The department may cancel any license issued under this chapter when that license has been issued in error or voluntarily surrendered to the department for cancellation. Whenever a driving school operator`s license or an instructor`s license is canceled, it shall be without prejudice and shall be surrendered to the department. Any person whose license has been canceled may immediately apply for a license, and the application may be accepted without additional fee or examination under rules and regulations adopted by the department. This section shall become operative on July 1, 1988.