Session Law

Identifying Information:L. 2002 ch. 082
Other Identifying Information:2002 Senate Bill 439
Tax Type:Other
Brief Description:An Act concerning real estate brokers and salespersons; relating to the licensure and regulation thereof; amending K.S.A. 58-3043 and 58-3047 and K.S.A. 2001 Supp. 58-3036, 58-3037, 58-3039, 58-3042, 58-3045, 58-3050 and 58-30,103 and repealing the existing sections.
Keywords:


Body:

CHAPTER 82

SENATE BILL No. 439


An Act concerning real estate brokers and salespersons; relating to the licensure and reg-

ulation thereof; amending K.S.A. 58-3043 and 58-3047 and K.S.A. 2001 Supp. 58-3036,

58-3037, 58-3039, 58-3042, 58-3045, 58-3050 and 58-30,103 and repealing the existing


sections.


Be it enacted by the Legislature of the State of Kansas:

Section 1. K.S.A. 2001 Supp. 58-3036 is hereby amended to read as

follows: 58-3036. Unless exempt from this act under K.S.A. 58-3037, and

amendments thereto, no person shall:

(a) Directly or indirectly engage in or conduct or represent that such

person engages in or conducts the business of a broker, associate broker

or salesperson within this state unless such person is licensed as such a

broker, associate broker or salesperson in accordance with this act.

(b) Directly or indirectly act or represent that such person acts as a

broker, associate broker or salesperson within this state unless such per-

son is licensed as such a broker, associate broker or salesperson in ac-

cordance with this act.

(c) Perform or offer, attempt or agree to perform any act described

in subsection (e) (f) of K.S.A. 58-3035, and amendments thereto, whether

as a part of a transaction or as an entire transaction, unless such person

is licensed pursuant to this act.

Sec. 2. K.S.A. 2001 Supp. 58-3037 is hereby amended to read as

follows: 58-3037. The provisions of this act shall not apply to:

(a) Any person, other than a person licensed under this act, who di-

rectly performs any of the acts within the scope of this act with reference

to such person's own property.

(b) Any person who directly performs any of the acts within the scope

of this act with reference to property that such person is authorized to

transfer in any way by a power of attorney from the owner, provided that

such person receives no commission or other compensation, direct or

indirect, for performing any such act.

(c) Services rendered by an attorney licensed to practice in this state

in performing such attorney's professional duties as an attorney.

(d) Any person acting as receiver, trustee in bankruptcy, administra-

tor, executor or guardian, or while acting under a court order or under

the authority of a will or a trust instrument or as a witness in any judicial

proceeding or other proceeding conducted by the state or any govern-

mental subdivision or agency.

(e) Any officer or employee of the federal or state government, or

any political subdivision or agency thereof, when performing the official

duties of the officer or employee.

(f) Any multiple listing service wholly owned by a nonprofit organi-

zation or association of brokers.

(g) Any nonprofit referral system or organization of brokers formed

for the purpose of referral of prospects for the sale or listing of real estate.

(h) Railroads or other public utilities regulated by the state of Kansas,

or their subsidiaries, affiliated corporations, officers or regular employees,

unless performance of any of the acts described in subsection (e) (f) of

K.S.A. 58-3035, and amendments thereto, is in connection with the sale,

purchase, lease or other disposition of real estate or investment therein

unrelated to the principal business activity of such railroad or other public

utility or affiliated or subsidiary corporation thereof.

(i) The sale or lease of real estate by an employee of a corporation

which owns or leases such real estate, if such employee owns not less

than 5% of the stock of such corporation.

(j) The sale or lease of new homes by a person, partnership, associ-

ation or domestic corporation who constructed such homes, but the pro-

visions of this act shall apply to the sale or lease of any such homes by

any employee of such person, partnership or association or by any em-

ployee of such corporation who owns less than 5% of the stock of such

corporation.

(k) The lease of real estate for agricultural purposes.

Sec. 3. K.S.A. 2001 Supp. 58-3039 is hereby amended to read as

follows: 58-3039. (a) Any person desiring to act as a broker or salesperson

must file a written application for a license with the commission or, if

required by the commission, with the testing service designated by the

commission. The application shall be in such form and detail as the com-

mission shall prescribe and shall be accompanied by application and li-

cense fees prescribed by K.S.A. 58-3063, and amendments thereto.

(b) A license to engage in business as a broker or salesperson shall

be granted only to a person who is 18 or more years of age and who has

a high school diploma or its equivalent.

(c) In addition to the requirements of subsection (b), except as pro-

vided in subsection (d), each applicant for an original license as a broker

shall have been:

(1) Licensed as a salesperson in this state or as a salesperson or broker

in another state, and shall have been actively engaged in any of the activ-

ities described in subsection (e) (f) of K.S.A. 58-3035, and amendments

thereto, for a period of at least two years during the five years immediately

preceding the date of the application for a license; or

(2) if an applicant resides in a county that according to the 1994

estimates of the U.S. bureau of the census has a population of 20,000 or

less, the commission may, upon a finding that such county suffers from

a shortage of brokers and upon compelling evidence of need, waive or

alter the requirements of this subsection. The commission shall adopt

rules and regulations to establish alternative licensing criteria for such

applicants.

(d) The commission may accept proof of experience in the real estate

or a related business or a combination of such experience and education

which the commission believes qualifies the applicant to act as a broker

as being equivalent to all or part of the experience required by subsection

(c).

(e) Except as provided in K.S.A. 58-3040, and amendments thereto,

each applicant for an original license shall be required to pass a written

examination covering generally the matters confronting brokers or sales-

persons, and no license shall be issued on the basis of such an examination

either or both sections of which were administered more than four

months prior to the date that the applicant's application is filed with the

commission. The examination may be given by the commission or any

person designated by the commission. Each person taking the examina-

tion shall pay the examination fee prescribed pursuant to K.S.A. 58-3063,

and amendments thereto, which fee the commission may require to be

paid to it or directly to the testing service designated by the commission.

The examination for a broker's license shall be different from or in ad-

dition to that for a salesperson's license.

(f) (1) On and after October 1, 1997, Each applicant for an original

salesperson's license who meets the requirements of this act shall be

issued a temporary salesperson's license which shall expire six months

after the last calendar day of the month in which the license was issued,

on the last calendar day of that month.

(2) No later than 10 days prior to the expiration date of a temporary

salesperson's license, the salesperson shall file an application on a form

provided by the commission. The application shall be accompanied by

the license fee prescribed by K.S.A. 58-3063, and amendments thereto,

and evidence of compliance with the requirements of subsection (f)(1) of

K.S.A. 58-3046a, and amendments thereto. The commission shall issue a

salesperson's license to a person who complies with the provisions of this

paragraph. The issuance date of the salesperson's license shall be the day

following the expiration date of the temporary license. The expiration date

of the license shall be determined in accordance with a schedule estab-

lished by rules and regulations of the commission.

(3) Failure to comply with the provisions of paragraph (2) shall au-

tomatically cancel the temporary license on its expiration date.

(4) A person whose temporary salesperson's license was canceled

pursuant to paragraph (3) may apply for a salesperson's license provided

such application, the license fee prescribed by K.S.A. 58-3063, and

amendments thereto, and evidence of attendance of 30 hours of instruc-

tion received after issuance of the temporary license pursuant to subsec-

tion (f)(1) of K.S.A. 58-3046a, and amendments thereto, are received by

the commission within three months after the expiration date of the tem-

porary license. The commission shall issue a salesperson's license to a

person who complies with the provisions of this paragraph. The expiration

date of the license shall be determined in accordance with a schedule

established by rules and regulations of the commission.

(g) The commission, prior to granting an original license, shall require

proof that the applicant has a good reputation for honesty, trustworthi-

ness, integrity and competence to transact the business of broker or sa-

lesperson in such manner as to safeguard the public interest.

(h) An application for an original license as a salesperson shall be

accompanied by the recommendation of the broker with whom the sa-

lesperson is to be associated, or by whom the salesperson is to be em-

ployed, certifying that the applicant is honest, trustworthy and of good

reputation.

Sec. 4. K.S.A. 2001 Supp. 58-3042 is hereby amended to read as

follows: 58-3042. (a) No real estate license shall give authority to any

person other than the person to whom the license is issued.

(b) No license shall be granted to a corporation, partnership, associ-

ation or limited liability company. Each person who is an officer of a

corporation or a member of a partnership, association or limited liability

company and who performs any act described in subsection (e) (f) of

K.S.A. 58-3035, and amendments thereto, and each person who is em-

ployed by or associated with a corporation, partnership, association or

limited liability company and who performs any act described in subsec-

tion (e) (f) of K.S.A. 58-3035, and amendments thereto, shall be a licensed

broker or licensed salesperson.

Sec. 5. K.S.A. 58-3043 is hereby amended to read as follows: 58-

3043. (a) In determining whether to grant or renew a license the com-

mission shall consider:

(1) Any revocation or suspension of a prior real estate license;

(2) whether an applicant has committed any of the practices enu-

merated in K.S.A. 58-3062, and amendments thereto, or has violated this

act or rules and regulations adopted hereunder during the term of any

prior license;

(3) any plea of guilty or nolo contendere to, or any conviction of: (A)

Forgery, embezzlement, obtaining money under false pretenses, larceny,

extortion, conspiracy to defraud or any other similar offense; (B) a crime

involving moral turpitude; or (C) any felony charge; and

(4) such other matters as the commission deems pertinent.

In its consideration of any such prior revocation, conduct or conviction,

the commission shall take into account the nature of the offense; any

aggravating or extenuating circumstances; the time elapsed since such

revocation, conduct or conviction; the rehabilitation or restitution per-

formed by the applicant; and such other factors as the commission deems

relevant.

(b) The commission may deny a license to any person who, without

a license, has engaged in a real estate activity for which a license was

required.

(c) When an applicant has made a false statement of material fact on

the application, such false statement may be sufficient reason for refusal

of a license.

Sec. 6. K.S.A. 2001 Supp. 58-3050 is hereby amended to read as

follows: 58-3050. (a) The commission may refuse to grant or renew a

license and the license of any licensee may be revoked, suspended, con-

ditioned or restricted or a licensee may be censured, if:

(1) The commission finds that the license has been obtained by false

or fraudulent representation or that the licensee has committed a viola-

tion of this act or rules and regulations adopted hereunder, or the bro-

kerage relationships in real estate transactions act or rules and regulations

adopted thereunder, whether the licensee acted as an agent or a principal

in the real estate transaction;

(2) the licensee has entered a plea of guilty or nolo contendere to, or

has been convicted of: (A) Forgery, embezzlement, obtaining money un-

der false pretenses, larceny, extortion, conspiracy to defraud or any other

similar offense; (B) a crime involving moral turpitude; or (C) any felony

charge; or

(3) the licensee has been finally adjudicated and found to be guilty

of violation of the federal fair housing act (42 U.S.C. 3601 et seq.) or

K.S.A. 44-1015 through 44-1029, and amendments thereto.;

(4) the licensee has obtained a license by false or fraudulent repre-

sentation; or

(5) the licensee has violated any lawful order or directive of the com-

mission.

(b) In addition to or in lieu of any other administrative, civil or crim-

inal remedy provided by law, the commission, in accordance with the

Kansas administrative procedure act and upon a finding that a licensee

has violated a provision of this act or rules and regulations adopted here-

under, or the brokerage relationships in real estate transactions act or

rules and regulations adopted thereunder, may impose on such licensee

a civil fine not exceeding $500 for each violation.

(c) If a broker or salesperson has been declared disabled by a court

of competent jurisdiction, the commission shall suspend the broker's or

salesperson's license for the period of disability.

(d) (1) Except as provided by paragraph (2) of this subsection, no

complaint alleging violation of this act or rules and regulations adopted

hereunder, or the brokerage relationships in real estate transactions act

or rules and regulations adopted thereunder, shall be commenced more

than three years from the date of the occurrence which is the subject of

the complaint.

(2) Unless the violation is not reasonably ascertainable, complaints

alleging violation of subsection (a)(4) or (a)(5) shall be commenced within

three years from the date of the occurrence of the violation. If the violation

is not reasonably ascertainable, complaints alleging violation of subsection

(a)(4) or (a)(5) shall be commenced within three years from the date of

violation is ascertained by the commission.

(e) All administrative proceedings pursuant to this section shall be

conducted in accordance with the Kansas administrative procedure act.

(f) Notwithstanding any provision of this act or the brokerage rela-

tionships in real estate transactions act to the contrary, the commission

may use emergency adjudicative proceedings, as provided by K.S.A. 77-

536, and amendments thereto, to summarily suspend the license of any

licensee if the commission has reasonable cause to believe that the li-

censee's trust account is in unsound condition or that the licensee is mis-

appropriating funds belonging to other persons.

(g) If a licensee has entered a plea of guilty or nolo contendere to, or

has been convicted of, any felony charge, the commission may use emer-

gency adjudicative proceedings, as provided by K.S.A. 77-536, and

amendments thereto, to suspend, revoke, condition or restrict the li-

censee's license.

(h) When the real estate license of an individual is revoked and that

individual's name is included in the trade or business name of a real estate

brokerage business, the commission may deny continued use of the trade

or business name if, in the opinion of the commission, it would be con-

fusing or misleading to the public.

If the revocation of the individual's license is appealed to district court

and a stay of the commission's order is granted by the court, the com-

mission may not deny continued use of the trade or business name until

such time as the district court upholds the order of the commission.

Sec. 7. K.S.A. 2001 Supp. 58-30,103 is hereby amended to read as

follows: 58-30,103. (a) Except when acting as a transaction broker or

solely as a seller, buyer, landlord or tenant, a broker shall act only as a

statutory agent in any real estate transaction. A licensee shall not act as

an undisclosed a dual agent or in a dual capacity of agent and undisclosed

principal in any transaction.

(b) A broker may work with a single party in separate transactions

pursuant to different relationships, including, but not limited to, selling

one property as a seller's agent and working with that seller in buying

another property as a buyer's agent if the broker complies with this act

in establishing the relationships for each transaction. A broker who has

been working with a seller, landlord, buyer or tenant as a transaction

broker may act as an agent for the seller, landlord, buyer or tenant if the

broker complies with this act in establishing the agency relationship.

(c) A broker may be engaged as a transaction broker by oral or written

agreement with the seller, landlord, buyer or tenant. A broker shall be

considered a transaction broker unless:

(1) An agency relationship between the broker and the party to be

represented is established pursuant to this section; or

(2) a broker works with a buyer or tenant as a subagent of the seller

or landlord by accepting an offer of subagency.

(d) (1) Except as provided in subsection (d)(2), a broker intending

to establish an agency relationship with a seller or landlord shall enter

into a written agency agreement with the party to be represented prior

to the licensee's engaging in any of the activities enumerated in subsection

(e) (f) of K.S.A. 58-3035, and amendments thereto, as an employee of, or

on behalf of, the seller or landlord.

(2) If the real estate which is to be offered for sale is owned by any

agency of the federal government, a broker may, on behalf of the owner,

engage in activities enumerated in subsection (e) (f) of K.S.A. 58-3035,

and amendments thereto, after obtaining verbal authorization from the

federal agency for which services are to be performed.

(e) To establish an agency relationship with a buyer or tenant, a bro-

ker shall enter into a written agency agreement with the party to be

represented no later than the signing of an offer to purchase or lease.

(f) An agency agreement shall set forth the terms and conditions of

the relationship, including a fixed date of expiration, any limitation on the

duty of confidentiality and the terms of compensation, and shall refer to

the duties and obligations pursuant to K.S.A. 2001 Supp. 58-30,106 or

58-30,107, and amendments thereto. The agreement shall be signed by

the party to be represented and by the broker or a licensee affiliated with

the broker. A copy of the agreement shall be furnished to the client at

the time the client signs the agreement. If, at the time the client signs

the agreement, the agreement is not signed by the broker or a licensee

affiliated with the broker, the broker or a licensee affiliated with the

broker shall furnish a copy of the agreement to the client within a rea-

sonable time after the agreement is signed by the broker or a licensee

affiliated with the broker.

(g) An agency agreement with a seller or landlord shall include any

potential:

(1) for the seller's agent or landlord's agent to act as a transaction

broker;

(2) for an affiliated licensee to act as a designated agent for the buyer

and the designated agent's supervising broker or branch broker, and an

affiliated licensee if applicable, to act as a transaction broker; or

(3) for the broker to designate an affiliated licensee to act as the

designated agent for the seller on the broker's personal listing pursuant

to subsection (b)(2) of K.S.A. 58-30,109 and amendments thereto.

(h) An agency agreement with a buyer or tenant shall include any

potential:

(1) For the buyer's agent or tenant's agent to act as a transaction

broker; or

(2) For an affiliated licensee to act as a designated agent for the seller

and the designated agent's supervising broker or branch broker, and an

affiliated licensee if applicable, to act as a transaction broker.

(i) An agency agreement shall not contain an authorization for the

broker to sign or initial any document on behalf of the broker's client in

a real estate transaction or authorization for the broker to act as attorney-

in-fact for the client.

(j) An agency agreement with a seller shall not provide that the bro-

ker's commission be based on the difference between the gross sales price

and the net proceeds to the owner.

(k) The broker shall not assign, sell or otherwise transfer a written

agency agreement to another broker without the express written consent

of all parties to the original agreement.

(l) A licensee shall not solicit an agency agreement from a seller or

landlord if the licensee knows that the seller or landlord has, with regard

to the property, an agency agreement granting an exclusive right to sell

or exclusive agency to another broker.

(m) A licensee shall not solicit an agency agreement from a buyer or

tenant if the licensee knows that the buyer or tenant has a written agency

agreement granting exclusive representation to another broker.

(n) A licensee shall not induce any party to break any agency agree-

ment.

(o) If a licensee knows that a buyer or tenant has an agency agreement

granting exclusive representation to another broker, the licensee shall not

contact the buyer or tenant and shall not initiate negotiations for the sale,

exchange or lease of real estate with the buyer or tenant. The licensee

may negotiate the sale, exchange or lease of real estate directly with the

buyer or tenant with the informed consent of the buyer or tenant. The

informed consent shall be evidenced by a consent agreement signed by

the buyer or tenant prior to any such direct negotiation. The consent

agreement shall acknowledge the buyer or tenant agency agreement and

that the buyer or tenant may be liable for compensation under the terms

of the agency agreement. The commission, by rules and regulations, shall

adopt a consent agreement to be used by licensees pursuant to this sub-

section.

(p) A licensee shall not contact the seller or landlord or negotiate a

sale, exchange or lease of real estate directly with a seller or landlord if

the licensee knows that the seller or landlord has an agency agreement

granting an exclusive right to sell or exclusive agency to another broker.

A buyer's or tenant's agent or a subagent may present an offer to the

seller or landlord if the seller's or landlord's agent is present.

Sec. 8. K.S.A. 2001 Supp. 58-3045 is hereby amended to read as

follows: 58-3045. (a) Except for a temporary salesperson's license issued

pursuant to subsection (f) of K.S.A. 58-3039, and amendments thereto,

each license issued or renewed by the commission shall expire on a date

determined in accordance with a schedule established by rules and reg-

ulations of the commission, which date shall be not more than two years

from the date of issuance or renewal. Except as otherwise provided by

this act, applicants for issuance or renewal of a license must satisfy all

applicable requirements prior to issuance or renewal of the license.

(b) (1) Except for a temporary salesperson's license issued pursuant

to subsection (f) of K.S.A. 58-3039, and amendments thereto, each license

shall be renewable upon the filing of a renewal application on or before

the renewal date, which is the last calendar day of the month preceding

the license expiration date. Such application shall be made on a form

provided by the commission and accompanied by (A) the renewal fee

prescribed by K.S.A. 58-3063, and amendments thereto, and (B) evidence

of compliance with the requirements of K.S.A. 58-3046a and amend-

ments thereto or the licensee's license with the licensee's request that

the license be deactivated on the renewal date pursuant to K.S.A. 58-

3049, and amendments thereto.

(2) Failure to comply with paragraph (1) on or before the renewal

date will automatically cancel the license on the license expiration date

unless the license is renewed pursuant to subsection (c) prior to the ex-

piration date.

(c) Any licensee who failed to comply with the requirements of sub-

section (b)(1), may have the licensee's license reinstated and renewed by

the payment of the renewal fee prescribed by K.S.A. 58-3063, and amend-

ments thereto, and a late fee of $50, if such fees are remitted to the

commission not later than six months following the expiration date of such

license and accompanied by (1) an application for late renewal obtained

from the commission, and (2) evidence of compliance with the require-

ments of K.S.A. 58-3046a and amendments thereto or a written request

that the licensee's license be renewed on deactivated status pursuant to

K.S.A. 58-3049 and amendments thereto.

(c) The commission may reinstate and renew the license of a licensee

who has failed to comply with the requirements of subsection (b)(1) if

within six months following the date of the expiration of the license, the

licensee submits to the commission an application for late renewal. Such

application shall be made on a form provided by the commission and shall

be signed by the licensee. Except for late renewal of a license on deacti-

vated status pursuant to K.S.A. 58-3849, and amendments thereto, such

application also shall be signed by the licensee's supervising broker or

branch broker, if applicable. Such application shall be accompanied by

(1) evidence of compliance with K.S.A. 58-3046a, and amendments

thereto, or a written request that such license be renewed on deactivated

status pursuant to K.S.A. 58-3849, and amendments thereto, and (2) pay-

ment of the renewal fee prescribed by K.S.A. 58-3063, and amendments

thereto, plus a late fee of $50.

(d) An application for renewal filed in compliance with the require-

ments of subsection (b) shall entitle the applicant to continue operating

under the applicant's existing license after its specified expiration date,

unless such license has been suspended or revoked and has not been

reinstated or unless such license is restricted, until such time as the com-

mission determines whether the application fulfills such requirements.

Sec. 9. K.S.A. 58-3047 is hereby amended to read as follows: 58-

3047. (a) The commission shall issue a license as broker or salesperson

to each applicant who is qualified under and complies with all provisions

of this act and rules and regulations adopted hereunder. The form of

license shall be prescribed by the commission.

(b) A salesperson's or associate broker's license shall be delivered or

mailed to the supervising broker or branch broker, if applicable, and shall

be kept in the custody and control of such broker until canceled or until

the salesperson or associate broker leaves employment by or association

with the broker.

(c) Immediately upon the termination of a salesperson or associate

broker from employment by or association with a broker, the supervising

broker or branch broker, if applicable, shall return such salesperson's or

associate broker's license to the commission for cancellation. A license

canceled but not suspended or revoked may be reinstated at any time

during the period for which it was issued upon receipt of the fee for

reinstatement prescribed by K.S.A. 58-3063 and amendments thereto and

an application therefor in a form prescribed by the commission. Such

application shall be made on a form provided by the commission and shall

be signed by the licensee and the licensee's supervising broker or branch

broker, if applicable.

(d) Except as provided in subsection (e), upon a change in the name

under which a broker is licensed or a change in the location of a broker's

office, the broker shall, within 10 days, return to the commission, for

cancellation and reinstatement under the new name or location of the

broker, the broker's license, together with the reinstatement fee pre-

scribed by K.S.A. 58-3063 and amendments thereto.

(e) Upon a change in the name under which a supervising broker is

licensed or a change in the location of a supervising broker's office, the

supervising broker shall, within 10 days, return to the commission to-

gether with the reinstatement fee prescribed by K.S.A. 58-3063 and

amendments thereto, for cancellation and reinstatement under the new

name or location of the supervising broker: (1) The license of the super-

vising broker; (2) the license of any other broker who is associated with

the supervising broker and whose license requires reinstatement under

the new name or location; and (3) the licenses of all salespersons and

associate brokers employed by or associated with the supervising broker.

Upon a change in the name under which a branch broker is licensed or

a change in the location of a branch broker's office, the branch broker

shall, within 10 days, return to the commission, for cancellation and re-

instatement under the new name or location of the branch broker, the

license of the branch broker and the licenses of all salespersons and as-

sociate brokers assigned to the branch office, together with the reinstate-

ment fee prescribed by K.S.A. 58-3063 and amendments thereto. Upon

a change in the broker designated as the branch broker or supervising

broker of an office, the supervising broker shall, within 10 days, return

to the commission, for cancellation, the licenses of the brokers who are

affected by the change, together with the reinstatement fee prescribed

by K.S.A. 58-3063 and amendments thereto.

(f) When any salesperson or associate broker is discharged for a vi-

olation of any of the provisions of this act, a certified written statement

of the facts with reference thereto shall be filed forthwith with the com-

mission by the supervising broker.

Sec. 10. K.S.A. 58-3043 and 58-3047 and K.S.A. 2001 Supp. 58-3036,

58-3037, 58-3039, 58-3042, 58-3045, 58-3050 and 58-30,103 are hereby

repealed.

Sec. 11. This act shall take effect and be in force from and after its

publication in the statute book.

Approved April 23, 2002.


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Date Composed: 10/10/2002 Date Modified: 10/10/2002