BILL ANALYSIS                                                                                                                                                                                                    

                                                                    SB 1196  

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          Date of Hearing:  August 3, 2016


                               Lorena Gonzalez, Chair

          SB 1196  
          (Hill) - As Amended June 20, 2016

          |Policy       |Business and Professions       |Vote:|16 - 0       |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |

          Urgency:  No  State Mandated Local Program:  YesReimbursable:   

          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  


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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          4)Requires that the suspension be rescinded and the license  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            of guilty is withdrawn by the licensee. 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.


          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)  


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