NEBRASKA REAL ESTATE COMMISSION

May 21, 2002

Staybridge Suites                         Staybridge Room                         Lincoln, NE


Opening

Chairperson Gale convened a Meeting of the Nebraska Real Estate Commission at 9:05 a.m. on May 21, 2002, 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. 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 the regulation and policy items.

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. Chairperson Gale reported that all Commissioners had been notified of the Meeting simultaneously, in writing, and that a proposed Tentative Agenda accompanied the notification.

Chairperson Gale 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. Chairperson Gale asked that guests sign the guest list.

Director Tyrrell noted that the Hearing had been continued since the Tentative Agenda was mailed to the Commissioners.

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, Shepard, Strand, Wiebusch, and Gale voting aye.

Minutes of April 3, 2002

The Minutes of the Commission Meeting held on April 3, 2002, were considered.

After review, a motion was made by Shepard and seconded by Johnson to approve the Minutes as presented. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, and Wiebusch voting aye, and with Gale not voting, not having been present at the Meeting.

Receipts and Expenditures Report for April

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

Director Tyrrell noted that there was nothing unusual to report in Receipts. In Expenditures Category 4414, Education Services, the entire amount was for just one month of examinations; and Category 4721, Commercial Transportation, showed a correction for an incorrectly coded receipt.

The Cash Fund Balance as of April 30, 2002, was $642,735.85, which compared to a Cash Fund Balance of $549,905.75 on April 30, 2001.

After discussion, a motion was made by Wiebusch and seconded by Nigro to file the April Receipts and Expenditures Report for audit. Motion carried with Johnson, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye, and with Moline temporarily absent and excused.

Specialized Registrations

Time-Share Registrations - Fairfield Smoky Mountains at
Governor
=s Crossing and Fairfield Orlando at Star Island

Director Tyrrell presented a Time-Share Registration Report for Fairfield Smoky Mountains at Governor=s Crossing and Fairfield Orlando at Star Island. A copy of said Report is attached to and made a part of these Minutes.

Following discussion, a motion was made by Strand and seconded by Wiebusch to approve the registrations as presented. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

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

Director Tyrrell presented for ratification the Non-Resident Licenses and Resident Licenses Issued to Persons Holding Licenses in Other States Report, a copy of which is attached to and made a part of these Minutes.

Commissioner Moline asked if extensive criminal activity had been noted on a particular non-resident broker=s application. Commissioner Moline said the person had previously been licensed in Nebraska, and had worked for Woods Brothers, where problems had arisen. Director Tyrrell did not have the application with him, but said he could call office staff and find out. It was the consensus of the Commission to address this Agenda Item after checking the application.

Later in the Meeting, Director Tyrrell noted that the broker reported on his application that he had never had any criminal convictions, had not been involved in any lawsuits during the past three years, and had no revocations or disciplinary actions in Colorado. Commissioner Moline said he knew him, and felt he was not worthy of having a license because he did not have the integrity needed to sell real estate in Nebraska. Chairperson Gale asked if it was the same person. Director Tyrrell said it appeared to be, and that the application indicated he previously had a Nebraska license. Commissioner Moline said the person he knew came from Colorado, and he thought he went back there.

A motion was made by Moline and seconded by Strand to ratify issuance of the licenses as set forth in the Report, with the exception of the non-resident broker as discussed. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

A motion was made by Moline and seconded by Johnson to deny issuance of the license to the non-resident broker as discussed.

Commissioner Strand asked Counsel Widger to clarify the procedure that would result if the motion passed. Counsel Widger noted that the law stated that applicants must have the qualities of honesty, trustworthiness, and integrity, and that Commissioner Moline did not believe the broker had those qualities. If the motion passed, the broker would have the opportunity to request a formal hearing within 30 days. After the evidence was presented at the Hearing, the Commission would decide whether to continue denial of the license. If the Commission continued to deny the license, the broker could appeal the decision to district court.

Commissioner Moline asked if he would have to recuse himself if he was a witness at the Hearing. Counsel Widger said yes, appearing as a witness would disqualify him from being a decision-maker.

Commissioner Strand asked if the Commission=s decision to deny a license would be upheld in court if the broker had no problems in Colorado during the past three years. Counsel Widger said that the Commission was given quite a bit of latitude on whether to grant a license, based on the applicant=s past behavior. The court usually gave deference to the Commission at the inception of a license, if due process had been granted and if the Commission gave the reasoning behind its decision.

Commissioner Moline said that, 3-4 years ago, his broker had a lot of difficulty with the person. Commissioner Moline did not have a good feeling about this fellow. He had worked at Woods Brothers for 2-3 years. Commissioner Moline did not recall the final ending, whether he was fired or not, and said he would have to look up the records. Chairperson Gale asked if he and his broker would be willing to testify. Commissioner Moline said he could not answer for Mr. Woods, but he did not think it would be problem for Commissioner Moline to testify as to accounting. Counsel Widger said it may be a formal or informal appearance, depending on timing. Director Tyrrell clarified the procedure.

A motion was made by Moline and seconded by Johnson to amend the motion, to request an Informal Special Appearance at an upcoming meeting so as to afford the applicant the opportunity to discuss any issues. If the applicant chooses not to appear, the license will be denied as of the date of said decision by applicant.

Commissioner Strand asked how the Commission would proceed if nothing bad had happened in the past 3-4 years. He said it was good to have the information, but if there was nothing on the broker=s record for a long period of time, he questioned why both sides would want to spend a lot of money on lawyers for a predetermined outcome.

Commissioner Nigro asked if the person held a broker=s license in Colorado. Director Tyrrell said yes, staff had a certification of licensure which indicated no problems since 1988. Commissioner Nigro asked if Colorado would be notified if the Nebraska license was denied. Director Tyrrell said yes.

Commissioner Strand noted that the problems at Woods Brothers would not show up on the broker=s license, but may still be there. Counsel Widger said staff could ask the Colorado Commission about their trust account examinations, because the problems would show up there. Director Tyrrell noted that the applicant was the designated broker. Commissioner Moline asked if there were any Nebraska complaints. Director Tyrrell said he did not know, and would have to check.

The amendment to the motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. A vote was then taken on the amended motion, which carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Examination Reports for March and April

Director Tyrrell presented for ratification the Examination Reports for March and April, copies of which are attached to and made a part of these Minutes.

Chairperson Gale asked if there were any applicants with misdemeanors on the Reports. Director Tyrrell said it was possible, and noted that only felonies and criminal or civil lawsuits came across his desk so that he could evaluate whether the applicants needed to be scheduled for an Informal Special Appearance, per the Commission=s policy. Director Tyrrell estimated that less than 5% of all applicants had any criminal record.

After review, a motion was made by Moline and seconded by Wiebusch to ratify the March and April Reports for the purpose of issuing licenses. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Real Estate Education Matters

Pre-License Education Instructor Approval

Director Tyrrell presented for ratification the Pre-License Education Instructor Approval Report, a copy of which is attached to and made a part of these Minutes.

After discussion, a motion was made by Wiebusch and seconded by Moline to ratify the Report. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Continuing Education Activity Approval

Director Tyrrell presented for ratification the Continuing Education Activity Approval Report, a copy of which is attached to and made a part of these Minutes.

After discussion, a motion was made by Moline and seconded by Nigro to ratify the Report. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Continuing Education Instructor Approval

Director Tyrrell presented for ratification the Continuing Education Instructor Approval Report, a copy of which 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, Shepard, Strand, Wiebusch, and Gale voting aye.

Continuing Education Activity Rejection

Director Tyrrell presented the Continuing Education Activity Rejection Report, a copy of which is attached to and made a part of these Minutes.

No action was necessary on this Report.

Continuing Education Activity Significant Change

Director Tyrrell presented for ratification the Continuing Education Activity Significant Change Report, a copy of which is attached to and made a part of these Minutes.

After discussion, a motion was made by Moline and seconded by Johnson to ratify the Report. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

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 #2002-001 - Teressa R. & Raymond B. Franken vs. Timothy Charles Plate & Maria M. Jones

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 Wiebusch that the Complaint be dismissed without prejudice. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Item B Complaint #2002-005 - Mary H. Jochim vs. Linda Matson Andersen

Prior to discussion of this matter, Commissioner Nigro recused herself, 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 Moline and seconded by Wiebusch that the Complaint be dismissed without prejudice. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Gale voting aye, with Nigro not participating or voting, having recused herself, thereby nullifying any potential conflict of interest.

Presentation of Stipulation and Consent Orders

There were no Stipulation and Consent Orders to be presented at the Meeting.

Hearings

May 21, 10:00 a.m. - Complaint #2001-053,
Karen Slusher vs. Pamela Johnson Norton - Continued

Prior to discussion of this matter, Commissioner Moline recused himself, thereby nullifying any potential conflict of interest.

The Hearing was continued so that Counsel Widger could give an investigative report to the Commission regarding new information obtained through depositions and interviews with the parties. The Complaint had resulted from a miscommunication between the agents for the buyer and seller, but their actions did not appear to rise to the level of negligence.

After being advised of the results of the investigation and discussion, a motion was made by Strand and seconded by Johnson that the Complaint be dismissed without prejudice. After further discussion, motion carried with Johnson, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye, and with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

Informal Special Appearances

May 21, 9:30 a.m. - Russell Carbaugh, Salesperson Applicant

Director Tyrrell presented an Exhibit which included correspondence regarding Mr. Carbaugh=s Special Appearance, a copy of Mr. Carbaugh=s application, supplemental information Mr. Carbaugh provided regarding his criminal history, and a letter of recommendation. A copy of said Exhibit is attached to and made a part of these Minutes. Mr. Carbaugh was present.

Mr. Carbaugh said he was a high school graduate, and had spent 7 years as an over-the-road truck driver. He currently worked at Subway, was a firefighter with the volunteer fire department, and was a family man who was tired of being gone all the time. He was now a very mellow individual, and focused on raising his kids. He wanted to get into real estate not just for the money, but to see happiness on other people=s faces. He attended church in Wahoo every Sunday, and had family in Wahoo and Omaha. His wife worked full-time at Saint Joseph=s Villa. Currently, he has just normal social activity with his family.

Chairperson Gale asked about Mr. Carbaugh=s misdemeanors. Mr. Carbaugh said he was divorced and remarried, and the misdemeanors occurred when he was with his first wife. He was a little out of control then, and was now paying the price for it. He had been very successful at making it better. If he could go back and change it, he would. He always tried to find a way to take care of things immediately now, when he got something in the mail.

Commissioner Strand asked about the term Adischarged.@ Mr. Carbaugh said he went through bankruptcy. Commissioner Moline asked if Mr. Carbaugh=s child support was current. Mr. Carbaugh said he was still a little behind, but he voluntarily had his wages garnished for current and past support.

Commissioner Moline asked if Mr. Carbaugh had talked to a broker about employment. Mr. Carbaugh said yes.

Commissioner Nigro expressed concern about the recent bad checks from November 2001. Mr. Carbaugh said that, to be honest, he was not familiar with AStop Ease@ and did not remember those bad checks, but saw it when he got the records from the courthouse. He thought his wife went there. Mr. Carbaugh noted that the medical bills were current.

Chairperson Gale asked about Mr. Carbaugh=s court appearance for traffic violations. Mr. Carbaugh said he got a speeding ticket and thought it was paid, then found the letter under the microwave 2 weeks after his license was suspended, when they rearranged the kitchen. His license was suspended for the unpaid speeding ticket. He did not know it was suspended, and only found out when he was pulled over. He did not get the notification letter. He went to court right away to get his license back, because at the time he was trucking, and his license was his job.

Chairperson Gale asked when Mr. Carbaugh would be caught up on child support. Mr. Carbaugh said it would be some time, perhaps the middle of next year at the current rate. His oldest child lives with him, and the other two live with their mother in Colorado. He also has two additional children with his current wife.

Commissioner Shepard asked if Mr. Carbaugh planned to do real estate full time, or continue at Subway while starting out. Mr. Carbaugh said he would like to do real estate full time, but still needed to support his family. He planned to work with the owner of Subway to do both, until his real estate career got going, and then he would do it full time. Commissioner Strand asked about the letter of recommendation. Mr. Carbaugh said it was from the assistant manager at Subway, Tom Jackson, and that they had a friendship outside the workplace. He had worked at Subway since January.

Chairperson Gale asked if all the debts were paid in full, except child support. Mr. Carbaugh said yes.

Commissioner Johnson asked where Mr. Carbaugh planned to work. Mr. Carbaugh said he planned to work in Lincoln, and noted he lived only 40 minutes from the office.

Commissioner Shepard said he thought the biggest problem would be cash flow, and noted that Mr. Carbaugh=s garnishment would not get satisfied if his income dropped. Mr. Carbaugh said that was why he planned to continue at Subway, to keep his payments current. The child support departments at the state and county level were aware of his intent to go into real estate.

Chairperson Gale asked if Mr. Carbaugh=s spouse had medical insurance. Mr. Carbaugh said no. Chairperson Gale noted that was part of the problem, with that bad check, and his wages being garnished to pay it off. Mr. Carbaugh agreed it was a problem, and reiterated that the garnishment was all voluntary. Commissioner Wiebusch asked if the garnishment was all done. Mr. Carbaugh said it would be fully taken care of by the end of June. Commissioner Moline asked for clarification if the medical bills actually involved a bad check. Mr. Carbaugh said no, he just could not pay the bill, and it was turned over to collection by the hospital in David City.

After discussion, a motion was made by Strand and seconded by Johnson to allow Mr. Carbaugh to sit for the salesperson examination, and to have a license issued upon passing.

Chairperson Gale said he was concerned with the creditworthiness issue, and maintaining professional standards in the industry. There was some concern with having continuing collection activity as a licensee, and he felt that possible future bad checks were unbecoming a professional. Chairperson Gale noted that the most recent bad checks were just in November. Chairperson Gale felt there should be a longer period of time for the applicant to recover good credit and maintain solvency. Chairperson Gale noted that the bad checks occurred after the bankruptcy. After his other debts had been wiped out, new bad debts were incurred.

Commissioner Nigro was also concerned about the recent bad checks. She noted that licensees handled money every day, and it bothered her that there were recent bad checks that he did not remember writing. Commissioner Nigro was concerned about Mr. Carbaugh dealing with daily business practices.

Commissioner Shepard said he would like to see more of the debts paid off. He felt they were not large amounts of money, and noted that Mr. Carbaugh had to be able to handle ongoing bills. If Mr. Carbaugh could stay current for the next year, it would be a lot better for him personally as well. Commissioner Shepard said he would vote against the motion.

Commissioner Strand said he was not familiar with the technicalities of bankruptcy. He noted that the November item was not from a bad check, it was from a hospital bill he could not pay. If a bad check occurred while sharing a checking account with a spouse, it was probably not a major problem, those things just happened sometimes due to miscommunication. Commissioner Strand said he knew there was a serious issue of managing money, but noted that it had been two years since the bankruptcy, and that Mr. Carbaugh had made good on the $89 check. Chairperson Gale said his concern on the medical bill was that people could arrange payments with the institution. Bills were only turned over for collection if the person refused to make any payments at all. Commissioner Strand said that was not the case at Saint Elizabeth=s, where bills were regularly sent through a credit house for claims efficiency. Commissioner Strand said he was familiar with the procedure, and it was routine.

A vote was taken on the pending motion. Motion failed with Moline and Strand voting aye, and with Johnson, Nigro, Shepard, Wiebusch, and Gale voting nay.

Chairperson Gale said that Mr. Carbaugh needed to pay off more debt and have better credit worthiness. There needed to be more time between the bankruptcy and issuing a license. The Commission would be willing to reconsider Mr. Carbaugh=s application in the future.

May 21, 9:45 a.m. - Daniel Wick, Salesperson Applicant

Director Tyrrell presented an Exhibit which included correspondence regarding Mr. Wick=s Special Appearance, a copy of Mr. Wick=s application, and supplemental information Mr. Wick provided regarding his criminal history. A copy of said Exhibit is attached to and made a part of these Minutes. Mr. Wick was present.

Mr. Wick said his background was in sales. He was raised in Chicago, lived in Seattle, then followed his girlfriend (now wife) to Nebraska. He has three kids, as his wife had two when they met and they had one together. Having a family changed him greatly, and he would like to put his past behind him.

Director Tyrrell noted that Mr. Wick was making a Special Appearance because the first item on his handwritten explanation was a felony, and any felony requires a Special Appearance under the Commission=s policy.

Mr. Wick said he was 19 and out with friends pulling a prank, doing skids in someone=s yard. Looking back, it was a foolish thing to do. The car ran into the person=s house, and he was charged with malicious mischief. He had been drinking but was not beyond the legal limit, so there was no DUI. He pled guilty because there was no question he was at fault. He was ordered to pay restitution.

Chairperson Gale noted that there was a DUI a few months later. Mr. Wick said he wished he was more familiar with the actual dates. He had requested the State Patrol records himself. He noted that one record had the arrest date after the conviction date, which was not exactly correct, but the DUI was probably within a year=s time of the malicious mischief conviction. Chairperson Gale said his concern was Mr. Wick=s record of drinking abuse. Mr. Wick said he had problems, and was a recovering alcoholic. He has been a member of Alcoholics Anonymous for the past three years, and has had regular attendance. His last DUI was in November 1997. His second DUI within 6 years was his turning point. The violation of suspension charge was filed as no valid operator=s license, and was lowered to a lesser charge due to the circumstances. He was technically without a license, but was beyond the suspension period. He had not paid all the fines, and was in a payment program with the court.

Chairperson Gale asked why Mr. Wick was interested in real estate. Mr. Wick said his father was a commercial appraiser, and he had helped his father remodel apartment buildings. He wanted to further his career. He felt he had conquered retail sales, having been in retail for 5 years, and wanted to move into a different type of sales. From watching his father, real estate seemed like an exciting career.

Chairperson Gale asked if Mr. Wick had been employed full time for the past 4 years. Mr. Wick said he has been employed for 2 years in Nebraska, and 3 in Washington. Chairperson Gale asked if there were any arrests during that time. Mr. Wick said not since his last DUI, in late 1997.

Commissioner Nigro asked if Mr. Wick currently had a valid license. Mr. Wick said yes. Commissioner Nigro asked Mr. Wick to tell the Commission about his bankruptcy. Mr. Wick said there was an accident involved in a DUI. He had paid $2000 restitution to the insurance company, but they wanted a lot more for interest, etc. Mr. Wick did not have the money to pay it off, and he needed a driver=s license, so he claimed bankruptcy. The restitution was for damage to property, and the bankruptcy was now discharged. Chairperson Gale asked what property was damaged. Mr. Wick said he ran into a fence.

Commissioner Nigro asked about Mr. Wick=s career in furniture sales. Mr. Wick said he had been employed at Payne Larson in Kearney since February 2000, and it was going very well for him. He kept up with his sales skills and had good financial stability. His wife had quit work after having their child fifteen months ago, and he was able to support his family with only that job. He made a base salary of $1000 per month plus commission.

Commissioner Wiebusch asked if Mr. Wick had anything to drink since joining Alcoholics Anonymous. Mr. Wick said no, not since 1997.

Chairperson Gale asked if Mr. Wick had asked officials in Washington about a pardon. Mr. Wick said he had not inquired there, but had in Kearney. An expungement required a 5-year period with no criminal offenses, and Mr. Wick would like to do that when he was eligible, when 5 years had passed since his last DUI. Mr. Wick reiterated that this happened in his younger years, he was not proud of it, and wished he could change the past.

After discussion, a motion was made by Nigro and seconded by Shepard to allow Mr. Wick to sit for the salesperson examination, and to have a license issued upon passing.

Commissioner Moline said he was struggling with consistency. The Commission had turned people down for financial problems, and not being far enough away from bankruptcy. This criminal activity was even more recent than the prior person, and included a felony and two DUIs. Commissioner Moline said it did not seem consistent.

Chairperson Gale said he was concerned with the history of drinking and driving, especially in a profession where Mr. Wick would have clients in the vehicle. Chairperson Gale was concerned about the safety of the public. Since there were no further violations since 1997 and Mr. Wick was active in Alcoholics Anonymous, that lessened the concern. Mr. Wick had a recent bankruptcy, but his employment record had been good over the past several years. Chairperson Gale felt that after some more time, and after expungement of Mr. Wick=s record, the Commission should consider his application. Chairperson Gale said the Commission had to consider carefully, and weigh the effect on people=s lives versus the public trust.

Commissioner Nigro agreed that the bankruptcy was recent, but resulted from an accident that happened 5 years ago. Commissioner Nigro understood Commissioner Moline=s concern for fairness. Commissioner Moline noted that the prior person=s debt incurred when he took his kid to the hospital, and he had no DUIs. Commissioner Moline said he was not questioning whether to allow this person to be licensed, he was just questioning the Commission=s consistency. The Commission did not yet have a benchmark, and that troubled him greatly. Commissioner Nigro said that the Commission was dealing with human beings, not just black-and-white facts, and had to consider a person=s ability to turn his life around.

A vote was taken on the pending motion. Motion carried with Johnson, Nigro, Shepard, Strand, and Wiebusch voting aye, and with Moline and Gale voting nay.

A motion was made by Johnson and seconded by Nigro to require Mr. Wick to notify Commission staff of any criminal charges, except those involving no possible jail time, for one year. Motion carried with Johnson, Moline, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Strand voting nay.

Personnel Matters - Closed Session

At 12:12 p.m. on May 21, a motion was made by Moline and seconded by Nigro that the Commission declare a brief recess, and resume in closed session to deal with personnel matters. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Chairperson Gale declared a brief recess, and reconvened the Meeting in closed session at 12:23 p.m.

At 12:50 p.m. on May 21, Commissioner Strand was excused from the remainder of the Meeting.

At 1:45 p.m. on May 21, a motion was made by Nigro and seconded by Wiebusch to go into open session and declare a brief recess. Motion carried with Johnson, Moline, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Strand not participating or voting, being absent and excused. Chairperson Gale declared a brief recess, and reconvened the Meeting at 1:51 p.m.

After reconvening in open, public session, a motion was made by Moline and seconded by Johnson to increase the salaries of Director Tyrrell and Deputy Director Hoffman by 1.5% on July 1, 2002, and by 2.5% on January 1, 2003. Motion carried with Johnson, Moline, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Strand not participating or voting, being absent and excused.

Review Audit Report for July 1, 2000, through June 30, 2001

Director Tyrrell presented an Exhibit which included the Audit Report for July 1, 2000, through June 30, 2001, and exit interview topics with related staff action. A copy of said Exhibit is attached to and made a part of these Minutes.

Director Tyrrell said the main problem identified was that the examiner vehicle logs were not considered satisfactory. The auditors did not think that anyone driving state vehicles was doing anything illegal or improper, just that it was poor record-keeping. Director Tyrrell agreed and instituted changes before the auditors completed the audit. The records are reviewed by the Deputy Director for Enforcement and the Finance Officer. Director Tyrrell reviewed the other items mentioned in the report. Director Tyrrell said the audit was a very pleasant experience, there was good cooperation on both sides, and all the auditor concerns had been addressed.

After review, a motion was made by Moline and seconded by Strand to accept the auditor=s report, and approve the actions taken by staff. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Approval of Trust Account Examination Cycle

Director Tyrrell noted the audit report reference to the trust account examination cycle, and asked the Commission to approve the examination cycle.

After discussion, a motion was made by Wiebusch and seconded by Moline to approve the 12-15 month trust account examination cycle for each trust account, including follow-up examinations as needed, and biannual examinations of large accounts. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Establish Fees for Providing Licensee Information in Electronic, Paper, and Label Formats

Director Tyrrell presented an Exhibit which specified the costs involved in providing licensee information in various formats. A copy of said Exhibit is attached to and made a part of these Minutes.

After discussion, a motion was made by Moline and seconded by Nigro to approve the fees as presented in the Exhibit, retroactive to May 13, 2002. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Deletion of New Proposed Language in 299 NAC 3-006.02 Adopted January 24, 2002

Director Tyrrell presented an Exhibit which showed the recent changes to Title 299, Chapter 3. A copy of said Exhibit is attached to and made a part of these Minutes.

Director Tyrrell reported that the Governor=s Policy Research Office (PRO) objected to the addition of 006.02, and the Governor would not approve the rules as passed. To avoid vetoing the entire set of changes, the Governor=s PRO suggested that the Commission remove section 006.02. Director Tyrrell checked with the Attorney General=s office, and was told that no rule hearing was needed to delete proposed new language which had not been formally approved, and the language could be deleted at this meeting as an agenda item. Commissioner Moline asked for clarification that there was no appeal of the Governor=s rejection. Director Tyrrell said that was his understanding.

Director Tyrrell recommended deleting section 006.02 and sending the remaining changes through for approval. The PRO told Director Tyrrell that the Insurance Department was working on their response to the State Title situation, and the Commission could review their proposed regulatory changes when they were done.

Commissioner Wiebusch asked if the other changes to Chapter 3 were acceptable. Director Tyrrell said yes.

A motion was made by Moline and seconded by Nigro to delete the new language in Chapter 3, Section 006.02, and forward the rest of the changes for formal approval. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Discussion on Requiring Criminal Background Checks by Rule and Regulation - Updated Information

Director Tyrrell presented information regarding the proposed rule to require background checks for applicants. In preparing the rule language, Director Tyrrell sent a copy to Lieutenant Dishong. Steve Shaw, chief legal counsel for State Patrol, replied. Director Tyrrell was told that some states would not give criminal history reports to an individual, and would only share that information with other law enforcement agencies. Also, not all states would do a fingerprint check. The proposed rule would create a situation where certain people could not comply with the rule. To make it workable, the Commission would have to put in all kinds of exceptions. Since this was a new policy and the Commission will be doing legislation anyway to implement the FBI checks, the Commission might be better off if they waited for the legislation and skipped this rule. The State Patrol offered to work with the Commission on the statutory language and send it to the FBI for preapproval, so that it could be submitted to the Legislature ready for implementation. Director Tyrrell agreed that it would probably be better to not confuse people with all the exceptions needed. The rule would not be in effect until probably November or December, and the legislation would probably be effective the following September.

Chairperson Gale asked if the FBI check legislation had been passed by other state agencies. Director Tyrrell said yes, and that information is reported from every state with one check from the FBI. Chairperson Gale asked if any rule was needed at this time. Director Tyrrell said that the FBI requires a statutory change to share information, and the Commission could not do that by rule. Commissioner Moline noted that the proposed rule was just intended as a stopgap measure until the legislation passed. Chairperson Gale said that the legislation could possibly include an emergency clause, to put it into effect next spring. Counsel Widger agreed that the rule would be two pages long, and far too involved.

It was the consensus of the Commission to not pass a rule regarding background checks, and to wait for the required legislation for implementation.

Legislative Matters

Director Tyrrell reported that LB 863 passed and was signed by the Governor, and will be effective July 20. Staff are updating documents accordingly for that implementation date.

No action was necessary on this Report.

Information Matters

ARELLO Spring Meeting - April 11-13, Ft. Worth TX - Report of Attendees

Commissioner Moline reported that the Information Services Council decided that the database with the National Association of Realtors7 needed to be cleaned up, and it was sent to the National Association of Realtors7 to eliminate duplicate listings. The Council also reviewed the disciplinary database and how to make it more user-friendly. Users had only a narrow way to search, and the Council suggested allowing broader searches with wild cards, so that jurisdictions would get longer lists to sort through. Commissioner Moline had also shared staff input on the new model license law, and thanked staff for their efforts. Commissioner Moline also distributed a copy of a draft report on focus groups regarding licensing laws. A copy of said report is attached to and made a part of these Minutes.

Commissioner Nigro said the mold seminar was interesting and well-presented. The Fair Housing Training Board Chair was not at the meeting, and not much effort was made to bring that forward. Commissioner Nigro hoped the Board would become active and viable again.

Commissioner Wiebusch agreed that the mold session was interesting, and that the meeting was very good overall. Commissioner Wiebusch received a questionnaire from ARELLO soliciting meeting feedback, and thought perhaps state budget cuts had negatively affected attendance.

Commissioner Johnson said the meetings were good. He was disappointed in the Realty Times session, and did not get much out of it, but the accountant had a good session.

Commissioner Shepard said he attended all the sessions, and noted that the food was great. This was his first time attending, and he thought the rapport and information were excellent. He found the session on recusing especially informative, and said that a lot of times Commissioners did not need to, according to that attorney. Director Tyrrell agreed, but noted that Commissioners would recuse even if they were with the company in question, and had no additional ex parte information. The cautious approach was usually taken in Nebraska, especially if a complaint was going forward to hearing. Attorneys seldom had to ask a Commissioner to recuse, because the Commissioner in question had usually already recused or decided they could be objective. Commissioner Shepard said the respect for Director Tyrrell within the organization was apparent, and it was a feather in Nebraska=s hat to have him here.

Director Tyrrell said he felt Donna Rice=s presentation was not one of her better ones, and thought the interruptions broke the flow of the presentation and was almost disrespectful. She usually gave excellent presentations on administrative procedures. Deputy Director Hoffman was trying to get people to understand the difference between forums and education sessions. New orientation materials were being put together for Commissioners, and Director Tyrrell believed it would be on CD, and may be produced by a Lincoln company. ARELLO also established the Robert W. Semenow Policy Research Endowment Fund.

Commissioner Moline said he was in Washington DC for the National Association of Realtors7 meetings last week, and attended a breakfast with ARELLO members and National Association of Realtors7 counsel. The National Association of Realtors7 was trying to get single approval of continuing education activities for multiple states, while paying fees to the individual states. Director Tyrrell noted that there was a program to certify content in the mid-80s. The small states put it in their laws to accept ARELLO certification, but the large states refused. Commissioner Moline said the National Association of Realtors7 would be working to understand licensing laws and facilitation, especially for commercial real estate on the Internet.

No action was necessary on this Report.

Public Hearing Scheduled on Title 302 - June 12, 2002

Director Tyrrell reported that the Public Hearing for Title 302, the Seller Property Condition Disclosure rule, was scheduled for June 12, 2002.

No action was necessary on this Report.

Trust Account Examination Evaluations - First Quarter 2002

Director Tyrrell presented the Trust Account Examination Evaluation - First Quarter 2002 Report. A copy of said Report is attached to and made a part of these Minutes.

Director Tyrrell reported that comments were again positive. He reviewed some of the comments received, and how the situations were handled.

No action was necessary on this Report.

Future Meeting Dates

June 12-13, 2002 - Staybridge Suites, Lincoln
August 21-22, 2002 - Staybridge Suites, Lincoln
September 25-26, 2002 - Staybridge Suites, Lincoln

Recesses and Adjournment

Commissioner Moline was temporarily absent and excused from 9:10 a.m. to 9:14 a.m.

Commissioner Strand was temporarily absent and excused from 9:50 a.m. to 9:54 a.m.

At 10:15 a.m. on May 21, Chairperson Gale declared a brief recess, and reconvened the Meeting at 10:28 a.m.

Commissioner Moline was temporarily absent and excused from 11:39 a.m. to 11:40 a.m.

Commissioner Strand was temporarily absent and excused from 11:16 a.m. to 11:18 a.m.

At 12:12 p.m. on May 21, a motion was made by Moline and seconded by Nigro that the Commission declare a brief recess, and resume in closed session to deal with personnel matters. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Chairperson Gale declared a brief recess, and reconvened the Meeting in closed session at 12:23 p.m.

At 12:50 p.m. on May 21, Commissioner Strand was excused from the remainder of the Meeting.

At 1:45 p.m. on May 21, a motion was made by Nigro and seconded by Wiebusch to go into open session and declare a brief recess. Motion carried with Johnson, Moline, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Strand not participating or voting, being absent and excused. Chairperson Gale declared a brief recess, and reconvened the Meeting at 1:51 p.m.

At 1:53 p.m. on May 21, there being no further business to come before the Commission, a motion was made by Wiebusch and seconded by Nigro that the Meeting adjourn. Motion carried with Johnson, Moline, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Strand not participating or voting, being absent and excused.

I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing Minutes of the May 21, 2002, Meeting of the Nebraska Real Estate Commission were available for inspection on June 5, 2002, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,
Les Tyrrell
Director

Guests Signing the Guest List

Perre Neilan, Nebraska Realtors7 Association, Lincoln
Harding Collis, NP Dodge, Omaha
Beth Lube, Re/Max Real Estate, Omaha