MINUTES OF THE ASSEMBLY COMMITTEE ON COMMERCE Sixty-eighth Session June 9, 1995 The Committee on Commerce was called to order at 3:58 p.m., on Friday, June 9, 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 Mr. Morse Arberry, Jr. Ms. Barbara E. Buckley Mr. Thomas A. Fettic Ms. Chris Giunchigliani Mr. David E. Humke COMMITTEE MEMBERS EXCUSED: Mr. Lynn Hettrick Mr. Michael A. (Mike) Schneider STAFF MEMBERS PRESENT: Paul Mouritsen, Research Analyst GUEST LEGISLATORS PRESENT: Assemblyman Bernard Anderson, Assembly District 31 OTHERS PRESENT: Anthony Armstrong, Armstrong Home Inspection Darrell Clark, Attorney for the Nevada Association of Realtors Joan Kruse, Deputy Administrator, Real Estate Division John Gibbons, Deputy Administrator, Real Estate Division Stan Warren, Sierra Pacific Power Company David Buhlig, Senior Land Use Specialist, Sierra Pacific Power Company Mark Henderson, Engineer and Home Inspector Joe McKnight, Western Health Care Products, Inc. Marie Soldo, Nevada Association of Health Maintenance Organizations Jerry Reeves, M.D., President, Selfless Medical Associates Gabriel Bonnet, M.D., Medical Director for Washoe Health Systems Holly Gregory, Co-Owner Gregory Development Group Ann Macfarlane, Six Gun Group Rose McKinney-James, Director of the Dept. of Business and Industry Douglas Bell, Manager, Community Resources of Clark County Michael Lynch, Builders Association of Northern Nevada Mike Ramos, Western Financial Group Alice Molasky, Insurance Commissioner Following roll call, Chairman Tiffany took A.B. 649 out of order to accommodate Assemblyman Anderson. ASSEMBLY BILL 649 - Provides for certification of inspectors of real estate. Assemblyman Bernard (Bernie) Anderson called forward a constituent of his from the city of Sparks, Tony Armstrong, to offer testimony in support of A.B. 649. Mr. Anderson said he had requested this bill to be drafted following discussions with Mr. Armstrong relative to a continuing problem in the practice of home inspection, not only in Washoe County, but throughout much of the state. Over the last six years, there was an increasing number of incidents in which individuals offered themselves as home inspectors even though they had no certification, experience or authority in the field. This had created many problems, particularly for buyers, but also for sellers. In many instances someone selling a piece of real estate needed a home inspector to inspect the building and indicate whether the home could meet local codes. The situation was also difficult for the buyers, since any confidence placed in a home inspector might be misplaced if that individual was not qualified. Assemblyman Anderson indicated this legislation had been started during the previous Session, but there had not been time to see it through the process. A.B. 649 was the result of compromises worked out between Mr. Armstrong, knowledgeable people in the real estate industry and other interested parties. There would be some potential fiscal impact on the state (see Exhibit C), Assemblyman Anderson remarked, but he drew the committee's attention to Section 24, page 5, and the renewal fee. Some modification to the fiscal note might be forthcoming, but he was not certain what this would be. Chairman Tiffany asked if the fiscal impact would be on personnel, and Assemblyman Anderson said he had not had a chance to go through it in great detail, but he was doubtful the total office expense was accurately portrayed. It would probably require a level of expertise in the Real Estate Division that currently did not exist, thus, there probably would be some personnel and overhead costs of equipment involved. The Chairman noted this budget had been closed in the Ways and Means Committee, and while Mr. Anderson recognized this, he pointed out additional revenue would be generated every other year when the recertification process came up. Clarifying the intent of the bill, Tony Armstrong, owner of Armstrong Inspection Services, told the committee the reason behind the bill was to bring competency and credibility to the inspection industry, and to do away with conflicts of interest. Since this was his living, he wanted to keep the industry squeaky clean. Minor changes he wished to have noted were in Section 10, line 13, page 2, to include "engineers and architects acting within the scope of their license," as those exempt. There was also some concern on the part of Sierra Pacific Power Company in respect to those inspectors of public utilities, Mr. Armstrong remarked. Ms. Giunchigliani asked Mr. Armstrong to clarify his occupation in the home inspection industry. Mr. Armstrong ascertained the bill did not require that a home inspection be undertaken, it merely stipulated that if a person was posing as a building inspector, he should be licensed and have some evidence of credibility to validate what that inspector was doing for the consumer. The core of the problem, Mr. Armstrong said, was that there were people who advertised themselves as home inspectors, when, in fact, they had absolutely no background and no training in the field of industrial or residential building, or electrical, plumbing or heating installation. As for how they differed from an appraiser, Mr. Armstrong said the inspectors placed no monetary value on the building. Their only role was to determine whether the building was safe and sound in terms of the electrical, plumbing, heating, roof condition, and generally, structural integrity from the bottom of the foundation to the top of the roof. Additionally, Mr. Armstrong believed an inspector should be responsible for his inspection, and if this was done improperly, the inspector needed to be accountable for that -- not the realtor, seller or buyer. Mr. Spitler asked if there was any informal association of people who did home inspections, and Mr. Armstrong said, "no," but there was a move to form such an association. In response to Mr. Spitler's question regarding how many people in the state of Nevada advertised themselves as home inspectors, Mr. Armstrong said this was approximately 50 people, and they were not affiliated with the insurance industry. Mr. Spitler then asked Mr. Armstrong how he proposed to disseminate the information without the assistance of a professional organization. Mr. Armstrong said he had personally made phone calls to his competitors, but other than word-of- mouth and advertising, he was not certain how this would be made known. In response to Mr. Arberry's question regarding how extensive his inspections were, and what the standards were, Mr. Armstrong explained that most inspection companies inspected from the bottom of the foundation to the top of the roof, although some went beyond this. His reports were about five pages long, and a checklist was used as the inspector moved through the house. Cosmetic conditions were not weighed, but rather, the structural integrity of the building was carefully considered. What if major repairs were needed, Mr. Arberry asked. Mr. Armstrong said it was simply the role of the home inspector to pass on recommendations in terms of what needed to be done. Generally, their customers were home buyers, and if there was a very minor repair needed, the inspector would be expected to bring this to the customer's attention. Discussion followed regarding how a major repair would be handled. Certainly, the inspector needed credibility in respect to background education which would alert him to the need for a professional engineer or architect. Mr. Fettic wondered what had occurred which pointed out the need for the bill. In response, Mr. Armstrong indicated there were unqualified persons in the field, some of them working within a franchised business, who foisted themselves off as inspectors without the necessary background or education to make the inspections they were being hired to make. Mr. Allard asked if many of the people in the home inspection business were formerly building inspectors for a governmental entity. Mr. Armstrong said certainly, and he was one of them. He told Mr. Allard the intent was to have the rules, regulations and testing procedures developed once the bill passed. As for who would develop the certification process, Chairman Tiffany said this would fall within the role of the Real Estate Department; however, Mr. Allard did not believe the Real Estate Department knew construction, and he said he saw this as a major flaw. Mr. Armstrong said he had offered to help develop a program, and hoped to go forward with some sort of regulation developing this aspect of the business. The issue of home inspectors was a very hot topic in Las Vegas right now, Mr. Schneider observed, and NBC and CBS had both called him for interviews. Relating the general source of the problem, Mr. Schneider explained that sometimes a person conducting a home inspection would supposedly find something wrong with the building. It would later be discovered this person was a contractor or builder who gouged the customer for thousands of dollars for work that did not have to be done. While this was not the problem in Reno, Mr. Armstrong believed it could, and probably would, become a problem in the future. He also saw it as a clear conflict of interest. Mr. Schneider noted there was language on page 6, line 3, which discouraged a contractor from doing the repairs for which he had prepared an inspection report. Mr. Armstrong told Mr. Arberry this inspection service was not restricted to home, but rather covered single-family residential, multi-family residential, general commercial and industrial. Ms. Giunchigliani agreed with the benefits of the bill, and agreed if the Real Estate Division was not the right agency to draft the regulations, perhaps the State Contractors' Board could be brought into the process. She also questioned the development of penalties. Section 17, Mr. Armstrong pointed out, contained penalty information, but Ms. Giunchigliani suggested Mr. Armstrong should make certain the grounds for disciplinary action fit that language. Darrell Clark, general counsel for the Nevada Association of Realtors, indicated Association support of the bill. He believed there was a need for the service, but wanted to see the inspectors go through background and qualification checks to determine the individual's qualifications. Mr. Clark continued with a section-by- section explanation of the bill. Mr. Spitler questioned the time element set forth in the bill. He was somewhat doubtful they could have the 50 people now in the industry certified and ready to abide by the regulations by October 1, 1995. Mr. Clark said he agreed. In response to Mr. Spitler's question whether Mr. Clark had worked with the Real Estate Division to determine what would be in the regulations, Mr. Clark said he had not. He assured Mr. Spitler there were no grandfathering clauses in the proposed legislation. Mr. Humke asked if there would be an objection to not placing this within the Real Estate Division, and Mr. Clark said he had no particular preference. It was Mr. Humke's suggestion that perhaps the State Contractors' Board would be the appropriate agency. Although the Chairman opened the hearing for opposing testimony, no one came forward. The Deputy Administrator of the Real Estate Division, Joan Kruse, indicated while the Real Estate Division saw a need for the bill, the Division was unable to handle any new mandates due to an already heavy work load, especially in the appraisal area. Also, attention was drawn to the fiscal note contained in Exhibit C. John Gibbons, also a Deputy Administrator for the Real Estate Division, stated he did not believe the Real Estate Division was the appropriate agency to deal with home inspection. He agreed with previous testimony that the State Contractors' Board could more appropriately be able to provide the needed expertise. However, if the duty was imposed upon the Real Estate Division, they would need someone with the minimum qualifications of a contractor to help adopt the rules and regulations necessary to implement the program, and this person would have to be hired prior to the adoption of those rules and regulations. A brief statement was offered by Stan Warren, representing Sierra Pacific Power Company. Mr. Warren submitted amendatory language (Exhibit D), which addressed certain concerns posed by Sierra Pacific Power Company. With Mr. Warren was David Buhlig, a Land Use Specialist for Sierra Pacific Power Company. Mr. Buhlig indicated support for A.B. 649, with the amendment shown in Exhibit D. He explained he had discussed the proposed language with Mr. Armstrong who had concurred with the amendment. Mr. Buhlig pointed out this amendment would appear on page 2, lines 18 and 19 of A.B. 649, and was needed because as a public utility there were many inspectors, usually responsible for inspecting installation of the company's facilities. Upon request, however, these inspectors often provided additional benefits and services in terms of safety inspection for customer-owned facilities such as gas furnaces, cook stoves, etc. For these inspections, a service charge was made. Often these people were the only ones available in rural areas to inspect for wiring, piping, meter box, etc. When a major installation deficiency was found, the individual was referred to the appropriate service area for remedy. An Engineer in the field of home inspections, Mark Henderson, also spoke in support of the bill. He noted there were some exclusions in the bill, most particularly on page 2, lines 14 through 17. Engineers, he stated, were governed by NRS 625, which was not listed in Section 10 of the bill. Additionally, while he did not know the section of statutes governing architects, he suggested that section be included, as well, since inspections were a normal part of engineering practice. Mr. Henderson indicated his willingness to work with whatever division was identified to administer the organization, in developing regulations. ASSEMBLY BILL 647 - Makes various changes regarding provision of health care services and supplies by health maintenance organization. The prime sponsor of the bill, Assemblyman Maureen Brower, Assembly District 3, explained that this legislation, as presented, was a "continuity of care" bill. Assemblyman Brower submitted her written testimony and read her remarks into the record (Exhibit E). Joe McKnight, owner of Western Health Care Products, submitted his testimony (Exhibit F) and read his remarks into the record. Mr. McKnight also submitted a letter from Edward Mazurkwicz, which described a difficult situation becoming unenrolled with an HMO (Exhibit G). Chairman Tiffany and Mr. McKnight discussed the justification for naming a specialist a primary care doctor. Mr. McKnight believed if an additional cost was not inflicted on an HMO, there was no subsequent disadvantage to the HMO. Chairman Tiffany believed, however, this went against the whole philosophy of the HMO primary care physician. Mr. McKnight said if the physician was billing for general health care services, and the HMO plan was paying a general practitioner a specific rate for those same services, an endocrinologist (for instance) would only receive the primary care physician rate. Obviously, the specialist had to accept the pay appropriate to the primary care physician. The language shown on page 1, lines 16 through 19, was questioned by Mr. Allard. He wondered if an HMO had a contract with a supplier for devices, why the enrollee should be allowed to go outside that structure to get a device from a supplier not under contract to the HMO. Ms. Brower assured Mr. Allard that in order for the patient to approach someone outside the HMO provider, the patient would have to show an established, six-month history of care with a certain supply company, prior to the individual's involvement with the HMO. Ms. Giunchigliani questioned why the bill was limited to Health Maintenance Organizations and not other health care organizations. Ms. Brower said there were other plans the provisions of this bill could fit into, but most of those offered alternative plans. For example, Preferred Provider Organizations would generally allow someone to go outside the plan, and with shared cost, be covered by the plan. Ms. Giunchigliani saw this as very limited, but said she was supportive of the concept. Mr. Spitler questioned whether "chronic medical condition" was defined, to which Mr. McKnight said these had been historically defined as "preexisting medical condition." Referring to page 1, line 17, Mr. Spitler also wondered if there was a definition of "durable medical supplies." Ms. Brower did not know, but suggested the Research Analyst determine this. If the bill was to pass, Mr. Spitler observed, those two terms would have to be defined. Noting the stipulation set forth in Section 2 that the rate for reimbursement had to be the same as under the plan, he also wondered if this also applied to durable medical supplies or devices. Mr. McKnight indicated the same rate paid by the HMO to their chosen supplier for durable medical equipment or supplies would have to apply to another provider. The new supplier -- the one having a preexisting relationship with the patient -- would have to accept that rate. This provision would have to be so stated in Section 3, Mr. Spitler maintained. Coming forward in opposition to the bill, Marie Soldo, representing the Nevada Association of Health Maintenance Organizations, introduced her co-testifiers, Jerry Reeves, M.D., President of Selfless Medical Associates, and Gabriel Bonnet, M.D., Medical Director for Washoe Health Systems, the parent of Hospital Health Plan. Ms. Soldo said there were seven licensed HMOs in the state of Nevada, all members of the Association. Collectively, the seven health plans covered approximately 200,000 people. She explained the HMO Act was passed in 1973 in Nevada, as well as at the federal level, and the purpose was to provide an alternative to the traditional medical delivery system and the health insurance systems being offered to the population. The systems emphasized prevention and continuity, and were organized to combine health insurance with the delivery system. She stated it was not an open system, nor was it intended to be an open system. Continuing, Ms. Soldo said she wished to correct certain statements about Medicaid and HMOs. The testimony indicating difficulty in becoming removed from an HMO was not necessarily the fault of the HMO. Oftentimes an individual had to work through a Social Security Office to effect this separation, which took time. Basically, Ms. Soldo said, they believed the bill would get to the very foundation of the HMO system, and would allow each member to bring in their own selected physician which would broaden the HMO delivery system and open it up, changing the financial arrangements they had with the contracted providers. Dr. Gabriel Bonnet, Assistant Administrative Director with Washoe Medical Center, introduced medical directors in the audience who were members of the Nevada Society of Health Maintenance Physicians, and Dr. Charles Signorino, Senior Medical Director of the Health Plan of Nevada, Dr. Michael Jenkin, Senior Medical Director and Dr. Douglas Peters, with St. Mary's Health Plan. Dr. Bonnet submitted a paper entitled "Nevada Society of Health Maintenance Physicians" (Exhibit H), and called attention to the fact that over 80 percent of the physicians participating with HMOs were either Board Certified or Board Eligible, and this compared with the eligibility of approximately 65 percent of the physicians in general, throughout the state. Taking exception to some of Assemblyman Brower's testimony, Dr. Bonnet stated the bill would, indeed, attack the fabric of HMOs. Many of those joining HMOs some time ago did so in the belief it once again returned the primary health care to the physician, and returned organized medicine into the form it should be. He believed some of the past problems, as well as the tremendous rise in the cost of medical care, was due to fragmentation in the field of medicine. Dr. Bonnet attested to the strict regulations governing a physician who wished to be certified and credentialed in an HMO. If outside physicians were allowed to participate in the system, this review process would be nonexistent. Dr. Jerry Reeves, a pediatric hematologist with Southwest Medical Associates, spoke on the necessary continuity, communication, education, understanding of the physician/patient relationship and office staff, which were all very important. People who chose not to use an HMO had made active choices, he stated. Therefore, patients who were seeing a provider who had not chosen to participate in an HMO had to be aware that that physician had actively given up that choice at some point in time. He said they saw the results of the fragmented care that could go on in some of the alternative systems, and if the measures of the bill were enacted right now, it would destroy the fabric of existing HMOs, and the extensive criteria used to select physicians and ensure their quality, safety, access and appropriate numbers. Dr. Reeves again brought attention to Exhibit H, and asked committee members to peruse this more extensive document which set out the various reasons they strongly opposed A.B. 647. Chairman Tiffany asked whether there were any managed care organizations which had open enrollment for physicians. In response, Ms. Soldo said any "willing provider" bills that were being passed were being passed for single specialty type providers or pharmacists, which appeared to have the most success in getting "any willing provider" bills passed. If the question was whether there was a state that had passed open-ended, open-enrollment of providers, she was not aware of it. As for the definition of "chronic care" raised by Mr. Spitler, Ms. Soldo pointed out HMOs did not have "preexisting conditions" provisions. When a group was accepted into an HMO, the entire group was accepted and no patient was excluded. Discussion followed. Dr. Bonnet indicated there were various plans on the market which allowed people the freedom of choice being sought in the bill. Clearly, these tended to be much more expensive and had fewer benefits, but this was the obvious tradeoff. Finally, Ms. Soldo stressed the employers and employees who selected HMOs did so knowing it was a closed system. Great efforts had been made to provide full disclosure, and there was no deception on the part of the health plan. Not only was it clear that HMOs were a limited provider system, but it was also known the HMOs provided more comprehensible medical benefits than the other systems. ASSEMBLY BILL 655 - Converts housing division of department of business and industry into Nevada housing agency. Assuming the Chair for a short period of time, Mr. Spitler called for testimony in support of A.B. 655. Coming forward to speak in favor of the bill, Holly Gregory, Co-Owner of Gregory Development Group, builder and manager of over 35 affordable housing projects in Nevada, submitted "The MacGregor - a Residential Hotel" (Exhibit I). She continued with her testimony, explaining for the committee her group relied on the Nevada Housing Division as a conduit for low-income housing tax credits and for home funds to develop affordable housing. She believed the state was badly in need of a more sophisticated staff to administer the complicated and complex programs coming forward to deal with the need for low-income affordable housing. Ms. Gregory maintained that many inconsistent and unnecessary regulations were required by the Housing Division, and she offered examples to substantiate her point. Ms. Gregory told the committee that conversations with affordable housing experts across the state, and with housing experts of national prominence, she and her group had been led to believe the tax credit program for the state of Nevada had not been administered in compliance with Section 42 of the Internal Revenue Code. This Code provided that preference in the allocation of tax credit dollars must be given to those projects which served the lowest income persons for the longest period of time. She said she knew of projects which met the criteria completely and did not receive an allocation of credits. Section 42 also required the Housing Finance Agency to award tax credits to those applications requiring the least amount of credits per unit; and she specifically knew of situations in which applications were unfunded, although the cost per unit, in terms of tax credit, was substantially lower than applications receiving tax credits. Under these circumstances, Ms. Gregory maintained the real losers were the people who so desperately needed affordable housing. She believed the Legislature needed to acknowledge the tremendous growth in the state, and also acknowledge the state had outgrown the capabilities of the current Housing Division. A.B. 655 would provide for a Board of seven appointees, five of whom were knowledgeable in construction, real estate sales and marketing, property management, mortgage banking and corporate finance, as well as two members with experience in development management and non-profit housing. Also testifying in support of A.B. 655, Ann Macfarlane, representing a partnership called "Six Gun Group," said although she had very little experience dealing with the Nevada Housing Division, on one occasion her group had proposed and nearly completed a conversion of 193 housing units at no more than $4,400 per unit. Their experience with the Housing Division was a continual pattern of changing rules, regulations, and requirements through the process. This might not have been such a critical issue except for the fact Reno so desperately needed these affordable housing units. It had been represented as being necessary by the Comprehensive Housing Affordability Strategy of the City of Reno. Ms. Macfarlane pointed out her group had received support from the city of Reno and from Washoe County. She called attention to Exhibit I, and invited any of the committee to visit this project. Continuing, Ms. Macfarlane explained the funding process the group had gone through and the delays experienced when working with the Nevada Housing Division seeking to obtain home fund loans. Ms. Macfarlane said she specifically supported Section 3, paragraph 2, which defined there should be a qualified agency board. Coming forward to testify before the committee, Assemblyman Tiffany, Assembly District 21, indicated the need for this bill had surfaced during the 1993 Session when a great number of complaints were received regarding the accountability and creativity of the Housing Division. This was particularly severe in Clark County where the housing needs were very evident. At that time, it was clear the private sector understanding was particularly astute. Thus, she had decided to bring the bill forward for these reasons. The major component of the bill, Ms. Tiffany said, was taking the Division and creating it as a quasi-government agency. She traced the progress of the measure and the organizational structure finally agreed upon. Ms. Tiffany mentioned there were many changes coming in the Housing and Urban Development (HUD) agency, which led to her prediction that HUD would become a shell, leaving these programs to be administered at the state level. She wished to see the Advisory Board increased; the Housing Division relocated to Clark County; and more creativity and flexibility in the plans. Following Chairman Tiffany's testimony, Rose McKinney-James, Director of the Department of Business and Industry, indicated she was fundamentally not opposed to privatizing this function. Her greatest concern, however, was the indefinite nature of what would happen to HUD. Also, the model had been patterned after legislation in the state of Utah and Ms. McKinney-James was not convinced that model made absolute sense for the state of Nevada. Ms. McKinney-James described the responsibilities now invested with the Housing Division, and added she believed there was merit in studying the Housing Division more broadly. She suggested spending more time with the sponsor of the bill to work on the issues Ms. Tiffany had raised. She did not believe the timing was right to move the office to Clark County, but believed there should be a focus on: 1) Enhancing private sector input; 2) looking at the staffing pattern; and 3) discussing the necessary steps to increase or enhance the presence of the Housing Division in the southern part of the state. The vehicle for doing this, she believed, could be A.C.R. 38. Thus, she asked for the opportunity to work with the sponsor of the bill to arrive at some accommodation consistent with the testimony to find a solution that made sense for both the Division, and the constituents the Division served. Ms. Giunchigliani noted she was the sponsor of A.C.R. 38, but she had taken note of the frustration voiced by the private sector testifiers. She suggested Ms. McKinney-James work out a reasonable plan with Ms. Tiffany, Ernie Nielsen from Washoe Legal Services and private sector parties. Ms. Giunchigliani mentioned there might be a possibility of forming an interim study committee which could include a few legislators as well as those people active in the housing area. Calling for opposing testimony, Mr. Spitler asked that a letter in opposition to A.B. 655, submitted by Mr. Nielsen, be entered for the record (Exhibit J). Douglas Bell, Manager of Community Resources in Clark County, said while he was opposed to A.B. 655, he did, indeed, support A.C.R. 38, which looked at the issues of affordable housing at the state level. He reiterated the major changes to take place during the next six to nine months in HUD. Mr. Bell then submitted written testimony (Exhibit K), and read his remarks into the record. The Government Affairs Director for the Builders' Association of Northern Nevada, Michael Lynch, also spoke in opposition to A.B. 655. He indicated he also spoke for Mr. Nielsen of Shelter Properties and Cloyd Phillips of Community Services Agency of Northern Nevada (see Exhibit L), long time affordable housing developers. Mike Ramos, formerly Housing Programs Administrator for the City of Reno and now representing Western Financial Group. Mr. Ramos testified to his lengthy experience in the field of affordable housing in Southern California cities. During his tenure with the city of Reno, Mr. Ramos said he had seen a steady increase to currently, a 2 percent vacancy factor. The Reno City Council had realized this as a significant problem, and as a result, a new position was created in the Community Resources Division with new monies received. Throughout his association in this field, Mr. Ramos said he had received a steady stream of comments regarding the inability of the existing Housing Division to properly, and in a timely fashion, administer federal housing dollars. It was Mr. Ramos' opinion that federal housing dollars came with enough regulations, and adding local encumbrances merely defeated the aim. Mr. Ramos stated emphatically, the changes going on with HUD had nothing to do with the ability of a Housing Division to operate in a competent manner. It was critical to have a housing division able to act quickly to meet the drastic affordable housing need in the community. With regard to the relocation of the Housing Division, Mr. Ramos believed the rural counties needed more attention than Clark County. He said the Division had a very limited budget for training in the rural counties, and currently, unexpended funds in the home program went to Clark County. He strongly suggested if a study group was formed it should include representation from the rural counties. With no further testimony on A.B. 655, Co-Chairman Spitler opened the hearing on A.B. 475. ASSEMBLY BILL 475 - Makes various changes to provisions governing insurance. Remarking on the extent of the bill, Co-Chairman Tiffany indicated the only discussion she thought was necessary was to consider the sections containing policy changes, not merely housekeeping measures. After some confusing discussion, it was clear Co-Chairman Tiffany had a copy of language different from what was available to the committee. Ms. Giunchigliani suggested the committee amend and rerefer the bill back to Commerce committee so they could see how the amended bill read. Co-Chairman Tiffany stated there was not enough time left in the Session for such an undertaking. She said the only avenue would be to either trust the Insurance Commissioner, Alice Molasky, and accept her recommendations, or to look at minor policy changes. Insisting, Ms. Giunchigliani remarked that since most changes appeared to be merely housekeeping measures, perhaps the committee could vote to amend and do pass the housekeeping measures, and in the meantime, Ms. Molasky could work with Senator Townsend to determine if there were policy changes. If there were policy decisions needed, these could be dealt with on the Senate side. ASSEMBLYMAN ALLARD MOVED TO ACCEPT ASSEMBLYWOMAN GIUNCHIGLIANI'S SUGGESTION AND TO AMEND AND DO PASS A.B. 475. ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION. Ms. Buckley observed these amendments had been submitted by Ms. Molasky some time previous, and had been available for review by committee members. THE MOTION CARRIED. (ASSEMBLYMEN BROWER, SPITLER AND TIFFANY VOTED NO, AND ALL OTHERS VOTED YES. ASSEMBLYMEN ARBERRY, SCHNEIDER AND HETTRICK WERE ABSENT FOR THE VOTE.) Mr. Humke pointed out for purpose of the record, committee members should have an opportunity to read the bill after it was reprinted with the amendments. If any further amendments were needed, these could be dealt with in General Assembly. The Insurance Commissioner, Ms. Molasky, interjected that Marie Soldo, representing the insurance industry, had proposed two amendments, and the Principal Research Analyst, Paul Mouritsen, had those to also submit to the bill drafters. Co-Chairman Tiffany said, "... and Paul will get those down to bill draft. We will then have the bill sent back to us to look at, redraft it with your amendments, any other amendments we will do on the floor. ... If it's not in what you presented the first time then we'll have to deal with it afterwards." With no further testimony, the meeting was adjourned at 6:35 p.m. RESPECTFULLY SUBMITTED: _____________________________ Iris Bellinger, Committee Secretary Assembly Committee on Commerce June 9, 1995 Page