LONG BEACH -- Real estate agents could pay less for licensing fees under a proposal the City Council will consider Tuesday.
The legislation, sponsored by Councilman Gary DeLong, would direct City Attorney Robert Shannon to write an ordinance amending municipal code to reclassify real estate agents from independent contractors to being a broker's employees.
Currently, about 2,000 to 2,500 real estate agents in Long Beach are required to pay a $202.73 fee each year to operate in Long Beach, according to the city.
The new law would change that, charging brokers $25.75 per employee.
An analysis found that the fee would collect between $51,500 to $64,375 - a net loss from the approximately $88,000 collected each year from realtors under the present system.
However, DeLong said the switch is business friendly and will benefit the city by simplifying a process that forces city staff members to pursue more than 2,000 real estate agents for fees instead of the 200-or-so brokers operating in Long Beach.
"Brokers know how many agents are working for them," said DeLong. "We can go to one broker and capture numerous agents. "
A representative from a real estate industry group active in Orange County and south Los Angeles County said the potential licensing change is welcome.
Phil Hawkins, executive vice president of the Pacific West Association of
He also noted that California already considers agents to be employees of a broker for supervisory and insurance purposes.
According to Hawkins, about half of the association's real estate agents didn't make a deal last year, and others made only a few transactions.
"Two hundred dollars is a lot of money when you're talking about not many deals at all," Hawkins said.
Long Beach has had some difficulty collecting business fees, a recent audit said.
The report released late last month examined the period from May 1, 2010, through April 30 of last year and found that between $2.4 million and $2.6 million in business license fees had gone uncollected.
Auditors blamed the deficit on a lack of clear procedures and reporting methods in the city's Business Relations Bureau, leading to inconsistent collection efforts and revenue adjustments without adequate supporting documents.
Businesses paid about 95 percent of the $11.7 million in licensing fees received in 2012 without any collection efforts by the city, the audit noted.
Councilwoman Suja Lowenthal and Councilman Patrick O'Donnell are co-sponsors of DeLong's proposal.
The council meets Tuesday at 5 p.m. in City Hall, 333 W. Ocean Blvd.
The meeting can be viewed live on Charter Communications Channel 3, Verizon FiOS Channel 21 and at longbeach.gov.