BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 1718
                                                                  Page  1

          Date of Hearing:   April 25, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                AB 1718 (Hill) - As Introduction:  February 16, 2012 

          Policy Committee:                              Business and 
          Professions  Vote:                            9 - 0 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill eliminates the alternate pathway in current law that 
          allows an individual who has received a four-year degree from a 
          college or university with a specialty in real estate to receive 
          a real estate broker's license.  Instead, an individual wishing 
          to become a real estate broker will need a minimum of two years' 
          experience as a licensed real estate salesperson. 

           FISCAL EFFECT  

          There are no significant costs associated with this legislation. 


           COMMENTS  

           1)Purpose of this bill  .  The purpose of this bill is to 
            eliminate the alternate pathway for real estate brokers that 
            allow them to substitute a four-year college degree for two 
            years of real estate sales experience. According to the 
            author, "Unqualified individuals lacking sufficient experience 
            are able to get their real estate broker's license by 
            exploiting a loophole in current law that permits an unrelated 
            college degree to be substituted for actual experience in real 
            estate."   

          The author further contends that the optional pathway in current 
            law that allows the real estate commissioner to waive the 
            two-year requirement if an individual has a four-year degree 
            with a specialty in real estate has evolved into a Department 
            of Real Estate policy to approve all such requests as opposed 
            to reviewing them on a case-by-case basis.  "As such, 








                                                                  AB 1718
                                                                  Page  2

            individuals can essentially substitute any four-year degree, 
            ex. in English, physical education, chemistry, etc., for 
            practical real world experience."

           2)Committee Question  . This bill purports to eliminate the 
            alternate pathway for real estate broker's licenses because it 
            has been abused by individuals with four-year degrees who have 
            no experience in real estate.  Currently, however, the 
            prerequisite for taking a real estate brokers exam is eight 
            college-level real estate courses (24 units) or the equivalent 
            of a minor in real estate. Given these requirements, it is not 
            clear why a four-year degree is a problem.

           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916) 
          319-2081