BILL ANALYSIS �
AB 278
Page 1
Date of Hearing: May 18, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 278 (Hill) - As Introduced: February 8, 2011
Policy Committee: Business and
Professions Vote: 9 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes the Department of Real Estate (DRE) to
adopt regulations allowing the Real Estate Commissioner to
establish a system for issuing citations to licensees in
violation of Real Estate Law or any regulation adopted under
that law.
FISCAL EFFECT
1)DRE takes approximately 1,000 disciplinary actions per fiscal
year. If 10% of those actions result in a citation and/or
fine at the proposed maximum of $1,000 each it would result in
approximately $100,000 in additional revenue for the Recovery
Account in the Real Estate Fund.
2)Workload associated with promulgating the required regulations
and establishing the new citations process would be minor and
absorbable within existing resources.
COMMENTS
1)Rationale . The author's office argues that while the Real
Estate Commissioner has authority to enforce real estate law,
he or she has a relatively narrow number of options for
imposing discipline and penalties. This bill would allow for
the issuance of a citation and a fine for relatively minor
violations that have not resulted in harm to the public.
AB 278 would provide a type of fix-it ticket that could be
levied without the necessity of a drawn out hearing and review
process. The author notes, "While certainly appropriate for
AB 278
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more serious violations, such a time consuming process does
not serve either the general public or the regulated community
in the most efficient manner in all cases."
2)Background . DRE licenses and regulates approximately 463,000
real estate professionals in California.
Under existing law, DRE has the authority to take regulatory
action against a real estate licensee for committing an
unlawful act. DRE may also censure an individual who lacks a
real estate license but is nevertheless performing duties for
which a license is necessary.
In administering and enforcing the Real Estate Law, the
Commissioner may issue regulations and hold hearings to
determine whether a licensee or license applicant has violated
real estate laws or regulations. The Commissioner may
suspend, revoke or deny a real estate license or impose
monetary penalties if violations are substantiated through the
hearings process. The Commissioner may also issue desist and
refrain orders in certain circumstances.
In practice, for more serious violations, DRE files an
accusation, which initiates the disciplinary process that can
eventually result in suspension or revocation of a license, or
issues a desist and refrain order. For less serious
violations, DRE issues a letter of corrective action. The
citations authorized by this bill would act as an intermediate
option for the DRE.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081