BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 706 (Price)
Hearing Date: 5/26/2011 Amended: 4/25/2011
Consultant: Maureen Ortiz Policy Vote: BP& ED 7-2
_________________________________________________________________
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BILL SUMMARY: SB 706 transfers the Office of Real Estate
Appraisers (OREA) into the Department of Real Estate (DRE), and
make several other changes relating to licensing and enforcement
programs within the DRE and the Department of Consumer Affairs.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
DRE oversight ----approximately $1,000
annually
potentially offset by fees----- Special*
DRE enforcement monitor $83 $166
$166 Special*
DRE admin $144
$288 $288 Special*
OREA admin $170
$339 $339 Special**
Revenue unknown revenue from
reimbursement
from
licensees for investigations Special* **
Court administration ---approximately $1,000
annually------ General
Advisory commission $20 $40
$40 Special*
* Real Estate Fund **Real Estate Appraisers Fund
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STAFF COMMENTS: SUSPENSE FILE. As proposed to be amended, SB
706 will only require the appointment of an enforcement monitor
at DRE, provide authority to recover costs for investigations,
and require recommendations by BT&H regarding consolidating the
OREA with the DRE, thereby deleting the other provisions in the
bill.
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SB 706 specifically does the following:
1) Transfers the Office of Real Estate Appraisers to the
control and supervision of the Department of Real Estate, and
requires the Real Estate Commissioner to enforce real estate
appraiser activity.
2) Allows the DRE and OREA to 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. It
also authorizes an administrative law judge to order a licensee
in a disciplinary proceeding to pay the reasonable costs of
investigating the prosecuting the disciplinary case against the
licensee.
3) Authorizes the DRE and OREA to require the licensee or
registrant to pay the costs association with probation
monitoring after placing the individual on probation.
4) Requires the automatic suspension of any licensee who is
incarcerated after conviction of a felony, and requires a
licensee to submit a written report to the DRE or OREA when that
licensee is subjected to an indictment, arrest, conviction
including ay felony or misdemeanor, and any disciplinary action
taken by another licensing entity or authority of this state or
of another state. Failure to report this information is
punishable by a fine of up to $5,000.
5) Requires the DRE and OREA to inform licensees of a
requirement to identify himself or herself as a licensee or
registrant to law enforcement and the court upon an arrest.
6) Requires the clerk of the court to report to the DRE or OREA
within 10 days any judgment for a crime committed or any
judgment in excess of $30,000 for which a licensee is
responsible due to negligence, error or omission in practice, or
rendering unauthorized professional services. The court would
also be required to transfer any preliminary hearing transcript.
7) Establishes an 11 member advisory commission to meet at
least four times annually, and to consult with and advise the
DRE on policies and procedures. All meetings must be open to
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the public.
8) Requires the Secretary of Business, Transportation and
Housing to appoint a DRE Enforcement Program Monitor by January
31, 2012 to monitor and evaluate DRE's disciplinary system and
report to the Legislature no later than August 1, 2012 and every
six months thereafter. The monitoring program will sunset
January 31, 2014.
9) Requires the Board of Accountancy, the Architects Board,
State Athletic Commission, Board of Barbering and Cosmetology,
Board of Guide Dogs for the Blind, Board of Chiropractic
Examiners, Department of Real Estate, and Office of Real Estate
Appraisers to disclose information about licensees on the
Internet. Posted information will include suspensions,
revocations, and other related enforcement action including
accusations filed pursuant to the Administrative Procedures Act.
The Department of Real Estate is responsible for regulating the
practice of real estate brokers and real estate salespersons and
currently licenses more than 483,000 persons. SB 36 (Calderon,
Chapter 160, Statutes of 2009) was enacted to implement the
federal Secure and Fair Enforcement Mortgage Licensing Act (SAFE
Act), which requires mortgage loan originators to obtain a
mortgage loan originator license endorsement from the DRE by
January 1, 2011. The DRE has issued over 22,000 such
endorsements prior to the January 1, 2011 deadline. DRE's
Enforcement and Audit sections investigate complaints regarding
alleged violations of the Real Estate Law, the Department's
regulations and other applicable laws.
The Office of Real Estate Appraisers currently licenses more
than 13,800 appraisers at four different license categories.
Additionally, OREA is responsible for oversight of appraisal
management companies (AMCs) and has issued approximately 200
certificates of registration to AMCs.
The Real Estate Advisory Commission was originally established
in 1935, but was repealed in 2005 through a Budget trailer bill
(SB 64, Chapter 77, Statutes of 2005), and a recommendation of
the California Performance Review.
This bill is the result of several oversight hearings held by
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the Senate Committee on Business, Professions and Economic
Development in March 2011 relating to the Department of Real
Estate, the Office of Real Estate Appraisers, and regulatory
boards and commissions under the Department of Consumer Affairs.