Acting Chairperson Wiebusch convened a meeting of the Nebraska Real Estate Commission at 9:02 a.m. on November 12, 2003, in the Fireside Room of the Days Hotel Carlisle, located at 10909 M Street in Omaha, Nebraska. All of the members of the Real Estate Commission were present, with the exception of Chairperson Gale, who was absent and excused. Also present were Director Les Tyrrell, Deputy Director for Education Teresa Hoffman, 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 a stipulation and consent order and the VOW discussion. Rob Kinsey, Special Assistant Attorney General and Counsel to the Commission, was present for the stipulation and consent orders. Jim Titus, Special Assistant Attorney General and Counsel to the Commission, was present for the retirement subdivisions and communities and time-share issues.

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 Wiebusch reported that all Commissioners had been notified of the meeting simultaneously, in writing, and that a proposed tentative agenda accompanied the notification.

Acting Chairperson Wiebusch 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. Acting Chairperson Wiebusch asked that guests sign the guest list.

Director Tyrrell noted that agenda item 20 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 Johnson to adopt the final agenda as presented. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

The minutes of the Commission meeting held on September 24, 2003, were considered.

After review, a motion was made by Moline and seconded by Shepard to approve the minutes as presented. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Director Tyrrell presented the Receipts and Expenditures Reports for September and October. Copies of said reports are attached to and made a part of these minutes.

Regarding the September Report, Director Tyrrell noted that in Receipts Category 481100, Investment Interest, $5025.99 was received in interest because DAS sold some bonds and distributed the interest; and Category 491300, Sale of Surplus Property, was from the sale of a surplused computer. In Expenditures, Category 521100, Postage Expense, was down considerably because the Commission Comment postage had not yet been billed, plus the category included encumbered funds. Total expenditures budgeted included approximately $21,000.00 of encumbered funds.

The cash fund balance as of September 30, 2003, was $549,309.10, which compared to a cash fund balance of $458,847.14 on September 30, 2002.

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

Regarding the October Report, Director Tyrrell noted that in Receipts, Categories 475160 and 475170 were considerably behind due to the late renewal mailing. In Expenditures, Category 521100, Postage Expense, and Category 521500, Publication and Printing, included expenses for the Commission Comment which were billed late; Category 531100, Office Supplies Expense, included a $62.00 coding error by DAS; Category 541700, Legal Related Expenses, was considerably more than anticipated because trust account statement copies had to be purchased from a bank as part of an investigation; and Category 559100, Other Operating Expense, did not include a late billing from Records Management.

The cash fund balance as of October 31, 2003, was $511,423.40, which compared to a cash fund balance of $511,122.02 on October 31, 2002. This was due to the late mailing of renewals and the resulting lack of renewal fees received.

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

Director Tyrrell presented a Time-Share Registration for Orange Lake Country Club

Villas III, A Condominium. A copy of said report is attached to and made a part of these minutes.

Following discussion, a motion was made by Moline and seconded by Poskochil to approve the registration as presented. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

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 Strand to ratify issuance of the licenses as set forth in the report. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Deputy Director Hoffman presented for ratification the September and October 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 Poskochil to ratify the September and October Examination Reports for the purpose of issuing licenses. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Deputy Director Hoffman reported that she had attended the Applied Measurement Professionals (AMP) Advisory Committee meeting, which was held in Kansas City on October 6, 2003.

Deputy Director Hoffman reported that AMP administered real estate licensing examinations for 10 states, and representatives from each were at the meeting. Participants were asked for feedback about the services they would like to have provided by AMP. There was discussion on how to keep the national examination appropriate and accurate for multiple states.

Simulation examinations, which are new to real estate, were discussed. In simulations, examinees are given a scenario, choose an action, and the examination routes the examinees according to the choices they make. This type of examination analyzes skills in decision-making and information-gathering. It tests not just memorized knowledge, but utilization of knowledge. This type of examination has been used successfully for years in medical licensing and certification. AMP has been working with Georgia, which was using the simulation examination format for continuing education credit in order to gather performance statistics toward a possible licensing examination. AMP would like to be the first real estate examination company to use this approach to real estate prelicense testing. AMP is encouraging Commissioners to look into this type of examination and will make themselves available to answer any questions Commissioners may have in this regard. AMP will also set up sample examinations so that the Commissioners can take the test and see what they think of it.

Commissioner Poskochil asked if the entire test would be in the simulation format. Deputy Director Hoffman said that they were only considering the broker examination at this time and that yes, the entire examination would be a simulation. Commissioner Poskochil asked if there would be a time factor for the different examination. Deputy Director Hoffman said that, at this point, they had not addressed the time element, but that since they could measure multiple concepts per item she did not believe that it would be a longer examination. Commissioner Poskochil asked how long Georgia had been using the new examination. Deputy Director Hoffman said that they had been gathering performance statistics for a year now.

Commissioner Strand asked what criteria was used for evaluating measurement with the simulation examination. Deputy Director Hoffman said that decision-making and information-gathering skills could now be factored in along with traditional knowledge measurement.

Commissioner Johnson asked for what other professional licenses this type of examination was used. Deputy Director Hoffman said it was used for respiratory care therapists, and that she would have to inquire into other professions using this type of examination. Commissioner Strand noted that the RFP process for administering examinations is competitive, and asked how other vendors were positioned to compete in this market. Deputy Director Hoffman said that she believed that AMP was out front in the development of this type of tool, and that she did not know of any other real estate examination company developing a similar examination.

Commissioner Wiebusch expressed a desire to make certain that AMP would include Nebraska schools and instructors in the ongoing development of simulation tools.

Deputy Director offered to share their insights with AMP.

No action was necessary on this report.

Deputy Director Hoffman presented a report on the Examination Facility Questionnaire Summary. A copy of said report is attached to and made a part of these minutes.

The report indicated that, overall, Nebraska was doing very well with their examination sites. Deputy Director Hoffman indicated that all sites had been recently visited, and had been satisfactory.

No action was necessary on this report.

Deputy Director Hoffman presented a report on the examination results by school. Since this information is confidential, a copy of said report is not attached to these minutes, but is maintained in the Commission office.

Deputy Director Hoffman noted that she reviewed this report every month, and cautioned the Commissioners to not base their judgments on this report alone. Some examinees had taken their education a long time before the examination, and applicants sometimes misreported their schools. Applicants are allowed to take courses from multiple schools, which further dilutes the percentages. Applicants who attended multiple schools included 20 salespeople and 14 brokers during this quarter, and 3 salesperson applicants were from out of state. These factors skew the statistics significantly, especially if there are low numbers of applicants. Also, school numbers do not equate to classroom numbers, because some students never take the examination.

Commissioner Moline asked if this was considered public information. Deputy Director Hoffman said they were shaky numbers, so staff have always kept it confidential. The Commission did not want someone advertising based on questionable statistics.

Commissioner Wiebusch said it would take some time to digest the information, and she understood why staff did not want it distributed.

With regard to school performance, Deputy Director Hoffman noted that Nebraska had an overall 75% pass score. Some states had much lower pass rates. Even though applicants had to pass both parts of the examination at one sitting, we still had one of the highest pass rates in country. AMP has commended our educators on their preparation. Over time, Deputy Director Hoffman had never found a school which was not consistently doing well. Market forces also encourage performance. A school whose students performed poorly would not get more students.

Commissioner Poskochil asked how long reports had been kept. Deputy Director Hoffman said she had gotten a quarterly report for years. Commissioner Strand said staff would need a long time to get any useful statistics. Commissioner Moline asked if the report could be run for a different time frame. Deputy Director Hoffman said she will get a year-end report. Commissioner Poskochil said the annual report would be useful.

Commissioner Moline said he would like to see if different types of schools have different pass rates. Deputy Director Hoffman said she would mail the year-end report to Commissioners before the appropriate meeting, for discussion at the meeting. Director Tyrrell said staff could send it out earlier than a week prior to the meeting, and mark it confidential. Deputy Director Hoffman noted it would be for the January or February meeting at the earliest. Commissioner Shepard asked if the Commission could get a three-year report. Deputy Director Hoffman said she will check. Commissioner Shepard said it would be useful, especially for smaller schools.

No action was necessary on this report.

Deputy Director Hoffman reported that implementing the background checks had been a learning process for our staff and the Nebraska State Patrol.

The Nebraska State Patrol staff who ran the reports were understaffed and backlogged at the beginning. Their newly-hired supervisor was previously from State Personnel, and Deputy Director Hoffman has had a good working relationship with her for some time. Things were looking up. The Commission needed to address one issue. There were people who did not have readable fingerprints, for various reasons. Also, some did not roll well onto the card, even though they were rolled by law enforcement. Fingerprints were scanned twice, then re-rolled if needed. If it did not work after the second roll, the Nebraska State Patrol suggested that the Commission use the same backup system as the Patrol itself uses. Nebraska State Patrol staff would do a background search based on all known names and aliases, with the Social Security number and date of birth. The resulting report would provide data from different databases, without the absolute verification of fingerprints. This was the procedure followed by law enforcement, and there is no alternative at the present time.

Commissioner Wiebusch asked how many applicants to date had unusable fingerprints. Deputy Director Hoffman said that, so far, two out of approximately sixty applicants.

Commissioner Moline asked if the Commission should notify the broker if the background search was not fingerprint-based. Director Tyrrell said he could check with counsel whether that might be considered discriminatory or defamatory. Commissioner Wiebusch thought that was a good idea.

Commissioner Poskochil asked if the statute now read that a fingerprint-based background search would be done, and if any other method was mentioned. Director Tyrrell said that was how it read, and no other method was mentioned, but this was the method that the Nebraska State Patrol used if they could not read the fingerprints. This would not be the standard procedure. As a backup, the Commission always had the question on every application, which asks for any criminal conviction. Even if a fingerprint-based search was done, each applicant must answer that question. If we receive a report, and the potential applicant calls to see if we have received it yet so the application can be sent in, we just tell the applicant that we have received the report, not what was on the report. Staff are keeping track on unsuccessful rolls, to pinpoint problems for the Nebraska State Patrol. Reports take as short as 2 days, and as long as 20 days, to complete. The average is 17 days from day they received the fingerprints to the day they do the report. Commissioner Poskochil noted that would be per fingerprint roll.

A vote was taken on the pending motion. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

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.

After review, a motion was made by Moline and seconded by Strand to ratify the reports. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

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:

Counsel Kinsey presented a dismissal order with regard to Mr. Lund, and a stipulation and consent order with regard to Mr. Earl, in the matter of Complaint #2003-008, Steven Buchanan vs. Michael Patrick Earl and John Francis Lund, Jr. A copy of said orders are attached to and made a part of these minutes. Mr. Earl and Mr. Lund were not present, but were represented by counsel Brian J. Mathey.

Counsel Kinsey reviewed the circumstances involved and noted the provisions of the stipulation and consent order, which had been signed by Mr. Earl. The order specified a censure, plus three hours of additional continuing education in agency law to be completed within sixty days.

After discussion, a motion was made by Poskochil and seconded by Johnson to enter into the order as presented with Mr. Earl, and to dismiss Mr. Lund from the complaint. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Prior to discussion of this matter, Commissioner Moline recused himself, thereby nullifying any potential conflict of interest. Counsel Kinsey presented a stipulation and consent order in the matter of Complaint #2003-047, Commission vs. Gregory G. Haer and Roger A. Nieman. A copy of said order is attached to and made a part of these minutes. Mr. Haer and Mr. Nieman were present and represented by counsel Doug Ruge.

Counsel Kinsey reviewed the circumstances involved and noted the provisions of the order, which had been signed by the Respondents. The order for Mr. Haer specified a censure, plus six hours of additional continuing education consisting of 3 hours in agency law and 3 in contracts, to be completed within ninety days. The order for Mr. Nieman specified a censure, plus three hours of additional continuing education in agency law to be completed within ninety days.

After discussion, a motion was made by Poskochil and seconded by Strand to enter into the order as presented. Motion carried with Johnson, Poskochil, Shepard, Strand, and Wiebusch voting aye, with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest, and with Gale not participating or voting, being absent and excused.

Counsel Ruge asked if Joe Valenti, employing broker for Mr. Haer and Mr. Nieman, could comment on a few points in the case. Acting Chairperson Wiebusch indicated that would be allowed.

Mr. Valenti said he would like to address practical things in our business, and asked if he and the Commission could visit about those topics. Mr. Valenti said that Mr. Haer had represented the builder for 15 years, and Mr. Haer had no way of knowing it was an unrepresented buyer. Other agents brought in buyers all the time, to look at model homes, specs, etc. Mr. Valenti would not consider Mr. Haer to be a dual agent unless he brought in the buyer. Hundreds of agents brought in buyers every day. Mr. Valenti said he was not sure how the listing agent would know, in the technical sense, if a person was an unrepresented buyer without having asked. Mr. Valenti said he did not know if a listing agent would ask. From a practical standpoint, in agency law, it was normally what a buyer and a seller would expect.

Director Tyrrell raised a point of order. This discussion was not on the agenda, and was not specific to this complaint, but rather were general agency comments. If the Commission wanted to put the discussion on the agenda, the Commission could address it in compliance with the Open Meetings Law. The Commission had the option to add it to the agenda as an emergency item, if it considered it so. The comments being made were not on this specific complaint, and were getting into an area not specifically related to this matter.

Mr. Valenti said he thought it was. Mr. Haer was the listing agent at the point of the purchase agreement. Director Tyrrell said he was not the listing agent at the time the buyer came into the model home.

Mr. Valenti said he would love to be a part of the discussion. He felt it was an item of concern for the industry, and this particular case.

Counsel Kinsey presented a stipulation and consent order in the matter of Complaint #2003-025, Robert and Jeanette Soto vs. Beverly Arlene Redwine. A copy of said order is attached to and made a part of these minutes. Ms. Redwine was not present.

After discussion, a motion was made by Moline and seconded by Strand to enter into the order as presented. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Counsel Widger presented a stipulation and consent order in the matter of Complaint #2003-046, Commission vs. Carolyn Lee Carnley. A copy of said order is attached to and made a part of these minutes. Ms. Carnley was not present.

The hearing scheduled for this meeting was continued.

Director Tyrrell noted that Mr. Benton was a potential applicant with a criminal background, even though the Omaha Police Department (OPD) report did not disclose any criminal records.

Mr. Benton said that he retired from Vickers in 2001, where he had worked since 1968. Mr. Benton had started at the very bottom, cleaning parts, and had progressed to middle manager after 33 years. He was tired of retirement and wanted a second career, so he took prelicense courses at Randall. Mr. Benton took part in a robbery 45 years ago, and pleaded guilty so there was no trial. He served 34 months and successfully completed parole. He has had no criminal infractions since then.

Commissioner Johnson asked Mr. Benton if he had talked to any brokers about employment. Mr. Benton said yes, he had an employing broker lined up if he passed the examination.

Mr. Benton asked why his conviction was not on the OPD report. Director Tyrrell said he did not know, but maybe the records were no longer available or not computerized. Mr. Benton said he was released prior to 1961. Commissioner Moline noted that the Commission would still do a fingerprint-based criminal history search during the application process. Director Tyrrell said yes.

After discussion, a motion was made by Moline and seconded by Poskochil to allow Mr. Benton to sit for the salesperson examination after making proper application, and to have a license issued upon passing the examination. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Director Tyrrell noted that Mr. Grimes was an applicant, and that his fingerprint-based criminal history report was included in the exhibit.

Mr. Grimes said he went by the name Allen Grimes. In 1979, he was in his first semester at college, and got involved in drugs at age 18. He got in trouble for it. Mr. Grimes had been in the honors dormitory at the university, and was unsupervised for the first time in his life. He got caught selling drugs to some guys in the dormitory. Mr. Grimes said he was wrong for doing it, he was told not to do it again, and he did not. Mr. Grimes got 2 years of probation. Mr. Grimes said this was the most shameful and embarrassing thing in his life, and he wished it had not happened. It was a long time ago and was short-lived. Mr. Grimes learned his lesson, and did not do it again. Mr. Grimes tried to do the right thing today. Mr. Grimes noted that he had included a few letters of recommendation and a copy of his college diploma, and noted that he graduated in 1984. Mr. Grimes had been in Nebraska for 10 years and loved it. It was suggested to him that he would be good at real estate, so Mr. Grimes started talking to people in the industry, touring model homes, and went through interviews. Mr. Grimes got more and more excited at each stage. Mr. Grimes had been offered a position in Omaha pending licensure.

Commissioner Moline asked if Mr. Grimes had done any drugs since his conviction. Mr. Grimes said he had not, and that he had not even had a drink for quite a while.

After discussion, a motion was made by Strand and seconded by Shepard to allow Mr. Grimes to sit for the salesperson examination, and to have a license issued upon passing. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Commissioner Moline said he had no problem with the current process of not reappearing.

Commissioner Johnson said he did not know if it would make any difference, but that he and Commissioner Shepard recently noticed a lot of conversation about the Commission licensing criminals. Commissioner Johnson asked if this might be another level of protection, it was probably not, but he was just bringing it up.

Commissioner Moline said that he had talked to people, and explained that applicants with years of exemplary behavior deserved a chance. Commissioner Moline had been thinking that if the Commission did not trust someone to be a broker, they should not give them a salesperson license.

Commissioner Strand questioned why the Commission would require a higher level for brokers.

Director Tyrrell noted that the Commission had previously placed restrictions on applicants, if licensed, to come back prior to obtaining a broker license.

Acting Chairperson Wiebusch said the option was good to keep in mind.

Director Tyrrell asked if the Commission wanted language that it could require reappearance on a case-by-case basis, but that it was not mandatory. That was the consensus of the Commission. Director Tyrrell said he would add reappearance language to the guidelines, and bring it back to the Commission for approval. Commissioner Moline asked that Director Tyrrell also reword the guidelines for clarity and brevity. The Commission agreed by consensus.

Director Tyrrell presented an exhibit which showed a potential change to the statutory language regarding the errors and omissions insurance policy premium limit. A copy of said exhibit is attached to and made a part of these minutes.

Director Tyrrell noted that the Commission needed to consider changing the limit, in light of the recent errors and omissions premium increases nationwide. Rice and Williams Underwriting Group both agreed that $500.00 would be an adequate fee cap, because the market would keep the fee below that. He also indicated that there was no way, according to a legislative staff person, the Commission would be given discretion in statute to set the fee.

Commissioner Moline questioned whether a $500 limit would be adequate for 5-10 years. Director Tyrrell said that both underwriters said it would. Commissioner Moline noted that they said $200 would be fine very recently. Commissioner Moline asked if the Commission should make it $800. Director Tyrrell said that was all right with him. Director Tyrrell had picked $500 because he could justify it easily. Director Tyrrell was going to recommend $750, but if the request was too high the legislators might want to modify the request.

Commissioner Moline said the Commission was kidding themselves with a $500 limit, since opting for all coverages this year cost approximately $380. Commissioner Moline thought that $750 would be reasonable for the short run, and $1000 would work for longer. Director Tyrrell said the Commission would know more next year, after the RFP process. Commissioner Poskochil agreed with Commissioner Moline that the Commission should go for $750.

Commissioner Strand asked if the Commission did not provide a plan, would it still be required on the open market. Director Tyrrell said no. Commissioner Moline said that, if that were the case, only those with errors and omissions insurance would get sued, not the little guy with no pocket. Errors and omissions was a consumer issue.

Commissioner Strand asked why the legislature would care about the premium limit. Director Tyrrell said that sometimes the Legislature did not like to delegate too much authority.

After discussion, a motion was made by Johnson and seconded by Moline to have the proposed change introduced in the 2004 Legislature. Motion carried with Johnson, Moline, Poskochil, Shepard, and Wiebusch voting aye, with Strand voting nay, and with Gale not participating or voting, being absent and excused.

Commissioner Strand noted that he would rather have a higher limit, so it would be continuously in effect.

Director Tyrrell presented an exhibit which consisted of the Deviation from Contractual Services Contract Process, the Rice errors and omissions contract, and the 2004 policy. A copy of said exhibit is attached to and made a part of these minutes.

This report was for informational purposes only, and required no action.

Director Tyrrell presented an exhibit which consisted of a report from the Auditor of Public Accounts office regarding internal control procedures as related to the Nebraska Information System (NIS), which was recently put on-line. A copy of said exhibit is attached to and made a part of these minutes.

No action was necessary on this report.

Director Tyrrell presented an exhibit on the costs of attending an ARELLO Meeting in January. A copy of said exhibit is attached to and made a part of these minutes. To date, potential attendees included Acting Chairperson Wiebusch and Deputy Director Hoffman.

After discussion, a motion was made by Moline and seconded by Johnson to approve the expenditures as presented for each attendee. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Counsel Titus presented an exhibit which showed time-share amendments suggested by registrants. A copy of said exhibit is attached to and made a part of these minutes.

Director Tyrrell noted that the comments were received after the changes were proposed to limit renewal fees to $1500. These additional changes could be added to the proposed amendments previously approved by the Commission.

Commissioner Moline asked if staff was OK with the additional changes. Director Tyrrell said that Counsel Titus had drafted this exhibit, Director Tyrrell reviewed it, and the changes were OK with them. Staff did not disagree philosophically with the proposed changes.

Counsel Titus noted that most of the changes were requested by Cindy Ross of Fairfield. Counsel Titus reviewed the requested changes.

A motion was made by Moline and seconded by Strand to not make the requested changes to 76-1708(5) and 76-1711(5).

Commissioner Moline noted that budgets could be manipulated, and that financial statements were needed. There were no requirements on a budget. Commissioner Strand said he knew from personal experience that furnishings were a big expense which might be budgeted every five years, but never spent. People needed to have actual results, and should not have to ask for them. Commissioner Poskochil said it would be too late, if it got to that issue, and asked what the additional cost would be. Counsel Titus said it would likely be 15-25 cents. Commissioner Johnson said that, as the statute currently read, there was no set charge, and a company could charge $500 if they needed to. Counsel Titus said there would be resistance from the Commission, which would argue reasonableness of the charge. Director Tyrrell said the situs state would have provisions and cost limits. Counsel Titus said that Florida law capped costs. Not all states had statutes on financial requirements, others were very loose. The other possibility was to require that the annual budget require actual figures. Counsel Titus agreed that correct information was critical.

Commissioner Strand said there was a discussion at one point, about how each time-share had to have bylaws, etc, even though it was hard to believe they would not be required to report their financials to clients. Due process was required. It seemed hard to imagine a time-share operator would not provide its budget to its existing and potential customers. It would have to be done at nominal cost if it was required up front every year.

Commissioner Wiebusch asked if an annual budget with actual numbers from the previous year would be OK. Counsel Titus said that may not save them money, because it would require an additional thing they did not currently do. Director Tyrrell said it may be better to leave the motion as is, which was to leave the statute as it has been. The Commission could change it later if needed. Counsel Titus said operators could currently send operating statements, rather than a budget or audit. The Commission had not been requesting that.

A vote was taken on the pending motion. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Director Tyrrell noted that current Nebraska advertising laws addressed virtual office websites (VOWs). Most of the people at the roundtable discussion were not doing anything special for them, and were waiting for specific problems to address. It would technically be possible to consider a VOW as a branch office, with an associate broker as the branch manager and with salespeople assigned to the branch. No one had yet done that.

Discussion ensued. Nebraska advertising laws were broad, and the Commission made interpretations as needed. Substantial contact was made by licensees, not by a website, and occurred when a licensee obtained information that was confidential in nature. Agency disclosure requirements were the same, whether it was done in person or electronically.

Director Tyrrell noted that there had been articles in the Commission Comment regarding agency and the internet, and he could tweak the information to apply it specifically to VOWs, or he could do a letter to brokers instead. Director Tyrrell will draft something and solicit Commissioner input on how to disseminate the information.

Commissioner Shepard agreed that it was a great meeting, with only one session that was not so good. Commissioner Poskochil did a great job in a dramatization, which makes the points hit home. The two videos from Deputy Director Hoffman received standing ovations.

Commissioner Wiebusch said there was a great deal of interest on criminal background checks from those states not yet doing them. Nebraska was in the forefront, and other states wanted to know how the process was going here. Director Tyrrell noted that it appeared we were the only state doing FBI fingerprint-based checks at that table. Commissioner Wiebusch also participated in a roundtable on errors and omissions insurance with Commissioners Johnson and Shepard.

Commissioner Strand noted that the media session went downhill fast. Commissioner Poskochil said they only reported what they heard or saw, so the Commission needed to provide them information that we wanted presented to the public. Commissioner Johnson said that one reporter told attendees to send him information on something unusual in their state, and he would publish it.

Commissioner Strand said he found the roundtables most useful, but they were also the most challenging due to the physical layout. Participants were three deep, and had to lean in and listen. Deputy Director Hoffman noted that roundtables were hard to plan, but were very popular. Deputy Director Hoffman encouraged Commissioners to always use their evaluation sheets.

Acting Chairperson Wiebusch noted that the Commission member training board wanted input on how to address public member needs. Commissioner Strand suggested a public member session be held without licensee members. Commissioner Strand emphasized that was not a criticism, but that most of the meeting was on governance, and it would be good to know how other public members were processing the information. Deputy Director Hoffman said other public members wanted to have a public member session. Commissioner Strand said he was fascinated by the presentation which indicated the Texas case dealt with water damage and not mold.

No action was necessary on this report.

Surveys were included in approximately every fourth piece of mail during September (excluding renewals). 141 were mailed, and 6 were returned. The response rate was low, but all comments received were positive.

No action was necessary on this report.

A motion was made by Moline and seconded by Johnson that the Commission stop mailing out the staff satisfaction survey and printing it in the Commission Comment.

Commissioner Moline cited the extremely low response rate, and questioned the value of the return vs. the expenditure of money and staff time. Director Tyrrell noted that staff get direct feedback from the people they help, which was extremely positive.

Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Director Tyrrell reviewed the changes made to the rule, including minor wording changes. All four forms were now attached. Instead of calling the renewal an Annual Report, it was now called the Annual Renewal Report. All language referencing the attachments was new, and some wording on the forms was changed. The effective date was changed to July 1, 2004. All other changes were the same as approved at the September rule hearing. The Commission needed to approve the new exhibit to go forward for the rule hearing.

Commissioner Moline asked for confirmation that a new rule hearing was required. Director Tyrrell said that was correct.

Director Tyrrell noted that a rule hearing was now required if changes in the law required changes in the forms.

A motion was made by Moline and seconded by Strand to set a rule hearing for January 21, 2004, on the proposed changes as presented in Exhibit 20. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

December 10-11, 2003 - Staybridge Suites, Lincoln

January 21-22, 2004 - Staybridge Suites, Lincoln

March 3-4, 2004 - Days Hotel Carlisle, Omaha

At 10:23 a.m., Acting Chairperson Wiebusch declared a brief recess, and reconvened the meeting at 10:32 a.m.

At 12:25 p.m., Acting Chairperson Wiebusch declared a recess for lunch, and reconvened the meeting at 1:05 p.m.

I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing minutes of the November 12, 2003, meeting of the Nebraska Real Estate Commission were available for inspection on November 26, 2003, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,
Les Tyrrell
Director