BILL ANALYSIS Ó
SB 1196
Page 1
SENATE THIRD READING
SB
1196 (Hill)
As Amended August 19, 2016
Majority vote
SENATE VOTE: 38-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Holden, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Wagner, Weber, Wood, | |
| | |Chau | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Business & |16-0 |Salas, Brough, Baker, | |
|Professions | |Bloom, Campos, | |
| | |Chávez, Dahle, Dodd, | |
| | |Eggman, Gatto, Gomez, | |
| | |Holden, Jones, | |
SB 1196
Page 2
| | |Mullin, Ting, Wood | |
| | | | |
| | | | |
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SUMMARY: Subjects the Bureau of Security and Investigative
Services (BSIS) to review by the appropriate committees of the
Legislature, and makes various changes to provisions in the
Alarm Company Act, Locksmith Act, Private Investigator Act,
Private Security Services Act, Proprietary Security Services
Act, and Collateral Recovery Act to improve the oversight,
enforcement and regulation by the BSIS of licensees under each
Act; adds a sunset review date for the Bureau of Real Estate
(CalBRE) and Bureau of Real Estate Appraisers (BREA), and makes
various changes to provisions in the Real Estate Law and the
Real Estate Appraisers' Licensing and Certification Law to
improve the oversight, enforcement and regulation by the CalBRE
and BREA, and makes other technical changes. Specifically, this
bill:
1)Subjects the BSIS to review by the appropriate committees of
the Legislature by January 1, 2020.
2)Updates the fine and citation structure for violations of
provisions in the Alarm Company Act, Private Investigator Act,
Private Security Services Act, and Collateral Recovery Act, as
specified.
3)Requires the insurer of any insurance policy secured by a
licensee list the BSIS as the certificate holder for the
purposes of receiving notifications related to the policy's
status.
4)Requires a licensee who is a private investigator to notify
the BSIS within 30 days of any change in its corporate
officers, or members required to be named.
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5)Provides that a licensee or qualified manager who possesses a
valid firearms qualification card may carry a firearm capable
of being concealed upon the person in a concealed manner if he
or she complies with Penal Code Section 26150.
6)Requires that a denial of a firearms qualification card be in
writing and with a description of the basis for denial, inform
the applicant that a review by the Private Investigator
Disciplinary Review Committee to contest the denial must be
requested within 30 days following the issuance of the denial;
specify that no review will be granted to an individual who is
otherwise prohibited from carrying a firearm.
7)Prohibits a person required to be registered as a security
guard from carrying or using a firearm unless he or she
possesses a valid and current firearms permit that is
associated with a valid and current security guard
registration.
8)Requires that a security guard carry on his or her person,
while on duty, a valid and current security guard registration
card, or if pending receipt of the registration card after the
bureau's approval, a hardcopy printout of the approved
security guard registration information, as provided, and a
valid picture identification.
9)Requires that a security guard carry on his or her person,
while on duty either a valid and current firearms permit, or
if pending receipt of the permit after the BSIS approval, a
hardcopy printout of the approved firearms permit information,
as provided, and a valid picture identification.
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10) Requires a person registered as a patrolperson, in addition
to a person who is a registered security guard, and his or her
employer to deliver to the director of the BSIS, within seven
days, a written report describing fully the circumstances
surrounding any incident involving the discharge of any
firearm in which he or she was involved while acting within
the scope of his or her employment.
11) Specifies that a person entering the employ of a licensee
to perform the functions of a security guard or security
patrolperson is exempt from completing a course of study in
the exercise of power to arrest prior to being assigned to a
duty location if that person is a peace officer, as defined,
and has successfully completed a course of study in the
exercise of power to arrest approved by the Commission on
Peace Officer Standards and Training, or is a federal
qualified law enforcement officer, as defined, and has
successfully completed a course of study in the exercise of
power to arrest.
12) Permits a duly appointed peace officer, as defined, or a
federal qualified law enforcement officer, as defined, and who
has written approval from his or her primary employer, to
carry a firearm while working as a security guard.
13) Exempts from the requirement for a licensee, qualified
manager of a licensee, or a security guard who, in the course
of his or her employment, may be required to carry a firearm,
prior to carrying a firearm, to complete a course of training
in the carrying and use of firearms and receive a
qualification card, if that person is a peace officer, as
defined, or a federal qualified law enforcement officer, as
defined, who has completed a course of study in the use of
firearms.
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14) Provides that agreements entered into on or after January
1, 2017, that include an automatic renewal provision renewing
the agreement for a period of more than one month, must
include a clear and distinct disclosure, as specified,
separate from the terms and conditions to advise the consumer
that the agreement contains the automatic renewal provision;
require the consumer to acknowledge the disclosure by signing
or initialing it; and, void invalidate the automatic renewal
provision if it is not separately acknowledged.
15) Requires the BSIS to issue a firearms permit, beginning
January 1, 2018, when specified conditions are met, including
among others:
a) The applicant is a licensee, qualified manager of a
licensee, or a registered security guard, subject to
specified provisions, and the firearms permit is associated
with a security guard registration regardless of any other
license possessed or associated with the firearms permit;
and,
b) The applicant is a registered security guard and he or
she has been found capable of exercising appropriate
judgment, restraint, and self-control, for the purposes of
carrying and using a firearm during the course of his or
her duties.
c) The applicant has filed with the bureau a classifiable
fingerprint card, a completed application for a firearms
permit, as specified. In lieu of a classifiable
fingerprint card, the applicant may submit fingerprints
into an electronic fingerprinting system administered by
the Department of Justice (DOJ). The terminal operator may
charge a fee sufficient to reimburse it for the costs
incurred in providing this service.
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16) Prohibits the BSIS from issuing a firearms permit,
beginning January 1, 2018, if the applicant:
a) Is a registered security guard who has been found
incapable, at the time of application, of exercising
appropriate judgment restraint, and self-control for the
purposes of carrying and using a firearm during the course
of his or her duties; however, specifies that an applicant
who has been denied a permit for this reason may reapply
for the permit after 12 months from the date of denial and
that this application will be treated as an initial
application; and,
b) Is a qualified manager of a licensee, who within the
past 12 months, has been found incapable of exercising
appropriate judgment restraint, and self-control for the
purposes of carrying and using a firearm during the course
of his or her duties, as specified.
17) Requires the BSIS to seek an emergency order against the
holder of a firearms permit if, after the BSIS's investigation
relating to the following events, the BSIS determines that the
permit holder presents an undue hazard to the public safety
that may result in substantial injury to another:
a) Receipt of subsequent arrest information for assault,
battery, or any use of force or violence on any person
committed by the permit holder;
b) A report from a BSIS-approved firearms training facility
or instructor;
c) A report from the permit holder's employer of former
employer, or a complaint filed by any member of the public,
that the permit holder may be a threat to public safety;
or,
d) The permit holder's appropriate judgment, restraint, and
self-control pursuant to the assessment required under
Business and Professions Code (BPC) Section 7583.47.
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18) Exempts from the requirement for a licensee, qualified
manager of a licensee, or a security guard who wishes to carry
a baton in the performance of his or her duties, to qualify to
carry the weapon, if that person is a peace officer, as
defined, or a federal qualified law enforcement officer, as
defined, who has completed a course of study in the use of
batons.
19) Permits the director of the BSIS to assess fines for
specified violations, including among others, carrying or
using a firearm while performing duties not related to the
qualifying license or registration to which the BSIS
associated the firearms permit.
20) Requires the BSIS to deny a firearms permit to any
applicant, who within the past 12 months, has been found
incapable of exercising appropriate judgment restraint, and
self-control for the purposes of carrying and using a firearm
during the course of his or her duties, to the assessment
required under BPC Section 7583.47.
21) Requires the BSIS to issue a firearms permit when specified
conditions are met, including among others, the applicant is a
licensee, qualified manager of a licensee, a designated branch
office manager of a licensee, or a registered alarm agent,
subject to specified provisions, including among others, that
the applicant has filed with the bureau a classifiable
fingerprint card, a completed application for a firearms
permit, as specified. In lieu of a classifiable fingerprint
card, the applicant may submit fingerprints into an electronic
fingerprinting system administered by the DOJ. The terminal
operator may charge a fee sufficient to reimburse it for the
costs incurred in providing this service.
22) Requires that a denial of a firearms permit on the basis of
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the results of an assessment, required for a permit associated
with a security guard registration, be in writing and with a
description of the basis for denial; and, inform the applicant
that he or she must request within 30 days following the
issuance of the denial a hearing to contest the denial.
23) Prohibits the BSIS from issuing a firearms permit, if the
applicant is a licensee, qualified manager of a licensee, a
designated branch office manager of a licensee, or a
registered alarm agent, who within the past 12 months, has
been found incapable of exercising appropriate judgment
restraint, and self-control for the purposes of carrying and
using a firearm during the course of his or her duties, to the
assessment required under BPC Section 7583.47.
24) Exempts a duly appointed peace officer, as defined, or a
federal qualified law enforcement officer, as defined, and who
has met specified provisions, from the prohibition for a
licensee, qualified manager, branch office manager, or alarm
agent to carry, use, or possess a loaded or unloaded firearm
in the course and scope of his or her employment, whether or
not it is serviceable or operative, unless he or she has in
his or her possession a valid and current firearms
qualification card.
25) Prohibits a licensee, qualified manager, branch office
manager, or alarm agent to use a firearm which is in violation
of law, or in knowing violation of the standards for carrying
and usage of firearms, as taught in the course of training in
the carrying and use of firearms, including, but not limited
to, carrying or using a firearm while performing duties not
related to the qualifying license, certificate, or
registration to which the BSIS associated the firearms permit.
26) Provides that if a licensee fails to provide proof of the
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required insurance upon request by the BSIS, the license is
subject to suspension and is automatically suspended until the
licensee provides proof to the BSIS of compliance with the
insurance coverage requirement; prior to an automatic
suspension, the BSIS is required to notify the licensee in
writing that he or she has 30 days to provide proof to the
BSIS of having the required insurance; and, if the licensee
fails to provide proof of insurance coverage within the notice
period, the BSIS may automatically suspend the license.
27)Requires every agreement, beginning January 1, 2017,
including but not limited to, materials to be provided for the
installation of an alarm system, and any amendments to the
provisions of an initial agreement, to be in writing, except
as provided; require each initial agreement to contain, among
other things, a disclosure that alarm company operators are
licensed and regulated by the BSIS, Department of Consumer
Affairs (DCA), including the BSIS's current address and
contact information.
28) Adds a four year sunset review date to the CalBRE and BREA.
29) Permits the Commissioner 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.
30) Requires the CalBRE to notify person whose license is
subject to suspension of his or her right to elect to have the
issue of the suspension heard.
31) 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.
32) Requires an applicant for a Real Estate Appraiser's license
to complete a BREA-approved course and examination that tests
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the applicant's knowledge of state and federal laws relating
to the practice of appraising.
33) Makes other technical changes.
FISCAL EFFECT: The provisions of this bill related to the BSIS
will result in the following costs:
1)Costs to conduct compliance inspections of firearms training
facilities are expected to be minor and absorbable. The BSIS
currently has 367 licensed firearm training facilities and
assumes a 5% increase annually.
2)Costs of $40,000 in the current year, $282,000 in fiscal year
2017-18, and $225,000 in 2018-19 and ongoing to the BSIS
(Private Security Services Fund), and 3.0 Personnel Years (PY)
of licensing staff, to develop and process psychological
assessments submitted with Firearm Permit applications. The
2017-18 cost includes $100,000 in contract costs.
3)Onetime costs of approximately $397,000 to add psychological
testing and firearm inspection codes to the BreEZe system.
4)Unknown penalty and fine revenue gains.
5)The Committee notes that the BSIS has projected expenditures
of approximately $12.1 million (mainly from the Private
Security Services Fund) annually, supporting 51.4 PY. This is
offset by the collection of approximately $12.1 million in fee
revenues. The Committee also notes that the Private Security
Services Fund and the Private Investigator Fund have revenues
and expenditures that are in balance, and both funds have
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healthy reserves to fund the additional expenditures related
to this bill.
According to the August 1, 2016 Assembly Appropriations
Committee, the provisions of this bill related to the CalBRE and
BREA will result in the following costs:
1)Minor and absorbable costs to CalBRE 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:
Purpose. This bill is sponsored by the author. According to
the author, "[This bill] ensures that CalBRE and BREA are
reviewed by the appropriate policy committees of the Legislature
in four years (2021). The bill additionally 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 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.
The bill also includes a number of consumer protection and
public safety reforms related to the operations of BSIS and
ensures that BSIS is reviewed by the appropriate policy
committees of the Legislature."
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Background. Joint Oversight Hearings and Sunset Review of the
(Department of Consumer Affairs) DCA Licensing Boards. In March
of 2015 and 2016, the Assembly Business and Professions
Committee and the Senate Business, Professions and Economic
Development Committee (Committees) conducted multiple joint
oversight hearings to review regulatory boards within the DCA
and one regulatory entity outside of the DCA. The sunset bills
are intended to implement legislative changes recommended in the
respective background reports drafted by the Committee staff for
the agencies reviewed that year.
Background on the BSIS. The BSIS currently licenses about
380,000 companies and employees serving in the areas of alarm
services, locksmith services, private investigation, private
security, repossession, and firearm and baton training.
Specifically, the BSIS regulates the following Acts: 1) Alarm
Company Act; 2) Locksmith Act; 3) Private Investigator Act; 4)
Private Security Services Act; 5) Proprietary Security Services
Act; and 6) Collateral Recovery Act.
Issuing Firearm/Baton Permits. California currently mandates
applicants for a firearm or baton permit to meet specified
minimum requirements, including among other things, completing a
written examination, completing a training course in the use of
firearms or batons, and submitting a classifiable fingerprint
card to specified agencies. This bill expands on those
provisions by requiring an applicant to be registered with the
BSIS, and has demonstrated that he or she has been found capable
of exercising appropriate judgment, restraint, and self-control,
for the purposes of carrying and using a firearm during the
course of his or her duties.
Assessing Applicants for Firearm/Baton Permits. Several states
may use third-party vendors to develop assessment tools in the
process of issuing firearms permits. However, California
currently does not have a standardized assessment. This bill
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requires the BSIS to implement a process to administer an
assessment and to consult with subject matter experts, such as
psychologists, who can assist the BSIS in establishing criteria
for a contract with a vendor to administer the assessment,
identify minimum standards for the assessment, and evaluate
currently available assessments.
Mandatory Reporting Requirements. The BSIS is not required by
law to collect reports of shooting incidents involving armed
guards. However, entities overseeing the actions of licensed
armed guards are required to submit these reports. It is
unknown how many incidents that meet the criteria for reporting
are not reported to the BSIS because this process depends upon
self-reporting. As a result of issues that have been raised
about the effectiveness of the self-reporting process for
firearm discharge incidents, this bill requires a person
registered as a security guard or patrolperson, and his or her
employer, to submit an incident report to the director of the
DCA describing fully the circumstances surrounding any incident
involving the discharge of any firearm while acting within the
course and scope of his or her employment.
Cite and Fine Updates. The BSIS issues citations and fines as a
means to encourage compliance with the laws and regulations of
the six acts within its oversight authority. This bill updates
the fine and citation structure for violations of provisions in
the Alarm Company Act, Private Investigator Act, Private
Security Services Act, and Collateral Recovery Act in order to
help the BSIS better encourage compliance with existing laws and
regulations.
Background on the CalBRE. CalBRE is the state entity currently
charged with responsibility to enforce the Real Estate Law, the
Subdivided Lands Act, and the Vacation Ownership and Time-share
Act of 2004. As a result of Governor Brown's reorganization
plan to the Legislature in 2012, the CalBRE became a bureau
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within the DCA, moving from the independent Department of Real
Estate (DRE) and AB 1317 (Frazier), Chapter 352, Statutes of
2013, enacted those statutory changes. With respect to its core
functions, CalBRE currently licenses 405,985 persons in
California. Last fiscal year, CalBRE issued over 25,000 new
licenses and renewed over 79,000.
CalBRE Licensee Suspension. 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.
This bill provides the 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.
Background on the BREA. In 1989, Title XI of the federal
Financial Institutions Reform, Recovery and Enforcement Act
(FIRREA) was adopted by congress mandating states to license and
certify real estate appraisers who appraise property for
federally related transactions. The federal law was enacted as
a result of the savings and loan crisis. In response to the
federal mandate, the California Legislature enacted the Real
Estate Appraisers Licensing and Certification Law.
The BREA, which is entirely funded by licensing fees, is a
single program comprised of two core components, licensing and
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enforcement. The Licensing Division implements the minimum
requirements for licensure, according to criteria established by
the federal government and California law. The Licensing
Division also registers Appraisal Management Companies (AMC) in
compliance with California law. The Enforcement Division
investigates the background of applicants, licensees, and AMC
registrants to ensure they meet the standards for licensure.
The Enforcement Division also investigates complaints of
violations of California law and national appraisal standards
filed against licensed appraisers and registered AMCs.
Federal Oversight of the BREA. The following entities are not
part of BREA, but they have influence over BREA and its
operations at the federal level:
1)The Appraisal Subcommittee (ASC) was created in 1989 pursuant
to Title XI of the FIRREA. The ASC's role as an independent
federal institution is to generally oversee the real estate
appraisal process as it relates to federally regulated
transactions and oversees the Appraisal Foundation.
2)The Appraisal Foundation (Foundation) is a non-profit
organization that works to advance professionalism for
appraisers through the promulgation of standards, appraiser
qualifications, and guidance regarding appraisal methods and
techniques. The Foundation is comprised of the Appraisal
Standards Board, the Appraisal Qualifications Board, and the
Appraisal Practices Board.
Licensee Education. 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 and
all licensed appraisers must meet minimum continuing education
(CE) requirements before renewing their license. In practical
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terms, this requires a renewal of the seven-hour Uniform
Standards of Professional Appraisal Practice course every two
years on its own, and a full CE (56 hours) renewal every four
years. 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.
This bill requires an applicant for a real estate appraiser's
license to complete a BREA-approved course and examination
testing the applicant on federal and state laws regulating the
appraisal profession.
Analysis Prepared by:
Gabby Nepomuceno / B. & P. / (916) 319-3301 FN:
0004939