THE ONE HUNDRED AND FIFTEENTH DAY

THE ONE HUNDRED AND FIFTEENTH DAY

Carson City(Wednesday), May 30, 2001

Senate called to order at 12:34 p.m.

President Hunt presiding.

Roll called.

All present.

Prayer by the Chaplain, Pastor Albert Tilstra.

Lord, in the hush of this moment, we pray that You may steal into our hearts and reveal to us how near and how dear You are.

There are times when You are not real to us, and we know why. It is not because You have withdrawn from us, but because we have wandered away from You, not because You are not speaking, but because we are not listening; not because Your love for us has cooled, but because we have fallen in love with things instead of persons.

O Lord, melt the coldness of our hearts that we may again fall in love with You who has loved us so much.

Amen.

Pledge of allegiance to the Flag.

Senator Raggio moved that further reading of the Journal be dispensed with, and the President and Secretary be authorized to make the necessary corrections and additions.

Motion carried.

REPORTS OF COMMITTEES

Madam President:

Your Committee on Commerce and Labor, to which were referred Assembly Bills Nos. 618, 661, has had the same under consideration, and begs leave to report the same back with the recommendation: Amend, and do pass as amended.

Randolph J. Townsend, Chairman

Madam President:

Your Committee on Finance, to which were referred Senate Bill No. 581; Assembly Bills Nos. 187, 189, 507, 517, 524, 527, 529, 532, 533, has had the same under consideration, and begs leave to report the same back with the recommendation: Do pass.

Also, your Committee on Finance, to which were referred Senate Bills Nos. 84, 442, 463, 579; Assembly Bill No. 530, has had the same under consideration, and begs leave to report the same back with the recommendation: Amend, and do pass as amended.

William J. Raggio, Chairman

Madam President:

Your Committee on Transportation, to which was referred Senate Bill No. 576, has had the same under consideration, and begs leave to report the same back with the recommendation: Amend, and do pass as amended.

Also, your Committee on Transportation, to which was referred Assembly Concurrent Resolution No. 37, has had the same under consideration, and begs leave to report the same back with the recommendation: Be adopted.

William R. O'Donnell, Chairman

MESSAGES FROM THE ASSEMBLY

Assembly Chamber, Carson City, May 29, 2001

To the Honorable the Senate:

I have the honor to inform your honorable body that the Assembly on this day passed Assembly Bills Nos. 506, 516, 522.

Also, I have the honor to inform your honorable body that the Assembly on this day passed, as amended, Assembly Bills Nos. 115, 503, 504, 514, 520, 523, 525, 526, 567.

Also, I have the honor to inform your honorable body that the Assembly on this day concurred in the Senate Amendment No. 793 to Assembly Bill No. 113; Senate Amendment No. 940 to Assembly Bill No. 182; Senate Amendment No. 751 to Assembly Bill No. 220; Senate Amendment No. 665 to Assembly Bill No. 239; Senate Amendment No. 754 to Assembly Bill No. 308; Senate Amendment No. 1089 to Assembly Bill No. 313; Senate Amendment No. 939 to Assembly Bill No. 314; Senate Amendment No. 792 to Assembly Bill No. 315; Senate Amendment No. 966 to Assembly Bill No. 320; Senate Amendment No. 906 to Assembly Bill No. 328; Senate Amendment No. 927 to Assembly Bill No. 338; Senate Amendment No. 689 to Assembly Bill No. 380; Senate Amendment No. 938 to Assembly Bill No. 413; Senate Amendment No. 980 to Assembly Bill No. 419; Senate Amendment Nos. 1068, 909 to Assembly Bill No. 429; Senate Amendment No. 937 to Assembly Bill No. 430; Senate Amendment No. 945 to Assembly Bill No. 442; Senate Amendment No. 936 to Assembly Bill No. 451; Senate Amendment Nos. 853, 1071 to Assembly Bill No. 452; Senate Amendment No. 682 to Assembly Bill No. 455; Senate Amendment Nos. 1072, 1137 to Assembly Bill No. 459; Senate Amendment No. 935 to Assembly Bill No. 461; Senate Amendment No. 934 to Assembly Bill No. 490; Senate Amendment No. 1066 to Assembly Bill No. 499; Senate Amendment No. 964 to Assembly Bill No. 540; Senate Amendment No. 933 to Assembly Bill No. 560; Senate Amendment No. 1050 to Assembly Bill No. 568; Senate Amendment Nos. 1043, 1080 to Assembly Bill No. 619; Senate Amendment No. 695 to Assembly Bill No. 632; Senate Amendment No. 932 to Assembly Bill No. 638.

Also, I have the honor to inform your honorable body that the Assembly on this day respectfully refused to concur in the Senate Amendment No. 1001 to Assembly Bill No. 219; Senate Amendment No. 965 to Assembly Bill No. 246; Senate Amendment Nos. 769, 1112 to Assembly Bill No. 483; Senate Amendment No. 911 to Assembly Bill No. 500; Senate Amendment No. 830 to Assembly Bill No. 637.

Also, I have the honor to inform your honorable body that the Assembly on this day respectfully refused to recede from its action on Senate Bill No. 482, Assembly Amendment Nos. 740, 783, and requests a conference, and appointed Assemblymen Manendo, Gustavson and Ohrenschall as a first Conference Committee to meet with a like committee of the Senate.

Also, I have the honor to inform your honorable body that the Assembly on this day appointed Assemblymen Leslie, Smith and Tiffany as a first Conference Committee concerning Assembly Bill No. 195.

Patricia R. Williams

Assistant Chief Clerk of the Assembly

Assembly Chamber, Carson City, May 30, 2001

To the Honorable the Senate:

I have the honor to inform your honorable body that the Assembly on this day adopted Assembly Concurrent Resolution No. 40.

Patricia R. Williams

Assistant Chief Clerk of the Assembly

MOTIONS, RESOLUTIONS AND NOTICES

Assembly Concurrent Resolution No. 40.

Senator Raggio moved the adoption of the resolution.

Remarks by Senators Raggio, Coffin and Townsend.

Senator Raggio moved to withdraw the motion.

Motion carried.

INTRODUCTION, FIRST READING AND REFERENCE

By the Committee on Finance:

Senate Bill No. 583—AN ACT relating to tourism; establishing a grant program for the development of projects relating to tourism; creating a committee to administer the grant program; prescribing the membership and duties of the committee; and providing other matters properly relating thereto.

Senator Raggio moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 115.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 503.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 504.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 506.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 514.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 516.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 520.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 522.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 523.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 525.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 526.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 567.

Senator Rawson moved that the bill be referred to the Committee on Government Affairs.

Motion carried.

MOTIONS, RESOLUTIONS AND NOTICES

Assembly Concurrent Resolution No. 40.

Senator Raggio moved the adoption of the resolution.

Remarks by Senators Townsend and Coffin.

Resolution adopted.

Resolution ordered transmitted to the Assembly.

GENERAL FILE AND THIRD READING

Senate Bill No. 295.

Bill read third time.

Roll call on Senate Bill No. 295:

Yeas—21.

Nays—None.

Senate Bill No. 295 having received a constitutional majority, Madam President declared it passed, as amended.

Bill ordered transmitted to the Assembly.

Senate Bill No. 445.

Bill read third time.

Roll call on Senate Bill No. 445:

Yeas—21.

Nays—None.

Senate Bill No. 445 having received a constitutional majority, Madam President declared it passed, as amended.

Bill ordered transmitted to the Assembly.

Senate Bill No. 449.

Bill read third time.

Roll call on Senate Bill No. 449:

Yeas—21.

Nays—None.

Senate Bill No. 449 having received a constitutional majority, Madam President declared it passed, as amended.

Bill ordered transmitted to the Assembly.

Senate Bill No. 459.

Bill read third time.

Roll call on Senate Bill No. 459:

Yeas—21.

Nays—None.

Senate Bill No. 459 having received a constitutional majority, Madam President declared it passed, as amended.

Bill ordered transmitted to the Assembly.

Assembly Bill No. 4.

Bill read third time.

Roll call on Assembly Bill No. 4:

Yeas—21.

Nays—None.

Assembly Bill No. 4 having received a constitutional majority, Madam President declared it passed, as amended.

Bill ordered transmitted to the Assembly.

Assembly Bill No. 285.

Bill read third time.

Roll call on Assembly Bill No. 285:

Yeas—21.

Nays—None.

Assembly Bill No. 285 having received a constitutional majority, Madam President declared it passed.

Bill ordered transmitted to the Assembly.

Assembly Bill No. 447.

Bill read third time.

Roll call on Assembly Bill No. 447:

Yeas—19.

Nays—McGinness.

Not Voting—O'Connell.

Assembly Bill No. 447 having received a constitutional majority, Madam President declared it passed, as amended.

Bill ordered transmitted to the Assembly.

Assembly Bill No. 454.

Bill read third time.

Roll call on Assembly Bill No. 454:

Yeas—21.

Nays—None.

Assembly Bill No. 454 having received a constitutional majority, Madam President declared it passed.

Bill ordered transmitted to the Assembly.

Assembly Bill No. 531.

Bill read third time.

Roll call on Assembly Bill No. 531:

Yeas—21.

Nays—None.

Assembly Bill No. 531 having received a constitutional majority, Madam President declared it passed.

Bill ordered transmitted to the Assembly.

Assembly Bill No. 598.

Bill read third time.

Roll call on Assembly Bill No. 598:

Yeas—21.

Nays—None.

Assembly Bill No. 598 having received a constitutional majority, Madam President declared it passed.

Bill ordered transmitted to the Assembly.

UNFINISHED BUSINESS

Consideration of Assembly Amendments

Senate Bill No. 216.

The following Assembly amendments were read:

Amendment No. 993.

Amend the bill as a whole by deleting sec. 3 and renumbering sec. 4 as sec. 3.

Amend sec. 4, page 2, by deleting lines 21 through 24 and inserting:

“Sec. 3. 1. If a contractor who engages in the repair, restoration, improvement or construction of a residential pool or spa is determined by the board to have violated:

(a) One or more of the provisions of NRS 597.716, 597.719 or 624.301 to 624.305, inclusive; or

(b) Any regulation adopted by the board with respect to contracts for the repair, restoration, improvement or construction of a residential pool or spa, the board may require that the contractor obtain the services of a construction control for each contract that the contractor enters into for the repair, restoration, improvement or construction of a residential pool or spa.”.

Amend the bill as a whole by adding new sections designated sections 4 and 4.5, following sec. 4, to read as follows:

“Sec. 4. 1. Any contractor or subcontractor who performs work for the repair, restoration, improvement or construction of a residential pool or spa shall, regardless of whether the work is performed under the direction of a builder who is also the owner of the property being improved:

(a) Apply for and obtain all applicable permits for the project; and

(b) Meet all applicable requirements imposed pursuant to this chapter, chapter 624 of NRS or any regulations adopted by the board with respect to contracts for the repair, restoration, improvement or construction of a residential pool or spa.

2. If a contractor or subcontractor performs work for the repair, restoration, improvement or construction of a residential pool or spa and the work is performed under the direction of a builder who is also the owner of the property being improved, the owner shall comply with all state and local laws and ordinances for the submission of names, licenses and information concerning any required bonds and insurance with respect to the contractors and subcontractors working on the project.

3. With respect to a contract for the repair, restoration, improvement or construction of a residential pool or spa, regardless of use, the work performed pursuant to such a contract must be supervised and controlled directly by the qualified employee or officer of the contract.

Sec. 4.5. A contractor who engages in the repair, restoration, improvement or construction of a residential pool or spa shall not:

1. Act as, or carry out the duties of, an officer, director, employee or owner of; or

2. Receive remuneration or any other thing of value for the loan, either directly or indirectly, from,

a bonding company, finance company, or any other corporation or business entity who cosigns, underwrites, obtains a deed of trust for, issues, sells, purchases or acquires a loan to finance the repair, restoration, improvement or construction of a residential pool or spa.”.

Amend the bill as a whole by deleting sec. 5 and adding a new section designated sec. 5, following sec. 4, to read as follows:

“Sec. 5. 1. If the repair, restoration, improvement or construction of a residential pool or spa is to be financed by the owner, before the contractor performs any work for the repair, restoration, improvement or construction of the residential pool or spa, the owner must:

(a) Find a third-party to agree to make the loan or give financing.

(b) Agree to accept the loan or financing of the third-party.

(c) Not rescind the loan or financing transaction within the period prescribed for rescission pursuant to the Truth in Lending Act, 15 U.S.C §§ 1601 et seq., or chapter 598 of NRS, if applicable.

2. A contract for the repair, restoration, improvement or construction of a residential pool or spa, regardless of use, is not enforceable against the owner if:

(a) Obtaining a loan for all or a portion of the contract price is a condition precedent to the contract.

(b) The contractor provides financing for all or a portion of the contract price.

3. An affiliate or associate of a contractor may not issue, purchase or acquire a loan to finance the repair, restoration, improvement or construction of a residential pool or spa, regardless of use.

4. A contractor shall not represent in any manner that the contract is enforceable or that the owner has any obligation under the contract if the requirements of this section are not satisfied.

5. As used in this section:

(a) “Affiliate” means a person that directly, or indirectly through one or more intermediaries, is controlled by, or is under common control with, a specified person.

(b) “Associate,” when used to indicate a relationship with any person, means:

(1) Any corporation or organization of which that person is an officer or partner or is, directly or indirectly, the beneficial owner of 10 percent or more of any class of voting shares;

(2) Any trust or other estate in which that person has a substantial beneficial interest or for which he serves as trustee or in a similar fiduciary capacity; or

(3) Any relative or spouse of that person, or any relative of the spouse.

(c) “Third-party” means a bonding company, finance company, or any other corporation or business entity who cosigns, underwrites, obtains a deed of trust for, issues, sells, purchases or acquires a loan to finance the repair, restoration, improvement or construction of a residential pool or spa.”.

Amend sec. 6, page 3, line 32, by deleting “act” and inserting: “act, or any regulations adopted with respect to contracts for the repair, restoration, improvement or construction of a residential pool or spa”.

Amend sec. 6, page 3, line 35, by deleting “519.719” and inserting “597.719”.

Amend sec. 9, pages 4 and 5, by deleting lines 41 through 48 on page 4 and lines 1 and 2 on page 5, and inserting:

“597.719 1. [A] The board shall adopt by regulation mandatory elements to be included in all contracts to be used by contractors for the repair, restoration, improvement or construction of a residential pool or spa. Such mandatory elements must not be waived or limited by contract or in any other manner. On and after October 1, 2001, any contract entered into between a contractor and the owner of a single-family residence for the repair, restoration, improvement or construction of a residential pool or spa must comply with the standard elements adopted by the board. A contract that does not comply with the standard elements adopted by the board is void and unenforceable against the owner.”.

Amend sec. 9, page 5, line 8, by deleting “number;” and inserting: “number . [;]”.

Amend sec. 9, page 5, line 10, by deleting “property;” and inserting” “property . [;]”.

Amend sec. 9, page 5, lines 11, 13 and 14, by deleting “contract;” and inserting: “contract . [;]”.

Amend sec. 9, page 5, line 16, by deleting “taxes;” and inserting:

“taxes . [;]”.

Amend sec. 9, page 5, by deleting lines 17 and 18 and inserting:

“(g) The amount , not to exceed $1,000 or 10 percent of the aggregate contract price, whichever is less, of any [advance] deposit paid or promised to be paid to the contractor by the owner [;] before the start of construction.”.

Amend sec. 9, page 5, line 20, by deleting “624.600;” and inserting: “624.600 . [;]”.

Amend sec. 9, page 5, by deleting line 25 and inserting: “incorporated into the original contract as a change order . [;] A change order is not enforceable against the owner contracting for the repair, restoration, improvement or construction of a residential pool or spa unless the change order clearly sets forth the scope of work to be completed and the price to be charged for the changes and is signed by the owner.”.

Amend sec. 9, page 5, line 30, by deleting “work; and” and inserting: “work . [; and]”.

Amend sec. 9, page 5, line 31, by deleting “amount” and inserting: “amount , shown in numeral form,”.

Amend sec. 9, page 5, line 33, after “contract.” by inserting: “Unless the contractor has furnished a bond for payment and performance covering full performance and completion of the contract and the cost of the bond is included in the price of the project the payment schedule must not provide for the contractor to receive, nor may the contractor actually receive, payments in excess of 100 percent of the value of the work performed on the project at any time, excluding finance charges, except as authorized by subsection 1 of NRS 597.716 or the regulations adopted by the board. With respect to a contract executed before October 1, 2001, if any payment schedule set forth in the contract does not comply with the provisions of this chapter or chapter 624 of NRS or any regulations adopted pursuant thereto:

(1) The obligation of the owner to make payments in accordance with the payment schedule shall be deemed void and unenforceable; and

(2) The lender, if any, may not initiate proceedings to enforce the payment of any applicable loan unless and until the contract is reformed or otherwise amended to comply with those provisions of law.

(l) If the contract provides for payment of a commission to a salesperson out of the contract price, a statement that the payment must be made on a pro rata basis in proportion to the schedule of payments made to the contractor by the disbursing party in accordance with the provisions of paragraph (k).”.

Amend the bill as a whole by deleting sections 10 through 12 and adding new sections designated sections 10 through 12, following sec. 9, to read as follows:

“Sec. 10. Chapter 624 of NRS is hereby amended by adding thereto the provisions set forth as sections 11 and 12 of this act.

Sec. 11. 1. The board shall designate an employee as ombudsman for residential pools and spas.

2. The ombudsman for residential pools and spas shall:

(a) Assist owners of single-family residences, contractors and financial institutions to understand their rights and responsibilities as set forth in NRS 597.713, 597.716 and 597.719 and sections 2 to 6, inclusive, of this act, and any regulations adopted pursuant thereto.

(b) Notify the board if it appears that any person has engaged in any act or practice that constitutes a violation of any of the provisions of this chapter or NRS 597.713, 597.716 or 597.719 or sections 2 to 6, inclusive, of this act, or any regulations adopted pursuant thereto.

Sec. 12. 1. Before granting an original contractor’s license to, or renewing the contractor’s license of, an applicant who engages or will engage in the repair, restoration, improvement or construction of residential pools or spas, the board may, in addition to any other conditions for the issuance or renewal of a license, require the applicant to file with the board a bond for the protection of consumers in an amount fixed by the board.

2. A bond required pursuant to subsection 1 is in addition to, may not be combined with and does not replace any other bond required pursuant to the provisions of this chapter. A contractor required to file a bond pursuant to subsection 1 shall maintain the bond for 2 years or for such longer period as the board may require.

3. A bond required pursuant to subsection 1 must be provided by a person whose long-term debt obligations are rated “A” or better by a nationally recognized rating agency.”.

Amend sec. 13, page 8, line 14, by deleting “$100,000.” and inserting “[$100,000.]$500,000.”.

Amend sec. 13, page 8, line 17, after “force.” by inserting: “A bond required by this section must be provided by a person whose long-term debt obligations are rated “A” or better by a nationally recognized rating agency.”.

Amend sec. 13, pages 8 and 9, by deleting lines 46 through 49 on page 8 and lines 1 through 10 on page 9, and inserting:

“7. If a contractor who engages in the repair, restoration, improvement or construction of a residential pool or spa:

(a) Becomes licensed pursuant to chapter 624 of NRS on or after July 1, 2001;

(b) Is determined by the board to have violated one or more of the provisions of NRS 624.301 to 624.305, inclusive;

(c) Enters into a contract on or after July 1, 2001, that is later found to be void and unenforceable against the owner pursuant to subsection 5 of NRS 597.719 or pursuant to any regulation adopted by the board with respect to contracts for the repair, restoration, improvement or construction of a residential pool or spa; or

(d) Has five valid complaints filed against him with the board within any 15-day period,

the contractor shall comply with the provisions of subsection 8.

8. A contractor described in subsection 7 shall, before commencing work for the repair, restoration, improvement or construction of a residential pool or spa, furnish to the building department of the city or county, as applicable, in which the work will be carried out:

(a) A performance bond in an amount equal to not less than 50 percent of the amount of the contract, conditioned upon the faithful performance of the contract in accordance with the plans, specifications and conditions set forth in the contract. The performance bond must be solely for the protection of the owner of the property to be improved.

(b) A payment bond in an amount equal to not less than 50 percent of the amount of the contract. The payment bond must be solely for the protection of persons supplying labor or materials to the contractor, or to any of his subcontractors, in carrying out the provisions of the contract.

A bond required pursuant to this subsection must be provided by a person whose long-term debt obligations are rated “A” or better by a nationally recognized rating agency. The contractor shall maintain the bond or cash deposit for the period required by the board.

9. As used in this section, “substantiated claims for wages” has the”.

Amend the bill as a whole by adding new sections designated sections 13.3 and 13.7, following sec. 13, to read as follows:

“Sec. 13.3. NRS 624.490 is hereby amended to read as follows:

624.490 Within 2 years after an injured person has obtained a judgment in any court of competent jurisdiction for recovery of damages against a residential contractor for an act or omission of the residential contractor that is in violation of this chapter , chapter 597 of NRS or the regulations adopted pursuant thereto, the injured person may apply to the board for satisfaction of the judgment from the account if:

1. The proceedings in connection with the judgment have terminated, including appeals;

2. He submits an application on a form established for this purpose by the board;

3. He submits proof satisfactory to the board of the judgment; and

4. Upon obtaining payment from the account, he assigns his rights to enforce the judgment to the board.

Sec. 13.7. NRS 624.510 is hereby amended to read as follows:

624.510 1. Except as otherwise provided in NRS 624.490 and subsection 2, an injured person is eligible for recovery from the account if the board or its designee finds that the injured person suffered actual damages as a result of an act or omission of a residential contractor that is in violation of this chapter , chapter 597 of NRS or the regulations adopted pursuant thereto.

2. An injured person is not eligible for recovery from the account if:

(a) The injured person is the spouse of the licensee, or a personal representative of the spouse of the licensee;

(b) The injured person was associated in a business relationship with the licensee other than the contract at issue; or

(c) At the time of contracting with the residential contractor, the license of the residential contractor was suspended or revoked pursuant to NRS 624.300.

3. If the board or its designee determines that an injured person is eligible for recovery from the account pursuant to this section or NRS 624.490, the board or its designee may pay out of the account:

(a) The amount of actual damages suffered, but not to exceed $30,000; or

(b) If a judgment was obtained as set forth in NRS 624.490, the amount of actual damages included in the judgment and remaining unpaid, but not to exceed $30,000.

4. The decision of the board or its designee regarding eligibility for recovery and all related issues is final and not subject to judicial review.

5. If the injured person has recovered a portion of his loss from sources other than the account, the board shall deduct the amount recovered from the other sources from the amount payable upon the claim and direct the difference to be paid from the account.

6. To the extent of payments made from the account, the board is subrogated to the rights of the injured person, including, without limitation, the right to collect from a surety bond or a cash bond. The board and the attorney general shall promptly enforce all subrogation claims.

7. The amount of recovery from the account based upon claims made against any single contractor must not exceed $200,000.

8. As used in this section, “actual damages” includes attorney’s fees or costs in contested cases appealed to the supreme court of this state. The term does not include any other attorney’s fees or costs.”.

Amend sec. 15, page 10, line 10, by deleting “4” and inserting “3”.

Amend the bill as a whole by renumbering sections 16 and 17 as sections 18 and 19 and adding new sections designated sections 16 and 17, following sec. 15, to read as follows:

“Sec. 16. Section 20.5 of chapter 423, Statutes of Nevada 1999, at page 1972, is hereby amended by adding thereto a new section to read as follows:

Sec. 20.5. 1. The provisions of section 10 of this act apply to qualified services completed on or after July 1, 1998.

2. The provisions of section 11 of this act apply to judgments entered on or after July 1, 2000.

Sec. 17. Section 21 of chapter 423, Statutes of Nevada 1999, at page 1972, is hereby amended to read as follows:

Sec. 21. 1. This section and sections 1 and 9 of this act become effective on October 1, 1999.

2. Sections 2 to 8, inclusive, and 10 to [20,] 20.5, inclusive, of this act become effective on July 1, 2001.”.

Amend sec. 17, page 10, by deleting lines 18 through 21 and inserting:

“3. Sections 3 to 8, inclusive, 10 to 13, inclusive, and 14, 15 and 18 of this act become effective on July 1, 2001.

4. Sections 13.3, 13.7, 16 and 17 of this act become effective at 12:01 a.m. on July 1, 2001.”.

Amend the title of the bill to read as follows:

“AN ACT relating to contractors; providing for the adoption of standards for advertisements used by contractors who repair, restore, improve or construct residential pools and spas; enacting and revising various provisions pertaining to such contractors; requiring the state contractors’ board to adopt standard contract elements for use by such contractors; providing for the designation of an ombudsman for residential pools and spas; revising the provisions governing eligibility for compensation from the recovery fund; providing a penalty; and providing other matters properly relating thereto.”.

Amend the summary of the bill to read as follows:

“SUMMARY—Makes various changes pertaining to contractors who engage in repair, restoration, improvement or construction of residential pools and spas. (BDR 52-1037)”.

Amendment No. 1114.

Amend sec. 4, page 2, by deleting line 45 and inserting: “directly by the qualified employee or qualified officer of the contractor.”.

Amend sec. 4.5, page 2, line 46, by deleting “A” and inserting: “Except as otherwise provided in section 5 of this act, a”.

Amend the bill as a whole by deleting sec. 5 and adding a new section designated sec. 5, following sec. 4.5, to read as follows:

“Sec. 5. 1. A contract for the repair, restoration, improvement or construction of a residential pool or spa, regardless of use, is not enforceable against the owner if the obtaining of a loan for all or a portion of the contract price is a condition precedent to the contract unless all of the following requirements are satisfied:

(a) A third-party agrees to make the loan or give the financing.

(b) The owner agrees to accept the loan or financing.

(c) The owner does not rescind the loan or financing transaction within the period prescribed for rescission pursuant to the Truth in Lending Act, 15 U.S.C. §§ 1601 et seq., or chapter 598 of NRS, if applicable.

2. Unless and until all applicable requirements of subsection 1 are satisfied, a contractor shall not:

(a) Perform or deliver any work, labor, material or services; or

(b) Represent in any manner that the contract is enforceable or that the owner has any obligation under the contract.

3. A contract for the repair, restoration, improvement or construction of a residential pool or spa, regardless of use, is not enforceable against the owner if the contractor provides a loan or gives financing for all or a portion of the contract price unless all of the following requirements are satisfied:

(a) The owner agrees to accept the loan or financing.

(b) The owner does not rescind the loan or financing transaction within the period prescribed for rescission pursuant to the Truth in Lending Act, 15 U.S.C. §§ 1601 et seq., or chapter 598 of NRS, if applicable.

4. Unless and until all applicable requirements of subsection 3 are satisfied, a contractor shall not:

(a) Perform or deliver any work, labor, material or services; or

(b) Represent in any manner that the contract is enforceable or that the owner has any obligation under the contract.

5. As used in this section, “third-party” means a bonding company, finance company, or any other corporation or business entity who cosigns, underwrites, obtains a deed of trust for, issues, sells, purchases or acquires a loan to finance the repair, restoration, improvement or construction of a residential pool or spa.”.

Amend sec. 9, page 6, by deleting line 8 and inserting:

“(k) [The] Except as otherwise provided in this subsection, the dollar amount of any progress”.

Amend sec. 9, page 6, by deleting lines 11 through 14 and inserting: “under the contract. The schedule of payments must show the amount of each payment as a sum in dollars and cents. The schedule of payments must not provide for the contractor to”.

Amend sec. 9, page 6, line 17, after “except” by inserting: “for an initial down payment”.

Amend sec. 9, page 6, lines 19 and 23, by deleting “payment schedule” and inserting: “schedule of payments”.

Amend sec. 9, page 6, between lines 26 and 27, by inserting: “The provisions of this paragraph do not apply if the contractor has furnished a bond for payment and performance covering full performance and completion of the contract and the cost of the bond is included in the price of the project.”.

Amend sec. 13, page 9, by deleting lines 9 and 10 and inserting: “residential pool or spa, obtain:”.

Amend sec. 13, page 9, by deleting line 24 and inserting: “bond for the period required by the board. The contractor shall furnish to the building department of the city or county, as applicable, in which the work will be carried out, a copy of any bond.”.

Amend the bill as a whole by deleting sections 13.3 and 13.7.

Amend sec. 16, page 11, line 35, by deleting: “July 1, 1998.” and inserting: “October 1, 1999.”.

Amend sec. 19, page 12, line 6, by deleting “13.3, 13.7,”.

Senator Townsend moved that the Senate concur in the Assembly amendments to Senate Bill No. 216.

Senator Care moved that the Senate recess subject to the call of the Chair.

Motion carried.

Senate in recess at 12:59 p.m.

SENATE IN SESSION

At 1:04 p.m.

President Hunt presiding.

Quorum present.

Senator Townsend withdrew his motion to concur in the Assembly amendments to Senate Bill No. 216.

Senator Townsend moved that the Senate do not concur in the Assembly amendments to Senate Bill No. 216.

Remarks by Senator Townsend.

Motion carried.

Bill ordered transmitted to the Assembly.

Senate Bill No. 219.

The following Assembly amendment was read:

Amendment No. 814.

Amend section 1, page 2, by deleting lines 21 through 24 and inserting: “discretion, is entitled to purchase the property by direct sale. If [no] a person who is entitled to purchase the property by direct sale pursuant to this paragraph reasonably believes that the department’s appraisal of the property is greater than the fair market value of the property, the person may file an objection to the appraisal with the department. The department shall set forth the procedure for filing an objection and the process under which a final determination will be made of the fair market value of the property for which an objection is filed. The department shall sell the property in the manner provided in subsection 2 if:

(1) No person requests to purchase the property by direct sale within 60 days after the notice is published pursuant to this paragraph [, the department shall sell the property in the manner provided in subsection 2.] ; or

(2) A person who files an objection pursuant to this paragraph fails, within 10 business days after he receives a written notice of the final determination of the fair market value of the property, to notify the department in writing that he wishes to purchase the property at the fair market value set forth in the notice.”.

Senator O'Donnell moved that the Senate concur in the Assembly amendment to Senate Bill No. 219.

Remarks by Senator O'Donnell.

Motion carried by a constitutional majority.

Bill ordered enrolled.

Senate Bill No. 527.

The following Assembly amendment was read:

Amendment No. 811.

Amend the bill as a whole by deleting section 1 and adding a new section designated section 1, following the enacting clause, to read as follows:

“Section 1. Chapter 370 of NRS is hereby amended by adding thereto a new section to read as follows:

1. Except as otherwise provided in subsection 2, a person may institute a civil action in a court of competent jurisdiction for appropriate injunctive relief if the person:

(a) Sells, distributes or manufactures cigarettes; and

(b) Sustains direct economic or commercial injury as a result of a violation of subsection 4 of NRS 370.240 or NRS 370.385.

2. Nothing in this section authorizes an action against this state, a political subdivision of this state, or an officer, employee or agency thereof.”.

Amend the bill as a whole by deleting sec. 5 and adding a new section designated sec. 5, following sec. 4, to read as follows:

“Sec. 5. NRS 370.385 is hereby amended to read as follows:

370.385 1. A wholesale or retail dealer shall not affix a Nevada cigarette revenue stamp or a metered machine impression upon a package, carton, packet or other container of cigarettes which:

(a) Does not meet the requirements of the Federal Cigarette Labeling and Advertising Act, 15 U.S.C. §§ 1331 et seq., for the placement of labels, warnings or any other information required by that Act to be placed upon a container of cigarettes sold within the United States;

(b) Is labeled as “for export only,” “U.S. tax exempt,” “for use outside the U.S.” or with similar wording indicating that the manufacturer did not intend for the product to be sold in the United States;

(c) Has been altered by the unauthorized addition or removal of wording, labels or warnings described in paragraph (a) or (b);

(d) Has been exported from the United States after January 1, 2000, and imported into the United States in violation of 26 U.S.C. § 5754; [or]

(e) Has been imported into the United States in violation of 19 U.S.C. § 1681a;

(f) Was manufactured, packaged or imported by a person who has not complied with 15 U.S.C. § 1335a with regard to the cigarettes;

(g) Violates a federal trade-mark or copyright law [.] ; or

(h) Violates any other federal statute or regulation or with respect to which any federal statute or regulation has been violated.

2. A wholesale or retail dealer shall not:

(a) Affix Nevada cigarette revenue stamps or metered machine impressions on;

(b) Sell or distribute in this state; or

cigarettes manufactured for export outside the United States.

3. The department may impose a penalty on a wholesale or retail dealer who violates subsection 1 or 2 as follows:

(a) For the first violation, a penalty of $5,000.

(b) For each subsequent violation, a penalty of $10,000.

4. Notwithstanding any other provision of law, the department [may seize, destroy or sell to the manufacturer, for export only, a container of] shall seize and destroy cigarettes upon which a revenue stamp or metered machine impression was placed in violation of subsection 1 or 2.

5. As used in this section, “cigarettes manufactured for export outside the United States” means cigarettes contained in a package or carton which indicates that the cigarettes are tax exempt and for use outside the United States.”.

Amend sec. 6, pages 2 and 3, by deleting lines 47 through 49 on page 1 and lines 1 and 2 on page 3, and inserting:

“370.415 1. The department, its agents, sheriffs within their respective counties and all other peace officers of the State of Nevada shall seize any contraband cigarettes found or located in the State of Nevada.

2. A sheriff or other peace officer who seizes cigarettes pursuant to this section shall provide written notification of the seizure to the department not later than 5 working days after the seizure. The notification must include the reason for the seizure.

3. After consultation with the department, the sheriff or other peace officer shall transmit the cigarettes to the department if:

(a) The cigarettes, except for revenue stamps or metered machine impressions being properly affixed as required by this chapter, comply with all state and federal statutes and regulations; and

(b) The department approves the transmission of the cigarettes.

4. Upon receipt of the cigarettes, the department shall dispose of the cigarettes as provided in subsection 4 of NRS 370.270.

5. If the sheriff or other peace officer does not transmit the cigarettes to the department, he shall destroy the cigarettes.”.

Amend the bill as a whole by deleting sec. 7 and renumbering sections 8 and 9 as sections 7 and 8.

Amend the title of the bill by deleting the fifth through ninth lines and inserting: “certificates regarding cigarettes imported into the United States; expanding the scope of prohibited acts by cigarette dealers; revising the provisions governing the disposal of certain contraband cigarettes; providing for a private right of action for injunctive relief regarding certain violations of chapter 370 of NRS; providing a penalty; and”.

Amend the summary of the bill to read as follows:

“SUMMARY—Revises provisions governing contraband cigarettes, cigarette dealers and enforcement of statutes regarding cigarettes. (BDR 32‑1326)”.

Senator McGinness moved that the Senate concur in the Assembly amendment to Senate Bill No. 527.

Remarks by Senator McGinness.

Motion carried by a constitutional majority.

Bill ordered enrolled.

Senate Bill No. 357.

The following Assembly amendments were read:

Amendment No. 1135.

Amend the bill as a whole by deleting sec. 2, renumbering section 1 as sec. 2 and adding a new section designated section 1, following the enacting clause to read as follows:

“Section 1. Chapter 445B of NRS is hereby amended by adding thereto a new section to read as follows:

1. If the board of county commissioners of a county whose population is 400,000 or more determines that the imposition of an additional fee is necessary to carry out the program for the control of air pollution established pursuant to subsection 1 of NRS 445B.500, the board of county commissioners may impose on or before July 1, 2002, an additional fee not to exceed $3 for each form certifying emission control compliance to be collected in the manner set forth in NRS 445B.830.

2. If the board of county commissioners imposes an additional fee pursuant to subsection 1, the board of county commissioners shall propose to the registered voters of the county at the general election held in 2002 the question of whether to impose an additional fee not to exceed $6 for each form certifying emission control compliance. If a majority of the registered voters of the county do not approve the question, any fee imposed pursuant to subsection 1 must not be collected after December 1, 2002. If a majority of the registered voters of the county approve the question, the board of county commissioners may collect not more than the amount of the additional fee stated on the ballot, including any additional fee imposed pursuant to subsection 1 after December 1, 2002.

3. The department of motor vehicles and public safety shall distribute any additional fees for forms certifying emission control compliance collected pursuant to this section to the local air pollution control agency in the county from which the additional fees were collected to carry out the program for the control of air pollution established pursuant to NRS 445B.500.

4. If the question proposed pursuant to subsection 2 is approved by the voters, the local air pollution control agency in the county in which the question is approved shall submit on or before October 1 of each year to the director of the legislative counsel bureau for transmittal to the interim finance committee a report on:

(a) The amount of money that the agency received during the immediately preceding fiscal year from the imposition of the additional fee; and

(b) The purposes for which that money was expended to carry out the program for the control of air pollution established pursuant to NRS 445B.500.”.

Amend section 1, pages 1 and 2, by deleting lines 13 through 16 on page 1 and lines 1 and 2 on page 2.

Amend section 1, page 2, lines 3 and 4, by deleting: “4 [, 5 and 6,] to 7, inclusive,” and inserting: “4, 5 and 6,”.

Amend section 1, page 2, line 5, by deleting “[4,] 5,” and inserting “4,”.

Amend section 1, page 2, by deleting lines 27 through 32.

Amend section 1, page 2, line 33, by deleting “5.” and inserting “4.”.

Amend section 1, pages 2 and 3, by deleting lines 47 and 48 on page 2 and line 1 on page 3, and inserting: “any disbursements made from the account pursuant to subsection 2.

5. Any regulations adopted pursuant to subsection 4 must provide”.

Amend section 1, page 3, line 11, by deleting “[4] 5” and inserting “4”.

Amend section 1, page 3, by deleting line 12 and inserting:

“6. Grants proposed pursuant to subsections 4 and 5 must”.

Amend sec. 3, page 3, by deleting lines 43 through 46 and inserting:

“Sec. 3. 1. This section and section 1 of this act become effective upon passage and approval.

2. Section 2 of this act becomes effective at 12:01 a.m. on July 1, 2001.

3. Section 1 of this act expires by limitation on June 30, 2009.”.

Amend the title of the bill to read as follows:

“AN ACT relating to air pollution; revising the provisions governing the disbursement of money from the pollution control account; authorizing the board of county commissioners of certain larger counties, in certain circumstances, to impose an additional fee for each form certifying emission control compliance for a limited period; requiring approval of the voters for continuation or increase of such a fee; providing that such fees must be distributed to the local air pollution control agency in the county in which the fees were collected; and providing other matters properly relating thereto.”.

Amend the summary of the bill to read as follows:

“SUMMARY—Authorizes board of county commissioners of certain larger counties, in certain circumstances, to impose additional fee for each form certifying emission control compliance for limited period and revises provisions governing the disbursement of money from the pollution control account. (BDR 40‑1180)”.

Amendment No. 1143.

Amend the bill as a whole by renumbering sec. 3 as sec. 4 and adding a new section designated sec. 3, following sec. 2, to read as follows:

“Sec. 3. 1. If the board of county commissioners imposes a fee pursuant to subsection 1 of section 1 of this act, the county and any agency of the county shall not expend public revenue to urge the passage of the question proposed to the voters pursuant to subsection 2 of section 1 of this act.

2. To the extent not prohibited by federal law, if:

(a) Such a county operates or has granted a franchise for the operation of a television system; and

(b) Programming, commercials or public service announcements are broadcast on that system which urge the passage of the question proposed to the voters pursuant to subsection 2 of section 1 of this act,

the county shall cause equal opportunities to be given to any person or group that opposes the passage of the question proposed to the voters pursuant to subsection 2 of section 1 of this act.”.

Amend sec. 3, page 3, line 44, by deleting “section 1” and inserting: “sections 1 and 3”.

Amend the title of the bill, seventh line, after “collected;” by inserting: “prohibiting the use of public revenue to urge the passage of the related ballot question; requiring equal broadcast opportunities on governmental television systems under certain circumstances;”.

Senator Rhoads moved that the Senate do not concur in the Assembly amendments to Senate Bill No. 357.

Remarks by Senator Rhoads.

Motion carried.

Bill ordered transmitted to the Assembly.

Recede From Senate Amendments

Senator James moved that the Senate do not recede from its action on Assembly Bill No. 54, that a conference be requested, and that Madam President appoint a first Conference Committee consisting of three members to meet with a like committee of the Assembly.

Remarks by Senator James.

Motion carried.

Bill ordered transmitted to the Assembly.

Appointment of Conference Committees

Madam President appointed Senators Porter, Washington and Care as a first Conference Committee to meet with a like committee of the Assembly for the further consideration of Assembly Bill No. 54.

Recede From Senate Amendments

Senator O'Donnell moved that the Senate do not recede from its action on Assembly Bill No. 133, that a conference be requested, and that Madam President appoint a first Conference Committee consisting of three members to meet with a like committee of the Assembly.

Remarks by Senator Townsend.

Motion carried.

Bill ordered transmitted to the Assembly.

Appointment of Conference Committees

Madam President appointed Senators Townsend, O'Connell and Schneider as a first Conference Committee to meet with a like committee of the Assembly for the further consideration of Assembly Bill No. 133.

Recede From Senate Amendments

Senator McGinness moved that the Senate do not recede from its action on Assembly Bill No. 653, that a conference be requested, and that Madam President appoint a first Conference Committee consisting of three members to meet with a like committee of the Assembly.

Remarks by Senator McGinness.

Motion carried.

Bill ordered transmitted to the Assembly.

Appointment of Conference Committees

Madam President appointed Senators Schneider, O'Connell and Coffin as a first Conference Committee to meet with a like committee of the Assembly for the further consideration of Assembly Bill No. 653.

Madam President appointed Senators Amodei, Townsend and Mathews as a first Conference Committee to meet with a like committee of the Assembly for the further consideration of Senate Bill No. 116.

MESSAGES FROM THE ASSEMBLY

Assembly Chamber, Carson City, May 30, 2001

To the Honorable the Senate:

I have the honor to inform your honorable body that the Assembly on this day passed, as amended, Assembly Bills Nos. 209, 319, 505, 510, 519, 521, 588, 612, 658.

Patricia R. Williams

Assistant Chief Clerk of the Assembly

Senator Raggio moved that the Senate recess subject to the call of the Chair.

Motion carried.

Senate in recess at 1:13 p.m.

SENATE IN SESSION

At 1:25 p.m.

President Hunt presiding.

Quorum present.

MOTIONS, RESOLUTIONS AND NOTICES

Senator O'Donnell moved that Senate Bill No. 576 be placed at the top of the Second Reading File.

Remarks by Senator O'Donnell.

Motion carried.

INTRODUCTION, FIRST READING AND REFERENCE

Assembly Bill No. 209.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 319.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 505.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 510.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 519.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 521.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 588.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 612.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

Assembly Bill No. 658.

Senator Rawson moved that the bill be referred to the Committee on Finance.

Motion carried.

SECOND READING AND AMENDMENT

Senate Bill No. 576.

Bill read second time.

The following amendment was proposed by the Committee on Transportation:

Amendment No. 1166.

Amend sec. 8, page 2, by deleting line 44 and inserting:

“(2) Possesses the qualifications set forth in 49 C.F.R. § 391.11(b)(2); and”.

Amend sec. 38, page 17, line 26, by deleting “A” and inserting: “Unless otherwise authorized by the terms of a certificate of public convenience and necessity issued to the fully regulated carrier of passengers on or before the effective date of this section, a”.

Senator O'Donnell moved the adoption of the amendment.

Remarks by Senator O'Donnell.

Conflict of interest declared by Senator Care.

Amendment adopted.

Bill ordered reprinted, engrossed and to third reading.

MOTIONS, RESOLUTIONS AND NOTICES

Senator O'Donnell moved that all rules be suspended, Senate Bill No. 576 be declared an emergency measure under the Constitution and placed on third reading and final passage upon return from reprint.

Remarks by Senator O'Donnell.

Motion carried unanimously.

SECOND READING AND AMENDMENT

Senate Bill No. 84.

Bill read second time.

The following amendment was proposed by the Committee on Finance:

Amendment No. 1148.

Amend the bill as a whole by deleting sections 1 through 4 and adding new sections designated sections 1 through 3, following the enacting clause, to read as follows:

“Section 1. The Department of Personnel shall increase the level of compensation of all uniformed highway patrol positions by one grade on the classified employee compensation schedule effective July 1, 2001.

Sec. 2. 1. There is hereby appropriated from the state highway fund to the State Board of Examiners to increase the level of compensation of all uniformed highway patrol positions by one grade:

For the fiscal year 2001-2002 $1,098,809

For the fiscal year 2002-2003 $1,167,170

2. There is hereby appropriated from the state general fund to the State Board of Examiners to increase the level of compensation of all uniformed highway patrol positions by one grade:

For the fiscal year 2001-2002 $17,075

For the fiscal year 2002-2003 $18,331

3. Any balance of the money appropriated by subsections 1 and 2 for the fiscal year 2001-2002 does not revert to the fund from which it was appropriated, but must be carried forward to the next fiscal year.

4. Any balance of the money appropriated by subsections 1 and 2 must not be committed for expenditure after June 30, 2003, and reverts to the fund from which it was appropriated as soon as all payments of money committed have been made.

Sec. 3. This act becomes effective on July 1, 2001.”.

Amend the title of the bill to read as follows:

“AN ACT relating to state financial administration; requiring the Department of Personnel to increase the level of compensation of uniformed highway patrol positions; making appropriations to the State Board of Examiners; and providing other matters properly relating thereto.”.

Amend the summary of the bill to read as follows:

“SUMMARY—Requires Department of Personnel to increase level of compensation of uniformed highway patrol positions and makes appropriations to State Board of Examiners. (BDR S‑750)”.

Senator Raggio moved the adoption of the amendment.

Remarks by Senator Raggio.

Amendment adopted.

Bill ordered reprinted, engrossed and to third reading.

Senate Bill No. 442.

Bill read second time.

The following amendment was proposed by the Committee on Finance:

Amendment No. 1151.

Amend the bill as a whole by deleting sections 1 and 2 and adding new sections designated sections 1 and 2, following the enacting clause, to read as follows:

“Section 1. 1. There is hereby appropriated from the state general fund to the Department of Prisons the sum of $1,034,239 for various replacement equipment at certain facilities.

2. Any remaining balance of the appropriation made by subsection 1 must not be committed for expenditure after June 30, 2003, and reverts to the state general fund as soon as all payments of money committed have been made.

Sec. 2. 1. There is hereby appropriated from the state general fund to the Department of Prisons for ongoing expenses of the Pioche Conservation Camp to lease a dishwasher:

For the fiscal year 2001-2002 $948

For the fiscal year 2002-2003 $948

2. Any balance of the sums appropriated by subsection 1 remaining at the end of the respective fiscal years must not be committed for expenditure after June 30 of the respective fiscal years and reverts to the state general fund as soon as all payments of money committed have been made.”.

Amend sec. 3, page 1, by deleting line 8 and inserting:

“Sec. 3. 1. Section 1 of this act becomes effective upon passage and approval.

2. Section 2 of this act becomes effective on July 1, 2001.”.

Amend the title of the bill to read as follows:

“AN ACT making appropriations to the Department of Prisons for various replacement equipment at certain facilities and ongoing expenses of the Pioche Conservation Camp to lease certain equipment; and providing other matters properly relating thereto.”.

Amend the summary of the bill to read as follows:

“SUMMARY—Makes appropriations to Department of Prisons for various replacement equipment at certain facilities and ongoing expenses of Pioche Conservation Camp to lease certain equipment. (BDR S‑1378)”.

Senator Raggio moved the adoption of the amendment.

Remarks by Senator Raggio.

Amendment adopted.

Bill ordered reprinted, engrossed and to third reading.

Senate Bill No. 463.

Bill read second time.

The following amendment was proposed by the Committee on Finance:

Amendment No. 1155.

Amend the bill as a whole by deleting sections 1 and 2 and adding new sections designated sections 1 and 2, following the enacting clause, to read as follows:

“Section 1. 1. There is hereby appropriated from the state general fund to the Department of Prisons the sum of $334,376 for maintenance projects at certain facilities.

Sec. 2. 1. There is hereby appropriated from the state general fund to the Department of Prisons for ongoing expenses for the various budget accounts of the Department:

For the fiscal year 2001-2002 $10,129

For the fiscal year 2002-2003 $10,129

Amend sec. 3, page 1, by deleting line 8 and inserting:

“Sec. 3. 1. Section 1 of this act becomes effective upon passage and approval.

2. Section 2 of this act becomes effective on July 1, 2001.”.

Amend the title of the bill to read as follows:

“AN ACT making appropriations to the Department of Prisons for maintenance projects at certain facilities and ongoing expenses for the various budget accounts; and providing other matters properly relating thereto.”.

Amend the summary of the bill to read as follows:

“SUMMARY—Makes appropriations to Department of Prisons for maintenance projects at certain facilities and ongoing expenses for various budget accounts. (BDR S‑1432)”.

Senator Raggio moved the adoption of the amendment.

Remarks by Senator Raggio.

Amendment adopted.

Bill ordered reprinted, engrossed and to third reading.

Senate Bill No. 579.

Bill read second time.

The following amendment was proposed by the Committee on Finance:

Amendment No. 1150.

Amend section 1, page 2, between lines 45 and 46, by inserting:

“Journal clerk 105”.

Senator Raggio moved the adoption of the amendment.

Remarks by Senator Raggio.

Amendment adopted.

Bill ordered reprinted, engrossed and to third reading.

Assembly Bill No. 530.

Bill read second time.

The following amendment was proposed by the Committee on Finance:

Amendment No. 1152.

Amend section 1, page 1, line 1, by deleting “There” and inserting “1. There”.

Amend section 1, page 1, line 2, by deleting “$67,887” and inserting “$54,572”.

Amend section 1, page 1, between lines 3 and 4 by inserting:

“2. There is hereby appropriated from the state general fund to the Department of Human Resources the sum of $13,315 for costs relating to the fingerprinting of the employees of the Welfare Division.”.

Amend section 2, page 1, line 4, by deleting “appropriation” and inserting “appropriations”.

Amend the title of the bill to read as follows:

“AN ACT making appropriations to the Department of Human Resources for the Welfare Division’s telephone system and for costs relating to the fingerprinting of employees of the Welfare Division.”.

Amend the summary of the bill to read as follows:

“SUMMARY—Makes appropriations to Department of Human Resources for Welfare Division’s telephone system and for costs relating to fingerprinting of employees of Welfare Division. (BDR S‑1370)”.

Senator Raggio moved the adoption of the amendment.

Remarks by Senator Raggio.

Amendment adopted.

Bill ordered reprinted, engrossed and to third reading.

Assembly Bill No. 661.

Bill read second time.

The following amendment was proposed by the Committee on Commerce and Labor:

Amendment No. 1159.

Amend sec. 18, page 4, by deleting lines 39 and 40 and inserting: “electric utilities. Such agreements, without limitation:

(a) May include agreements to construct or install”.

Amend sec. 18, page 5, line 5, by deleting “purposes” and inserting: “purposes, sold at wholesale by such parties”.

Amend the bill as a whole by deleting sections 27 through 131 and the text of repealed sections and adding new sections designated sections 27 through 36 and the text of repealed sections, following sec. 26, to read as follows:

“Sec. 27. Chapter 704 of NRS is hereby amended by adding thereto a new section to read as follows:

“Biomass” means any organic matter that is available on a renewable basis, including, without limitation:

1. Agricultural crops and agricultural wastes and residues;

2. Wood and wood wastes and residues;

3. Animal wastes;

4. Municipal wastes; and

5. Aquatic plants.

Sec. 28. NRS 704.005 is hereby amended to read as follows:

704.005 As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 704.010 to 704.030, inclusive, and section 27 of this act have the meanings ascribed to them in those sections.

Sec. 29. Section 1 of Assembly Bill No. 197 of this session is hereby amended to read as follows:

Section 1. Chapter 704 of NRS is hereby amended by adding thereto a new section to read as follows:

1. On and after October 1, 2001, each electric utility shall disclose to its retail customers information about electric services, and any products and services relating thereto, that are being provided to or purchased for those retail customers by the electric utility. The disclosure must:

(a) Be in a standard, uniform format established by the commission by regulation;

(b) Be included:

(1) At least two times each calendar year, as an insert in the bills that the electric utility sends to its retail customers; and

(2) If the electric utility maintains a website on the Internet or any successor to the Internet, on that website; and

(c) Include adequate information so that a retail customer can readily evaluate his options for obtaining electric services or any products or services relating thereto.

2. A disclosure required by this section must include, if applicable:

(a) The average mix of energy sources used to generate the electricity sold by the electric utility to the retail customer. An electric utility may, if available, use a regional average that has been determined by the commission for that portion of electricity sold by the electric utility to the retail customer for which the specific mix of energy sources cannot be discerned.

(b) The average emissions, measured in pounds per megawatt-hour, of:

(1) Any high-level radioactive waste, sulfur dioxide, carbon dioxide, oxides of nitrogen and heavy metals released in this state from the generation of the electricity sold by the electric utility to the retail customer; and

(2) Any other substances released in this state from the generation of the electricity sold by the electric utility to the retail customer which the commission, in cooperation with the division of environmental protection of the state department of conservation and natural resources, determines may cause a significant health or environmental impact and for which sufficiently accurate and reliable data is available.

If an electric utility uses a regional average for the mix of energy sources pursuant to paragraph (a), the electric utility shall, if available, use for the average emissions pursuant to this paragraph a regional calculation that has been determined by the commission.

(d) Information concerning any energy programs that provide assistance to retail customers with low incomes, including, without limitation, information on the procedures to apply for such programs.

3. An electric utility:

(a) Shall make the disclosures required pursuant to this section in accordance with the requirements adopted by the commission as to form and substance; and

(b) Shall ensure that it provides the information in compliance with all applicable state and federal law governing unfair advertising and labeling.

4. The commission shall adopt such regulations concerning form and substance for the disclosures required by this section as are necessary to ensure that retail customers are provided with sufficient information so that they can readily evaluate their options for obtaining electric services and any products and services relating thereto.

5. The provisions of this section do not require an electric utility to disclose to its retail customers any information about electric services, and any products and services relating thereto, that are subject to the provisions of sections 3 to 26, inclusive, of Assembly Bill No. 661 of this session.

6. As used in this section:

(a) “Electric utility” has the meaning ascribed to it in section 19 of Assembly Bill No. 369 of this session.

(b) “Energy source” includes, without limitation:

(1) Coal, natural gas, oil, propane and any other fossil fuel;

(2) Geothermal energy, solar energy, hydroelectric energy, nuclear energy, wind, biofuel and biomass; and

(3) Any other specific energy source that is used to generate the electricity provided to the retail customer.

Sec. 30. Assembly Bill No. 369 of this session is hereby amended by adding thereto a new section designated sec. 15.5, following sec. 15, to read as follows:

Sec. 15.5. The provisions of sections 8 to 18, inclusive, of this act do not prohibit an electric utility from pledging, mortgaging, granting a security interest in or otherwise encumbering any of its generation assets or other property for the purpose of securing indebtedness of the electric utility which exists on the effective date of this act or which is issued or incurred by the electric utility after the effective date of this act in financing transactions approved by the commission.

Sec. 31. Section 35 of Assembly Bill No. 369 of this session is hereby amended to read as follows:

Sec. 35. Except as otherwise provided in section 36 of this act and notwithstanding the provisions of any other specific statute to the contrary:

1. An electric utility shall not file an application for a fuel and purchased power rider on or after the effective date of this act.

2. Each application for a fuel and purchased power rider filed by an electric utility which is pending with the commission on the effective date of this act and which the electric utility did not place into effect before or on April 1, 2001, is void and unenforceable and is not valid for any purpose after April 1, 2001.

3. If, before March 1, 2001, an electric utility incurred any costs for fuel or purchased power, including, without limitation, any costs for fuel or purchased power recorded or carried on the books and records of the electric utility, and those costs were not recovered or could not be recovered pursuant to a fuel and purchased power rider placed into effect by the electric utility before March 1, 2001, the electric utility is not entitled, on or after March 1, 2001, to recover any of those costs for fuel or purchased power from customers, and the commission shall not allow the electric utility to recover any of those costs for fuel or purchased power from customers.

4. Except as otherwise provided in this section, on and after the effective date of this act:

(a) The commission shall not take any further action on the comprehensive energy plan, and each electric utility that jointly filed the comprehensive energy plan shall be deemed to have withdrawn the comprehensive energy plan;

(b) The rates that each electric utility placed into effect on March 1, 2001, pursuant to the comprehensive energy plan shall be deemed to be a component of the electric utility’s rates for fuel and purchased power; and

(c) The revenues [collected] for services provided by each electric utility [before April] for the period of March 1, 2001, to March 31, 2001, inclusive, from the rates that each electric utility placed into effect on March 1, 2001, pursuant to the comprehensive energy plan shall be deemed to be a credit in the electric utility’s deferred accounts.

5. On or before October 1, 2001, each electric utility that primarily serves densely populated counties shall file a general rate application pursuant to subsection 3 of NRS 704.110, as amended by this act. On or before December 1, 2001, each electric utility that primarily serves densely populated counties shall file an application to clear its deferred accounts pursuant to subsection 7 of NRS 704.110, as amended by this act. After such an electric utility files the application to clear its deferred accounts, the commission shall investigate and determine whether the rates that the electric utility placed into effect on March 1, 2001, pursuant to the comprehensive energy plan are just and reasonable and reflect prudent business practices. On the date on which the commission issues a final order on the general rate application, the commission shall issue a final order on the electric utility’s application to clear its deferred accounts. The total rates to provide electric service that were in effect on April 1, 2001, for the electric utility must remain in effect until the date on which the commission issues a final order on the general rate application. The commission shall not adjust the rates of the electric utility during this period unless such an adjustment is absolutely necessary to avoid rates that are confiscatory under the Constitution of the United States or the constitution of this state. The commission:

(a) May make such an adjustment only to the extent that it is absolutely necessary to avoid an unconstitutional result; and

(b) Shall not, in any proceedings concerning such an adjustment, approve any rate or grant any relief that is not absolutely necessary to avoid an unconstitutional result.

After the electric utility files the general rate application that is required by this subsection, the electric utility shall file general rate applications in accordance with subsection 3 of NRS 704.110, as amended by this act. After the electric utility files the application to clear its deferred accounts that is required by this subsection, the electric utility shall file applications to clear its deferred accounts in accordance with section 19 of this act and subsection 7 of NRS 704.110, as amended by this act.

6. On or before December 1, 2001, each electric utility that primarily serves less densely populated counties shall file a general rate application pursuant to subsection 3 of NRS 704.110, as amended by this act. On or before February 1, 2002, each electric utility that primarily serves less densely populated counties shall file an application to clear its deferred accounts pursuant to subsection 7 of NRS 704.110, as amended by this act. After such an electric utility files the application to clear its deferred accounts, the commission shall investigate and determine whether the rates that the electric utility placed into effect on March 1, 2001, pursuant to the comprehensive energy plan are just and reasonable and reflect prudent business practices. On the date on which the commission issues a final order on the general rate application, the commission shall issue a final order on the electric utility’s application to clear its deferred accounts. The total rates to provide electric service that were in effect on April 1, 2001, for the electric utility must remain in effect until the date on which the commission issues a final order on the general rate application. The commission shall not adjust the rates of the electric utility during this period unless such an adjustment is absolutely necessary to avoid rates that are confiscatory under the Constitution of the United States or the constitution of this state. The commission:

(a) May make such an adjustment only to the extent that it is absolutely necessary to avoid an unconstitutional result; and

(b) Shall not, in any proceedings concerning such an adjustment, approve any rate or grant any relief that is not absolutely necessary to avoid an unconstitutional result.

Sec. 32. Section 6 of Senate Bill No. 372 of this session is hereby amended to read as follows:

Sec. 6. 1. “Provider of electric service” and “provider” mean any person or entity that is in the business of selling electricity to retail customers for consumption in this state, regardless of whether the person or entity is otherwise subject to regulation by the commission.

2. The term includes, without limitation, a provider of new electric resources that is selling electricity to an eligible customer for consumption in this state pursuant to the provisions of sections 3 to 26, inclusive, of Assembly Bill No. 661 of this session.

3. The term does not include:

(a) This state or an agency or instrumentality of this state.

(b) A rural electric cooperative established pursuant to chapter 81 of NRS.

(d) A utility established pursuant to chapter 709 or 710 of NRS.

(e) A cooperative association, nonprofit corporation, nonprofit association or provider of electric service which is declared to be a public utility pursuant to NRS 704.673 and which provides service only to its members.

(f) A landlord of a mobile home park or owner of a company town who is subject to any of the provisions of NRS 704.905 to 704.960, inclusive.

(g) A landlord who pays for electricity that is delivered through a master meter and who distributes or resells the electricity to one or more tenants for consumption in this state.

Sec. 33. Section 9 of Senate Bill No. 372 of this session is hereby amended to read as follows:

Sec. 9. 1. “Retail customer” means [a customer who] an end-use customer that purchases electricity [at retail.] for consumption in this state.

2. The term includes, without limitation:

(a) This state, a political subdivision of this state or an agency or instrumentality of this state or political subdivision of this state when it is an end-use customer that purchases electricity [at retail; and] for consumption in this state, including, without limitation, when it is an eligible customer that purchases electricity for consumption in this state from a provider of new electric resources pursuant to the provisions of sections 3 to 26, inclusive, of Assembly Bill No. 661 of this session.

(b) A residential, commercial or industrial end-use customer that purchases electricity for consumption in this state, including, without limitation, an eligible customer that purchases electricity for consumption in this state from a provider of new electric resources pursuant to the provisions of sections 3 to 26, inclusive, of Assembly Bill No. 661 of this session.

(c) A landlord of a mobile home park or owner of a company town who is subject to any of the provisions of NRS 704.905 to 704.960, inclusive.

(d) A landlord who pays for electricity that is delivered through a master meter and who distributes or resells the electricity to one or more tenants for consumption in this state.

Sec. 34. 1. Section 2 of Assembly Bill No. 197 of this session is hereby repealed.

2. Section 4 of Senate Bill No. 372 of this session is hereby repealed.

Sec. 35. 1. For the purposes of sections 3 to 26, inclusive, of this act:

(a) An electric utility that provides distribution services to an eligible customer who is purchasing energy, capacity or ancillary services from a provider of new electric resources shall charge the eligible customer based upon the rates for the electric utility’s distribution services that were on file with the commission on April 1, 2001, until the commission approves a change in those rates and such a change becomes effective.

(b) Not later than March 1, 2002, the commission shall establish the initial rates for all other components of electric service which are within the jurisdiction of the commission and which are necessary for a provider of new electric resources to sell energy, capacity and ancillary services to an eligible customer pursuant to the provisions of sections 3 to 26, inclusive, of this act. The commission may establish such initial rates as a part of a general rate application that is pending or filed with the commission on or after the effective date of this act.

2. The commission shall:

(a) Not later than November 1, 2001, adopt regulations to carry out and enforce the provisions of sections 3 to 26, inclusive, of this act.

(b) Not later than March 1, 2002, approve tariffs to carry out and enforce the provisions of section 22 of this act.

3. Notwithstanding the provisions of section 25 of this act, the commission is not required to submit a report to the legislative commission for any calendar quarter that ends before October 1, 2001.

4. As used in this section, the words and terms defined in sections 4 to 16, inclusive, of this act have the meanings ascribed to them in those sections.

Sec. 36. This act becomes effective upon passage and approval.

TEXT OF REPEALED SECTIONS

Section 2 of Assembly Bill No. 197 of this session:

Sec. 2. NRS 704.965 is hereby amended to read as follows:

704.965 As used in NRS 704.965 to 704.990, inclusive, and section 1 of this act, unless the context otherwise requires, the words and terms defined in NRS 704.966 to 704.975, inclusive, have the meanings ascribed to them in those sections.

Section 4 of Senate Bill No. 372 of this session:

Sec. 4. “Biomass” means any organic matter that is available on a renewable basis, including, without limitation:

1. Agricultural crops and agricultural wastes and residues;

2. Wood and wood wastes and residues;

3. Animal wastes;

4. Municipal wastes; and

5. Aquatic plants.”.

Amend the title of the bill to read as follows:

“AN ACT relating to energy; authorizing certain eligible customers to purchase electrical energy, capacity and certain ancillary services from providers of new electric resources; revising and repealing various provisions concerning the regulation of public utilities; and providing other matters properly relating thereto.”.

Senator Townsend moved the adoption of the amendment.

Remarks by Senators Townsend, Titus, Neal, Care and Amodei.

Senator Neal requested that the following remarks be entered in the Journal.

Senator Townsend:

Thank you, Madam President. This is the bill that deals specifically with large user language that would allow two separate service territories. This amendment deals only with these service territories. It does the following: in the north, where one utility is the actual monopoly utility, it allows users of one megawatt or more to petition the Public Utilities Commission (PUC) to exit and find generation for themselves. This would, of course, be under conditions that would not burden the remaining customers either financially or in the future. It would also allow, under section 18, the utility to work with any users or new generation suppliers to develop new generation in the State of Nevada.

In southern Nevada, the monopoly utility there and persons being served by it would also be allowed to petition the PUC for purposes of exit under the following conditions: they would only be able to take 80 percent of their load and the utility could not be injured in any way, nor the remaining customers. But no more than 50 percent of the utility’s total load would be allowed to leave. Anyone who does leave would be required to buy the equivalent of an additional 10 percent of their load and provide that to the remaining customers in case there was a benefit to the deal made by those who leave. It would, also, allow governmental entities, which are taxpayer funded, as well as healthcare entities, that are publicly funded, and educational entities, which are publicly funded, to take advantage of a deal if they were to choose to leave. All of those entities would be required to petition the PUC, and the PUC would use standards that would be in the public interest.

Senator Titus:

Thank you, Madam President. I believe what was just described is what is being left in the bill as opposed to what is being taken out of the bill. Those removed provisions are what I oppose, and this amendment makes a bad bill even worse. Looking at this in a cursory fashion, I find that first, the amendment removes the provisions which would lift the cap on net metering. This is a good provision because it allows people to generate energy and to give what they do not use back to the system and put more energy on the grid.

Second, it removes the taskforce that is to develop policy on conservation and renewable resources. I think that is extremely important.

Third, and perhaps most important, it removes the provision that says the PUC cannot raise rates without first having a public hearing. This gets us right back into the situation whereby the global settlement was reached last summer and increases went into effect earlier this spring. For those reasons, I would oppose the amendment.

Senator Townsend:

Let me address the concerns of the distinguished Senator from southern Nevada. First of all, the Taxation Committee, the Commerce and Labor Committee and this body have passed two provisions regarding renewable energy. One is the tax abatement provision that was sponsored by Senator Rhoads that would remove the 5 percent we legislatively are allowed to do and then go to the public for the remaining 2 percent for those people who will build renewable energy options in Nevada.

Second, Commerce and Labor passed Senate Bill No. 372. This bill dealt with the portfolio standard, which is the leading portfolio standard bill in the country. The trust fund for renewable energy and energy conservation was funded by a $1,000 per megawatt charge on new producers. On one hand, the questioner sponsored a bill that was passed unanimously here to accelerate the permitting process for new generation. This amendment would remove a $1,000 penalty per megawatt. They are not billed in megawatts. They are billed at 250 megawatts or more. It is easy to see that such a penalty would dissuade people from building these generation plants because there is a tax or penalty to do so. That flies in the face of what we have all attempted to do here and that is to deal with supply.

Third, there is nothing that prohibits this Governor, the PUC or the Attorney General, through the Bureau of Consumer Protection, from setting up a task force to deal with renewable energy or conservation issues. The expansion of net metering is a very important provision. However, the provision on net metering did not deal with cost, and that is extremely important, and, as a result, if we remove the 10-kilowatt cap, we do not know who’s going to pay for it. It is something that we would consider were someone to address that issue.

In regard to the issue of raising rates, there is nothing currently in regulation nor in law that allows the PUC to raise rates. There must, first, be a hearing whether it is a deferred energy account, the clearing of that deferred account or a general rate case. Assembly Bill No. 369, supported by this body, signed by the Governor, puts back all of the rules and regulations on raising of rates. Those must go to hearing. The Consumer Advocate has always been a party to those hearings. I think that the sunshine provided by the media on such a sensitive issue would make it uncomfortable for anyone who did not meet those standards, no matter who is serving on the Public Utilities Commission. I can tell you, that although I am not going to sit here and tell you that rates will go down, the fact is the mechanism in place is one that will find every penny necessary to protect the public interest and keep the lights on. I do not have fears with regard to any of the three issues that were brought forward in opposition to this amendment.

Senator Neal:

Madam President, the amendment, as it is written is very confusing to me so I would like to start with some general questions. We are amending the bill as a whole by deleting sections 27 through 131 and the text, or the repeal section, and adding new sections designated 27 through 36. First of all, let me ask the question why are sections 27 through 131 being repealed, and why is the repealed section been put back in? That seems to be the case.

Senator Townsend:

The portions that are being removed from the bill, not only with the three issues that were presented by the previous speaker but a number of elements, would have added a cost or provided absolutely no value to the public at large. The bill is drafted as it is to leave in the Re-power Nevada provisions. The repeal of the repealers is because those sections dealt with things that were currently in some other bills. Since we are removing some of these texts, you would, therefore, remove those, such as sections from Assembly Bill No. 197, which dealt with biomass repeated and repeated again. The amendment is necessary to deal with passage of Assembly Bill No. 369 and number of bills that have previously passed. Specifically, the conflicts are with Assembly Bill No. 197, Senate Bills Nos. 163, 210, 317, 372 and the substantive changes that I made reference to earlier.

Senator Neal:

As we talk about agreements in the amendment, is it correct that the amendment in the bill will allow or will not allow the larger utility users, such as casinos and miners, to become deregulated? Is that correct?

Senator Townsend:

I would not use the term deregulation at all. I would characterize the provision as the ability to leave the current incumbent provider to buy energy, and energy only, on your own.

Senator Neal:

Now, we have established that the casinos and other large users can leave the system. The agreements that are mentioned here, are those agreements or the terms of them as far as being able to purchase power, would that information be public?

Senator Townsend:

Could the Senator be more specific as to what part of the agreement is public?

Senator Neal:

How much do they pay for power? I am talking about the agreements that they would be able to enter into in terms of purchasing power on the open market. Will those agreements be public?

Senator Townsend:

I will answer that in two, separate ways since we are talking about two, separate sections of the State.

In the north, what is referred to in the amendment as “less densely populated areas,” the real concern for that service territory is the two mines in question which use over 25 percent of the base load of that service territory. Their only requirement is to apply to the PUC to leave. The agreements they sign for the cost of electricity are not public. That is a contractual obligation between themselves and the supplier of the commodity.

In the south, because the entity that leaves is required to buy an additional 10 percent of its load as a benefit to the remaining customers, that 10 percent will be made available for remaining consumers. Therefore, the cost of that will be made public.

Senator Neal:

I gather that in looking at the preamble of the bill, the section that is dealing with the reliability, the reasonable price and the supply of electricity is critical to the economy of this State and to the health, safety and welfare of the residents of this State. In subsection 2, “the electrical utility in this State depends on regional emergency markets to purchase 50 percent of the electricity needed to serve their customers in this State and such purchases are often made pursuant to agreements with terms of one year or less.” I gather this is still in the bill?

Senator Townsend:

The amendment amends the bill as a whole by deleting sections 27 through 131. Therefore, everything previous to section 27 stays exactly as they are. There is a small change on page 4 and page 5 and then the repealers in section 27. Otherwise, they stay in the bill.

Senator Neal:

Is that, then, by that reference and by the agreements that have been spoken of, in terms of these entities leaving and purchasing their power on the open market. I would assume that they would have to do that through the transmission lines that are in existence. If that is the case, then is it not a fact that, federally, those transmission lines are deregulated? Is that correct?

Senator Townsend:

The Federal Energy Regulatory Commission retains jurisdiction over our transmission lines for obvious reasons such as the Commerce clause. As a result, they set the Open Access Transmission Tariff commonly known as OATT, which is the tariff used by someone purchasing at wholesale in order to bring a commodity across those lines.

Senator Neal:

If I am to understand, correctly, your answer is that electricity that moves through those particular lines is deregulated electricity.

Senator Townsend:

All electricity, whether it is controlled by the current utility or by a new provider, no matter who buys it, will move across those transmission lines unless additional lines are built.

Senator Neal:

Could you tell me, what would be the effect upon the ratepayers if we pass this particular legislation in terms of increase in costs?

Senator Townsend:

If nothing were occurring in the current energy market place, such as is going on today, I could probably give a simple answer. But since rising costs are affecting our rates today, it may not be as easy to answer the question. I will do the best I can.

Currently, in the north there are significant transmission constraints, known as “load pockets.” I leave that aside for now and answer your question relative to southern Nevada. There is not a great deal of flexibility remaining in southern Nevada to move new capacity across those lines. There is a small percentage available to do so. With the current market demanding more supply and supply about to come on line starting next year, there is a tremendous demand for new transmission lines. Once one or two of the new energy providers comes on line, they will fill up the remaining portion of that transmission capability. At that point, new transmission must be built.

Specifically to your question as to the rates, the rates will come into effect in the following manner. Under Assembly Bill No. 369, where deferred energy accounting is now part of our regulatory financial scheme, there will be, every six months, a clearing of that account which can be spread over a three-year period That will occur whether anyone leaves or not. The second issue is the general rate case from Assembly Bill No. 369, which requires the PUC to look at the entire funding mechanism of our incumbent utilities. That will come next year. All of their rates will be reviewed. Were someone to actually leave, they would have to petition the PUC. They could not do that before April, 2002, thereby giving an opportunity for the utility to provide the PUC with their response specifically as to the impact on general rates.

The goal of allowing people to leave is the following. In the north, where we have a transmission constraint, we have two mining companies who use close to 30 percent of the total base–load capacity. That base–load capacity is the load that the utility owns and generates itself. It is the lowest cost for power that is available. Some of it is coal, such as the Valmy Plant, and some of it is natural gas. If we are able to remove that approximate 30 percent from the total load and move those customers off the system, then that 30 percent base–load becomes available to us as residential and small commercial customers. During our peak time, the most expensive generation we can buy is on the open market. We need 30 percent less of that.

I use the north as an example because you are only dealing with two companies. In southern Nevada, approximately 350 megawatts would be considered to be the Strip or gaming load. The University System and Community College System is somewhere between 100 and 200 megawatts. Your base load in southern Nevada runs approximately 2,500 megawatts. Your peak load goes to 4,700 to 4,800 megawatts during your hot summer months. Assuming that at the first opportunity those two entities leave, the educational entities and the strip, that is approximately 500 megawatts leaving, which is approximately 15 percent of your load. That gives the low-cost, locally–owned and generated power an opportunity to be used for the residential customer and does not require the utility to buy an additional 15 percent at high-priced, peak power prices. Therefore, there is an opportunity to suppress prices because more power is available. But we must balance it against the rising fuel costs and the rising purchase power agreements. We do not control fuel prices, what natural gas costs and what coal costs on the open market, but if we reduce the amount of purchase power we have to procure, then we do have more control over our own destiny in southern Nevada.

Senator Neal:

You mention the term “load pocket.” I understand what the term means. If you take the amount of electricity in terms of megawatts from the Strip out of the area along with other large users, does the amount of electricity leaving the area create “load pockets” within the residential areas?

Senator Townsend:

Thank you, Madam President. Excellent question. My colleague has studied this area very closely and asks an important question. Does this create a good opportunity, or in fact, physically create a problem? The answer is, that would only occur if the PUC allowed it to happen. The ability to move new capacity across a transmission line is one of the fundamental issues before the Federal Energy Regulatory Commission (FERC), Congress, this House and in every legislature in the United States. The ability to move new capacity across those lines cannot be at the expense of old capacity. The access one has must be equal to, but not better than, what the other has so there cannot be a disadvantage to any remaining customers, whether they are residential, small commercial or large entities. Some large may stay. Some may decide it is not in their best interest or they cannot find the right deal at the moment. If I could make a point regarding that, because yours’ is a crucial point as we get closer to the transmission that you make reference to. This encourages the financial markets and those people who build those lines to come to southern Nevada to work with the Bureau of Land Management (BLM). Because, make no mistake, under the Minority Leader’s bill, we have to deal with the federal government to accelerate the building process. They are going to have to come in quickly and move through the process quickly. They will have to get additional transmission, not just to run from Utah, New Mexico, Arizona through southern Nevada on their way to Los Angeles but to actually move that energy around the Las Vegas valley.

Senator Neal:

Is it not a fact Senator, that if you have “load pockets” whether they are preexistent or created by entities leaving the system, and if you have those areas to be filled by individuals who want to come in and build power plants to take care of that, is it not a fact that that energy becomes deregulated energy?

Senator Townsend:

When a private party, or for that matter a public entity, builds a generator, the term deregulation only comes into play depending on who the end user is. The wholesale market has been deregulated, and the retail market has not. The problem California faces obviously is a supply problem. They compounded it by enacting regulatory scheme that purported to deregulate their retail market, capped their retail prices and forced their incumbent utilities to sell their generation. They took all the basics of economics and muddled them. They came up with the crisis they face today on top of the fundamental problem of the lack of supply.

Senator Neal:

Madam President, please permit me one more question. I have just read the amendment. I tried to read the bill, but a lot has been taken out of the bill. As I understand the amendment, it would disallow the aggregation of residential consumers.

Senator Townsend:

It is my understanding that the bill never allowed aggregation. It was not addressed in the bill to start with, and it still not addressed in the amendment.

Senator Neal:

I think you have answered my question, Mr. Chairman. Madam President, I would like to have a few comments to make in reference to the discussion that has just taken place. This amendment and the bill that is being proposed seems to me a back door to deregulating the process. If we are to maintain the action that we took early in the session, to allegedly stop deregulation in its tracks, somehow it has gained its legs back and is moving through the back door. I see this amendment somewhere in the future, 6 months, 7 months or 8 months from now, having a tremendous increase in residential rates of power. For one reason, the amendment sets up a situation whereby the large users in this State, the casinos, the miners and others, would be able to leave this electrical market without being able to carry with it residential customers through the action of aggregation. Aggregation is another one of those concepts that allows for deregulation. It forces the residential customers to look at this particular aspect. It leaves us to the fluctuation of high-energy rates that will be coming over our transmission lines. As the Senator indicated, those transmission lines have been deregulated and have been deregulated as of 1992. The last two years of former President Bush’s administration allowed certain large companies to enter into this particular market of electricity and manipulate that market to their advantage.

The Senator had indicated something about a load pocket, load pocket simply means that you do not have sufficient electricity going into an area. To give you an example, if you have a 20‑megawatt hours line that is needed in town “X” and you can only supply 15 megawatt hours, the five megawatts becomes a “load pocket”. If you have a company that goes in and sets up a plant and supplies the other 5-megawatt hours those 5-megawatt hours become deregulated electricity. The customers would have to pay whatever those companies want to charge.

We have not had the FERC step in and help in this situation. In fact, they have said, hands off; let the market bear whatever price it can afford. I think the action we took earlier in the session was a good one in terms of trying to roll back the deregulation, but now this monster has reappeared in terms of this amendment and Assembly Bill No. 661. It does not do us any good. It will not do the public any good, particularly, the ratepayers who would be bearing the burden of paying the high costs of electricity.

Somewhere and somehow this Legislature, as many legislatures across the country have, will have to take a position against deregulation. We have to say that energy is a necessity and should never be bartered on the open market. We are not allowing this to happen, and that is deregulation. Whatever you want to call this bill, it is deregulation because we are allowing the large customers to move out and buy whatever the market would allow them to pay for energy. I think this is a wrong measure to take. It does a disservice to the public. It is a complete turnaround from the action we took earlier in the session when the headlines went out that deregulation has been stopped in the State of Nevada. This brings it back in full force, and therefore, I would vote against the amendment and the bill.

Senator Titus:

Now that I have had a little more time to read the amendment, I have a few more questions. One is on section 10. By this description of an eligible customer, is it true that the only private customers who would qualify would be very big gaming, very big mining and the BMI complex, that industry that some of you fought so hard to get exempted from the provisions of Assembly Bill No. 349?

Senator Townsend:

I will do the best I can because the question is an excellent one. There are two eligible customer groups. The total number of eligible customer is approximately 180. I cannot break them out because I do not have the list here, but as noted in the bill and the amendment, they are governmental entities as well as those that provide educational or health care services that are, in fact, taxpayer funded.

Senator Titus:

My next question, Madam President, is on section 44. I believe it has been removed. I realize that some of you voted to kill the mill assessment bill that would set up an assistance program to help the needy with power bills. Now, I understand that section 44 which is being eliminated by this amendment would have required the PUC to establish requirements and regulations as to when you can cut somebody’s power off if they are needy or ill. Why would you want to do that?

Senator Townsend:

It’s an excellent point; one our committee specifically asked. In fact, I believe it was Senator Carlton who asked the question to the PUC. They already have the authority to do that. They have regulations on that. They would be glad to work with any member of this body or the other House to draft additional regulations, but that authority is already there. We saw it as unnecessary.

Senator Titus:

And then my third question is, does the consumer advocate, whose primary function is to protect the interest of ratepayers, endorse this amendment?

Senator Townsend:

The only thing that the consumer advocate said in the hearing was that he did not agree to the proposed merger language that was being negotiated. We, therefore, took that language out. I cannot speak as to what he has said, specifically, about the amendment other than what has been written in the press.

Senator Care:

Thank you, Madam President. My questions are not so complex. I note that section 32 gives a definition of provider of electric service. Provider now, specifically, states that the term does not include a landlord who pays for electricity that is delivered through a master meter and who distributes or resells the electricity to one or more tenants for consumption in this State. Further, the term “retail customer” now would include that landlord. My only question is whether that would have an impact on the electrical bills for apartment dwellers?

Senator Townsend:

The answer is no. Those who live in master–metered parks are done individually, whether they are renters or owners. They would have the same regulatory mechanism that they currently have today. The rates would not be affected by anything in this bill other than the normal rate regulations we have currently in law.

Senator Amodei:

Thank you, Madam President. Electric markets have never been more turbulent and risky than they are today. The large Nevada customers who would potentially be eligible to leave their local utilities, and this is very important, do so at their own risk and peril. If they leave and come back, they run the risk of coming back to utility prices that are much higher than when they left. I do not think that’s a good idea for our residential customers.

One of the things what we struggled with early in this session was supply in our State because we import a lot of electricity. Without building a single power plant, this potentially increases the supply of electricity in the north for residential customers by 25 percent. In the south, the supply for residential customers increases by 15 percent. Why is that important when you talk about price? Because in Assembly Bill No. 369, when we prohibited the sale of those power plants, we did that so we could have cost-based generation electricity available to our customers. If you are concerned about residential customers, that’s a good thing. If 25 percent of it is available in the northern power grid and you are concerned about residential customers, that is a good thing.

That is why we prohibited the sale of those plants and we are trying to open up more of those cost-base generating plants' products to our residential customers. If the big folks can go out on their own and find some better deal and we can accomplish this for residential customers–so be it. In the words of William Swackhamer, who used to serve in this body, the big guys will take care of themselves. It’s the little ones we ought to look out for. That is what this is doing, and I support the amendment. I also support the amendment as a way to continue the bill and to allow our brethren in the south end of the building the opportunity to revive some measures that would provide for low-income people who need assistance. Then they can decide that the work that was done by the Commerce and Labor Committee in the Senate was quality work as opposed to something that ought to be demagogued. Thank you.

Amendment adopted.

Bill ordered reprinted, re-engrossed and to third reading.

Assembly Bill No. 618.

Bill read second time.

The following amendment was proposed by the Committee on Commerce and Labor:

Amendment No. 1153.

Amend the bill as a whole by deleting sec. 79 and inserting:

“Sec. 79. (Deleted by amendment.)”.

Amend sec. 96, page 36, by deleting lines 19 through 22 and inserting:

“Sec. 96. 1. A producer of insurance shall not act as an agent unless he is appointed as an agent by the insurer. A producer who is not acting as an agent is a broker who does not need to be appointed.”.

Amend sec. 96, page 36, by deleting lines 37 through 42 and inserting:

“5. A broker shall not place insurance, other than life insurance, health insurance, annuity contracts or coverage written pursuant to the Surplus Lines Law set forth in chapter 685A of NRS, that covers property or risks within this state unless the broker does so with a licensed agent of an authorized insurer.

6. A producer who is acting as an agent may also act as and be a broker with regard to insurers for which he is not acting as an agent. The sole relationship between an insurer and a broker who is appointed as an agent by the insurer as to any transactions arising during the period in which he is appointed as an agent is that of insurer and agent, and not insurer and broker.

7. As used in this section:

(a) “Agent” means a producer of insurance who is”.

Amend sec. 96, page 36, between lines 44 and 45, by inserting:

“(b) “Broker” means a producer of insurance who:

(1) Is not an agent of an insurer;

(2) Solicits, negotiates or procures insurance on behalf of an insured or prospective insured; and

(3) Does not have the power, by his own actions as a broker, to obligate an insurer upon any risk or with reference to any transaction of insurance.”.

Senator Townsend moved the adoption of the amendment.

Remarks by Senator Townsend.

Conflict of interest declared by Senator Porter.

Amendment adopted.

Bill ordered reprinted, re-engrossed and to third reading.

UNFINISHED BUSINESS

Appointment of Conference Committees

Madam President appointed Senators Washington, Townsend and Mathews as a first Conference Committee to meet with a like committee of the Assembly for the further consideration of Senate Bill No. 482.

GENERAL FILE AND THIRD READING

Senate Bill No. 576.

Bill read third time.

Roll call on Senate Bill No. 576:

Yeas—16.

Nays—Carlton, Neal, Titus, Wiener—4.

Not Voting—Care.

Senate Bill No. 576 having received a two-thirds majority, Madam President declared it passed, as amended.

Bill ordered transmitted to the Assembly.

UNFINISHED BUSINESS

Signing of Bills and Resolutions

There being no objections, the President and Secretary signed Senate Bills Nos. 27, 38, 61, 133, 182, 210, 245, 297, 299, 301, 317, 330, 405, 412, 425, 504, 522, 530, 536, 539, 543, 544, 548, 552, 563, 569; Assembly Bills Nos. 27, 37, 82, 113, 182, 220, 239, 308, 313, 314, 315, 320, 328, 338, 380, 383, 395, 413, 417, 419, 428, 429, 430, 442, 451, 452, 455, 459, 461, 468, 469, 490, 499, 540, 560, 568, 574, 619, 632, 638, 650; Assembly Concurrent Resolution No. 40.

remarks from the floor

Senator O'Donnell requested that his remarks be entered in the Journal.

Unfortunately, I was in the hospital when the Governor had his press conference regarding his measures to support education. I did not get the opportunity to vote in favor of the measure to raise some revenue for the educational process in our State. I would like to go on record as voting in favor of that measure. I know I can’t technically do that, but I would like my remarks placed in the Journal that I would support Senator James' and Governor Guinn’s proposal to fund education.

guests extended privilege of senate floor

On request of Senator Amodei, the privilege of the floor of the Senate Chamber for this day was extended to the following students from Dayton High School: Kimberly Wilson, Petr Soucek, Noah Kunkle, Tracy Smith, Cindy Wanbaugh, Angela Zelaya, Jessica McIntyre, Chris Tavares, Cathy Miller, Jason Arevalo, Bronson McFall, Genaro Coronado, Ramon Alvarez, Robert Burr, Brandon Coata, Zach Gallegly, Mathieu Garneau, Ben Griffith, Jennifer Armstrong, Colleen Boettcher, Matt Council, Jared Feser, Amy Jackson, Jessica McIntyre, Cathy Miller, Melissa Shubeck, Maggie Springer, Mike Thomson, Samantha Wiggins, Garrett Collins, Jake Conti, Sofia Cornell, Noah Duffy, Jennifer Essman, Logan Haymore, Josh Hurt, Tina Irwin, Dan Jackson, May Jessena, Tinja Tahdesmaki, Emily Leach, Jarod McPherson, Victoria Mesquita, Anthony Piersanti, Dan Larsen, Cody Oden, Heather Palmer, Mike Sampang, Toni Rustrum, Brianna Savage, Joanna Slivkoff, Diana Spiegle, Mark Wheeler, Kristi Winters, Jennifer Morphew, Robert Sharp, Dustan Page; chaperones: Ruth Eubank, Dawn Cleveland and teacher: Sam Eubank

On request of Senator Raggio, the privilege of the floor of the Senate Chamber for this day was extended to the following visitors from the Idaho Legislature: Jeannine Wood; Secretary of the Senate; Pamm Juker; Chief Clerk of the House and Glenn Harris; Idaho Information Systems and the following Nevada Legislative Counsel Legal Division: Brenda Erdoes, Jan Needham, Kim Morgan, Scott Wasserman, Tom Linden, Steve Coburn, Tim Chandler, Risa Lang, Randy Stephenson, Susan Gardner, Kristen Roberts, Brad Wilkinson, Eileen O’Grady, Kim Marsh Guinasso, Leslie Hamner, Ann Iverson, Scott McKenna, Kevin Powers, Rene Yeckley, Wil Keane, Bruce Daines, Scott Eichhorn, Kelly Lee and Mary Alice McGreevy.

Senator Raggio moved that the Senate adjourn until Thursday, May 31, 2001 at 11 a.m.

Motion carried.

Senate adjourned at 2:39 p.m.

Approved:Lorraine T. Hunt

President of the Senate

Attest: Claire J. Clift

Secretary of the Senate