MINUTES OF THE ASSEMBLY COMMITTEE ON COMMERCE Sixty-eighth Session March 15, 1995 The Committee on Commerce was called to order at 3:30 p.m., on Wednesday, March 15, 1995, Chairman Spitler 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. Morse Arberry, Jr. Mrs. Barbara E. Buckley Mr. Thomas A. Fettic Mrs. Chris Giunchigliani Mr. David E. Humke Mr. Michael A. (Mike) Schneider GUEST LEGISLATORS PRESENT: None STAFF MEMBERS PRESENT: Paul Mouritsen, Research Analyst Barbara Moss, Secretary OTHERS PRESENT: Rita Lumos, Board of Engineers and Surveyors Jerry Higgins, Board of Engineers and Surveyors Cathie Jackson Ford, Nevada Mortgage Bankers Brenda Chapman, Escrow 1 Carole Lefcourte, Deputy Secretary for Commercial Recordings Kateri Cavin, Deputy Attorney General Walter Bruce Robb, Attorney at Law The meeting was called to order by Chairman Spitler at 3:40 p.m. Following roll call, Mr. Spitler brought to the attention of the committee a letter from Denise Bevard regarding earthquake insurance (Exhibit C). He indicated at the end of the A.B. 211 hearing on March 6, 1995, he informed Ms. Bevard no action would be taken on the bill until she notified the Committee she had been contacted by the insurance agents. Based on the letter, she had been contacted and the need for A.B. 211 was no longer valid. Therefore, the Chair entertained a motion on A.B. 211. A MOTION WAS MADE BY ASSEMBLYMAN BUCKLEY TO INDEFINITELY POSTPONE A.B. 211. THE MOTION WAS SECONDED BY ASSEMBLYWOMAN GIUNCHIGLIANI. THE MOTION CARRIED UNANIMOUSLY. The Chair stated the Committee had been contacted by the sponsors of A.B. 121 requesting withdrawal of the bill. The hearing had taken place March 1, 1995 and representatives from the airport had been in attendance. The bill contained various changes considering bidding and awarding of contracts for public works. The Chair entertained a motion. A MOTION WAS MADE BY ASSEMBLYMAN HUMKE TO INDEFINITELY POSTPONE A.B. 121. THE MOTION WAS SECONDED BY ASSEMBLYWOMAN GIUNCHIGLIANI. THE MOTION CARRIED UNANIMOUSLY. The Chair asked for committee introduction for B.D.R. 54-1772. BILL DRAFT REQUEST 54-1772 - An act relating to real estate licensees which authorizes the establishment by regulation of fees for certain examinations of licensure increasing the authority of the real estate commission concerning courses of continuing education for licensees, revising certain requirements concerning the maintenance of records relating to licensees, and providing other matters properly relating thereto. A MOTION WAS MADE BY ASSEMBLYWOMAN GIUNCHIGLIANI TO INTRODUCE B.D.R. 54-1772. THE MOTION WAS SECONDED BY ASSEMBLYMAN TIFFANY. THE MOTION CARRIED UNANIMOUSLY. The Chair asked for committee introduction for B.D.R. 10-1767. BILL DRAFT REQUEST 10-1767 - An act relating to subdivided land authorizing the administrator of the real estate division of the Department of Business and Industry to impose a fine or suspend, revoke or place conditions upon the permit of a developer for engaging in certain conduct, authorizing the administrator to enter into an agreement with a developer to discontinue activities not in compliance with certain laws in lieu of issuing an order to cease and desist and providing other matters properly related thereto. A MOTION WAS MADE BY ASSEMBLYWOMAN GIUNCHIGLIANI TO INTRODUCE B.D.R. 10-1767. THE MOTION WAS SECONDED BY ASSEMBLYMAN PERKINS. THE MOTION CARRIED UNANIMOUSLY. The Chair requested a committee introduction for a bill draft pertaining to the housing division. He stated the Ways and Means Committee had been aware of concern regarding the housing division being strictly a government agency as opposed to a quasi government private enterprise agency. He entertained a motion to draft it as a full bill draft for consideration. A MOTION WAS MADE BY ASSEMBLYWOMAN GIUNCHIGLIANI TO INTRODUCE A BILL DRAFT PERTAINING TO THE HOUSING DIVISION BEING A GOVERNMENT AGENCY AS OPPOSED TO A QUASI GOVERNMENT PRIVATE ENTERPRISE AGENCY. THE MOTION WAS SECONDED BY ASSEMBLYMAN ARBERRY. THE MOTION CARRIED UNANIMOUSLY. Assemblywoman Giunchigliani informed the committee she and Assemblyman Allard had worked on A.B. 115 to decide whether or not to change the definition of door-to-door. Their conclusion was to not change it. She had written, based on the testimony from direct sales, how to incorporate what they termed "the nag" into the statute, plus the language in the initial bill. She had suggested amendments to the staff and, working with Paul Mouritsen, results would be forthcoming to which the committee could respond. The hearing was opened on A.B. 298. ASSEMBLY BILL 298 - Revises provisions governing licensing and regulation of professional engineers and land surveyors. Mr. Jerry Higgins, from the Board of Engineers and Surveyors, introduced Rita Lumos, also a member and legislative chairman for the Board, a professional public land surveyor, and the city surveyor for Las Vegas. He also introduced Bruce Robb, attorney for the state Board, who presented A.B. 298 and explained it section-by-section. The Chair asked for questions. Assemblywoman Giunchigliani asked what disciplines came under engineering. Mr. Robb stated there were eight disciplines registered in engineering, including electrical, mechanical, structural, civil, fire protection and others innumerated in the statute. Assemblyman Brower asked if a person went to a college or university offering the program, took the test but was not a registrant, would they be required to return to the Board should they decide to become a registrant. Mr. Robb explained they would make application to the Board to take the examination. Ms. Brower queried would they be required to take the examination again. Mr. Robb stated he did not know, but it made sense if the individual had taken the examination and passed it the Board would not require it be taken again. The Board would only assure the individual had the moral character to be allowed to take the examination. As counsel to the Board he recommended they not require reexamination. Ms. Brower suggested that would need clarification. Mr. Robb maintained should they receive authority to allow a non-applicant to take the exam perhaps they would clarify it. The Chair closed the hearing on A.B. 298 but entertained a discussion of concerns regarding same. Ms. Brower questioned if a person took the test for educational purposes, later changed his mind and wished to be considered for registration, would he be required to take the test a second time before the Board. Assemblyman Fettic pointed out page 2, section 2, line 24, which authorized a college or university to give part one of the written examination. He understood both parts were required. Mr. Higgins answered part one was the fundamental examination. Part two was the professional examination requiring four more years additional experience. He explained the Board had authority to waive part one and would do so in a situation where the individual demonstrated his ability, either through education or experience. Mr. Spitler referred to lines 28 and 29, sub-section 3: "An applicant for registration must pass part one of the written examination or receive a waiver of part one before taking part two of the examination." Mr. Higgins answered typically the applicant would apply to the Board for a waiver on the basis he had already passed the examination. Ms. Giunchigliani noted it gave an applicant opportunity through the waiver portion before having to take the other part of the examination, therefore, it was consistent with the statutory part. There being no further questions, the Chair entertained a motion. ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO DO PASS A.B. 298. ASSEMBLYMAN BROWER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. Ms. Brower was requested to handle A.B. 298 on the Assembly floor. The Chair opened discussion on A.B. 191 which had been heard by the Committee on Commerce on March 8, 1995, voted amend and do pass, but reconsidered due to questions which had arisen subsequent to the vote. Mr. Spitler informed the Committee there would be no action taken on the bill this date as there was more information forthcoming. He introduced Ms. Carole Lefcourte, Deputy Secretary for Commercial Recordings, from the office of the Secretary of State, who explained the intent of the bill and answered questions. Ms. Buckley expressed her concern regarding Section 2 (Exhibit D), the immunity clause. She stated at the first hearing she had asked for an explanation of Section 2 and was told the Secretary of State was not the proper person to name, it should have been the state of Nevada. Upon re-reading the bill her impression was it insulated the Secretary of State from immunity for his actions. She felt this was a very serious step. Ms. Kateri Cavin, Deputy Attorney General for the Secretary of State, clarified neither the Secretary of State nor the state of Nevada had liability. She further explained, much of the information given from the Secretary of State's office was over the telephone, specifically trademarks in this case. There was no statute requiring the Secretary of State to give information over the telephone. His office filed documents and retrieved them for the public which was done by a certification process. It was a cumbersome process and, over the years in order to expedite customer service, they began to give information over the telephone. As that information bank grew, information given over the telephone was occasionally incorrect. It was protection from liability for telephone information that was being sought by this bill. Information on file in the Secretary of State's office was correct. If the Secretary of State erred in not filing a document that should have been filed, or filed it incorrectly, there would be liability. The Secretary of State would not be insulated from that kind of liability, however, he needed protection should an inadvertent error be given over the telephone. Ms. Buckley asked how many telephone calls dealt with trademark questions. Ms. Cavin answered between 75 to 100 calls per day. Ms. Lefcourte provided a scenario wherein a customer called on the telephone to inquire whether a particular trademark was registered with the state. The customer gave an incorrect name, the employee answering the call typed in the name and the computer showed no record on file. She gave other examples such as punctuation differences, similar names and situations where the computer would not show it recorded. A split second response given over the telephone based on information contained in the computer and, through staff error or incomplete information given by the customer, the information was eventually found to be incorrect. Ms. Buckley inquired how many times the Secretary of State had been sued for giving out erroneous information on the telephone regarding trademarks. Ms. Cavin remarked she had been representing the Secretary of State for four years and there had been no lawsuits for giving out such information. She explained this bill was a precautionary measure, not a fixative. Ms. Buckley asked how there could be liability on behalf of the Secretary of State for file mistakes but no liability for telephone information based upon the language drafted. She asserted she did not see the differentiation. Ms. Lefcourte explained the language in Section 2 was being modified so the intent was clearly directed at giving information out as opposed to any act the Secretary of State may or may not perform. The language was being amended to read: "A person may not bring any action against the Secretary of State or any of his employees based on any action or failure to act in giving any information concerning trademarks, trade names or service marks." Mr. Spitler noted the wording had not specified "over the telephone". Ms. Lefcourte agreed. Mr. Humke agreed with Ms. Buckley's assertion the language of the bill provided an absolute limitation of liability and was not appropriately drafted. Ms. Giunchigliani asked if records were kept on names of callers and information given thus providing supporting documentation to protect the employee. Ms. Lefcourte responded there was not such a system. Ms. Giunchigliani asked if such a system could be used to show proof of information given over the telephone in the event of errors being discovered at a later time. Ms. Lefcourte said many customers desired to remain anonymous when requesting information because litigation could have been involved. She was unsure to what extent they could collect that information from callers. The greater problem, as she saw it, was in the corporate division of which trademarks were a part. They received between 1,500 and 2,000 calls per day and to ask each caller their name and address would slow the process down considerably and be inefficient as well. Ms. Giunchigliani's suggestion would protect the employee but not solve the problem. Ms. Giunchigliani declared the language of the bill too broad. Ms. Cavin responded the original language was taken directly from the Department of Motor Vehicles in Chapter 482.434 wherein the 1967 legislature gave them absolute immunity for their actions. She stated they would modify the language to satisfy the Committee's concerns. Mr. Perkins suggested the language include a statement that information given was noncertified or telephonic. Ms. Buckley concurred and reiterated her concern about limiting liability. She stated it was a rare occurrence when liability was found which was the reason there had not been lawsuits. However, in an egregious case where small business was effected it would not be correct to cut off their rights automatically. She acknowledged a $50,000 sovereign immunity limit and mandatory arbitration for claims under $25,000, but expressed hesitation at cutting off liability when there had not been abuse or a current problem. She felt it too drastic. Ms. Cavin stated there had not been lawsuits regarding trademarks. There had been one Uniform Commercial Code case and, although that was a different chapter of the Nevada Revised Statutes, liability had not been found because it was the first time it had occurred in the Secretary of State's office. Her fear as Deputy Attorney General was if the Secretary of State were to be sued again there would be liability if things were not changed. The advice to her client was to take precautionary measures if possible, particularly with the volume of rapidly growing information on file. She reiterated very few mistakes were made, however, if it were only one in 10,000 and cost the state $50,000, it would be too much. Customer service might be effected which should be prevented if possible. There being no further questions or business the Chair adjourned the meeting at 4:15 p.m. RESPECTFULLY SUBMITTED: Barbara Moss, Committee Secretary APPROVED BY: Assemblyman Larry L. Spitler, Chairman Assemblyman Sandra Tiffany, Chairman Assembly Committee on Commerce March 15, 1995 Page