Chairperson Gale convened a Meeting of the Nebraska Real Estate Commission at 9:07 a.m. on February 26, 2002, in the Staybridge Room of the Staybridge Suites, located at 2701 Fletcher Avenue in Lincoln, Nebraska. All of the members of the Real Estate Commission were present, with the exception of Commissioner Nigro, 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 the Title 302 revision discussion.

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.

Director Tyrrell noted that Item 8c had been added since the Tentative Agenda was mailed to the Commissioners.

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

The Minutes of the Commission Meeting held on January 24, 2002, 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, Shepard, Strand, Wiebusch, and Gale voting aye, and with Nigro not participating or voting, being absent and excused.

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

With regard to the January Report, Director Tyrrell noted the following: at the bottom of the last page, the date on the left will be corrected to 2002, and a corrected copy will be placed in the Minutes book. In Receipts Category 7512, New Broker License Fees, an incorrect journal entry will be corrected on future reports; and in Category 7532, Examination Fees, the odd amount was due to an applicant paying the additional $4 fee increase from last summer. Expenditure Category 4421, Other Contract Services, included the temporary help for renewal season because Personnel had not yet billed us; Category 4731, State-Owned Transportation, included a two-month payment.

The Cash Fund Balance as of January 31, 2002, was $733,773.65, which compared to a Cash Fund Balance of $672,285.45 on January 31, 2001.

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

Director Tyrrell presented a Renewal Report, which showed renewals as of February 25, 2002. A copy of said Report is attached to and made a part of these Minutes.

Director Tyrrell noted that the renewal figures were normal.

No action was necessary on this Report.

Director Tyrrell presented a Time-Share Registration for Vacation Village at Parkway. A copy of said Report is attached to and made a part of these Minutes.

Following discussion, a motion was made by Wiebusch and seconded by Moline to approve the Vacation Village at Parkway registration as presented. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Gale voting aye, and with Nigro 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 States 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 Wiebusch to ratify issuance of the licenses as set forth in the Report. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Gale voting aye, and with Nigro not participating or voting, being absent and excused.

Deputy Director Hoffman presented for ratification the Examination Report for January, 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 Wiebusch to ratify the January Report for the purpose of issuing licenses. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Gale voting aye, and with Nigro 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.

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

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

Deputy Director Hoffman presented information regarding activities submitted by the Council of Real Estate Brokerage Managers (CRB), a copy of which is attached to and made a part of these Minutes.

Deputy Director Hoffman noted that she traditionally brought continuing education activities to the Commission when she had questions regarding approvable subject matter. Deputy Director Hoffman reviewed the Exhibit, and noted that these activities were traditionally not approvable, because they were business-oriented instead of consumer-oriented. If the Commission wished to maintain its past policy, Deputy Director Hoffman recommended rejection of these activities.

After discussion, a motion was made by Moline and seconded by Wiebusch to reject all three courses.

Chairperson Gale said that some of the material seemed to fit under #6 of the guidelines, utilizing computers to serve the customer, or #18, e-commerce, or #9, counseling the real estate client. Commissioner Moline said that was a good point, but asked if the instructor was someone who claimed to have knowledge about the future, and if there was any real substance to the course. Deputy Director Hoffman noted that most of the material was on brokerage income and profitability, and how to position the business in the marketplace.

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

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

There were no Hearings scheduled for this Meeting.

Mr. Baade said he was interested in a career in real estate. His arrest was for a Class III felony, possession with intent to deliver, but was plea bargained down to a Class IV felony. He had been employed at the Nebraska State Penitentiary, and was having financial difficulties, when an inmate offered him money to bring in marijuana. He chose to do it, and suffered the consequences. He was sentenced to 18-36 months, and served 19 months. The Parole Board would not grant him parole, because he had betrayed the system by delivering marijuana into the Penitentiary, so he served his full sentence. This was his single felony conviction, he had no prior convictions, and had been in no trouble since. He had worked 20 months at Corrections. The way it usually worked, first-time offenders could usually enter a pretrial diversion program, which was a 6-8 week intensive program which included drug testing and monitoring the person. Completion of the program would result in the person having no criminal record. The county attorney did not allow him to participate because he betrayed the institution. His lawyer told him it would be beneficial if he cooperated with the State Patrol and Nebraska State Penitentiary investigations, but that did no good. During the presentence investigation, the investigator recommended that he get 3 years of probation, but the judge chose incarceration.

Chairperson Gale asked if Mr. Baade took an oath as a correctional officer. Mr. Baade said he was not an officer, he was a food service specialist, and there was no oath. Chairperson Gale said that licensees were given a pretty high level of public trust, and asked if Mr. Baade thought he qualified for that trust. Mr. Baade said he thought he did now. Mr. Baade said he violated the public trust by bringing drugs into prison, and served his prison sentence, which was very eye-opening. The experience taught him a lot about himself, what he wanted in life, and the consequences of decisions. Mr. Baade felt he was trustworthy again.

Chairperson Gale asked about the newly-adopted guidelines for applicants with criminal history. Director Tyrrell said that allowing applicants with felony convictions to sit for the examination was at the discretion of the Commission, and there was no prohibition against it in the guidelines. Chairperson Gale noted that convicts could get pardons after 10 years, and asked for confirmation that Mr. Baade had not yet been pardoned. Mr. Baade said he had not. Chairperson Gale asked what happened to the money Mr. Baade received for the drug transaction. Mr. Baade said he guessed it stayed with him, and noted that it was not much, just a couple hundred dollars over a month-long period. Mr. Baade said the investigation never delved into that. Chairperson Gale asked if Mr. Baade had turned himself in, or if he was caught as the result of an investigation. Mr. Baade said that, on occasion, Corrections searched the employees when they came in to work. Mr. Baade saw the officers doing the staff searches, and could have just left instead of going in without getting into trouble, but he went ahead and turned the stuff into them. They held him until the State Patrol showed up. Mr. Baade said that, when you are involved in something like that, you can not tell the inmate that you are not going to do it any more. The inmate would go to your superiors, and you would get fired. Mr. Baade felt it was better to give it up that morning. He knew he would probably lose his job, but he did not think he would be incarcerated. Mr. Baade said it happened more than you would like to think, and that it happened before and after him. If he had just left, he would have just received a reprimand from his boss for not going through the search, but he wanted it to be over with because he was tired of having it over his head.

Chairperson Gale asked if Mr. Baade had cooperated with the investigation. Mr. Baade gave them the information he had, including his source. Chairperson Gale asked if the plea bargain was allowed because he cooperated. Mr. Baade said it was that, and because he was not given the normal breaks, like the pretrial diversion program. He could have gotten 10 years for the Class III felony.

Commissioner Johnson asked if Mr. Baade was aware that, even though there was flexibility in real estate, there would be times he could not go to ballgames and events. Mr. Baade said yes. Commissioner Wiebusch noted that 60-hour weeks, and working nights and weekends, were common. Mr. Baade said he thought the financial rewards would be better than in food service. Commissioner Johnson said hopefully.

After discussion, a motion was made by Shepard and seconded by Johnson to allow Mr. Baade to sit for the salesperson examination after making proper application, and to have a license issued upon passing.

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

Commissioner Moline noted that Mr. Payne said he had not used drugs since his release, but asked if he had been around others who had. Mr. Payne said yes, a friend who lived in their basement was a heavy user, but Mr. Payne kicked him out.

Commissioner Johnson noted that Mr. Payne had made progress with his current job, and had good potential for advancement, and questioned whether Mr. Payne wanted to leave it to go into real estate sales. Mr. Payne said yes, he enjoyed houses. He hoped to eventually do appraisals, and get to know all aspects of the business. Commissioner Johnson said there was a lot more to it than liking houses, and that he was glad to hear Mr. Payne was doing well in the mortgage business.

A motion was made by Wiebusch and seconded by Johnson to not approve Mr. Payne to sit for the examination.

Commissioner Moline asked if Mr. Payne had contacted Director Tyrrell, or if Director Tyrrell had contacted him. Director Tyrrell said he had tried to notify Mr. Payne by mail at his last known address, and the letter was returned as undeliverable. Shortly after that, Director Tyrrell received an email from Mr. Payne asking if he could reappear. Commissioner Moline asked if Mr. Payne had tried to keep track of the time. Director Tyrrell said yes, we tried to contact him first, but he contacted us too.

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

Director Tyrrell noted that, because the motion to deny licensure failed, Mr. Payne would be allowed to sit for the salesperson examination after making proper application, and to have a license issued upon passing.

Commissioner Moline asked if Mr. Nelson was moving to Nebraska. Director Tyrrell said no, he was staying in Colorado, but Nebraska had lots of non-resident licensees.

Commissioner Moline asked if Mr. Nelson had falsified a loan application. Director Tyrrell said he had falsified his income. Chairperson Gale asked if anyone had suffered a loss as a result. Director Tyrrell said he did not think so. Commissioner Strand noted that Mr. Nelson was convicted of a crime. Chairperson Gale noted that the conviction was in Nebraska. Director Tyrrell said the conviction was in 1987, and Mr. Nelson had served 3 years on probation. Commissioner Strand noted that it was 2 years on probation. Chairperson Gale asked if Mr. Nelson had only been licensed in Colorado since June 1, 2001. Director Tyrrell said yes. Chairperson Gale noted that the sentencing letter was pretty positive. Commissioner Strand also noted that Mr. Nelson had paid restitution of $2300 as a condition of probation.

Director Tyrrell reviewed the changes made since the last Commission Meeting. For the effective date on the last page, Director Tyrrell recommended that it be the same as the new agency brochures, which was January 1, 2003. The implementation process could be the same for both, that it was OK to use the new form prior to the effective date, but mandatory after 1-1-03. The Commission agreed by consensus.

Commissioner Moline asked if a licensee would need to get a new form completed and signed if an agreement entered into prior to 1-1-03 included the old form. Director Tyrrell said yes.

Commissioner Moline noted that the Commissioners could have lunch or dinner together, as long as they did not discuss business. Director Tyrrell said that was correct, and it was also permissible to have a chance meeting, or to all attend another meeting such as ARELLO. If something came from the meeting, or if the Commissioners crystallized a decision there, it could be a violation of the Open Meetings Law. The Commission needed to be careful, because that would be like making decisions in closed session. Director Tyrrell noted that the Commission could discuss issues in closed session, but had to come out of closed session in order to make decisions. Chairperson Gale asked if the Commission could do planning, just not make decisions. Counsel Widger noted that closed sessions could be done to discuss litigation, Attorney General opinions, purchasing decisions, or anything that would injure the reputation of parties involved, but all decisions must be made in open session.

Chairperson Gale said he did not intend to use the retreat for making nitty-gritty decisions. He just wanted to get an overview of the industry and how it all worked. Director Tyrrell said that, if there was a formalized process, it must be done in open meeting. The chance meeting provision was a limited exemption so that notice was not required, for example, to send four Commissioners to an ARELLO meeting in Ft. Worth. If the Commissioners were called together to conduct Commission business, the meeting had to be noticed. Counsel Widger emphasized that Commissioners did not discuss issues or make decisions while at lunch.

Chairperson Gale asked if a meeting would have to be noticed if the Commission just had speakers come in for educational purposes. Counsel Widger said yes, that it was better to err on the side of caution.

Director Tyrrell reported that LB 863 was on General File, but had not yet been prioritized as of yesterday.

No action was necessary on this Report.

Director Tyrrell presented the Trust Account Examination Evaluation - Fourth Quarter 2001 Report. A copy of said Report is attached to and made a part of these Minutes.

Chairperson Gale asked if there had been discussion of having the Nebraska Real Estate Commission examine title company trust accounts, instead of the Department of Insurance. Director Tyrrell said that would not be likely to happen, because Insurance was a code agency and Real Estate was a non-code agency, and they addressed different industries. Director Tyrrell had provided the Department of Insurance and members of the Legislature with information and forms used by the Nebraska Real Estate Commission trust account examination program.

No action was necessary on this Report.

Director Tyrrell reminded Commissioners to make their hotel reservations by March 4 if they planned to attend, and to get their registration forms in to the office.

Commissioner Moline noted that there would be a committee meeting regarding the website database and the model law during the Spring Meeting, and asked Commissioners to get their comments to him as soon as possible.

No action was necessary on this Report.

April 3-4, 2002 - Staybridge Suites, Lincoln
May 7-8-9, 2002 - Staybridge Suites, Lincoln
June 12-13, 2002 - Staybridge Suites, Lincoln
August 21-22, 2002 - Staybridge Suites, Lincoln
September 25-26, 2002 - Staybridge Suites, Lincoln

At 10:00 a.m. on February 26, Chairperson Gale declared a brief recess, and reconvened the Meeting at 10:16 a.m.

At 11:47 a.m., Chairperson Gale passed the gavel to Acting Chairperson Wiebusch, and was excused from the remainder of the Meeting.

At 11:48 a.m. on February 26, there being no further business to come before the Commission, a motion was made by Moline and seconded by Shepard that the Meeting adjourn. Motion carried with Johnson, Moline, Shepard, Strand, and Wiebusch voting aye, and with Nigro and Gale not participating or voting, being absent and excused.

I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing Minutes of the February 26, 2002, Meeting of the Nebraska Real Estate Commission were available for inspection on March 11, 2002, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,
Les Tyrrell
Director