Real Estate Cont. Education

Codifies real estate brokers' responsibilities including
continuing education of associated real estate licensees and
staff.  Combines existing real estate continuing education
provisions into a single section and mandates that continuing
education be based on current information, law, and rules. (SB20

THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                H.D. 2
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The purpose of this Act is to:
 2      (1)  Consider if consumer protection is being compromised in
 3           real estate transactions in Hawaii as indicated by the
 4           Association of Real Estate License Law Officials
 5           (ARELLO) which reported that Hawaii, requiring ten
 6           hours per two-year licensing period, is ranked forty-
 7           six out of forty-nine states for mandatory continuing
 8           education hours based on average hours per year of
 9           licensing period, with the number one ranked state
10           requiring thirty hours within a two-year licensing
11           period;
12      (2)  Combine continuing education provisions applicable to
13           real estate licensees into a new section for easier
14           review and understanding;
15      (3)  Increase flexibility, range, and the number of options
16           available in the provision of continuing education
17           courses;
18      (4)  Codify the principal brokers' responsibilities in a new
19           section, including requirements for training and
20           educating associated real estate licensees; and

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                                     S.B. NO.           S.D. 1
                                                        H.D. 2

 1      (5)  Direct the department of commerce and consumer affairs,
 2           in consultation with the Hawaii Association of Realtors
 3           to convene a work study group and discuss continuing
 4           education and other administration issues with various
 5           interested parties, and submit any proposed consensus-
 6           derived legislation to the next legislature.
 7      SECTION 2.  Chapter 467, Hawaii Revised Statutes, is amended
 8 by adding two new sections to be appropriately designated and to
 9 read as follows:
10      "467-     Principal brokers.  (a)  The principal broker
11 shall have direct management and supervision of the brokerage
12 firm and its real estate licensees.
13      (b)  The principal broker shall be responsible for:
14      (1)  The client trust accounts, disbursements from those
15           accounts, and the brokerage firm's accounting
16           practices;
17      (2)  The brokerage firm's records, contracts, and documents;
18      (3)  All real estate contracts of the brokerage firm and its
19           handling by the associated real estate salesperson;
20      (4)  Proper handling of any commission application, real
21           estate license application, or renewal application that
22           the principal broker or the brokerage firm expressly
23           agrees to handle on behalf of the applicant, including

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                                     S.B. NO.           S.D. 1
                                                        H.D. 2

 1           without limitation, verifying for completeness and
 2           appropriate fees, and mailing or delivering the
 3           appropriate documents to the commission by the required
 4           deadline;
 5      (5)  Developing policies and procedures for the brokerage
 6           firm concerning the handling of real estate
 7           transactions and the conduct of the associated real
 8           estate licensees and other staff, including education
 9           and enforcement of the policies and procedures;
10      (6)  Setting a policy on continuing education requirements
11           for all associated real estate licensees in compliance
12           with the statutory requirement;
13      (7)  Ensuring that the licenses of all associated real
14           estate licensees and the brokerage firm license are
15           current and active;
16      (8)  Establishing and maintaining a training program for all
17           associated real estate licensees; and
18      (9)  Ensuring that all associated real estate licensees are
19           provided information and training on the latest
20           amendments to real estate licensing laws and rules as
21           well as other related laws and rules.
22      467-     Continuing education.  (a)  The commission shall
23 have the authority to:

Page 4                                                     20
                                     S.B. NO.           S.D. 1
                                                        H.D. 2

 1      (1)  Set content and other requirements for continuing
 2           education courses, providers, and instructors;
 3      (2)  Determine whether requirements have been met;
 4      (3)  Specify a mandatory core course or courses or
 5           equivalencies for a licensing biennium;
 6      (4)  Determine how many hours of a continuing education
 7           course will be credited toward the continuing education
 8           requirements for real estate licensees;
 9      (5)  Develop its own continuing education courses or approve
10           courses developed by others; and
11      (6)  Allow the provision of courses taught by alternative
12           delivery methods with interactive instructional
13           techniques.  Interactive instructional techniques may
14           include but are not limited to:
15           (A)  The opportunity for immediate exchange with an
16                instructor; and
17           (B)  Assessment and remediation through the assistance
18                of computer, electronic, audio, or audiovisual
19                interactive instruction designed to internally
20                measure and evaluate whether students have
21                mastered stated learning objectives.
22      (b)  Continuing education providers shall:
23      (1)  Certify that instructors have met the commission
24           requirements;

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                                     S.B. NO.           S.D. 1
                                                        H.D. 2

 1      (2)  Ensure that instructors are competent in the subject
 2           matter of the course and are current in their knowledge
 3           of the subject matter; and
 4      (3)  Ensure that the course is based on current information,
 5           laws, and rules.
 6      (c)  Continuing education instructors shall ensure that
 7 their courses are based on current information, laws, and rules.
 8      (d)  Continuing education courses shall be designed to
 9 improve a licensee's competency, or professional standards and
10 practice and shall:
11      (1)  Be offered by a provider approved by the commission and
12           be one of the following:
13           (A)  Approved by the commission and delivered by an
14                instructor certified by a commission-approved
15                continuing education provider;
16           (B)  A national course delivered by an instructor
17                certified by the National Association of Realtors
18                or its affiliates;
19           (C)  A national course delivered by an instructor
20                certified by the Building Owners and Managers
21                Association, the Community Associations Institute,
22                or any other national organization approved by the
23                commission; or

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                                     S.B. NO.           S.D. 1
                                                        H.D. 2

 1           (D)  Certified by the Association of Real Estate
 2                License Law Officials;
 3      (2)  Be designed to allow students to exceed minimal entry
 4           level competency in the subject matter of the course
 5           including consumer protection in real estate
 6           transactions; and
 7      (3)  Not require an examination."
 8      SECTION 3.  Section 467-1, Hawaii Revised Statutes, is
 9 amended by deleting the definition of "continuing education".
10      [""Continuing education" means a course:
11      (1)  With a curriculum level above the current minimal
12           competency entry level in any of the following areas:
13           (A)  Protection of the general public in its real
14                estate transactions;
15           (B)  Consumer protection; or
16           (C)  Improvement of the licensee's competency and
17                professional standards and practice; and
18      (2)  That is:
19           (A)  Approved by the commission and delivered by an
20                approved continuing education instructor;
21           (B)  A national course taught by a nationally certified
22                instructor certified by the National Association
23                of Realtors or its affiliates; or

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                                     S.B. NO.           S.D. 1
                                                        H.D. 2

 1           (C)  A national course taught by a nationally certified
 2                instructor certified by, including but not limited
 3                to, the Building Owners and Managers Association,
 4                the Community Associations Institute, or other
 5                national organization approved by the commission;
 6 provided that the continuing education course is offered by an
 7 approved continuing education provider.  Continuing education
 8 courses shall not require an examination."]
 9      SECTION 4.  Section 467-11.5, Hawaii Revised Statutes, is
10 amended to read as follows:
11      "467-11.5  Prerequisites for license renewal.(a)  Prior
12 to the license renewal of a real estate broker or real estate
13 salesperson, the licensee shall provide the commission with proof
14 of having attended ten hours of continuing education or its
15 equivalent as determined by the commission during the two-year
16 period preceding the application for renewal.  Failure to satisfy
17 the continuing education requirement by the license expiration
18 date shall result in the license being automatically placed on an
19 "inactive" status.
20      (b)  To reactivate a license which has been placed on an
21 "inactive" status, the licensee shall submit to the commission
22 proof of having satisfied the continuing education requirement of
23 this section, a complete application setting forth the

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                                     S.B. NO.           S.D. 1
                                                        H.D. 2

 1 information as may be prescribed or required by the commission,
 2 and payment of the proper fee.
 3      [(c)  Courses offered by alternative delivery methods with
 4 interactive instructional techniques may be approved by the
 5 commission.  Interactive instructional techniques may include but
 6 are not limited to:
 7      (1)  The opportunity for immediate exchange with an
 8           instructor; and
 9      (2)  Assessment and remediation through the assistance of
10           computer, electronic, audio, or audiovisual interactive
11           instruction designed to internally measure and evaluate
12           whether students have mastered stated learning
13           objectives.
14      (d)] (c)  No license shall be renewed if the license trade
15 name, partnership or corporation is not currently registered with
16 the department of commerce and consumer affairs."
17      SECTION 5.  The department of commerce and consumer affairs,
18 in consultation with the Hawaii Association of Realtors, shall
19 initiate a work study group during the legislative interim to
20 discuss continuing education and administration issues with other
21 interested parties.  The work study group's consensus
22 recommendations on proposed legislation to address consumer
23 protection and licensee concerns shall be submitted to the

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                                     S.B. NO.           S.D. 1
                                                        H.D. 2

 1 president of the senate, the speaker of the house, the co-chairs
 2 of the senate committee on commerce and consumer protection, and
 3 the chair of the house committee on consumer protection and
 4 commerce prior to the convening of the regular session of 2000.
 5      SECTION 6.  Statutory material to be repealed is bracketed.
 6 New statutory material is underscored.
 7      SECTION 7.  This Act shall take effect upon its approval.