MINUTES OF THE ASSEMBLY COMMITTEE ON COMMERCE Sixty-eighth Session March 27, 1995 The Committee on Commerce was called to order at 3:30 p.m., on Monday, March 27, 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 Ms. Sandra Tiffany, Chairman Mrs. Maureen E. Brower, Vice Chairman Mr. Richard Perkins, Vice Chairman Mr. Dennis L. Allard Mr. Morse Arberry, Jr. Ms. Barbara E. Buckley Mr. Thomas A. Fettic Mr. Lynn Hettrick Mr. David E. Humke Mr. Michael A. (Mike) Schneider COMMITTEE MEMBERS EXCUSED: Mrs. Chris Giunchigliani STAFF MEMBERS PRESENT: Paul Mouritsen, Research Analyst Barbara Moss, Secretary OTHERS PRESENT: Robert G. Whittemore, Nevada State Psychological Association Joan Buchanan, Real Estate Division Mary Marsh Linde, Deputy Attorney General for Real Estate Division Bob Gagnier, State of Nevada Employees Association Paula Berkley, Nevada State Board of Psychological Examiners David Antonuccio, Nevada State Board of Psychological Examiners Louis Ling, Nevada State Board of Psychological Examiners John Gibbons, Real Estate Division Carol Proni, Mental Health/Mental Retardation Ronda Moore, Nevada Board of Psychological Examiners The meeting was called to order by Chairman Spitler at 3:40 p.m. Following roll call, Mr. Spitler informed the Committee they were to hear A.B. 329, A.B. 343 and A.B. 344. He indicated to those in the audience that A.B. 329 was sponsored by Assemblywoman Giunchigliani who was out-of-town due to a death in the family and would not be present at the hearing. There were individuals who had traveled in order to testify on the bill, therefore, the Committee would hear their testimony. He cautioned the Committee to keep in mind there were two sides to every story and those sides would be put together when Ms. Giunchigliani had an opportunity to present the bill personally. Those were the conditions under which the bill would be heard. The Chair asked for Committee introduction for Bill Draft Request (B.D.R.) 18-512: Revising provisions governing the operating fund of the Department of Administration and providing other matters properly relating thereto. ASSEMBLYMAN ARBERRY MOVED TO INTRODUCE B.D.R. 18-512. ASSEMBLYMAN TIFFANY SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. The Chair indicated the sub-committee hearing on A.B. 299, originally scheduled Wednesday, March 29, 1995 in Las Vegas, had been rescheduled on Friday, April 7, 1995 in Las Vegas and the time would be announced at a later date. The sub- committee consisted of Assemblymen Tiffany, Brower, Buckley and Schneider. The Chair opened the hearing on A.B. 329. ASSEMBLY BILL 329 - Requires board of psychological examiners to issue licenses without examination to certain persons employed by State of Nevada as psychologists. (BDR-S- 1617) Dr. David Antonuccio, representative and Secretary/Treasurer of the Nevada State Board of Psychological Examiners, Clinical Psychologist, Assistant Chief of Psychology at the Veteran's Administration Center in Reno, and Associate Professor in the School of Medicine at the University of Nevada; and Dr. Robert G. Whittemore, Licensed Psychologist Number Nine, representing the Nevada State Psychological Association in Reno, Nevada, were introduced to the Committee. Dr. Antonuccio indicated he would present a brief history. He stated the 1985 legislature passed a bill requiring all psychologists employed by the Department of Human Resources Division of Mental Hygiene and Mental Retardation to be licensed by 1988. Those individuals employed by the Mental Health and Mental Retardation Division prior to July 1, 1985 were exempt from the requirement. No psychologists employed by the Division were grandfathered into licensure. Those employees employed after July 1, 1985 made application to the Board and were licensed if they met all requirements. If they were unable to meet the requirements their job classification was changed to a non-psychological one. The Division of Child and Family Services was created in 1991 and was governed by the provisions of the Nevada Revised Statutes (NRS) 433.267, the same ones that governed Mental Hygiene and Mental Retardation, requiring its psychologists and employees to be licensed. In 1993 Chapter 433B was created. NRS 433B.160 also required all psychologists within the Department of Human Resources Child and Family Services Division to be licensed. In addition to education and experience requirements, the Board of Psychological Examiners administered a written examination, required in all 50 states, entitled the Examination for Professional Practice of Psychology. The Board also administered a standardized oral exam that tested the applicant's ability to apply psychological knowledge, skills, ethics and state law to hypothetical cases. Both the written and oral examinations had established content validity based on a comprehensive job analysis of psychology practice developed by the Association of State and Provisional Psychology Boards. The Board's oral examination was similar to that required in other states, such as California and Arizona. The mission of the Nevada Psychological Examiners was to protect the public by ensuring licensees were competent to practice psychology. Without the ability to examine candidates for licensure the Board could not fulfill its mission to protect the public by ensuring its licensees are competent. Psychologists practice in many areas important to Nevadans, including decisions about commitment to mental institutions, the custody and care of children, and the competence of individuals to stand trial. Those were but a few examples where psychologists must be competent to practice or the consequences to the public may be drastic. Dr. Antonuccio continued by stating basically their job was to protect the consumer. There were standards established in the NRS, the Nevada Administrative Code (NAC), oral and written examinations. He asserted it was a difficult task to protect the public if they were not able to examine applicants. The Nevada requirements basically were the person must have a Ph.D. in psychology from an American Psychological Association (APA) program or the equivalent psychology program. They must have one year pre-doctoral supervision by a licensed psychologist, one year post-doctoral supervision by a licensed psychologist, must pass the national written examination and the standardized oral examination. Licensing a psychologist without examination would be, in his opinion, like licensing a physician without examination. It could be dangerous and inappropriate. Dr. Robert Whittemore indicated he held License Number Nine, which was issued to him over 30 years ago. He was representing the Nevada State Psychological Association at this Committee meeting. He served for 13 years on the Board of Psychological Examiners having been appointed by three separate Governors. A.B. 329, as it appeared before the Committee, was an open attempt to grandfather one or more individuals in under licensure as a psychologist in the state of Nevada. This was clearly, in his judgment, preferential legislation. The Board of Psychological Examiners had, since its inception over 30 years ago, upheld NRS 641. They had bent over backwards to encourage psychologists to qualify both as original certificatees and now as licensees. They had gone so far as to allow individuals from non-traditional schools who met the requirement of 641.170, sec. 4: " . . . has doctorate level training from an accredited educational institution deemed equivalent by the Board in both subject matter and extent of training". Thus any argument you might have heard that the Board was arbitrary and capricious in denying that possibility to individuals who qualified under a slightly different educational institution was simply not borne out by the facts. The Board had bent over backwards to encourage both certification and licensure. If A.B. 329 was passed it would destroy the efforts of the profession to protect the interests of all consumers, both private and public, as Dr. Antonuccio pointed out, and would make a mockery of those licensees who found it necessary to take the examination -- not once, not twice, but three times, in some cases, in order to qualify. The argument may be given that the absence of a license is restraint of trade. He pointed out those people were currently employed, therefore, the absence of a license did not mean there was any element of restraint of employment insofar as they were concerned. He once again pointed out this was prejudicial legislation designed for one specific purpose and should it be passed it would, indeed, denigrate the attempts of the Board of Psychological Examiners to protect the public in the state of Nevada. Assemblyman Humke asked Dr. Antonuccio how psychologists were similar to physicians and not like some of the professions grandfathered in by the legislature. Dr. Antonuccio answered psychologists took care of patients, as did physicians, sometimes very ill and suicidal patients, in other words, life or death circumstances. Therefore it was very important the psychologist had adequate training and supervision in caring for those patients. Mr. Humke queried if their testing requirements measured the degree to which they could be a self-directed profession. Dr. Antonuccio replied affirmative. Mr. Humke asked Dr. Whittemore if the Board had ever been sued by unsuccessful applicants over their testing and other requirements. Dr. Whittemore was unable to answer the question since his tenure on the Board had ended. However, during the period of time he was on the Board there were questions raised but they were handled internally. They allowed each of the individuals to appear before the Board, explain their circumstances and, in some cases, the circumstances appeared to warrant some consideration. As far as he knew, during the time he was on the Board, they were not sued successfully for denial of certification. Mr. Humke asked exactly what years Dr. Whittemore was on the Board. Dr. Whittemore clarified he was on the Board for 13 years and off for about eight years. Dr. Antonuccio wished to respond to Mr. Humke's question about grandfathering. He wanted to clarify nobody had been grandfathered in by the original legislation. If they were working for the Division before July 1, 1985 they were not held to that requirement and could still work there without obtaining a license. Nobody actually got a license as a grandfather clause. He felt that was an important point. Assemblyman Hettrick asked how many people this applied to at the two agencies listed. Dr. Antonuccio answered four people but was not sure. Mr. Hettrick questioned if any of the four people had attempted the examination and were not able to pass it. Dr. Antonuccio was unsure who they were or who proposed the legislation. Mr. Hettrick asked if he knew the names of the four people. Dr. Antonuccio answered no, but one of the other testifiers might know. Dr. Whittemore followed up to Mr. Hettrick's question and pointed out it was preferential to the point that it applied only to the Mental Hygiene and Mental Retardation Division. There were other individuals employed in other state agencies who theoretically could come back and qualify under that provision if they were so inclined. Assemblyman Tiffany asked Dr. Antonuccio if the possession of a license made a difference in an employee's state personnel pay scale classification category. He replied he worked for the federal government, therefore, he would not know exactly how it worked in the state. The Chair asked if there were any more questions. He reminded the panel a more complete hearing was forthcoming which would provide an opportunity for other ideas and opinions to be brought forward. The Chair recognized Paula Berkeley, Lobbyist for the Nevada State Board of Psychological Examiners, who wished to address two points. She indicated Ms. Giunchigliani had the names of the individuals who qualified. The main person who encouraged this legislation would have liked to practice outside the department and a license would allow her to do it. The department would also be in attendance at the next hearing to testify the person was not qualified to become a licensed psychologist. She thanked the Committee for allowing the testimony because the two testifiers had left their practices in order to do it. She indicated there were two deputy attorney's general involved with these cases and they would testify at the next hearing. Mr. Spitler expressed concern regarding the consideration of someone not qualified for licensing. He did not think the Committee would be entertaining testimony on individuals who may or may not have been qualified. The bill was not addressing a specific person. He stated the issue would await the return of Ms. Giunchigliani. The Chair asked if anyone else wished to testify for or against A.B. 329. There being no more testimony the hearing on A.B. 329 was closed. The hearing was opened on A.B. 343. ASSEMBLY BILL 343 - Revises provisions governing certain conduct of developers of subdivided land. (BDR 10-1767) Ms. Joan Buchanan, Administrator of the Real Estate Division, explained her division handled real estate licenses, appraisers and the 1031 people, and also were in charge of the sale of subdivisions. They were addressing Chapter 119 of the NRS (Exhibit C). This was a Real Estate Division requested bill which provided for the division to be able to assess fines, or suspend, revoke or place conditions upon property, report permit, partial registration or license of a developer. If terms of the particular permit or report were violated the division had no ability to assess fines. If there was fraud involved they could file a gross misdemeanor charge in District Court but they felt that was not a good solution. In addition, on Page two, number six, a cease-and-desist order could be issued to unlicensed individuals. In lieu of ordering a cease-and-desist order they wanted to be able to enter into some kind of agreement with the developer to correct the problems within five days and then they would be permitted to resume sales. They did that in Chapter 119, the Time Share Act, and it had worked very well. They did not make it public. It was a deal where everything worked out, the subdivision was corrected, and they went on with their business. They had not intended to add any more to the bill beyond that. In the meantime the Real Estate Division had encountered a larger problem with subdivisions which they were unable to solve because of exemptions. She introduced Mary Marsh Linde, Deputy Attorney General for the Real Estate Division, who explained the bill and answered questions. Mr. Spitler asked if she could give the Committee, in real terms, the types of incidences that necessitated this action. Ms. Buchanan indicated Ms. Linde would cover that in her presentation of the bill. Assemblyman Allard asked if the fines would be discretionary and how large an amount they might be. Ms. Buchanan answered that information was not in the bill. In the bill last session for real estate licensees the fines went from a minimum of $500 to a maximum of $5,000, per violation. Mr. Allard indicated the amounts should have been stated in the bill. Ms. Buchanan agreed. Mary Marsh Linde, Deputy Attorney General for the Real Estate Division, explained the proposed amendments to A.B. 343 had suggested themselves recently by the number of cases brought to their attention where unregistered, perhaps otherwise exempt, subdivisions had been a source of problems over which the Division had no jurisdiction and no ability to provide redress for the consumer. Particularly these were subdivisions where there was exemption from registration available to the developer by function of one or the other of the exemptions in 119, 120, 121 and 122. Most numerous were the exemptions for the owner-builder, where the owner of the land was also builder of the homes being sold. There was an exemption available in 119-120 whereby the developer was not required to get anything more than a letter from the Division acknowledging advantage was being taken of the exemption in 119-120. Therefore, when there was a problem in a subdivision of this type, the ability of the Division to respond to problems was extremely limited and were actually absent. The choice the Division had was to go to the broker selling the lots to ascertain whether he knew about the problems but was failing to disclose them. It did not get to the developer or to the root cause of the problem. These were soil problems, common area ownership problems, assessment for reserve problems; problems for which they could not call the developer on the carpet because they were not required to go through registration of disclosures. The proposed amendment was intended to provide discretion to the Administrator to deny an exemption that would otherwise be available to a developer by function of ownership of the land and development of that land. Those discretionary denials of an exemption would come about where it appeared, upon the basis of information garnered by the Division, that adequate protection for the consumer would not be available unless there was a registration and full disclosure in the property report format to be illicited on a regularly registered subdivision. This would have provided them the basis to return to the developer on his disclosures and inform him, although he did not have any problem with the soils, he had expansive soils and the foundations were cracking. This would have provided some means of controlling the sales of the subdivision and given the Division a basis for jurisdiction when problems such as that arose. Mr. Spitler asked, if the consumer did not have recourse through the Division there would not be an administrative remedy and the consumer would be required to go to court. Ms. Linde responded the consumer would be left civil remedy which they were not attempting to impair. They were trying to provide a measure of consumer protection whereby they would be able to go into a subdivision with authority to make sales cease-and-desist until the soils could be tested and provide a forum for fact gathering to ascertain what problems existed in order to decide if sales should be suspended. That process would provide some consumer protection in order that sales would not continue until the problems were stopped. Mr. Spitler stated with so many gated communities in Southern Nevada, what percentage of the land fell under the exemption as opposed to falling under the Division's jurisdiction. Ms. Linde said it was significant and a good number of those subdivisions which were subject to covenants and restrictions did fall within an exemption. Therefore, a whole master plan community could be completely exempt. Assemblyman Buckley stated concern on the language of number 3 of the amendment in that it was so broad and open-ended. "The administrator, in his or her discretion, deems that it may not adequately protect consumers." From her vantage point she would rather have seen a more specific exception to the exemption under 120, 121 and 122, perhaps citing soils or other problems actually experienced. She stated it was so open-ended it was difficult to know what it was. Ms. Linde said if they were writing the bill request at this time they would have suggested a specific limitation effectively eliminating the availability of exemptions where there was a planned unit development. In other words, where there were any common areas, covenants, or restrictions recorded against the properties, those properties would automatically not have been eligible for an exemption. Those were typically the properties that raised issues regarding compliance with covenants and restrictions in terms of deeding of common areas. This had not reached the soils issue but was more likely to reach a larger number of people because, typically, planned unit developments were over 35 units. Therefore, in that number they would have been able to provide a measure of protection for a greater number of purchasers. She stated they could perhaps express that limitation or advert to regulations that would have expressed that limitation. Assemblyman Arberry asked was there anything within the NRS that defined "developer". Ms. Linde responded affirmatively and quoted from the NRS: "The owner of subdivided land who on his own behalf or through an agent or subsidiary offers it for sale." Mr. Arberry asked her to explain the first line of the bill where it stated, ". . . commissions upon any property report". He queried, what was a property report? Ms. Linde responded a property report was a report issued when a developer, who was not eligible for an exemption from registration, came to the Division, made the disclosures required by the Division, and the Division would issue a property report. The property report was a permit to sell the subdivided land on the basis of the disclosures contained in the property report which must be renewed periodically over the life of sales in that subdivision. Mr. Arberry asked what was the permit? Ms. Linde explained basically there were different ways of getting the authorization to sell subdivided land. One was the property report which was also referred to as a permit, and also referred to as a license in the statute itself. They were functionally equivalent terms, used interchangeably in the statute. Mr. Arberry asked if there were any time limits for a consumer to go after a developer. He further queried, if a developer developed a subdivision of 50 homes and problems arose after the final phase, was there a time limit within which the buyers could complain? Ms. Linde stated they were not attempting to govern any civil action against the developer for damages. What they were trying to do was control the right to sell subdivided lands while they were still for sale by the initial developer. In other words, their ability to issue a cease and desist order as a means of enforcing a true disclosure on a required property report would cease when the last lot was sold to the initial buyer from the developer. That basically was the life cycle of that kind of statute and did not govern or control when an individual buyer wished to sue a developer. Ms. Buchanan stated perhaps if they were required to disclose the soil was expansive soil they might go down one more foot and do it properly. Mr. Arberry asked her to define "exempt". Ms. Linde explained "exempt" meant the developer did not have to give the Division the required full disclosure report, which included many details having to do with soils, identifying common areas, the budget for reserves for replacement of common elements, what schools were near, and what utilities and facilities were available to the subdivision. The public report was the full disclosure required of every developer who could not take advantage of an exemption. They were trying to get more subdividers to give them public report information by disallowing access to the exemption where they could avoid giving any information. Mr. Arberry asked to be brought back to the discussion of cease-and-desist. Ms. Linde explained once a developer had made the disclosures required by the property report information questionnaire, that property report gave him a permit to sell. There was an extensive dossier of information on that subdivision. For example, expansive soils -- the developer had to give explanation of the type of soils encountered throughout the subdivision in the property report. If that information turned out to be false or misleading, they then had a jurisdictional basis to close down the sales on that subdivision on the basis of having been given false or misleading information on a property report which invoked the power to issue a cease-and-desist order to suspend sales operations. Mr. Arberry asserted that was why he had asked at the beginning what was the definition of a developer. If a group of people who were not developers bought a number of acres, subdivided them, put a wall around them and called it a gated, private community; how was that affected? Ms. Linde responded if it was less than 35 lots and was owned by those owners, it would not come within the subdivision rules for a property report disclosure. There were already a number of ways, as he had just discovered, to avoid the registration process. However, there were those they attempted to trap under the rules available and they wished to expand the net in the interest of consumer protection in order to get the disclosure needed to test whether or not a fair sale was occurring. Mr. Allard expressed concern about what he viewed as carte blanche by the administration to issue cease-and-desist orders. He asked what criteria or evidence would be used on which to base a cease-and-desist order. If there was a crack in sheet rock, would an investigation be done to ascertain if there was expansive soils? Ms. Buchanan explained a situation where a developer had been moving property out of a common area association. If the developer were in her realm she would have requested him to fix the problem in order to adhere with the filing with the Real Estate Division. Mr. Allard queried how they would discover whether or not it complied with the disclosure. Ms. Buchanan answered if action was being taken to move property and the Division had the original declaration. Mr. Allard asked to return to the expansive soils example. If small cracks were discovered in a slab, were deemed to be in violation of the report, a cease-and-desist order could be issued, according to the bill. Was this up to the discretion of the Real Estate Division? Ms. Linde said virtually every enforcement had some level of discretion. They investigated and took a pulse check on it to see if it rose to the level of an enforceable posture. If an investigation was adequately accomplished it was possible to ascertain if there was a wide spread enough problem in the subdivision. Mr. Allard declared he saw no provision for appeal. Ms. Linde stated there was appeal provision in the main part of A.B. 343 and cited 3, 4 and 5 on the process of giving a hearing and having an appeal. Mr. Allard reiterated his concern about giving the administration carte blanche and the thousands of dollars it might cost. Assemblyman Schneider pointed out developers obtained engineering and soils reports and built according to those reports. If the reports were not followed the State Contractors Board would take action. He maintained the Real Estate Division regulated sales but did not have expertise to examine engineering and soils reports, inspect pads and slabs to determine whether or not they were done properly. Ms. Linde stated there was a never-ending line of individuals complaining to the Director's office. These individuals had contacted everyone but no one had helped them. Mr. Schneider said this was a local entity problem and should have been brought to the city or county responsible for zoning and performing inspections. Ms. Tiffany declared this was an administration expansion of authority. She expressed confusion regarding their goal. She recalled their testimony in the Ways and Means Committee where they had complained of being backlogged, understaffed, and requested general fund money. If customers were following local rules and purchasers had a simple remedy she did not understand why the Real Estate Division was trying to expand their scope. She asked how they were planning to pay for this expansion of authority. Ms. Buchanan replied the exemption fee was $250 and registration of a subdivision was $500. She was unable to estimate how much extra work or money would be needed. If they had the ability in the last year to fine violators they probably would have assessed ten fines at approximately $3,000. Ms. Buckley referred back to the original bill, lines 26 and 27, " . . . the terms of an agreement between a developer and the state would remain confidential unless violated by the developer". She asked why they wished to keep agreements confidential. Ms. Buchanan indicated it was taken from the time share law in 1984 and had worked well in situations in which it had been used. Ms. Buckley asked if that provision were deleted would it effect their ability to engage in settlement agreements. Ms. Buchanan responded, possibly. She asserted developers arrogantly ignored their requests for documentation. Mr. Hettrick asked if a builder was in the exemption category was a contractor's licensed required in order to build homes. Ms. Linde answered, no, not necessarily. She quoted Chapter 119.20: "The chapter does not apply to any person who is licensed in the state to engage and is engaged in the business of the construction of residential, commercial or industrial buildings located in the state for disposition . . . any person who owns the land and is licensed in the state of Nevada to construct residential buildings if the land is located in the state and is to include residential building." Therefore, an owner-builder was exempt. Mr. Hettrick stated if land was sold, the land owner would hire a contractor and there would be recourse with that contractor. If it were a contractor buying lots to resell he would be the owner-builder and qualify as such. Ms. Linde replied the owner-builder exception was used by corporations which gave one share to the builder entity and 99 percent of the remainder of the corporation was held by the owner of the land. Mr. Hettrick understood because of the exemption rules they were able to get around the law. He asked if any of those problems had been turned over to the State Contractor's Board. She said they had tried to but there was no appetite for it. He asked would it help if they were given ability to issue a cease- and-desist order, where there were exemptions, with a referral to the State Contractors Board. Ms. Linde said she was sensitive to Mr. Schneider's concern regarding the assistance of expert witnesses in evaluating structural issues. If there was guaranteed cooperation with the State Contractors Board it would provide a comfort level about the issues. She indicated they were alone in their efforts and the amendment was brought to the attention of the Committee to ascertain if some level of consumer protection could be enacted. She also understood the concerns regarding staffing requirements and the load this could represent, however, if Nevada was a state where all that was needed was to construct an owner-builder corporation, there was no remaining meaning to any registration requirement. Mr. Allard asked where home owner warranties fit into the situation. Ms. Linde stated that was a civil contractual remedy back to the builder. He submitted the "buck" should stop in the civil courts where both sides could bring forth complaints. He stated he was a contractor and found it highly unusual for the State Contractors Board not to investigate problems such as cracked slabs. He wondered how the contractors could go against their bond. He asserted there was all kinds of recourse. Ms. Linde submitted the bond recourse would not be adequate because the amount of the bond was quickly exhausted when there were a couple of failing houses. Mr. Allard recalled she had said the State Contractors Board had not tried to go against the bond, they just did nothing. She reiterated the consumers did not try to go against the bond, they came to the Real Estate Division asking what recourse was available. Mr. Allard reiterated that Ms. Linde had said she contacted the State Contractors Board and they had done nothing about it. She said they did not indicate interest in pursuing these cases. Mr. Arberry recalled asking for the definition of "developer" and both testifiers had continued to talk about subdivisions. He asked about a developer who developed a mall. Ms. Buchanan explained Chapter 119 had to do with sale of subdivided lands. He queried what about subdivided land for malls. Ms. Linde referred to Section 119.110 which defined subdivision as " . . . any subdivision of land to be divided over any period into 35 or more lots or parcels". Therefore, in a commercial development, unless it was a condominium that had 35 or more interests, it would not be a "subdivision" for the purposes of the regulations in Section 119. Mr. Arberry clarified the word "developer" was broader. Ms. Linde reiterated a developer was someone who subdivided more than 35 units for sale. The Chair declared, based upon the testimony, the bill needed work. He requested Ms. Linde and Ms. Buchanan to get together with the State Contractors Board to resolve some of the issues identified by Mr. Hettrick. The bill could be brought up for further discussion after that had been accomplished. He directed them to contact him in one week. The Chair asked if there were any more questions or discussion, for or against, A.B. 343. There being no response, the hearing was closed on A.B. 343. The hearing was opened on A.B. 344. ASSEMBLY BILL 344 - Revises provisions governing regulation of real estate licensees. (BDR-54-1772) Ms. Joan Buchanan, Administrator of the Real Estate Division, informed the Committee she was present to speak in favor of A.B. 344. She referred to Line 22: "The Commission shall adopt regulations establishing the fee for an examination for a license as a real estate broker, broker-salesman or salesman and all other fees necessary for the administration of the examination." On Page 3, Line 29, it removed the $55 set by statute for examination. In an audit done two years ago the legislative auditor stated the Real Estate Division should have their examination fees set in regulation. She agreed. They wished to go to interactive computers for testing instead of having it done once a month at a testing center. They could not afford to do that or improve the real estate examination because they were not authorized to charge more for the testing service. They would like to have the flexibility. All regulations were adopted by the Real Estate Commission, therefore, this was at the suggestion of the Real Estate Division. The ultimate authority was the five member commission. Mr. Spitler, referring to Line 29, asked if the fee would be established by regulation, as opposed to statute, for the examination. Would their budget be contingent upon whatever the fee was and would it still be rolled into the administrative costs of their budget? When would it be reviewed by the money committees? Since it was not in statute what would the mechanics be to roll it into the budget in order for it to be reviewed? Ms. Buchanan stated she was not sure mechanically how it was set up. At the time of the audit the funds went to the testing service and the remainder was given to the Division. At the present time the testing service sent the Division all the money and was sent a check for services. It was built into the budget but she did not know exactly how it would be effective through the statutes versus regulations. She pointed out Section 4 stated all the records would not be held in the main office but in district offices. Several years ago two sets of license files were maintained. The main office was in Carson City, therefore, people licensed in Clark County would have two license files. This was eliminated due to space. She informed the Committee an identical bill would be drafted on appraisers soon. The Chair asked if there was any more testimony, pro or con, on A.B. 344. There being none Chairman Spitler adjourned the hearing at 4:40 p.m. RESPECTFULLY SUBMITTED: Barbara Moss, Committee Secretary APPROVED BY: Assemblyman Larry L. Spitler, Chairman Assemblyman Sandra Tiffany, Chairman Assembly Committee on Commerce March 27, 1995 Page