MINUTES OF THE ASSEMBLY COMMITTEE ON COMMERCE Sixty-eighth Session April 17, 1995 The Committee on Commerce was called to order at 3:38 p.m., on Monday, April 17, 1995, by the presiding Chairman, Sandra Tiffany, 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 Ms. Maureen E. Brower, Vice Chairman Mr. Richard Perkins, Vice Chairman Mr. Dennis L. Allard Ms. Barbara E. Buckley Mr. Thomas A. Fettic Ms. Chris Giunchigliani Mr. Lynn Hettrick Mr. David E. Humke Mr. Michael A. (Mike) Schneider COMMITTEE MEMBERS EXCUSED: Mr. Morse Arberry, Jr. STAFF MEMBERS PRESENT: Paul Mouritsen, Research Analyst GUEST LEGISLATORS PRESENT: John Carpenter, Assembly District 33 OTHERS PRESENT: Renee Diamond, Administrator, Manufactured Housing Division Ross Whitacre, Employment Security Division Pat Coward, Nevada Land Title Association Scott Walshaw, Financial Institutions Division Joe Guild, Nevada Mobile Home Park Owners' Association Following roll call, Chairman Tiffany asked the committee to take action to introduce Bill Draft Request 54-199, which made various changes relating to collection agencies. ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO INTRODUCE BDR 54-199. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. THE MOTION CARRIED. (ASSEMBLYMAN ARBERRY WAS ABSENT FOR THE VOTE.) The Chairman also asked the committee to request a bill to be drafted for Assemblywoman Vivian Freeman which would require insurance companies to cover the cost of food for people afflicted with the disorder known as "PKU." Mr. Hettrick asked for more explanation of the disorder. Chairman Tiffany explained this disorder afflicted some 50 or 60 people with dietary problems resulting in their inability to eat meat and a number of other things. ASSEMBLYMAN SPITLER MOVED FOR INTRODUCTION. ASSEMBLYMAN PERKINS SECONDED THE MOTION. THE MOTION FAILED. (ASSEMBLYMEN ALLARD, BROWER, FETTIC, HETTRICK AND HUMKE VOTED NO, ALL OTHERS VOTED YES, AND ASSEMBLYMAN ARBERRY WAS ABSENT FOR THE VOTE.) ASSEMBLY BILL NO. 192 - Makes various changes to provisions relating to hearing aid specialists. The chairman of the subcommittee which had worked on the bill, Lynn Hettrick, explained the subcommittee had revised the bill significantly (see Exhibit C), in an effort to address concerns expressed in the first hearing. Copies of the amendments made had been sent to the other two members of the subcommittee and both believed the problems having to do with being a trustee or a fiduciary of a business trust or a partner in a partnership had been resolved. As one of the members of the subcommittee, Ms. Buckley said she believed Mr. Hettrick had done a good job of taking a very unclear bill and crafting it to meet the objectives of the bill. She stated she supported all the amendments proposed. In response to Mr. Allard's question, Mr. Hettrick indicated the fee structure would stay the same, which was what the requesters of the bill had originally proposed. The fines were cut from $20,000 to $10,000, but the fee structure was basically identical to what was before them. ASSEMBLYMAN HUMKE MADE A MOTION TO ADOPT THE AMENDMENT PROPOSED BY ASSEMBLYMAN HETTRICK AND TO AMEND AND DO PASS A.B. 192. ASSEMBLYMAN SPITLER SECONDED THE MOTION. THE MOTION CARRIED. (ASSEMBLYMAN ALLARD VOTED NO, ALL OTHERS VOTED YES, AND ASSEMBLYMAN ARBERRY WAS ABSENT FOR THE VOTE.) Chairman Tiffany asked Mr. Hettrick to present A.B. 192 in General Assembly. ASSEMBLY BILL 343 - Revises provisions governing certain conduct of developers of subdivided land. There was no discussion on the bill. ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO DO PASS A.B. 343. ASSEMBLYMAN FETTIC SECONDED THE MOTION. THE MOTION CARRIED. (ASSEMBLYMEN BROWER, ALLARD, TIFFANY AND SCHNEIDER VOTED NO, ALL OTHERS VOTED YES, AND ASSEMBLYMAN ARBERRY WAS ABSENT FOR THE VOTE.) Chairman Tiffany asked Mr. Fettic to present A.B. 343 in General Assembly. ASSEMBLY BILL 344 - Revises provisions governing regulation of real estate licenses. Mr. Fettic pointed out he was a real estate broker and it appeared A.B. 344 might have some impact on him in the respect of changing educational courses, etc. However, he did not think it would affect him any more than anyone else, so he would take part in voting on the bill. Mr. Spitler expressed some confusion concerning the bill, and in an effort to clarify it for everyone, Chairman Tiffany asked the Legal Researcher, Paul Mouritsen, to offer some clarification. Basically, Mr. Mouritsen said, the bill allowed the Real Estate Division to set the fees for examination by regulation. It also allowed records to be held in the district offices rather than the home offices. ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO DO PASS A.B. 344. ASSEMBLYMAN SPITLER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. (ASSEMBLYMAN ARBERRY WAS ABSENT FOR THE VOTE.) Chairman Tiffany asked Mrs. Brower to present the bill on the floor. ASSEMBLY BILL 268 - Establishes restrictions for depositing and disbursing money deposited in escrow. ASSEMBLYMAN PERKINS MOVED TO INDEFINITELY POSTPONE A.B. 268. ASSEMBLYMAN SPITLER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. (ASSEMBLYMAN ARBERRY WAS ABSENT FOR THE VOTE.) ASSEMBLY BILL 437: Allows certain state agencies to share their records with local governments. The Chairman noted that Washoe County had been the prime sponsor of this bill, however, there was no one in attendance from Washoe County to testify. Coming forward, however, Ross Whitacre, Assistant Chief of Benefits from the Employment Security Department, explained his Department was funded entirely by the Department of Labor and federal dollars, and therefore, had an interest in how the money was spent. Mr. Whitacre indicated when the bill was first introduced, the Department had certain concerns, and these concerns had prompted a suggested amendment (Exhibit D). First, he said, the Department was concerned about the issue of confidentiality. They believed stronger language was needed to ensure confidentiality of the information given to local governments, and this was addressed in the first part of the amendment shown in Exhibit D. The second concern expressed by Mr. Whitacre was in respect to fees. In the past, he said, no fees had been charged to law enforcement agencies in their pursuit of legal investigations. Actually, there was no intention to change that policy unless the workload became so heavy it took up a substantial amount of time. If this happened, the Department wished to have the authority to charge a fee since a 1989 amendment to NRS 612.265 provided for law enforcement agencies to request information from the Employment Security Department in the pursuit of ongoing legal investigations. Mr. Hettrick questioned the intent of the first phrase, and he and Mr. Whitacre discussed language which would strengthen the specific points of confidentiality needed by the Division. Since Washoe County was not represented, Mr. Spitler suggested the bill be rescheduled for a future meeting. Chairman Tiffany announced the bill would be brought before committee again the following meeting, and suggested Mr. Whitacre bring a reworked amendment to be looked at by the committee. If the sponsors did not attend the next hearing, Chairman Tiffany stated there was a possibility of indefinitely postponing the bill. ASSEMBLY BILL 439: Revises various provisions relating to mobile home parks. Coming forward to offer introductory testimony, the bill sponsor, Renee Diamond, Administrator of the Division of Manufactured Housing, read her testimony into the record (Exhibit E). Mr. Allard asked why a landlord should be expected to pay a fee on an unoccupied lot. The fiscal note, Ms. Diamond noted, raised approximately $22,000 based on the fact that somewhat less than 1800 spaces were currently not paid for. Since payments were submitted to the Division on an annual basis, the Division contended at some point during any given year, many of those spaces were rented. This appeared to Mr. Allard to be unfair. Ms. Diamond pointed out the Division had made no fee increase since 1984. There had been some consideration of increasing all fees from $12 to $15, however, it was decided to stay with a $12 fee, but levy it on all spaces, both occupied and unoccupied. Mr. Allard opined it might be fairer to, in fact, raise the fees on occupied spaces to $15 rather than to levy a $12 fee across the board. Ms. Diamond stressed the additional fees, in any event, did not go to the agency. Rather these fees were directed to removing people from the waiting list for low-income subsidy. Thus, every park would benefit. In response to Mr. Allard's question regarding what would be done if there were more people on the eligibility list than there were funds to subsidize, Ms. Diamond told them it was on a first come/first serve basis and they divided the available money by the number of people. Currently there were 180 people on the waiting list who had been predetermined to be eligible. The criteria used to determine eligibility took into account all income received by an individual, which included child support payments. This was the same eligibility criteria employed by other agencies, Ms. Diamond maintained. Mr. Allard asked what the cost of administration for the program was. Ms. Diamond said there was one program person and an aid, but she did not know the exact figures. When Mr. Hettrick questioned how many people were actually served by the program, Ms. Diamond said approximately 200 people were being served. There was, however, a modified regulation. Initially, they used a formula which took $150 as the base. Thus, if an eligible person lived in a $400 mobile park, this person would receive the difference between $400 and $150. The Division had found this to be unfair. Some people had simply adjusted their living costs and moved into a less expensive mobile park, which meant they actually received a disproportionate amount. This was now changed to a percentage formula instead of an artificial dollar figure in order for every person to receive an equal amount. Mr. Hettrick also questioned what the average amount would be for the 200 people being served. Ms. Diamond said she did not know, but thought it would average less than $150 each. She told Mr. Hettrick she would get him this information. Chairman Tiffany announced she and the Co-Chairman, Mr. Spitler, had decided to put this bill in a subcommittee for further work. She named Mr. Allard and Ms. Buckley to make up this subcommittee. Ms. Buckley asked, in regard to the change that each person would receive to an amount equal to the percentage in rent, she wondered whether there had been thought given to those individuals paying high rent in a park and who were most affected by high rent increases. Was there a way this could be adjusted? Ms. Diamond did not believe it was entirely possible to resolve this problem. On the philosophical side, she said, was it the Division's place to establish policy which told those people in high rent mobile spaces how to live their lives? Ideally, she indicated, the best thing would be to have a fund to move those people to other, less expensive spots. Questioning the language on Page 3, lines 21 and 22, Ms. Buckley wished to know why the Division was requesting the change, and what the import of the change would be. Ms. Diamond said it was her understanding this had been requested for clarification, but she would provide Ms. Buckley with more complete information on this. Representing the Nevada Mobile Home Park Owners' Association, Joe Guild explained he had been working on this concept since its inception. Years ago a compromise had been struck between the industry and the mobile home owners. He indicated there had been problems, as with any issue of this scope, and he welcomed the opportunity to work with the subcommittee and Ms. Diamond to improve the statute and make it more comprehensive. Two problems with the bill noted by Mr. Guild were: 1) Occupied space fee; and 2) Referring to Ms. Buckley's question regarding Section 8, Mr. Guild said there was a constitutional problem relating to the language in that section. Assemblyman John Carpenter, Assembly District 33, urged caution on the bill. He said he did not know how a $12 fee could be placed on a space which had not been rented for a year. Mr. Carpenter explained in the 100-space mobile home park owned by him, there was a practice of offering discounts or exemptions from a rent increase to people who needed it. This amounted to approximately $3,500 to the people within his park. In addition to this, he paid $1,212 to the Division. He believed some other criteria other than a percentage be crafted such as upon "need" of the people. Chairman Tiffany asked Mr. Carpenter if he supported the idea of a trust fund in any form. Mr. Carpenter believed it would be preferable if private industry took it upon themselves to help those in need, but alternatively, this was a compromise which was not too unpalatable. If the government became too heavily involved, he believed the owners would stop giving help on their own. In explaining how the system worked, Ms. Diamond said the persons applied to the Division, and were asked for documentation. The park managers were called to determine what the rent was, how long the individual had resided in that location, and whether the person resided in the site they indicated. Discussion continued between Mr. Carpenter and Mr. Allard regarding the method for calculating need. Both Mr. Carpenter and Mr. Fettic noted the language concerning a felony penalty indicated on page 2, lines 1 through 3, needed to be studied by the subcommittee. With no further discussion on A.B. 439, Chairman Tiffany opened the hearing on A.B. 440. ASSEMBLY BILL 440 - Revises provisions governing escrow agents and agencies. Coming forward to explain the intent of the bill, Scott Walshaw, Commissioner of Financial Institutions Division, said specially, the bill made some housekeeping changes to Chapter 645(A), the Independent Escrow Act; and the last part of the bill dealt with the fine level for escrow agents and agencies. The agency had been requested to do a study on bonding levels, Mr. Walshaw remarked. When the Financial Institutions Division had inherited escrow companies from the Real Estate Division in the 1991 Session, they had started auditing those escrow companies. In some cases, these companies had never been audited. Many problems were revealed, and as a result, several companies had been closed since that time. This had meant a number of losses, and when the legislative audit coincided with those events, the Division had suggested bonding levels of $25,000 per licensee might be too low. This observation had been made to the escrow companies. As a result of introducing A.B. 440, the land title associations had voiced some concerns which Mr. Walshaw said he was not prepared to comment on. He asked the committee to give him the opportunity to meet with the Land Title Association and the Chapter 645(A) licensees to discuss this particular issue. Once they had met they would then like to come back and discuss the bill. Pat Coward, representing the Land Title Association, said as way of background that most of the escrow officers and the Escrow Association were represented in NRS 692(A), although there was a small segment of independent escrow people who fell under NRS 645(A). He said he would contact the approximately 30 companies and look at the sliding scale to determine what was fair and equitable. Chairman Tiffany agreed to postpone the hearing of A.B. 440. With no further business to come before the committee, Chairman Tiffany adjourned the hearing at 4:45 p.m. RESPECTFULLY SUBMITTED: Iris Bellinger, Committee Secretary APPROVED: ________________________________ Chairman, Larry L. Spitler ________________________________ Chairman, Sandra Tiffany Assembly Committee on Commerce April 17, 1995 Page