BILL ANALYSIS Ó
SB 1196
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1196
(Hill) - As Amended June 20, 2016
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|Policy |Business and Professions |Vote:|16 - 0 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY: This bill makes several changes regarding the Bureau
of Real Estate (BRE) and the Bureau of Real Estate Appraisers
(BREA) based on recommendations made during the legislative
sunset review process. Specifically, this bill:
1)Adds a four year sunset review date to the BRE and BREA.
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
licensee.
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3)Requires the BRE 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4)Requires that the suspension be rescinded and the license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of guilty is withdrawn by the licensee.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 BREA-approved course and examination that tests the
applicant's knowledge of state and federal laws relating to
the practice of appraising.
FISCAL EFFECT:
1)Minor and absorbable costs to BRE to handle the additional
requirements for suspended licenses.
2)Minor and absorbable costs to BREA to update the application
for a real estate appraiser and the applicant's packet.
COMMENTS:
1)Purpose. According to the author, "This bill is necessary to
add sunset dates for BRE and BREA in order to ensure oversight
over the real estate and appraiser profession. The health,
safety, and welfare of consumers are protected by a
well-regulated real estate and appraiser profession. BRE and
BREA have shown over the years a strong commitment to improve
the Bureaus' overall efficiency and effectiveness and has
worked cooperatively with the Legislature and this Committee
to bring about necessary changes. While the Bureaus need to
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review some of their enforcement and licensing practices, BRE
and BREA should both be given a four-year sunset date so that
the Committee may review once again if the issues and
recommendations in the background paper and others of the
Committee have been addressed."
2)Background. The BRE currently licenses 405,985 persons in
California. Licensed salespersons (265,645) outnumber
licensed brokers (136,232) nearly two to one. Last fiscal
year, BRE issued over 25,000 new licenses and renewed over
79,000. BRE's enforcement efforts resulted in 185 license
denials, 705 licensing disciplinary actions (revocations,
surrenders, suspensions and public reprovals) and 62 Desist
and Refrain Orders. Moreover, BRE issued over 2,350 final
public reports, which translated to 30,641 new housing units
being offered for sale in California in FY 2014/2015.
The BREA, entirely funded by licensing fees, is a single
program comprised of two core components, licensing and
enforcement. The Licensing Division implements the minimum
requirements for licensure, according to criteria established
by the federal government and California law. The Enforcement
Division investigates the background of applicants, licensees,
and Appraisal Management Companies to ensure they meet the
standards for licensure. The Enforcement Division also
investigates complaints of violations of California law and
national appraisal standards.
3)Sunset Review Process. In March of 2016, the Assembly Business
and Professions Committee and the Senate Business, Professions
and Economic Development Committee (Committees) conducted
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multiple joint oversight hearings to review 11 regulatory
boards within the DCA and one regulatory entity outside of the
DCA. The sunset bills, including this one, are intended to
implement legislative changes recommended in the respective
background reports drafted by the Committee staff for the
agencies reviewed this year.
With respect to BRE and BREA, the provisions governing these
bureaus would not be repealed if the sunset date is not
extended; rather, the sunset date serves to subject the
bureaus to review by the appropriate policy committees on a
regular basis.
4)Current Legislation. SB 710 (Galgiani), pending concurrence
on the Senate Floor, corrects a drafting error that requires
the listing of a company name and a responsible broker's
license number on all "team" advertising and instead requires
only one or the other to be listed.
5)Prior Legislation. SB 706 (Price), Chapter 712, Statutes of
2011, made numerous enforcement enhancements to the former
Department of Real Estate and the former Office of Real Estate
Appraisers; required licensing boards to post information
about licensees on the Internet, as specified; and made
updating and conforming changes.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081
SB 1196
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