Chairperson Gale convened a meeting of the Nebraska Real Estate Commission at 9:07 a.m. on May 16, 2005, 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 Education Teresa Hoffman, Deputy Director for Enforcement Terry Mayrose, and Administrative Assistant Heidi Burklund. Rob Kinsey, Special Assistant Attorney General and Counsel to the Commission, was present for the Mills hearing. Abbie Widger, Special Assistant Attorney General and Counsel to the Commission, was present for the rule hearing.

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 public 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 no agenda items had been added since the tentative agenda was mailed to the Commissioners.

After review of the final agenda, a motion was made by Poskochil and seconded by Strand to adopt the final agenda as presented. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

The minutes of the Commission meeting held on March 17, 2005, were considered.

After review, a motion was made by Poskochil and seconded by Grady to approve the minutes as presented. Motion carried with Grady, Johnson, Moline, Poskochil, and Shepard voting aye, with Gale not voting, having been absent and excused for part of the meeting, and with Strand not participating or voting, having been absent and excused for the entire meeting.

Director Tyrrell presented the Receipts and Expenditures Reports for March and April. Copies of said reports are attached to and made a part of these minutes. Director Tyrrell noted that an explanation page was included on each report.

Regarding the reports, Director Tyrrell noted that any unusual items were set forth on the explanation pages, and that examination and application fees were still running high.

The cash fund balance as of March 31, 2005, was $995,658.07, which compared to a cash fund balance of $901,342.47 on March 31, 2004.

The cash fund balance as of April 30, 2005, was $973,860.72, which compared to a cash fund balance of $861,766.33 on April 30, 2004.

After discussion, a motion was made by Moline and seconded by Shepard to file the March and April Receipts and Expenditures Reports for audit. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Director Tyrrell presented a Time-Share Registration for Fairfield Las Vegas Grand Desert Tower 3. A copy of said report is attached to and made a part of these minutes.

After discussion, a motion was made by Johnson and seconded by Strand to approve the registration as presented. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

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

After review, a motion was made by Moline and seconded by Grady to ratify issuance of the licenses as set forth in the report. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

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

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

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

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

Deputy Director Hoffman presented for ratification the Continuing Education Instructor Approval Report, a copy of which is attached to and made a part of these minutes.

Deputy Director Hoffman 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 review, a motion was made by Moline and seconded by Grady to ratify the reports. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Deputy Director Hoffman 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.

Deputy Director Hoffman presented the Continuing Education Renewal Report, a copy of which is attached to and made a part of these minutes.

After review, a motion was made by Grady and seconded by Shepard to approve the report. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Deputy Director Hoffman presented the Continuing Education Annual Report, a copy of which is attached to and made a part of these minutes.

After review, a motion was made by Moline and seconded by Poskochil to remove the providers listed in the annual report from the approved provider list. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Chairperson Gale asked if this was the first time the Commission had offered an Instructor Development Workshop. Deputy Director Hoffman said no, a workshop was offered approximately every two years. The Commission used to charge an admission fee, but decided not to charge several years ago. That helped keep expenses down for instructors, who had to travel and miss work in order to attend. Chairperson Gale said it was good to repeat the workshops periodically. Deputy Director Hoffman noted that she met Ms. Spodek through the Real Estate Educators Association.

Commissioner Johnson asked Deputy Director Hoffman if a course called Neighborhood Gold Program had been monitored at all. Deputy Director Hoffman said no, and asked if it had been offered recently. Commissioner Johnson said he took it, and it was popular because of the continuing education credit. People kept asking in class how to do the program, and the instructor would tell them to see him after class. Commissioner Johnson would not mind someone monitoring a class at some time. It was an easy three hours, conducted right in the office, so it was very convenient. New licensees probably learned something, but the course was promoting the program more than Commissioner Johnson would have liked. Deputy Director Hoffman said she would call for the student evaluations, and would watch the scheduling.

Deputy Director Hoffman mentioned that the provider of a course on warranty programs, about which the Commission had been concerned, had turned over the course to an established continuing education provider, because the original program provider wanted it to be taught well. Deputy Director Hoffman thought this a positive step and worth noting.

No action was necessary on this report.

Deputy Director Mayrose presented a revised 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 # 2004-059 Melanie J. Miller vs. Robert S. Stevens

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 Strand that the complaint be dismissed without prejudice. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Item B Complaint # 2004-066 Daniel and Pamela Guevara vs. Darcy Kay Hall

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 Strand and seconded by Grady that the complaint be dismissed without prejudice. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Item C Complaint # 2004-068 Tayla M. Dickey and Richard C. Dickey vs. Vicki Leigh Reed

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 Poskochil and seconded by Moline that the complaint be dismissed without prejudice, and that a letter of admonition be sent regarding providing documentation upon request. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Item D Complaint # 2005-001 Richard J. Wells vs. Thomas J. Gifford

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 Strand that the complaint be dismissed without prejudice. Motion carried with Grady, Moline, Shepard, Strand, and Gale voting aye, and with Johnson and Poskochil voting nay.

Item E Complaint # 2005-002 Ronald G. VanNortwick vs. Laura P. Gammel

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 Shepard that the complaint be dismissed without prejudice. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Item F Complaint # 2005-005 Brian J. and Sandy J. Shukis vs. Charles J. P. Warga

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 Poskochil and seconded by Moline that the complaint be dismissed without prejudice. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Item G Complaint # 2005-009 Commission vs. Constance J. Nordhues

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 Grady and seconded by Shepard that the complaint be set for hearing on the violations alleged in the report. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Item H Investigative Matter

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

After discussion, a motion was made by Moline and seconded by Poskochil that the Commission file a complaint on its own motion and set it for hearing on the violations alleged in the report. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Deputy Director Mayrose presented a stipulation and consent order in the matter of Complaint #2005-010, Commission vs. Lisa Marie McGuire. A copy of said order is attached to and made a part of these minutes. Ms. McGuire was not present.

After discussion, a motion was made by Moline and seconded by Poskochil to enter into the order as corrected. Motion carried with Grady, Moline, Poskochil, Shepard, Strand, and Gale voting aye, and with Johnson abstaining.

A hearing was held on May 16, at 10:05 a.m., in the matter of Complaint #2004-061,

Commission vs. Stuart B. Mills. Rob Kinsey, Special Assistant Attorney General and Counsel to the Commission, appeared for the Complainant. Respondent Mills was present and represented by counsel Robert Bartle of Lincoln.

Counsel Kinsey presented an oral stipulation regarding the facts in the case.

After opening statements, Counsel Kinsey offered 3 exhibits, all of which were received by Chairperson Gale, and called no witnesses.

Counsel Bartle offered no exhibits, and called no witnesses. Counsel Bartle noted that he would call witnesses and present exhibits during the penalty phase.

After closing arguments had been presented, Chairperson Gale declared the hearing concluded.

A motion was made by Strand and seconded by Moline that Mr. Mills be found guilty of violating Neb. Rev. Stat. 81-885.24(29) and 76-218. After discussion, Commissioner Moline noted that the Commission did not have jurisdiction over the notary law (76-218). Moline offered a friendly amendment to remove the reference to Neb. Rev. Stat. 76-218, which was accepted by Strand. After further discussion, the motion was withdrawn by the mover and seconder.

A motion was made by Strand and seconded by Moline that Mr. Mills be found guilty of violating Neb. Rev. Stat. 81-885.24(29). Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Chairperson Gale then opened the disciplinary envelope. No prior disciplinary actions were on file.

Counsel Kinsey stated that he had no comments to offer regarding the penalty phase.

Counsel Bartle called Mark Johnson and Stuart Mills as witnesses, and presented 14 exhibits.

At 11:30 a.m., Chairperson Gale declared a brief recess, and reconvened the hearing at 11:42 a.m.

Commissioner Strand said that, with the Commission knowing all the circumstances, including that the felony conviction resulted from a lie to the IRS (Internal Revenue Service), a suspension served on probation seemed appropriate. Commissioner Strand did not want to deprive Mr. Mills of his livelihood, if the Commission could do that.

Commissioner Grady said he agreed with Commissioner Strand. Since Mr. Mills had been convicted of a felony, the Commission needed to take disciplinary action, or it would send a bad message about how the Commission viewed similar situations. Commissioner Grady said he did not know the proper wording, but he would support a motion to that effect.

Commissioner Strand said he understood the spirit of the motion and that it made a point, but it seemed to him that it would create some awkward practices in reality, with the 30-day window. Commissioner Moline noted that the decision would go in the Commission Comment. Licensees might think it was no big deal if there was no actual suspension. Commissioner Moline asked Director Tyrrell what had been normal punishments in similar cases in the past. Director Tyrrell began looking up similar cases in the disciplinary history manual.

Commissioner Shepard asked if Mr. Mills had any pending contracts at this point, or present listings. Chairperson Gale noted that the evidentiary portion of the hearing was closed, and the Commission had no more opportunity to explore those kinds of evidentiary issues. The Commission had to go with what they knew. Commissioner Strand asked if an actual suspension would cause listings to be invalidated. It was the consensus of the Commission that it would.

Commissioner Johnson said the Commission had put licenses on suspension for two years, all served on probation. He agreed that 30 days of actual suspension may cause problems. Commissioner Moline said the Commission could try a different motion.

The mover and seconder withdrew the pending motion.

Commissioner Poskochil noted that, for applicants, probation had to be completed before allowing them to sit for the examination. He did not think the Commission had let anyone practice while on probation, but he had only been on the Commission for two years.

Director Tyrrell cited penalties from the past 12 years, which had included censures; actual suspensions; and combinations of actual suspensions and suspensions served on probation. Commissioner Poskochil said those did not deal with felony violations. Chairperson Gale said the difference was that Mr. Mills had lied to the IRS. It may have been a misdemeanor otherwise, but the IRS was setting the example that they did not tolerate any type of misrepresentation. There was a big public policy reason for that. Even though there had been no bad consequences to anyone else, Mr. Mills had lied to the IRS. Chairperson Gale questioned what the Commission would say to anyone else with a felony conviction.

Commissioner Moline said he took exception to the implication that it was OK to lie to a person or to state government, but not to the IRS. He had made the motion because 6 months seemed reasonable, with 30 days of actual suspension to send a message. The Commission might want to consider additional continuing education requirements. There needed to be some actual consequence, and the Commission would have six months to monitor Mr. Mills. That seemed to fit with the penalties in previous cases.

Commissioner Poskochil said he did not believe previous cases were the same as this one. Commissioner Moline said Commissioner Poskochil did not know that for sure, and did not know who had been hurt in previous cases.

Commissioner Poskochil noted that Mr. Mills would get his law license back on December 6, 2005, and was on probation until August 2006. Commissioner Poskochil could live with Mr. Mills getting his real estate license back when he got his law license back, and being on probation while he was on probation for that.

Commissioner Shepard said that would get the Commission past the probationary period with the Supreme Court. It sent a message to have the probationary suspension last for two years. The Commission had to take the license for a while. It was not an issue that it deterred his business. If the Commission did not actually suspend the license at all, and allowed it all to be served on probation, that would not be the right message to send.

A vote was taken on the pending motion. Motion carried with Grady, Johnson, Moline, and Shepard voting yes, and with Poskochil, Strand, and Gale voting no.

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 Kinsey 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 12:28 p.m.

Director Tyrrell reviewed the proposed amendments set out in Title 299, Chapter 2, and the letters received prior to the meeting. No one appeared either for or against the proposed amendments at the hearing.

Director Tyrrell noted that the change proposed in the Riesberg letter would require a statutory change, and was not a change that the Commission could make under the rule change process.

A motion was made by Moline and seconded by Shepard that the Commission adopt Title 299, Chapter 2, with the proposed amendments as further amended at the hearing; to direct staff complete the filing process for the proposed rule changes; and to authorize staff to make any non-substantive grammatical, spelling, or punctuation corrections needed.

Commissioner Poskochil asked Director Tyrrell if he thought a disclosure document was necessary, as proposed in the Riesberg letter. Director Tyrrell said that, since other jurisdictions allowed multiple trade names, he would want to survey other jurisdictions to see how they handled the issue. Director Tyrrell could see the reasoning to some degree, but he did not know if it was too much. Commissioner Poskochil said he was just asking to determine whether making the rule change would be ahead of the issue raised in the letter. Director Tyrrell said he did not know if very many brokers would operate under multiple trade names, at least initially.

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

Chairperson Gale declared the rule hearing concluded at 1:29 p.m.

Chairperson Gale said that, on the Pardons Board, they did not pardon those who had sexually assaulted minors. Many offenders had excuses, but that did not matter. If an applicant was a registered sex offender, he or she should not be licensed. This was not the only occupation available.

Commissioner Poskochil said he would rather not act on this agenda item, and wanted to give Mr. Pavlik the opportunity to reappear at a later date. Chairperson Gale said that was fine if the Commission wanted to wait, but it would not change his mind.

Commissioner Moline said it was hard to approve someone with this kind of crime.

A motion was made by Moline and seconded by Strand to not allow Mr. Pavlik to sit for the examination or have a real estate license. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Commissioner Strand noted that the criminal history was 17 years old, which was a long enough period of time that he was not concerned.

Commissioner Grady asked Director Tyrrell if he had asked why Mr. Cavanaugh needed a Nebraska license. Director Tyrrell said he assumed Mr. Cavanaugh or his company wanted to list Nebraska properties or assist buyers in Nebraska. That was a question he did not typically ask, but those were usually the two reasons for real estate licensees in bordering states.

A motion was made by Strand and seconded by Moline to allow Mr. Cavanaugh to have a nonresident salesperson license issued after making proper application, if his Colorado license was in good standing. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, and Strand voting aye, and with Gale voting no.

Director Tyrrell noted that Mr. Kolnik had requested a special appearance, which was scheduled for today, but Mr. Kolnik had called to let staff know he would not be in attendance due to health reasons.

Commissioner Strand said the documentation stated that Mr. Kolnik was on probation for five years, starting in 2002. It would be consistent to tell him to come back when he was off probation. Director Tyrrell noted that Mr. Kolnik was released early from probation, according to another document in the exhibit.

A motion was made by Moline and seconded by Grady to not allow Mr. Kolnik to sit for the examination or have a real estate license. Motion carried with Grady, Johnson, Moline, Shepard, Strand, and Gale voting aye, and with Poskochil voting nay.

At 3:21 p.m., a motion was made by Johnson and seconded by Grady to go into closed session for discussion of personnel matters. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

At 3:43 p.m., a motion was made by Moline and seconded by Strand to go into open session. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

A motion was made by Moline and seconded by Grady that the Director and Deputy Director for Education and Licensing receive a 3% pay increase effective July 1, 2005. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

An exhibit regarding the examination performance, a copy of which is attached to and made a part of these minutes, was made available to the Commissioners by Larry Fabrey of AMP (Applied Measurement Professionals).

Mr. Fabrey said the Advisory Board included representatives from all 12 jurisdictions which contract with AMP, and recently met at the ARELLO meeting held in California. The Advisory Board had reviewed the results of the job analysis, which included a detailed listing of 200-250 tasks. Surveys had been sent out to all jurisdictions for which they could get address labels, not just those that contracted with AMP. Nebraska had a 14% response rate, which was the 3^rd highest, and had good input. The Advisory Board set the decision rules regarding which items were included in the examination outline.

Mr. Fabrey said that other states have asked why the examination is not administered in other languages. He said that, while there may be different areas of towns that would not require English competency, a license was statewide. In the old days, the examination would be translated by giving it to a person who spoke the language and having the person translate items. This was not very satisfactory. Then, about 20-30 years ago, translation and back-translation were the standard, having two different people do it. With that method, it was discovered that the meaning of words and phrases could be lost. Then, the standard was adaptation, to get groups of content experts who spoke both languages to make sure the wording was a faithful representation of what was intended to be tested. That was a very expensive process. Mr. Fabrey asked if language had been an issue in Nebraska.

Chairperson Gale said that Nebraska had a rapidly-growing Hispanic population, and there were areas where people did not speak any English at all. Chairperson Gale asked Director Tyrrell if the Legislature had taken a look at it. Director Tyrrell said not to his knowledge. The Commission had translated the agency brokerage relationships brochures into Spanish and Vietnamese, but with the caveat from legal counsel and translators that they be used only for informational purposes. For legal purposes, people signed the English version.

Chairperson Gale said he thought it had come into question in the voter area. Spanish voter registration and voter guide forms were made available in one area, and had to be made available statewide.

Mr. Fabrey said the bottom line was protection of the public, and keeping them well-informed.

Commissioner Moline noted that the exhibit referred to the national portion of the examination. Mr. Fabrey said that was correct. Commissioner Moline asked how the state portion was done. Mr. Fabrey said there were items in the question bank that had been pre-tested. AMP asked representatives of the state in question to review the questions prior to pre-testing, to make sure they did not conflict with state law. Questions were pre-tested by being included on the examination, but not being counted for the score. There might be up to 5 items on an examination that did not count toward the score. In the national question pool, there was no overlap between the sales and broker questions, but usually the state items were from exactly the same pool. There was not much reason to test again on items for which licensees had already demonstrated competence.

Commissioner Moline asked if Mr. Fabrey was familiar with other states that allowed applicants to pass each part separately. Mr. Fabrey said yes, but they had limitations on the number of attempts. In Missouri, candidates had to pass within six months after graduation from pre-license courses. Illinois had a problem with schools splitting the education, where students were prepped to pass only the national portion, then prepped to pass only the state portion. Commissioner Moline asked, in reality, how many people actually took just one part of the examination. Mr. Fabrey said the number was small, and the number that concentrate on one part at a time may be 10%, from what providers told him. Providers were usually helping the poorer students to concentrate on smaller areas.

Commissioner Poskochil asked if the cost to switch over would be borne by AMP or the state. Mr. Fabrey said that was not set in stone yet. It would probably have to be borne by AMP, since they wanted to develop a better assessment tool, and because it was the right thing to do. The incentive for states was that it was a better method of assessment, and the incentive for AMP was that additional states would start to buy AMP services.

Commissioner Poskochil asked if AMP planned to convert the salesperson examination to simulation if the broker simulation was successful. Mr. Fabrey said no, salespeople needed to demonstrate basic knowledge of terms and calculations.

Director Tyrrell noted that, in Nebraska, a person could go directly for a broker license without obtaining a salesperson license and passing the examination. Director Tyrrell asked if AMP had thought of a solution to that. Mr. Fabrey said that issue was discussed at length by the Advisory Board, because that was possible in several other states as well. Applicants might obtain a salesperson license by reciprocity, or go directly to a broker license. From a psychometric standpoint, to provide assurance of basic knowledge, his recommendation would be that those people be required to take the salesperson examination first, then the broker examination. Director Tyrrell said that could be a situation requiring a statute or rule change, to require an additional examination if going directly to broker. Mr. Fabrey said AMP may also be able to have a combination examination, with certain percentages of simulation and multiple-choice items. A state could request that, and AMP would develop it. The state would probably want a combined score on the multiple-choice portion, then another score on the simulation.

Commissioner Strand asked which states used a composite score. Mr. Fabrey noted that was in the exhibit. Commissioner Strand said that, with a 50% pass rate, it seemed to suggest that pre-license education was better at addressing how to pass the national examination rather than the state examination. Mr. Fabrey said he was not sure that was the case. It could be that 50% of candidates pass both portions at the same time, 25% pass only the state portion, and 25% pass only the national portion.

Chairperson Gale asked how often the examination was upgraded for the changing dynamics of the profession. Mr. Fabrey said AMP did a job analysis every 5 years. He worked on real estate licensing examinations and nursing specialty certifications. He also volunteered his time on the National Commission on Certifying Agencies, which set standards for voluntary certifications, and required that job analyses be done every 5 years. The examination was updated more often than that. AMP used multiple versions of both portions, so that candidates had different examination versions each time with consistent difficulty and content.

Chairperson Gale asked if there were regional differences. Mr. Fabrey said no, but AMP may get more ongoing feedback from the larger states, because there were more people. The software would find a new form for each candidate each time. After 15 times, either the order of the questions or the multiple-choice answers was scrambled, so if a person tried to copy from someone else, they would get it wrong.

Mr. Fabrey said he would like to come back to demonstrate the simulation examination. Commissioners would be encouraged to take both the current examination and the simulation. He would eventually like to get feedback from employing brokers about the real-life job performance of brokers who were licensed via the simulation examination.

Commissioner Poskochil asked if other professions were using the simulation examination. Mr. Fabrey said that the advanced level for respiratory therapy used a simulation examination.

Chairperson Gale said it was a joke among the Bar Association that law schools did not prepare students to practice law, and it would be easier if students could learn procedures during training. The educational process was important. Mr. Fabrey noted that the content on the examination was based on what practitioners told them was important, which helped close the loop.

Commissioner Johnson asked if Mr. Fabrey would bring in practitioners to develop the simulation examination. Mr. Fabrey said groups of knowledgeable people, which included practitioners, would meet with AMP in Atlanta and Chicago to develop examination items. The Advisory Board would then meet in Kansas City to review the items. They would have a group of content experts to approve and pre-test the items, then have the state representatives review the items to make sure the national items were not inconsistent with state law.

No action was necessary on this report.

Director Tyrrell presented exhibits regarding proposed guidelines for pre-hearing conferences and conduct of hearing. Copies of said exhibits are attached to and made a part of these minutes.

Commissioner Strand said it sounded like the Commission was trying to spend more money on lawyers. Chairperson Gale said there could be a better job done if it was done right. Chairperson Gale did not like having lawyers throw things at him during hearings. This procedure was for his benefit, and for the benefit of all Commissioners. It was a wise investment if helped the parties and the Commission do a better job.

Commissioner Poskochil asked if Chairperson Gale would be present at the pre-hearing conference, if he appointed an attorney as the pre-hearing officer. Chairperson Gale said no, only the pre-hearing officer would attend. Commissioner Poskochil asked if the pre-hearing officer would review the evidence, and find out what was relevant. Chairperson Gale said yes, and the pre-hearing officer would get as many joint stipulations as possible. Commissioner Poskochil asked how long the conferences would last. Chairperson Gale said it depended on the complexity of the case. On simple cases, the Commission would do without, but on complicated cases, it would be helpful.

Commissioner Strand asked if the expense would be charged to the respondent, if found guilty. Director Tyrrell said no, this was a pre-hearing conference, and was not part of the hearing cost. Commissioner Poskochil asked if a court reporter was needed. Director Tyrrell said no, the pre-hearing conference was not on the record. Commissioner Poskochil asked if the pre-hearing officer would investigate what issues were relevant to the charge. Chairperson Gale said the pre-hearing officer would not be investigating the case. The purpose was to get the exhibits organized, to note whether they were stipulated or contested, to determine whether witnesses were qualified experts and what issues the witnesses would address, and to get a brief on any complex legal issues. The Commission had no time to read briefs when they were dumped on them during a hearing.

Chairperson Gale said the Commission would try this procedure out, and see if it was helpful. If it was not, the Commission would try to find another way to streamline the hearing process.

Commissioner Shepard asked what age LB 505 would set as the age of majority, if it passed. Director Tyrrell said the bill would change it to 18, but the bill had not moved at all this year.

No action was necessary on this report.

Commissioner Grady said he was still the new kid on the block, and was still learning what ARELLO was all about and its past history. There was a lot of good information, and he really found it beneficial to learn how things were done in other parts of world. The sessions he attended were good.

Commissioner Shepard agreed that the sessions were very good. Nothing earthshaking was presented, and a lot of it had been discussed before. It was good to get the information on internet-based practices.

Commissioner Johnson said he had been to a few meetings, so he would complain. Overall, the meeting was very good, but the scheduling was a problem. The first day had quite an illustrious panel, but the time frame was fairly short. Basically, they heard that there were too many people and not enough houses in California, and those less economically advantaged could not afford to buy a house unless it was far away from major cities. There was good information in the Inman News session, but Mr. Inman was only given 20 minutes. Some other stuff could have been cut back. Even with the scheduling problems, Commissioner Johnson learned a lot.

Commissioner Poskochil said Nebraska was really fortunate with our agency law, and that we had some really good laws on the books. Our agency law was fairly clear, which made some things easier here than other places, especially regarding dual agency. It will be interesting to wait and see where licensees and regulators would end up, with the big companies coming into the real estate market. Commissioner Poskochil said he did not spend enough time on the internet to know about all of the rebates and programs available. The big names in the industry said to wait and see how it applied to us, and to regulation. There were a lot of people practicing real estate who said they were not, and it was all changing.

Director Tyrrell said that enforcement was currently done as each web site was reported to staff, by cease and desist order.

Commissioner Grady said there was a new business where people bought into a vacation club, spent $300,000 for a 30-year membership, and could go anywhere in world and stay as long as they wanted on a first-come, first-served basis. There was some salvage possible for someone to sell the remainder of the membership. The business was not designed for everybody, and the material said a person needed to be prepared to spend $50-75,000 on vacations annually. Commissioner Strand said he could name a half dozen people in Lincoln who had already joined. It was limited to 26 weeks, or something like that. Director Tyrrell noted that another business was doing a ship, and it cost a couple million dollars to get in. Commissioner Strand said it was also like a time share, in that you paid maintenance fees whether you used it or not.

Director Tyrrell said that ARELLO was trying to enhance the Commission Member Training Board to get the initial information out in a more timely manner, then follow up individually.

Deputy Director Hoffman said she could not add to the reports. Commissioners had attended the same programs she was in, and she had also been frustrated by the programming. Committee meetings were held at the same time as the forums, which was very frustrating, and it did not used to be that way. The information received was good, and the information on the California market was fascinating, so it was time well spent.

Director Tyrrell mentioned that Commission staff have had inquiries regarding the meal allowances for travel out of state and within the state. Director Tyrrell noted that it was Commission policy that the limits were $45 for out-of-state travel, and $30 for in-state travel. That policy was a carryover from the early 1980s, and the Commission could change it if desired. It was not a limit set by the IRS or state rules or anything like that. The only state requirement was that if someone paid $75 or more for one meal, they had to have a receipt for that meal; otherwise, they just had to do a meal log. Director Tyrrell could put the issue on the next agenda, if the Commission wanted to consider changing the limit.

No action was necessary on this report.

Director Tyrrell presented the Trust Account Examination Evaluation Report - First Quarter 2005. A copy of said report is attached to and made a part of these minutes.

Director Tyrrell reported that comments were again very positive. He reviewed some of the comments received, and how the situations were handled. A discussion was held with the examiner involved regarding accommodating office schedules, and not giving advice regarding business structure.

Commissioner Grady noted that another comment was received that the return mail postage stamp was a problem. Director Tyrrell said that occasionally came up, and noted that the Commission still got a 50-60% return, which was outstanding for any survey.

No action was necessary on this report.

Director Tyrrell presented exhibits regarding minimum services brokerage. Copies of said exhibits are attached to and made a part of these minutes.

Director Tyrrell said minimum services brokerage was a topic of discussion at ARELLO meetings. Putting it on the agenda caused a call from the Department of Justice. Director Tyrrell told the person that it was just an information matter, and that the Commission was not considering doing anything with it at this time. Director Tyrrell noted that the Nebraska agency statute was probably doing the same thing as the other states were now trying to do, because they had not put duties into their agency laws.

The articles showed that the Department of Justice was interested in jurisdictions discussing the issue. Staff was in process of having a Commission Comment article written, which would show what Nebraska law said about it. Commissioner Strand asked if Director Tyrrell was sure that was a good idea. Director Tyrrell said he was not sure, and he had not written it yet. Commissioner Strand questioned whether writing on anti-trust issues was a good thing to do. Commissioner Moline said he had talked to a Texas Commissioner, and they were considering requiring fidelity and other really basic stuff. Nebraska licensees had been required to do those things for years. Basically, our requirements are in the agency statute, and maybe an article on what is required by agency law would be appropriate.

Commissioner Grady asked if Director Tyrrell expected a response from the Department of Justice. Director Tyrrell said no, they were just trying to determine if Nebraska was considering minimum services brokerage. When Director Tyrrell explained that it was just an information matter, that the Commission was not considering any action on the issue, and that the Nebraska agency statute currently handled it, she seemed very happy and was very pleasant. Commissioner Grady asked if the Department of Justice had not known that Nebraska had an agency law. Director Tyrrell said it seemed they had not known.

Commissioner Moline noted that Nebraska had the agency statute, but it was not necessarily being met with every listing and every purchase contract. That was why the article was needed. Commissioner Strand said that sometimes, if attention was called to an issue, it could cause regulation headaches.

Director Tyrrell noted that Commissioner Moline gave him some additional articles during the meeting, which he would forward to Commissioners for their information.

Director Tyrrell said that staff would draft the article for the June Commission Comment, and would hold the June issue until after Commissioners approved the article at the June meeting.

No action was necessary on this report.

Director Tyrrell presented an exhibit regarding the ARELLO District Meeting, which will be held July 17-19, 2005, in Nashville, Tennessee. A copy of said exhibit is attached to and made a part of these minutes.

Director Tyrrell suggested that Commissioners make their hotel reservations early, especially for the upcoming Toronto meeting, even if they had to cancel the reservations later.

No action was necessary on this report.

June 13-14, 2005 - Ramada Limited South, Lincoln

August 24-25, 2005 - Staybridge Suites, Lincoln

September 22-23, 2005 - Staybridge Suites, Lincoln

At 9:53 a.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 10:05 a.m.

At 11:30 a.m., Chairperson Gale declared a brief recess, and reconvened the hearing at 11:42 a.m.

The Mills hearing was adjourned at 12:28 p.m. Chairperson Gale declared a recess for lunch, and reconvened the meeting at 1:10 p.m.

Chairperson Gale declared the rule hearing concluded at 1:29 p.m.

At 2:30 p.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 2:43 p.m.

At 3:21 p.m., a motion was made by Johnson and seconded by Grady to go into closed session for discussion of personnel matters. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

At 3:43 p.m., a motion was made by Moline and seconded by Strand to go into open session. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

At 4:00 p.m., Commissioner Moline was excused from the remainder of the meeting.

At 4:39 p.m., there being no further business to come before the Commission, a motion was made by Poskochil and seconded by Grady that the meeting adjourn. Motion carried with Grady, Johnson, Poskochil, Shepard, Strand, and Gale voting aye, and with Moline absent and excused.

I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing minutes of the May 16, 2005, meeting of the Nebraska Real Estate Commission were available for inspection on May 25, 2005, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,

Les Tyrrell
Director