the Department of Real Estate (department)
and would also provide that the office is under the supervision and
control of the Real Estate Commissioner (commissioner). The bill
would make it the commissioner's responsibility to enforce those
provisions governing real estate appraiser activity. The bill would
require the Director of the Office of Real Estate Appraisers
(director) to administer the licensing and certification provisions
for real estate appraiser activity and would make the director
responsible to the commissioner. The bill would state that
protection of the public shall be the highest priority for the
department and the office in exercising their licensing, regulatory,
and disciplinary functions.
The bill would authorize the department and the office to enter
into a settlement with a licensee or applicant instead of the
issuance of an accusation or statement of issues against the licensee
or applicant , and would require the
settlement to identify the factual basis for the action being taken
and the statutes or regulations that have been violated ,
and would provide that settlement against a licensee or applicant
would be a public record, as specified . The bill would
authorize an administrative law judge to order a licensee in a
disciplinary proceeding to pay, upon request of the
department commissioner or the office
director , the reasonable costs of investigating
and prosecuting the disciplinary case against the licensee.
When the commissioner or director disciplines a licensee or
registrant by placing him or her on probation, the bill would
authorize the commissioner and the director to require the licensee
or registrant to pay the costs associated with the probation
monitoring.
The bill would provide that a license or certificate shall be
suspended if the licensee or registrant is incarcerated after the
conviction of a felony and would require the department or the office
to notify the licensee or registrant of the suspension and of his or
her right to a specified hearing. The bill would specify that no
hearing is required, however, if the conviction was for a violation
of federal law or state law for the use of dangerous drugs or
controlled substances or specified sex offenses.
The bill would require a licensee and registrant to report to the
department or the office when there is an indictment or information
charging a felony against the licensee or registrant or when he or
she has been convicted of a felony or misdemeanor. The bill would
make a violation of this reporting requirement a cause for discipline
and a crime, thereby imposing a state-mandated local
program .
The bill would require a licensee and registrant to identify
himself or herself as a licensee or registrant of the department or
the office to law enforcement and the court upon an arrest or being
charged with a crime. The bill would require the department and the
office to inform its licensees and registrants of this requirement.
The bill would require the district attorney, city attorney, and
other prosecuting agencies to notify the department, the office, and
the court clerk if felony charges have been filed against a licensee
or registrant of the department or the office. The bill would
require, within 10 days after a court judgment, the clerk of the
court to report to the department or the office when a licensee or
registrant has committed a crime or is liable for his or her
professional negligence resulting in a specified judgment. The bill
would require the clerk of the court to transmit to the department
and the office specified felony preliminary transcript hearings
concerning a defendant licensee or registrant. By imposing additional
duties on these local agencies, the bill would impose a
state-mandated local program.
The bill would require costs recovered pursuant to these
disciplinary proceedings to be deposited in either the Real Estate
Fund or the Real Estate Appraisers Regulation Fund, as specified, and
would make the funds available upon appropriation by the
Legislature.
The bill would require the commissioner to appoint a Real Estate
Advisory Commission comprised of 11 members to meet at least 4 times
annually, subject to specified procedures. Under the bill, the
commission would consult with and advise the commissioner on the
department's policies and procedures.
The bill would require the Secretary of Business, Transportation
and Housing, by January 31, 2012, to appoint a Department of Real
Estate Enforcement Program Monitor whose duties would include
monitoring and evaluating the department's disciplinary system and
reporting his or her findings, as specified, to the department and
the Legislature no later than August 1, 2012. This bill would make
the provisions that pertain to the enforcement program monitor
inoperative on January 31, 2014.
The bill would require the secretary to review and evaluate the
office, and make recommendations to the Legislature by October 1,
2014, regarding whether the office should be, among other things,
consolidated within the department or another state entity.
The bill would provide that, on and after January 1, 2015, the
department and the office shall be subject to specified review by the
appropriate policy committees of the Legislature.
(2) Existing law provides for the regulation of various profession
and vocation licensees by boards within the Department of Consumer
Affairs. The department is under the control of the Director of
Consumer Affairs. Existing law, the Chiropractic Act, enacted by
initiative, provides for the licensure and regulation of
chiropractors by the State Board of Chiropractic Examiners. Existing
law requires certain boards within the department to disclose on the
Internet information on their respective licensees.
This bill would delete certain healing arts boards within the
department from that requirement. The bill would require the
California Board of Accountancy, the California Architects Board, the
State Athletic Commission, the State Board of Barbering and
Cosmetology, the State Board of Guide Dogs for the Blind, the State
Board of Chiropractic Examiners, the Department of Real Estate, and
the Office of Real Estate Appraisers to disclose on the Internet
information on their respective licensees, as specified.
The bill would make other conforming and technical changes.
(3) 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 with regard to certain mandates no
reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 27 of the Business and Professions Code is
amended to read:
27. (a) Each entity specified in subdivisions (c), (d), (e), and
(f) shall provide on the Internet information regarding the status of
every license issued by that entity in accordance with the
California Public Records Act (Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code) and the
Information Practices Act of 1977 (Chapter 1 (commencing with Section
1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code). The
public information to be provided on the Internet shall include
information on suspensions and revocations of licenses issued by the
entity and other related enforcement action, including accusations
filed pursuant to the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code) taken by the entity relative to persons,
businesses, or facilities subject to licensure or regulation by the
entity. The information may not include personal information,
including home telephone number, date of birth, or social security
number. Each entity shall disclose a licensee's address of record.
However, each entity shall allow a licensee to provide a post office
box number or other alternate address, instead of his or her home
address, as the address of record. This section shall not preclude an
entity from also requiring a licensee, who has provided a post
office box number or other alternative mailing address as his or her
address of record, to provide a physical business address or
residence address only for the entity's internal administrative use
and not for disclosure as the licensee's address of record or
disclosure on the Internet.
(b) In providing information on the Internet, each entity
specified in subdivisions (c) and (d) shall comply with the
Department of Consumer Affairs Guidelines for Access to Public
Records.
(c) Each of the following entities within the Department of
Consumer Affairs shall comply with the requirements of this section:
(1) The Board for Professional Engineers, Land Surveyors, and
Geologists shall disclose information on its registrants and
licensees.
(2) The Structural Pest Control Board shall disclose information
on its licensees, including applicators, field representatives, and
operators in the areas of fumigation, general pest and wood
destroying pests and organisms, and wood roof cleaning and treatment.
(3) The Bureau of Automotive Repair shall disclose information on
its licensees, including auto repair dealers, smog stations, lamp and
brake stations, smog check technicians, and smog inspection
certification stations.
(4) The Bureau of Electronic and Appliance Repair, Home
Furnishings, and Thermal Insulation shall disclose information on its
licensees and registrants, including major appliance repair dealers,
combination dealers (electronic and appliance), electronic repair
dealers, service contract sellers, and service contract
administrators.
(5) The Cemetery and Funeral Bureau shall disclose information on
its licensees, including cemetery brokers, cemetery salespersons,
cemetery managers, crematory managers, cemetery authorities,
crematories, cremated remains disposers, embalmers, funeral
establishments, and funeral directors.
(6) The Professional Fiduciaries Bureau shall disclose information
on its licensees.
(7) The Contractors' State License Board shall disclose
information on its licensees and registrants in accordance with
Chapter 9 (commencing with Section 7000) of Division 3. In addition
to information related to licenses as specified in subdivision (a),
the board shall also disclose information provided to the board by
the Labor Commissioner pursuant to Section 98.9 of the Labor Code.
(8) The Bureau for Private Postsecondary Education shall disclose
information on private postsecondary institutions under its
jurisdiction, including disclosure of notices to comply issued
pursuant to Section 94935 of the Education Code.
(9) The California Board of Accountancy shall disclose information
on its licensees and registrants.
(10) The California Architects Board shall disclose information on
its licensees, including architects and landscape architects.
(11) The State Athletic Commission shall disclose information on
its licensees and registrants.
(12) The State Board of Barbering and Cosmetology shall disclose
information on its licensees.
(13) The State Board of Guide Dogs for the Blind shall disclose
information on its licensees and registrants.
(d) The State Board of Chiropractic Examiners shall disclose
information on its licensees.
(e) The Department of Real Estate shall disclose information on
its licensees.
(f) The Office of Real Estate Appraisers shall disclose
information on its licensees and registrants.
(g) "Internet" for the purposes of this section has the meaning
set forth in paragraph (6) of subdivision (e) of Section 17538.
SEC. 2. Section 10002 is added to the Business
and Professions Code, to read:
10002. "Commission" refers to the Real Estate Advisory
Commission.
SEC. 3. Section 10002.5 is added to the
Business and Professions Code, to read:
10002.5. "Member" refers to a member of the Real Estate Advisory
Commission.
SEC. 4. SEC. 2. Section 10004 of the
Business and Professions Code is amended to read:
10004. "Department" means the Department of Real Estate in the
Business, Transportation and Housing Agency.
SEC. 5. Section 10050 of the Business and
Professions Code is amended to read:
10050. There is in the Business and Transportation Agency a
Department of Real Estate, the chief officer of which department is
named the Real Estate Commissioner.
It shall be the principal responsibility of the commissioner to
enforce all laws in this part (commencing with Section 10000),
Chapter 1 (commencing with Section 11000) of Part 2, and Part 3
(commencing with Section 11300) of this division in a manner which
achieves the maximum protection for the purchasers of real property
and those persons dealing with real estate licensees.
SEC. 6. SEC. 3. Section 10050.1 is
added to the Business and Professions Code, to read:
10050.1. Protection of the public shall be the highest priority
for the Department of Real Estate in exercising its licensing,
regulatory, and disciplinary functions. Whenever the protection of
the public is inconsistent with other interests sought to be
promoted, the protection of the public shall be paramount.
SEC. 7. Section 10054 is added to the Business
and Professions Code, to read:
10054. (a) The commissioner shall appoint a Real Estate Advisory
Commission to consult with and advise the commissioner on the
department's policies and procedures in protecting the public and in
administering the provisions of this part, Chapter 1 (commencing with
Section 11000) of Part 2, and Part 3 (commencing with Section
11300). The commission shall be comprised of 11 members, five of whom
shall be real estate brokers licensed under this part and six of
whom shall be public members. The commissioner shall preside at
commission meetings.
(b) Two of the licensed members shall hold a mortgage loan
originator license endorsement from the department. One public member
shall be a consumer advocate and one public member shall be a local
law enforcement representative.
(c) The members shall receive a per diem salary as provided in
Section 11564.5 of the Government Code, and in addition thereto each
shall be allowed his or her actual and necessary expenses in the
discharge of his or her duties.
SEC. 8. Section 10055 is added to the Business
and Professions Code, to read:
10055. (a) At the meetings described in Section 10057, the
commissioner shall meet, consult with, and advise the commission on
the functions and policies of the department and on how the
department may best serve the people of the state by, among other
things, recognizing the legitimate needs of the industry regulated by
the department and the department's licensees while maintaining
protection of the public as the department's highest priority.
(b) At the meetings described in Section 10057, the commission
shall solicit the views and suggestions of the public and of the
licensees of the department.
SEC. 9. Section 10056 is added to the Business
and Professions Code, to read:
10056. The commission may make policy recommendations and
suggestions to the commissioner as it deems beneficial and
appropriate.
SEC. 10. Section 10057 is added to the Business
and Professions Code, to read:
10057. The commissioner shall call meetings of the commission at
least four times each year and written notice of the time and place
of each meeting shall be given to the members and such other persons
as shall have requested notice and shall be posted prominently on the
department's Internet Web site at least 10 days before such meeting.
SEC. 11. Section 10058 is added to the Business
and Professions Code, to read:
10058. The meetings of the commission are subject to Bagley-Keene
Open Meeting Act (Article 9 (commencing with Section 11120) of
Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).
SEC. 12. Section 10060 is added to the Business
and Professions Code, to read:
10060. All records of the commission shall be open to inspection
by the public during regular office hours, except as otherwise
provided by law.
SEC. 13. Section 10080 of the Business and
Professions Code is amended to read:
10080. The commissioner may adopt, amend, or repeal rules and
regulations that are reasonably necessary for the enforcement of the
provisions of this part and of Chapter 1 (commencing with Section
11000) of Part 2 of this division. The rules and regulations shall be
adopted, amended, or repealed in accordance with the provisions of
the Administrative Procedure Act. In addition to other notices
required by law, the commissioner shall notify the Real Estate
Advisory Commission of the intention to adopt rules and regulations
at least 30 days prior to such adoption.
SEC. 14. SEC. 4. Section 10100.4 is
added to the Business and Professions Code, to read:
10100.4. (a) Notwithstanding Section 11415.60 of the Government
Code, the department may enter into a settlement with a licensee or
applicant instead of the issuance of an accusation or statement of
issues against that licensee or applicant.
(b) The settlement shall identify the factual basis for the action
being taken and the statutes or regulations violated.
(c) A person who enters a settlement pursuant to this section is
not precluded from filing a petition, in the timeframe permitted by
law, to modify the terms of the settlement or a petition for early
termination of probation, if probation is part of the settlement.
(d) Any settlement with a licensee executed pursuant to this
section shall be considered discipline and a public record
and shall be posted on the department's Internet Web site. Any
settlement against an applicant executed pursuant to this section
shall be considered a public record and shall be posted on the
department's Internet Web site. by the department.
SEC. 15. SEC. 5. Section 10106 is
added to the Business and Professions Code, to read:
10106. (a) Except as otherwise provided by law, in any order
issued in resolution of a disciplinary proceeding before the
department, the commissioner may request the administrative law judge
to direct a licensee found to have committed a violation of this
part to pay a sum not to exceed the reasonable costs of the
investigation and enforcement of the case.
(b) In the case of a disciplined licensee that is a corporation or
a partnership, the order may be made against the licensed corporate
entity or licensed partnership.
(c) A certified copy of the actual costs, or a good faith estimate
of costs where actual costs are not available, signed by the
commissioner or the commissioner's designated representative, shall
be prima facie evidence of reasonable costs of investigation and
prosecution of the case. The costs shall include the amount of
investigative and enforcement costs up to the date of the hearing,
including, but not limited to, charges imposed by the Attorney
General.
(d) The administrative law judge shall make a proposed finding of
the amount of reasonable costs of investigation and prosecution of
the case when requested pursuant to subdivision (a). The finding of
the administrative law judge with regard to costs shall not be
reviewable by the commissioner to increase the cost award. The
commissioner may reduce or eliminate the cost award, or remand to the
administrative law judge where the proposed decision fails to make a
finding on costs requested pursuant to subdivision (a).
(e) Where an order for recovery of costs is made and timely
payment is not made as directed in the commissioner's decision, the
commissioner may enforce the order for repayment in any appropriate
court. This right of enforcement shall be in addition to any other
rights the commissioner may have as to any licentiate to pay costs.
(f) In any action for recovery of costs, proof of the commissioner'
s decision shall be conclusive proof of the validity of the order of
payment and the terms for payment.
(g) (1) Except as provided in paragraph (2), the department shall
not renew or reinstate the license of any licensee who has failed to
pay all of the costs ordered under this section.
(2) The department may, in its discretion, conditionally renew or
reinstate for a maximum of one year the license of any licensee who
demonstrates financial hardship and who enters into a formal
agreement with the department to reimburse the department within that
one-year period for the unpaid costs.
(h) All costs recovered under this section shall be considered a
reimbursement for costs incurred and shall be deposited in the Real
Estate Fund to be available, notwithstanding Section 10451, upon
appropriation by the Legislature.
(i) Nothing in this section shall preclude the department from
including the recovery of the costs of investigation and enforcement
of a case in any stipulated settlement.
SEC. 16. SEC. 6. Section 10186 is
added to the Business and Professions Code, to read:
10186. (a) When the commissioner disciplines a licensee by
placing him or her on probation, the commissioner may, in addition to
any other terms and conditions placed upon the licensee, require the
licensee to pay the monetary costs associated with monitoring the
licensee's probation.
(b) The commissioner shall not renew a license or an endorsement
if the licensee fails to pay all of the costs he or she is ordered to
pay pursuant to this section once the licensee has served his or her
term of probation.
(c) The commissioner shall not reinstate a license or license
endorsement if the petitioner has failed to pay any costs he or she
was ordered to pay pursuant to this section.
(d) All costs recovered under this section shall be considered a
reimbursement for costs incurred and shall be deposited in the Real
Estate Fund to be available, notwithstanding Section 10451, upon
appropriation by the Legislature.
SEC. 17. SEC. 7. Section 10186.1 is
added to the Business and Professions Code, to read:
10186.1. (a) A license or an endorsement of the department shall
be suspended automatically during any time that the licensee is
incarcerated after conviction of a felony, regardless of whether the
conviction has been appealed. The department shall, immediately upon
receipt of the certified copy of the record of conviction, determine
whether the license or endorsement has been automatically suspended
by virtue of the licensee's incarceration, and if so, the duration of
that suspension. The department shall notify the licensee of the
suspension and of his or her right to elect to have the issue of
penalty heard as provided in subdivision (d).
(b) If after a hearing before an administrative law judge from the
Office of Administrative Hearings it is determined that the felony
for which the licensee was convicted was substantially related to the
qualifications, functions, or duties of a licensee, the commissioner
upon receipt of the certified copy of the record of conviction,
shall suspend the license or endorsement until the time for appeal
has elapsed, if no appeal has been taken, or until the judgment of
conviction has been affirmed on appeal or has otherwise become final,
and until further order of the department.
(c) Notwithstanding subdivision (b), a conviction of a charge of
violating any federal statute or regulation or any statute or
regulation of this state regulating dangerous drugs or controlled
substances, or a conviction of Section 187, 261, 262, or 288 of the
Penal Code, shall be conclusively presumed to be substantially
related to the qualifications, functions, or duties of a licensee and
no hearing shall be held on this issue. However, upon its own motion
or for good cause shown, the commissioner may decline to impose or
may set aside the suspension when it appears to be in the interest of
justice to do so, with due regard to maintaining the integrity of,
and confidence in, the practice regulated by the department.
(d) (1) Discipline may be ordered against a licensee in accordance
with the laws and regulations of the department when the time for
appeal has elapsed, the judgment of conviction has been affirmed on
appeal, or an order granting probation is made suspending the
imposition of sentence, irrespective of a subsequent order under
Section 1203.4 of the Penal Code allowing the person to withdraw his
or her plea of guilty and to enter a plea of not guilty, setting
aside the verdict of guilty, or dismissing the accusation, complaint,
information, or indictment.
(2) The issue of penalty shall be heard by an administrative law
judge from the Office of Administrative Hearings. The hearing shall
not be held until the judgment of conviction has become final or,
irrespective of a subsequent order under Section 1203.4 of the Penal
Code, an order granting probation has been made suspending the
imposition of sentence, except that a licensee may, at his or her
option, elect to have the issue of penalty decided before those time
periods have elapsed. Where the licensee so elects, the issue of
penalty shall be heard in the manner described in subdivision (b) at
the hearing to determine whether the conviction was substantially
related to the qualifications, functions, or duties of a licensee. If
the conviction of a licensee who has made this election is
overturned on appeal, any discipline ordered pursuant to this section
shall automatically cease. Nothing in this subdivision shall
prohibit the department from pursuing disciplinary action based on
any cause other than the overturned conviction.
(e) The record of the proceedings resulting in a conviction,
including a transcript of the testimony in those proceedings, may be
received in evidence.
(f) Any other provision of law setting forth a procedure for the
suspension or revocation of a license or endorsement issued by the
department shall not apply to proceedings conducted pursuant to this
section.
SEC. 18. SEC. 8. Section 10186.2 is
added to the Business and Professions Code, to read:
10186.2. (a) (1) A licensee shall report any of the following to
the department:
(A) The bringing of an indictment or information charging a felony
against the licensee.
(B) The arrest of the licensee.
(C) The conviction of the licensee, including any verdict of
guilty, or plea of guilty or no contest, of any felony or
misdemeanor.
(D) Any disciplinary action taken by another licensing entity or
authority of this state or of another state or an agency of the
federal government.
(2) The report required by this subdivision shall be made in
writing within 30 days of the date of the bringing of the indictment
or the charging of a felony, the arrest, the conviction, or the
disciplinary action.
(b) Failure to make a report required by this section shall
be a public offense punishable by a fine not to exceed five
thousand dollars ($5,000) and shall constitute a cause for
discipline.
SEC. 19. Section 10186.3 is added to the
Business and Professions Code, to read:
10186.3. A licensee shall identify himself or herself as a
licensee of the department to law enforcement and the court upon
being arrested or charged with a misdemeanor or felony. The
department shall inform its licensees of this requirement.
SEC. 20. Section 10186.4 is added to the
Business and Professions Code, to read:
10186.4. Within 10 days after a judgment by a court of this state
that a person who holds a license, endorsement, or other similar
authority from the department has committed a crime, or is liable in
a judgment for an amount in excess of thirty thousand dollars
($30,000) caused by his or her negligence, error or omission in
practice, or his or her rendering unauthorized professional services,
the clerk of the court that rendered the judgment shall report that
fact to the department.
SEC. 21. Section 10186.5 is added to the
Business and Professions Code, to read:
10186.5. (a) The district attorney, city attorney, or other
prosecuting agency shall notify the department and the clerk of the
court, in which the charges have been filed, of any filings against a
licensee of the department charging a felony immediately upon
obtaining information that the defendant is a licensee of the
department. The notice shall identify the licensee and describe the
crimes charged and the facts alleged. The prosecuting agency shall
also notify the clerk of the court in which the action is pending
that the defendant is a licensee, and the clerk shall record
prominently in the file that the defendant holds a license from the
department.
(b) The clerk of the court in which a licensee is convicted of a
crime shall, within 48 hours after the conviction, transmit a
certified copy of the record of conviction to the department.
SEC. 22. Section 10186.7 is added to the
Business and Professions Code, to read:
10186.7. (a) The clerk of the court shall transmit any felony
preliminary hearing transcript concerning a defendant licensee to the
department where the total length of the transcript is under 800
pages and shall notify the department of any proceeding where the
transcript exceeds that length.
(b) In any case where a probation report on a licensee is prepared
for a court pursuant to Section 1203 of the Penal Code, a copy of
that report shall be transmitted by the probation officer to the
department.
SEC. 23. SEC. 9. Section 10186.8 is
added to the Business and Professions Code, to read:
10186.8. (a) (1) The Secretary of the Business, Transportation
and Housing Agency shall appoint a Department of Real Estate
Enforcement Program Monitor no later than January 31, 2012. The
secretary may retain a person for this position by a personal
services contract, the Legislature finding, pursuant to Section 19130
of the Government Code, that this is a new state function.
(2) The secretary shall supervise the enforcement program monitor
and may terminate or dismiss him or her from this position.
(b) The secretary shall advertise the availability of this
position. The requirements for this position include experience in
conducting investigations and familiarity with state laws, rules, and
procedures pertaining to the department and familiarity with
relevant administrative procedures.
(c) (1) The enforcement program monitor shall monitor and evaluate
the department's discipline system and procedures, making as his or
her highest priority the reform and reengineering of the department's
enforcement program and operations, and the
improvement of the overall efficiency of the department's
disciplinary system , and the improvement of the department's
efforts to receive public input from its licensees and from members
of the public .
(2) This monitoring duty shall be on a continuing basis for a
period of no more than two years from the date of the enforcement
program monitor's appointment and shall include, but not be limited
to, improving the quality and consistency of complaint processing and
investigation and reducing the timeframes for each, reducing any
complaint backlog, assuring consistency in the application of
sanctions or discipline imposed on licensees. The monitoring duties
shall include the following areas:
(A) The accurate and consistent implementation of the laws and
rules affecting discipline.
(B) Staff concerns regarding disciplinary matters or procedures.
(C) Appropriate utilization of licensed professionals to
investigate complaints.
(D) The department's cooperation with other governmental entities
charged with enforcing related laws and regulations regarding real
estate licensees.
(E) Whether the department's efforts to receive public input would
be improved by the establishment of a real estate advisory
commission required by statute.
(3) The enforcement program monitor shall exercise no authority
over the department's discipline operations or staff; however, the
department and its staff shall cooperate with him or her, and the
department shall provide data, information, and case files as
requested by the enforcement program monitor
to perform all of his or her duties.
(4) The secretary shall assist the enforcement program monitor in
the performance of his or her duties, and the enforcement program
monitor shall have the same investigative authority as the secretary.
(d) The enforcement program monitor shall submit an initial
written report of his or her findings and conclusions to the
department and the Legislature no later than August 1, 2012, and
every six months thereafter, and be available to make oral reports to
each, if requested to do so. The enforcement program monitor may
also provide additional information to either the secretary or the
Legislature at his or her discretion or at the request of either the
secretary or the Legislature. The enforcement program
monitor shall make his or her reports available to the public or the
media. The enforcement program monitor shall make every effort to
provide the department with an opportunity to reply to any facts,
findings, issues, or conclusions in his or her reports with which the
department may disagree.
(e) The department shall reimburse the secretary for all of the
costs associated with the employment of an enforcement program
monitor.
(f) This section shall remain in effect only until January 31,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 31, 2014, deletes or extends
that date.
SEC. 10. Section 10186.9 is added to the
Business and Professions Code , to read:
10186.9. Notwithstanding any other provision of law, on and after
January 1, 2015, the department shall be subject to review by the
appropriate policy committees of the Legislature. The review shall
include, but shall not be limited to, an evaluation of the reports
submitted by the enforcement program monitor pursuant to subdivision
(d) of Section 10186.8.
SEC. 24. Section 11301 of the Business and
Professions Code is amended to read:
11301. There is hereby created within the Department of Real
Estate an Office of Real Estate Appraisers to administer and enforce
this part.
SEC. 25. Section 11302 of the Business and
Professions Code is amended to read:
11302. For the purpose of applying this part, the following
terms, unless otherwise expressly indicated, shall mean and have the
following definitions:
(a) "Agency" means the Business, Transportation and Housing
Agency.
(b) "Appraisal" means a written statement independently and
impartially prepared by a qualified appraiser setting forth an
opinion in a federally related transaction as to the market value of
an adequately described property as of a specific date, supported by
the presentation and analysis of relevant market information.
The term "appraisal" does not include an opinion given by a real
estate licensee or engineer or land surveyor in the ordinary course
of his or her business in connection with a function for which a
license is required under Chapter 7 (commencing with Section 6700) or
Chapter 15 (commencing with Section 8700) of Division 3, or Chapter
3 (commencing with Section 10130) or Chapter 7 (commencing with
Section 10500) and the opinion shall not be referred to as an
appraisal. This part does not apply to a probate referee acting
pursuant to Sections 400 to 408, inclusive, of the Probate Code
unless the appraised transaction is federally related.
(c) "Appraisal Foundation" means the Appraisal Foundation that was
incorporated as an Illinois not-for-profit corporation on November
30, 1987.
(d) (1) "Appraisal management company" means any person or entity
that satisfies all of the following conditions:
(A) Maintains an approved list or lists, containing 11 or more
independent contractor appraisers licensed or certified pursuant to
this part, or employs 11 or more appraisers licensed or certified
pursuant to this part.
(B) Receives requests for appraisals from one or more clients.
(C) For a fee paid by one or more of its clients, delegates
appraisal assignments for completion by its independent contractor or
employee appraisers.
(2) "Appraisal management company" does not include any of the
following, when that person or entity directly contracts with an
independent appraiser:
(A) Any bank, credit union, trust company, savings and loan
association, or industrial loan company doing business under the
authority of, or in accordance with, a license, certificate, or
charter issued by the United States or any state, district,
territory, or commonwealth of the United States that is authorized to
transact business in this state.
(B) Any finance lender or finance broker licensed pursuant to
Division 9 (commencing with Section 22000) of the Financial Code,
when acting under the authority of that license.
(C) Any residential mortgage lender or residential mortgage
servicer licensed pursuant to Division 20 (commencing with Section
50000) of the Financial Code, when acting under the authority of that
license.
(D) Any real estate broker licensed pursuant to Part 1 (commencing
with Section 10000) of Division 4 of the Business and Professions
Code, when acting under the authority of that license.
(3) "Appraisal management company" does not include any person
licensed to practice law in this state who is working with or on
behalf of a client of that person in connection with one or more
appraisals for that client.
(e) "Appraisal Subcommittee" means the Appraisal Subcommittee of
the Federal Financial Institutions Examination Council.
(f) "Controlling person" means one or more of the following:
(1) An officer or director of an appraisal management company, or
an individual who holds a 10 percent or greater ownership interest in
an appraisal management company.
(2) An individual employed, appointed, or authorized by an
appraisal management company that has the authority to enter into a
contractual relationship with clients for the performance of
appraisal services and that has the authority to enter into
agreements with independent appraisers for the completion of
appraisals.
(3) An individual who possesses the power to direct or cause the
direction of the management or policies of an appraisal management
company.
(g) "Director" means the Director of the Office of Real Estate
Appraisers.
(h) "Federal financial institutions regulatory agency" means the
Federal Reserve Board, Federal Deposit Insurance Corporation, Office
of the Comptroller of the Currency, Office of Thrift Supervision,
Federal Home Loan Bank System, National Credit Union Administration,
and any other agency determined by the director to have jurisdiction
over transactions subject to this part.
(i) "Federally related real estate appraisal activity" means the
act or process of making or performing an appraisal on real estate or
real property in a federally related transaction and preparing an
appraisal as a result of that activity.
(j) "Federally related transaction" means any real estate-related
financial transaction which a federal financial institutions
regulatory agency engages in, contracts for or regulates and which
requires the services of a state licensed real estate appraiser
regulated by this part. This term also includes any transaction
identified as such by a federal financial institutions regulatory
agency.
(k) "License" means any license, certificate, permit,
registration, or other means issued by the office authorizing the
person to whom it is issued to act pursuant to this part within this
state.
(l) "Licensure" means the procedures and requirements a person
shall comply with in order to qualify for issuance of a license and
includes the issuance of the license.
(m) "Office" means the Office of Real Estate Appraisers.
(n) "Registration" means the procedures and requirements with
which a person or entity shall comply in order to qualify to conduct
business as an appraisal management company.
(o) "State licensed real estate appraiser" is a person who is
issued and holds a current valid license under this part.
(p) "Uniform Standards of Professional Appraisal Practice" are the
standards of professional appraisal practice established by the
Appraisal Foundation.
(q) "Course provider" means a person or entity that provides
educational courses related to professional appraisal practice.
(r) "Commissioner" means the Real Estate Commissioner.
(s) "Department" means the Department of Real Estate in the
Business, Transportation and Housing Agency.
SEC. 26. Section 11310 of the Business and
Professions Code is amended to read:
11310. The Governor shall appoint, subject to confirmation by the
Senate, the Director of the Office of Real Estate Appraisers who
shall administer the licensing and certification program for real
estate appraisers. In making the appointment, consideration shall be
given to the qualifications of an individual that demonstrate
knowledge of the real estate appraisal profession.
(a) The director shall serve at the pleasure of the Governor. The
director shall administer the licensing and certification program in
consultation with the Governor and the commissioner. The salary for
the director shall be fixed and determined by the commissioner with
approval of the Department of Personnel Administration.
(b) The director shall not be actively engaged in the appraisal
business or any other affected industry for the term of appointment,
and thereafter the director shall be subject to Section 87406 of the
Government Code.
(c) Institutional safeguards shall be established and maintained
between the department and the office and its employees to protect
the independence of the appraiser regulatory function from
realty-related activities consistent with Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989, as
amended, by the Real Estate Appraisal Reform Amendments (12 U.S.C.
Secs. 3331-3351). Decisions relating to appraisal license issuance,
revocation, and disciplinary actions shall be made by the director
and shall not be made or influenced by the department or the
commissioner.
(d) The director, in consultation with the commissioner and in
accordance with the State Civil Service Act, may appoint and fix the
compensation of legal, clerical, technical, investigation, and
auditing personnel as may be necessary to carry out this part. All
personnel shall perform their respective duties under the supervision
and direction of the director.
(e) The director may appoint not more than four deputy directors
as he or she deems appropriate. The deputy directors shall perform
their respective duties under the supervision and direction of the
director.
(f) Every power granted to or duty imposed upon the director under
this part may be exercised or performed in the name of the director
by the deputy directors, subject to conditions and limitations as the
director may prescribe.
SEC. 27. SEC. 11. Section 11310.1 is
added to the Business and Professions Code, to read:
11310.1. Protection of the public shall be the highest priority
for the Office of Real Estate Appraisers in exercising its licensing,
regulatory, and disciplinary functions. Whenever the protection of
the public is inconsistent with other interests sought to be
promoted, the protection of the public shall be paramount.
SEC. 28. Section 11313 of the Business and
Professions Code is amended to read:
11313. The office is under the supervision and control of the
commissioner. The duty of administering this part is vested in the
director and he or she is responsible to the commissioner therefor.
The director shall adopt and enforce rules and regulations as are
determined reasonably necessary to carry out the purposes of this
part. Those rules and regulations shall be adopted pursuant to
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code.
SEC. 12. Section 11313.2 is added to the
Business and Professions Code , to read:
11313.2. (a) The secretary shall review and evaluate the office,
and make recommendations to the Legislature by October 1, 2014,
regarding whether the office should be consolidated within the
Department of Real Estate, or consolidated within any other state
department or office, and shall provide appropriate justification for
that recommendation.
(b) Notwithstanding any other provision of law, on and after
January 1, 2015, the office shall be subject to review by the
appropriate policy committees of the Legislature. The review shall
include, but shall not be limited to, the recommendations of the
secretary regarding the office.
SEC. 29. SEC. 13. Section 11315.7 is
added to the Business and Professions Code, to read:
11315.7. (a) Notwithstanding Section 11415.60 of the Government
Code, the office may enter into a settlement with a licensee or
applicant instead of the issuance of an accusation or statement of
issues against that licensee or applicant.
(b) The settlement shall identify the factual basis for the action
being taken and the statutes or regulations violated.
(c) A person who enters a settlement pursuant to this section is
not precluded from filing a petition, in the timeframe permitted by
law, to modify the terms of the settlement or a petition for early
termination of probation, if probation is part of the settlement.
(d) Any settlement with a licensee executed pursuant to this
section shall be considered discipline and a public record
and shall be posted on the office's Internet Web site. Any settlement
with an applicant executed pursuant to this section shall be
considered a public record and shall be posted on the office's
Internet Web site. by the office.
SEC. 30. SEC. 14. Section 11315.9 is
added to the Business and Professions Code, to read:
11315.9. (a) Except as otherwise provided by law, in any order
issued in resolution of a disciplinary proceeding before the office,
the director may request the administrative law judge to direct a
licensee found to have committed a violation of this part to pay a
sum not to exceed the reasonable costs of the investigation and
enforcement of the case.
(b) In the case of a disciplined licensee that is a corporation or
a partnership, the order may be made against the licensed corporate
entity or licensed partnership.
(c) A certified copy of the actual costs, or a good faith estimate
of costs where actual costs are not available, signed by the
director or the director's designated representative shall be prima
facie evidence of reasonable costs of investigation and prosecution
of the case. The costs shall include the amount of investigative and
enforcement costs up to the date of the hearing, including, but not
limited to, charges imposed by the Attorney General.
(d) The administrative law judge shall make a proposed finding of
the amount of reasonable costs of investigation and prosecution of
the case when requested pursuant to subdivision (a). The finding of
the administrative law judge with regard to costs shall not be
reviewable by the director to increase the cost award. The director
may reduce or eliminate the cost award, or remand to the
administrative law judge where the proposed decision fails to make a
finding on costs requested pursuant to subdivision (a).
(e) Where an order for recovery of costs is made and timely
payment is not made as directed in the director's decision, the
office may enforce the order for repayment in any appropriate court.
This right of enforcement shall be in addition to any other rights
the office may have as to any licentiate to pay costs.
(f) In any action for recovery of costs, proof of the director's
decision shall be conclusive proof of the validity of the order of
payment and the terms for payment.
(g) (1) Except as provided in paragraph (2), the office shall not
renew or reinstate the license of any licensee who has failed to pay
all of the costs ordered under this section.
(2) The office may, in its discretion, conditionally renew or
reinstate for a maximum of one year the license of any licensee who
demonstrates financial hardship and who enters into a formal
agreement with the office to reimburse the office within that
one-year period for the unpaid costs.
(h) All costs recovered under this section shall be considered a
reimbursement for costs incurred and shall be deposited in the Real
Estate Appraisers Regulation Fund to be available upon appropriation
by the Legislature.
(i) Nothing in this section shall preclude the office from
including the recovery of the costs of investigation and enforcement
of a case in any stipulated settlement.
SEC. 31. SEC. 15. Section 11319.1 is
added to the Business and Professions Code, to read:
11319.1. (a) When the director disciplines a licensee or
registrant by placing him or her on probation, the director may, in
addition to any other terms and conditions placed upon the licensee
or registrant, require the licensee or registrant to pay the monetary
costs associated with monitoring the licensee's or registrant's
probation.
(b) The director shall not renew a license of a licensee or a
certificate of a registrant who fails to pay all of the costs he or
she is ordered to pay pursuant to this section once the licensee or
registrant has served his or her term of probation.
(c) The director shall not reinstate a license or certificate if
the petitioner has failed to pay any costs he or she was ordered to
pay pursuant to this section.
(d) All costs recovered under this section shall be considered a
reimbursement for costs incurred and shall be deposited in the Real
Estate Appraisers Regulation Fund to be available upon appropriation
by the Legislature.
SEC. 32. SEC. 16. Section 11319.2 is
added to the Business and Professions Code, to read:
11319.2. (a) A license of a licensee or a certificate of a
registrant shall be suspended automatically during any time that the
licensee or registrant is incarcerated after conviction of a felony,
regardless of whether the conviction has been appealed. The office
shall, immediately upon receipt of the certified copy of the record
of conviction, determine whether the license of the licensee or
certificate of the registrant has been automatically suspended by
virtue of the licensee's or registrant's incarceration, and if so,
the duration of that suspension. The office shall notify the licensee
or registrant in writing of the license or certificate suspension
and of his or her right to elect to have the issue of penalty heard
as provided in subdivision (d).
(b) If after a hearing before an administrative law judge from the
Office of Administrative Hearings it is determined that the felony
for which the licensee or registrant was convicted was substantially
related to the qualifications, functions, or duties of a licensee or
registrant, the director upon receipt of the certified copy of the
record of conviction, shall suspend the license or certificate until
the time for appeal has elapsed, if no appeal has been taken, or
until the judgment of conviction has been affirmed on appeal or has
otherwise become final, and until further order of the director.
(c) Notwithstanding subdivision (b), a conviction of a charge of
violating any federal statute or regulation or any statute or
regulation of this state regulating dangerous drugs or controlled
substances, or a conviction of Section 187, 261, 262, or 288 of the
Penal Code, shall be conclusively presumed to be substantially
related to the qualifications, functions, or duties of a licensee or
registrant and no hearing shall be held on this issue. However, upon
its own motion or for good cause shown, the director may decline to
impose or may set aside the suspension when it appears to be in the
interest of justice to do so, with due regard to maintaining the
integrity of, and confidence in, the practice regulated by the
office.
(d) (1) Discipline may be ordered against a licensee or registrant
in accordance with the laws and regulations of the office when the
time for appeal has elapsed, the judgment of conviction has been
affirmed on appeal, or an order granting probation is made suspending
the imposition of sentence, irrespective of a subsequent order under
Section 1203.4 of the Penal Code allowing the person to withdraw his
or her plea of guilty and to enter a plea of not guilty, setting
aside the verdict of guilty, or dismissing the accusation, complaint,
information, or indictment.
(2) The issue of penalty shall be heard by an administrative law
judge from the Office of Administrative Hearings. The hearing shall
not be had until the judgment of conviction has become final or,
irrespective of a subsequent order under Section 1203.4 of the Penal
Code, an order granting probation has been made suspending the
imposition of sentence, except that a licensee or registrant may, at
his or her option, elect to have the issue of penalty decided before
those time periods have elapsed. Where the licensee or registrant so
elects, the issue of penalty shall be heard in the manner described
in subdivision (b) at the hearing to determine whether the conviction
was substantially related to the qualifications, functions, or
duties of a licensee or registrant. If the conviction of a licensee
or registrant who has made this election is overturned on appeal, any
discipline ordered pursuant to this section shall automatically
cease. Nothing in this subdivision shall prohibit the office from
pursuing disciplinary action based on any cause other than the
overturned conviction.
(e) The record of the proceedings resulting in a conviction,
including a transcript of the testimony in those proceedings, may be
received in evidence.
(f) Any other provision of law setting forth a procedure for the
suspension or revocation of a license or certificate issued by the
office shall not apply to proceedings conducted pursuant to this
section.
SEC. 33. SEC. 17. Section 11319.3 is
added to the Business and Professions Code, to read:
11319.3. (a) (1) A licensee or registrant shall report any of the
following to the office:
(A) The bringing of an indictment or information charging a felony
against the licensee or registrant.
(B) The arrest of the licensee or registrant.
(C) The conviction of the licensee or registrant, including any
verdict of guilty, or plea of guilty or no contest, of any felony or
misdemeanor.
(D) Any disciplinary action taken by another licensing entity or
authority of this state or of another state or an agency of the
federal government.
(2) The report required by this subdivision shall be made in
writing within 30 days of the date of the bringing of the indictment
or the charging of a felony, the arrest, the conviction, or the
disciplinary action.
(b) Failure to make a report required by this section shall
be a public offense punishable by a fine not to exceed five
thousand dollars ($5,000) and shall constitute a cause for
discipline.
SEC. 34. Section 11319.4 is added to the
Business and Professions Code, to read:
11319.4. A licensee or registrant shall identify himself or
herself as a licensee or registrant of the office to law enforcement
and the court upon being arrested or charged with a misdemeanor or
felony. The office shall inform its licensees and registrants of this
requirement.
SEC. 35. Section 11319.5 is added to the
Business and Professions Code, to read:
11319.5. Within 10 days after a judgment by a court of this state
that a person who holds a license, certificate, or other similar
authority from the office has committed a crime, or is liable in a
judgment for an amount in excess of thirty thousand dollars ($30,000)
caused by his or her negligence, error or omission in practice, or
his or her rendering unauthorized professional services, the clerk of
the court that rendered the judgment shall report that fact to the
office.
SEC. 36. Section 11319.6 is added to the
Business and Professions Code, to read:
11319.6. (a) The district attorney, city attorney, or other
prosecuting agency shall notify the office and the clerk of the
court, in which the charges have been filed, of any filings against a
licensee or registrant of the office charging a felony immediately
upon obtaining information that the defendant is a licensee or
registrant of the office. The notice shall identify the licensee or
registrant and describe the crimes charged and the facts alleged. The
prosecuting agency shall also notify the clerk of the court in which
the action is pending that the defendant is a licensee or
registrant, and the clerk shall record prominently in the file that
the defendant holds a license or certificate from the office.
(b) The clerk of the court in which a licensee or registrant is
convicted of a crime shall, within 48 hours after the conviction,
transmit a certified copy of the record of conviction to the office.
SEC. 37. Section 11319.7 is added to the
Business and Professions Code, to read:
11319.7. (a) The clerk of the court shall transmit any felony
preliminary hearing transcript concerning a defendant licensee or
registrant to the office where the total length of the transcript is
under 800 pages and shall notify the department of any proceeding
where the transcript exceeds that length.
(b) In any case where a probation report on a licensee or
registrant is prepared for a court pursuant to Section 1203 of the
Penal Code, a copy of that report shall be transmitted by the
probation officer to the office.
SEC. 38. No reimbursement is required by this
act pursuant to Section 6 of Article XIII B of the California
Constitution for certain costs that may be incurred by a local agency
or school district because, in that regard, this act creates a new
crime or infraction, eliminates a crime or infraction, or changes the
penalty for a crime or infraction, within the meaning of Section
17556 of the Government Code, or changes the definition of a crime
within the meaning of Section 6 of Article XIII B of the California
Constitution.
However, if the Commission on State Mandates determines that this
act contains other costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division 4 of
Title 2 of the Government Code.