BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 706| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 706 Author: Price (D) Amended: 5/31/11 Vote: 21 SENATE BUS., PROF. & ECON. DEVEL. COMMITTEE : 7-2, 5/2/11 AYES: Price, Emmerson, Corbett, Correa, Hernandez, Negrete McLeod, Vargas NOES: Walters, Wyland SENATE APPROPRIATIONS COMMITTEE : 6-2, 5/26/11 AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg NOES: Walters, Runner NO VOTE RECORDED: Emmerson SUBJECT : Business and Professions SOURCE : Author DIGEST : This bill makes numerous enforcement enhancements to the Department of Real Estate (DRE) and the Office of Real Estate Appraisers (OREA); requires licensing boards to post information about licensees on the Internet, as specified; and makes updating and conforming changes. ANALYSIS : Existing law : 1. Provides for the licensure, and regulation of more than CONTINUED SB 706 Page 2 483,000 real estate brokers, real estate salespersons, and more than 22,000 mortgage loan originator license endorsements by DRE in the Business, Transportation and Housing Agency (BT&H). The Real Estate Commissioner (Commissioner), who serves as the chief executive of the Department, is appointed by the Governor, subject to Senate confirmation. The Commissioner is mandated to enforce the Real Estate Law. 2. Provides for the licensure and regulation of more than 13,800 real estate appraisers, and the certification of more than 200 appraisal management companies (AMCs) by OREA within BT&H. The Director of OREA (Director) serves as the chief executive of OREA, and is appointed by the Governor, subject to Senate confirmation. The Director is mandated to enforce the Real Estate Appraisers Licensing and Certification Law. 3. Requires specified boards within the Department of Consumer Affairs (DCA) to disclose on the Internet information on their respective licensees, including information on the status of every license, suspensions and revocations of licenses issued and other related enforcement actions. This bill: 1. States that protection of the public shall be the highest priority for DRE and OREA in exercising their licensing, regulatory, and disciplinary functions and that whenever the protection of the public is inconsistent with other interests sought to be promoted, the protection of the public shall be paramount. 2. Allows 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. Requires the settlement to identify the factual basis for the action being taken and the statutes or regulations violated. Specifies that a person who enters a settlement is not precluded from filing a petition, in the timeframe permitted by law, to modify the terms of the settlement or petition for early termination of probation, if probation is part of the CONTINUED SB 706 Page 3 settlement. States that any settlement executed against a licensee shall be considered discipline, by the Department. 3. Authorizes an administrative law judge to order a licensee in a disciplinary proceeding to pay, upon request of the Commissioner or Director, the reasonable costs of investigation and enforcement of the disciplinary case against the licensee (cost recovery). 4. When a licensee is placed on probation, authorizes the Commissioner or Director to, 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. 5. Requires 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 makes the funds available upon appropriation by the Legislature. 6. Requires the automatic suspension of any licensee who is incarcerated after conviction of a felony, regardless of whether the conviction has been appealed. Requires the DRE or OREA to notify the licensee in writing of the suspension and of his or her right to elect to have the issue of penalty heard, as specified. 7. Requires a licensee to submit a written report of any of the following to the DRE or OREA: The bringing of an indictment or information charging a felony against the licensee; arrest of the licensee; conviction of the licensee, including any felony or misdemeanor; and, any disciplinary action taken by another licensing entity or authority of this state or of another state. Requires the report to be made in writing within 30 days; and that failure to make a report shall constitute a cause for discipline. 8. Requires the Secretary of BT&H, by January 31, 2012, to appoint a DRE Enforcement Program Monitor (Monitor), whose duties include: CONTINUED SB 706 Page 4 A. Monitor and evaluate DRE's disciplinary system and procedures and report his or her findings, as specified, to the DRE and the Legislature no later than August 1, 2012 and every six months thereafter, as specified. B. Make his or her reports available to the public and to the media. 9. Sunsets the provisions relating to the Monitor on January 31, 2014. 10.Provides the following regarding posting information about licensees on the internet pursuant to BPC Section 27: A. Requires the posted information to include: suspensions, revocations, and other related enforcement action, including accusations filed pursuant to the Administrative Procedures Act. B. Deletes certain healing arts boards within DCA from the requirements to post licensee information in the Internet. C. Additionally requires the following to post information on the Internet: (1) The Board of Accountancy. (2) The Architects Board. (3) The State Athletic Commission. (4) The State Board of Barbering and Cosmetology. (5) The State Board of Guide Dogs for the Blind. (6) The State Board of Chiropractic Examiners. (7) The Department of Real Estate. (8) The Office of Real Estate Appraisers. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes According to the Senate Appropriations Committee: Fiscal Impact (in thousands) CONTINUED SB 706 Page 5 Major Provisions 2011-12 2012-13 2013-14 Fund DRE oversight ----approximately $1,000 annually Special* potentially offset by fees----- DRE enforcement monitor $83 $166 $166 Special* DRE admin $144 $288 $288 Special* OREA admin $170 $339 $339 Special** Revenue unknown revenue from Special** reimbursement from licensees for investigations Court administration approximately $1,000 annually General Advisory commission $20 $40 $40 Special* * Real Estate Fund **Real Estate Appraisers Fund JJA:do 5/31/11 Senate Floor Analyses SUPPORT/OPPOSITION: NONE RECEIVED **** END **** CONTINUED