BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 706|
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                                 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 
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             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 

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             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:


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             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)

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           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

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