BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1807| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1807 Author: Bonta (D) Amended: 8/15/16 in Senate Vote: 21 SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 9-0, 6/27/16 AYES: Hill, Bates, Block, Gaines, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16 AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen ASSEMBLY FLOOR: 78-0, 6/1/16 - See last page for vote SUBJECT: Real estate licensees SOURCE: California Association of Realtors DIGEST: This bill allows a licensee of the Bureau of Real Estate to petition the Real Estate Commissioner to remove his or her notice of disciplinary action from the Bureau's Internet Web site because the information is no longer necessary to prevent a credible risk to the public, as specified. ANALYSIS: Existing law: 1) Establishes within the Department of Consumer Affairs a AB 1807 Page 2 Bureau of Real Estate (BRE or Bureau), the chief officer of which is named the Real Estate Commissioner (Commissioner); the BRE is mandated to protect the public by exercising its licensing, regulatory, and disciplinary functions; whenever the protection of the public is inconsistent with other interests sought to be promoted, the protection of the public shall be paramount. (Business and Professions Code (BPC) § 10000, et seq.) 2) Provides that the Commissioner enforce the provisions of the Real Estate Law; has full power to regulate and control the issuance and temporary or permanent revocation of all licenses to be issued; and, perform all other acts and duties necessary for their enforcement. (BPC § 10071) 3) Provides that the Commissioner may adopt, amend, or repeal rules and regulations that are reasonably necessary for the enforcement. (BPC § 10080) 4) Requires the Commissioner to provide on the Internet information regarding the status of every license issued, including information on suspensions and revocations of licenses, accusations filed pursuant to the Administrative Procedure Act relative to persons or businesses subject to licensure or regulation; provides that the information not include personal information, except for the licensee's address of record. (BPC § 10083.2) 5) Specifies actions by a licensee for which the Commissioner or a designee may issue a citation and fine, including when a person who does not possess a real estate license, prepaid rental listing service license, or a real estate broker license is engaged or has engaged in activities for which the respective license is required; or when a licensee is violating or has violated provisions, as specified. (BPC § 10080.9) 6) Authorizes the Commissioner to promulgate regulations for citations and fines associated with a violation or violations AB 1807 Page 3 of the Real Estate Law; requires the citation to be provided in writing with particularities and nature of the violation; provides that the citation may be made by certified mail at the address of record of a licensee cited, or to the last known mailing, business, or residence address of an unlicensed person or entity cited; requires time be allowed to comply with an order of correction that is specified in the citation; and provides that the person receiving the citation may request an extension of the time to comply with the order if the cited person or entity is unable to complete the correction or pay the fine within the time specified. (Title 10 California Code of Regulations §§ 2907.1-2907.4) This bill: 1) Declares that it is appropriate for the BRE to continue reporting on its license verification Internet Web page, which is hosted on the BRE Web site when discipline has been imposed upon a licensee for conduct that indicates a credible risk of harm to the public; and that the BRE may consider and grant on a case-by-case basis a licensee's petition to discontinue the reporting of past disciplinary actions when the petitioning licensee has demonstrated to the satisfaction of the Commissioner that the continued reporting is no longer required in order to avoid or reduce such a risk to the public. 2) Declares that the BRE may require a petitioner to pay in advance of consideration a fee to defray costs associated with consideration of the petition. 3) Declares that the BRE is not authorized or required to destroy public records maintained pursuant to the California Public Records Act. 4) Declares that the Legislature intends to establish a process by which a licensee may petition the BRE to remove a notice of past discipline from the license verification Internet Web site of the BRE. AB 1807 Page 4 5) Provides that a licensee may petition the Commissioner to remove from the posting of discipline, as specified, an item that through passage of time and evidence of rehabilitation is no longer required in order to prevent a credible risk to members of the public utilizing licensed activity of the licensee. 6) Authorizes the Commissioner, upon petition by a licensee accompanied by a fee, to remove from the posting of a discipline that has been posted on the BRE's Internet Web site for no less than 10 years and for which the licensee provides evidence of rehabilitation indicating that the notice is no longer required in order to prevent a credible risk to members of the public utilizing licensed activity of the licensee. 7) Requires the Commissioner, when evaluating a petition, to take into consideration other violations that present a credible risk to the members of the public since the posting of discipline requested for removal. 8) Defines "posted" as the date of disciplinary action taken on the BRE Web site. 9) Authorizes BRE to develop, through regulations, the amount of the fee and the minimum information to be included in a licensee's petition, including, but not limited to, a written justification and evidence of rehabilitation. 10)Requires the petition process to commence January 1, 2018, or upon completion of regulations to implement the process, whichever comes first. Background AB 1807 Page 5 According to the author, "The current disciplinary system under the BRE 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 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 simply provides the BRE Commissioner the ability to determine how long certain disciplinary actions should be posted online, ensuring that rehabilitated licensees are operating on a level playing field." 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 BRE, even if the violation for which the licensee was 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. The Commissioner already has the authority to review disciplinary actions against a licensee and evaluate whether the disciplinary action should be modified. This bill provides an avenue for licensees to request a disciplinary action on the BRE's Web site be removed if the Commissioner agrees that there is evidence of rehabilitation and the licensee is not a potential risk to consumers. FISCAL EFFECT: Appropriation: Yes Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee, this bill would incur minor costs to adopt regulations specifying what information must be provided by a petitioner to BRE and ongoing cots for BRE to evaluate the petitions from licensees and their AB 1807 Page 6 past disciplinary history. SUPPORT: (Verified8/11/16) California Association of Realtors (source) OPPOSITION: (Verified8/11/16) Department of Finance ARGUMENTS IN SUPPORT: The California Association of Realtors (Sponsor) writes in support, "This bill creates a process by which a licensee can have an old record of discipline removed from [the BRE] website profile if the [Commissioner] determines that protection of the public interest and public welfare will be adequately maintained. Additionally, the process would be paid for by the petitioner thereby avoiding any new costs to the [BRE]." ARGUMENTS IN OPPOSITION: The Department of Finance argues that this bill "results in costs not included in the Administration's current fiscal plan. The Bureau [also] did not start posting disciplinary actions to their website until 2011." ASSEMBLY FLOOR: 78-0, 6/1/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gray, Grove, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, AB 1807 Page 7 Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NO VOTE RECORDED: Gordon, Harper Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-4104 8/15/16 20:10:09 **** END ****