BILL ANALYSIS Ó
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Date of Hearing: May 4, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1807 (Bonta) - As Amended April 18, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill allows a licensee of the Bureau of Real Estate
(Bureau) to petition the Real Estate Commissioner (Commissioner)
to remove his or her notice of disciplinary action from the
Bureau's Internet Web site if that action has been noticed for
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at least ten years and the licensee provides evidence of
rehabilitation indicating the information is no longer necessary
to prevent a credible risk to the public. The bill further
allows the Bureau to charge a fee to cover the costs of
considering a petition, and requires the Bureau to develop
regulations establishing the minimum information to be included
in a licensee's petition.
FISCAL EFFECT:
1)The Bureau anticipates significant costs beginning in FY
2020-21 of approximately $340,000 (special funds) and $292,000
(special funds) ongoing for three positions for the associated
workload to process, review and make recommendations on each
request received. These costs, which are fee supported, assume
the same type of staffing currently used by Bureau for similar
workload for existing Bureau functions. (See Comment #3
below.)
2)The Bureau notes that certain licenses generated significant
disciplinary actions between 2004 and 2009, during the real
estate "bubble", and from 2008 to the present due to the
bursting of the real estate bubble and subsequent market
decline. For these reasons the Bureau anticipates the workload
impact of this bill may not decline until approximately 2030.
COMMENTS:
1)Purpose. According to the author, "The current disciplinary
system under the Bureau serves an important role in ensuring
consumers have access to a real estate licensee's disciplinary
history. That information serves as a valuable tool in
protecting consumers and promoting transparency. However, this
tool has also negatively impacted a small class of real estate
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licensees who have had minor disciplinary actions on their
record for many years. Even after the licensee has been
rehabilitated and the license penalty has been removed, there
isn't an opportunity to have that action removed from the
online database."
This bill provides a self-funding process for licensees to
petition to have a disciplinary action removed from the
Bureau's website
2)Background. A person wishing to engage in the real estate
business and to act in the capacity of, advertise, or assume
to act as a real estate broker or real estate salesperson
within the State of California must obtain a license from the
Bureau. Currently, there are approximately 535,000 real estate
licensees in California.
Under current law, low-level disciplinary actions that the
Bureau addresses via citation and fine do not appear on its
website. The Bureau investigates these situations following
standards set out in regulations. When a violation warrants
disciplinary action against a licensee, the Commissioner is
required to post a notice of discipline on the Bureau's Web
site so that the information is available to a consumer who
searches specifically for that licensee. These notices remain
on the Web site indefinitely.
According to the California Association of Realtors, some
licensees have used this information to gain a competitive
advantage over licensees with a record of discipline from the
Bureau, even if the violation for which the licensee was
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disciplined is several years old, the licensee has complied
with corrective actions specified in the citation, and the
violation is no longer relevant to the licensee's ability to
operate.
3)Clarifying Amendments. Staff notes that the Bureau is
interpreting this bill to mean that all past disciplinary
actions would not be eligible to be removed from the Bureau's
website until a minimum of ten years after the enactment SB
706 (Price), Chapter 712, Statutes of 2011; therefore they
don't anticipate costs until FY 2020-21. If this is not the
author's intent, clarifying amendments may be needed.
4)Prior Legislation. SB 706 (Price), Chapter 712, Statutes of
2011, established the requirement that disciplinary actions be
posted to the Bureau of Real Estate's website.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081
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