Bill Text: CA SB706 | 2011-2012 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Business and professions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2011-10-09 - Chaptered by Secretary of State. Chapter 712, Statutes of 2011. [SB706 Detail]
Download: California-2011-SB706-Amended.html
Bill Title: Business and professions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2011-10-09 - Chaptered by Secretary of State. Chapter 712, Statutes of 2011. [SB706 Detail]
Download: California-2011-SB706-Amended.html
BILL NUMBER: SB 706 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 12, 2011
AMENDED IN ASSEMBLY JUNE 27, 2011
AMENDED IN SENATE MAY 31, 2011
AMENDED IN SENATE APRIL 25, 2011
AMENDED IN SENATE MARCH 24, 2011
INTRODUCED BY Senator Price
FEBRUARY 18, 2011
An act to amend Sections 27, 10004, 10166.02, 10166.12, 10175.2,
10236.2, 10450.6, 10470, 10470.1, 10471, 10471.1, 10471.3, 10471.5,
10472, 10472.1, 10473, 10473.1, 10474, 10474.5, 10475, 10476, 10477,
10479, and 10481 of, to amend, repeal, and add Section 11360 of,
and to add Sections 10050.1, 10100.4, 10106, 10186, 10186.1,
10186.2, 10186.8, 10186.9, 11310.1, 11313.2, 11315.7,
11315.9, 11319.1, 11319.2, and 11319.3 to, and to add and
repeal Section 10186.8 of, the Business and Professions
Code, relating to business and professions.
LEGISLATIVE COUNSEL'S DIGEST
SB 706, as amended, Price. Business and professions.
(1) Existing law provides for the licensure, endorsement, and
regulation of real estate brokers, real estate salespersons, and
mortgage loan originators by the Real Estate Commissioner of the
Department of Real Estate in the Business, Transportation and Housing
Agency. The Office of Real Estate Appraisers within the Business,
Transportation and Housing Agency is under the supervision and
control of the Secretary of Business, Transportation and Housing.
Existing law provides for the licensure, certification, and
regulation of persons who engage in specified real estate appraisal
activity by the Director of the Office of Real Estate Appraisers, who
is responsible to the Secretary of Business, Transportation and
Housing.
This bill would state that protection of the public shall be the
highest priority for the department and the office in exercising
their licensing, regulatory, and disciplinary functions.
The bill would authorize the department and the office to enter
into a settlement with a licensee or applicant instead of the
issuance of an accusation or statement of issues against the licensee
or applicant and would require the settlement to identify the
factual basis for the action being taken and the statutes or
regulations that have been violated. The bill would authorize an
administrative law judge to order a licensee in a disciplinary
proceeding to pay, upon request of the commissioner or the director,
the reasonable costs of investigating and prosecuting the
disciplinary case against the licensee.
When the commissioner or the director disciplines a licensee or
registrant by placing him or her on probation, the bill would
authorize the commissioner and the director to require the licensee
or registrant to pay the costs associated with the probation
monitoring.
The bill would provide that a license or certificate shall be
suspended if the licensee or registrant is incarcerated after the
conviction of a felony and would require the department or the office
to notify the licensee or registrant of the suspension and of his or
her right to a specified hearing. The bill would specify that no
hearing is required, however, if the conviction was for a violation
of federal law or state law for the use of dangerous drugs or
controlled substances or specified sex offenses.
The bill would require a licensee and registrant to report to the
department or the office when there is an indictment or information
charging a felony against the licensee or registrant or when he or
she has been convicted of a felony or misdemeanor. The bill would
make a violation of this reporting requirement a cause for
discipline.
The bill would require costs recovered pursuant to these
disciplinary proceedings to be deposited in either the Real Estate
Fund or the Real Estate Appraisers Regulation Fund, as specified, and
would make the funds available upon appropriation by the
Legislature.
The bill would require the Secretary of Business,
Transportation and Housing, by January 31, 2012, to appoint a
Department of Real Estate Enforcement Program Monitor whose duties
would include monitoring and evaluating the department's disciplinary
system and reporting his or her findings, as specified, to the
department and the Legislature no later than August 1, 2012. This
bill would make the provisions that pertain to the enforcement
program monitor inoperative on January 31, 2014 State
Auditor to conduct an audit of the Department of Real Estate, as
specified, to be funded by moneys from the Real Estate
Fund, subject to appropriation by the Legislature .
The bill would require the secretary to review and evaluate the
office, and make recommendations to the Legislature by October 1,
2014, regarding whether the office should be, among other things,
consolidated within the department or another state entity.
The bill would provide that, on and after January 1, 2015, the
department and the office shall be subject to specified
review by the appropriate policy committees of the
Legislature.
(2) Existing law authorizes the director to adopt regulations
relating to the license renewal process that include, among other
things, continuing education requirements. Existing law authorizes
renewal applicants to certify that they have read and understand
specified state and federal laws instead of being required to take a
course relating to federal and state appraisal laws.
This bill would, commencing January 1, 2013, require these renewal
applicants to take that course.
(3) Existing law establishes in the Real Estate Fund the Recovery
Account, which is continuously appropriated for purposes of funding
the Real Estate Recovery Program. The account is funded by crediting
a specified percentage of any real estate license fee collected
unless the balance in the Recovery Account is at least $3,500,000.
Existing law provides that when an aggrieved person obtains a final
judgment in a court of competent jurisdiction or an arbitration award
against a defendant based upon specified misconduct by the
defendant, the aggrieved person may file a claim application with the
Department of Real Estate for payment from the Recovery Account of
the amount unpaid on the judgment which represents an actual and
direct loss to the claimant in the transaction. Existing law requires
the commissioner to render a final written decision on the
application within 90 days, except as specified, after a completed
application has been received. Under existing law, if the
commissioner fails to render a written decision in response to the
claim within a specified timeframe, the claim shall be deemed to have
been denied by the commissioner on the final day for rendering the
decision.
This bill would rename the Recovery Account as the Consumer
Recovery Account and would delete the provision specifying that the
claim shall be deemed to have been denied in the circumstances
described above.
(4) Existing law provides for the regulation of various profession
and vocation licensees by boards within the Department of Consumer
Affairs. The department is under the control of the Director of
Consumer Affairs. Existing law, the Chiropractic Act, enacted by
initiative, provides for the licensure and regulation of
chiropractors by the State Board of Chiropractic Examiners. Existing
law requires certain boards within the department to disclose on the
Internet information on their respective licensees.
This bill would require the California Board of Accountancy, the
California Architects Board, the State Athletic Commission, the State
Board of Barbering and Cosmetology, the State Board of Guide Dogs
for the Blind, the State Board of Chiropractic Examiners, the
Department of Real Estate, and the Office of Real Estate Appraisers
to disclose on the Internet information on their respective
licensees, as specified.
(5) The bill would make other conforming and technical changes.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 27 of the Business and Professions Code is
amended to read:
27. (a) Each entity specified in subdivisions (c), (d), (e), (f),
and (g) shall provide on the Internet information regarding the
status of every license issued by that entity in accordance with the
California Public Records Act (Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code) and the
Information Practices Act of 1977 (Chapter 1 (commencing with Section
1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code). The
public information to be provided on the Internet shall include
information on suspensions and revocations of licenses issued by the
entity and other related enforcement action, including accusations
filed pursuant to the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code) taken by the entity relative to persons,
businesses, or facilities subject to licensure or regulation by the
entity. The information may not include personal information,
including home telephone number, date of birth, or social security
number. Each entity shall disclose a licensee's address of record.
However, each entity shall allow a licensee to provide a post office
box number or other alternate address, instead of his or her home
address, as the address of record. This section shall not preclude an
entity from also requiring a licensee, who has provided a post
office box number or other alternative mailing address as his or her
address of record, to provide a physical business address or
residence address only for the entity's internal administrative use
and not for disclosure as the licensee's address of record or
disclosure on the Internet.
(b) In providing information on the Internet, each entity
specified in subdivisions (c) and (d) shall comply with the
Department of Consumer Affairs Guidelines for Access to Public
Records.
(c) Each of the following entities within the Department of
Consumer Affairs shall comply with the requirements of this section:
(1) The Board for Professional Engineers, Land Surveyors, and
Geologists shall disclose information on its registrants and
licensees.
(2) The Bureau of Automotive Repair shall disclose information on
its licensees, including auto repair dealers, smog stations, lamp and
brake stations, smog check technicians, and smog inspection
certification stations.
(3) The Bureau of Electronic and Appliance Repair, Home
Furnishings, and Thermal Insulation shall disclose information on its
licensees and registrants, including major appliance repair dealers,
combination dealers (electronic and appliance), electronic repair
dealers, service contract sellers, and service contract
administrators.
(4) The Cemetery and Funeral Bureau shall disclose information on
its licensees, including cemetery brokers, cemetery salespersons,
cemetery managers, crematory managers, cemetery authorities,
crematories, cremated remains disposers, embalmers, funeral
establishments, and funeral directors.
(5) The Professional Fiduciaries Bureau shall disclose information
on its licensees.
(6) The Contractors' State License Board shall disclose
information on its licensees and registrants in accordance with
Chapter 9 (commencing with Section 7000) of Division 3. In addition
to information related to licenses as specified in subdivision (a),
the board shall also disclose information provided to the board by
the Labor Commissioner pursuant to Section 98.9 of the Labor Code.
(7) The Bureau for Private Postsecondary Education shall disclose
information on private postsecondary institutions under its
jurisdiction, including disclosure of notices to comply issued
pursuant to Section 94935 of the Education Code.
(8) The California Board of Accountancy shall disclose information
on its licensees and registrants.
(9) The California Architects Board shall disclose information on
its licensees, including architects and landscape architects.
(10) The State Athletic Commission shall disclose information on
its licensees and registrants.
(11) The State Board of Barbering and Cosmetology shall disclose
information on its licensees.
(12) The State Board of Guide Dogs for the Blind shall disclose
information on its licensees and registrants.
(13) The Acupuncture Board shall disclose information on its
licensees.
(14) The Board of Behavioral Sciences shall disclose information
on its licensees, including marriage and family therapists, licensed
clinical social workers, licensed educational psychologists, and
licensed professional clinical counselors.
(15) The Dental Board of California shall disclose information on
its licensees.
(16) The State Board of Optometry shall disclose information
regarding certificates of registration to practice optometry,
statements of licensure, optometric corporation registrations, branch
office licenses, and fictitious name permits of its licensees.
(17) The Board of Psychology shall disclose information on its
licensees, including psychologists, psychological assistants, and
registered psychologists.
(d) The State Board of Chiropractic Examiners shall disclose
information on its licensees.
(e) The Department of Real Estate shall disclose information on
its licensees.
(f) The Office of Real Estate Appraisers shall disclose
information on its licensees and registrants.
(g) The Structural Pest Control Board shall disclose information
on its licensees, including applicators, field representatives, and
operators in the areas of fumigation, general pest and wood
destroying pests and organisms, and wood roof cleaning and treatment.
(h) "Internet" for the purposes of this section has the meaning
set forth in paragraph (6) of subdivision (e) of Section 17538.
SEC. 2. Section 10004 of the Business and Professions Code is
amended to read:
10004. "Department" means the Department of Real Estate in the
Business, Transportation and Housing Agency.
SEC. 3. Section 10050.1 is added to the Business and Professions
Code, to read:
10050.1. Protection of the public shall be the highest priority
for the Department of Real Estate in exercising its licensing,
regulatory, and disciplinary functions. Whenever the protection of
the public is inconsistent with other interests sought to be
promoted, the protection of the public shall be paramount.
SEC. 4. Section 10100.4 is added to the Business and Professions
Code, to read:
10100.4. (a) Notwithstanding Section 11415.60 of the Government
Code, the department may enter into a settlement with a licensee or
applicant instead of the issuance of an accusation or statement of
issues against that licensee or applicant.
(b) The settlement shall identify the factual basis for the action
being taken and the statutes or regulations violated.
(c) A person who enters a settlement pursuant to this section is
not precluded from filing a petition, in the timeframe permitted by
law, to modify the terms of the settlement or a petition for early
termination of probation, if probation is part of the settlement.
(d) Any settlement with a licensee executed pursuant to this
section shall be considered discipline by the department.
SEC. 5. Section 10106 is added to the Business and Professions
Code, to read:
10106. (a) Except as otherwise provided by law, in any order
issued in resolution of a disciplinary proceeding before the
department, the commissioner may request the administrative law judge
to direct a licensee found to have committed a violation of this
part to pay a sum not to exceed the reasonable costs of the
investigation and enforcement of the case.
(b) In the case of a disciplined licensee that is a corporation or
a partnership, the order may be made against the licensed corporate
entity or licensed partnership.
(c) A certified copy of the actual costs, or a good faith estimate
of costs where actual costs are not available, signed by the
commissioner or the commissioner's designated representative, shall
be prima facie evidence of reasonable costs of investigation and
prosecution of the case. The costs shall include the amount of
investigative and enforcement costs up to the date of the hearing,
including, but not limited to, charges imposed by the Attorney
General.
(d) The administrative law judge shall make a proposed finding of
the amount of reasonable costs of investigation and prosecution of
the case when requested pursuant to subdivision (a). The finding of
the administrative law judge with regard to costs shall not be
reviewable by the commissioner to increase the cost award. The
commissioner may reduce or eliminate the cost award, or remand to the
administrative law judge where the proposed decision fails to make a
finding on costs requested pursuant to subdivision (a).
(e) Where an order for recovery of costs is made and timely
payment is not made as directed in the commissioner's decision, the
commissioner may enforce the order for repayment in any appropriate
court. This right of enforcement shall be in addition to any other
rights the commissioner may have as to any licentiate to pay costs.
(f) In any action for recovery of costs, proof of the commissioner'
s decision shall be conclusive proof of the validity of the order of
payment and the terms for payment.
(g) (1) Except as provided in paragraph (2), the department shall
not renew or reinstate the license of any licensee who has failed to
pay all of the costs ordered under this section.
(2) The department may, in its discretion, conditionally renew or
reinstate for a maximum of one year the license of any licensee who
demonstrates financial hardship and who enters into a formal
agreement with the department to reimburse the department within that
one-year period for the unpaid costs.
(h) All costs recovered under this section shall be considered a
reimbursement for costs incurred and shall be deposited in the Real
Estate Fund to be available, notwithstanding Section 10451, upon
appropriation by the Legislature.
(i) Nothing in this section shall preclude the department from
including the recovery of the costs of investigation and enforcement
of a case in any stipulated settlement.
SEC. 6. Section 10166.02 of the Business and Professions Code is
amended to read:
10166.02. (a) A real estate broker who acts pursuant to Section
10131.1 or subdivision (d) or (e) of Section 10131, and who makes,
arranges, or services loans secured by real property containing one
to four residential units, and any salesperson who acts in a similar
capacity under the supervision of that broker, shall notify the
department by January 31, 2010, or within 30 days of commencing that
activity, whichever is later. The notification shall be made in
writing, as directed, on a form that is acceptable to the
commissioner.
(b) No individual may engage in business as a mortgage loan
originator under this article without first doing both of the
following:
(1) Obtaining and maintaining a real estate license pursuant to
Article 2 (commencing with Section 10150).
(2) Obtaining and maintaining a real estate license endorsement
pursuant to this article identifying that individual as a licensed
mortgage loan originator.
(c) License endorsements shall be valid for a period of one year
and shall expire on the 31st of December each year.
(d) Applicants for a mortgage loan originator license endorsement
shall apply in a form prescribed by the commissioner. Each form shall
contain content as set forth by rule, regulation, instruction, or
procedure of the commissioner.
(e) In order to fulfill the purposes of this article, the
commissioner may establish relationships or contracts with the
Nationwide Mortgage Licensing System and Registry or other entities
designated by the Nationwide Mortgage Licensing System and Registry
to collect and maintain records and process transaction fees or other
fees related to licensees or other persons subject to this article.
(f) A real estate broker or salesperson who fails to notify the
department pursuant to subdivision (a), or who fails to obtain a
license endorsement required pursuant to paragraph (2) of subdivision
(b), shall be assessed a penalty of fifty dollars ($50) per day for
each day written notification has not been received or a license
endorsement has not been obtained, up to and including the 30th day
after the first day of the assessment penalty. On and after the 31st
day, the penalty is one hundred dollars ($100) per day, not to exceed
a total penalty of ten thousand dollars ($10,000), regardless of the
number of days, until the department receives the written
notification or the licensee obtains the license endorsement.
Penalties for violations of subdivisions (a) and (b) shall be
additive.
(g) The commissioner may suspend or revoke the license of a real
estate broker or salesperson who fails to pay a penalty imposed
pursuant to this section. In addition, the commissioner may bring an
action in an appropriate court of this state to collect payment of
that penalty.
(h) All penalties paid or collected under this section shall be
deposited into the Consumer Recovery Account of the Real Estate Fund
and shall, upon appropriation by the Legislature, be available for
expenditure for the purposes specified in Chapter 6.5 (commencing
with Section 10470).
SEC. 7. Section 10166.12 of the Business and Professions Code is
amended to read:
10166.12. (a) As often as the commissioner deems necessary and
appropriate, the commissioner shall examine the affairs of each real
estate broker who is required to notify the commissioner or obtain a
license endorsement pursuant to Section 10166.02 for compliance with
this part. These examinations shall also include a review of the
affairs of all real estate brokers and real estate salespersons
acting under the supervision of each real estate broker who is
required to file reports with the department pursuant to Section
10166.07. The commissioner shall appoint suitable persons to perform
these examinations. The commissioner and his or her appointees may
examine the books, records, and documents of the licensee, and may
examine the licensee's officers, directors, employees, or agents
under oath regarding the licensee's operations. The commissioner may
cooperate with any agency of the state or federal government, other
states, agencies, the Federal National Mortgage Association, or the
Federal Home Loan Mortgage Corporation. The commissioner may accept
an examination conducted by one of these entities in place of an
examination by the commissioner under this section, unless the
commissioner determines that the examination does not provide
information necessary to enable the commissioner to fulfill his or
her responsibilities under this division.
(b) The commissioner may impose a penalty against a real estate
broker or real estate salesperson whose affairs are examined or
reviewed pursuant to subdivision (a) based on the findings of the
examination or review. The commissioner may suspend or revoke the
license or license endorsement of a real estate broker or real estate
salesperson who fails to pay that penalty. In addition, the
commissioner may bring an action in an appropriate court of this
state to collect payment of the penalty.
(c) Penalties collected pursuant to subdivision (b) shall be
deposited into the Consumer Recovery Account of the Real Estate Fund
and shall, upon appropriation by the Legislature, be available for
expenditure for the purposes specified in Chapter 6.5 (commencing
with Section 10470).
(d) The statement of the findings of an examination conducted
pursuant to this section shall belong to the commissioner and shall
not be disclosed to anyone other than the licensee, law enforcement
officials, or other state or federal regulatory agencies for further
investigation and enforcement. Reports required of licensees by the
commissioner under this division and results of examinations
performed by the commissioner under this division are the property of
the commissioner.
SEC. 8. Section 10175.2 of the Business and Professions Code is
amended to read:
10175.2. (a) If the Real Estate Commissioner determines that the
public interest and public welfare will be adequately served by
permitting a real estate licensee to pay a monetary penalty to the
department in lieu of an actual license suspension, the commissioner
may, on the petition of the licensee, stay the execution of all or
some part of the suspension on the condition that the licensee pay a
monetary penalty and the further condition that the licensee incur no
other cause for disciplinary action within a period of time
specified by the commissioner.
(b) The commissioner may exercise the discretion granted under
subdivision (a) either with respect to a suspension ordered by a
decision after a contested hearing on an accusation against the
licensee or by stipulation with the licensee after the filing of an
accusation, but prior to the rendering of a decision based upon the
accusation. In either case, the terms and conditions of the
disciplinary action against the licensee shall be made part of a
formal decision of the commissioner.
(c) If a licensee fails to pay the monetary penalty in accordance
with the terms and conditions of the decision of the commissioner,
the commissioner may, without a hearing, order the immediate
execution of all or any part of the stayed suspension in which event
the licensee shall not be entitled to any repayment nor credit,
prorated or otherwise, for money paid to the department under the
terms of the decision.
(d) The amount of the monetary penalty payable under this section
shall not exceed two hundred fifty dollars ($250) for each day of
suspension stayed nor a total of ten thousand dollars ($10,000) per
decision regardless of the number of days of suspension stayed under
the decision.
(e) Any monetary penalty received by the department pursuant to
this section shall be credited to the Consumer Recovery Account of
the Real Estate Fund.
SEC. 9. Section 10186 is added to the Business and Professions
Code, to read:
10186. (a) When the commissioner disciplines a licensee by
placing him or her on probation, the commissioner may, in addition to
any other terms and conditions placed upon the licensee, require the
licensee to pay the monetary costs associated with monitoring the
licensee's probation.
(b) The commissioner shall not renew a license or an endorsement
if the licensee fails to pay all of the costs he or she is ordered to
pay pursuant to this section once the licensee has served his or her
term of probation.
(c) The commissioner shall not reinstate a license or license
endorsement if the petitioner has failed to pay any costs he or she
was ordered to pay pursuant to this section.
(d) All costs recovered under this section shall be considered a
reimbursement for costs incurred and shall be deposited in the Real
Estate Fund to be available, notwithstanding Section 10451, upon
appropriation by the Legislature.
SEC. 10. Section 10186.1 is added to the Business and Professions
Code, to read:
10186.1. (a) A license or an endorsement of the department shall
be suspended automatically during any time that the licensee is
incarcerated after conviction of a felony, regardless of whether the
conviction has been appealed. The department shall, immediately upon
receipt of the certified copy of the record of conviction, determine
whether the license or endorsement has been automatically suspended
by virtue of the licensee's incarceration, and if so, the duration of
that suspension. The department shall notify the licensee of the
suspension and of his or her right to elect to have the issue of
penalty heard as provided in subdivision (d).
(b) If after a hearing before an administrative law judge from the
Office of Administrative Hearings it is determined that the felony
for which the licensee was convicted was substantially related to the
qualifications, functions, or duties of a licensee, the commissioner
upon receipt of the certified copy of the record of conviction,
shall suspend the license or endorsement until the time for appeal
has elapsed, if no appeal has been taken, or until the judgment of
conviction has been affirmed on appeal or has otherwise become final,
and until further order of the department.
(c) Notwithstanding subdivision (b), a conviction of a charge of
violating any federal statute or regulation or any statute or
regulation of this state regulating dangerous drugs or controlled
substances, or a conviction of Section 187, 261, 262, or 288 of the
Penal Code, shall be conclusively presumed to be substantially
related to the qualifications, functions, or duties of a licensee and
no hearing shall be held on this issue. However, upon its own motion
or for good cause shown, the commissioner may decline to impose or
may set aside the suspension when it appears to be in the interest of
justice to do so, with due regard to maintaining the integrity of,
and confidence in, the practice regulated by the department.
(d) (1) Discipline may be ordered against a licensee in accordance
with the laws and regulations of the department when the time for
appeal has elapsed, the judgment of conviction has been affirmed on
appeal, or an order granting probation is made suspending the
imposition of sentence, irrespective of a subsequent order under
Section 1203.4 of the Penal Code allowing the person to withdraw his
or her plea of guilty and to enter a plea of not guilty, setting
aside the verdict of guilty, or dismissing the accusation, complaint,
information, or indictment.
(2) The issue of penalty shall be heard by an administrative law
judge from the Office of Administrative Hearings. The hearing shall
not be held until the judgment of conviction has become final or,
irrespective of a subsequent order under Section 1203.4 of the Penal
Code, an order granting probation has been made suspending the
imposition of sentence, except that a licensee may, at his or her
option, elect to have the issue of penalty decided before those time
periods have elapsed. Where the licensee so elects, the issue of
penalty shall be heard in the manner described in subdivision (b) at
the hearing to determine whether the conviction was substantially
related to the qualifications, functions, or duties of a licensee. If
the conviction of a licensee who has made this election is
overturned on appeal, any discipline ordered pursuant to this section
shall automatically cease. Nothing in this subdivision shall
prohibit the department from pursuing disciplinary action based on
any cause other than the overturned conviction.
(e) The record of the proceedings resulting in a conviction,
including a transcript of the testimony in those proceedings, may be
received in evidence.
(f) Any other provision of law setting forth a procedure for the
suspension or revocation of a license or endorsement issued by the
department shall not apply to proceedings conducted pursuant to this
section.
SEC. 11. Section 10186.2 is added to the Business and Professions
Code, to read:
10186.2. (a) (1) A licensee shall report any of the following to
the department:
(A) The bringing of an indictment or information charging a felony
against the licensee.
(B) The arrest of the licensee.
(C) The conviction of the licensee, including any verdict of
guilty, or plea of guilty or no contest, of any felony or
misdemeanor.
(D) Any disciplinary action taken by another licensing entity or
authority of this state or of another state or an agency of the
federal government.
(2) The report required by this subdivision shall be made in
writing within 30 days of the date of the bringing of the indictment
or the charging of a felony, the arrest, the conviction, or the
disciplinary action.
(b) Failure to make a report required by this section shall
constitute a cause for discipline.
SEC. 12. Section 10186.8 is added to the
Business and Professions Code, to read:
10186.8. (a) (1) The Secretary of the Business, Transportation
and Housing Agency shall appoint a Department of Real Estate
Enforcement Program Monitor no later than January 31, 2012. The
secretary may retain a person for this position by a personal
services contract, the Legislature finding, pursuant to Section 19130
of the Government Code, that this is a new state function.
(2) The secretary shall supervise the enforcement program monitor
and may terminate or dismiss him or her from this position.
(b) The secretary shall advertise the availability of this
position. The requirements for this position include experience in
conducting investigations and familiarity with state laws, rules, and
procedures pertaining to the department and familiarity with
relevant administrative procedures.
(c) (1) The enforcement program monitor shall monitor and evaluate
the department's discipline system and procedures, making as his or
her highest priority the reform and reengineering of the department's
enforcement program and operations, the improvement of the overall
efficiency of the department's disciplinary system, and the
improvement of the department's efforts to receive public input from
its licensees and from members of the public.
(2) This monitoring duty shall be on a continuing basis for a
period of no more than two years from the date of the enforcement
program monitor's appointment and shall include, but not be limited
to, improving the quality and consistency of complaint processing and
investigation and reducing the timeframes for each, reducing any
complaint backlog, assuring consistency in the application of
sanctions or discipline imposed on licensees. The monitoring duties
shall include the following areas:
(A) The accurate and consistent implementation of the laws and
rules affecting discipline.
(B) Staff concerns regarding disciplinary matters or procedures.
(C) Appropriate utilization of licensed professionals to
investigate complaints.
(D) The department's cooperation with other governmental entities
charged with enforcing related laws and regulations regarding real
estate licensees.
(E) Whether the department's efforts to receive public input would
be improved by the establishment of a real estate advisory
commission required by statute.
(3) The enforcement
program monitor shall exercise no authority over the department's
discipline operations or staff; however, the department and its staff
shall cooperate with him or her, and the department shall provide
data, information, and case files as requested by the enforcement
program monitor to perform all of his or her duties.
(4) The secretary shall assist the enforcement program monitor in
the performance of his or her duties, and the enforcement program
monitor shall have the same investigative authority as the secretary.
(d) The enforcement program monitor shall submit an initial
written report of his or her findings and conclusions to the
department and the Legislature no later than August 1, 2012, and
every six months thereafter, and be available to make oral reports to
each, if requested to do so. The enforcement program monitor may
also provide additional information to either the secretary or the
Legislature at his or her discretion or at the request of either the
secretary or the Legislature. The enforcement program monitor shall
make his or her reports available to the public or the media. The
enforcement program monitor shall make every effort to provide the
department with an opportunity to reply to any facts, findings,
issues, or conclusions in his or her reports with which the
department may disagree.
(e) The department shall reimburse the secretary for all of the
costs associated with the employment of an enforcement program
monitor.
(f) This section shall remain in effect only until January 31,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 31, 2014, deletes or extends
that date.
SEC. 12. Section 10186.8 is added to the
Business and Professions Code , to read:
10186.8. The State Auditor shall conduct an audit of the
department to determine if the department is effectively and
efficiently carrying out its responsibilities with regard to the laws
and regulations related to the department's enforcement and
discipline program for its licensees. The audit shall include, but
not be limited to, the quality, consistency, and timeliness of
complaint processing, investigations, and the application of
sanctions or discipline imposed on licensees. The State Auditor shall
report his or her audit findings to the department and the
appropriate policy committees of the Legislature no later than August
1, 2012. The commissioner shall reimburse the State Auditor for
costs incurred in completing the audit using moneys from the Real
Estate Fund, subject to appropriation by the Legislature.
SEC. 13. Section 10186.9 is added to the Business and Professions
Code, to read:
10186.9. Notwithstanding any other provision of law, on and after
January 1, 2015, the department shall be subject to review by the
appropriate policy committees of the Legislature. The review
shall include, but shall not be limited to, an evaluation of the
reports submitted by the enforcement program monitor pursuant to
subdivision (d) of Section 10186.8.
SEC. 14. Section 10236.2 of the Business and Professions Code is
amended to read:
10236.2. (a) A real estate broker who satisfies the criteria of
subdivision (a) or (b) of Section 10232 and who fails to notify the
Department of Real Estate, in writing, of that fact within 30 days
thereafter as required by subdivision (e) of Section 10232 shall be
assessed a penalty of fifty dollars ($50) per day for each additional
day written notification has not been received up to and including
the 30th day after the first day of the assessment penalty. On and
after the 31st day the penalty is one hundred dollars ($100) per day,
not to exceed a total penalty of ten thousand dollars ($10,000),
regardless of the number of days, until the department receives the
written notification.
(b) The commissioner may suspend or revoke the license of any real
estate broker who fails to pay a penalty imposed under this section.
In addition, the commissioner may bring an action in an appropriate
court of this state to collect payment of the penalty.
(c) All penalties paid or collected under this section shall be
deposited into the Consumer Recovery Account of the Real Estate Fund.
SEC. 15. Section 10450.6 of the Business and Professions Code is
amended to read:
10450.6. There shall be separate accounts in the Real Estate Fund
for purposes of real estate education and research and for purposes
of recovery which shall be known respectively as the Education and
Research Account and the Consumer Recovery Account. The commissioner
may, by regulation, require that up to 8 percent, or any lesser
amount that he or she deems appropriate, of the amount of any license
fee collected under this part be credited to the Education and
Research Account. Twelve percent of the amount of any license fee
collected shall be credited to the Consumer Recovery Account,
provided, however, that if as of June 30 of any fiscal year the
balance of funds in the Consumer Recovery Account is at least three
million five hundred thousand dollars ($3,500,000), all funds in
excess of this amount which have been credited to the Consumer
Recovery Account shall instead be credited to the Real Estate Fund.
As long as the balance of funds in the Consumer Recovery Account
exceeds three million five hundred thousand dollars ($3,500,000), all
license fees collected, except for the percentage of license fees
credited to the Education and Research Account, shall be credited to
the Real Estate Fund. Funds in the Education and Research Account
shall be used by the commissioner in accordance with Section 10451.5.
The Consumer Recovery Account is continuously appropriated for
carrying out Chapter 6.5 (commencing with Section 10470).
As used in this part or any other provision of law, "Recovery
Account" shall be deemed to refer to the Consumer Recovery Account.
SEC. 16. Section 10470 of the Business and Professions Code is
amended to read:
10470. If, on June 30 of any year, the balance remaining in the
Consumer Recovery Account in the Real Estate Fund is less than two
hundred thousand dollars ($200,000), every licensed broker, when
obtaining or renewing any broker license within four years
thereafter, shall pay, in addition to the license fee, a fee of seven
dollars ($7), and every licensed salesperson, when obtaining or
renewing such license within four years thereafter, shall pay, in
addition to the license fee, a fee of four dollars ($4). The fees
from both broker and salesperson licensees shall be paid into the
State Treasury and credited to the Consumer Recovery Account.
SEC. 17. Section 10470.1 of the Business and Professions Code is
amended to read:
10470.1. (a) In addition to the amount paid into the Consumer
Recovery Account as set forth in Section 10450.6, the Real Estate
Commissioner may authorize the transfer from the Real Estate Fund to
the Consumer Recovery Account of any amounts as are deemed necessary.
(b) If the balance remaining in the Consumer Recovery Account
contains more than four hundred thousand dollars ($400,000), the
commissioner may authorize the transfer of all or part of the surplus
amount into the Real Estate Fund.
(c) The commissioner may authorize the return to the Consumer
Recovery Account of all or any amount previously transferred to the
Real Estate Fund under this section.
SEC. 18. Section 10471 of the Business and Professions Code is
amended to read:
10471. (a) When an aggrieved person obtains (1) a final judgment
in a court of competent jurisdiction, including, but not limited to,
a criminal restitution order issued pursuant to subdivision (f) of
Section 1202.4 of the Penal Code or Section 3663 of Title 18 of the
United States Code, or (2) an arbitration award that includes
findings of fact and conclusions of law rendered in accordance with
the rules established by the American Arbitration Association or
another recognized arbitration body, and in accordance with Sections
1281 to 1294.2, inclusive, of the Code of Civil Procedure where
applicable, and where the arbitration award has been confirmed and
reduced to judgment pursuant to Section 1287.4 of the Code of Civil
Procedure, against a defendant based upon the defendant's fraud,
misrepresentation, or deceit, made with intent to defraud, or
conversion of trust funds, arising directly out of any transaction in
which the defendant, while licensed under this part, performed acts
for which a real estate license was required, the aggrieved person
may, upon the judgment becoming final, file an application with the
Department of Real Estate for payment from the Consumer Recovery
Account, within the limitations specified in Section 10474, of the
amount unpaid on the judgment that represents an actual and direct
loss to the claimant in the transaction. As used in this chapter,
"court of competent jurisdiction" includes the federal courts, but
does not include the courts of another state.
(b) The application shall be delivered in person or by certified
mail to an office of the department not later than one year after the
judgment has become final.
(c) The application shall be made on a form prescribed by the
department, verified by the claimant, and shall include the
following:
(1) The name and address of the claimant.
(2) If the claimant is represented by an attorney, the name,
business address, and telephone number of the attorney.
(3) The identification of the judgment, the amount of the claim
and an explanation of its computation.
(4) A detailed narrative statement of the facts in explanation of
the allegations of the complaint upon which the underlying judgment
is based.
(5) (A) Except as provided in subparagraph (B), a statement by the
claimant, signed under penalty of perjury, that the complaint upon
which the underlying judgment is based was prosecuted conscientiously
and in good faith. As used in this section, "conscientiously and in
good faith" means that no party potentially liable to the claimant in
the underlying transaction was intentionally and without good cause
omitted from the complaint, that no party named in the complaint who
otherwise reasonably appeared capable of responding in damages was
dismissed from the complaint intentionally and without good cause,
and that the claimant employed no other procedural means contrary to
the diligent prosecution of the complaint in order to seek to qualify
for the Consumer Recovery Account.
(B) For the purpose of an application based on a criminal
restitution order, all of the following statements by the claimant:
(i) The claimant has not intentionally and without good cause
failed to pursue any person potentially liable to the claimant in the
underlying transaction other than a defendant who is the subject of
a criminal restitution order.
(ii) The claimant has not intentionally and without good cause
failed to pursue in a civil action for damages all persons
potentially liable to the claimant in the underlying transaction who
otherwise reasonably appeared capable of responding in damages other
than a defendant who is the subject of a criminal restitution order.
(iii) The claimant employed no other procedural means contrary to
the diligent prosecution of the complaint in order to seek to qualify
for the Consumer Recovery Account.
(6) The name and address of the judgment debtor or, if not known,
the names and addresses of persons who may know the judgment debtor's
present whereabouts.
(7) The following representations and information from the
claimant:
(A) That he or she is not a spouse of the judgment debtor nor a
personal representative of the spouse.
(B) That he or she has complied with all of the requirements of
this chapter.
(C) That the judgment underlying the claim meets the requirements
of subdivision (a).
(D) A description of searches and inquiries conducted by or on
behalf of the claimant with respect to the judgment debtor's assets
liable to be sold or applied to satisfaction of the judgment, an
itemized valuation of the assets discovered, and the results of
actions by the claimant to have the assets applied to satisfaction of
the judgment.
(E) That he or she has diligently pursued collection efforts
against all judgment debtors and all other persons liable to the
claimant in the transaction that is the basis for the underlying
judgment.
(F) That the underlying judgment and debt have not been discharged
in bankruptcy, or, in the case of a bankruptcy proceeding that is
open at or after the time of the filing of the application, that the
judgment and debt have been declared to be nondischargeable.
(G) That the application was mailed or delivered to the department
no later than one year after the underlying judgment became final.
(d) If the claimant is basing his or her application upon a
judgment against a salesperson, and the claimant has not obtained a
judgment against that salesperson's employing broker, if any, or has
not diligently pursued the assets of that broker, the application
shall be denied for failure to diligently pursue the assets of all
other persons liable to the claimant in the transaction unless the
claimant can demonstrate, by clear and convincing evidence, either
that the salesperson was not employed by a broker at the time of the
transaction, or that the salesperson's employing broker would not
have been liable to the claimant because the salesperson was acting
outside the scope of his or her employment by the broker in the
transaction.
(e) The application form shall include detailed instructions with
respect to documentary evidence, pleadings, court rulings, the
products of discovery in the underlying litigation, and a notice to
the applicant of his or her obligation to protect the underlying
judgment from discharge in bankruptcy, to be appended to the
application.
(f) An application for payment from the Consumer Recovery Account
that is based on a criminal restitution order shall comply with all
of the requirements of this chapter. For the purpose of an
application based on a criminal restitution order, the following
terms have the following meanings:
(1) "Judgment" means the criminal restitution order.
(2) "Complaint" means the facts of the underlying transaction upon
which the criminal restitution order is based.
(3) "Judgment debtor" means any defendant who is the subject of
the criminal restitution order.
The amendments to this section made at the July 1997-98 Regular
Session shall become operative July 1, 2000.
SEC. 19. Section 10471.1 of the Business and Professions Code is
amended to read:
10471.1. (a) The claimant shall serve a copy of the notice
prescribed in subdivision (e) together with a copy of the application
upon the judgment debtor by personal service, by certified mail, or
by publication, as set forth in subdivision (b).
(b) If the judgment debtor holds an unexpired and unrevoked
license issued by the department, service of the notice and a copy of
the application may be made by certified mail addressed to the
judgment debtor at the latest business or residence address on file
with the department. If the judgment debtor does not hold an
unexpired and unrevoked license issued by the department and personal
service cannot be effected through the exercise of reasonable
diligence, the claimant shall serve the judgment debtor by one
publication of the notice in each of two successive weeks in a
newspaper of general circulation published in the county in which the
judgment debtor was last known to reside.
(c) If the application is served upon the judgment debtor by
certified mail, service is complete five days after mailing if the
place of address is within the State of California, 10 days after
mailing if the place of address is outside the State of California
but within the United States, and 20 days after mailing if the place
of address is outside the United States. Personal service is complete
on the date of service. Service by publication is complete upon
completion of the second week of publication.
(d) If a judgment debtor wishes to contest payment of an
application by the commissioner, he or she shall mail or deliver a
written response to the application addressed to the department at
its headquarters office within 30 days after service of the notice
and application, and shall mail or deliver a copy of the response to
the claimant. If a judgment debtor fails to mail or deliver a timely
response, he or she shall have waived his or her right to present
objections to payment.
(e) The notice served upon the judgment debtor shall include the
following statement:
""NOTICE: Based upon a judgment entered
against you in favor of ______________________
(name of claimant)
, application for payment from the Consumer
Recovery Account of the Real Estate Fund is
being made to the Department of Real Estate.
""If payment is made from the Consumer
Recovery Account, all licenses and license
rights that you have under the Real Estate Law
will be automatically suspended on the date of
payment and cannot be reinstated until the
Consumer Recovery Account has been reimbursed
for the amount paid plus interest at the
prevailing rate.
""If you wish to contest payment by the Real
Estate Commissioner, you must file a written
response to the application addressed to the
Department of Real Estate at ___________ within
30 days after mailing, delivery, or publication
of this notice and mail or deliver a copy of
that response to the claimant. If you fail to
do so, you will have waived your right to
present your objections to payment.''
(f) If a judgment debtor fails to mail or deliver a written
response to the application with the department within 30 days after
personal service, mailing, or final publication of the notice, the
judgment debtor shall not thereafter be entitled to notice of any
action taken or proposed to be taken by the commissioner with respect
to the application.
SEC. 20. Section 10471.3 of the Business and Professions Code is
amended to read:
10471.3. (a) The commissioner shall render a final written
decision on the application within 90 days after a completed
application has been received unless the claimant agrees in writing
to extend the time within which the commissioner may render a
decision.
(b) The commissioner may deny or grant the application or may
enter into a compromise with the claimant to pay less in settlement
than the full amount of the claim. If the claimant refuses to accept
a settlement of the claim offered by the commissioner, the written
decision of the commissioner shall be to deny the claim or it shall
be deemed denied if a written decision is not rendered within the
time specified in subdivision (a). Evidence of settlement offers and
discussions between the commissioner and the claimant shall not be
competent evidence in judicial proceedings undertaken by the claimant
pursuant to Section 10472.
SEC. 21. Section 10471.5 of the Business and Professions Code is
amended to read:
10471.5. (a) The commissioner shall give notice of a decision
rendered with respect to the application to the claimant and to a
judgment debtor who has filed a timely response to the application in
accordance with Section 10471.1.
(b) If the application is denied, the notice to the claimant and
judgment debtor shall include the following:
"Claimant's application has been denied. If the claimant wishes to
pursue the application in court, the claimant must file the
application as follows in a superior court of this state not later
than six months after receipt of this notice, pursuant to Section
10472 of the Business and Professions Code. If the underlying
judgment is a California state court judgment, the application shall
be filed in the court in which the underlying judgment was entered.
If the underlying judgment is a federal court judgment, the
application shall be filed in the superior court of any county within
California that would have been a proper venue if the underlying
lawsuit had been filed in a California state court, or in the
Superior Court of the County of Sacramento."
(c) If the decision of the commissioner is to make a payment to
the claimant out of the Consumer Recovery Account, the following
notice shall be given to the judgment debtor along with a copy of the
decision of the commissioner:
"The decision of the Real Estate Commissioner on the application
of ____ is to pay $____ from the Consumer Recovery Account. A copy of
that decision is enclosed.
"Pursuant to Section 10475 of the Business and Professions Code,
all of your licenses and license rights under the Real Estate Law
will be suspended effective on the date of the payment, and you will
not be eligible for reinstatement of any license issued under
authority of the Real Estate Law until you have reimbursed the
Consumer Recovery Account for this payment plus interest at the
prevailing legal rate."
"If you desire a judicial review of the suspension of your
licenses and license rights, you may petition the superior court for
a writ of mandamus. If the underlying judgment is a California state
court judgment, the petition shall be filed in the court in which the
judgment was entered. If the underlying judgment is a federal court
judgment, the petition shall be filed in the superior court of any
county within California that would have been a proper venue if the
underlying lawsuit had been filed in a California state court, or in
the Superior Court of the County of Sacramento. To be timely, the
petition must be filed with the court within 30 days of receipt of
this notice."
SEC. 22. Section 10472 of the Business and Professions Code is
amended to read:
10472. (a) A claimant against whom the commissioner has rendered
a decision denying an application pursuant to Section 10471 may,
within six months after the mailing of the notice of the denial, file
a verified application in superior court for an Order Directing
Payment Out of the Consumer Recovery Account based upon the grounds
set forth in the application to the commissioner. If the underlying
judgment is a California state court judgment, the application shall
be filed in the court in which the underlying judgment was entered.
If the underlying judgment is a federal court judgment, the
application shall be filed in the superior court of any county within
California that would have been a proper venue if the underlying
lawsuit had been filed in a California state court, or in the
Superior Court of the County of Sacramento.
(b) A copy of the verified application shall be served upon the
commissioner and upon the judgment debtor. A certificate or affidavit
of service shall be filed by the claimant with the court. Service on
the commissioner may be made by certified mail addressed to the
headquarters office of the department. Service upon a judgment debtor
may be made in accordance with Section 10471.1. The notice served
upon the judgment debtor shall read as follows:
"NOTICE: An application has been filed with the court for a
payment from the Consumer Recovery Account that was previously denied
by the Real Estate Commissioner.
"If the Department of Real Estate makes a payment from the
Consumer Recovery Account pursuant to court order, all of your
licenses and license rights under the Real Estate Law will be
automatically suspended until the Consumer Recovery Account has been
reimbursed for the amount paid plus interest at the prevailing rate.
"If you wish to defend in court against this application, you must
file a written response with the court within 30 days after having
been served with a copy of the application. If you do not file a
written response, you will have waived your right to defend against
the application."
SEC. 23. Section 10472.1 of the Business and Professions Code is
amended to read:
10472.1. (a) The commissioner and the judgment debtor shall each
have 30 days after being served with the application in which to file
a written response. The court shall thereafter set the matter for
hearing upon the petition of the claimant. The court shall grant a
request of the commissioner for a continuance of as much as 30 days
and may, upon a showing of good cause by any party, continue the
hearing as the court deems appropriate.
(b) The claimant shall have the burden of proving compliance with
the requirements of Section 10471 by competent evidence at an
evidentiary hearing. The claimant shall be entitled to a de novo
review of the merits of the application as contained in the
administrative record.
(c) If the judgment debtor fails to file a written response to the
application, the application may be compromised or settled by the
commissioner at any time during the court proceedings and the court
shall, upon joint petition of the claimant and the commissioner,
issue an order directing payment out of the Consumer Recovery
Account.
SEC. 24. Section 10473 of the Business and Professions Code is
amended to read:
10473. Whenever the court proceeds upon an application under
Section 10472, it shall order payment out of the Consumer Recovery
Account only upon a determination that the aggrieved party has a
valid cause of action within the purview of Section 10471, and has
complied with Section 10472.
The commissioner may defend any such action on behalf of the
Consumer Recovery Account and shall have recourse to all appropriate
means of defense and review, including examination of witnesses and
the right to relitigate any issues material and relevant in the
proceeding against the Consumer Recovery Account which were
determined in the underlying action on which the judgment in favor of
the applicant was based. If the judgment in favor of the applicant
was by default, stipulation, consent, or pursuant to Section 594 of
the Code of Civil Procedure, or whenever the action against the
licensee was defended by a trustee in bankruptcy, the applicant shall
have the burden of proving that the cause of action against the
licensee was for fraud, misrepresentation, deceit, or conversion of
trust funds. Otherwise, the judgment shall create a rebuttable
presumption of the fraud, misrepresentation, deceit, or conversion of
trust funds by the licensee, which presumption shall
affect the burden of producing
evidence.
The commissioner may move the court at any time to dismiss the
application when it appears there are no triable issues and the
petition is without merit. The motion may be supported by affidavit
of any person or persons having knowledge of the facts, and may be
made on the basis that the petition, and the judgment referred to
therein, does not form the basis for a meritorious recovery claim
within the purview of Section 10471; provided, however, the
commissioner shall give written notice at least 10 days before the
motion.
The commissioner may, subject to court approval, compromise a
claim based upon the application of an aggrieved party. The
commissioner shall not be bound by any compromise or stipulation of
the judgment debtor.
SEC. 25. Section 10473.1 of the Business and Professions Code is
amended to read:
10473.1. The judgment debtor may defend an action against the
Consumer Recovery Account on his or her own behalf and shall have
recourse to all appropriate means of defense and review, including
examination of witnesses. All matters, including, but not limited to,
the issues of fraud, misrepresentation, deceit, or conversion of
trust funds, finally adjudicated in the underlying action are
conclusive as to the judgment debtor and the applicant in the
proceeding against the Consumer Recovery Account.
SEC. 26. Section 10474 of the Business and Professions Code is
amended to read:
10474. Notwithstanding any other provision of this chapter and
regardless of the number of persons aggrieved or parcels of real
estate involved in a transaction or the number of judgments against a
licensee, the liability of the Consumer Recovery Account shall not
exceed the following amounts:
(a) Except as provided in subdivision (b), causes of action which
occurred on or after January 1, 1980, twenty thousand dollars
($20,000) for any one transaction and one hundred thousand dollars
($100,000) for any one licensee.
(b) For applications for payment from the Consumer Recovery
Account filed on or after January 1, 2009, fifty thousand dollars
($50,000) for any one transaction and two hundred fifty thousand
dollars ($250,000) for any one licensee.
(c) When multiple licensed real estate personnel are involved in a
transaction and the individual conduct of two or more of the
licensees results in a judgment meeting the requirements of
subdivision (a) of Section 10471, the claimant may seek recovery from
the Consumer Recovery Account based on the judgment against any of
the licensed real estate personnel, subject to the limitations of
this section and subparagraph (E) of paragraph (7) of subdivision (c)
of Section 10471.
SEC. 27. Section 10474.5 of the Business and Professions Code is
amended to read:
10474.5. If the amount of liability of the Consumer Recovery
Account as provided for in Section 10474 is insufficient to pay in
full the valid claims of all aggrieved persons by whom claims have
been filed against any one licensee, the amount shall be distributed
among them in the ratio that their respective claims bear to the
aggregate of the valid claims, or in any other manner as the court
deems equitable. Distribution of any moneys shall be among the
persons entitled to share therein, without regard to the order of
priority in which their respective judgments may have been obtained
or their claims have been filed. Upon petition of the commissioner,
the court may require all claimants and prospective claimants against
one licensee to be joined in one action, to the end that the
respective rights of all claimants to the Consumer Recovery Account
may be equitably adjudicated and settled.
SEC. 28. Section 10475 of the Business and Professions Code is
amended to read:
10475. Should the commissioner pay from the Consumer Recovery
Account any amount in settlement of a claim or toward satisfaction of
a judgment against a licensed broker or salesperson, the license of
the broker or salesperson shall be automatically suspended upon the
date of payment from the Consumer Recovery Account. No broker or
salesperson shall be granted reinstatement until he or she has repaid
in full, plus interest at the prevailing legal rate applicable to a
judgment rendered in any court of this state, the amount paid from
the Consumer Recovery Account on his or her account. A discharge in
bankruptcy shall not relieve a person from the penalties and
disabilities provided in this chapter.
SEC. 29. Section 10476 of the Business and Professions Code is
amended to read:
10476. If, at any time, the money deposited in the Consumer
Recovery Account is insufficient to satisfy any duly authorized claim
or portion thereof, the commissioner shall, when sufficient money
has been deposited in the Consumer Recovery Account, satisfy the
unpaid claims or portions thereof, in the order that the claims or
portions thereof were originally filed, plus accumulated interest at
the rate of 4 percent a year.
SEC. 30. Section 10477 of the Business and Professions Code is
amended to read:
10477. Any sums received by the commissioner pursuant to any
provisions of this chapter shall be deposited in the State Treasury
and credited to the Consumer Recovery Account.
SEC. 31. Section 10479 of the Business and Professions Code is
amended to read:
10479. When, the commissioner has paid from the Consumer Recovery
Account any sum to the judgment creditor, the commissioner shall be
subrogated to all of the rights of the judgment creditor and the
judgment creditor shall assign all of his or her right, title, and
interest in the judgment to the commissioner and any amount and
interest so recovered by the commissioner on the judgment shall be
deposited to the Consumer Recovery Account.
SEC. 32. Section 10481 of the Business and Professions Code is
amended to read:
10481. Nothing in this chapter limits the authority of the
commissioner to take disciplinary action against any licensee for a
violation of the Real Estate Law, or of Chapter 1 (commencing with
Section 11000) of Part 2, or of the rules and regulations of the
commissioner; nor shall the repayment in full of all obligations to
the Consumer Recovery Account by any licensee nullify or modify the
effect of any other disciplinary proceeding brought pursuant to the
Real Estate Law.
SEC. 33. Section 11310.1 is added to the Business and Professions
Code, to read:
11310.1. Protection of the public shall be the highest priority
for the Office of Real Estate Appraisers in exercising its licensing,
regulatory, and disciplinary functions. Whenever the protection of
the public is inconsistent with other interests sought to be
promoted, the protection of the public shall be paramount.
SEC. 34. Section 11313.2 is added to the Business and Professions
Code, to read:
11313.2. (a) The secretary shall review and evaluate the office,
and make recommendations to the Legislature by October 1, 2014,
regarding whether the office should be consolidated within the
Department of Real Estate, or consolidated within any other state
department or office, and shall provide appropriate justification for
that recommendation.
(b) Notwithstanding any other provision of law, on and after
January 1, 2015, the office shall be subject to review by the
appropriate policy committees of the Legislature. The review shall
include, but shall not be limited to, the recommendations of the
secretary regarding the office.
SEC. 35. Section 11315.7 is added to the Business and Professions
Code, to read:
11315.7. (a) Notwithstanding Section 11415.60 of the Government
Code, the office may enter into a settlement with a licensee or
applicant instead of the issuance of an accusation or statement of
issues against that licensee or applicant.
(b) The settlement shall identify the factual basis for the action
being taken and the statutes or regulations violated.
(c) A person who enters a settlement pursuant to this section is
not precluded from filing a petition, in the timeframe permitted by
law, to modify the terms of the settlement or a petition for early
termination of probation, if probation is part of the settlement.
(d) Any settlement with a licensee executed pursuant to this
section shall be considered discipline by the office.
SEC. 36. Section 11315.9 is added to the Business and Professions
Code, to read:
11315.9. (a) Except as otherwise provided by law, in any order
issued in resolution of a disciplinary proceeding before the office,
the director may request the administrative law judge to direct a
licensee found to have committed a violation of this part to pay a
sum not to exceed the reasonable costs of the investigation and
enforcement of the case.
(b) In the case of a disciplined licensee that is a corporation or
a partnership, the order may be made against the licensed corporate
entity or licensed partnership.
(c) A certified copy of the actual costs, or a good faith estimate
of costs where actual costs are not available, signed by the
director or the director's designated representative shall be prima
facie evidence of reasonable costs of investigation and prosecution
of the case. The costs shall include the amount of investigative and
enforcement costs up to the date of the hearing, including, but not
limited to, charges imposed by the Attorney General.
(d) The administrative law judge shall make a proposed finding of
the amount of reasonable costs of investigation and prosecution of
the case when requested pursuant to subdivision (a). The finding of
the administrative law judge with regard to costs shall not be
reviewable by the director to increase the cost award. The director
may reduce or eliminate the cost award, or remand to the
administrative law judge where the proposed decision fails to make a
finding on costs requested pursuant to subdivision (a).
(e) Where an order for recovery of costs is made and timely
payment is not made as directed in the director's decision, the
office may enforce the order for repayment in any appropriate court.
This right of enforcement shall be in addition to any other rights
the office may have as to any licentiate to pay costs.
(f) In any action for recovery of costs, proof of the director's
decision shall be conclusive proof of the validity of the order of
payment and the terms for payment.
(g) (1) Except as provided in paragraph (2), the office shall not
renew or reinstate the license of any licensee who has failed to pay
all of the costs ordered under this section.
(2) The office may, in its discretion, conditionally renew or
reinstate for a maximum of one year the license of any licensee who
demonstrates financial hardship and who enters into a formal
agreement with the office to reimburse the office within that
one-year period for the unpaid costs.
(h) All costs recovered under this section shall be considered a
reimbursement for costs incurred and shall be deposited in the Real
Estate Appraisers Regulation Fund to be available upon appropriation
by the Legislature.
(i) Nothing in this section shall preclude the office from
including the recovery of the costs of investigation and enforcement
of a case in any stipulated settlement.
SEC. 37. Section 11319.1 is added to the Business and Professions
Code, to read:
11319.1. (a) When the director disciplines a licensee or
registrant by placing him or her on probation, the director may, in
addition to any other terms and conditions placed upon the licensee
or registrant, require the licensee or registrant to pay the monetary
costs associated with monitoring the licensee's or registrant's
probation.
(b) The director shall not renew a license of a licensee or a
certificate of a registrant who fails to pay all of the costs he or
she is ordered to pay pursuant to this section once the licensee or
registrant has served his or her term of probation.
(c) The director shall not reinstate a license or certificate if
the petitioner has failed to pay any costs he or she was ordered to
pay pursuant to this section.
(d) All costs recovered under this section shall be considered a
reimbursement for costs incurred and shall be deposited in the Real
Estate Appraisers Regulation Fund to be available upon appropriation
by the Legislature.
SEC. 38. Section 11319.2 is added to the Business and Professions
Code, to read:
11319.2. (a) A license of a licensee or a certificate of a
registrant shall be suspended automatically during any time that the
licensee or registrant is incarcerated after conviction of a felony,
regardless of whether the conviction has been appealed. The office
shall, immediately upon receipt of the certified copy of the record
of conviction, determine whether the license of the licensee or
certificate of the registrant has been automatically suspended by
virtue of the licensee's or registrant's incarceration, and if so,
the duration of that suspension. The office shall notify the licensee
or registrant in writing of the license or certificate suspension
and of his or her right to elect to have the issue of penalty heard
as provided in subdivision (d).
(b) If after a hearing before an administrative law judge from the
Office of Administrative Hearings it is determined that the felony
for which the licensee or registrant was convicted was substantially
related to the qualifications, functions, or duties of a licensee or
registrant, the director upon receipt of the certified copy of the
record of conviction, shall suspend the license or certificate until
the time for appeal has elapsed, if no appeal has been taken, or
until the judgment of conviction has been affirmed on appeal or has
otherwise become final, and until further order of the director.
(c) Notwithstanding subdivision (b), a conviction of a charge of
violating any federal statute or regulation or any statute or
regulation of this state regulating dangerous drugs or controlled
substances, or a conviction of Section 187, 261, 262, or 288 of the
Penal Code, shall be conclusively presumed to be substantially
related to the qualifications, functions, or duties of a licensee or
registrant and no hearing shall be held on this issue. However, upon
its own motion or for good cause shown, the director may decline to
impose or may set aside the suspension when it appears to be in the
interest of justice to do so, with due regard to maintaining the
integrity of, and confidence in, the practice regulated by the
office.
(d) (1) Discipline may be ordered against a licensee or registrant
in accordance with the laws and regulations of the office when the
time for appeal has elapsed, the judgment of conviction has been
affirmed on appeal, or an order granting probation is made suspending
the imposition of sentence, irrespective of a subsequent order under
Section 1203.4 of the Penal Code allowing the person to withdraw his
or her plea of guilty and to enter a plea of not guilty, setting
aside the verdict of guilty, or dismissing the accusation, complaint,
information, or indictment.
(2) The issue of penalty shall be heard by an administrative law
judge from the Office of Administrative Hearings. The hearing shall
not be had until the judgment of conviction has become final or,
irrespective of a subsequent order under Section 1203.4 of the Penal
Code, an order granting probation has been made suspending the
imposition of sentence, except that a licensee or registrant may, at
his or her option, elect to have the issue of penalty decided before
those time periods have elapsed. Where the licensee or registrant so
elects, the issue of penalty shall be heard in the manner described
in subdivision (b) at the hearing to determine whether the conviction
was substantially related to the qualifications, functions, or
duties of a licensee or registrant. If the conviction of a licensee
or registrant who has made this election is overturned on appeal, any
discipline ordered pursuant to this section shall automatically
cease. Nothing in this subdivision shall prohibit the office from
pursuing disciplinary action based on any cause other than the
overturned conviction.
(e) The record of the proceedings resulting in a conviction,
including a transcript of the testimony in those proceedings, may be
received in evidence.
(f) Any other provision of law setting forth a procedure for the
suspension or revocation of a license or certificate issued by the
office shall not apply to proceedings conducted pursuant to this
section.
SEC. 39. Section 11319.3 is added to the Business and Professions
Code, to read:
11319.3. (a) (1) A licensee or registrant shall report any of the
following to the office:
(A) The bringing of an indictment or information charging a felony
against the licensee or registrant.
(B) The arrest of the licensee or registrant.
(C) The conviction of the licensee or registrant, including any
verdict of guilty, or plea of guilty or no contest, of any felony or
misdemeanor.
(D) Any disciplinary action taken by another licensing entity or
authority of this state or of another state or an agency of the
federal government.
(2) The report required by this subdivision shall be made in
writing within 30 days of the date of the bringing of the indictment
or the charging of a felony, the arrest, the conviction, or the
disciplinary action.
(b) Failure to make a report required by this section shall
constitute a cause for discipline.
SEC. 40. Section 11360 of the Business and Professions Code is
amended to read:
11360. (a) The director shall adopt regulations governing the
process and procedures for renewal of a license which shall include,
but not be limited to, continuing education requirements, which shall
be reported on the basis of four-year continuing education cycles.
(b) An applicant for renewal of a license shall be required to
demonstrate his or her continuing fitness to hold a license prior to
its renewal. Applicants shall also fulfill continuing education
requirements established pursuant to this section and may certify
that they have read and understand all applicable California and
federal laws and regulations pertaining to the licensing and
certification of real estate appraisers in lieu of being required to
take a minimum of four hours of federal and California
appraisal-related statutory and regulatory law every four years.
(c) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
SEC. 41. Section 11360 is added to the Business and Professions
Code, to read:
11360. (a) The director shall adopt regulations governing the
process and procedures for renewal of a license which shall include,
but not be limited to, continuing education requirements, which shall
be reported on the basis of four-year continuing education cycles.
(b) An applicant for renewal of a license shall be required to
demonstrate his or her continuing fitness to hold a license prior to
its renewal. Applicants shall also fulfill continuing education
requirements established pursuant to this section and shall be
required to take a minimum of four hours of federal and California
appraisal related statutory and regulatory law every four years.
(c) This section shall become operative on January 1, 2013.
