NEBRASKA REAL ESTATE COMMISSION

June 26-27, 2001

Staybridge Suites                         Staybridge Room                         Lincoln, NE


Opening

Acting Chairperson Fletcher convened a Meeting of the Nebraska Real Estate Commission at 9:00 a.m. on June 26, 2001, in the Staybridge Room of the Staybridge Suites, located at 2701 Fletcher Avenue in Lincoln, Nebraska. All of the members of the Real Estate Commission were present, with the exception of Chairperson Gale, who was temporarily absent and excused. Acting Chairperson Fletcher noted that Commissioner Paul Landow had resigned effective June 11, 2001, so the Commission consisted of six members for this Meeting. Also present were Director Les Tyrrell, Deputy Director for Enforcement Terry Mayrose, and Administrative Assistant Heidi Burklund. Abbie Widger, Special Assistant Attorney General and Counsel to the Commission, was present for two Hearings and the policy items. Rob Kinsey, Special Assistant Attorney General and Counsel to the Commission, was present for presentation of a Motion to Dismiss.

Notice of Meeting (Adopt Agenda)

Director Tyrrell presented a Public Notice and Proofs of Publication thereof relating to this Meeting, all of which are attached to and made a part of these Minutes. Acting Chairperson Fletcher reported that all Commissioners had been notified of the Meeting simultaneously, in writing, and that a proposed Tentative Agenda accompanied the notification.

Acting Chairperson Fletcher pointed out to those in attendance that a APublic Copy@ of the materials being used during the Meeting was available to the public on the Counsel table in the Meeting Room, and that the procedures followed were in accordance with the Open Meetings Law. Acting Chairperson Fletcher asked that guests sign the guest list.

Director Tyrrell noted that Item 11c had been continued since the Tentative Agenda was mailed to the Commissioners, for presentation of a Motion to Dismiss on behalf of the Complainant.

After review of the Final Agenda, a motion was made by Nigro and seconded by Wiebusch to adopt the Final Agenda as presented. Motion carried with Johnson, Moline, Nigro, Wiebusch, and Fletcher voting aye, with Gale not participating or voting, being temporarily absent and excused.

Minutes of May 22-23, 2001

The Minutes of the Commission Meeting held on May 22-23, 2001, were considered.

After review, a motion was made by Nigro and seconded by Wiebusch to approve the Minutes as presented. Motion carried with Johnson, Moline, Nigro, Wiebusch, and Fletcher voting aye, with Gale not participating or voting, being temporarily absent and excused.

Receipts and Expenditures Reports for May

Director Tyrrell presented the Receipts and Expenditures Report for May 2001. A copy of said Report is attached to and made a part of these Minutes.

With regard to the May Report, Director Tyrrell noted the following: in Receipts, there was nothing unusual to report. In Expenditures: Category 4212, Communication Expense, reflected a two-month payment; Category 4222, Conference Registration Fees, included the registration fee for the Investigator Workshop; Category 4431, Contracted Services Travel, was for the Instructor Workshop instructor=s lodging; and Category 4856, Hardware Data Processing, was for a laptop for Ms. Burklund to use to take Minutes during Commission Meetings.

The Cash Fund Balance as of May 31, 2001, was $516,715.96, which compared to a Cash Fund Balance of $490,019.72 on May 31, 2000.

After discussion, a motion was made by Moline and seconded by Wiebusch to file the May Receipts and Expenditures Report for audit. Motion carried with Johnson, Moline, Nigro, Wiebusch, and Fletcher voting aye, with Gale not participating or voting, being temporarily absent and excused.

Specialized Registrations

There were no Specialized Registrations to report.

Non-Resident Licenses and Resident Licenses Issued to Persons Holding Licenses in Other States

This Report, a copy of which is attached to and made a part of these Minutes, was presented by Director Tyrrell and reported to be in order.

After review, a motion was made by Moline and seconded by Nigro to ratify issuance of the licenses as set forth in the Report. Motion carried with Johnson, Moline, Nigro, Wiebusch, and Fletcher voting aye, with Gale not participating or voting, being temporarily absent and excused.

Examination Report - May

Director Tyrrell presented a Report relating to the real estate examinations administered during May 2001. A copy of said Report is attached to and made a part of these Minutes.

After review, a motion was made by Wiebusch and seconded by Johnson to ratify the May Report for the purpose of issuing licenses. Motion carried with Johnson, Moline, Nigro, Wiebusch, and Fletcher voting aye, with Gale not participating or voting, being temporarily absent and excused.

Real Estate Education Matters

Pre-License Education Instructor Approval

Director Tyrrell presented for ratification the Pre-License Education Instructor Approval Report, which listed approvals for two pre-license education instructors. A copy of said Report is attached to and made a part of these Minutes.

After discussion, a motion was made by Wiebusch and seconded by Nigro to ratify the Report. Motion carried with Johnson, Moline, Nigro, Wiebusch, and Fletcher voting aye, with Gale not participating or voting, being temporarily absent and excused.

Continuing Education Activity Approval

Director Tyrrell presented for ratification the Continuing Education Activity Approval Report, which listed approvals for three continuing education activities. A copy of said Report is attached to and made a part of these Minutes.

After discussion, a motion was made by Moline and seconded by Wiebusch to ratify the Report. Motion carried with Johnson, Moline, Nigro, Wiebusch, and Fletcher voting aye, with Gale not participating or voting, being temporarily absent and excused.

Continuing Education Instructor Approval

Director Tyrrell presented for ratification the Continuing Education Instructor Approval Report, which listed approvals for two continuing education instructors. A copy of said Report is attached to and made a part of these Minutes.

After discussion, a motion was made by Wiebusch and seconded by Johnson to ratify the Report. Motion carried with Johnson, Moline, Nigro, Wiebusch, and Fletcher voting aye, with Gale not participating or voting, being temporarily absent and excused.

Continuing Education Activity Significant Change

Director Tyrrell presented for ratification the Continuing Education Activity Significant Change Report, which listed approvals for five continuing education activities. A copy of said Report is attached to and made a part of these Minutes.

After discussion, a motion was made by Nigro and seconded by Moline to ratify the Report. Motion carried with Johnson, Moline, Nigro, Wiebusch, and Fletcher voting aye, with Gale not participating or voting, being temporarily absent and excused.

Pending Sworn Complaints and Investigative Matters

Director Tyrrell presented a Summary Report of the pending complaints, which included a list of licensees presently under disciplinary action or on appeal. A copy of said Report is attached to and made a part of these Minutes.

No action was necessary on this Report.

The following Sworn Complaints and Investigative Matters were presented to the Commission:

Item A Complaint #2001-019 - Kevin & Michael Girouex vs. Linda Claire McGuire & Lisa Marie McGuire

Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Fletcher and seconded by Nigro that the Complaint be dismissed without prejudice. Motion carried with Fletcher, Johnson, Moline, Nigro, Wiebusch, and Gale voting aye.

Item B Complaint #2001-023 - Pace Woods vs. Larry F. Zitek

Prior to discussion of this matter, Commissioner Moline recused himself, thereby nullifying any potential conflict of interest. Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Fletcher and seconded by Nigro that the Complaint be set for Hearing on the alleged violations noted in the Conclusion of the Investigative Report. Motion carried with Fletcher, Johnson, Nigro, Wiebusch, and Gale voting aye, with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

Item C Complaint #2001-025 - Jerry J. & Mary K. Owens vs. Dale Martin Engel

Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Moline and seconded by Nigro that the Complaint be set for Hearing, for alleged violations 1, 3, 4, and 5. Motion carried with Fletcher, Johnson, Moline, Nigro, Wiebusch, and Gale voting aye.

Item D Complaint #2001-016 - H. Michael Cutler Matter

Director Tyrrell verbally presented a situation in which a licensee was sent certified mail and did not pick it up at the post office, and requested that he be allowed to deliver the Complaint by personal service, regular mail, or both. A motion was made by Fletcher and seconded by Nigro to allow service by alternative means. Motion carried with Fletcher, Johnson, Moline, Nigro, Wiebusch, and Gale voting aye.

Commissioner Fletcher commended Director Tyrrell and Deputy Director Mayrose on a job well done for Jessica St. John. Ms. St. John sent a letter to the Commissioners which praised Director Tyrrell=s and Deputy Director Mayrose=s quick response and helpfulness in straightening out a problem she had encountered. The rest of the Commissioners concurred.

Presentation of Stipulation and Consent Orders

There were no Stipulation and Consent Orders to present.

Hearings

June 26, 9:30 a.m. - Show-Cause Hearing on
Complaint #1998-026, Commission vs. Buree Stovall

A Hearing was held on June 26, at 9:45 a.m., in the matter of Complaint #1998-026, after a search of the premises for Ms. Stovall. Abbie Widger, Special Assistant Attorney General and Counsel to the Commission, appeared for the Complainant. The Hearing began without Respondent Buree Stovall, who subsequently arrived at 9:50 a.m. and represented herself. Chairperson Gale asked if Ms. Stovall would be represented by counsel. Ms. Stovall said she did not think she needed a lawyer for being eight days late.

Chairperson Gale took judicial notice that Ms. Stovall was personally served on June 2, 2001, after certified mail sent to Ms. Stovall was returned, undelivered, to the Commission. Commissioner Moline noted that Ms. Stovall=s name was spelled differently on some documents, and asked for the proper spelling of Ms. Stovall=s name. Counsel Widger said she had misspelled it on several documents. Chairperson Gale asked if Ms. Stovall was served under the correct spelling. Counsel Widger said yes.

Counsel Widger noted that the purpose of this Hearing was to allow Ms. Stovall to explain why she did not comply with the Order of the Commission, and to show cause why additional disciplinary action should not be taken against her. Counsel Widger reviewed the original Order, which provided for a two-year suspension, with 90 days served and the remainder stayed and served on probation, and twelve hours of additional continuing education. Ms. Stovall had not completed the required ethics course by the deadline of March 18, 2001, but subsequently completed the course after the deadline had passed.

Ms. Stovall said she did not bring any evidence, because she did not think it was absolutely necessary. She said she got all the courses completed, and was just eight days late. Ms. Stovall maintained that ethics courses were not available as often as other courses, so it was hard to get enrolled. She had surgeries and health problems, and was involved in two accidents. It was still hard for her to get to places and do the things she needed to do, and she needed the Commission to understand.

After Opening Statements, Counsel Widger presented eight Exhibits, all of which were offered and received by Chairperson Gale. Counsel Widger called Deputy Director Mayrose, Director Tyrrell, and Ms. Stovall as witnesses.

Prior to Ms. Stovall=s testimony, there was a lengthy discussion regarding whether Ms. Stovall wanted to proceed without an attorney, or wanted to delay the proceedings and be represented by an attorney. After Counsel Widger reviewed the disciplinary options available to the Commission and Ms. Stovall=s appeal options, Ms. Stovall decided to proceed without an attorney.

Ms. Stovall presented no Exhibits, and called Deputy Director Mayrose as a witness.

At 11:28 a.m., Chairperson Gale declared a brief recess, and reconvened the Hearing at 11:40 a.m.

After closing arguments had been presented, Chairperson Gale declared the Hearing concluded at 11:45.

A motion was made by Wiebusch and seconded by Nigro that the Commission sustain the Motion to Show Cause, and find that the Respondent had not complied with the Order.

Commissioner Wiebusch noted that Ms. Stovall was informed there was a deadline for the additional continuing education to be completed, and she did not complete it prior to the deadline. Commissioner Nigro noted that Ms. Stovall had received ample notification on numerous occasions of the requirements of the Order, and that she had not complied with those requirements.

A roll call vote was taken on the pending Motion. Motion carried with Fletcher, Johnson, Moline, Nigro, Wiebusch, and Gale voting aye.

A motion was made by Moline and seconded by Fletcher to censure Ms. Stovall=s license, with no further penalty due to mitigating circumstances.

Commissioner Moline said there were extenuating circumstances in this situation. Commissioner Moline noted that Ms. Stovall should have tried to work out the problems with staff or the Commission, but also noted that she made an attempt to make it right. Chairperson Gale concurred, as Ms. Stovall had met all the requirements of the Order except completing the last three hours of continuing education prior to the deadline.

A roll call vote was taken on the pending Motion. Motion carried with Fletcher, Johnson, Moline, Nigro, and Gale voting aye, and with Wiebusch voting nay.

Chairperson Gale notified the Respondent that the costs incurred for the court reporter and any witness fees would be billed to the Respondent, as provided for in 305 NAC Chapter 4, and that the Respondent would have thirty days from the date of the Order to reimburse the Commission for said costs.

With the consent of the Respondent, Chairperson Gale directed Counsel Widger to prepare the Findings of Fact and the Order.

Chairperson Gale announced that all Exhibits related to this Hearing would be retained in the Commission Office.

The Hearing was adjourned at 11:56 a.m.

June 26, 1:30 p.m. - Petition to Review Rejection of
Broker
=s Application - Lucille Anne Champion

A Hearing was held on June 26, at 1:55 p.m., in the matter of a Petition to Review Rejection of Broker=s Application. Abbie Widger, Special Assistant Attorney General and Counsel to the Commission, appeared for the Commission. Petitioner Lucille Anne Champion was not present. Counsel Widger noted that staff searched the premises, and had been unable to locate Ms. Champion.

Counsel Widger waived her opening statement. Counsel Widger presented eight Exhibits, all of which were offered and received by Chairperson Gale. Counsel Widger called Director Tyrrell and Deputy Director Mayrose as witnesses.

Counsel Widger requested that the Commission dismiss the petition, due to Ms. Champion=s failure to appear or present relevant evidence, and because the Petition to Review Rejection of Broker=s Application was procedurally defective.

A motion was made by Fletcher and seconded by Wiebusch to dismiss the Petition with prejudice, based on the Petitioner=s failure to appear and failure to file a proper petition.

Counsel Widger reviewed the Exhibits and the filing timeline. Counsel Widger noted that staff had returned Ms. Champion=s application on March 1, 2001, and Ms. Champion should have filed the petition on or before March 31. Ms. Champion did not file anything until May 24, 2001, and that was an incomplete request for a formal hearing.

A roll call vote was taken on the pending Motion. Motion carried with Fletcher, Johnson, Moline, Nigro, Wiebusch, and Gale voting aye.

Seeing no objections, Chairperson Gale directed Counsel Widger to prepare the Order.

Chairperson Gale announced that all Exhibits related to this Hearing would be retained in the Commission Office.

The Hearing was adjourned at 2:25 p.m.

June 27, 9:30 a.m. - Complaint #2001-021,
Joseph Valenti vs. Daniel Carl Bohm

A Hearing was to be held on June 27, at 9:30 a.m., in the matter of Complaint #2001-021. The Hearing was continued, pending presentation of a Motion to Dismiss. Prior to discussion of this matter, Commissioner Nigro recused herself, thereby nullifying any potential conflict of interest.

Rob Kinsey, Special Assistant Attorney General and Counsel to the Commission, presented the Motion to Dismiss on behalf of the Complainant. Counsel Kinsey also distributed copies of the flier on which the Complaint was based. A copy of each Exhibit is attached to and made a part of these Minutes, denoted as 11c1 and 11c2 respectively.

Counsel Kinsey said that, in discussions regarding the Complaint, Mr. Valenti and Mr. Ruge had not seen that the flier included APrudential Ambassador R.E.@ With that knowledge, they were unwilling to proceed with or testify regarding the Complaint. The Commission needed to decide whether leaving off Athe@ and using AR.E.@ instead of AReal Estate@ was a violation on which they wished to take action. Director Tyrrell noted that the Respondent=s company subsequently filed an additional trade name which omitted Athe@ from the original trade name.

After discussion, a motion was made by Moline and seconded by Fletcher that the Motion to Dismiss be accepted without prejudice.

Commissioner Moline was concerned about people trying to conceal that the public would be dealing with a licensee, but thought the issue would be better addressed in changing the Rules to deal with future instances.

Chairperson Gale noted that the agent=s PC name was very legible, but the broker=s trade name was nearly unreadable, which he found troubling. The public would not know with whom they would be doing business from this type of advertising.

Commissioner Wiebusch agreed with Chairperson Gale=s concerns, but felt that Commissioner Moline=s approach was the appropriate way to deal with the situation and all similar situations.

Counsel Kinsey noted that it was a technical violation, because the trade name was not advertised as registered with the Commission. However, he could see the wisdom of dealing with the situation through Rule and Regulation, rather than dealing with each company individually through Complaints. Commissioner Johnson asked if Counsel Kinsey felt there would be a flood of complaints on the subject, if the Commission acted on this Complaint. Counsel Kinsey said he did not know, but it seemed like an issue in Omaha right now. Commissioner Moline said he had seen similar advertising in Lincoln.

Commissioner Wiebusch asked if the Commission could simply issue a Cease and Desist Order, without going to Hearing. Director Tyrrell said that, if the flier had come in as an anonymous report, staff would have contacted the broker and asked them to make the trade name bigger, and to spell it out, so that the ad could not be construed as misleading the public. Brokers have always cooperated with such requests in the past, but if a broker failed to cooperate, it would be brought to the Commission as an investigative report.

Commissioner Johnson felt that the reference to the Abig companies@ was misleading, because The Prudential Ambassador Real Estate was also a big company. Chairperson Gale said that looking at the entire ad was beyond the scope of this decision, which was limited to discussion of the broker trade name, but agreed that the ad was misleading and misrepresented who was sponsoring the ad.

Counsel Kinsey said that, in the industry, the company was known as APrudential Ambassador.@ When Mr. Valenti saw that was included, he no longer had any problem with the ad.

A vote was taken on the pending Motion. Motion carried with Fletcher, Johnson, Moline, Wiebusch, and Gale voting aye, with Nigro not participating or voting, having recused herself, thereby nullifying any potential conflict of interest.

Informal Special Appearances

There were no Informal Special Appearances.

Report on Findings Regarding Earnest Money Disputes

Counsel Widger reported her findings regarding earnest money disputes. Counsel Widger consulted with Fred Hoppe, the Chair of the Nebraska Bar Association committee which addresses those practices, and Christi Neighbor, with the Nebraska Department of Insurance, who works with title insurance.

Ms. Neighbor reported to Counsel Widger that the Title Insurance Division was not having problems with the issue, and that no consumer complaints had reached the Department of Insurance regarding earnest money disputes. Escrow agreements grant broad discretion, and agents can make judgment calls regarding the rightful disposition of the earnest money.

Fred Hoppe told Counsel Widger that the current regulations are not a problem. If a licensee believes the seller has breached the contract, Mr. Hoppe advises the licensee to hold the earnest money for a year, then return it to the buyer. The buyer can file a small claims action, and the broker can pay the earnest money into the small claims court and let the court decide who is entitled to the money. Mr. Hoppe more often sees a problem with the buyer backing out and wanting the earnest money back, but not being willing to sign for receipt of the money. Mr. Hoppe recommends holding the money for a year, then when it is clear the transaction will not happen, the broker can pay the earnest money to the seller. Mr. Hoppe does not recommend changing the regulations, and does not see issue as a problem.

Commissioner Johnson said he could see why the title insurance regulators did not get complaints, because the complainants are working with a Realtor, and that was where they thought the problem was. Counsel Widger said that was true, even though the complainants gave their permission in writing to transfer the earnest money. Director Tyrrell noted that all three legal counsels and staff recommended that the rule not be changed at this time, but that recommendation was not binding on Commission.

Commissioner Johnson asked if complaints might result from 1% of all transactions. It was the consensus of the Commission that it could be, if even that many. Commissioner Moline said that disputes usually result when one party is upset and refuses to negotiate a resolution, but the broker still has civil liability.

It was the consensus of the Commission to have staff monitor the situation.

No action was necessary on this Report.

Review Criteria for Applicants with Criminal Convictions and/or

Disciplinary History in Other Jurisdictions

Director Tyrrell presented an Exhibit which included policies from other jurisdictions regarding applicants with criminal convictions and/or disciplinary history in other jurisdictions. Director Tyrrell also presented an Exhibit which consisted of a summary of action taken by the Commission on applicants with criminal convictions and/or disciplinary history in other jurisdictions, and their resulting license status and disciplinary history. A copy of each Exhibit is attached to and made a part of these Minutes, denoted as 14a and 14b respectively.

Chairperson Gale said the Commission needed to know the current statutes for restoring civil rights. Director Tyrrell clarified that the Commission does not currently require that civil rights be restored prior to licensure, but it was required until approximately the mid-1990s.

Chairperson Gale asked if completion of probation had been required. Director Tyrrell said that has always been taken into consideration, and a few applicants were allowed licensure while on parole.

Chairperson Gale referenced the License Act, ' 81-885.12, which cited required qualifications and reasons for denial of licensure. Director Tyrrell noted that the law provided for Commission discretion, and quoted that certain convictions Amay in itself be sufficient ground for refusal of a license.@ Chairperson Gale noted the specific types of convictions listed which may allow denial of licenses. Director Tyrrell said all convictions are currently brought before Commission.

Chairperson Gale asked how staff learned of convictions, and asked if staff checked NCIC records for applicants. Director Tyrrell said there was a question on the initial application and on renewal applications regarding convictions, but the Commission would not necessarily know if an applicant filed a false application. The Commission staff often finds out about convictions through the newspapers, or when another licensee reports it to the Commission. In the past, the Commission decided they did not want to incur the expense of NCIC background checks on all applicants. Counsel Widger noted that a State Patrol background check costs $10.00, and a national NCIC check costs $15.00.

Chairperson Gale asked if staff do credit checks on applicants. Director Tyrrell said no. Chairperson Gale asked if the Commission could. Director Tyrrell said he did not think the law would preclude doing credit checks.

Chairperson Gale said he has heard horror stories about people with criminal histories coming into the state and fleecing the public. Chairperson Gale thought the Commission should consider further checks, because self-disclosure was not a very reliable method of obtaining criminal histories. Director Tyrrell noted that Exhibit 14a included current practices in other jurisdictions, and that one jurisdiction required fingerprinting and an FBI check.

Chairperson Gale asked if licensees were required to inform employing brokers of their criminal history. Director Tyrrell said yes, in certain instances when the applicant made a special appearance prior to licensure. There was no general requirement for licensees to report current violations to their employing brokers. Chairperson Gale asked if any jurisdictions required periodic checks of their licensees against NCIC. Director Tyrrell said not at this time. Commissioner Moline reiterated that convictions must be reported on renewal applications. Chairperson Gale noted that, if a conviction happened out of state, it would probably not show up in Nebraska newspapers. Chairperson Gale asked if there was a national database on licensees. Director Tyrrell said yes, for license revocation or disciplinary action in other jurisdictions. Chairperson Gale asked if our database was periodically compared to the national disciplinary action database. Director Tyrrell said yes, and that if a person is licensed in other jurisdictions, those jurisdictions share disciplinary information with each other, as specified in licensure recognition agreements.

Commissioner Moline said it seemed like Nebraska requirements were about the same as other jurisdictions. Director Tyrrell agreed. Commissioner Johnson noted that there was a wide range of policies in other jurisdictions.

Chairperson Gale asked if Commissioners were provided copies of court documents for special appearances, or if the Commission relied on applicants for all information. Director Tyrrell said that staff obtained copies of judgments and court documents whenever possible before the special appearance, and all available documentation was provided to the Commission.

Commissioner Wiebusch asked if the Bar Association had standards for applicants. Chairperson Gale said that the Bar Association issued advisory opinions on its standards, and applicants can tell from those what the standards are. If an applicant had a criminal conviction, he or she would not be allowed to sit.

Counsel Widger suggested that other licensing boards within the state might have more comparable standards. Director Tyrrell said he had not yet surveyed other licensing boards, just other jurisdictions as the Commission had requested. After discussion, it was the consensus of the Commission that Director Tyrrell should contact licensing entities for CPAs, insurance agents, appraisers, mortgage brokers, and stockbrokers, because those would be more comparable to real estate licensees.

Commissioner Johnson said he was in favor of developing guidelines, but noted that the Commission had either done an excellent job or been very lucky, compared to some mortgage brokers.

Review Revisions to AUse of Unlicensed Persons by Licensees@ Policy

Director Tyrrell presented an Exhibit which included current Nebraska policy and policies from other jurisdictions regarding allowable and prohibited uses of unlicensed persons by licensees. A copy of said Exhibit is attached to and made a part of these Minutes.

Director Tyrrell noted that this was not a list of recommendations, but merely practices in other jurisdictions for the Commission to consider when reviewing their policy. In some instances, Nebraska law may prohibit activities allowed in other jurisdictions. Commissioner Moline asked if that was the case for the first three items. Director Tyrrell said yes, in his opinion.

Discussion ensued on the limits of the Commission=s jurisdiction over unlicensed persons. Director Tyrrell said that the Commission would have to determine whether specific instances were violations on a case-by-case basis, if a complaint was filed as a result of an unlicensed employee=s activities.

Commissioner Nigro asked Director Tyrrell to find out from Williams Underwriting Group whether adopting any of the items in italics would impact the state policy=s Errors and Omissions insurance coverage. Director Tyrrell said he would, and said it was his understanding that unlicensed persons were covered for work done at the direction of a licensee.

Commissioner Moline asked if there was a report from the Nebraska Realtors7 Association on the subject. Director Tyrrell said he presumed the Nebraska Realtors7 Association was researching the topic, as the Commission had requested at the previous Meeting.

A motion was made by Johnson and seconded by Moline to table the discussion. Motion carried with Fletcher, Johnson, Moline, Nigro, Wiebusch, and Gale voting aye.

Preliminary Review of Title 299, Chapters 1, 2, 3, 5, & 7

Director Tyrrell presented Exhibits which included proposed changes to Title 299. A copy of each Exhibit is attached to and made a part of these Minutes. Director Tyrrell reviewed the input and hearing procedures for changing Rules and Regulations.

Counsel Widger reviewed the proposed changes in each Exhibit, and emphasized that this was a first draft which was open to any changes the Commission felt necessary. After extensive discussion, the Commission decided to review or change the following provisions:

Chapter 1-001 - Commissioner Moline questioned the requirement that applicants wait a month after failing the examination three times. Director Tyrrell explained that the original reasoning was that applicants who failed three times needed additional study, instead of just taking it over and over and learning the examination. The original provision, when the examination was administered monthly, was that applicants had to sit out for three months after failing three times. When daily examinations were implemented, the waiting period was lowered to 30 days. Chairperson Gale asked if review courses could be required after failing three times. Director Tyrrell said the Commission had no jurisdiction over test prep courses, and it was up to the applicants how to study. Director Tyrrell noted that applicants could just study from the License Law provided in their application packets, at no additional cost. Some test prep courses allow people to repeat the course for free if they fail after taking a test prep course. Chairperson Gale asked the audience for their opinions. Harding Collis said he personally felt there should be no limit on the frequency at which an applicant can retake the examination. Director Tyrrell offered to check with AMP, the examination company, regarding their philosophy on unlimited retakes.

Chapter 2-003 - Commissioner Moline distributed a copy of Kentucky regulations regarding Internet advertising. A copy of the Exhibit is attached to and made a part of these Minutes, denoted as 16b1. Commissioner Moline felt that all advertising should clearly indicate that the public would be dealing with a real estate licensee, and that it should not be the smallest typeface on the ad. Discussion ensued on the difficulties of typeface regulation. Counsel Widger noted that the current regulation had a very broad definition of advertising, which provided the same requirements for all advertising. There were not separate requirements for Internet advertising, newspaper ads, fliers, signs, TV commercials, business cards, etc. Separate standards might be problematic, and the Commission=s philosophy had been to set standards for all advertising, no matter how creative advertising methods might get. Counsel Widger said there were some good things in the Kentucky regulation that might apply to all advertising, such as requiring that the street address and telephone number of the company=s principal office be included. Commissioner Moline agreed that keeping the regulation broad to cover all forms of advertising was good policy. Director Tyrrell noted that all advertising must be done under the supervision of the employing or designated broker. Commissioner Nigro agreed with Commissioner Moline that the public must know with whom they are dealing. Commissioner Fletcher noted that specific type size requirements may conflict with franchise agreements. Commissioner Wiebusch proposed that the company name may not be in smaller print than the agent=s name. Counsel Widger noted that the regulations must be specific enough to give guidance, and must pass the scrutiny of the Attorney General=s staff. Commissioner Moline agreed that the company name should be just as big as the agent=s name, and that the public should be able to identify that the company is a real estate firm. Sole practitioners had to put Abroker@ after their name, and companies should be just as clearly identified. Some companies tried to purposely mislead the public. Director Tyrrell said it might be difficult to specify what companies had to include in trade names, etc., and noted that some non-licensed persons had companies with Areal estate@ in the name. Director Tyrrell noted that no complaints had been received from the public regarding non-disclosure of licensee status, and that, at some point, licensees must provide agency brochures. Chairperson Gale said the Commission wanted to ensure that advertising was fair, and that the employing broker=s name was always identified with a phone number, as well as the agent=s name and phone number. It was the consensus of the Commission that it was more important that advertising include the company phone number than the company street address, and that the dba name and a phone number designated by the employing broker should be included. Franchises should not be excluded from any regulations. Commissioner Wiebusch said it would be interesting to see how other jurisdictions handle the issue. Director Tyrrell said he could research that and report back. Commissioner Moline suggested that the Commission think about it for a month, and emphasized that the goal was that the public could readily identify that they were working with licensees.

Chapter 2-008 - Commissioner Moline asked if the wording should be changed, as the regulation appeared to prohibit a broker from hiring an attorney or closing agent. Counsel Widger said the intent was to prohibit in-house unlicensed persons from doing closings, like a closing secretary. Counsel Widger will fix it in the next draft.

Chapter 5-003.22 - Director Tyrrell noted that the language will be changed to specify designated or employing brokers, to include sole proprietorships until LB 215's provisions are passed.

Chapter 7-006.01 - Commissioner Wiebusch asked if the provision for providing scheduling notice 30 days in advance of offering an approved course should also be deleted. Director Tyrrell will review the provision with Deputy Director Hoffman.

The consensus of the Commission was to have staff review the noted sections and make revisions as needed, and the Commission would review them at the next Meeting.

Retirement Resolution for Vera David-Beach

Director Tyrrell presented an Exhibit which consisted of a retirement resolution for Vera David-Beach. A copy of said Exhibit is attached to and made a part of these Minutes.

Director Tyrrell noted that Ms. David-Beach had been with the State of Nebraska for over 42 years, and invited the Commissioners to attend her retirement reception on Friday.

Commissioner Nigro asked if the position opening had been posted. Director Tyrrell said that the position will not be filled, and that temporary workers will be used during busy times in the office.

A motion was made by Fletcher and seconded by Johnson that the resolution be adopted. Motion carried with Fletcher, Johnson, Moline, Nigro, Wiebusch, and Gale voting aye.

Approval of Major Merchant Agreement with First National Bank of Omaha

Director Tyrrell presented an Exhibit which included a list of transaction fees and a major merchant agreement with First National Bank of Omaha. A copy of said Exhibit is attached to and made a part of these Minutes.

Director Tyrrell explained that the Exhibit showed fees for both on-line and swipe machine transactions in the office. Director Tyrrell noted a decrease in authorization charges for on-line transactions, from 40 cents to 6 cents. Other fees remained the same as previously presented to the Commission. The processing company changed because CyberCash went out of business, so VeriSign was awarded the contract for the same fees, plus a new $100 setup fee. The Commission office is ready for credit card transactions, but Nebrask@ On-Line (NOL) is not quite ready because they have not yet finalized their contract with VeriSign. With the Commission=s approval, Director Tyrrell planned to wait until NOL was ready, so that there would be only one setup fee, and licensees would have the same capabilities available on-line and in the office. The Agreement is exactly the same as the Agreement between First National Bank and the state, and the Commission only needed to enter into it to become a location. Director Tyrrell recommended that the Commission approve the Agreement and authorize him to enter into it when everything was ready.

Commissioner Fletcher asked when Director Tyrrell anticipated implementing usage of credit cards. Director Tyrrell said it would be as soon as possible, in July or August, but definitely by the time renewals are mailed.

Commissioner Wiebusch applauded staff for moving forward with developing more service -oriented capabilities. Director Tyrrell said that kudos go to Monica Wade, Finance Officer, who had done some of NOL=s work to get the project moving.

A motion was made by Moline and seconded by Nigro to authorize Director Tyrrell to enter into the Merchant Agreement with First National Bank of Omaha as presented, and proceed with implementation when everything was in place. Motion carried with Johnson, Moline, Nigro, Wiebusch, and Fletcher voting aye, with Gale not participating or voting, being temporarily absent and excused.

Proposed Credit Card Processing Policy

Director Tyrrell presented an Exhibit which consisted of a proposed credit card processing policy. A copy of said Exhibit is attached to and made a part of these Minutes.

Director Tyrrell noted that the policy dealt with privacy of information, proper usage of account numbers, and handling transactions. If staff violated the policy, discipline ranging from a reprimand to termination could be taken, depending on the circumstances.

Chairperson Gale noted that he had received Privacy Act information from several credit card, insurance, and similar companies, and asked if the Commission also needed to develop a privacy policy. Director Tyrrell said he did not think government agencies, at least as regarded licensee information, were not covered by Privacy Act. Chairperson Gale asked that staff monitor the situation, and develop a privacy policy if the need arose.

A motion was made by Moline and seconded by Fletcher to adopt the credit card processing policy as presented. Motion carried with Fletcher, Johnson, Moline, Nigro, Wiebusch, and Gale voting aye.

Approval of Participation Agreement with ARELLO - Licensee/Registrant

Database Web Site

Director Tyrrell presented an Exhibit which consisted of a participation agreement with ARELLO for a Licensee/Registrant Database Web Site. A copy of said Exhibit is attached to and made a part of these Minutes.

Director Tyrrell reviewed the contract and addendum, and noted that this database will merge data from ARELLO-member jurisdictions to create a centralized repository of licensure information. Director Tyrrell noted that the addendum assured that the format would have to be agreeable to both the Nebraska Real Estate Commission and ARELLO; that neither Social Security nor license numbers would be published; and that permission was granted only for the purposes of the web site, not specifically granted for any individual organization=s use. Counsel Widger reviewed and approved of the addendum. Commissioner Fletcher asked if Craig Cheatham of ARELLO had agreed to the addendum. Director Tyrrell said Mr. Cheatham had no problem with any of it.

Commissioner Johnson asked if the only permission granted in the contract was to the National Association of Realtors, and no one else. Director Tyrrell said yes.

Commissioner Moline asked why Social Security numbers were provided, which gave the opportunity to make a mistake. Director Tyrrell said Social Security numbers and license numbers were only provided to allow the data to be merged easily. Nebraska will only provide license numbers, but some states use Social Security numbers as license numbers.

Commissioner Moline asked if giving permission for statistical purposes was a problem. Director Tyrrell said that database users will still be able to use the public information for whatever purposes they want, he just did not want the Commission to give blanket permission to any specific organization. He did not want to create the appearance that the Commission endorsed the National Association of Realtors7=s marketing or membership drives.

Commissioner Moline asked what it would cost the Commission to participate in the database. Director Tyrrell said there was no additional cost, because we would provide the same information that we put on our website. Commissioner Moline asked how often the information was updated. Director Tyrrell said it was supposed to be updated daily. If ARELLO finds they cannot update daily, there will be an indication of when the website was last updated. Commissioner Moline asked if it would be a large gap. Director Tyrrell said it might be once a month, but if they do not update daily, ARELLO indicated there would be a link to our website for updated information.

A motion was made by Nigro and seconded by Wiebusch to authorize Director Tyrrell to enter into the agreement and addendum with ARELLO. Motion carried with Johnson, Moline, Nigro, Wiebusch, and Fletcher voting aye, with Gale not participating or voting, being temporarily absent and excused.

Legislative Matters - Final Report

Director Tyrrell reviewed the final disposition of various Legislative Bills of interest to the Commission. In compliance with LB 68, a mailing will be done to current time share registrants, and forms will be available on the website in mid-August. LB 215 was passed by the Legislature, then vetoed by the Governor, and there were not enough votes in the Legislature to override the veto. Director Tyrrell had discussed the bill with several Senators, and hoped to develop a workable strategy by September for its eventual passage. Director Tyrrell said he had no negative comments on the amendments, but that they caused the bill to get bogged down, and it did not appear it would pass with the controversial amendments. LB 445 dealt with the rule approval process, and was meant to ensure that legislative intent was followed in subsequent rules, but some Senators felt that was the Attorney General=s job. LB 445 also would have changed submittal and review timelines, and may reach the floor next year.

On June 27, Chairperson Gale distributed a letter and documents received from Senator Ernie Chambers regarding LB 215 and future real estate legislation. A copy of the Exhibit is attached to and made a part of these Minutes, denoted as 21c.

No action was necessary on this Report.

Information Matters

There were no Information Matters to report.

Future Meeting Dates

August 20-21 - Staybridge Suites, Lincoln

September 26-27 - Holiday Inn Central, Omaha

Director Tyrrell noted that the Retirement Dinner for Commissioner Fletcher, former Commissioner Landow, and former Chairperson Moore will be held on August 20 at Hillcrest Country Club.

Recesses and Adjournment

At 9:34 a.m. on June 26, Acting Chairperson Fletcher declared a brief recess, and passed the gavel to Chairperson Gale, who reconvened the Meeting at 9:45 a.m.

At 11:28 a.m. on June 26, Chairperson Gale declared a brief recess, and reconvened the Meeting and Hearing at 11:40 a.m.

At 12:22 p.m. on June 26, Chairperson Gale declared a recess for lunch.

At 1:35 p.m. on June 26, Chairperson Gale reconvened the Meeting.

At 2:25 p.m. on June 26, Chairperson Gale declared a brief recess, and reconvened the Meeting at 2:45 p.m.

At 3:37 p.m. on June 26, Chairperson Gale declared a brief recess, and reconvened the Meeting at 3:40 p.m.

At 3:45 p.m. on June 26, Chairperson Gale recessed the Meeting until 9:30 a.m. on June 27.

At 9:35 a.m. on June 27, Chairperson Gale reconvened the Meeting.

At 10:10 a.m. on June 27, Chairperson Gale declared a brief recess, and reconvened the Meeting at 10:25 a.m.

At 12:18 p.m. on June 27, there being no further business to come before the Commission, a motion was made by Fletcher and seconded by Moline that the Meeting adjourn. Motion carried with Fletcher, Johnson, Moline, Nigro, Wiebusch, and Gale voting aye.

I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing Minutes of the June 26-27, 2001, Meeting of the Nebraska Real Estate Commission were available for inspection on July 10, 2001, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,
Les Tyrrell
Director

Guests Signing the Guest List

Cheryl Meier, CBSHOME, Omaha
Perre Neilan, Nebraska Realtors
7 Association, Lincoln
Harding Collis, NP Dodge, Omaha
Bevan Alvey, for Larry Zitek, Lincoln
Carl Sjulin, for Larry Zitek, Lincoln
Mike Gutschenritter, Woods Bros., Lincoln