MINUTES OF THE
SENATE Committee on Commerce and Labor
Seventy-First Session
May 8, 2001
The Senate Committee on Commerce and Laborwas called to order by Chairman Randolph J. Townsend, at 7:00 a.m., on Tuesday, May 8, 2001, in Room 2135 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to the Grant Sawyer Office Building, Room 4401, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Randolph J. Townsend, Chairman
Senator Ann O’Connell, Vice Chairman
Senator Dean A. Rhoads
Senator Mark Amodei
Senator Raymond C. Shaffer
Senator Michael A. (Mike) Schneider
Senator Maggie Carlton
GUEST LEGISLATORS PRESENT:
Assemblywoman Vonne S. Chowning, Clark County Assembly District No. 28
Assemblyman Lynn C. Hettrick, Douglas County and Carson City Assembly District No. 39
Assemblywoman Merle A. Berman, Clark County Assembly District No. 2
Assemblyman Gregg Brower, Carson City and Washoe County Assembly District No. 37
STAFF MEMBERS PRESENT:
Scott Young, Committee Policy Analyst
Silvia Motta, Committee Secretary
OTHERS PRESENT:
Patricia Jarman-Manning, Commissioner, Consumer Affairs Division, Department of Business and Industry
Barry Perea, Showtime Tours
Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association
Renee Diamond, Administrator, Manufactured Housing Division, Department of Business and Industry
Charles W. Joerg, Lobbyist, Nevada Manufactured Housing Association
Danny L. Thompson, Lobbyist, Political Director, Nevada State American Federation of Labor-Congress of Industrial Organizations
Louis S. Test, Attorney, Sani-Hut Company Incorporated
Michael Lindell, Attorney, Quick Space
Margi A. Grein, Lobbyist, Nevada State Contractors’ Board
Dennis Haney, Attorney, Nevada State Contractors’ Board
Ronald M. Krump, Chief Executive Officer, Krump Construction Incorporated
Margaret Cavin, Owner, J & J Mechanical
Michael S. Lynch, Lobbyist, Builders Association of Northern Nevada
Renny Ashleman, Lobbyist, Southern Nevada Home Builders Association
John Madole, Lobbyist, Nevada Chapter Associated General Contractors
Donald E. Jayne, Lobbyist, Nevada Self-Insured Association No. 200
Robert A. Ostrovsky, Lobbyist, Nevada Resort Association and Employers Insurance Company of Nevada
Herbert Jones, Concerned Citizen, Las Vegas
Nancyann Leeder, Nevada Attorney for Injured Workers, Department of Business and Industry
Jeanette K. Belz, Lobbyist, Liberty Mutual Insurance Company
Kimberly Maxson Rushton, Legislative Liaison, Office of the Attorney General
Maureen Brower, Lobbyist, American Insurance Association
Sue Dunt, Risk Manager, Risk Management Division, Department of Administration
Cliff King, Appeals Panel for Industrial Insurance, Division of Insurance, Department of Business and Industry
John Reiser, President, Reiser and Associates, Incorporated
James L. Wadhams, Lobbyist, American Insurance Association
Terry Johnson, Labor Commissioner, Office of the Labor Commissioner, Department of Business and Industry
Lucille Lusk, Lobbyist, Nevada Concerned Citizens
Alan Glover, Clerk Recorder, Carson City
Larry M. Osborne, Lobbyist, Carson City Chamber of Commerce
Barbara Reed, Clerk/Treasurer, Douglas County
Wayne Carlson, Lobbyist, Public Agency Compensation Trust
John E. Jeffrey, Lobbyist, Southern Nevada Central Labor Council
Ronald P. Dreher, Lobbyist, Peace Officers Research Association of Nevada
Kevin Chadwick, Safety Officer, Risk Management Division, Department of Administration, Washoe County
Jim Fry, Workers’ Compensation Analyst, Risk Management Division, Department of Administration
Martha Tittle, Lobbyist, Clark County School District
Lisa M. Black, Lobbyist, Nevada Nurses Association
Raymond (Rusty) McAllister, Professional Firefighters of Nevada and Member, Police and Firemen’s Retirement Fund Advisory Committee, Public Employees’ Retirement System
Jon L. Sasser, Lobbyist, Washoe Legal Services Incorporated
Patricia Jarman-Manning, Commissioner, Consumer Affairs Division, Department of Business and Industry
Chairman Townsend:
We will open the hearing on Assembly Bill (A.B.) 245.
ASSEMBLY BILL 245: Makes various changes relating to advertising and charges by certain tour brokers and tour operators and requires certain tour brokers and tour operators to deposit security. (BDR 52-1021)
Assemblywoman Vonne S. Chowning, Clark County Assembly District No. 28:
I bring to you today Assembly Bill 245, which is a consumer protection measure. Some people in the tour operations industry brought concerns to me regarding consumers and tourists who were ripped off. You also have a blue packet in front of you (Exhibit C) to give you an idea of what is happening. When people hear about or tourists in their hotel rooms read an advertisement in magazines for “two for one” coupons for the Grand Canyon and decide to use the coupon, they get on a bus, a taxi, or some sort of transportation to get to an airplane hangar, only to be told there is an additional cost they have to pay for environmental fuel, airport park entrance fees, et cetera, and the coupon is no longer valid. In some cases, as in Clark County, there have been reports where people have been ripped off by $30, $40, $80, or as much as $1300. If you charge someone $30 more, the profits could add up very rapidly.
The intent of this bill is to add tour operators and tour brokers under the deceptive trade portion of our statutes, so these people no longer can get away with advertising fraudulently. There were other concerns brought to our attention in the process of this bill, such as the tiny mine tour in Virginia City, for which they only charge $4 per person. The Consumer Affairs Division was very interested in requiring a $10,000 bond be charged, so people who are in the business legitimately would be bonded. We changed the bond requirement so bonds are only required in areas with a population of 400,000 or more.
I would like to present an amendment to strengthen the bill, to delete reference to charter buses, and add definitions for “sightseeing tour” and “cash price.” Since the beginning of this legislation, we have found out how quickly these people can react, when they found out the total cost (per tour) must be stated in the advertisement. Now, what they are doing is collecting “cash only,” and telling tourists, “If you pay in cash, then you’ll receive a discount, but if you pay with a credit card, you do not receive the discount.” We had to make other changes, such as to clarify the term “cash price,” so it would mean United States currency, travelers checks, or credit cards.
Mr. Chairman, this is a measure to protect our economy and our tourists, so they do not return home to Kansas, Missouri, or New Jersey with a bad experience from their vacation. Many will go back home and never say a word about it, but they would not return to Nevada either because they are so disappointed in the way they were treated.
Chairman Townsend:
Madam Commissioner, is it fair to say we do not have control currently over what Mrs. Chowning has brought before us?
Patricia Jarman-Manning, Commissioner, Consumer Affairs Division, Department of Business and Industry:
Yes, it would be fair to say.
Chairman Townsend:
This committee is probably under the misconception you have to state, specifically in law, whether you are covered by deceptive trade practice.
Ms. Jarman-Manning:
The problem is, many times we do not find out about the problem until after it has happened, and the tourists return to their states and write to us explaining why they are not coming back to Nevada again. It has been happening more and more. We think it would be best if we did some proactive legislation at this point to get a handle on it rather than have it continue. As Mrs. Chowning said, the tourists may or may not complain to us; however, when they go back to their home state, they say, “I was treated terrible. I feel I was ripped off in Las Vegas, and there is nobody to do anything about it.” That is when our industry begins to hurt.
Chairman Townsend:
Have you ever prosecuted any of these cases?
Ms. Jarman-Manning:
The Office of Attorney General, I believe, has done some civil actions against some of the tour companies.
Senator O'Connell:
Could you explain to the committee what happens, once you are notified of a violation such as this? Do you investigate it?
Ms. Jarman-Manning:
Generally, the process starts when we get a complaint at the division; we require all complaints be in writing. A copy of the written complaint is sent to the business, and an investigator is place on the case; sometimes we will go undercover to see if in fact the alleged violation is occurring. Many times the consumer/traveler/tourist will go back home before writing a letter; in some instances, it is not even a formal complaint, just a, “FYI (for your information), to let you know what happened to me.” We will follow up on the letter, and any formal complaints.
Senator O'Connell:
Ms. Jarman-Manning, if they are already being investigated in your jurisdiction, and you already have, under the deceptive trade act, the authority to prosecute, then what is the purpose for A.B. 245?
Barry Perea, Showtime Tours:
When the advertisement problems started some years ago, the
Office of Attorney General (AG) was not able to do very much. They did not have any exclusions in cases
where advertisers would claim, “This is last week’s coupon. You must pay (an amount) in addition to the
charges.” This is how the fine print of
environmental fees and taxes came into place.
I guess the AG has taken the position, if advertisers add the fine
print, it is all we can enforce. But
what really happens is the consumer gets to the terminal to purchase the ticket
for $100 and then all of these fictitious charges are added.
Chairman Townsend:
Perhaps there should be some statutory authority for the commissioner to deal with charges. I think Assemblywoman Chowning and the commissioner need to review the entire issue of chapter 598 of Nevada Revised Statutes (NRS). In the event they are not able to craft regulations dealing with immediate problems that may come up, we cannot wait. These are consumer issues we need to deal with right away.
Senator O'Connell:
Is the expiration date on coupons addressed in this bill?
Mr. Perea:
No. There is no mention in the bill, because the coupons have changed since we commenced putting this bill together. The term “cash price” was in the bill; now it has been changed to “cash price in brochures,” so it would appear they are complying with the law. Chairman Townsend’s well-taken point is to have some kind of rule-making process in place; however, it is a little late in this session to try and do so.
Senator O'Connell:
Since we have to otherwise amend the bill, I think we need to clearly address the expiration date issue.
Chairman Townsend:
It should also include that the coupon will be honored, unless there is a specific date of expiration stamped on the advertisement or brochure. It is important to understand, in our industry, as in the automobile industry, there are hundreds of vendors who provide direct mail or television coupons; they learn the laws in every state. If you choose to take a book out of a hotel, there would be a million of those coupons for other recreational spots, and they have the same problem. I respect what you have presented today. I just think it brings up a bigger issue, one for which the commissioner needs some flexibility. Whether it is the tourism industry or automobile industry, or any other industry, she needs to be able to respond.
Assemblywoman Chowning:
I agree. The more we can clarify today, the fewer amendments we will have to request in the future. On page 2, line 30 of the proposed amendment (Exhibit C) is what we were trying to get, “A tour broker and tour operator shall not charge a customer for a sightseeing tour an amount that exceeds the total cash price for the tour, and any fee or tax not included, must be stated clearly.” Because as you know, in these ads, the extra fees are in tiny print on the bottoms of the coupons. These fees are vague. These terms do not exist and they are fraudulent.
I will accept any amendment to absolutely clear the problem in this industry. It is refreshing to have members from an industry recognize there are problems, be willing to cooperate, and not mind paying a bond. The good businesspeople, who are conducting business fairly, should have the right to serve our tourists. I have never taken one of those tours over the Grand Canyon. However, I would like to someday, but I do not want to be ripped off.
Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association:
As you see A.B. 245 in its second reprint form, some of its original intentions have been removed. For example, charter bus operations, which would be preempted from regulation, were a major concern. The original intent of the bill was to curb advertising abuses, nothing to do with charter buses or charter planes. Nonetheless, as the amendment states, this would apply to any tour of 24 hours or less, whether it is an airplane, helicopter, raft, bus, or van.
Prior testimony indicated these individuals, who have been abusing consumers, are very creative. Already, since the bill has gone through the Assembly, these individuals have made changes to their brochures to meet what was in the bill. We hope the amendment will close as many loopholes as possible. Obviously, we are all concerned about the tourists and their impression of our state. We want them to visit again and we want them to be able to tell their neighbors, “We had a great time in Nevada.”
With respect to the coupons, the amendment you proposed, Mr. Chairman, is an excellent one, because many times we see coupons with no expiration date. I would also agree the same sort of thing we are talking about here could apply to almost any activity in which the consumer is promised a price. However, we request you retain the essential elements we have asked you to consider.
Chairman Townsend:
If there is no further testimony, we will close the hearing on A.B. 245 and open the hearing on A.B. 384.
ASSEMBLY BILL 384: Changes terms used in provisions relating to mobile home parks to refer to manufactured home parks. (BDR 10-1010)
Renee Diamond, Administrator, Manufactured Housing Division, Department of Business and Industry:
The Housing Division has one problem with this bill. In deleting the term “mobile home,” a term for homes produced before the Manufactured Housing Construction and Safety Act of 1974, we would, in essence, be barring older homes from places they have dwelt for a long time. With the assistance of Brenda J. Erdoes, Legislative Counsel, Legal Division, Legislative Counsel Bureau, some corrections were made to section 4, lines 12 through 15, which were then submitted to Assemblyman Mark A. Manendo, Clark County Assembly District No. 18. If he were here, he would say he is trying to improve the image of folks who live in the manufactured housing communities.
SENATOR O’CONNELL MOVED TO DO PASS AND PLACE A.B. 384 ON THE CONSENT CALENDAR.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Townsend:
We will open the hearing on Assembly Bill 552.
ASSEMBLY BILL 552: Revises provisions relating to manufactured buildings. (BDR 40-561)
Ms. Diamond:
Sections 1 and 2 of A.B. 552 were requested by the Housing Division in an effort to clarify chapter 461 of NRS. These are the statutes governing the types of factory-built housing, their uses, and installation procedures. This was also requested to resolve confusion with local jurisdictions as to what factory-built housing and modular buildings are utilized for. They are designed to be affixed to real estate and become an improvement to the real estate when transferred to it. This bill further clarifies these buildings should not be confused with manufactured housing, which may be real estate, personal property, or a commercial coach, but must remain transportable personal property, regulated under chapter 489 of NRS.
Ms. Diamond
The initial bill draft adds language to clarify factory-built housing units are installed under local jurisdiction requirements, since they become part of real property, per chapter 461 of NRS. Meanwhile, manufactured homes and commercial coaches are regulated by chapter 489 of NRS and have different standards. All buildings transported into the state for sale or use within the state must have a factory-built housing insignia or a commercial coach compliance seal. With the designation on the data plates, combined with the clarification contained in sections 1 and 2 of A.B. 552, we believe there would be no question of the status of a unit’s property or what the unit should be used for. At the conclusion of my testimony in the Assembly Committee on Commerce and Labor on April 9, 2001, I was disturbed to find an amendment concerning chapter 489 of NRS was offered on behalf of two commercial coach dealers. The amendment is, essentially, section 3 of A.B. 552, on the second page. The amendment was adopted even over my strenuous objection regarding the safety issues of deregulated and uninspected commercial coaches, which in many cases are used by workers for periods of up to 18 months. The lone dissenting vote in the Assembly turned out to be from Assemblyman Tom Collins, Clark County Assembly District No. 1, who sees these units on job sites regularly and understands the potential for danger.
I have included in your packet some pictures showing the effect of fire and rollovers with potential for personal injury (Exhibit D). Section 3, page 2, lines 14 to 31 of A.B. 552, represent Assembly Amendment No. 441, creating a new definition and exemption from the regulation in chapter 489 of NRS. This amendment creates a new category on lines 23 to 30 of “temporary commercial coach,” but states where units could be sold or leased for time periods up to 18 months at the same location. The added language on lines 16 to 18 removes the requirement for dealer’s license for anyone leasing or selling under the new category “temporary commercial coach.” Lines 19 to 22 exempt these temporary commercial coach dealers from the majority of the statutes in chapter 489 of NRS, deleting the laws which include fees for: certificates of installation; labels of installation; licenses of manufacturers, dealers, salesmen, responsible for managing employees, servicemen, and rebuilders. However, the law under NRS 489.287 remains enforceable by a city or county building department and enforceable by the Housing Division, if city or county building departments fail to enforce. In such a case, I need to know how I would enforce the safety and installation standards if they were exempt from licensing.
Ms. Diamond:
These laws have been in effect for years. Nonetheless, 2 years ago, the Housing Division discovered local jurisdictions were not inspecting commercial coaches. We placed the enforcement in Clark County, and when asked by the dealers to further delay for 30 days, we agreed and have continued to work in smoothing out delivery of inspections, et cetera. From April 2000 to April 2001, the division provided installation inspections on 1295 commercial coaches, where 9 percent failed for safety reasons, mostly electrical, even though installation was performed by a licensed installer.
I would like to articulate, on the record, the problems with the amendment, because I believe the safety of Nevada workers and the public who enter commercial coaches is compromised by creating a category of commercial coaches exempt from many of the statutes designed for the purpose of safety and accountability of those who profit from them. If we create this special temporary category without license and regulation, how do we enforce or invoke the current statutes provided through administrative redress, because we would be swamped with civil actions we simply cannot afford. Under this amendment process, we would fail to properly provide notice to interested workers, government agencies, and consumers. By using this process, we would not have been able to provide a fiscal note, which we believe could be up to $100,000 or $140,000 per year, and if we built a budget for it, it would include the fees for the inspection of all types of commercial coaches.
I would like to add, not all commercial coaches are small units, or used on short-term. Three major hotels in Las Vegas have commercial coaches from 14,000 to 30,000 square feet, with 140- to 300-person occupancy loads. These were placed in temporarily, while the three hotels in question were being built, but because they are so functional, they have been converted, and are now being utilized as training centers and human resource centers. I am concerned over the possibility some volunteer ticket taker, construction workers, a child at a model airplane race, or a consumer picking carpet for a new home, might be injured when innocently entering a temporary commercial coach.
I would prefer to see A.B. 552 withdrawn, rather than processed with its current amendment. If this amendment goes through, we would have no way of telling the difference between a unit placed for a weekend event or a unit placed for under an 18-month period and left there permanently; if the units are not inspected, it presents a danger to the public.
Charles W. Joerg, Lobbyist, Nevada Manufactured Housing Association:
My association is in total agreement with sections 1 and 2 of the bill for clarification purposes. However, we are adamantly opposed to section 3. We do not believe anybody in the industry should be exempted from the regulations when public safety is involved. Every aspect of the manufactured housing industry is inspected at various levels and we don’t want to set a precedent and have somebody killed or electrocuted in the event the language of the bill is not written properly. We feel it would be bad policy for the state if people are entering unsafe buildings when doing business. There needs to be some governmental regulation and an inspection process, whether it is at the local or the state level. We are totally opposed to it.
Danny L. Thompson, Lobbyist, Political Director, Nevada State American Federation of Labor-Congress of Industrial Organizations (AFL-CIO):
We decided not to attend the Assembly hearing on this bill, after concluding it did not pertain to us, until after it was amended, at which point we had talked to Ms. Diamond in this regard. There is no construction job going on in the state without some sort of temporary office. All of these temporary offices are hooked up to public utilities; many of them are hooked up to natural gas systems. We just want to make sure it is done right, and consider safety as a first priority on the job. This amendment was originally considered on a bill with good intentions. I do not believe it has had a full and fair hearing on these particular issues. We would like to go on the record as opposed to section 3 for all of the same reasons stated earlier.
Senator O'Connell:
How many accidents have occurred, other than the Lone Mountain rollover shown in these photos (Exhibit D)?
Ms. Diamond:
We have heard of some here in northern Nevada. Very often the accidents occur on job sites and other areas. These are not the kind of accidents making the news, and unfortunately, the industry has no requirement to report accidents. Regarding the accident on Lone Mountain, actually, we were called out because the wrong tie-downs had been used and they failed, and it was an uninspected unit. As a matter of fact, one of them led us to understand local jurisdictions were not inspecting them. I could not tell you whether there are or are not many failures, but I can tell you my nightmare is if you have one person in the unit or 300 people, something will happen. What we are seeing in our 9 percent of failures is a certain amount of default with electrical systems. These are not complicated structural units, like a manufactured home; there is not a lot of weight to them. But the connection to utilities is as important and complicated as the permanent installation of a manufactured home.
I will say we have seen raw sewage not being put into a sewer line and falling down on the ground; we have seen electrical panels welded shut when it is against the law; so, in the event of an emergency, a worker or citizen would not be able to shut off an electrical panel during a fire; we have seen all kinds of infractions leading to the 9 percent of failure. I suspect it is not a major number of these units failing. Nonetheless, if one fails and someone gets hurt, as was the gentleman in the rollover, who had a fairly seriously shattered arm and shoulder, then it is a serious issue.
Louis S. Test, Attorney, Sani-Hut Company Incorporated:
The reason this proposed amendment was added to A.B. 552 was not necessarily to deal with these issues on a long-term basis. Up in the northern part of Nevada, we have a number of units for special events. They are normally set right on the ground and are small units, approximately 1000 feet or less. The events commonly last for 2 to 3 days and the units are used for ticket sales and concessions according to the present law, every time we place one of these units at one of these special events, we would be in violation. Many times the units are not even on wheels, but, because of the definition of commercial coach, everything falls under this mass definition.
We had discussions with Ms. Diamond during which she made some proposals, but, unfortunately, we did not have an opportunity to talk about all the issues. She suggested a 10-day placement along with an inspection to make sure the units are placed on the property accurately.
The amendment was intended to find a way to comply with the law. We are not suggesting there should not be inspections. However, in our opinion, Ms. Diamond’s inspectors should not have to go to a construction site, when you have a building inspector already there to check on the building inspections for the rest of the construction of the job, including the unit’s tie-down. Our main concern is for the temporary special use permit for these units, because of the industry’s broad definition of commercial coach.
Currently, when persons on one of the job sites have the need to move one of our units from one point to another point, they have to call for an inspection. In my opinion, it was not intended for this type of module unit to be required to have the same inspection as the one at Mandalay Bay (hotel-casino) set on construction sites for longer periods of time. If they want to limit it to 10 days, put in a 24-hour notification period, and Ms. Diamond’s other suggestion, where they do not need an installation inspection certificate if the division is notified within a 24-hour period and removed within 10 days, then she would eliminate the need for a plumbing and electrical certificate, et cetera. As I mentioned, there are local inspectors who can make sure the units are adjusted correctly; needless to say, if the inspectors have to do so, then it is lack of communication between the state and the local agencies. On the other hand, if the sites already have the inspectors, I think we are just duplicating the work, in which case we would ask for an exemption on the short term and the issues with the 10 days, the 24-hour notice, and the waiver of the inspection certificates.
Michael Lindell, Attorney, Quick Space:
My client’s interest would be having a little more than a 10-day period, because his business is slightly different than the business of Mr. Test’s clients. My client’s business involves, for example, utilization of a construction trailer, where it may be moved several times on a particular job site; so 10 days may not be sufficient for a subdivision development, depending on the size of the subdivision. The other issue is that all of these commercial coaches are constructed according to preapproved standards, including manufacture safety and tie-down requirements. We are not asking and of those coaches to be exempt or changed. In addition, I heard Ms. Diamond talk about raw sewage, electrical defects and improper connections. Building permits are fine; we certainly are not going to discharge raw sewage on the ground, nor do we want to be installing electrical connections improperly to cause danger to ourselves or to anybody else. Finally, we had some discussions with Ms. Diamond about size limitation, because, apparently, in Las Vegas there are some 13,000‑square-foot, temporary commercial coaches in use. We would be more than willing to limit the size to 2,000 square feet. We are interested in temporary kinds of use, consistent with what we are currently using. We are suggesting a period of 90 days, as opposed to 10 days, and if it needs to be longer, then we will go through the inspection with the state. Our proposal does not preclude the state from inspecting them, if the state has the staff time; our proposal provides for a 24-hour notice upon placement.
Chairman Townsend:
We will bring this bill up in a work session Friday, May 11, 2001. It would also be helpful if you could work with Ms. Diamond and agree on a resolution.
Ms. Diamond:
I have attempted to meet with the two business people and their representatives (Mr. Test and Mr. Lindell) to come up with a more suitable definition. One might relieve them of some of the regulatory burden. A variety of offers have gone back and forth, including information I faxed them. However, I have not received a reply. I would have to maintain that you see the difference between the two representatives of just two of the businesses in the industry, and their definition of “temporary.” My problem is, if 10 or 90 days are temporary, yet the bill calls for 18 months as temporary, and we are removed from the regulatory process in accordance with this bill, how do I even enforce regulations? Local jurisdiction, I have been told, will not enforce commercial coach safety inspections. They will only inspect the site, while OSHA (Occupational Safety and Health Administration) does the site and other working conditions, but nobody will inspect coaches with utility connections.
It is true there are installation standards provided with
the commercial coaches, but who is going to make sure those installations
standards are followed? The failure in
the Lone Mountain rollover was caused by the tie-downs to the ground, because
they used the wrong tie-down for the type of soil. Throughout Nevada and the Clark County Valley, you have hundreds
of soil qualities and
different standards for tie-downs in each of those. No standardized installation alone can ever cover all types of
soils. You need a person to inspect
them totally.
Chairman Townsend:
We will close the hearing on A.B. 552, and open the hearing on A.B. 620.
ASSEMBLY BILL 620: Makes various changes relating to contractors. (BDR 54-407)
Margi A. Grein, Lobbyist, Nevada State Contractors’ Board:
I would like to explain to you the purpose of sections 1 through 3, which establish a construction education account. Currently, the fines the board collects go into the General Fund and there is no mechanism for the board to use those funds. This method will focus on the future of construction by allocating those fines to construction education programs. Section 2 of the bill establishes a commission appointed by the Governor that approves or recommends grants from the program.
Senator O'Connell:
Do you know approximately how much money the education account would involve?
Ms. Grein:
Currently we have been collecting approximately $40,000 to $50,000 a year. I believe, with the new provisions regarding fines not paid, it can be a higher figure; it would also depend on the fines the board imposes as well.
Senator O'Connell:
And right now, this money does not come to you?
Ms. Grein:
No, it does not.
Senator O'Connell:
Collectively, you have no idea of the total amount of money we would be talking about from the General Fund?
Dennis Haney, Attorney, Nevada State Contractors’ Board:
We are under $50,000 at this point, totally.
Ms. Grein:
The commission would consist of one board member and six members appointed by the Governor (Kenny C. Guinn) from the construction industry, and two members with knowledge in construction education. It is strictly voluntary; there is no cost to the State Contractors’ Board for this particular legislation.
Chairman Townsend:
You are saying you collect $40,000 to $50,000 per year in fines, which goes to the General Fund, correct?
Ms. Grein:
Correct.
Chairman Townsend:
You are also saying, you want the same amount of money to be allocated to the education account, and you are telling us there is no effect to the State?
Ms. Grein:
Right, but I do not believe those fines are included in the budget.
Chairman Townsend:
That would be different from whether it affects the State. It may not require money approval from the committee, but there is an impact.
Mr. Haney:
The impact is the amount of the fines, which presently is under $50,000.
Ms. Grein:
Also, in 1993, when the attorney general amended all State boards statutes to recover or impose fines, there were comments from this committee suggesting fines should not be commingled with the State General Fund. We were deducting investigation costs from those fines, when they were not recovered. Then we were advised, through an opinion, we no longer could do so; once we had official notice, we started reimbursing the State for those fines. What actually went into the fund, prior to this year (2001) was basically nothing after subtracting investigation costs.
Mr. Haney:
Section 4 is to clarify the current procedure when we deny an application for license. We are required to have a hearing, and this section will allow us not to require a hearing, unless the applicant requests one. On page 3, line 10, the word “deliver” should be “sent,” because in most cases, by the time the license is denied, the applicants have left the state. If they do not request a hearing, it becomes difficult to find them.
Ms. Grein:
Additionally, in section 6, subsection 3, on page 4, we are allowing licensees to voluntarily make a contribution to the education account in addition to the fines. I also have a proposed amendment (Exhibit E) to the bill. There are two important issues to be addressed. First, is you cannot waive your lien rights in a contract. Nevada and Florida are the only two states, I am aware of, which have such a provision; we would like to suggest it be added to the bill as well. Second, I have added a section 14, which would amend NRS 624.031 to address property owner issues.
Ronald M. Krump, Chief Executive Officer, Krump Construction Incorporated:
The reason I got involved in this matter is I believe we need to improve our industry, and what better way to spend this kind of money, than to help educate and improve our industry.
Chairman Townsend:
There has to be a lower threshold, in terms of age, to reach these students and show them the value and the importance of the industry, including the professionalism involved.
Mr. Krump:
Yes, I think that is right. A number of programs have been started, such as the toolbox program, where small tool kits are given out to the classes in elementary schools, hoping to make students aware of the broad base of careers in construction, including college graduate requirements, such as architects, engineers, project managers, and so on. Yes, I believe we need to start at an early age, but we need to work all the way through school because, unfortunately, most people think construction consists of digging ditches and pounding nails.
Chairman Townsend:
Is it the basic level where everyone has to start before they move up the ranks? Many people from your and my generation started at the basic level of the industry, even though they may have had a college degree.
Mr. Krump:
That is true. But, we also have many people in the industry who did not receive the basic training. One of the goals is to introduce them to the very basics of the project.
Chairman Townsend:
I do not think it would hurt anyone to learn how to dig a ditch.
Mr. Krump:
Through this class, we feel we are also teaching life skills, which everybody can use in their lifetime.
Margaret Cavin, Owner, J & J Mechanical:
What I have seen in the 22 years of my career is fewer and fewer people wanting to get into the trades. Mr. Krump and I participated about 2 years ago in kind of a workshop with school counselors. They were unaware there was a nationwide shortage of construction workers, and unaware of the high wages available in our industry. Basically, they were concentrating strictly on kids bound for college. A fact of life is the majority of kids are not college-bound, or if they are, it is for a very short period of time. Parents, counselors, and kids would need to be educated on the great careers in construction. One thing I find very attractive is you can basically earn a salary while you learn.
There seems to be some type of cloud over the construction industry for whatever reason; for example, a plumber working for me makes $27.15 an hour plus excellent benefits. Mr. Krump’s program has really helped. It showed kids some kind of a broad-based indication of what is available in the construction industry. Even though it does not sound like a lot, $50,000 is a large amount of money for what we are trying to accomplish.
Chairman Townsend:
I commend you on this effort. I know you have been trying for a long time, but, more
importantly, I think the impact it is going to have will be significant. Another fact is we have some kind of
preconceived notion the answer to
the world is getting a Ph.D. (Doctor of Philosophy) from Harvard
University. We need to aspire to all
the best things the world has to offer, and they should be perceived as
wonderful opportunities.
Ms. Cavin:
A survey was taken last year (2000) on the average age of the construction work force, which is 47 years old. We need avenues to bring young people into the trade.
Michael S. Lynch, Lobbyist, Builders Association of Northern Nevada:
We support this effort 100 percent. All of the issues we talked about regarding construction in the state of Nevada really pay off when it comes to finding and developing a competent work force. I think to tend these problems is a step in the right direction.
Renny Ashleman, Lobbyist, Southern Nevada Home Builders Association:
I understand this committee has been offered the opportunity to outlaw lien waivers for the third time. We had a subcommittee under Senator Carlton, where all of the members, the contractors, subcontractors, home builders and owners, and so on, worked for quite some time on a bill to reach a compromise. That compromise was then presented to the subcommittee and ended up being adopted. These same issues, including the lien waiver, were raised and it was agreed to work on the entire lien revision over the interim, between now and next session. The compromise in Senate Bill (S.B.) 274 depended upon whether we were going to remove the right, by contract, to stop a lien waiver in advance. The problem is that it completely unbalances the lien law; you will have to reform the rest of the lien law to make it work properly.
SENATE BILL 274: Revises provisions governing right and duties of contractors and subcontractors under contracts or subcontracts. (BDR 54-593)
Mr. Ashleman:
On behalf of the entire coalition we worked together with, except for the contractors’ board, which worked with us when it suited them and when it did not, they left, we would ask you defeat the proposed amendments to release lien waivers.
Chairman Townsend:
Are you opposed to the changes in NRS?
Mr. Ashleman:
I have not had the opportunity to analyze them, so I do not have a position at this time. I will be happy to report to you when the changes have been reviewed, at a later date.
John Madole, Lobbyist, Nevada Chapter Associated General Contractors:
We support A.B. 620, particularly with the reference to the construction education provisions on which Mr. Krump, Ms. Cavin and Mr. Lindell testified. However, I just learned of the amendment today, and have not had a chance to review it.
Chairman Townsend:
We will close the hearing on A.B. 620, and bring it back in the work session scheduled for Friday (May 11, 2001). The hearing on A.B. 44 is now open, and will use the work session document (Exhibit F).
ASSEMBLY BILL 44: Makes various changes concerning industrial insurance. (BDR 53-772)
Chairman Townsend:
Ms. Belz, (Jeanette K. Belz, Lobbyist, Mutual Insurance Company) and Mr. Nort, (Charles R. Nort, Lobbyist, Pratte Development) both made a presentation regarding changes in the language from 7 calendar days (page 3, Exhibit F). John F. Wiles, Division Counsel, Division of Industrial Relations, Department of Business and Industry, wrote to us asking to clarify it would not be necessary for the administrator to adopt regulations each year for the required annual adjustment to the medical fee schedule. I believe as a result, most of these fees for which are currently contracted, he would, for the third time, just attach a fee schedule adjustment to the medical CPI (consumer price index.)
It would be my recommendation we accept Mr. Wiles’ proposal on page 6 (Exhibit F). If it is done in a manner in not attached to a national index, then Mr. Wiles could actually proceed with a hearing. If he says it is CPI or medical CPI, he could do it without a hearing. But if it is not a standard to which all the medical providers could point, it would be handled with a hearing.
Then there is a proposal to require a casualty insurer, writing homeowners’ policies in this state, to provide industrial insurance to a homeowner who is insured by such company, and who employs a person in domestic service, if the homeowner requires such coverage.
Senator Carlton:
I believe this particular legislation was introduced last session (the Seventieth Session.) I was opposed to it then, and I have some questions today. How is this different?
Assemblyman Lynn C. Hettrick, Douglas County and Carson City Assembly District No. 39:
The language of the proposed amendment to this bill, (page 7, work session document, Exhibit F) for NRS 616B.032, changes, “A private carrier may provide” to read, “shall provide upon request.” It is still optional to the homeowner, but it says if the insurance carrier is requested to provide this coverage, it shall provide it. What we have found is no one wants to be first. If we just add in this language, it would make it an option for people to choose coverage for domestic workers in their home.
Chairman Townsend:
The last recommendation is from Mr. Herbert Jones, an injured worker. His suggested changes are on page 9, subsection (a), of the work session document:
If the employee has not received the minimum lump sum [payment], the insurer of the employee’s employer shall deduct from the compensation, for the permanent total disability, an amount equal to the [monthly] installment rate for awards for permanent total disability not to exceed 10 percent of the monthly compensation for permanent total disability until the lump sum is recovered.
In other words, when trying to recapture money, it cannot exceed 10 percent of the monthly compensation. Although it would take a longer time to get the money back, it would make it easier on the individual claimant.
Donald E. Jayne, Lobbyist, Nevada Self-Insured Association No. 200:
I would like to express my support to amendments 1 and 2 previously mentioned. However, I have some questions about amendment 3 as far as the need to delete some of this section. I agree with what Chairman Townsend referenced that it was Mr. Wiles’ intention to “not be required to go to regulation hearings every year.” Once we established a baseline, then it would be indexed to an appropriate index and could be automatically adjusted. The only concern I have is, without Mr. Wiles being present, I do not know if I can address whether or not, by removing this section, we would delete the need to come back if there is a substantive change or a change requiring a regulation.
Robert A. Ostrovsky, Lobbyist, Nevada Resort Association, and Employers Insurance Company of Nevada:
I would like some further explanation on the changes proposed by Mr. Jones. They are substantive, but I am not quite clear what the exact issue is.
Herbert Jones, Concerned Citizen, Las Vegas:
This proposal on page 9 (Exhibit F) basically makes this “deal” constitutional. When an individual receives a permanent partial disability award, and then later becomes permanently and totally disabled under the law, the system has the right to recoup the previous permanent partial disability awards, because double benefits are not allowed under the law. The system is currently set up under two methods. One is based on if you did not receive the minimum lump sum based on the monthly installment rate. The monthly installment rate can take, in my case, as much as 22 percent of 66 2/3 percent of my income. Before the legislature was able to stop the state industrial insurance, in 1999, for getting unjust insurance, the calculation was recovered with all but 35 years in my case, because at that time I became permanently totally disabled. In such case, it was getting an unjust enrichment. We, as permanently, totally injured workers, are trying to make it fair.
Under state and federal constitutional laws, “People who have the same sanction should be treated the same. Both recoupments should be at the 10 percent rate in a fair manner, whether you are a young or old injured worker. The NRS 616C.440 already states a recoupment must be done in a reasonable manner. And, in my case, no one from any financial institution can state that “22 percent of 66 2/3,” is reasonable. We understand we have to pay back the money, but in a reasonable and fair manner, which the law already states.
Mr. Ostrovsky:
This amendment appeared today for the first time. I have no idea of its economic value. I understand the concerns just stated by Mr. Jones. There are standards, and it appears the court established the deductions in a couple of cases, back in 1996 and 1997. I agree with Mr. Jones; the insurance companies have a right to recover this money, but I do not know if 10 percent is the right number. Without such information, I cannot support the amendment as it is written.
Nancyann Leeder, Nevada Attorney for Injured Workers, Department of Business and Industry:
Mr. Jones is, of course, not the only client of the Nevada Attorney for Injured Workers (NAIW) affected by this amendment. Basically, the amendment would limit the amount of money taken out of the impaired worker’s income. Once a person is found to be entitled to receive permanent total disability, he cannot work. Mr. Jones told us, in his case, taking out the permanent partial disability prior pay lump sum from 66 2/3 percent of his average monthly wage, the amount of his permanent total disability pension, means taking 22 percent out of the 66 2/3 percent remaining. This leaves him, as it does any other NAIW client, with very little to live on, not enough. What they are trying to do is get a fairer payback percentage in computing the monthly withdrawal each month to pay back the money they already received in a lump sum for their permanent partial disability, so they are still able to live on the pension. We do have many clients in this type of situation, but Mr. Jones brought forward his concerns to this committee.
Chairman Townsend:
I believe everyone understands and is empathetic to the issue, whether it is 8, 10, or 15 (percent).
Ms. Leeder:
I think the reason he chose 10 percent, is the minimum lump sum already specifies 10 percent.
Mr. Ostrovsky:
I urge you to consider the fact this amendment just appeared today. This issue has not been discussed and I do not know what the impact is; if there are many people involved, it must represent a lot of money.
Chairman Townsend:
How many people do you (Ms. Leeder) have in your organization who may be affected by this problem?
Ms. Leeder:
Probably six, or maybe eight persons would be affected over a period of time. We did not have the problem at all until 1992, because the amount of money recouped, or taken out by Employers Insurance Company of Nevada (EICON), was previously in line with this proposal; then EICON started taking out more. We addressed the matter in 1995 and again in 1999. The EICON was taking out interest, even though the amount that had been paid was discounted. The problem really has just risen in the past decade.
Mr. Thompson:
I recall Mr. Jones’ testimony. This is not our proposed amendment, but we do support it. I think anything less than 22 percent would be reasonable. We cannot be like the Internal Revenue Service (IRS) when they decide you did not pay them. I know of a case where they have a pensioner who earns $800 a month, and the IRS takes $750 a month. I believe 10 percent would be more reasonable. I think they are entitled to recoup the money; this amendment will provide for it, and not put people in a situation where they can’t live.
Chairman Townsend:
We will give you the necessary time, Mr. Ostrovsky, to review and work on the matter, to get your questions answered and find some actual hard numbers. Therefore, we will continue this matter on Friday (May 11, 2001) and process the bill.
Assemblyman Hettrick:
If you look at the second page of the proposed amendment (page 8, Exhibit F), “A domestic worker employed in the home,” part of the intent of this bill was to cover domestic workers who are outside mowing the lawn, or taking care of a garden. I would like to make sure the language does not impact where the coverage would apply to anyone covered by the homeowner’s policy on the property.
Senator O'Connell:
I am thinking of someone who has many rental properties,
where they may have
a handyperson who works for them on a regular basis. If we specify “in the home,” then the person could not be
covered. Wouldn’t you rather maintain
such option?
Assemblyman Hettrick:
We do not want the words “in the home.” I would rather see “employed” and “covered by the policy.” In the instance you just raised, I believe it would be considered a business, and not covered by a homeowner’s policy. This is for a homeowner’s policy for individuals at home only.
Senator O'Connell:
It isn’t a business. It might be a retired person, who still owns several rentals or maybe some commercial property, and they have a person who they call on a regular basis to work on a continual basis.
Assemblyman Hettrick:
To cover this particular situation appropriately, as a domestic worker under subsection 2, subparagraph 2 of the amendment (page 7, Exhibit F) it says, “of $150 per month if he is employed not more than 20 hours per week.” This is specifically designed to cover domestic workers, someone who cleans houses once a week, or someone who mows the lawn regularly, and may get injured; there is no question this type of worker would be medically covered by workers’ compensation. The intent is to be able to provide coverage without having to sue the homeowner.
Chairman Townsend:
At this time, we will close the hearing on A.B. 44 and proceed to A.B. 47. This bill was amended and passed by this committee. However, some technical changes are needed.
ASSEMBLY BILL 47: Makes various changes concerning policies of industrial insurance. (BDR 53-769)
Jeanette K. Belz, Lobbyist, Liberty Mutual Insurance Company:
After the last hearing on this bill, Kevin Higgins, Chief Deputy Attorney General, Office of the Attorney General, had some concerns about the amendment as it was passed. Since then he has worked out the language, as the proposed amendment (Exhibit F, work session document) indicates.
Chairman Townsend:
The yellow highlighted portion (page 12, Exhibit F) of the amendment reads:
If the employer is a member of an association of self-insured public or private employers, is available for inspection by the administrator or his auditor or agent or an investigator of the attorney general at the employer’s principal place of business, if situated in a permanent structure or is made available within 24 hours if the place of business is located at a temporary location which is intended to remain in place for 12 months or less.
So, Ms. Rushton, is this adequate for the attorney general?
Kimberly Maxson Rushton, Legislative Liaison, Office of the Attorney General:
Yes, sir, it is.
Maureen Brower, Lobbyist, American Insurance Association:
We are in favor of the bill as it is currently amended.
Chairman Townsend:
Committee, all we need to do is rescind our action on the amendment, and replace it with this amendment.
SENATOR O’CONNELL MOVED TO RESCIND THE PREVIOUS ACTION TAKEN ON A.B. 47.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS A.B. 47.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Townsend:
I will close the hearing on A.B. 47, and open the hearing on A.B. 48.
ASSEMBLY BILL 48: Makes various changes concerning policies of industrial insurance. (BDR 53-768)
Chairman Townsend:
It is my understanding James L. Wadhams, Lobbyist, American Insurance Association, has submitted a proposed amendment (pages 14 to 32, Exhibit F) indicating the administrator “shall assess each insurer, including each employer who provides accident benefits.” Then there is a second amendment (page 33, Exhibit F) by Sue Dunt, Risk Manager, Risk Management Division, Department of Administration, in reference to private (insurance) carriers subsequent injury fund. Has there been any change since its original proposal on April 18 (2001)?
Mr. Capurro:
The amendment before you from Mr. Wadhams, dated April 18, 2001, to my knowledge, is the original amendment, but it incorporates the language we had proposed regarding self-insured employers and self-insured groups; it also includes our (Nevada Motor Transport Association) proposed amendment. We are in full support of both provisions.
Chairman Townsend:
Please point out where your amendment is in Mr. Wadhams’ proposal.
Mr. Capurro:
Throughout the bill there are several references. The statement reflects the relative hazard of employments covered by the self-insured employer, or by the self-insured group of employers. It references, in Mr. Wadhams original amendment, where in all cases it is based upon premium. Our testimony in the past has been, “It is not appropriate for self-insured employers or groups.” He (Mr. Wadhams) agreed. Therefore, the statement “reflect relative hazard in employments covered by the self-insured employers or groups,” has been removed.
Chairman Townsend:
Committee, his reference is on page 2, subsection 6, paragraphs (a) and (b), where it says:
After allocating the amounts payable, the administrator shall apply an assessment rate to the: (a) Private carriers reflecting the relative hazard of the employments covered by the private carriers, results in an equitable distribution of costs among the private carriers and is based upon expected annual premiums to be received; (b) Self-insured employers resulting in an equitable distribution of costs among the self-insured employers and is based upon expected annual expenditures for claims.
This is because they do not pay premiums, and the same applies with the association of self-insured, public and private employers.
Mr. Capurro:
Yes, sir. It also corrects an error in the original language referencing the relative hazard of the employments. It has been stricken out for self-insured employers and self-insured groups.
Chairman Townsend:
Regarding Ms. Dunt’s proposal, in lieu of eliminating the subsequent injury fund, NRS 616B.590 would be amended to clarify “private carriers must credit reimbursements received from the fund to the injured workers’ claim and make appropriate adjustments to the employer’s policy.” In other words, the first amendment is to correct the current oversight in the law, which does not specifically require the private carrier to credit the account; the second amendment would require private carriers to notify the affected employer within 30 days of receipt of each reimbursement from the fund; the third amendment is to clarify that occupational diseases are not excluded from subsequent injury fund relief. Do you agree Ms. Dunt?
Sue Dunt, Risk Manager, Risk Management Division, Department of Administration:
Yes, that is correct.
Chairman Townsend:
I believe the recommendation then is to leave the bill as a whole, and amend it with Mr. Wadhams’ language regarding the assessment portion, then with Ms. Dunt’s additional language to clarify the three issues previously mentioned.
Mr. Ostrovsky:
We testified in opposition to Ms. Dunt’s amendments, and will continue to maintain the same opposition.
Mr. Thompson:
We would like to go on record in support of Mr. Wadhams, and Ms. Dunt’s amendment clarifying the subsequent injury fund, including occupational diseases.
Cliff King, Appeals Panel for Industrial Insurance, Division of Insurance, Department of Business and Industry:
I would like to explain how the reimbursement works in a 3-way system like we currently have. It is a little different from the monopolistic system, we had with only one carrier, the State Industrial Insurance System (SIIS), which would be responsible, and it did not matter which accounts were credited or charged for loses. In today’s world, if Travelers (insurance) makes a claim to The Hartford (insurance) for reimbursement of a subsequent injury, primarily, they have to establish the proper amount, because, theoretically, a subsequent injury fund is supposed to pay the difference between the present injury and the prior injury; in theory, you have dollars to be challenged. The Division of Industrial Relations (DIR) collects and administers the funds. The dollars going into the fund would come from the private carriers, but to actually arrive at the dollar amount of reimbursement can sometimes be troublesome and lengthy, and in some cases, require litigation to be able to determine the proper amounts. Secondly, the National Council on Compensation Insurance (NCCI) manual refers to a provision for any reimbursements going to an employers’ experience rating plan. This modification would be recalculated up to 5 years prior to the current year for any reimbursements.
We have been advised there can be a lengthy delay between
the time of the claim and the reimbursement, and for such reason you can
recalculate the modifications up to 5 years.
Finally, the carriers must abide by the NCCI manual, which was adopted
as the advisory organization under a statute by the commissioner; those manuals
and filings were filed and approved by the division, and would continue to do
so even today. When it comes down to
giving a credit to an individual employer . . . the employer’s only benefit
would be if he is experience-rated or on some kind of a loss-sensitive
form. A year
ago we had roughly 43,000 employers in the state insured under the private
system, and roughly 28,000 of those are not eligible for experience rating, but
it would affect one-third of the employers today.
Ms. Dunt:
We understand there are many issues involved with the subsequent injury fund. Our intent is to help support the policy behind the subsequent injury fund, which would be an incentive to employers to give workers with an injury or prior disability a chance to get employment. There are many roadblocks to accomplish the intent as it was developed, but we feel there needs to be clarification in this matter.
Mr. Ostrovsky:
I am against the amendments offered by Ms. Dunt and the bill as amended by Mr. Wadhams’ proposal.
Chairman Townsend:
Does anyone else object to the bill and Mr. Wadhams’ assessment amendment? All there is left to debate is the additional amendment submitted by Ms. Dunt relative to subsequent injury.
Senator O'Connell:
In your testimony, Mr. King, you indicated Ms. Dunt’s amendment could incur lawsuits and delay the time on an amount to be paid to the employer. Is that correct?
Mr. King:
Part of the problem deals with the amount to be reimbursed. The DIR administers the second injury fund and collects the funds, but when it comes to the actual reimbursement, it can create problems. For example, if you have a major claim, and when Travelers requests reimbursement of a certain amount, and does not receive it, it could lead to litigation; it has occurred in other states as well.
Chairman Townsend:
Does anyone, other than Ms. Dunt and Mr. Thompson, object to the second proposed amendment (Exhibit F) on page 33, which is to “clarify occupational diseases . . . are not excluded from subsequent injury fund relief”?
John Reiser, President, Reiser and Associates, Incorporated:
No, no objection.
James L. Wadhams, Lobbyist, American Insurance Association:
Yes.
Mr. Ostrovsky:
Yes.
Mr. Capurro:
I would agree with Mr. Ostrovsky.
Chairman Townsend:
Regarding the first amendment (page 33, Exhibit F), which “requires private carriers to notify the affected employer within 30 days of receipt of each reimbursement for the fund,” is there any opposition?
Mr. Wadhams:
We comply with the NCCI manual, which has been adopted by the insurance commissioner. The first amendment offered by Ms. Dunt is redundant, and I am disappointed. I mistakenly believed they were going to withdraw it after last Friday. Obviously something must have changed since then. We think both amendments on page 33 (Exhibit F) are currently covered by very detailed regulations from the insurance commissioner.
Chairman Townsend:
In such case, let us address Mr. Wadhams’ amendments on the compensation assessment formula.
SENATOR O’CONNELL MOVED TO ADOPT THE AMENDMENTS OFFERED BY MR. WADHAMS TO A.B. 48.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS A.B. 48 WITH THE PREVIOUSLY ADOPTED AMENDMENT.
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Townsend opened the hearing on A.B. 74.
ASSEMBLY BILL 74: Prohibits employment of children under 16 years of age in certain activities relating to commercial sales. (BDR 53-659)
Chairman Townsend:
Senator Rhoads had some concerns whether the language would work for rural areas, in comparison to the rest of our state. On the multicolor work document (page 37, Exhibit F) entitled, “Proposed Amendment for Assembly Bill 74,” paragraph (g), I do not think it exempts smaller counties. It simply states “child employed with the permission of his parent or guardian, by a person engaged in an agricultural activity” or “child employed, with the permission of his parent or guardian, by a person engaged in a theatrical, musical, performing arts, or other entertainment enterprise “is exempt.
Senator Rhoads:
That is correct. However, I do have another amendment, Amendment No. 670, which would exclude the counties with 100,000 or less.
Chairman Townsend:
In addition, we have other amendments to consider from the work session document entitled, “Alternative Optional Amendments to A.B. 74.” The first one on page 41, under “(g)” addressing the redefinition of 26 United States Code (U.S.C.) section 501(c)(3), “Or any bona fide charitable, civic, educational, eleemosynary, fraternal, humanitarian, patriotic, political, religious or veteran’s organization which is not operated for profit.” Were those the definitions added by Ms. Lusk?
Lucille Lusk, Lobbyist, Nevada Concerned Citizens:
Yes. Those came from Jan K. Needham (Principal Deputy Legislative Counsel, Legal Division, Legislative Counsel Bureau) in response to some concerns.
Chairman Townsend:
My concern is, Mr. Johnson (Labor Commissioner), every time we add something into statute, we are spellbound with it for two years. As our resident expert in the area of labor law, you need to advise us. Should we attempt to give you some statutory authority to regulate these issues, in case there are changes in the market place? What is best for you to meet the needs Assemblywoman Berman has brought to this committee’s attention?
Terry Johnson, Labor Commissioner, Office of the Labor commissioner, Department of Business and Industry:
I believe it is necessary for this committee to address this issue, as you have done in the past. I also think it would be helpful for the labor commissioner to be able to adopt regulations, and further clarify the intent of this legislation. As it stands today, the labor commissioner does not have the statutory authority to implement child labor laws in this state. It would be helpful to have the ability to go back, in the interim, and present to the commission what is being discussed here today.
Chairman Townsend:
Under the legal draft, there is a fourth option (page 43 of Exhibit F) stating, amend the bill as a whole by deleting section 2 and adding . . . the following (subsection):
1. The labor commissioner shall adopt regulations prohibiting the employment of a child under the age of 16 years in connection with the solicitation for sale or selling of any product, good, or service at any time or place or in any manner the labor commissioner determines to be dangerous to the health or welfare of such a child. 2. No child under the age of 16 years may be employed, permitted, or required to work in any capacity, including, without limitation, as an independent contractor, in connection with the solicitation for sale or selling of any product, good, or service at any time or place or in any manner prohibited by the labor commissioner pursuant to subsection 1.
Assemblywoman Merle A. Berman, Clark County Assembly District No. 2:
I think this is the best language for the labor commissioner. I would also like to point out the fist option on page 41 addresses Senator Rhoads’ concerns, and if he is happy with the language, we could proceed.
Chairman Townsend:
I believe Assemblywoman Berman is recommending we use the fourth option in addition to Senator Rhoads’ recommendation, which includes the child employed in agricultural activities, theatrical and musical, and the population of 100,000 or less.
Senator Rhoads:
It certainly would be satisfactory.
Chairman Townsend:
I think we need to give Mr. Johnson the right to enforce these laws. My concern is if we start with this laundry list, the “bad guys” either come up with some new contention, or we end up dealing with some strange group that will sue us on a constitutional basis. I would hate to see it happen. I believe what you (Senator Rhoads) have recommended is important, and the state needs to address it, but in fair manner. I also think, in the event we use all of the options recommended, it should be sufficient. Would you agree Mr. Johnson?
Mr. Johnson:
Certainly we would support it and we are willing to enact the will of the legislature.
Chairman Townsend:
Initially you (Mr. Johnson) need to corroborate with Assemblywoman Berman to draft the regulations, prepare the notice for hearing, and would have to accommodate her (Assemblywoman Berman) by addressing these issues at those hearings.
Senator Rhoads:
Mr. Johnson, in section 2, (Exhibit F) what would be the definition for “dangerous to their health or welfare” of a child?
Mr. Johnson:
In this particular matter, “dangerous” would be circumstances in which children were being required to work late into the evening, 10 or 11 o’clock at night on a school night, or working in unsupervised conditions. Certainly, in instances where their state and their welfare are open to harm. We have had a number of instances, where, in fact, the potential is there.
Senator Rhoads:
Does it mean a minor cannot work at a McDonalds after 10 o’clock at night?
Mr. Johnson:
No. I think if the labor commissioner tried to carry such argument to such extent, it would certainly be met with some resistance, not only by this body, but by the public, and perhaps by the courts as well. As it stands now, the labor commissioner has the authority to declare certain types of work dangerous, and those provision are set forth in NRS 609.200. The problem is, it gives the labor commissioner the ability to declare any given type of work dangerous, but there really has not been any guidance as to how the labor commissioner should handle it without the authority to adopt regulations or any references to filing a determination with the secretary of state indicating how the provisions should be carried out. I think by giving the express authority to adopt regulations, it would be helpful and open up the process, so we can involve citizens, as we done before, and arrive at a good-faith effort. In regard to your question about making such type of work dangerous, the answer would be no. I could not see it within the labor commissioner’s authority.
Lucille Lusk:
I have no objection to the recommendations. In fact, I would like to eliminate the laundry list and the whole reference to volunteerism, because I do not believe it was ever intended to affect anyone. I also would like for this committee to make very clear on the record that when we are talking about “prohibiting him employment,” we are talking about prohibiting employment for personal remuneration, and it does not affect involvement in any other manner.
Senator Carlton:
I would like to thank Mr. Johnson and Assemblywoman Berman for their collaboration, and, Ms. Lusk, I agree with you. I am a volunteer person myself and I understand what you are trying to accomplish.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS A.B. 74 WITH THE FOURTH PROPOSED AMENDMENT AND THE LANGUAGE SUBMITTED BY SENATOR RHOADS.
SENATOR CARLTON SECONDED THE MOTION.
Senator O'Connell:
I would like to ask the secretary to include in the minutes our intent, as far as the bill is concerned, which was expressed by Ms. Lusk.
Chairman Townsend:
If we use the original language proposed by Senator Rhoads, would it be too constricting, Mr. Johnson? Should the portion related to agricultural activities and theatrical be part of a regulation?
Mr. Johnson:
I believe the portion dealing with agricultural product as a fixed location would be consistent with the legislation’s intent, going back perhaps as early as 1911, to exempt certain types of agricultural activities from the child labor provisions. However, regarding musical performance and theatrical production, I personally and professionally don’t think it would be necessary. I think we can cover our basis with the agricultural intention and the language about 100,000 population or less.
Chairman Townsend:
Would you agree, Senator Rhoads, if we just retain the agricultural language and add the theatrical and musical in a regulation?
Senator Rhoads:
That would be acceptable.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Townsend:
Let us open the hearing on Assembly Bill 154. I believe we had some concerns about the time it expires, and we needed to figure out the mechanics.
ASSEMBLY BILL 154: Revises provisions governing persons who conduct business under assumed or fictitious name. (BDR 52-443)
Alan Glover, Clerk/Recorder, Carson City:
Either the chamber of commerce or the Carson City Treasurer had other suggestions, which would make this county an option, but I would think you would require the county to adopt an ordinance to include some sort of notification and to publish a notice in the newspaper, indicating there will be a 5-year term limit.
Larry M. Osborne, Lobbyist, Carson City Chamber of Commerce:
If the proposed amendment would include “submitted by the legal division,” or “adopted,” then we would not be in opposition to A.B. 154.
Chairman Townsend:
Have you had an opportunity, Senator (Mr. Glover is a former Nevada State senator), to review the proposed language change prepared by the Legislative Counsel Bureau (LCB)?
Mr. Glover:
In concept, the change is acceptable. I have not read the amendment, but I am confident we (Clerk/Recorder’s Office) agree with the LCB.
Barbara Reed, Clerk/Treasurer, Douglas County:
We do not have any objection to the amendment. This proposal came through the County Fiscal Officers’ Association and was a bill we crafted and supported, not realizing the Carson City Treasurer was handling it. We felt we had unanimous support from all of the clerks, but did not realize it is handled differently in Carson City.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS A.B. 154 WITH THE PROPOSED LEGISLATIVE COUNSEL BUREAU AMENDMENT.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Townsend:
Continuing with our work session, we will now open the hearing on A.B. 160.
ASSEMBLY BILL 160: Revises provisions governing industrial insurance. (BDR 53-1097)
SENATOR O’CONNELL MOVED TO DO PASS A.B. 160 AND PLACE ON CONSENT CALENDAR.
SENATOR CARLTON SECONDED THE MOTION.
Senator Carlton:
In regard to possibly allowing the presentence investigators to become independent contractors, under the definition of sole proprietor, would this bill apply to those individuals as well? Or, is an independent contractor different from a sole proprietor?
Chairman Townsend:
It is my understanding an independent contractor is substantially different from a sole proprietor.
Senator O'Connell:
The sole proprietor would be the person hiring, and the independent contractor would the person doing the work, I would think.
Senator Carlton:
If they hire themselves, but what if they were all independent? I just would like some clarification on some of the terminology. If each of these employees is self-employed, which would fall under the sole proprietor, and if an independent contractor is actually a sole proprietor, how would those two affect each other?
Chairman Townsend:
The bill refers to a sole proprietor contracting with the state; in the meantime we have been discussing an independent contractor.
Wayne Carlson, Lobbyist, Public Agency Compensation Trust:
When I was a county risk manager in Washoe County, I was involved in crafting the language to exempt the contractor from the requirement for this same reason. We had janitorial contractors working for the county, who were sole proprietors and did most of the work themselves, but on some occasions they hired other employees. We also had a situation with a crop duster, who was a sole proprietor. We had some mosquito abatement spraying to be done in a three-county contract; we were self-insured and the other two entities were insured by the system. The sole proprietor did not want to buy workmen’s comp coverage, even though we insisted on it, because we certainly did not want to take the risk.
You are correct. An independent contractor of any organization, corporation, partnership, anyone independently operating, or a sole proprietor can be inclusive. Our intent was not to get the default employee, if a particular sole proprietor chose to be in violation. Now he would be obligated to cover his employees under any circumstance, but not himself. The same is true for partners. They are not obligated to cover themselves, but must cover their employees.
Senator Carlton:
I appreciate the explanation. My concern is, if in other parts of the legislation we are allowing some job classifications previously covered by the state to become independent sole proprietors, who will be working on state property . . . a sole proprietor? If they are on state property and not covered, where do we stand if something happens to one of these people?
Mr. Carlson:
I think the provisions indicate, if the state agrees to cover them under workmen's compensation, the state can do so, but in the contract, they still would be independent contractors, or sole proprietors. It is permissive. However, it must be part of the contract; otherwise, those persons injured, who are sole proprietors, would have to come in on a negligence theory, because they would not be employees, they would be under their own benefit, and would be inclined to sue the state under a negligence theory.
Senator O'Connell:
I think Senator Carlton has brought up a very important point, as to what our intent is with this bill, and how it is being interpreted. I think it is important the minutes certainly reflect the question and the answer she has received to her questions.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Townsend:
We will now open the hearing on Assembly Bill 217.
ASSEMBLY BILL 217: Repeals certain provisions that prohibit payment of death benefit under industrial insurance to surviving spouse who remarries. (BDR 53-1251)
Chairman Townsend:
I had an overview prepared of various options (pages 55 and 56, Exhibit F) for this committee to understand the impacts. Obviously, the first option is to pass the bill as it is, with the inclusion of “all surviving spouses on a retroactive basis who have not already remarried.” The EICON has approximately 563 surviving spouses who would be eligible for this benefit. While it is difficult to predict accurately the number of death claims covered by self-insured employers, after July 1, 1999, the prior 4 years would suggest approximately 45 percent of the death claims in Nevada are covered by self-insured employers. At that point it would increase the total to more than 900. But, we do not have a fiscal note.
Option 2 is to amend the benefit to peace officers as defined in NRS 617.135 and salaried firefighters and volunteer firefighters who suffer an injury in the course or scope of employment resulting in death. There would be a fiscal impact on a retroactive and going forward basis. However the fiscal impact would be minimal and likely would be covered through existing funding mechanisms.
Option 3 is to amend the bill to include an assessment mechanism for all insurers to cover the cost of retroactive impact, including all surviving spouses that have not already remarried on a retroactive basis. It would have the same impact as option 1; in such case you would have to have an actuarial study to determine the impact and how much the assessment would be. Option 4 is to amend the bill to establish a different benefit scheme for spouses remarried prior to the date self insurance came into existence from those who remarry prior to the set date. This would be, perhaps, considering a 3- or 5-year lump sum, less than options 1 and 2, but the funding are the same as for the previous options.
John E. Jeffrey, Lobbyist, Southern Nevada Central Labor Council:
I would like to go on record saying, “I am opposed to an amendment making the benefits exclusive . . . public safety people.” I have seen firsthand the results of fatalities on the job, particularly in the construction industry. In fact, one of my best friends was killed many years ago, and his spouse went through problems similar to those this bill attempts to correct. I don’t think I can tell the construction workers we were in support of having one class of people who should receive this benefit, and others who would not be eligible. I think it should cover all workers, including those workers whose spouses have not chosen to accept the lump-sum benefit up to this point.
Chairman Townsend:
My notes reflect that during the month of January of this year (2001), 563 individuals were receiving a benefit as a surviving spouse, and the total cost for January was $614,643 and the annual cost was $7,598,950. Two (spouses) received payments during calendar year 2000 as final installments after remarriage. During January no one was receiving installment benefits following remarriage. Lump sum is not an option, only installments. We are still dealing with these 563 being the only beneficiaries left with EICON, and you still have an approximately 45 percent increase on self-insured cases.
Mr. Ostrovsky:
It is somewhat less than 45 percent, because we know the self-insured provision has only been around since 1982, and we know we still have claims from the old SIIS, dating back to 1942. When we worked on these options, we compared with other states. Basically, the benefits currently provided in Nevada are consistent with the benefits provided across the nation; the monthly payments are usually replaced by a lump sum payment at the time the spouse remarries. It is typical; we don’t know of any other state offering benefits like the one proposed here. Now, for police and firemen, the impression was we had already provided an enhanced benefit, compared to other workers, in the heart/lung section of the law. This proposal was developed around the line of duty for police or firemen who lose their lives in the line of duty, and not for someone who is retired, then develops the heart/lung kind of problem. For the police officers and firefighters who give up their lives performing jobs for society, we thought there would be some logical support for separating them in this 5-step proposal.
Mr. Jeffrey:
My point is the workers who build buildings are as important to the state as the officers who work protecting people. Again, I do believe if this bill passes, it would affect everybody. I do not have any figures, but self-insured employers do not necessarily insure the same kind of risk as the private carriers, due to mining and construction. Mining and construction are two of the most hazardous jobs in the state. Except for the self-insured associations, I think the other self-insured groups, such as the resorts do not have many fatalities, but they have more premium or potential payment; not nearly as high risk categories as in construction and mining.
Chairman Townsend:
The committee is left with not much guidance, because the bill states the penalty for remarrying is being stricken. However, it says there is no effect on state or local government. This was introduced February 22, 2001. Why is there not a fiscal note to give us some kind of guidance? Or have we misunderstood the effects of this bill?
Mr. Jayne:
I would have to agree there is some fiscal impact. I cannot say why a fiscal note was not introduced on the Assembly side, but when you are looking at the bill, as originally drafted, it covers all employees in the state of Nevada, which would encompass any state employees and any self-insured employees, such as firefighters or police officers; the impact of these payment would be picked up by those municipalities and cities. I think we need to realize when the National Council on Compensation Insurance prepares the fiscal note, they do not pick up the impact from the self-insured side.
Chairman Townsend:
But we do not have an impact statement from anybody.
Mr. Jayne:
That is correct, we do not. The work done by NCCI is projecting into the future as opposed to the past.
Chairman Townsend:
I understand, but it is very difficult for this committee to decide a policy without knowing the impact.
If you accept Mr. Jeffrey’s theory, then you have three options. One is to leave it the way it is; two, to pass the bill the way it currently is, which you would need to know the impact of; and three would be, rather than just extend it for the lifetime of the surviving spouse, to change it to 4 or 5 years and increase the lump sum payment.
This did not happened when Mr. Jeffrey was chairman. Bills used to be complete by the time the drafts were presented. We did not always agree, but we did not have to go through any troubles to find an answer; he did his work. I think everyone is empathetic, but it is hard for this committee to understand what those three options might entail. We have an annual current cost, from EICON alone, of approximately $7.6 million, which is what we currently pay out to survivor spouses, including some lump sum payments.
Mr. Ostrovsky:
Those are just the current monthly installment payments we are making, which adds to the annual cost.
Chairman Townsend:
They are saying the total cost is $600,000, but actuarially, do not they realize that a percentage of spouses are going to remarry; therefore, it would keep the premium down as a result.
Mr. Ostrovsky:
If we have a death, the spouse could be drawing the benefits for approximately 20 years, but if this bill passes, 20 years will probably come closer to 40 years, doubling the cost. Every one of those could become a million dollar claim. We already add about $500,000 to the cost of each claim, as a result of this bill in its original form. We would also have to go back and adjust for the year; we know the beneficiaries from deaths occurring in 1942 are not going to draw for another 40 years. Currently, no one has done any calculation, and the local governments will “absorb” a lot of this cost in the future, because if it is a police or firefighter bill, local governments are almost all exclusively self-insured, either through a group in the rural areas or individually self-insured.
Mr. Jayne:
Within the self-insured association we have a “pro-group” as one of our members. We do have some individual self-insured entities, which would be directly impacted by this bill covering police and firefighters. Certainly, from prior testimony, it is unusual to extend the coverage; most states have some control over it. From research I obtained in the interim on this bill, as many as 47 states have some limitation on this benefit, and three states do not specify. It is a matter within the policy purview for this committee to extend the benefits for surviving spouses; yet, it would be somewhat unusual. However, the reason we are having problems pricing it is we are entering a new matter.
Chairman Townsend:
I respect that. However, this bill was already processed by another house, and we still do not have any numbers. It would not be logical for us to make a determination at this time.
Ronald P. Dreher, Lobbyist, Peace Officers Research Association of Nevada:
I believe the reason for no fiscal impact statement from the Assembly side is the benefit is already being paid. As Mr. Ostrovsky stated, it is already calculated to be in effect for approximately 20 years, regardless of whether it is EICON or any other insurance company. It has been acknowledged they have to pay the benefit and, therefore, there is no cost to the state. Obviously, it has already been built into the system. The Public Employees Retirement System (PERS) did away with the inequity and the remarriage penalty; that is the reason this bill was brought forward. We do not believe the cost is there, even though, as we stated in previous work sessions, this is something very complex. A way to resolve this issue is to start with the police and firefighters, to make it even less costly. We added the provision “who suffers and injury in the scope of employment resulting in death,” which took it outside the realm of the other workers’ compensation type of coverage. It is a benefit the spouses receive and will continue to receive, unless they remarry.
I realize the intent of this legislation is already being done; therefore, we are to assume the spouses are not going to remarry. Maybe there are some other provisions like option 4 takes into consideration. Let us split it: “Before 1980, a 5-year lump sum; after 1980, no lump sum.” Then add to the provisions, “If you remarry and subsequently get a divorce, the benefits will continue.”
Chairman Townsend:
The hardest decision for this committee is placing a value of one group versus another group. For example, most of the groups are being paid out of taxpayer money or there are funding issues with regard to self-insurers. However, we have no knowledge of the impact. If it is negligible, it is one thing, and we are presuming, based on testimony, it may be. Given the financial implications of the current budget for the next 2 years, we must have some indication from the municipalities, rather than simply proceeding without knowing its cost.
Mr. Jeffrey:
According to prior testimony, there were two spouses who lost their benefits within the last year.
Chairman Townsend:
According to the information I received from EICON, “Two persons received payments during calendar year 2000 as final installments, and two received payments during calendar year 2000 as final installments after remarriage.”
Mr. Jeffrey:
I do not see why this committee is under the impression there will be a big fiscal impact, when there were only two people in the year 2000. It may have been an unusual year, but I think what is happening with this particular provision is many people are not getting married in order to avoid losing the benefit.
Chairman Townsend:
The committee has learned over time to be more cautious. Do we know how many surviving spouses have children?
Mr. Ostrovsky:
No, we do not.
Chairman Townsend:
Do we know if there is another jurisdiction in the country dealing differently with death benefits for surviving spouses who have children?
Mr. Jeffrey:
Not to my knowledge.
Mr. Jayne:
It is not specified in my research.
Senator Carlton:
I recall a spouse, some years ago, who decided to remarry and lost her benefits. However, her children continued to receive their benefits and were not affected by her decision. Could it be one of the formulas?
Mr. Ostrovsky:
Such provision already exists in the current law. If the spouse remarries, he or she receives a lump sum payment, but the children also receive payments until 18 years of age. I urge the committee to take a closer look at options 2 and 3, which is a way to start. As indicated before, we only lose on the average of one officer or one firefighter on an annual basis, whatever cost is determined, it would need to be spread across, because we no longer have one source.
Senator O'Connell:
I believe some of those payments actually continue to the age of 23, provided the children are in college.
Chairman Townsend:
I would like for you, Mr. Ostrovsky, to research how many, out of the 563 total surviving spouses with children under the age of 18 or 23, currently receive benefits, and the due time for those benefits to terminate.
You are asking this committee to decide on a very difficult issue. When someone loses a mother or father in an accident, it is an entirely different issue than the theoretical one requested here, because today’s issues do not relate to those children’s benefits. It was not brought up, but it should be addressed; “surviving” is not just the spouse, it includes the whole family.
Mr. Jayne:
This bill does impact the surviving children. They are “out of the loop” at this point in time. If we were to pass this bill with the proposed amendments, or in the original version, the children, at 15 percent per child up to the existing benefit, would be “out of the loop” permanently. The money goes to the surviving spouse, and that individual receives the money, not the children, upon the event of remarriage.
Mr. Dreher:
Section 8 would address the issue, continuing benefits for the surviving spouse and the benefits for the children, so we are not cutting them out. We are still keeping them in the bill; compensation payable to a surviving spouse is for the use and benefit of the surviving spouse and the dependent children. While the children may be removed from one section, the children are covered under section 8 of A.B. 217. It is not our intention to take money from the surviving children.
Chairman Townsend:
The bill is addressing only a partial, the surviving spouse. There is a component missing, the children. The issues are very serious for surviving families.
Kevin Chadwick, Safety Officer, Risk Management Division, Department of Administration, Washoe County:
Unfortunately, we have had three fatalities. Last year (2000) one of our surviving spouses from 1991 remarried and received the 2-year lump sum; her children were grown. Currently, we have two surviving spouses, one of a deputy sheriff deputy, and a second of a park employee.
We would be opposed to option 2 of the proposal, because it would be unfair to penalize someone such as the park employee’s surviving spouse, in the event she chooses to remarry, and donates the lump sum to the sheriff’s department. Originally, we opposed the bill in general as it was then drafted. I believe our third party administrator reserves funds for those two surviving victims to approximately age 70. Each one of those claims represents over $800,000 in reserves. Our state industrial reserves are $.5 million, and the county (Washoe) is also in debt for at least $.5 million in claims costs.
Chairman Townsend:
When you say approximately $1 million per claim, is it over 20 years?
Mr. Ostrovsky:
It is over the lifetime of the surviving spouse. The 20-year number is closer to $.5 million, depending upon the age of the surviving spouse, but it only averages to 20 years of reserve.
Chairman Townsend:
Mr. Ostrovsky, please provide Ms. McGee (Crystal M. McGee, Senior Research Analyst, Workers’ Compensation, Research Division, Legislative Counsel Bureau) with the information, as well as the total number of children under 18 years of age in the state. In the meantime, we will hold this matter until Friday (May 11, 2001).
Chairman Townsend:
We will open the hearing on Assembly Bill 279. We received a recommendation the words “preventative and” be added between “for” and “medical,” (page 60 of Exhibit F). We also have a proposal by Senator O'Connell to insert the phrase “in the course and scope of employment” after “contagious disease” (page 59, Exhibit F) and throughout the rest of the references. Then Assemblywoman Leslie, (Assemblywoman Sheila Leslie, Washoe County Assembly District No. 27) provided the attached copy (page 61 of Exhibit F) from Ms. Dunt.
ASSEMBLY BILL 279: Provides for availability of industrial insurance benefits to employees for exposure to certain contagious diseases. (BDR 53-123)
Jim Fry, Workers’ Compensation Analyst, Risk Management Division, Department of Administration:
We are presently making the effort for state employees, together with my proposal. Based on the first reprint of the bill, the fiscal note has been removed.
Martha Tittle, Lobbyist, Clark County School District:
We were advised by counsel to add the word “preventative,” to define meaning.
Mr. Fry:
My recommendation complies with OSHA’s regulations, and it is set as the prophylactic treatment as prescribed by the United States Public Health Service.
Lisa M. Black, Lobbyist, Nevada Nurses Association:
However, it needs to be noted the Nevada Nurses Association has some concern on the time window of reporting; a person who is exposed to these diseases, in particularly Tuberculosis, does not always know the time of exposure. Very often, a nurse can be caring for a patient and, after a period of 72-hours has lapsed, learned this person was infectious; therefore, there could be some issues with people being ineligible for such benefits.
Senator O'Connell:
Since it is already in the law, what difference is this bill going to make?
Mr. Fry:
It exists in the OSHA laws right now. It specifies it is the employer’s responsibility. This allows for making it available through industrial insurance, and for the industrial insurance carrier to pay. I think most employers would rather pay for the insurance from out-of-pocket money, since these contagious diseases can become quite costly. We have created a list to include police, firefighters, and healthcare providers; this tends to exclude everyone else.
Chairman Townsend:
Under chapter 616 of NRS, which is the workmen's compensation law, and chapter 617 of NRS, which is the occupational disease law, we have a list, which has carved everybody else out. Nonetheless, this is the mechanism you must use.
Senator O'Connell:
Then this proposal does away with the list?
Mr. Fry:
The list is still there, but this is in addition to it. The bill implies that “all employees,” in the event they are exposed in the scope of the course of their employment, would be covered.
Senator O'Connell:
Then, why do we have the list?
Chairman Townsend:
I do not remember when we enacted chapter 617 of NRS, but what happened is you had basic fall-and-sprain kinds of issues; then occupational diseases came in. We carved fall-and-sprain issues out and moved specific groups, fire, police, and the medical community, to occupational disease. Certain things have to happen under chapter 616 of NRS; then you get certain reimbursements, and only certain groups get that are under chapter 616 of NRS. Now they can still be covered under this statute, but if it is a disease, then it moves over to chapter 617 of NRS. This bill specifically uses chapter 617 of NRS and says that if you have an occupational disease, it is compensable under this, if the following things have occurred. This defines how it is going to be defensible as a reimbursable occupational disease. You cannot have had it before you said you did, which I think is the issue. And that has never been defined before.
What you are looking for in chapter 617 of NRS, is to say, “If you think you have been exposed, you go in and get a test, and the test says you did not have it before you were exposed; therefore, if you do end up past the incubation period contracting the disease, then it is compensable.”
Senator O'Connell:
But, it is the time element she is concerned about.
Ms. Black:
At this point, we would not want one concern to hold up the rest of the bill.
Chairman Townsend:
Your point not only should be noted, but so should everything happening in the medical community and exposure in the work place, whether it is fire or other hazardous materials. You just do not know when you could be exposed.
Ms. McGee:
I would like to clarify whether Mr. Fry’s amendment and Senator O’Connell’s definition of preventive treatment will be included.
Chairman Townsend:
That is correct.
Ms. McGee:
We were not provided with a definition of preventive treatment, but I can say, in the definition of accident benefits, it does, to some extent, provide one. Would you prefer to use such definition?
Chairman Townsend:
Let us try to be unique and consistent.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS A.B. 279.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Townsend:
We will now open the hearing on Assembly Bill 337. Mr. Barengo (Robert Barengo, Lobbyist, AT&T) has some concerns about section 1, subsection 4 of this bill.
ASSEMBLY BILL 337: Revises provisions relating to deceptive trade practices. (BDR 52-484)
Ms. Rushton:
As you recall, Mr. Barengo suggested some alternative language. I testified we had met and purposely amended the bill, to include such language to address his concerns. Furthermore, we discussed the matter and concluded he was comfortable with the explanation I provided. He asked Senator Townsend to make a brief statement on the floor regarding the technological ability, or lack of ability, for someone to block soliciting calls. I asked Mr. Barengo to provide me with a copy for our review, to ensure we are consistent with the intent.
Chairman Townsend:
In other words, he is comfortable with the statement in the record, as opposed to a change in this bill.
Ms. Rushton:
Yes, sir.
SENATOR RHOADS MOVED TO DO PASS A.B. 337.
SENATOR CARLTON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Townsend:
I open the hearing on A.B. 345.
ASSEMBLY BILL 345: Revises provisions governing claims for compensation under industrial insurance for certain occupational diseases. (BDR 53‑1267)
Chairman Townsend:
Assemblyman Goldwater (Assemblyman David E. Goldwater, Clark County Assembly District No. 10) is proposing to amend the bill to require all insurers, rather than only self-insured counties or cities, provide information to the Division of Industrial Relations, with the intent to capture all of the statistics.
Raymond (Rusty) McAllister, Lobbyist, Professional Firefighters of Nevada and Member, Police and Firemen’s Retirement Fund Advisory Committee, Public Employees’ Retirement System:
When we came before this committee in 1999, to discuss the heart/lung situation and various contagious diseases, we brought to your attention the frequent problems of getting medical coverage under presumption or conclusive presumption. At the time, you had told us if we brought forth specific instances, you would assist us in correcting the problem. This is our fist attempt to correct those problems, by trying to gather the statistical data from insurers, so if there is a frivolous denial, we can report it to this committee. The amendment is meant to capture all of the insurers, as opposed to just self-insured persons, but it is only for those four specific items, such as heart, lung, contagious disease exposures, and cancer.
Chairman Townsend:
If we process this bill, I would assume it would include the amendment proposed by Mr. Goldwater.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS A.B. 345 WITH THE AMENDMENT PROVIDED BY ASSEMBLYMAN GOLDWATER.
SENATOR CARLTON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Townsend:
I will open the hearing on Assembly Bill 363.
ASSEMBLY BILL 363: Allows patient to obtain his healthcare records without charge under certain circumstances. (BDR 54-1098)
Chairman Townsend:
Susan V. Bailey, President of the Nevada Health Information Management Association, suggested an amendment (page 67 of Exhibit F) to add the word “pertinent.”
Jon L. Sasser, Lobbyist, Washoe Legal Services Incorporated:
At the original hearing of this bill, there was a question about unfunded mandate. It is my understanding Senator O’Connell spoke to Mr. Hadfield (Robert S. Hadfield, Lobbyist, Nevada Association of Counties), and, hopefully, he was able to address her concerns. This morning I was made aware of, and have no problems with, the word “pertinent” being added.
Senator O'Connell:
Shall the provider of healthcare furnish one copy of pertinent records? And is the rest of the language besides “pertinent” going to be added?
Mr. Sasser:
There are two letters from Ms. Bailey’s association, one dated April 18, 2001 and the other dated May 7, 2001, but I was addressing the most recent letter. One copy is already in the bill, the rest of the language on there, I do think, may be problematic, because it is limited to physicians, and licensed therapists; I do not know why nurses’ notes were left out. However, I do not have a problem, nor does the sponsor of the bill, with the latest addition.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS A.B. 363 WITH THE ADDITION OF THE WORD “PERTINENT.”
SENATOR RHOADS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
Chairman Townsend:
I open the hearing on A.B. 439.
ASSEMBLY BILL 439: Revises provisions relating to deceptive trade practices. (BDR 52-1263)
Scott Young, Committee Policy Analyst, Research Division, Legislative Counsel Bureau:
The agreement was to change section 8, to remove the language about cash and the interim General Fund provision. I spoke with Commissioner Patricia Jarman-Manning, (Consumer Affairs Division, Department of Business and Industry). She and I had worked on the language and we will be submitting it to the bill drafters. If the committee chooses to adopt these recommendations, which would be to remove section 8 entirely, and to provide for any money generated by these recommendations going into the General Fund account, but for it not to revert to the General Fund, and continue to rollover; therefore, the commissioner’s office would continue to use its funding source for this particular project.
Senator Shaffer:
It was a 2-to-1 vote, 2 yeas, and 1 nay.
Chairman Townsend:
Senator Schneider, I believe, has concerns regarding the training received by individuals who make soliciting phone calls. They are required to have a script approved by the Office of the Attorney General, the Consumer Affairs Division, or the Division of Financial Institutions. I believe Ms. Jarman-Manning reviews any scripts for telemarketing, and the Real Estate Division reviews any timeshare ones.
Ms. Jarman-Manning:
Yes, I do. But only my office only reviews for telemarketing at this time.
Senator Schneider:
In the timeshare industry, the scripts have to be turned in ahead of time, approved, and posted in front of each telemarketer. All callers must follow the script or they lose their license, especially if they deviate from the script. I also had another problem, because the real estate industry is very active in Las Vegas, where people will tell realtors, “If you can find me a house in a certain neighborhood, I would be interested in buying.” Then the realtor starts calling all of the neighbors. It is basically why I voted against it. I really think it places a chilling effect of some form.
Chairman Townsend:
I have provided everyone with a copy of the Idaho Telephone Solicitation Act (Exhibit G), which is substantially different from our current proposal. It requires a subscriber to pay $10 to the appropriate person, in this case the attorney general, to request, “I do not want to be called”; it is how Idaho funds its project. It has to be within 30 days after a new telephone solicitation contact list has been published.
My position is very strong. When you start to exclude people, you create different classes. We are either in a free market system, where you are asked to call someone, as in the example given by Senator Schneider, or all persons making calls would have a preauthorized and regulated script. It is very troublesome to me, and I understand the commissioner’s position. However, my feeling is there is a window of time in everyone’s life when sitting in his or her own home in which there is a certain level of privacy, which may be the only time the person has and can expect privacy. Now, we are taking the position in which we have to proactively say you cannot bother me in my own house. I think it is the opposite way of doing business. I have respect for the quality time families have together, but I also respect the telemarketing industry. One, either no one calls, including existing relationships, except if you are going to terminate a relationship and you need to let the person know they need to pay their phone bill, or they are overdrawn at the bank, because at this point there is no marketing to do. Two, either everyone or no one gets to be marketed. Three, if you are going to let everybody get marketed, you are going to do what Senator Schneider explained, where you have more control of those issues.
Chairman Townsend:
I agree. We either let everyone call, since it is a competitive market, and set certain standards, or we decide no one is to call. Let them use another method, such as the post office, e-mail, et cetera.
Assemblyman Gregg Brower, Parts of Carson City and Washoe County Assembly District No. 37:
It is for the very reasons you articulated, including the example from your own personal experience, which motivated and prompted this bill to be introduced. I simply would like to iterate to this committee, to ignore the problem and demands of many of your own constituents for something to be done, is to do nothing at all about the problem. If this committee does not agree with some of the exemptions in this bill, the committee has the power to change them. However, I would like to suggest not doing that, because it may be difficult to sort out whether particular exemptions should be included.
Senator Carlton:
The automated messages bother me the most. I do not mind talking to a person, but it disturbs me to answer the phone and get an automated message; it disrupts my evening. There is one issue I noticed in the Idaho example about unsolicited advertisement by telephone facsimile machines. It seems I have been getting more and more of those advertisements, and going through an inordinate amount of paper from people sending me “trips to Hawaii,” or “Las Vegas.” If there is an opportunity for us to do something with this legislation, I would like to see the automated messages stopped. Keep in mind this bill does not apply to charitable or political organizations, because an actual person is used to talk to the public, and not an automated message.
Chairman Townsend:
Are automated political messages protected?
Mr. Young:
I spoke with legislative counsel regarding this issue. In general, you could prohibit all types of content across the board, including political, but you cannot selectively delete certain ones.
Senator O'Connell:
I would like to ask the review committee whether there was much emphasis put on the call rotation, which goes from one number to the next number, and ends up tying up a business line. Also, whether public announcements, allowing people to add their name to the list to request not to be called, were part of the committee’s specific concern.
Chairman Townsend:
We did not discuss the first one, but how does the Consumer Affairs Division plan on letting the public know they can get on this list?
Ms. Jarman-Manning:
There has been limited public education funding. Normally it is set up to campaign 4 times a
year. However, half will be set up in
January and half in
July. We have not arranged the period
of time, but we will be doing some public service announcement and regular
interviews throughout the state to simulate the information the best we
can.
Senator O'Connell:
I would like to suggest the telephone companies inform their customers on their billing statement about the list option, so customers may decide whether they choose to be added or be removed from the list. I would think it is good public relations.
Ms. Jarman-Manning:
It is an excellent idea, but I believe it would have to be mandated by this committee.
Chairman Townsend:
We need to get certain questions answered. We would need to see your spending budget to educate the public. We want legal answers to the questions Senator Carlton brought up about the automated dialing and serial dialing, as to ascertain whether we can prohibit serial dialing.
Senator Carlton:
I need to clarify it is the serial dialing with the automated message. There are auto-dialing systems which use a live person.
Ms. Jarman-Manning:
I can tell you we are going to spend $8000 a year, $4000 each campaign, and the campaign would last for a period of 3 months. We are in affiliation with the Nevada Broadcasters Association in the non-commercial suspending announcements, and get a minimum of 3-to-1 return. Most of the time we get between 10 and 14 to 1 return on the money. Our money was reduced from $20,000 to $17,000 for public education.
Ms. Rushton:
I would like to bring to your attention section 4 of the
bill (A.B. 439) requires telephone companies that produce directories to
contain or list information to notify the consumer of the “do not call
list.” Additionally, the attorney
general’s office has a Website, similar to the other states that have enacted a
“no call” legislation. We will be doing
Website announcements and allowing for
consumers to contact us to request their name be added to the list. We also have a public service campaign we
intent to roll out, if the bill is passed.
With respect to Senator Carlton’s question, I would like to confirm she is not asking about the content of the message, but rather the serial aspect and the automated dialing.
Senator Carlton:
Correct.
Mr. Thompson:
Some time ago, I recall, there was a law passed in regard to, not a serial dialer, but a sequential dialer, meaning it dials numbers in sequence. As far as I know, that particular measure was passed, and I believe is it still against the law to have one of those instruments, because at the time, I worked at the Piner Chemical Company, where intrinsic safety part of the system were the phones.
Ms. Rushton:
There were some concerns yesterday, during the subcommittee meeting noted by Mr. McMullen (Samuel P. McMullen, Lobbyist, AT&T) with respect to section 3 of the bill and the fact this list was going to be published at least every 6 months. The comment was made in response to my comments the intent has not changed, just the language; however, I believe it would be more appropriate to go forward and modify the language. I have provided for you a proposed amendment (Exhibit H) specifically noting when the list would be published, so there is no question, and you would not have to take it to a regulatory session, where people may feel they were not notified when it was published.
Additionally, with respect to section 4, “A person who publishes telephone directories for distribution to the general public in this state shall ensure each telephone directory includes a statement summarizing the provisions of sections 2 to 9, inclusive, of this act as specified by the commissioner by regulation.”
Chairman Townsend:
Committee, we will be back at 7:00 tomorrow morning; then we will be in work session on Friday. Thank you very much for all of your assistance.
Chairman Townsend:
I adjourn the meeting at 10:25 a.m.
RESPECTFULLY SUBMITTED:
Silvia Motta,
Committee Secretary
APPROVED BY:
Senator Randolph J. Townsend, Chairman
DATE: