BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 1196|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: SB 1196
Author: Hill (D)
Amended: 4/12/16
Vote: 21
SENATE BUS, PROF. & ECON. DEV. COMMITTEE: 9-0, 4/18/16
AYES: Hill, Bates, Berryhill, Block, Galgiani, Hernandez,
Jackson, Mendoza, Wieckowski
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: Bureau of Real Estate: Bureau of Real Estate
Appraisers
SOURCE: Author
DIGEST: This bill (1) adds a four-year sunset date to the
Bureau of Real Estate and Bureau of Real Estate Appraisers; (2)
provides the Real Estate Commissioner the authority to suspend
the license of a real estate licensee who has entered into a
guilty plea for a felony or a crime substantially related to the
qualifications, functions, or duties of a real estate license;
and (3) requires an applicant for a Real Estate Appraiser's
license to complete a course and examination that tests the
applicant's knowledge of state and federal laws relating to the
practice of appraising.
ANALYSIS:
SB 1196
Page 2
Existing law:
1) Establishes the Real Estate Law, administered by the Bureau
of Real Estate (CalBRE or Bureau), within the Department of
Consumer Affairs (DCA), which licenses and regulates real
estate salespersons, brokers, and mortgage loan originators.
(BPC § 1000 et seq.)
2) Provides that the Real Estate Commissioner (Commissioner) may
revoke or suspend a real estate license who entered a plea of
guilty or nolo contendere to, or was found guilty of, or
convicted of, a felony, or a crime substantially related to
the qualifications, functions, or duties of a real estate
licensee, after the time for appeal has elapsed or the
judgment of conviction has been affirmed on appeal. (BPC §
10177(b))
3) Establishes the Real Estate Appraiser's Law, administered by
the Bureau of Real Estate Appraisers (BREA), within the DCA,
which licenses and regulates real estate appraisers. (BPC §
11300 et seq.)
4) Requires the Bureau Chief to adopt regulations governing the
process and procedures for renewal of a license to include,
but not be limited to, continuing education (CE)
requirements, which will be reported on the basis of
four-year CE cycles. (BPC § 11360)
This bill:
1) Requires CalBRE and BREA to be reviewed by the appropriate
policy committees in four years.
2) Provides the Commissioner the authority to suspend the
SB 1196
Page 3
license of a real estate licensee who has entered into a
guilty plea for a felony or a crime substantially related to
the qualifications, functions, or duties of a real estate
license.
3) Requires the Bureau to notify person whose license is subject
to suspension of his or her right to elect to have the issue
of the suspension heard.
4) Requires that the suspension be rescinded and the license
reinstated to its status prior to the suspension if the plea
of guilty is withdrawn by the licensee.
5) Requires an applicant for a Real Estate Appraiser's license
to complete a Bureau approved course and examination that
tests the applicant's knowledge of state and federal laws
relating to the practice of appraising.
6) Makes other technical changes.
Background
1)Review of CalBRE - issues identified and recommended changes.
The following are some of the major issues pertaining to
CalBRE along with background information concerning the
particular issue. Recommendations were made by the Senate
Business, Professions and Economic Development Committee staff
regarding the particular issue areas which needed to be
addressed.
a) Issue: Licensee Suspension
Background. Currently, BPC Section 10177 (b) is written in
such a way that it requires "the time for appeal" to elapse
on a guilty plea before CalBRE can use it for disciplinary
action. The full language for BPC Section 10177(b) reads:
SB 1196
Page 4
BPC § 10177. "The commissioner may suspend or revoke the
license of a real estate licensee, delay the renewal of a
license of a real estate licensee, or deny the issuance
of a license to an applicant, who has done any of the
following, or may suspend or revoke the license of a
corporation, delay the renewal of a license of a
corporation, or deny the issuance of a license to a
corporation, if an officer, director, or person owning or
controlling 10 percent or more of the corporation's stock
has done any of the following:
(b) Entered a plea of guilty or nolo contendere to, or
been found guilty of, or been convicted of, a felony, or
a crime substantially related to the qualifications,
functions, or duties of a real estate licensee, and the
time for appeal has elapsed or the judgment of conviction
has been affirmed on appeal, irrespective of an order
granting probation following that conviction, suspending
the imposition of sentence, or of a subsequent order
under Section 1203.4 of the Penal Code allowing that
licensee to withdraw his or her plea of guilty and to
enter a plea of not guilty, or dismissing the accusation
or information."
CalBRE has seen instances where major criminal cases involving
real estate fraud have taken years to work their way through
federal and state criminal courts. In these cases, CalBRE has
seen licensees who were defendants plead guilty relatively early
in the process as part of a plea bargain that furthers the
prosecution of other defendants. Those guilty pleas may not
result in a conviction for months, if not years, as the case
against the other defendants proceeds. As presently written in
statute, that guilty licensee (who has entered his or her own
voluntary and knowing plea) may continue to practice real
estate.
The ability for the Bureau to take swift action against a
licensee and promote public health and safety appears to be
limited by this section of statute. Without the authority to
SB 1196
Page 5
suspend a license from a real estate licensee who voluntarily
enters a guilty plea to a felony or substantially related crime,
real estate licensees are able to continue to practice real
estate.
Recommendation and proposed statutory change. The
Legislature may wish to grant the Commissioner authority to
suspend the license of a real estate licensee who has
entered into a guilty plea for a felony or a crime
substantially related to the qualifications, functions, or
duties of a real estate license.
This bill makes the following changes to the Real Estate Law
related to licensee suspension:
Provides the Commissioner authority to suspend the
license of a real estate licensee who has entered into a
guilty plea for a felony or a crime substantially related
to the qualifications, functions, or duties of a real
estate license. The language would be added onto BPC §
10177(b). The language reads:
"Notwithstanding the above, and with the recognition that
sentencing may not occur for months or years following
the entry of a guilty plea, the commissioner may suspend
the license of a real estate licensee upon the entry by
the licensee of a guilty plea to the crimes mentioned
above. If the plea of guilty is withdrawn, the suspension
shall be rescinded and the license reinstated to its
status prior to the suspension. The Bureau shall the
notify person whose license is subject to suspension of
his or her right to elect to have the issue of the
suspension heard in accordance with Section 10100 of the
Business and Professions Code."
2)Review of the BREA - issues identified and recommended
changes. The following are some of the major issues
pertaining to BREA along with background information
concerning the particular issue. Recommendations were made by
SB 1196
Page 6
the Senate Business, Professions and Economic Development
Committee staff regarding the particular issue areas which
needed to be addressed.
a) Issue: Licensee Education
Background. Prior to licensure, applicants are not required
take a course or pass an exam to show fluency in federal
and state laws and regulations. Only upon renewal of the
licensure must real estate appraisers demonstrate their
knowledge of federal and state laws and regulations.
Real estate appraiser licenses must be renewed every two years.
However, there are two separate CE requirements in order to
renew a license. All licensed appraisers must meet minimum CE
requirements before renewing their license. A total of 56 hours
of CE is required during the four-year continuing education
cycle, including the following mandatory courses for all license
categories:
Seven-hour National Uniform Standards of
Professional Appraisal Practice (USPAP) course-required
every two years.
Four-hour Bureau approved course entitled "Federal
and State Laws and Regulations"- required every four
years. (BPC § 11360(a)).
In practical terms, this requires a renewal of the seven-hour
USPAP course every two years on its own, and a full CE (56
hours) renewal every four years. Generally the requirement is a
full CE 56 hour renewal every other two year cycle, with a
reduced seven-hour CE renewal cycle in between.
CE courses or seminars must cover appraisal related topics
including subjects such as land use planning, appraisal computer
applications, cost estimating, and green building appraisals.
SB 1196
Page 7
Recommendation and proposed statutory change. To ensure
adequate public protection and curtail unnecessary complaint
investigations, the Legislature may wish to require applicants
for a real estate appraiser license to initially demonstrate
their knowledge of the federal and state laws regulating the
appraisal profession. The most effective way to accomplish this
would be to require applicants, prior to licensure, to complete
a course and pass an examination that would include questions
regarding federal and state laws and regulations.
This bill makes the following changes to the Appraisers Law
related to licensee education:
Requires an applicant for a real estate appraiser's license to
complete a Bureau-approved course and examination testing the
applicant on federal and state laws regulating the appraisal
profession.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified5/10/16)
None received
OPPOSITION: (Verified5/10/16)
None received
Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-4104
5/11/16 15:58:19
SB 1196
Page 8
**** END ****