MINUTES OF THE ASSEMBLY COMMITTEE ON COMMERCE Sixty-eighth Session January 30, 1995 The Committee on Commerce was called to order at 3:30 p.m., on Monday, January 30, 1995, Chairman Sandra Tiffany presiding in Room 332 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Larry L. Spitler, Chairman Mrs. Sandra Tiffany, Chairman Mrs. Maureen E. Brower, Vice Chairman Mr. Richard Perkins, Vice Chairman Mr. Dennis L. Allard Mr. Morse Arberry, Jr. Mrs. Barbara E. Buckley (Late-excused) Mr. Thomas A. Fettic Mrs. Chris Giunchigliani (Late-excused) Mr. Lynn Hettrick Mr. David E. Humke (Late-excused) Mr. Michael A. (Mike) Schneider COMMITTEE MEMBERS ABSENT: None GUEST LEGISLATORS PRESENT: None STAFF MEMBERS PRESENT: Mr. Paul Mouritsen, Senior Staff Analyst OTHERS PRESENT: Ms. Jenny Higgins, Nevada State Board of Engineering and Land Survey; Mr. Ande Engleman, NPA; Mr. Stan Olsen, LVMPD; Mr. Frank Barker, LVMPD; Ms. Margi Grein, Director of Finance and Public Relations, Nevada State Contractors Board; Mr. David J. Reese, Legal Council, Nevada State Contractors Board; Ms. Deborah Sheltra, Member State Contractors Board; Mr. Jack Jeffrey, Southern Nevada Building and Construction Trades Council AFL-CIO; Mr. Jay Panmer, Nevada State Contractors Board; Mr. Eric Cooper, LVCC; Mr. Joe Cain, TMSG. After roll call was taken the meeting was called to order by Chairman Sandra Tiffany. ASSEMBLY BILL 41 - Revises applicability of provisions governing exemption from licensure as contractor for sale or installation of certain finished products, materials or articles of merchandise. Margi A. Grein, Director of Finance and Public Relations, Nevada State Contractors Board and David J. Reese, Legal Counsel for the Nevada State Contractors Board appeared before the commitee to testify in favor of A.B. 41. Ms. Grein explained the NSCB was revising their exemption statute to exclude the exemption on certain items and introduced a Memorandum to the Committee (Exhibit C). She indicated Mr. Reese would further explain their position. Mr. Reese stated A.B. 41was the resurrection of a bill introduced late in the 1993 legislative session that underwent revision in an attempt to accommodate the various interests involved. He explained they are attempting to clarify and strengthen the exemption statute in the state contractors law, Chapter 624. Their concern is with a specific exemption within statute 330 dealing with the sale or installation of any finished products, materials or articles of merchandise that may not actually be fabricated into a structure. This particular exemption has been a subject of controversy as to whether or not certain activities require licensing. Mr. Reese went on to explain the language contained in A.B. 41, for the most part, is a mixture suggested to the NSCB by labor input and associated general contractors. This language is taken from court cases construing what "fixture" is and what "fixture" is not. One of the primary cases coming before the NSCB that encouraged passing of legislation to clear up this controversy was one involving a conveyor system that was going to be built by a large company from out-of-state. This company obtained a license, although under statute 330 it was uncertain whether or not they were required to do so. Although the conveyor system was extremely large, complex and specifically designed for the building, it was not actually part of the structure. However, once it was completely erected and the electricity hooked up, it became an integral part of the structure. Under the language of the statute there was question as to whether a license would be required. Mr. Reese read and further discussed the Memorandum submitted by Ms. Grein (Exhibit C). Assemblyman Schneider was recognized by the Chair and queried if this bill was related to computer issues heard during the 1993 legislative session. The Chair recognized Assemblyman Giunchigliani who responded this issue was related to A.B. 772 that had five reprints, in which the computer issue was addressed, language was resolved but changed again, and the bill was let go at the end of the session. Mr. Reese commented there was concern the amendment, as drafted during the 1993 legislative session, might have included too many things. A.B. 41 attempts to clarifify that computers, slot machines, and items of that nature, traditionally not requiring a contractor's license, would not require one under this new statute. He explained an attempt was made to get this bill on the calendar early so problems could be addressed. Assemblyman Spitler was recognized by the Chair and questioned Mr. Reese if the bill would pertain to modular furniture. He asked for clarification of item (c): "Cannot be removed without causing substantial damage to the structure." Mr. Reese responded by citing the tests in (Exhibit C) and a discussion ensued. Mr. Spitler inquired if most companies obtain a contractor's license. Mr. Reese responded that in contested cases the companies have usually obtained a license. He called attention to substantial companies, such as Litton Industries or Rapistan Demag (Exhibit D), who may not have considered obtaining a license before proceeding with a project. This resulted in objections from licensed companies and union employees interested in bidding on the project. The question then arose as to whether or not the law had been violated by bidding on a project without first obtaining a contractor's license. The statute, as written, was not clear on these questions. Mr. Spitler asked what particular companies would benefit and for whom would these issues be clarified should this bill be passed. Mr. Reese indicated all aspects of the construction industry, individuals who should be covered by SIIS, and others who desire a level of qualification would be the benefactors of this bill. Mr. Spitler queried what types of businesses would be impacted negatively because of A.B. 41. Ms. Grein was recognized by the Chair and responded that the NSCB often receives requests for requirements on license classifications. She provided a set of documents submitted to the NSCB containing types of items they are attempting to address (Exhibit D). Most of the companies that have inquired about license requirement do so before entering Nevada. Some examples of this were Litton, General Electric and T. J. Max. Most of the problems have come from large industrial machinery companies rather than small ones. Assemblyman Allard was recognized by the Chair, identified himself as a contractor and concurred with the revisions in this statute. He expressed concern about item 4, section 1. After a brief discussion the Chair asserted that items l, 2, 3 and 4 were the exemptions and asked Mr. Allard to confine his questions to item 6. The Chair asked if there were any more proponents to A.B. 41 and recognized Harvey Whittemore, a partner with Lionel, Sawyer and Collins, appearing on behalf of International Game Technology and the Nevada Resort Association. He indicated concern with this issue in the past and stated no opposition to A.B. 41, but desired clarification that installation of a gaming device was not going to require a contractor's license. He suggested if the Committee chose to process this legislation he would draft an appropriate amendment which would basically state, for purposes of this section, that a gaming device shall not be an item which is permanently installed and would create a substantial structural improvement. Therefore, installation or removal of slot machines would not require a contractor's license. Mr. Whittemore indicated he would answer any questions from the Committee. The Chair recognized Ms. Giunchigliani who clarified Mr. Whittemore's contention that this amendment would be listed under the exemption area in Section 6. A brief discussion ensued. The Chair recognized Mr. Spitler who, after a brief discussion, indicated this bill could possibly result in harassment of small businessses. The Chair recognized Mr. Jack Jeffrey, Secretary-Treasurer, Southern Nevada Building and Construction Trades Council AFL-CIO, who indicated full support of the intent of A.B. 41 as drafted. He raised a question regarding Keno, which involves an extensive electrical task , and would need to be more narrowly defined. He indicated he would be willing to work with Mr. Whittemore to more specifically define the parameters of the amendment in this regard. He further discussed warehousing and manufacturing, where racking systems of 30 to 40 feet high can be a hazard if not done properly; conveyors having not only moving parts but several electric motors requiring controllers and control systems need to be done properly. He mentioned several situations where individuals have done work assuming they did not need a contractor's license when, for the sake of protection of the public and employees at the installations, a contractor's license should be required and qualified people doing the work. Mr. Jeffrey indicated that whether or not a building permit is required is conducive to solving the problem. He stated a building permit is required in Clark County at this time. If a building permit is required on a commercial structure a licensed contractor must obtain the permit. Mr. Jeffrey reiterated the issue of gaming devices needed to be narrowly focused because there was a world of difference between one gaming device and another. The Chair recognized Ms. Giunchigliani who requested to speak with Mr. Reese. Mr. Reese again appeared before the Committee. Ms. Giunchigliani asked Mr. Reese if currently there are appeal rights to the NSCB if it is ruled that a license is required. Mr. Reese answered in the affirmative explaining there is a request for advisory opinion and an individual may be granted a complete hearing on an issue. If the individual disagrees with the opinion he may go through judicial review and appeal to the court for a decision on the issue. Ms. Giunchigliani queried could an individual, a small company, or any company, have a process to go through in order to be able to resolve a concern regarding having a building permit and a contractor's license. Mr. Reese responded in the affirmative, however, he brought up the issue that should an individual go through this appeal process and not have a license he could possibly be charged with one of the criminal statutes under Chapter 64. This would be a misdemeanor, and if it was a repeated violation it would a gross misdemeanor, which would make it a criminal issue. This would take it into a different arena and it would appear not before the USCB, but before the court. Ms. Giunchigliani asked if local governments contacted the NSCB when a permit for a specific type of structure is granted. Mr. Reese indicated the NSCB is not involved in permit process other than clarifying the law for the permitting department, or when charges are brought against an individual without a contractor's license, who may or may not have a permit. Ms. Giunchigliani questioned if the Board notified local building departments of new legislation. Mr. Reese indicated the Contractor's Board, the Board of Architects, the Board of Engineering and the building department have been making an effort to coordinate more efficiently to promote better understanding industry-wide when a license or a permit is needed. He indicated a positive interchange in that regard. Ms. Giunchigliani reiterated the safeguards for both consumers, as well as business people, embarking on new endeavors if the Committee should decide to move forward on the bill. The Chair recognized Assemblyman Fettic who questioned Mr. Reese regarding the proposed change and why it was necessary to have sub-section c as a part of it. Mr. Reese stated it was traditional language in determining whether or not something is a fixture. The Chair recognized Assemblyman Arberry who queried Mr. Reese regarding the definition of partitions. Mr. Spitler, at this point, requested to be recognized by the Chair. Mr. Spitler was so recognized and stated that Messrs. Whittemore and Jeffrey planned to get together to discuss the amendment. In addition, Mr. Spitler was requesting Brian Gresh, who represents the interior design modularized furniture group, to also participate. Mr. Arberry inquired if ceilings were 16 feet high, would eight foot, metal frame, sheet rock walls brought in be classified as partitions. He indicated that in his experience building permits were sometimes not obtained for this type of installation. The Chair asked for any other questions for Mr. Reese. There being none, Mr. Reese was thanked and dismissed. The Chair asked if there were any other proponents or opposition to the bill. There were none. The Chair recommended that Messrs. Whittemore, Jeffrey, Gresh and Spitler get together and create an amendment by Wednesday, February 1, 1995, in order to rehear at that time in order for a vote to be taken. The Chair recognized Ms. Grein who asked if it would be possible for someone at the NSCB to meet with Messrs. Whittemore, Jeffrey, Gresh and Spitler. The Chair granted the request. The Chair closed the hearing on A.B. 41. ASSEMBLY BILL 64 - Increases monetary threshold at which awarding authority is required to advertise for bids for public works projects. Assemblyman John Carpenter, Assembly District Number 33, sponsor of A.B. 64, withdrew the bill. Therefore no action was taken on A.B. 64. The Chair asked for a motion to accept a Bill Draft requested by the State Board of Professional Engineers and Land Surveyers, who were unable to submit it in a timely fashion. ASSEMBLYMAN SPITLER MOVED TO ACCEPT THE BILL DRAFT. ASSEMBLYMAN HUMKE SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT. The Chair requested a committee introduction for Bill Draft 28-362, the summary of which states: "Makes various changes concerning bidding and awarding of contracts for public works." The Chair requested a motion to introduce Bill Draft 28-362. ASSEMBLYMAN SPITLER MOVED TO INTRODUCE BILL DRAFT 28-362. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT. The Chair indicated the Committee would be adjourned until Wednesday at which time the Committee would hear Assembly Bill 25, vote on A.B. 26, A.B. 63 and hear A.B. 41 again with an amendment. The Chair recognized Assemblyman Humke who requested the sense of the Committee on A.B. 26 potential amendments. The Chair recognized Mr. Spitler who acknowledged Mr. Humke had requested a better definition of "reasonable". He inquired whether Mr. Humke had been able to confer with anyone to arrive at a more "reasonable" definition. Mr. Humke indicated Mr. Higgins had sent him three different options. One option would be to reference a professional association, which Mr. Humke did not prefer. Another option would be to include a letter in terms of intent that would serve as legislative history. Another option would be to show an analogy to another Board, the dental and hygiene Board, as an example, which would set out particularity in the statute. It would specify the number of hours required annually for continuing education, criteria used to accredit each course, and requirements for submission of proof of attendance. Mr. Spitler requested copies of the options for the Committee. There being no further business to come before committee, the meeting was adjourned at 4:05 p.m. RESPECTFULLY SUBMITTED: Barbara Moss, Committee Secretary APPROVED BY: Assemblyman Larry L. Spitler, Chairman Assemblyman Sandra Tiffany, Chairman Assembly Committee on Commerce January 30, 1995 Page