BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1381| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1381 Author: Weber (D) Amended: 8/26/16 in Senate Vote: 21 SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 7-1, 6/13/16 AYES: Hill, Block, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski NOES: Gaines NO VOTE RECORDED: Bates SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 9-0, 8/25/16 (Pursuant to Senate Rule 29.10) AYES: Hill, Bates, Block, Gaines, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski ASSEMBLY FLOOR: 65-10, 1/27/16 - See last page for vote SUBJECT: Professions and vocations: real estate appraisers: real estate brokers SOURCE: Author DIGEST: This bill provides that an "outdoor advertising representative" is not required to register as a broker with the Bureau of Real Estate; defines an "outdoor advertising representative" as specified; requires the owner or operator of the advertising display to maintain liability insurance; and requires the Bureau of Real Estate Appraisers to provide AB 1381 Page 2 information on its Web site regarding the continuing education courses taken by a licensee. Senate Floor Amendments of 8/26/16 define an "outdoor advertising representative", as specified, clarify that an "outdoor advertising representative" is not required to obtain a real estate broker's license, and require that the owner or operator of the advertising display maintain liability insurance coverage, as specified. ANALYSIS: Existing law: 1) Establishes the Outdoor Advertising Act that regulates outdoor advertising structures and signs. (Business and Professions Code (BPC) § 5200) 2) Declares that it is the intent of the Legislature to regulate advertising displays adjacent to highways included in the national system of interstate and defense highways or the federal-aid primary highway system. (BPC § 5228) 3) Authorizes the governing body of any city or city and county to enact ordinances requiring licenses or permits for the placing of advertising displays in view of any highway. (BPC § 5231) 4) States that a person engages in the business of outdoor advertising whenever, personally or through employees, that person places an advertising display, changes the advertising message of an advertising display that does not pertain exclusively to that person's business and is visible to a state highway or freeway. (BPC § 5300) 5) Prohibits a person to engage in or carry on the business or occupation of outdoor advertising without first having paid the license fee. The fee is payable annually in advance on the first day of July of each year to the Director of Transportation or his authorized agent. Requires each license remain in force for the term of one year from and after the first day of July, and may be renewed annually. (BPC § 5301) AB 1381 Page 3 6) Provides that persons acting in the capacity of a film location representative in connection with a transaction are not required to be licensed as a real estate broker. (BPC § 10133.4(a)) 7) Defines "film location representative" as an employee of a principal arranging for the use of real property for photographic purposes. (BPC § 10133.4(b)(1)) 8) Defines "principal" as the person who will use the real property for photographic purposes. (BPC § 10133.4(b)(2)) 9) Requires, in every transaction by a film location representative, the principal maintain liability insurance coverage for death, bodily injury, and property damage arising out of, or in connection with the use, ownership, or maintenance of real property which is the subject of the transaction. (BPC § 10133.4(c)) 10)Requires that the liability insurance not be less than five hundred thousand dollars ($500,000) per person or one million dollars ($1,000,000) per occurrence for personal injury and five hundred thousand dollars ($500,000) for property damage. (BPC § 10133.4(c)) 11)Requires that the liability insurance be issued by an insurance carrier authorized to sell such insurance in California. (BPC § 10133.4(c)) 12)Establishes the Real Estate Appraisers' Licensing and Certification Law (Act), administered by the Bureau of Real Estate Appraisers (BREA) within the Department of Consumer Affairs (DCA), which regulates the licensing of real estate appraisers. (BPC § 11300 et seq.) 13)Requires the BREA to provide information on the Internet in regarding, among other things, the status of every license and registration issued by the BREA. (BPC § 11317.2(a)) 14)Requires the Director of the DCA to adopt regulations for licensure which shall meet, at a minimum, the requirements and standards established by the Appraisal Foundation and the AB 1381 Page 4 federal financial institutions regulatory agencies acting pursuant to Section 1112 of the Financial Institutions Reform Recovery and Enforcement Act of 1989, Public Law 101-73 (FIRREA). (BPC § 11340(c)) 15)Requires the director to adopt regulations governing the process and procedures for renewal of a license, which shall include, but not be limited to, continuing education requirements, which shall be reported on the basis of four-year continuing education cycles. (BPC § 11360) This bill: 1) Provides that an "outdoor advertising representative" is not required to register as a broker with the Bureau of Real Estate (BRE). 2) Defines an "outdoor advertising representative" as an employee of a corporation or a limited liability company or a general partner of a partnership, that holds a license issued by the Department of Transportation to engage in the business of outdoor advertising, arranging for the lease or transfer of real property by his or her employer or an interest in real property solely for the placement of, access to, or operation of, an advertising display and appurtenances. 3) Requires, in every transaction involving the transfer, lease, or use of real property for the operation of an advertising display negotiated by an outdoor advertising representative, the owner or operator of the advertising display to maintain liability insurance coverage for death, bodily injury, and property damage arising out of, or in connection with, its acts, omissions, or operations on the real property. 4) Requires that the liability insurance not be less than five hundred thousand dollars ($500,000) per person or one million dollars ($1,000,000) per occurrence for personal injury and five hundred thousand dollars ($500,000) for property damage. 5) Requires that the liability insurance be issued by an insurance carrier authorized to sell such insurance in California. AB 1381 Page 5 6) Requires BREA to provide, on the Internet, the continuing education course information provided by a licensee when an individual applies for licensure renewal. 7) Removes obsolete references to the Office of Real Estate Appraisers and inserts the word "Bureau". Background According to the author, "AB 1381 would provide the public with additional information on the continuing education courses taken when an appraiser seeks to renew his or her license. By listing an appraiser's continuing education courses, the public will have a better understanding of who appraises their property. In addition, businesses would be better able to evaluate candidates and select appraisers with certain specializations. Additionally, AB 1381 clarifies that employees of outdoor advertising companies can continue to conduct business negotiations related to the placement and operation of outdoor advertising displays without seeking licensure as a real estate broker for specific transactions related to the placement, access, and operation of an outdoor advertising display. Since 1901, this has been industry practice, and with decades of experience, we have little evidence that the status quo needs to be changed. This issue was raised recently as the result of a signal inquiry raised at the BRE. This bill takes a measured approach explicitly detailing the types of transactions that outdoor advertising representatives may negotiate and further requires that the outdoor advertising company maintain appropriate liability insurance - a model that has served the film industry well. As the Little Hoover Commission and others continue their efforts to study appropriate levels of licensure, and how appropriate licensure levels can facilitate economic prosperity as well as maintain consumer protection, it is appropriate to codify this century-long practice." Broadway Heights Community Council and the author ultimately underscore, "AB 1381 would provide the public with additional information on the continuing education courses taken when an appraiser seeks to renew his or her license. By listing an appraiser's AB 1381 Page 6 continuing education courses, the public will have a better understanding of who appraises their property. In addition, businesses would be better able to evaluate candidates and select appraisers with certain specializations." FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee that analyzed the June 1, 2016 version, this bill will result in minor and absorbable costs. Given the new outdoor advertising provisions, additional costs are unknown. SUPPORT: (Verified8/25/16) Broadway Heights Community Council California State Outdoor Advertising Association Outfront Media OPPOSITION: (Verified8/25/16) None received The California State Outdoor Advertising Association writes that this bill "takes a measured approach explicitly detailing the types of transactions that outdoor advertising representatives may negotiate and further requires that the outdoor advertising company maintain appropriate liability insurance - a model that has served the film industry well." ASSEMBLY FLOOR: 65-10, 1/27/16 AYES: Achadjian, Alejo, Travis Allen, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, AB 1381 Page 7 Gomez, Gonzalez, Gordon, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Mullin, Nazarian, O'Donnell, Olsen, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Williams, Wood, Atkins NOES: Bigelow, Brough, Beth Gaines, Gallagher, Grove, Harper, Melendez, Obernolte, Steinorth, Wilk NO VOTE RECORDED: Chang, Gray, Kim, Patterson Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-4104 8/29/16 18:49:53 **** END ****