NEBRASKA REAL ESTATE COMMISSION

September 24, 2003

Staybridge Suites                         Staybridge Room                         Lincoln, NE


Opening

Chairperson Gale convened a meeting of the Nebraska Real Estate Commission at 9:03 a.m. on September 24, 2003, 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. Abbie Widger, Special Assistant Attorney General and Counsel to the Commission, was present for the stipulation and consent order. Jim Titus, Special Assistant Attorney General and Counsel to the Commission, was present for the rule change hearing and the Time-Share Act discussion 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 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 agenda item 10a had been added since the tentative agenda was mailed to the Commissioners.

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

Minutes of August 20, 2003

The minutes of the Commission meeting held on August 20, 2003, were considered.

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

Receipts and Expenditures Report for August

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

Director Tyrrell noted that Receipts Category 475220, Promotional Land Registration, showed $5.00 submitted to complete a registration fee. Expenditures Category 521500, Publication and Printing, was over for the month because it included renewal envelopes and continuing education reminders; Category 527200, Repair and Maintenance of Motor Vehicles, included the cost of repairing two permanently-assigned vehicles, which were vandalized in two different areas of town within about a month of each other; Category 527400, Repair and Maintenance of Data Processing Equipment, showed $1257.00 for 5-year warranties on the new examiner laptops, which had to be shown in this category due to the NIS system, rather than being included in the purchase price; Category 547100, Educational Services, was over because 108 examinations were administered during July; Category 555200, Software/New Purchases, were for a new antivirus program for the office, which was purchased with the savings on the new laptops.

The cash fund balance as of August 31, 2003, was $585,675.22, which compared to a cash fund balance of $538,368.28 on August 31, 2002.

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

2003-2004 Fiscal Year Monthly Budget Spread
Including Encumbrances from June 2003

Director Tyrrell presented the 2003-2004 Fiscal Year Monthly Budget Spread. A copy of said report is attached to and made a part of these minutes.

Director Tyrrell reviewed the budget spread changes, and noted that changes had been necessary due to encumbrances from fiscal year 2002-2003. The specific encumbrances were shown on a separate page for ease of reference. Under the NIS system, the encumbrances could not be shown until September. The budget spread was also adjusted for the late mailing of 2004 renewals and the expenditures for the laptop warranties and antivirus program.

No action was necessary on this report.

Specialized Registrations

There were no specialized registrations to report.

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

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, Wiebusch, and Gale voting aye.

August Examination Report

Deputy Director Hoffman presented for ratification the August Examination Report, a copy of which is attached to and made a part of these minutes.

Deputy Director Hoffman noted that she will be attending the October 6 meeting with AMP.

Commissioner Strand asked if there was a difference between the pre-license courses offered by different schools. Deputy Director Hoffman said that all schools were licensed by the Board of Education, all instructors taught from the same course outlines, and all instructors met the Commission=s criteria. The Commission did not prefer one school over another. The school reports from AMP showed similar performance. Commissioner Moline asked if the Commissioners could see the report. Deputy Director Hoffman said the Commissioners could, but they had not in the past, and noted that schools with few students tended to have skewed pass rates. Commissioner Moline said he would like to see the report. Deputy Director Hoffman said she would provide it.

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

Real Estate Education Matters

Continuing Education Activity Approval

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 noted that one activity dealt with diversity issues such as using licensed translators. Commissioner Moline asked Deputy Director Hoffman to let the Commissioners know when and where the activity would be offered.

Continuing Education Instructor Approval

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 Wiebusch and seconded by Moline to ratify both reports. Motion carried with Johnson, Moline, Poskochil, 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 #2003-019 - Angela S. Melancon vs. Carolyn Lee Carnley

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, and that a letter of admonishment be sent to the respondent regarding the $2.00 overcharge on the monthly commission. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Item B Complaint #2003-028 - Arlan Boelter vs. Terry Keith Held

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

Item C Complaint #2003-031 - Phil & Laurie Janulewicz vs. Robert J. Daniel

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

Item D Complaint #2003-032 - Judy Pittack vs. John Walter Hammon

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

Item E Complaint #2003-034

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 Johnson that the complaint be dismissed. Motion failed with Johnson and Moline voting aye, and with Poskochil, Shepard, Strand, Wiebusch, and Gale voting nay.

A motion was made by Strand and seconded by Poskochil to delay a decision pending further investigation. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

The Commissioners specified the information they wanted Deputy Director Mayrose to obtain: whether all the lot prices went up at that time, or if this lot price went up because of the additional 6 feet of dirt; were the lots initially platted, then improved with dirt, then the price changed; were there any walkout lots in the area; what was the street level compared to the grade level, and was the 6 feet of dirt was added at the curb; pictures of the lot, from the back toward the front, and from the front toward the back; on what basis the licensee started advertising walkout lots; had the lots been platted, the street and grades established, and the dirt added later; were streets and improvements in place prior to the dirt being added; and whether the builder had done anything to change the grade since building began.

Item F Complaint #2003-036 - Tanya Berger vs. H. James Merrigan

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

Presentation of Stipulation and Consent Orders

Complaint #2003-017, Commission vs. Vincent Muniz, Sr.

Prior to discussion of this matter, Commissioner Johnson recused himself, thereby nullifying any potential conflict of interest. Counsel Widger presented a stipulation and consent order in the matter of Complaint #2003-017, Commission vs. Vincent Muniz, Sr. A copy of said order is attached to and made a part of these minutes. Mr. Muniz was not present.

Counsel Widger reviewed the circumstances involved and noted the provisions of the order, which had been signed by Mr. Muniz. The order specified a full suspension of Mr. Muniz=s license for five years, effective October 1, 2003.

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

Hearings

September 24, 9:30 a.m. - Rule Hearing on Title 300, Chapter 1

At 9:41 a.m. on September 24, Chairperson Gale called to order the public hearing on the proposed amendments to Title 300, Chapter 1, of the Commission=s Rules and Regulations. Chairperson Gale explained that the hearing would be conducted in accordance with the Administrative Procedure Act, and explained how testimony would be given.

Director Tyrrell presented four exhibits, which included: 1) a copy of the meeting notice, which was published in two newspapers and filed with the Secretary of State, the Executive Board of the Legislative Council, and the Governor=s Policy Research Office; 2) a copy of the Lincoln Journal-Star and Omaha Daily Record proofs of publication of the meeting notice; 3) a copy of the letter and attachments which were sent to solicit comments from all the registered retirement subdivisions and communities; and 4) a copy of the proposed amendments to Title 300, Chapter 1, in legislative style. Exhibit 4 (marked as item 11a in the Commissioner packets) is attached to and made a part of these minutes.

Director Tyrrell noted that two comments had been received regarding the rule changes. There was one telephone call from a person who said that the changes were fine, and one inquiry asking if Section 5 was deleted due to statutory changes, which was the case.

Director Tyrrell reviewed the amendments set out in Title 300, Chapter 1. Director Tyrrell noted that a correction needed to be made to the effective date, which will be February 29, 2004.

Chairperson Gale asked if there were any comments from the public. There were none.

A motion was made by Moline and seconded by Wiebusch to change the effective date to February 29, 2004. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

A motion was made by Moline and seconded by Shepard that the Commission adopt Title 300, Chapter 1, as amended, and to direct staff complete the filing process for the proposed rule changes. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

A motion was made by Wiebusch and seconded by Johnson that the Commission authorize staff to make any non-substantive grammatical, spelling, or punctuation corrections needed. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Chairperson Gale declared the rule hearing concluded at 9:55 a.m.

Informal Special Appearances

September 24, 10:45 a.m. - Steven M. Abboud,
Salesperson Applicant - Reappearance

Director Tyrrell presented an exhibit which included the exhibit and excerpt from Mr. Abboud=s previous special appearance, additional information regarding Mr. Abboud=s criminal history and driver=s license status, and correspondence regarding Mr. Abboud=s special appearances. A copy of said exhibit is attached to and made a part of these minutes. Mr. Abboud was present.

Chairperson Gale reviewed the procedure for informal special appearances.

Mr. Abboud noted that he had met the Commission=s requirements as outlined at his previous special appearance. He had submitted proof that his driver=s license had been reinstated. If the Commission approved his application, he would work with Mark Abboud at Real Estate Associates. Mr. Abboud noted that he got a speeding ticket or two since his last special appearance, but he took classes and got them dismissed. Chairperson Gale asked if he had lost points. Mr. Abboud said that, since he completed the classes, no points were taken.

Chairperson Gale asked Director Tyrrell if Mr. Abboud would have to appear before the Commission if he applied for a broker license. Director Tyrrell said no, after his initial application, if there were no additional convictions, no reappearance was required. Chairperson Gale asked if, under the Commission=s guidelines, a broker applicant would need to reappear after he or she had appeared for a salesperson license. Director Tyrrell said that he had assumed that if an applicant appeared once, he or she would not have to reappear for the same convictions to upgrade to a broker license. That was not his interpretation of the guidelines. Chairperson Gale said that a salesperson was under the supervision of a broker, and the broker was responsible for the trust account, etc. If an applicant had a burglary conviction or something similar, Chairperson Gale did not feel that he would want them to automatically get a broker license. Director Tyrrell said the Commission could do it that way, but he had assumed that one appearance would take care of the initial convictions.

Commissioner Moline said that he had assumed that, if an applicant made a special appearance and got licensed, they were good to go. Commissioner Moline wondered if requiring a reappearance for a broker license was a requirement that the Commission would want to make for certain individuals, on a case-by-case basis. The Commission could decide at the first special appearance whether they wanted to see the applicant again if he or she applied for a broker license.

Commissioner Poskochil noted that there had been previous appearances by applicants with similar backgrounds, and asked if the Commission was opening itself up to allegations of discrimination. Director Tyrrell noted that criminal history background checks were only required for those who applied after the statutory change, and did not apply to those already licensed.

After discussion, a motion was made by Moline and seconded by Shepard to allow Mr. Abboud to sit for the salesperson examination, and to have a license issued upon passing; and that if Mr. Abboud applied for a broker license, he would have to reappear before the Commission.

Commissioner Poskochil asked if Mr. Abboud was employed. Mr. Abboud said he had been, but was not now. Commissioner Poskochil asked if Mr. Abboud had paid the fee required to get his driver=s license reinstated. Mr. Abboud said yes. Commissioner Poskochil asked if Mr. Abboud had any outstanding charges, fines, warrants, etc. Mr. Abboud said no.

Commissioner Moline offered a friendly amendment to his motion, to add the conditions that Mr. Abboud notify his employing broker of his criminal history, and that Mr. Abboud immediately notify Commission staff if he had any further contact with the law which could result in jail time during his first two years of licensure. The friendly amendment was accepted by the seconder, Commissioner Shepard.

Commissioner Johnson noted that a couple of the speeding convictions were for going 15 mph over the speed limit on the interstate, which was really moving. Mr. Abboud said there was a lot of construction around Sapp Brothers, and the speed zones changed every few feet, so you did not know what it was. He lives right by the construction. Mr. Abboud noted that one ticket said he got probation, but it should have been dismissed, and he did not know why it had not been. Commissioner Johnson said he just did not want Mr. Abboud to take someone down the interstate at 90 mph. Mr. Abboud said he would not.

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

Director Tyrrell raised the issue of Mr. Abboud=s expired application, which had expired 5 days before the meeting. Mr. Abboud said he was in a bad financial situation right now, and had a plethora of bills. A motion was made by Strand and seconded by Johnson to waive the one-year fee. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Gale voting aye, and with Poskochil voting nay.

September 24, 11:15 a.m. - Jason J. Kuehn, Salesperson Applicant

Director Tyrrell presented an exhibit which included Mr. Kuehn=s salesperson application, information regarding Mr. Kuehn=s criminal history and driver=s license status, and correspondence regarding Mr. Kuehn=s special appearance. A copy of said exhibit is attached to and made a part of these minutes. Mr. Kuehn was present.

Director Tyrrell noted that the May 2001 conviction for driving under the influence (DUI) was the only criminal conviction that Mr. Kuehn had reported on his salesperson application. Mr. Kuehn failed to report the additional criminal convictions, including two prior DUI convictions, which were discovered by staff investigation. All the convictions were considered incidents or misdemeanors, not felonies. Commissioner Moline asked for clarification that the application question asked for all convictions, not just felonies. Director Tyrrell said that was correct.

Chairperson Gale reviewed the procedure for informal special appearances.

Mr. Kuehn said he was now 24, and was currently a server in the food industry. Before that, he had worked in sales, operated his own company (Kuehn Guttering), and held telemarketing jobs. He had a 7-year-old son, and the juvenile charges on his record were from when he and his son=s mother split up. He used alcohol at that time, went through treatment, and had learned to not use alcohol for his problems. Mr. Kuehn said he was currently finishing probation for the 2001 DUI conviction. He had gone to some Alcoholics Anonymous meetings and was not getting much out of it, so his probation officer released him from that requirement. Mr. Kuehn said he totally abstained from alcohol. Mr. Kuehn said he had consulted his attorney regarding the application question, and she told him to just list the most recent DUI conviction. Mr. Kuehn said he was not happy in the serving industry, and thought he would be good at real estate because he had been successful in sales, so he wanted to try it. His grandfather and uncle were in the real estate business. Mr. Kuehn wanted a career where he could support his family, buy a house, and what not.

Chairperson Gale asked if Mr. Kuehn was currently on probation. Mr. Kuehn said yes. Chairperson Gale asked if it was for the 2001 DUI conviction. Mr. Kuehn said yes, and that his probation would be done at the end of November. Chairperson Gale said that the Commission=s practice had been to not consider applicants while they were completing their sentence.

Chairperson Gale asked if Mr. Kuehn was currently driving under a court permit. Mr. Kuehn said he had the option to get a work permit, but had not done it yet because he had not needed it yet, because his job was near his home. Mr. Kuehn was waiting to see if he needed it for real estate, because the work permit application asked for the specific position for which it was needed. It would not be approved if the work site was close to his residence. Commissioner Moline asked if Mr. Kuehn had been driving while suspended. Mr. Kuehn said no.

Commissioner Strand asked if Mr. Kuehn could get a driver=s license after his probation ended. Mr. Kuehn said he could get a work permit at any time. After December 2004, he could get his driver=s license reinstated. Commissioner Strand said he thought it was a stretch to get a work permit to drive clients all around town, as opposed to going to and from work. Mr. Kuehn said the work permit was valid for work-related driving, including errands. Chairperson Gale asked if Mr. Kuehn had consulted with his probation officer regarding the work permit. Mr. Kuehn said yes, and his probation officer agreed that it could be used for real estate. Commissioner Strand asked Mr. Kuehn if he had talked to potential employing brokers. Mr. Kuehn said he was waiting to see if he could obtain a real estate license. Commissioner Strand reiterated that it seemed like a stretch for a work permit, and would create a liability issue to drive other people around. Mr. Kuehn said he had SR22 insurance, which covered him and anyone else in his car.

Chairperson Gale asked if the current DUI was Mr. Kuehn=s third offense. Mr. Kuehn said yes, it was. Chairperson Gale said he was a little surprised that a work permit would be allowed, because people with third offense DUI convictions had to come before the parole board to get an interlock device, and that was only allowed after they had served 7 years of their mandatory 15-year suspension. Mr. Kuehn said that the judge only gave him a 1-year suspension for the DUI, and a 2-year suspension for losing his license due to points two times within two years. Mr. Kuehn said he abstained from alcohol, and saw no need to include it in his life since it has caused him all these problems.

Commissioner Moline said he would feel better if Mr. Kuehn=s probation officer confirmed what Mr. Kuehn had told the Commission, especially about the work permit and driving others around. Commissioner Moline said he wanted a letter from Mr. Kuehn=s probation officer to get the facts on Mr. Kuehn=s driving status. Chairperson Gale said he also wanted to wait until Mr. Kuehn completed his probation successfully. Commissioner Moline told Mr. Kuehn that Commissioner Strand had noticed that the probation order was dated November 1, so Mr. Kuehn=s probation might end a month earlier than he thought. Mr. Kuehn said he was just going off what his probation officer said, and the probation officer may have gotten him confused with someone else. Commissioner Moline noted that the next Commission meeting was shortly after November 1.

Commissioner Poskochil asked about Mr. Kuehn=s dispute with Sam=s Club. Mr. Kuehn said the dispute was about $300-400 on his charge card, and Sam=s Club had added charges up to about $900. He was not willing to pay the whole amount, but he settled at half, for $500.

Commissioner Poskochil asked how Mr. Kuehn was currently getting around. Mr. Kuehn said he took taxis, or got a ride from a mutual friend. He just traveled when he needed to, and was saving his money up for a car and insurance. Commissioner Poskochil asked how Mr. Kuehn had gotten to the Commission meeting. Mr. Kuehn said he had his lady, Angie, bring him up here. Commissioner Poskochil questioned how Mr. Kuehn could possibly be allowed to drive. Mr. Kuehn said he did not see a problem. The DMV (Department of Motor Vehicles) had sent him the permit form, and he just had to fill it out and send it in. It was approved in advance, so Mr. Kuehn just had to do it.

Commissioner Poskochil said that, with 3 DUIs, he found it hard to believe that Mr. Kuehn was not required to do Alcoholics Anonymous. Commissioner Poskochil said he needed documentation from Mr. Kuehn=s probation officer that Mr. Kuehn did not have to attend Alcoholics Anonymous meetings. Commissioner Poskochil said that multiple DUIs were really a liability in the real estate field. Mr. Kuehn said he had attended quite a bit of counseling, and he could provide documentation of the counseling he had completed.

Commissioner Poskochil asked about the multiple firearms charges from 1999. Mr. Kuehn said that, basically, he was 18 and was working for hourly wages doing gutters. He was 18 years old and fascinated with firearms. An opportunity came up where he could get an old .22, like ladies had in their garters in the old Westerns. Mr. Kuehn was pulled over and was charged for it, but the gun was not loaded. All the firearms charges were on the same date. Commissioner Poskochil noted that was the same date Mr. Kuehn was charged with a DUI, minor in possession, and disorderly conduct. Commissioner Moline said that was not a good day for him. Mr. Kuehn said that was just another example of why he did not need to include a lot of alcohol in his daily activities.

Chairperson Gale asked if Mr. Kuehn had to use an interlock device. Mr. Kuehn said he did when he had gotten a 90-day suspension, and he had an interlock for 60 days. Chairperson Gale explained to the Commission that an interlock was a breathing device that locked up the car if alcohol was detected in the driver=s breath.

Chairperson Gale asked if Mr. Kuehn was sure there was not 15-year suspension. Mr. Kuehn said there was not, and all his court papers said he was eligible to get his license back in December 2004.

Commissioner Wiebusch told Mr. Kuehn he had a hurdle to overcome with her, since he had no license, and there was a great deal of responsibility when licensees had people in their cars. Mr. Kuehn said it was no secret that he had quite a bit of problems in the past. He was asking for a chance to turn his life around even more, and to get into something so he could afford the nicer things in life, take care of a family, and be the kind of man he wanted to be. Mr. Kuehn said he did not have anything to combat the license issue with. He could not change it, but he was very remorseful. He had changed and turned his life around, and was not making juvenile mistakes any more.

A motion was made by Moline to defer the Commission=s decision until the November 12 meeting, and that Mr. Kuehn needed to supply a letter or documentation from his probation officer to confirm that the probation officer had released Mr. Kuehn from his alcohol treatment requirement; that stated whether Mr. Kuehn was in compliance with his probation requirements, and explained his current status; that stated whether Mr. Kuehn could actually get a provisional driver=s license that would allow him to chauffeur clients whenever and wherever needed for the real estate business, while his regular driver=s license was under suspension for third offense DUI; and if doing that was recommended by the probation officer.

Mr. Kuehn said he would get that worked out, and would ask his probation officer for a letter, but he did not know if he could get a recommendation letter, because his probation officer already said he would not give one. Commissioner Moline said he just wanted the probation officer to confirm the facts as Mr. Kuehn had presented them. Director Tyrrell said that probation officers would not usually write a recommendation letter. Commissioner Strand clarified that the letter just needed to characterize Mr. Kuehn=s probation status and compliance. Mr. Kuehn reiterated that his probation officer had refused to give him a recommendation letter.

Commissioner Strand seconded the motion.

Commissioner Poskochil asked if deferring to November would allow Mr. Kuehn enough time to get the required information. Commissioner Moline said that was Mr. Kuehn=s burden, unless the Commission wanted to vote him down today. Commissioner Poskochil agreed that the Commission needed more information.

Chairperson Gale said he needed Mr. Kuehn to have a period of time after he was off probation to show he had reestablished himself with good behavior. Chairperson Gale noted that Mr. Kuehn could accomplish his goals in a number of occupations which would not require a real estate license. This was only one of hundreds of opportunities. Chairperson Gale said the Commission=s job was to make sure Mr. Kuehn did not endanger the lives of people who trusted him while they were in his company. The public expected a very high level of conduct from real estate licensees. Chairperson Gale said that he did not feel that Mr. Kuehn had accomplished too much by staying out of trouble while still on probation. Chairperson Gale would like to know how Mr. Kuehn was doing 6 months after probation, while not under the controlled supervision that would put him back in jail for stepping out of line. Chairperson Gale noted that Mr. Kuehn was driving under suspension when he got one of his DUIs. Mr. Kuehn was driving totally illegally, plus driving under the influence. Mr. Kuehn was already totally ignoring the law, plus drinking and driving. If the Commission approved the motion today, to delay a decision until November, Chairperson Gale did not want Mr. Kuehn to think he was over the hurdle. Chairperson Gale noted that Mr. Kuehn had been well spoken, and should be proud of himself for coming and discussing his past openly. Chairperson Gale could tell that Mr. Kuehn was trying to move ahead, but he did not meet Chairperson Gale=s standard yet.

Mr. Kuehn said he was just always interested in real estate, with his uncle and grandfather in the business. He wanted to do pretty much whatever it took to take the real estate test, whether it was in November or in 6 months, because he could do something else in the meantime. Mr. Kuehn said he would do whatever it took to make the Commission comfortable with his getting a license.

Chairperson Gale noted that the motion did not include a waiting period while Mr. Kuehn was off probation. Commissioner Moline said he just wanted the information provided by Mr. Kuehn to be confirmed by Mr. Kuehn=s probation officer. Commissioner Strand noted that, after the information was provided, the Commission could make a motion that Mr. Kuehn be approved to sit when he was off probation. Chairperson Gale agreed that the additional information would be helpful. Commissioner Strand said he would like to know more certainly about Mr. Kuehn=s driving status. Commissioner Strand had a suspicion that a person could not be a taxi driver on a work permit. Mr. Kuehn would be driving people around, and Mr. Kuehn needed to provide confirmation that it was allowed.

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

Chairperson Gale instructed Mr. Kuehn to get the additional information as requested, and said the Commission would see him at the November meeting.

September 24, 11:45 a.m. - Laura Sabatka, Potential Applicant

Director Tyrrell presented an exhibit which included information regarding Ms. Sabatka=s criminal history, letters of recommendation, and correspondence regarding Ms. Sabatka=s special appearance. A copy of said exhibit is attached to and made a part of these minutes. Ms. Sabatka was present.

Chairperson Gale reviewed the procedure for informal special appearances.

Ms. Sabatka thanked the Commission for seeing her. Ms. Sabatka said she was not proud of her background, and that she made a lot of mistakes, due to irresponsibility and alcohol and drug use. Ms. Sabatka said she knew she was an alcoholic and drug addict. Ms. Sabatka had taken many steps to address her problems, and the most important thing in her life was her sobriety. The main charge she was here to confront was her felony conviction. In 1999, she was living with her long-term boyfriend, and they had a home and business together. He proceeded to manufacture methamphetamine (meth). Ms. Sabatka was aware he was doing it, but was very much against it. She had been a user for 10 years prior to that, and abused alcohol. She knew she should have left her home, but just could not. It was a horrible time in her life. They were investigated for approximately a year. Both of them were arrested and indicted, along with another man and woman. She was charged with conspiracy for knowing about it and not reporting it, even though she was not participating in it. She only participated once, when she purchased 10 packs of pills used to manufacture meth. She and her boyfriend were very estranged at that time. It took a long time to be sentenced, and they were both on pretrial release programs which included random urinalysis. She had not received treatment, and did not believe she could live a life without drugs. Her boyfriend failed a urinalysis right away, and eventually she did too, and she was incarcerated in the Pottawattamie County Jail. Finally, while there, she realized she had a problem, and asked God for help. She knew she did not want to live that way any longer. She was released to Campus for Hope, and that was where she found hope in her heart. From there, she was in a 3/4-release program. She started attending Alcoholics Anonymous, as many as 12 meetings a week. Ms. Sabatka said she found a way for her life there, and it had become her life. She has a sponsor, was currently active in Alcoholics Anonymous, and it had become her base. During the sentencing process, the prosecutor found out she was a minor player, and recommended that she not go to prison. She was sentenced to the Council Bluffs federal work release facility, and has worked at her job at the Nebraska Medical Center for over 3 years now. After sentencing, she was on house arrest, but could work daily and attend Alcoholics Anonymous meetings. She was released in January 2003. She is currently serving three years of federal supervised release. Ms. Sabatka noted the letter she had provided from her probation officer. She was currently required to attend Alcoholics Anonymous meetings, and write monthly reports on her living situation and job. She very rarely saw her probation officer, because he knew she was doing what she needed to be doing. Ms. Sabatka was trying to clear up everything from her past, and do the right things today. Real estate was always in the back of her mind, she just never had the courage to do it. In her current job, she supplied equipment to patients and did billings and medical records, which took her throughout the hospital. She just received her performance review, and should have brought it, because she got outstanding marks from her supervisor. She was so grateful because she had to go through this to get to where she was now. Ms. Sabatka said she owed it to the fellowship of Alcoholics Anonymous, and to God. She had been sober for 32 years now, and it was a wonderful way to live.

Chairperson Gale congratulated Ms. Sabatka on turning her life around, and said it could have gone the other way. Ms. Sabatka was the kind of person that gave us hope, in the prison system, that people can turn their lives around. Chairperson Gale said he had no problem in terms of her personal history or conduct, but the question was that her 3-year supervised release would not be complete until 2004. Chairperson Gale asked for confirmation that she did not have to see her probation officer. Ms. Sabatka said no, he was located in Lincoln, and she had not seen him in 5 months. They had a very good rapport. Chairperson Gale said it was a fine letter on her behalf. Ms. Sabatka said he was a good man, and she was able to talk to him from the heart. Commissioner Shepard noted that it was rare to get a recommendation letter from a probation officer. Ms. Sabatka said it had been a hard lesson, but it needed to be that hard to wake her up.

Commissioner Johnson asked if Ms. Sabatka had taken real estate courses. Ms. Sabatka said she had called the Commission office regarding the felony conviction, and the person she talked to said she did not think it would be a big problem. At the time, Ms. Sabatka had a real sense of urgency and desire, so she proceeded with the classes in good faith and completed them. Commissioner Johnson asked about her employment opportunity. Ms. Sabatka said she would work for her current landlord, who did commercial real estate and property management. Ms. Sabatka said she had a property management background in Arizona, and her work at a title company made her interested in real estate. Ms. Sabatka=s landlord had helped her out, and Ms. Sabatka would work under her.

Commissioner Poskochil asked if Ms. Sabatka was on supervisory probation until December 2004. Ms. Sabatka said yes. Director Tyrrell said he had confirmed that the supervised release was not probation, that it was less restrictive than probation, and that Ms. Sabatka did not have scheduled times to meet with her probation officer. Ms. Sabatka reported in by sending a letter, but it could be just a telephone call. She was on no restrictions, and it was considered to be less than probation.

Commissioner Poskochil asked if Ms. Sabatka had filed an application. Director Tyrrell said no, she was a potential applicant.

Commissioner Strand asked for clarification that Ms. Sabatka was not on probation. Ms. Sabatka said no, it was supervised release. There was a possibility that she could go before the judge and ask to be released. Her probation officer said it was administrative release, and she did not know the details of that, but assumed it was more paperwork. Commissioner Strand asked if staff had talked to her probation officer. Commissioner Poskochil noted that applicants must complete their sentence. Director Tyrrell indicated he had talked to the probation officer, and that this status was usually done pre-sentence, like being released on one=s own recognizance.

Commissioner Moline said that, for him, Ms. Sabatka=s situation rose to the level of extraordinary circumstances, with her sentence and the recommendation letter from her probation officer.

Commissioner Poskochil asked if Ms. Sabatka lived on her own in an apartment. Ms. Sabatka said yes, it was close to the Medical Center, because she had no vehicle at the time. She now has a vehicle that gets her around, and she was fully insured and everything, because it was very important to her to be accountable for her actions, and to not step out of line. Her landlord would be her employing broker. Ms. Sabatka had maintained her rent and bills, had been clearing up credit issues from the past, and this was just one more thing to clear up. She knew that if she worked hard, she could get over her past.

A motion was made by Strand to allow Ms. Sabatka to sit for the salesperson examination after making proper application, if no further items were discovered during the criminal history background search, and to have a license issued upon passing, with the conditions that Ms. Sabatka notify her employing broker of her criminal history, that the employing broker verify that notification to the Commission in writing, and that Ms. Sabatka immediately notify Commission staff if she had any further contact with the law which could result in jail time during her first two years of licensure. Chairperson Gale offered a friendly amendment that Ms. Sabatka be required to furnish final discharge papers to the Commission office when she completed her sentence. Strand accepted the friendly amendment, and Shepard seconded the motion as amended. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Review of Retirement Subdivisions and Communities Forms

Counsel Titus presented an exhibit which consisted of forms used to register retirement subdivisions and communities. A copy of said exhibit is attached to and made a part of these minutes.

Counsel Titus noted that Commissioner Strand had requested that the forms be reviewed by the Commission.

Commissioner Strand asked if item 6 on Exhibit 13a, which asked for current audited financial statements of the developer, needed to be changed to conform with the current proposed changes. Counsel Titus said no, the Commission was now asking for audited financial statements as required under the new statute.

Commissioner Strand asked if it was conceivable that health care services would be offered, as listed in item 11 on Exhibit 13a. Counsel Titus said it was possible. If the services included assisted living, that would require Health and Human Services licensing. If it was just retirement living with a future upgrade discounted, that would need to be listed. An actuarial study was needed to prove that the money coming in would keep it going and cover costs. Health and Human Services licensing did not look at financial feasibility.

Chairperson Gale noted that the form read as if it would be a notarized statement, but did not require a notarized signature. Chairperson Gale said that some retirement communities would involve signatures from outside the state, which were not signed in Nebraska, and asked if there was any reason the form was not notarized. Counsel Titus noted that the signatures were previously notarized. Director Tyrrell asked Counsel Titus if all the retirement communities were in Nebraska. Counsel Titus said that all of them were in the state now, but it was possible that a retirement community could be from outside Nebraska. Director Tyrrell said the statement replaced the notary requirement and was based on electronic filing requirements. The current wording was developed by legal counsel. It had been changed because it was not possible to electronically notarize documents. All notarized forms were changed to non-notarized forms with similar language so that they could be submitted via the website. In the cases of promotional lands, time shares, subdivided lands, retirement communities, and campgrounds, electronic filing was not available because plats, architectural drawings, etc. had to be included in the filing. Those had downloadable forms, which were to be included with all the required documentation.

Chairperson Gale asked if notarized signatures were required by law. Counsel Titus said there was no requirement for acknowledgment. Director Tyrrell noted that, by the end of 2004, all state agencies were required to have all forms able to be filed electronically. That requirement will be enforced by the state=s chief information officer.

Chairperson Gale asked if it would be useful to require a printed name. Counsel Titus noted that there was a place in the paragraph above for a printed name, and said that most forms were either typed or printed.

Commissioner Wiebusch asked if the Commission needed to vote to change the renewal fee noted on Exhibit 13b. Director Tyrrell said it was not needed, because the fee would automatically change if the Title 300 amendments are approved by the Attorney General and the Governor.

A motion was made by Wiebusch and seconded by Shepard to approve all the forms for use. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Report on Commissioner Per Diem Research

Director Tyrrell presented an exhibit on per diems paid by state boards and commissions. A copy of said exhibit is attached to and made a part of these minutes.

It was the consensus of the Commission to leave the per diem as is.

Information Matters

ARELLO Annual Meeting - October 25-28, 2003 - Portland, Oregon

Director Tyrrell reminded the Commissioners of the ARELLO Annual Meeting, which will be held October 25-28, 2003 in Portland, Oregon. Commissioners Shepard, Wiebusch, Strand, Poskochil, and Johnson are registered for the meeting, and Chairperson Gale was considering whether to attend.

No action was necessary on this report.

Errors and Omissions Loss Information Report as of June 30, 2003

Director Tyrrell presented the Errors and Omissions Insurance Loss Report through June 30, 2003. A copy of said report is attached to and made a part of these minutes.

Director Tyrrell noted that there was nothing unusual in the report.

No action was necessary on this report.

Amend Trust Account Examination Procedures and Cycle

Deputy Director for Enforcement Mayrose presented an exhibit which included the changes Commissioners had requested to the trust account examination cycle and procedures, as discussed at the previous Commission meeting. A copy of said exhibit is attached to and made a part of these minutes.

Deputy Director Mayrose noted that paragraph 4 had been added and implemented per the Commission=s instructions at the previous meeting.

After discussion, a motion was made by Moline and seconded by Strand to adopt the procedures and cycle as presented. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Additional Proposed Amendments to the Time-Share Act

Counsel Titus presented an exhibit which consisted of a rough draft of the legislative bill to amend the Time-Share Act. A copy of said exhibit is attached to and made a part of these minutes.

Counsel Titus noted that additional amendments were being proposed which would keep time share estate and use owners= addresses confidential, in addition to the renewal fee cap of $1500.00 which the Commission had previously approved. The Nebraska statute was in direct conflict with current Florida law, which addressed privacy concerns, so the changes were needed. The proposed wording would accommodate other jurisdictions= laws, while still allowing a member to solicit proxies and do mailings to other members. The association board would decide what mailings were appropriate and legitimate business purposes, and that decision could be appealed to the jurisdictional authority where the association was located. Chairperson Gale asked who decided what was appropriate, office staff or the governing board, and said that needed to be addressed. Director Tyrrell said that specifying an entity could conflict with laws in various situs jurisdictions. Counsel Titus said that time share members would complain to the board if they were mistreated by management. Director Tyrrell indicated that privacy was the big issue. If members had a legitimate issue that was being denied, they would let the Commission know, and the Commission would handle it in a similar manner as a complaint.

After discussion, a motion was made by Moline and seconded by Strand to approve the amendments as presented, to have them introduced in the 2004 Legislature, and to authorize staff to make any non-substantive grammatical, spelling, or punctuation corrections needed. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Director Tyrrell noted that the proposed amendments will be mailed to all registrants to solicit comments, which will be noted in his legislative testimony.

Proposed Objectives for 2003-2004

Director Tyrrell presented an exhibit regarding the Commission=s proposed 2003-2004 objectives. A copy of said exhibit is attached to and made a part of these minutes.

Commissioner Moline asked that the Commission expand on Objective 3, to work with Risk Management and the Department of Administrative Services (DAS) to get coverage for builders and make limitations non-cumulative. Director Tyrrell noted that coverage supplied by private carriers must still be equivalent to the Commission=s policy. The stackable coverage was the thing that made it equivalent. Director Tyrrell asked if that should be added to Objective 4 and combined with the request for proposal (RFP) review process. Commissioner Moline said yes.

Director Tyrrell noted that if the RFP was sent out during January or February, underwriters may not want to write the policy for 2005, since they would not yet have the June 30, 2004, loss report. Commissioner Moline asked that the Commission find out what it could do to reduce risk, to keep the state plan viable. Director Tyrrell noted that the Seller Property Condition Disclosure Statement was one reason Nebraska had such a low premium. Commissioner Moline said the Commission should ask insurers what would make Nebraska even more attractive.

Commissioner Strand asked for a white paper on the general issue, and wanted to know which states were in the insurance business and which were not. Commissioner Strand wanted to find out philosophically what the overall direction should be, which would be a basis for discussion. Commissioner Moline said the issue was the ability to get insured. In transactions involving small and large brokers, if one was insured and one was not, the insured one always carried the liability.

After discussion, a motion was made by Moline and seconded by Strand to adopt the 2003-2004 objectives as amended in discussion. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Errors and Omissions Insurance Renewal for 2004

Director Tyrrell informed the Commission that the lowest 2004 premium that could be negotiated by Williams Underwriting Group, Inc., was $140.00, and that offer had been rescinded. Director Tyrrell had been working with Risk Management and DAS on a solution. The Commission had an October 30 deadline to inform licensees of the errors and omissions insurance policy terms. There was a provision in DAS procedures for emergency contract procurement, which was not an RFP. Risk Management said it could be done that way, and that the best way would be to work with the current program administrator and have the Commission waive the renewal deadline requirement. Our legal counsel said the two parties to the contract could agree to waive it. Last night, Dick Williams said he could not guarantee us that we could get coverage within two weeks. The two carriers he was negotiating with had never written professional liability policies before. Rice was the only other errors and omissions insurance underwriter Director Tyrrell knew. Director Tyrrell talked to them this morning, and they thought they could do it, so the Commission could negotiate directly with them. Cindy Rice Grissom said she did not think the deadlines were a problem. This solution would work only for one year, not for the total problem, then the Commission could do a full-blown RFP next year. Ms. Grissom indicated that it may work better if the Commission could negotiate a two-year term, which could probably result in a lower premium. The Commission could do that, but would have to do some things to accomplish it. Staff will try to get the exact same policy, terms, and conditions as the current policy, and Ms. Grissom indicated it should not be a problem to stay under the $200.00 limit. Director Tyrrell suggested that the Commission either: 1) authorize staff to negotiate, make the changes needed, and enter into an errors and omissions insurance agreement; 2) authorize the Budget and Planning Subcommittee to work with staff to accomplish that; 3) set up a different committee, consisting of no more than three Commissioners, to work with staff to accomplish that; or 4) specify one Commissioner to work with staff to accomplish that. The Commission will need to be able to move on a proposed contract by October 15.

Commissioner Johnson asked if this meant Williams Underwriting Group was out of the errors and omissions insurance business. Director Tyrrell said no, that other states were a month behind Nebraska for deadlines. New Mexico was currently working with Rice, and Director Tyrrell did not know about the other states. Director Tyrrell said that the Commission may need some wiggle room. Counsel Widger said the Commission may get some wiggle room under the emergency waiver clause, but the Commission must provide notice by October 30 if the premium was under $200.00 If it was over $200.00, it would be impossible due to the statutory cap.

Commissioner Moline asked how the Commission could require people to be insured, if the Commission missed the deadline. Director Tyrrell said that was the problem. The October 30 notice was required because the Commission had to give licensees the opportunity to obtain bids on equivalent policies. Ms. Grissom was gearing up to do that as if she already had the Commission=s permission, and she will send those materials to us to be included in renewal materials. Director Tyrrell did not see any way to roll those dice, unless the Commission decided not to offer a state plan. If it was allowed, the Commission could get a two-year contract, if it made a difference in the premium. Director Tyrrell also strongly recommended that the Commission go to the Legislature to raise the premium limit, because the premium may continue to go higher. Director Tyrrell agreed with Commissioner Moline=s suggestion that the Commission may want to try for legislation that allowed the premium to be set at the discretion of the Commission, in consultation with Risk Management. Another option was to get out of the errors and omissions insurance business. In 1989, when the policy was first being negotiated, the state=s risk manager questioned the wisdom of getting into the insurance business.

Commissioner Poskochil asked if there was a $140.00 offer from Rice. Director Tyrrell said he did not know what the Rice premium would be, and after further review and underwriting, the rate could be very different, even lower. Commissioner Moline noted that Arizona=s policy cost three times as much as Nebraska=s, and that Nebraska enjoyed incredibly low premiums. Even if the premium was $150-200, it would still be low.

Chairperson Gale asked if Nebraska was in a larger pool. Director Tyrrell said the group consisted of Nebraska. To some degree, the overall insurance market would affect the premium. Commissioner Moline agreed that if a whole line of business was not profitable, regardless of individual state experience, a company would get out of the business. Also, with all the new construction, Nebraska may be getting the same mold problems that have been an issue in Texas and California. Commissioner Moline offered two suggestions:1) take whatever we can get, for as long as we can get it; and 2) look at the errors and omissions insurance requirements, to adjust coverages as needed to keep the premium low and cover crucial areas.

Commissioner Johnson asked if Williams Underwriting Group could still be the underwriter. Director Tyrrell said that Mr. Williams could not guarantee that he could get coverage for Nebraska in time, or even months from now.

A motion was made by Johnson and seconded by Strand to authorize the Budget and Planning Subcommittee to work with staff to negotiate and enter into contractual agreements regarding errors and omissions insurance for 2004. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Future Meeting Dates

November 12, 2003 - Staybridge Suites, Lincoln

December 10-11, 2003 - Staybridge Suites, Lincoln

January 30, 2004 - Staybridge Suites, Lincoln

NOTE: after the meeting, the consensus of the Commission was to leave the meeting dates as originally scheduled, with November 12-13 at the Days Inn Carlisle in Omaha and January 21-22 at the Staybridge Suites in Lincoln.

Recesses and Adjournment

At 9:33 a.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 9:41 a.m.

At 10:50 a.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 11:00 a.m.

At 12:19 p.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 12:35 p.m.

At 1:47 p.m. on September 24, there being no further business to come before the Commission, a motion was made by Moline and seconded by Strand that the meeting adjourn. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing minutes of the September 24, 2003, meeting of the Nebraska Real Estate Commission were available for inspection on October 8, 2003, 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

Rod Faubion, NP Dodge, Omaha

Judy Burford, CBSHOME Real Estate, Omaha

Beth Lube, Re/Max Real Estate Group, Omaha