BILL NUMBER: SB 875AMENDED BILL TEXT AMENDED IN ASSEMBLY MAY 25, 2012 AMENDED IN SENATE JANUARY 4, 2012 AMENDED IN SENATE MARCH 25, 2011 INTRODUCED BY Senator Price FEBRUARY 18, 2011 An act to amendSectionSections 10087, 10100 , and 10152 of, to add Section 10153.01 to, and to repeal Section 10154 of, the Business and Professions Code, relating to real estate. LEGISLATIVE COUNSEL'S DIGEST SB 875, as amended, Price. Real estate licensees. Existing law, the Real Estate Law, provides for the licensure and regulation of real estate brokers and real estate salespersons by the Department of Real Estate and makes a willful violation of that law a misdemeanor . Existing law authorizes the department to deny, suspend, or revoke a license on various grounds using specified procedures generally applicable to state agencies. Under existing law, a hearing to determine whether to issue a license must be initiated by filing a statement of issues. Existing law provides additional procedures with respect to certain licensing boards, including, among other things, the authority to notify an applicant that the application is denied in lieu of filing a statement of issues, as specified. This bill would require the Department of Real Estate to use those additional procedures when denying a license or a license endorsement and would also delete an obsolete provision. Existing law authorizes the commissioner to require any proof he or she may deem advisable concerning the honesty and truthfulness of an applicant for a real estate license or license examination before authorizing the issuance of a real estate license. Existing law authorizes a person whose license has been revoked or suspended to petition the agency for reinstatement of the license or reduction of a penalty, as specified. This bill would require the commissioner to require a person submitting a petition for reinstatement of a license or reduction of a penalty to submit his or her fingerprints with the petition. Existing law authorizes the commissioner to suspend or bar a person from a position of employment, management, or control (1) where that action is in the public interest and the person has committed or caused a violation of the Real Estate Law or a rule or order adopted thereunder or (2) where the person has been convicted of a crime or held liable in a civil action where the judgment involves an offense involving dishonesty, fraud, or deceit or any other offense reasonably related to the qualifications, functions, or duties of a person engaged in the real estate business. This bill would also authorize the commissioner to bar that person from participation in examinations for licensure and would specify that a person who is suspended or barred from a position of employment, management, or control is also barred from participation in examinations for licensure. The bill would prohibit a person from cheating on, subverting, or attempting to subvert a licensing examination and would authorize the commissioner to bar a person who willfully engages in that conduct from taking a licensing examination and from holding an active real estate license for a period of up to 3 years. Because a willful violation of the prohibition on cheating or subverting a licensing examination would be a crime, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:noyes . THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 10087 of the Business and Professions Code is amended to read: 10087. (a) In addition to acting pursuant to the authority provided under Sections 10086, 10176, and 10177, the commissioner may, after appropriate notice and opportunity for a hearing, by order, suspend,orbar from any position of employment, management, or control, or bar from participation in an examination for licensure, for a period not exceeding 36 months, a real estate salesperson or real estate broker, or an unlicensed person issued an order under Section 10086, if the commissioner finds either of the following: (1) That the suspension or bar is in the public interest and that the person has committed or caused a violation of this division or rule or order of the commissioner, which violation was either known or should have been known by the person committing or causing it or has caused material damage to the public. (2) That the person has been convicted of or pleaded nolo contendere to any crime, or has been held liable in any civil action by final judgment, or any administrative judgment by any public agency, if that crime or civil or administrative judgment involved any offense involving dishonesty, fraud, or deceit, or any other offense reasonably related to the qualifications, functions, or duties of a person engaged in the real estate business in accordance with the provisions of this division. (b) Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) of Division 3 of Title 2 of the Government Code). If no hearing is requested within 15 days after the mailing or service of that notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing. (c) Upon receipt of a notice of intention to issue an order pursuant to this section, the person who is the subject of the proposed order is immediately prohibited from engaging in any business activity involving real estate that is subject to regulation under this division. (d) Persons suspended or barred under this section are prohibited from participating in any business activity of a real estate salesperson or a real estate broker and from engaging in any real estate-related business activity on the premises where a real estate salesperson or real estate broker is conducting business. Persons suspended or barred under this section are also prohibited from participating in any real estate-related business activity of a finance lender, residential mortgage lender, bank, credit union, escrow company, title company, or underwritten title company. Persons suspended or barred from a position of employment, management, or control under this section are also barred from participating in examinations for licensure.SECTION 1.SEC. 2. Section 10100 of the Business and Professions Code is amended to read: 10100. (a) Before suspending or revoking any license or license endorsement issued under the provisions of this part, the department shall proceed as prescribed by Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the department shall have all the powers granted therein. (b) Upon denial of an application for a license or license endorsement issuable under the provisions of this part, the department shall proceed under Sections 485 to 488, inclusive. SEC. 3. Section 10152 of the Business and Professions Code is amended to read: 10152. (a) The commissioner may require any other proof he or she may deem advisable concerning the honesty and truthfulness of any applicant for a real estate license or license examination, or of the officers, directors, or persons owning more than 10 percent of the stock, of any corporation making application therefor, before authorizing the issuance of a real estate license. For this purpose the commissioner may call a hearing in accordance with this part relating to hearings. To assist in his or her determination the commissioner shall require every original applicant to be fingerprinted prior to issuing a license. The commissioner may require the fingerprints to be submitted either with the application to take the license examination or with the application for a real estate license.(b) This section shall become operative on July 1, 2004.(b) The commissioner shall require a person who submits a petition for reinstatement of his or her license or reduction of a penalty pursuant to Section 11522 of the Government Code, in addition to meeting any other requirements imposed for purposes of the reinstatement or penalty reduction, to submit his or her fingerprints with the petition. SEC. 4. Section 10153.01 is added to the Business and Professions Code , to read: 10153.01. (a) No person shall cheat on, subvert, or attempt to subvert a licensing examination given by the department. Cheating on, subverting, or attempting to subvert a licensing examination includes, but is not limited to, engaging in, soliciting, or procuring any of the following: (1) Any communication between one or more examinees and any person, other than a proctor or examination official, while the examination is in progress. (2) Copying answers from another examinee or permitting one's answers to be copied by another examinee. (3) The taking of all or a part of the examination by a person other than the applicant. (4) Removing from the examination room any examination materials without authorization. (5) The unauthorized reproduction by any means of any portion of the actual licensing examination. (6) Aiding by any means the unauthorized reproduction of any portion of the actual licensing examination. (7) Possession or use at any time during the examination or while the examinee is on the examination premises of any device, material, or document that is not expressly authorized for use by examinees during the examination, including, but not limited to, notes, crib sheets, textbooks, and electronic devices. (8) Failure to follow any examination instruction or rule related to examination security. (9) Providing false, fraudulent, or materially misleading information concerning education, experience, or other qualifications as part of, or in support of, any application for admission to an examination. (b) The commissioner may bar any candidate who willfully cheats on, subverts, or attempts to subvert an examination from taking any license examination and from holding an active real estate license under any provision of this code for a period of up to three years.SEC. 2.SEC. 5. Section 10154 of the Business and Professions Code is repealed. SEC. 6. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.