MINUTES OF THE ASSEMBLY COMMITTEE ON COMMERCE Sixty-eighth Session June 12, 1995 The Committee on Commerce was called to order at 3:45 p.m., on Monday, June 12, 1995, Chairman Larry 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 Ms. Chris Giunchigliani Mr. Lynn Hettrick Mr. David E. Humke Mr. Michael A. (Mike) Schneider STAFF MEMBERS PRESENT: Paul Mouritsen, Senior Research Analyst OTHERS PRESENT: Mr. David Horton, Alternative Therapy Mr. Jack Holmes, Washoe County and NALS Mr. Rober J. Patlon, American Consulting Engineers Council Mr. Ted Fuetsch, State Board of Architects Mr. Max Montgomery, Cherokee Engineering, Inc., / President of National Society of Professional Engineers in Nevada Mr. Rob Watson, NNFA Ms. Nalani L. Kaeck, Nevada Dietetic Association Mr. Robert Vanselow, Physician's Assistant Ms. Diana Swenson Mr. George Ball, CEC Nevada Ms. Carol J. Pruner Mr. Clinton Ray Miller, NCIH, NS, EI Ms. Bonnie Dahl, Nevada DieteticAssociation Mr. Joe Guild, Nevada Dietetic Association Dr. Frank Davis, Nevada Podiatry Board Mr. Ron Menken, Washoe County School District Mr. Max Hershenow, AIA Nevada Mr. Tom Stephens, NDOT Mr. Greg Erny, AIA Nevada Ms. Pam Miller, ACC Ms. Christine Jenks Ms. Marsha Berkbigler, Nevada State Medical Ms. Patricia Justice, Legislative Representative-Clark County Mr. Henry Etchemendy, NASB Mr. Kurt Fritsch, City of Henderson Mr. John Loete, City of Reno Mr. John Barada, AIA North Nevada Ms. Kay Oring, President, NV Dietetic Mr. William Edwards, Executive Director, Board of Oriental Medicine Ms Andrea Crossman, Starlight International Ms. Jerry Higgins, State Board of Engineers and Land Surveyors Mr. Tom Grady, Nevada League of Cities Mr. Bob Hadfield, Nevada Association of Counties Mr. Samuel McMullen, Nevada State Board of Nursing Following roll call, Chairman Spitler announced to the audience the Committee would be going in and out of full Committee and Subcommittee because there were many members who were testifying on other bills, both in the Assembly and Senate. The hearing began with a Subcommittee. Chairman Spitler opened the hearing on S.B. 193. SENATE BILL 193 - Prohibits use of designation or abbreviation which indicates person is licensed or registered dietitian under certain circumstances. Mr. Joe Guild, representing the Nevada Dietetic Association (NDA), introduced Kay Oring, President of the NDA, and Bonnie Dahl, Legislative Chair of the NDA. He indicated his intention to walk the Subcommittee through the bill emphasizing what the bill was not, rather than what it was. He introduced the bill as a title act as opposed to a practice act. A title act established the title of Dietician in the law and prohibited use of that title by someone in conjunction with their work if they were not qualified to use it. On page 2, section 2, line 6, the bill stated: "The purpose of this act is to protect the health, safety and welfare of the public by ensuring that only competent persons use the title of dietitian." On page 1, section 4, was the definition of "commission". Ms. Kay Oring and Ms. Bonnie Dahl had fulfilled all the requirements of the Commission on Dietetic Registration and carried cards so stating. The Commission's qualifications included a minimum number of hours of continuing education, practical experience and a Bachelor of Science (BS) degree in dietetics. Ms. Oring and Ms. Dahl had advanced degrees in their field; and Ms. Oring was a Ph.D. as well as a Registered Dietetician (R.D) (Exhibit C). The national standards which enabled individuals to carry the designation of licensed or registered dietician were substantial. All the bill asked was that people who held themselves out in the state of Nevada as Registered Dieticians fulfill the educational and other requirements of the National Commission. Nevada had no involvement insofar as a board or commission overseeing their activities, therefore, there was little fiscal impact to local government and none to the state. On page 2, section 8, were words which concerned opponents of the bill. It was the definition, within the context of the legislation, of the practice of dietetics. Elsewhere in the bill was the word "practice" used in the exemption section 10. It was the most important part of the section because it was the belief of the Senate Commerce and Labor Committee, and of the entire Senate, that the exemption sections in the bill applied to all the people who would appear before the Assembly Commerce Committee to oppose the bill. In other words, a person would not violate the act and commit a misdemeanor if they fit within the exemptions. Mr. Guild referred to line 41, section 10, subsection 8, and pointed out that a person who provided nutritional information to customers concerning food, food materials, dietary products or dietary supplements in connection with the sale or distribution of those products, or conducted a class or seminar relating to nutrition, was exempted from the misdemeanor part of the bill. Therefore, a person who owned a health food store or the like, and provided counseling in conjunction with the sale of their products, or a person who manufactured a product and conducted informational or seminar- type activities in conjunction with the sale of that product was exempt from the provisions of the bill. Finally, section 11 was the actual designation section and if a person used, in conjunction with activities which were not exempt from the bill, the words "licensed dietician", "dietician", "registered dietician", etc., he/she would be violating the provisions of the bill and commiting a misdemeanor. Mr. Guild indicated the Committee would hear a great deal of testimony that the act was, in fact, a practice act disguised as a title act. Apparently there were other places in the country that had passed similar pieces of legislation. Ohio had been used by the opponents of the bill in a discussion in the Senate. The Ohio Attorney General and the local District Attorney had prosecuted vigorously, under a similar act, people who used the designation "licensed dietician" , " registered dietician", and so forth. That was not the intent of this act. S.B. 193 had gone through five reprints in the Senate during its deliberations and five hearings on the reprints in which there were ample legislative records that the intent of the bill was a title act only, not a practice act. He put great emphasis upon it because he knew what the opposition was going to say. Mr. Guild provided the final transcript of the Senate Commerce and Labor hearing on June 2, 1995, in relevant part (Exhibit D). He indicated other transcripts could also be provided that would assure the Committee the intent of the legislation was to make it a title act, not a practice act. He discussed (Exhibit D) at great length. Mr. Schneider, referring to (Exhibit D) page 1, stated that Senator Townsend asked Mr. Guild if he had added "homeopathy". Mr. Guild's response had been, homeopathy was not included in NRS chapter 630A. Mr. Schneider asked for further explanation. Mr. Guild said the original act, although its intent was to include homeopathy, on page 2, section 10, line 15, the bill drafters had inadvertently left out a reference to chapter 630A. It was now included and homeopathy was an exempted endeavor under the provisions of the bill. Mr. Schneider understood they prescribed food and herbs. Mr. Guild indicated the exemptions in the bill listed on page 2 meant a person could use the designation Registered Dietician in conjunction with their practice and not commit a misdemeanor. In any event, homeopathy and its practices would not violate the provisions of the act by just engaging in the practice of homeopathy. Ms. Giunchigliani asked about the area of oriental medicine. Mr. Guild said he did not know but surmised if oriental medicine was covered in NRS Chapters 630, 632 or 633, it would be exempt. If not, an oriental medicine practitioner could violate the act, for example, in conjunction with the practice of acupuncture by saying he/she was a licensed dietician when he/she was not, and this would cause him/her to commit a misdemeanor. Ms. Giunchigliani said she would have to see if oriental medicine was referenced in the aforementioned statutes. Mr. Guild reiterated the attempt was to simply enact into the statutes the title of Registered Dietician. Therefore, unless he, himself, was exempted under section 10, if he dispensed nutritional advice and called himself a Registered Dietician in conjunction with his law practice, he would be committing a misdemeanor. However, he could dispense nutritional advice and not call himself a Registered Dietician and not be committing a misdemeanor. Ms. Giunchigliani imagined herself a doctor of oriental medicine and in her practice of acupuncture she recommended herbs. If she used the term "dietician" she could be guilty of a misdemeanor; if she said she was an acupuncturist and prescribed herbs but did not use the term "dietician", she would not be affected by the legislation. Mr. Guild said that was correct, unless she fit within one of the exemptions under section 10. Therefore, she could be an acupuncturist, a practitioner of oriental medicine and be under subsection 9 at the bottom of page 2, "a person who provides information relating to a program of weight control", and not violate the provisions of the act. Ms. Giunchigliani observed in their own practice they were not required to be dieticians, therefore, was a different standard being put in for those individuals in order to capture them, or simply to create a category for registration. Mr. Guild said the purpose of the act was to acknowledge that people who had earned the designation "Registered Dietician" from the National Commission on Dietetics were the only people who could use that designation, except those who were exempted in section 10. Ms. Giunchigliani asked how they selected those four areas and why had NRS Section 634A, which was oriental medicine, been deleted when that was an area that administered herbals and so forth. Mr. Guild answered for the same reason NRS Section 630A was deleted in the first draft of the bill and added as an amendment in the Senate. He was certain NRS Section 634 was inadvertently left out. Mr. William Edwards, the Executive Director of the Board of Oriental Medicine, indicated they had been licensing acupuncturists and practitioners in oriental medicine since 1973. They currently had 34 licensees, 13 practicing in Las Vegas and three in the Reno/Lake Tahoe area. He spoke only to NRS Chapter 634A and had been instructed to request on page 2, line 14, section 10, the provisions of the chapter did not apply to Chapter 634A on oriental medicine (Exhibit E). Mr. David Horton, of the Nevada Alternative Therapy Support Group, thought there were some things to be borne in mind when trying to depend upon so-called legislative history to get out of a mess. He referred to S.B. 298, also on the agenda, and reminded the committee that Amigdalin and Procane Hydrochloride had been legalized in Nevada by the legislature intervening and saying no medical board could bother any practitioner merely because he used those two substances. That was clear legislative history and in his view it was clear statutory enactment. Yet he had the misfortune of listening in a meeting where there was a criminal prosecution proceeding brought by a District Attorney's office in the state of Nevada attended by a Deputy Attorney General in which this statement was made. If a clinic was allowed to reopen that used one of those substances, in this particular case, Amigdalin, it would be a criminal act. The legislature did not know what they were doing when they legalized Laetrile. The Deputy Attorneys General stood moot and there were people who died as a result of that clinic not being reopened. The Committee needed to be very careful when depending upon legislative history, or even on express language. The particular provisions he wished to address had to do with the exemptions starting on page 2, line 42, where it was suggested by the previous speaker that a person was exempted from the misdemeanor provisions of the bill if he fell into that category. He gave an example: A health food store proprietor was consulted by someone who had several problems, one of which had to do with regular sleep. The health food store proprietor said he would recommend some vitamin C and Melatonin, which he did not carry because it was expensive and hard to get. He felt the person would have success with it. Line 42 provided nutritional information to customers concerning food, food materials, dietary products or supplements and if it stopped there it would be all right. The added language "... in connection with the sale or distribution of those products ..." meant the Shakley distributor was happy because he only recommended products that he sold. However, the humanitarian who did not sell what he recommended went to jail. In number 9, which stated "... a person who provides information relating to a program of weight control ...", it was all right. If added "... if the program and any changes in the program have been approved by a Registered Dietician ...", they were staking out turf that could produce a certain amount of grief. Mr. Horton indicated he was involved with the bill when first drafted in the Senate, and, with the multitudinous changes, he was amazed at how much it had changed. The general idea was that since they could not get a regular board, they wanted to have registration. If that was all they wanted to do, there was a simple way to do it. He presented the Committee with a five section, half page statement that would do what was intended at the inception without stumbling on the rocks that could cause all kinds of problems. It was the proposed substitute amendment to S.B. 193 supported by the National Nutritional Foods Association (Exhibit F). He suggested the simplest way to handle it would be to return to plan one. If they wanted a registration that was limited to their nationally approved registrants, this would do it! It would not get them into the areas that could be a "mare's nest" when ten years after the enactment notions got into people's minds. People would go around asking, "Are you a Registered Dietician? What do you mean by doing this weight loss program? Is your program approved by a Registered Dietician?" This was the type of confusion that could cause all kinds of grief. Mr. Horton suggested the Committee peruse the proposed substitute amendment to see if it would do the job and avoid problems. Mr. Rob Watson was present on behalf of himself as a business owner of a nutritional company in Carson City, Nevada, and represented the National Nutritional Food Association (NNFA). He and the NNFA recognized the bill was a title protection act but felt it was not clearly written. He had issued a letter with a proposed amendment to all the Committee members the previous week which pointed out concerns of the NNFA. It began with section 2 where the purpose of the bill was to protect the health, safety and welfare of the public by ensuring only competent persons used the title of Dietician. He questioned where there was a problem with individuals falsely using the title. Secondly, he asked if the many definitions in sections 5, 6, 7 and 8 were needed for a title protection Act? They believed the answer was no. He found section 10, the exemption section, completely confusing. Why would he want to call himself a registered dietician? According to Mr. Guild he could call himself a registered dietician but submitted he did not wish to do so. He did not wish to register with the committee on dietetic registration; he only wanted to be able to sell nutritional products. He had a problem with subsection 9 of section 10 which stated, as Mr. Horton mentioned, there was an exemption for the development of weight control products or changes if they were approved by a registered dietician. He had on his staff a nutritionist and a biochemist who designed all their products. Did it now mean he had to hire a registered dietician any time he wanted to change a product line? He found the substitute amendment to be clear and concise. Ms. Diana Swenson, representing herself, expressed concern with section 10, exemption 9, line 46 on page 2, "... a person who provides information relating to a program of weight control if the program and any changes to the program have been approved by a Registered Dietician ..." Ms. Swenson confessed she had a weight control problem and knew many people who also had the problem. They had been in dietician controlled, approved programs which had not worked. Some of the individuals experienced health problems, had turned to alternative methods and were successful. She was concerned with that exemption and did not necessarily want to be in a program that had been approved by a registered dietician. As a private citizen she believed the legislation infringed upon her right and freedom to choose. Ms. Carol Pruner, the owner of a health food store and professionally known as the "Herb Lady", agreed completely with Mr. Watson's statements. She indicated in all the testimony she had not heard about the arrest of any person who had called himself a dietician. During the discussion, from the previous meeting, between Senator Townsend and Mr. Clinton Miller, Ms. Pruner said they had been assured of exemption. However, Senator Townsend added he could not speak for anyone after his term or when he was no longer in office. Mr. Horton had addressed that very occurrence using Amigdelan as an example of something being approved and later an individual had been prosecuted to the limit of the law. Although at the present time everyone had a certain understanding of the legislation, in ten years' time if that understanding changed, what would happen to those individuals in the alternative field? Ms. Pruner said she supported the amendment. Mr. Jim Jenks, a concerned citizen, indicated concern with increasing government for no reason. It seemed a shame to make it a misdemeanor for a person to use the title of Registered Dietician. He respected their position and felt they had earned the title. If it was just intent to register, they would not have all the limitations and restrictions. He disapproved of section 10, number 9, and felt they were trying to reclaim territory if the intent was just to register a Dietician. He supported the amendment. Mr. Clinton Ray Miller, represented the National Council for Improved Health, a California association of companies with international headquarters in California, Nature Sunshine International and Enrich International with both their international headquarters in Utah. He addressed some testimony that inadvertently may have misinformed the Committee. He recalled the lobbyist for the dieticians testified that the word "practice" was not included anywhere in the bill except in section 10. Section 8 included the word "practice" which made it a practice act. Regardless of the allegations that it was not a practice act, section 8 defined "practice" in such all inclusive terms that it included everything being done by all their competitors. Mr. Miller recalled questions asked regarding homeopathic and oriental medicine being exempt. He did not understand the answer which was a clear "no, they would not be exempt", if they gave any kind of a diet or weight control program that did not have the approval of the dieticians. Oriental doctors, many of whom were in weight control programs, could not give weight control information according to the exemption in the bill. It said one could give weight control information but only if the plan had been approved by a Dietician. It was a meaningless exemption. He thought it ironic that if it was not killed or amended, S.B. 193 would give a monopoly over all information relating to weight control programs in Nevada to the American Dietetic Association (ADA). The ADA had the most highly controversial trade union with one of the worst records in the United States of creating and modifying weight control programs. Mr. Miller called attention to the article on the left side of the blue folder (Exhibit G) from the Washington Post, dated March 7, 1993. The article reported hundreds of Nutri/Systems weight control customers had gall stone operations soon after going on the Nutri/Systems program. Under S.B. 193 the Nutri/System weight control program would be perfectly legal in Nevada because the company proudly boasted that all Nutri/System meal plans were developed under the supervision of their team of dieticians. This was typical of a dietician controlled program. S.B. 193, on the other hand, would make it a crime for a non- dietician to give customers a copy of the article as part of nutritional assessment or counseling suggesting that the dietician-approved Nutri/System weight control program may cause too rapid weight loss and did not provide sufficient calories or fat to stimulate the gall bladder to release bile to aid in digestion of fat. Under S.B. 193 it would be a crime to provide this or any of the hundreds of similar articles from medical journals which warned that the results of dietician-approved Nutri/System or hospital diets ranging from 1,000 to 1,500 calories and 22 to 33 grams of fat a day may cause bile to crystalize into painful gall stones requiring surgery. Fortunately Nevada citizens could travel to California or any other adjacent states where the state legislatures had refused to give dieticians monopoly control over the information relating to weight control programs as did S.B. 193. Mr. Miller stated on January 28, 1993, the New England Journal of Medicine published a special ten page article entitled, "Unconventional Medicine in the United States". He noted the two questions raised earlier in the hearing had to do with unconventional or alternative practices. The study shocked the American Dietetic Association which was one of the major promotors and defenders of conventional medicine and dietary therapy practices in the United States. The surprising conclusion of the study stated, "The frequency of use of unconventional therapy in the United States is far higher than previously reported." The study found, "Americans made an estimated 425-million visits to providers of unconventional therapy compared to 388 million for conventional therapy." This shocked the entire medical and nonmedical communities across the world. The report noted, interestingly, that 72 percent who used unconventional therapies did not inform their medical doctor they had done so because they did not want to upset him/her. They liked their doctors and wanted both opinions, but found when they told them they were going to an alternative practice, it so upset the doctor they felt it better not to tell him/her. It also found that nine out of ten respondents, 89 percent, who saw providers of unconventional therapy, did so without recommendation of the medical doctor. Mr. Miller indicated he and the hundreds-of-thousands of customers of the clients he represented strongly supported the position of the National Food Association presented by Rob Watson. There was no question about it, the five simple sections did exactly what they alleged. If the purpose was a title protection act, it did it clearly. He, personally, would not give them a title protection act. He could not speak because his associations had indicated their support, along with the other groups that were for it. If they wanted a title protection act, that did it. However, S.B. 193 went so far beyond it that he guaranteed the Committee would spend more time over the next ten years sorting it out. The great revolution in America at the present time was between alternative and conventional therapy with conventional therapy in the minority. The minority now had the audacity to come before the Committee, after losing the battle in the marketplace, saying they could not win the battle in the marketplace and were asking for legislative control over all weight control programs. Ms. Andrea Crossman from Sparks, Nevada, representing Starlight International who marketed weight management products, indicated problems with section 10, number 9. She felt the amendment covered the dietician's needs. Even though she recommended weight management products to her people, she had no desire to put a "D" or an "RD" behind her name. She felt number 5 in the amendment covered that for the dieticians. She did not want the recommendations she knew to be successful to be restricted by section 10, number 9. She was in favor of the amendment. Ms. Nalani Kaeck, a Registered Dietician and a certified diabetes educator, stated there was some misunderstanding about whether or not they could or should call themselves "registered". They already were registered. There was no appeal to be considered a Registered Dietician. Those registered had the right to call themselves "RD's". They were not talking specifically about weight control programs. A Dietician's work was not tied up with weight control programs one-hundred percent. There many who did many different types of counseling and medical nutrition therapy. There were dieticians working with the "WICK" programs, the food stamp programs, the commodities programs, the elder centers, and in hospitals supervising food service. She asserted most of them were too busy to police and/or shut down health food stores or interfere with their business. They often recommended and worked with people who practiced alternative health styles. It was certainly against their principles to say a person did not have the right to seek an alternative health style. They felt they did an alternative life style because their work did not include prescribing medication. To call themselves Registered Dieticians was similar to a doctor. When a doctor said he was an M.D., he should be an M.D., and when an individual went to him they went with confidence that he was an M.D. and not just calling himself by that title. There being no further testimony or questions, the hearing was closed on S.B. 193. The hearing was opened on S.B. 298. SENATE BILL 298 - Prohibits disciplinary action against physician or osteopathic physician for prescribing or administering certain controlled substances for treatment of intractable pain. Chairman Spitler indicated the bill had been heard earlier but the amendment was now being considered by the Committee. Ms. Marsha Berkbigler indicated the purpose of the amendment (Exhibit H) was to amend the medical practice act to define in the definition of medicine that telemedicine was, in fact, a practice of medicine in the state of Nevada. The Nevada Board of Medical Examiners (NBME) would be responsible for writing regulations pertaining to telemedicine and how licensing programs would be handled, who would be exempt, and all other aspects of it. Ms. Berkbigler, the NBME, and the sponsor were all in agreement on the language. The issue had come up about half-way through the session as a national problem, and national associations of medical boards were beginning to look at it as such. A meeting had been held in Texas, and another meeting was being planned for summer 1995 to touch on the issue. It was becoming more and more possible to treat a patient in Nevada from Florida and vice versa. Nevada needed to have some enabling legislation in its definition of its practice of medicine, and the amendment accomplished it. It was put into this legislation because it was late in the session and difficult to get a bill draft out, therefore, the amendment was the same statutory citation. They initially received approval and she apologized for the awkward handling. Mr. Allard indicated he had met with Ms. Berkbigler and some of the doctors, was convinced the amendment was needed and was prepared to make a motion. Ms. Tiffany asked Ms. Berkbigler to define the meaning of "information" when equipment transferred "information" concerning the medical condition of the patient electronically. Ms. Berkbigler said it was possible at the present time to put a patient through a CAT scan or scope machine and have it read in another state. That was the transfer of "information". Essentially they would be reading an X-ray, some type of cardiac rhythm, bodily functions, pictures of tumors, and so forth. There were major advances being made in medicine. It would become a major type of medicine in America. Ms. Tiffany asked if she was talking about diagnostic techniques and information, not just patient record information. Ms. Berkbigler said that was correct. Ms. Tiffany indicated paperless and wireless diagnostic information could be hooked up from the physician's office to the hospital to the labs. The legislation was important in order to move into the 21st century. She called it "beta site" at the present time because it was being implemented in some large hospitals in large metropolitan areas. However, the technology was there. Ms. Berkbigler agreed and said it would only get better! Ms. Tiffany expressed her support for it although she was disappointed at how it was brought to the Committee. She had discussed it with several physicians and was comfortable with the amendment. She recommended amend and do pass when the Chair entertained a motion. Ms. Buckley asked Ms. Berkbigler the import of adding this to the practice of medicine. Did it by inference take it out of any other professional sphere? Ms. Berkbigler answered it did not. A newspaper had picked up a comment made in Nevada that the NBME did not believe telemedicine was the practice of medicine. In fact, that was not what the NBME had said or believed. Because of that it became a national issue and immediately some businesses began organizing nationwide to do diagnostic treatments through X-ray systems. Therefore, it was important to include it in Nevada's statutes. Ms. Buckley asked if there was any known opposition to the particular section. Ms. Berkbigler responded no, they had reached an agreement with the NBME on the exact language and no one was in opposition to it. Chairman Spitler disclosed he worked for Sprint Central Telephone Company and said it was an exciting and phenomenal field with digital switching and the clarity by which doctors could make diagnoses over the miles. He indicated he would participate in the discussion. Chairman Spitler asked if there were any more questions or if anyone else wished to speak on S.B. 298. There being none he closed the public hearing on S.B. 298. The Chairman felt one of the things missing in S.B. 298 was the definition of intractable pain. He had talked with a number of doctors and they did not know how the NBME would look at it. At the present time, administrative code ruled it would be up to them. If the Committee agreed, he would like that consideration added to the amend and do pass motion. He wondered if there were any members who disagreed. Ms. Tiffany completely agreed on defining intractable pain in regulation. She thought the NBME was where it should happen. She felt conditions were well recognized for the chronic problem of intractable pain as well as what was called a diagnosis. Both "condition" and "diagnosis" needed to be defined in regulation. It needed to be clarified -- not just "chronic back pain", but "chronic back pain after doing "X", "Y", and "Z"." The NBME was exactly where it could be done in regulation and she supported it. Chairman Spitler indicated the amendment would include having the NBME define in their rule making, intractable pain, and also include the amendment brought forward by Ms. Berkbigler. Mr. Paul Mouritsen, Research Analyst, asked if it was requirement to define or authorization to define. The Chair indicated it was requirement to define. ASSEMBLYMAN ALLARD MADE A MOTION TO AMEND AND DO PASS S.B. 298. ASSEMBLYMAN GIUNCHIGLIANI SECONDED THE MOTION. THE MOTION CARRIED. The hearing was opened on S.B. 389. SENATE BILL 389 - Authorizes physicians' assistants to prescribe controlled substances. Mr. Robert Vanselow, a Physician's Assistant (PA) working in Las Vegas, indicated he had been working as a PA for the last 17 years and had been appointed to the NBME as a PA advisor and consultant. He was also the legislative coordinator for the Nevada Academy of Physician's Assistants. S.B. 389 was born out of a grand plan set forth in 1989. After discussion with many people they opted to ask for prescriptive privileges for noncontrolled substances. They felt they needed to establish a track record with the people of the state of Nevada to show the system did work, the checks and balances were in place, and PA's were dependent practitioners upon regularly licensed physicians through the NBME, as well as DO's. In conversations throughout the last year with the NBME, as well as the Board of Pharmacy, they had opted to bring the bill forward. He felt it spoke for itself. There was no grand plan for them to become independent practitioners. He believed they were trained appropriately to handle the responsibility, and the checks and balances were in place because they were supervised by a physician. Mr. Allard asked what criteria were used for the issuance of the certificate. Was it the same thing as the Advanced Practitioner of Nursing (APN)? Mr. Vanselow said it was similar to the APN except the PA's were licensed through the NBME and were always under the supervision of a physician. It may not be direct supervision, the physician may be 50 miles away, and the communication could be telecommunicated through faxes or telephone. Mr. Allard asked if the certificate issued to the APN was as stringent as the one issued to the PA's. Mr. Vanselow answered it was probably more stringent. The PA's spoke on a daily basis with their supervising physician and went through the logic involved in dealing with patients and their problems. APN's were licensed through the State Board of Nursing and did not have supervising physicians; they had collaborating physicians, and, as such, were under less stringent restriction. Ms. Tiffany asked if the PA's currently could prescribe controlled substances. Mr. Vanselow answered no. Only the PA- physician team could prescribe controlled substances. Ms. Tiffany clarified in the bill they were asking to be allowed to write prescriptions. He said that was correct. Ms. Tiffany asked if they were asking for their own DEA number. Mr. Vanselow said that would have to be worked out with the NBME and the Board of Pharmacy. It had been handled in any number of ways across the United States, and he believed there were currently 24 other states that allowed PA's to write prescriptions for controlled substances. Some had their own DEA numbers which allowed for greater trackability and accountability. Other places handled it thusly: if he was a resident or interne at the University Medical Center in Las Vegas and did not have his own DEA number, he would use the institution's DEA number with his initials behind it. Perhaps the NBME would opt to use their supervising physician's DEA number with their initials. Ms. Tiffany indicated her only problem with the bill was prescribing controlled substances. She stated the Committee had just gone through discussion of optometrists and ophthalmologists prescribing controlled substances, clinical experience and interactions with other drugs. She was comfortable with the way it was being done at the present time which was under consultation of a physician. For PA's to be allowed to prescribe controlled substances in the rural areas with no direct supervision was bothersome to Ms. Tiffany. Mr. Vanselow stated in rural areas with populations of less than 1,000 PA's were basically the only care available. He stressed that supervision of PA's, directly with the physician looking over their shoulder in the same facility or 50 miles away, was real and occurred every day. The supervising physician had to be on site at least one day a week to review all charts from the previous week. Ms. Tiffany asserted controlled substances were very serious. Mr. Vanselow agreed. Ms. Tiffany compared them to concealed weapons and suggested the Sheriff did not dole out permits for them frequently. Mr. Vanselow said in the legislative session in 1989 there was an option to include prescribing of controlled substances by PA's. They opted not to do it because they wanted to establish a track record. He felt they had done an excellent job because there had not been a single complaint against a PA for prescribing inappropriately in the last six years. He thought they could do a similar job with controlled substances which would allow them to better serve patients and their supervising physicians. Ms. Tiffany related in Los Angeles, California, physicians in larger clinics, with massive volumes of people, ran into trouble maintaining supervision of controlled substances. With managed care in clinics becoming a more popular method of delivering medicine, supervision large clinics and rural areas was more difficult and, she wished to take great care with it. With autonomy in the license of the physician, she asked who would be the oversight, the pharmacist or the DEA. Mr. Vanselow asserted they did not use the word "autonomy" lightly. There were varying degrees of autonomy with PA`s. Obviously, if he were seeing a sore throat or an ear ache he might use one level, but if he was caring for a patient's implantable defibrillator he would be at another level. He could not impress upon her strongly enough how seriously they took supervision -- it was the "very nature of their beast" and how they worked every day. Ms. Tiffany brought up an example of a patient taking four or five different drugs at the same time and stated physicians went through clinical practice to learn interaction of medicines. She felt patients experienced difficulties when being attended by three or four doctors with nobody aware of exactly what medications they were taking. Mr. Vanselow said it still happened. Mr. Tiffany asserted allowing PA's to prescribe controlled substances might be opening the flood gates for many difficult complications. Mr. Vanselow summarized that the work of PA's was completely up to their supervising physicians and the individual Board of Medical Examiners or DO Board. The bill was not carte blanche for PA's to write a prescription for Percoset; it was up to the individual physician. If he worked for a physician who told him not to write prescriptions for class 2 narcotics, he would not do so. The attempt of the legislation was to provide broad brush strokes and leave the responsibility in the hands of the Board of Pharmacy and Board of Medical Examiners, as well as ultimately the supervising physician. He felt PA's were trustworthy to handle the prescribing of controlled substances. Mr. Allard asked to what extent PA's were educated in the systemic affects of controlled substances. Mr. Vanselow said PA's were generally trained in medical schools and had roughly two-thirds the education of a physician in terms of hours. They had 102 weeks of training and were eternally interns and residents because they were always supervised. The average PA education included 66.3 hours in didactic pharmacology. Mr. Allard asked if the doctor was out, the PA was in, and a patient came in, would the PA be able to prescribe the drugs if the bill passed. Mr. Vanselow answered, absolutely. Mr. Allard stated in that event they would not be under constant supervision. Mr. Vanselow said that was not true. The physician was always available to them. Mr. Allard said if that was the case, why did they need the legislation. If the physician was always available they could write the prescription themselves. Mr. Vanselow said they were always available but perhaps by telephone. Mr. Allard clarified they would have to approve it by telephonic means; the PA could not just write the prescription. Mr. Vanselow said that was how it occurred at the present time. Mr. Allard said the physician would have to telephone or fax the PA and give permission to prescribe "this substance to this patient". Mr. Vanselow stated a long-standing relationship between physician and PA made them of one mind when prescribing for patient's maladies. Mr. Allard asked if there was not a long-standing relationship and the PA had recently gone to work for the physician, under the provisions, would the PA be able to prescribe drugs. Mr. Vanselow answered, only if the physician allowed the PA to do so through the Board of Medical Examiners. Chairman Spitler asked how PA's kept up with the latest drug treatment methods. Mr. Vanselow said through Continuing Medical Education (CME). Physicians were required to have 40 hours of CME every two years. PA's were required to have 100 hours in order to keep their licensure. Ms. Tiffany expressed appreciation for PA's and thought the public would be leaning more and more upon their care as society grew into the next phase of medicine. She felt they were very important. She hated to think of killing the bill if there was a definite benefit. She asked Mr. Vanselow's thoughts if prescribing controlled substances was removed from the bill. Mr. Vanselow indicated that was the bill. He said they could already possess, administer and dispense. They had proven their responsibility in those aspects, and he believed the system worked well. Ms. Tiffany submitted if prescribing was removed, it negated the reason for the bill. Mr. Fettic asked how the PA's obtained their certificate. Mr. Vanselow indicated being a PA required completion of a course of training accredited by the Council of Allied Health Education by the American Medical Association (AMA). It had become an independent group at the insistence of the AMA. After completion of the course, that they were eligible to sit for the National Board Exam which was the National Commission for Certification of Physician Assistants, a three-day examination requiring problem solving techniques. Mr. Fettic interjected and asked if it was up to the PA's individual physician as to whether or not the PA could become certified. Mr. Vanselow replied no, absolutely not. He said not to confuse PA's with medical assistants. Chairman Spitler asked if there was any more testimony or questions on S.B. 389. There being none the hearing was closed on S.B. 389 and opened on A.B. 690. ASSEMBLY BILL 690 - Revises provisions governing practice of podiatry. Dr. Frank Davis, representing the Podiatry Board for the state of Nevada, stated the bill addressed candidates applying to the state for licensure. In section 1, line 9, they deleted the internship. In the practice of podiatry and the education thereof there were no internships; they were called residencies. Paragraph (f) was put in by the Legislative Counsel Bureau (LCB) to be consistent with other various statutes. A Deputy Attorney General had been scheduled to testify but was unable to attend the hearing, therefore, Dr. Davis was unable to address the specifics. Item 2, "Upon payment of the fee not to exceed $600 . .", was deleted to address the two items on lines 23 and 24. In the past the $600 had been used to administer the test which had been done by members of the State Board of Podiatry in their offices or locations where they could secure testing facilities and the like. The original money was used for investigation and the various licensing clerical duties. Mr. Spitler indicated it was the same as previously, only reworded. Dr. Davis said in 1984 they had gone to national testing which came about because of difficulties with subjectivity and objectivity in administering the examination. They hired a national test which had been adopted by many states across the nation and was for all intents and purposes a "boards part three" type test, multiple choice and clinical type examination. They had incurred additional costs in doing it, not only with purchasing the test but in locating the facility and proctor to administer it. Mr. Spitler asked the purpose of the $400 fee. Dr. Davis said there were other costs involved over and above the actual testing. They sent out almost 100 packets on inquiries for licensing in the state, and out of the 100 that went out, approximately 15 candidates applied. Out of the 15 candidates approximately one-half actually qualified to take the test. Mr. Spitler asked what was the cost of application for licensure. Dr. Davis said it was $600 at the present time. Mr. Spitler said they were already up to their maximum amount. He asked if the fee for examination was not to exceed $400. Dr. Davis said the main reason they wished to have that included was because in the past the fee had increased as much as $100 a year. They wanted to ensure they remained fiscally responsible in between legislative sessions. Mr. Spitler asked if there were any more substantive changes in the bill. Dr. Davis said the second page included more appropriate wording. The last page, NRS 635.080, eliminated reciprocity. The Nevada Board of Podiatry was a member of a federal licensing board association who had experienced litiguous problems with reciprocity in the past. The last sentence referred to granting reciprocity to states who had equivalent qualifications. Dr. Davis stated podiatry was a young profession and the qualifications and scope of practice were constantly being improved. Individuals fled from one state to another requesting reciprocity in an attempt to escape their troubled state. Those persons may not have the qualifications required by that particular state because they were perhaps grandfathered in from earlier training. Therefore, the Nevada Board of Podiatry wished to give a uniform examination to all applicants who entered the state. Ms. Giunchigliani said she would have trouble supporting the bill without some form of reciprocity. She asserted they were arbitrarily removing anyone who had been licensed in another state. Dr. Davis explained they could apply for application in the state of Nevada, and, if they met the qualifications in the first section of the bill, they could take the examination. Ms. Giunchigliani suggested perhaps she did not understand his definition of reciprocity. Dr. Davis, in his understanding, defined reciprocity thusly: If a person had a license to practice in the state of Nevada, and the requirements were equivalent to the requirements in Washington, Washington would grant a license because of the equivalencies. Ms. Giunchigliani asked why they would not retain reciprocity by determining equivalency and giving an exam, rather than removing reciprocity. Dr. Davis indicated there was a licensing test, and they were interested in eliminating confusion occurring from that particular section. Many doctors had the same definition of reciprocity as Dr. Davis, and they wished to take advantage of it upon entering the state of Nevada. The Board had no mechanism at the present time to give a specific test. Ms. Giunchigliani suggested that might be a more appropriate route rather than closing the door to some form of reciprocity. She asked if it would be possible by statute to retain the language for reciprocity, but have the applicants sit for an examination. Dr. Davis said the purpose of reciprocity was not to go through the various requirements for licensure, such as testing. She said not always, in most cases reciprocity meant an equivalency was recognized and the standard had been met in another state. There could be an additional requirement that would match the standard for the state of Nevada. She felt they might be eliminating more people than was prudent. She felt if they passed an examination it would give another alternative in addition to graduating from a school in Nevada. Dr. Davis said there were no Podiatry schools in the state of Nevada. Ms. Giunchigliani asked him to think about it in those terms. They might want to keep that opportunity alive since there were no schools in Nevada and all applicants came from out-of-state. Dr. Davis indicated they wished to have all applicants go through the licensing process in an assessment of basic qualifications. If he practiced in another state, and desired a license in Nevada, he could go through the licensing process. If he met all the equivalent standards and took the exam, he would get a license. The reason for removing the reciprocity statute was because they wanted people to go through the original licensing process. She suggested Dr. Davis look at page 2, section 2, to ascertain if something could be added. Ms. Giunchigliani asked why they wished to delete the internship on page 2, section 1. Dr. Davis explained podiatry did not have internships. She asked how long was residency. Dr. Davis said residencies were available for one, two or three years, depending upon specialities and the residency program. Ms. Giunchigliani asked if they could do residency here or would they be required to transfer in. Dr. Davis said there were no residencies in the state of Nevada at the present time. The individual would have completed their residency program before coming to Nevada. Ms. Tiffany asked how many people had applied for reciprocity in the last two years. Dr. Davis said approximately three or four. She asked if there was a glut of podiatrists in Nevada. He indicated he was a proponent of competition, therefore, he did not feel there was a glut of podiatrists in the state. Depending upon the area, he felt there might be those who would disagree. She asked what a medical physician had to do to practice in the state of Nevada. Dr. Davis said he could only conjecture on the answer to that question. Ms. Tiffany observed since there was no school in the state she felt it advisable to encourage high quality people to come to Nevada. She stated there was a large migration at the present time and the population was expanding exponentially. She did not like to think they were keeping out good physicians by not granting reciprocity. Dr. Davis said good qualified physicians did not have a problem qualifying in the first part of the bill. He referred to an unnamed individual who had created difficulty when requesting reciprocity and had "hung his hat" on that particular section of the NRS. His state had equivalent requirements, but he was fleeing difficulties experienced there and moving to the state of Nevada to practice podiatry. The Board, standing on the requirements, required him to go through the basic assessment rather than reciprocity. Three months later he was arrested and convicted because of the difficulties in his home state. Ms. Tiffany was sympathetic with the problem, recognized podiatry schools were "all over the board", and realized they were attempting to raise the standards of people coming into the state, not trying to keep competition out. Chairman Spitler asked if there was any more testimony or questions on S.B. 690. There being none, he asked the pleasure of the Committee. Ms. Tiffany asked for a vote on Wednesday, June 14, 1995, and the Committee concurred. The hearing was closed on A.B. 690 and opened on A.B. 686. ASSEMBLY BILL 686 - Requires state and local governments to select registered professional engeineers, professional land surveyors and registered architects for certain public works on basis of competitive bidding. Chairman Spitler explained A.B. 686 resulted from a conversation in the Ways and Means Committee among members who came to the Commerce Committee regarding capital improvement programs. The question had been asked why it was not competitively bid. Commerce had then asked for a bill draft request. Therefore, the question to be asked of those testifying was why architectural or engineering services were not a bid situation. Mr. George Ball, a consulting engineer in the state of Nevada for approximately 30 years and representing the Consulting Engineering Counsel of Nevada (CECN), which was a member of the National Organization of the American Consulting Engineering Counsel, consisting of 5,000 consulting firms and 200,000 employees, indicated his opposition to A.B. 686 (Exhibit I). Qualification based selection (QBS) as opposed to price bidding selection was of great importance to them, as well as other groups representing design professionals. In their opinion it directly impacted the quality of professional services provided by their members. QBS described the competitive contracting process including public announcements of the project, full and open competition and careful review of the firm's capabilities, experience, technical skills and personnel. He emphasized those four issues because they struck to the heart of the proposed legislation. The CECN believed it was in the best interest of the public that the highest quality engineering services be provided to both public and private sector clients. It was long standing experience that led them to believe the procurement of those services on the basis of professional qualifications and competence was the key to providing the highest quality work at a fair and reasonable price for both the client and the design professional. The use of QBS to procure the professional services of design professionals provided the client and the public with the most important aspects of those services, namely, the innovative approaches and alternative methods which arose when working together with the design professional on defining the precise scope of the project. They believed the QBS process fostered a sound, fundamental relationship which was important between the client and the professional. The design professional was hired to represent the client's interests in the design and construction process. He/she was retained to define the scope of work and point out to the client the various aspects required by his project. In other words, project analysis and scope development were a vital part of a capital project. The client, even large cities and counties, did not have a total definition or realization of what they were getting into on some projects. Under QBS, the design professional had a chance to work with the client in precisely identifying his needs, together they decided the scope of work. He believed, as did CECN that the QBS process included a wide range of competitive considerations, whereas the price bidding system provided only one aspect of design competition at a price which may be the least likely to indicate the most capable firm to provide the needs of the client. The engineering profession was extremely competitive. In order to better serve their clients, engineer support QBS required them to compete based on skill, experience, and ability to perform the services required, not on the illusionary economy that a low bid may provide. In 1974 to 1985 the state of Maryland adopted a price bidding procedure for the selection of consultants, both architects and engineers. During that same period the state of Florida was a QBS state. They did a study to compare the cost of AE services in Florida and Maryland during the same period on similar types of projects. The result of that study indicated the cost for design services was about doubled in Maryland. The bid price stayed at that point in time and dropped in 1985, as compared to Florida. In addition, the administrative costs of managing the bidding process required an 11 percent increase in personnel and about an 18 percent increase in the budget of costs to administer the bidding process. In addition, the accomplishments of the projects, from design out-the-door to bidding probably took another one-third longer in Maryland. In conclusion, using QBS methods could ensure the acquisition of the most capable of professional, while at the same time obtaining a price that was fair and reasonable to the client. The main advantage to the QBS system was that the design professional and his client were working in a collaborative spirit to maximize the quality, value, cost effectiveness and usefulness of the final project. Ms. Buckley confessed she was not familiar with bidding processes, however, it seemed to her one would want to consider qualifications and price. With qualifications would be competency to do work and the actual work performed. She asked why would all those factors not be considered in the selection of an architect. Being an engineer, Mr. Ball indicated he would speak from the engineer's point of view. The QBS system involved the competition based on the experience, qualifications, personnel and so on. Usually two or three firms were selected in order. They would take the number one selected firm, negotiate a cost and that was when the price came in. If there were three qualified firms, whether they were architectural or engineering, with similar qualifications and experience, their fee schedules, which generated the resulting costs on the same scope of work, would be similar. The negotiation of price would come in after selection and they would sit down with the entity selecting them and negotiate price based on the scope of work defined. Ms. Buckley said that did not answer her question. She asked why they could not throw in price as well. For example, if an individual had a good price but they were not well qualified, they would be eliminated. Why could price not be a factor? His experience had shown the first thing a reviewing agent would look at, if price was included, was the price. Qualifications, experience, technical competency and the remainder of factors went out-the-window! He had no problem dealing with the price once an individual had been selected based on qualifications. Many times the public agencies, even the large ones, such as the city of Las Vegas, city of Reno, county of Clark, did not have the expertise in-house to really know all the things they needed. Therefore, for them to define the competent, complete scope of work that would allow the professionals to submit a price based on the same playing field probably did not exist. Ms. Giunchigliani indicated what had generated the discussion was the viewing of architectural plans, for example, in school districts. They would go from one place to another and see the exact same design. They would pay a "bunch" more money for the exact same school, sometimes within the same county, sometimes from county-to-county. The other thing that raised the issue was Lovelock prison where they had paid for a design and then paid again for the same design by the same architect. The architect had written in a qualifier that the design belonged to them and the state had to pay another $1.5 million. Ms. Giunchigliani asserted she saw nothing wrong with the bidding process. She thought a requirement could be written that the qualifications, experience, expertise and competency must be taken into account at a higher level versus the dollar amount, but it could be part of the entire bid. What she was hearing was someone decided the qualifications or the QBS, and then sat down and cut a deal on the negotiated price. Therefore, all they were looking at was the expertise and then they cut a deal afterwards. She asked Mr. Ball if that was correct. Mr. Ball answered yes. Ms. Giunchigliani had a problem with it, especially the public works. She appreciated his honesty about it, but she felt the two went "hand-in-glove" and the price should not be dealt with after the fact. Part of what was bid on was not only the expertise but the dollar amount for which the job could be done. Mr. Ball said her point was well taken, but when he read the proposals to NRS 625 which was the registration law that licensed professional engineers from professional land surveyors, he saw where all qualification references were deleted and the only thing referred to regarding selection was bid. Ms. Giunchigliani reiterated the two should go hand-in- glove. Mr. Ball indicated, in engineering and architectural selection procedures, the statement of qualifications was usually the first step and then a proposal was submitted. The price proposal was a separate submittal. The first document reviewed was the qualification statement and selection was based on that. Then they looked at the price proposal. Mr. Ball was unsure if that was good or bad. He preferred to stay with QBS which the Brooks bill and the federal government had followed for a long time and it had been successful. Nonetheless, he appreciated Ms. Giunchigliani's comments. Ms. Brower declared she was in favor of the bill and agreed that qualifications should be included as part of the process. In section 1, subsection 3, referencing selection of a professional engineer, professional land surveyor or registered architect, she asked if that spoke to the qualifications. Mr. Ball answered, not really, and spoke from the engineering viewpoint because he had served nine years on the Board to register and license professional engineers and land surveyors. What it spoke to, in the case of the engineer, was he/she had completed a qualified curriculum of four years and graduated from an accredited institution, had passed 16 hours of engineering examination, and had the requisite required four years of experience. It did not qualify the individual beyond that point. Ms. Brower asked if that should eliminate him/her from the bid process? Mr. Ball replied, absolutely not. The first step in selecting any professional in the state of Nevada, as required by NRS 625 and the registration law for architects, mandated the first thing one must have to advertise oneself as a professional engineer or architect was registration. To be selected to design a prison, which was apparently subject to some question by the Commerce Committee and the legislature, an individual with a significant amount of education and experience was needed. They would need many years to develop the expertise to do a project that would be within the requirements to provide a long-lasting facility. A person with four years of experience could not compete with somebody with 30 years' experience. Ms. Brower felt perhaps the bill could state when bidding on a prison the individual would be required to have prior experience building prisons; when building schools to have had experience in building schools; something specific to apply to the qualifications. Mr. Allard, coming from a construction background, felt if the bill were passed as is, it would be a disaster. He thought much of what Mr. Ball said was true. To base it solely on price would be horrible. In his line of work just because a person had the lowest bid did not mean they were the best qualified or had the experience to accomplish the job. He felt the best case scenario would be to take a group of qualified, experienced engineers and architects. From that group take the best price, make that secondary to the qualifications and experience. If they went strictly by price and accepted just a registered architect or engineer and gave them the job wholesale, based on that criteria he felt they would be asking for trouble. Mr. Humke, referring to the Lovelock Prison, stated he had read the "money committee" was dissatisfied with the fact the architect had wanted an additional fee to construct another 500 beds of the same prison design. He understood the architectural firm had an intellectual property interest in the design and plans and had the right to sell them. He asked if the bill was designed to get at that problem, if it was a problem, and how was it defined. He felt the problem was with the public works board in not procuring the services of the architectural firm on a one time or sliding scale should the prison grow from 500 to 2,500 beds. He felt the fault was with the public works board. Chairman Spitler stated the Lovelock issue was what brought it to the attention of everyone but was not the core of the issue. Mr. Jack Holmes, representing Washoe County and the Nevada Association of Land Surveyors, indicated most of his testimony had been covered by Mr. Ball and Mr. Allard. He believed he could answer the questions from the bureaucratic standpoint after he had read (Exhibit J) to the Committee. Currently they were concerned about price and he felt some of the questions that had been brought up were quite valid. Having served on the oral review committee at the state board he indicated the people who passed the examination and might be subject to submitting bids were minimally qualified at that point. Many times they were in their mid-20's in age and could be future "stars" of the industry at a later date. He would rather see those future stars work with a senior individual and that was what the basic qualification procedure actually did within the county when they had a project. They interviewed the firms considering being the primary participants in a project. The review process allowed them to select those most qualified. They had a budget to stay within and as such would not always choose the most highly qualified, but those who could meet the budget criteria. With the lowest bid possible they would not be able to select the most qualified firm or individual, therefore, he did not feel they would be responsible to the people served. Mr. Roger Patton with Louis Berger & Associates, Inc. in Las Vegas, and representing the Consulting Engineer's Council in Nevada, submitted a packet of information entitled, "Qualifications-Based Selection - Just the Facts" (Exhibit K). He stated since the Brooks Act was enacted in 1972 nearly 40 states had gone to a QBS of consultants, including the state of Nevada. Uppermost in everyone's mind was saving money. Professional engineering in a project generally represented one to two percent of the total cost of a project when the total life cycle costs of design, construction, operation and maintenance were considered. Yet it was within that one to two percent that all decisions relating to the cost and quality of the facility were made. Common sense would say if they did a good design construction, maintenance and operating costs would be lowered. It had been estimated that a two percent reduction in cost by reducing or minimiizing engineering costs would result in a 20 percent increase in overall project costs. A bidding procedure ensured that the engineer who was willing to put the least amount of effort into the design would win the project. With the current procedure in place government agencies would be able to select the professional engineers likely to produce the most cost effective designs. The decision was in the hands of the government agencies. If it was changed to a competitive bidding procedure, the engineering firmswilling to take additional time to search for innovative and cost effective solutions would be penalized. Also penalized would be the engineering firms who took additional time to carefully check the quality of their work, which was crucial to the health and safety of the public. He believed if the bill were to pass, in the long run, costs would be increased. After life and safety, the primary goal of the engineer was, produce projects that were cost effective. Mr. Fettic indicated Carson City went with the low bid only one time and ended up paying three times. He agreed with Mr. Allard. He felt people thought there was no competition now, an engineer, architect or a surveyor simply indicated what they would charge and that was it. In his experience in Carson City that was not the case. There was intense competition for some of their contracts. Ms. Tiffany kept hearing low bid and cost and that was not where she or her co-chair were coming from. They were the ones who wished to see the bill brought forward. They both sat on money committees and the Ways and Means Committee and had seen time- after-time not what she would call saving money, but throwing money away. They finally reached a point where they wanted to do something about it which was the reason for the bill. She resented the way they were portraying the Committee and what was being considered in the bill for bidding. She was not "born yesterday" and had been involved in a lot of bidding processes in the last 10 to 15 years. They were goods, not services, which might have been different. What was put into bids? Qualifications, references, financial conditions, solvency, terms and conditions, bonding, how change orders were handled -- that was the bid process. Yes, it would cost the companies more money when bidding on a complete package and maybe it would be passed on and absorbed. However, it might put an end to "wasting"! Lovelock Prison was the straw that broke the camel's back. She asserted if the state paid to have a prison designed, the state owned that design, and that was the way the contract should be written. There was nothing so creative about a prison that they had to search for innovative ways to design it. Depending upon the land, they could probably have a "cookie cutter" prison design. Schools should be done the same way. She was sick of paying for original designs over and over again! Unfortunately there were only engineers present. She would like to hear from the architects. The bill was not about low bid, if they continued to pound on that subject they would lose her "ear" on it. Ms. Buckley agreed with Mr. Allard who had remarked he did not want a person just out of medical school to perform their first brain surgery on him. The same could be said of designs. She asked if there was a hybrid version where first, on an annual basis, qualifications were accepted, culled, and those who were proven to be competent and qualified were allowed to bid. Mr. Ted Fuetsch, Chairman of the Nevada State Board of Architecture (NSBA), submitted a response to A.B. 686 (Exhibit L) and indicated he was, as was the Committee, a public servant, and the NSBA qualified architects to practice. As had been observed, their qualification process determined the entry level qualifications of architects in the state of Nevada. The challenge before the Committee was to decide whether the current system allocated public dollars to the best "NE teams". He did not believe the current system was broken. It had faults as all systems did. There were misunderstandings about it but, the system in the state determined quite adequately the entry level qualifications of architects. There were 1,950 licensed architects in the state at the present time and a national system of reciprocity allowed the state access to another 60,000 architects throughout the country, which provided benefit of experience gained over many years of practice. He felt the Committee had concluded that selection based upon bidding price alone was not smart politics or business. The challenge was how to replace the current system of negotiating fees with a system that was perhaps more foolproof. The alternative was the cost benefit of preparing a detailed scope of work which was biddable versus having the public servant adequately educated in order to aggressively and comprehensively negotiate the best fee. He sensed there was frustration and doubt that the public sector was being adequately served by these public servants. He hoped the agency heads in the room would reinforce his statement that the system was not broken. He believed the negotiators currently responsible for arranging architecture and engineering fees were doing a professional and responsible job on behalf of the agencies for whom they procured services. In closing, he indicated they had been successful in dealing with problems and challenges in the building industry. They had arranged a proposal for interior design registration which they believed would be successful by bringing the problem to all entities involved. He felt the Committee viewed this as a tremendous problem and observed the legislation was a dramatic "Rambo" proposition. He hoped the NSBA could be involved on an on-going basis and contribute a more constructive dialog to address the problem. Mr. Allard asked if it would be workable to have a system where a request for proposal would go to three different architects who would create a design, bring it back for perusal, and the price negotiated based upon the best design. Mr. Fuetsch deferred to the other architects who were also present and representing practice to answer that question. Mr. Max Hershenow, President of the American Institute of Architect's Society (AIA Nevada), a component of the National American Institute of Architects, indicated the question raised by Mr. Allard described a competition scenario. The members of AIA would not have a problem with it as long as those who were providing design services were compensated for them. It would be difficult to ask three architects to provide the state with a building design on the "come", because they were providing a professional service. However, once again it came down to what criteria would be used to select the three firms to participate in the competition. Would it be based on qualifications? Would it based on price? How would they short list to three? Mr. Allard said it would be done much as it was at the present time but more than one would be selected. He would like to see some competition in the process and believed that was the intent of the bill. He feared if it was opened up wholesale for competitive bidding it would cost more in the long run and they would be "stepping over a dollar to pick up a dime". Mr. Fuetsch suggested it be tried on one or two projects keeping precise records of the cost of preparing the detailed scope of work so it could be bid to ascertain whether there was cost benefit to the public. What they had to offer was a detailed analysis of Spiro Agnew's experiment in Maryland which said it was a disaster. Generally, from that experiment it looked like a great opportunity to employ more architects and engineers for the same project. Mr. Allard asked if it was the same type scenario he had outlined or did it just open it up. Mr. Fuetsch said they had prepared detailed scopes of work and found it took time to prepare and cost a fair amount of money to get a package that represented the project. In the current system the package providing the detailed description of the project was never prepared but was part of the services being purchased, which they called programming or pre-design services. Mr. Allard was not talking about the state making a detailed package. Mr. Fuetsch asserted they had to. What were they going to bid upon? Mr. Allard answered he was talking about asking three or more individuals to come up with a preliminary design and price, and based upon those, selection would be made. That would be the first step. Once the architect came up with a framework, so to speak, three or more others would come forth with their ideas and give financial parameters. On that basis the entity would have a variety from which to choose. Mr. Fuetsch said the current system did not even prepare a description of what the architects would be asked to design. They did not designate it was going to be a 500 room prison with all the other rooms. Therefore, the document would have to be prepared ahead of time in order to ask them to design something. Mr. Allard said they could be told a 500 room prison at "X" site. Mr. Fettic said he was "unsophisticated" and did not "get it". It seemed to him if the state wanted to build something and advertised it, there would be somebody around who would want to do it. There might be an architect who wished to design it, an engineer who wished to engineer it, or somebody who wanted to do it all. It sounded to him that Mr. Fuetsch did not believe in competition. Mr. Fuetsch reiterated he felt the current system was competitive and they did believe in competition. It had come out two years ago in the ethics hearings about the architecture school design in Las Vegas. He felt QBS selection was very competitive. Mr. Fettic said it could be and asked if they went out for bid. He indicated when he was with the city, the city did. He said they had no trouble at all getting people to bid on building sewers, streets, and the rest of it. Mr. Fuetsch stated when talking about professional services, the product, the bricks and mortar to be purchased, was unknown. The quantity, the position, the placement, all were totally unknown. Mr. Fettic understood that. Mr. Fuetsch said very often they were trying to buy the services which would define what it was they were going to buy. Mr. Fettic indicated perhaps they should talk privately because he was not picking up what Mr. Fuetsch was laying down, and Mr. Fuetsch was not picking up what he was laying down, but he felt they trying to go down the same track. Mr. John Barada, President of the American Institute of Architects, Northern Nevada Chapter, wished to respond to some of the questions he had heard in the testimony. Relative to the question about a hybrid system, he had heard many of the Committee members say qualifications-based components were appropriate. Was there some way to bid the product at that point? There was inherently nothing wrong or against adding the bid component at that point. It was a matter of practicality. When there was a selection of qualified individuals or firms, would money be saved by doing a bid system at that point? As discussed, it took a number of different detailed descriptions of what was being bid in order to properly bid it. The process, as it currently existed, had the negotiator from the public works board, or whatever state entity, negotiating with the architecture engineers. Not that they were negotiating with the only architect selected, but they were ranked, usually at least three, sometimes more than three. The short list itself was usually three to five. Therefore, the negotiation proceeded on the basis of the next firm, should those negotiations with the first firm be unsuccessful. The negotiators for the state knew what projects cost. They had done many projects, seen many fees, and had a sound basis for making the decisions about negotiating with the first firm. If the situation proved to be too difficult they could dismiss the first firm and move on to the next. He knew because he was nearly dismissed with one negotiation he had with the state. They had to come to other agreements in order to make a price that was acceptable for the project under consideration. There was competition in the system already, but in a way that did not cost the state additional funds to further identify the details of the project so each individual could "bid the same project". As an example, it had been asked if they could request a design for a 500 bed prison. If he were to ask them to buy him a five passenger automobile, what would he get? He might have in mind something more of an off-road nature. They might have thought, based on their experience, he should have had a sports car. It would have been an inappropriate design. Most likely he should have been given a little more detail than that. They found it took considerable detail to accomplish a design or, for that matter, to give a price for the design. The competition was there, but it was a question of whether or not the bidding would gain enough more for the state, at that point, in a hybrid system to be worth the effort it would take to get an apples-to- apples comparison. They tended to think not. Mr. Barada continued, insofar as the question regarding exact same designs, why could they not use the same design from one project to the next? There were many issues involved. As the days and years passed, building codes changed, the program of what went into the building could have changed, there might be a different type of inmate or problem being solved -- similar but different. There were also different budgets to be considered. Sometimes there were different sites. A different site had different geotechnical situations, different topography, different climates. All those elements went into a design. Therefore, an exact same design did not really exist. It was equivalent to saying if he were going to buy a brand new Ford Taurus, they may look exactly the same from the exterior but the version he wanted may have antilock brakes, air bags, V8 engine and a variety of engineered designed features which were altogether different from the four cylinder, stick shift, no- air-bag model. Designs were not exactly the same, nor could they ever be, because there were always additional conditions which were applied to it which required reconsideration of the validity and appropriateness to the prescribed circumstances. He believed there were price considerations already taken into account, and modifications, however minor they may have appeared, were always necessary from one design to the next. They may be larger than what was first realized. Mr. Fettic wanted to get down to the "nitty gritty" and said he was at the hearing that predicated the issue. There was frustration by everyone there on the Lovelock Prison when it turned out the state did not own the plans. Was that the fault of the architect or public works because they did not have the proper contract? He understood a contract could be written so the plans would be owned by the state after the project was completed. He asked if that was correct. Mr. Barada said in terms of the legalities as to who would own the plans, they were getting into areas of law with which he was not comfortable. It had traditionally been that the client did not own the design. The design was an instrument of service to accomplish the desire of the client. He agreed that was a traditional approach. He added as a practical matter, using his automobile as an analogy, he drove a 1966 Mustang which was getting quite old, and he owned the design to it by virtue of driving it. If he were to buy a new car, would he really want to buy the same car again, or would he need to consider the changes that had been made in the industry and technology since that time. If he was asking an architect to take responsibility for delivering a product that would satisfy the needs, should he be satisfied with the old design? If the design was used without the architect involved, who then was taking responsiblity for the design at that point? If the state did it on its own were they looking for the architect to be responsible? There were a variety of legal issues that went beyond his ability to respond to the issue, but he believed it was in the best interest to update the design each and every time it was used, even if a similar design was used. Mr. Max Montgomery, owner of Cherokee Engineering, Inc. and President for the National Society of Professional Engineers in Nevada, wished to clarify a few things. In 1972 the Brooks Act was enacted. S.B. 686, before the changes, was a sort of "mini" Brooks Act. There were six steps in QBC selection: (1) Public Announcement - Anyone interested could file papers indicating their interest in doing the job. (2) Submit Qualifications. (3) Review the applications - The applications would be culled and the most qualified retained. (4) Rank the Respondents - The state board ranked them from 1 to 5 and took five of the best qualified companies and began negotiations. (5) Negotiate - The companies made proposals which took a lot of work and were not something that could be done on the back of a match cover. Elaborate proposals were done to sell themselves as top notch candidates in order to get the job. The client and the professional began their exchange of dialog -- what were they looking for? Was it the Mustang or the Cadillac? (6) Selection - The selection was made money-wise, and then selection was made based upon the proposal. Mr. Montgomery stated the QBS system had been in place a long time. However, it was not sitting too well with the "money people". He thought it could be resolved. He could not understand why the state board was unable to take legal ownership of the plans. He was Chief Engineer for seven years at the prison. There were different levels of prisons -- maximum and minimum. He had built camps all over the state of Nevada which was a completely different level of retaining prisoners. It was important to communicate what was being sought. However, if the state board attempted to write specifications for each project, they would be "boggled" down with paperwork. Mr. Allard wondered, under the scenario Mr. Montgomery outlined, if there could be three architects involved in the initial process of deciding between the Cadillac and the Mustang. They would submit monetary proposals and there would be three qualified bidders with which the entity felt comfortable. Mr. Montgomery saw a problem because they would be paying three different companies for the same type of service that could be done by negotiating from the start. Extra money would be spent to reach the same point. Mr. Allard was not talking about a total design. Mr. Montgomery said even preliminary designs would take a great deal of work before there was a "footprint" of the building or a look at the infrastructure. Ms. Tiffany asked the four testifiers at the table which of them owned their own company, which ones did public works and were familiar with the bidding process, and who owned the largest company? She asked the indicated individual to come forward and answer her questions from the businessman's point of view. She related an experience she had at an ALEC conference, which was a national conference for legislators, where she had been in attendance at a discussion of privatizing public works boards which had been done in a number of states. She asked them to imagine the issue under discussion was being privatized and one of the four testifiers was the CEO. They were accustomed to those kinds of bid processes because they bid them. What would they do if it was their company and they had to make profit and live with it? How would they change the process, or would they keep it the same? Mr. Hershenow, AIA Nevada, thought he would keep it much the same. He felt the process worked and selected the design professional, whether it was an architect or an engineer, that was most qualified to do the work. Fee negotiations, as had been stated, were competitive and nobody was giving money away on behalf of the state. He felt they were fairly compensated. What needed clarification was providing the documents. They had very little to go on from the beginning. It was not like a contractor bidding on a massive set of prison drawings so they problem-solved and developed it over the life of the project. The solution came fairly late and he thought that was why the state hired based on qualifications. Ms. Tiffany gave Lovelock Prison as an example. They paid $1.5 million for a design on phase one. Phase two was literally a "flop" on phase one. It was their company. It was not private sector money, and now they had to pay $1.5 million again! Could he do that with public sector money? Mr. Hershenow answered no, if it was full fee for the work. If they wanted to speak to the specifics of the scenario, he was not sure that project deserved a full fee, but he was not familier with the specifics. "Cookie cutter" architecture was difficult because each project was site-user and environmentally specific. Therefore, even a "flip-flop" had some work involved. In terms of the state wanting to own documents and then procuring their own architectural services, there was liability that came with building anything. He did not think it fair if the full fee was negotiated for a site adaptation of a portion of a building. He was not sure it was prevalent throughout the state and this legislation would solve the problem. It may have been a one time occurrence or one that did not happen often. He had been involved with firms that did site adaptor work and, typically, there was a reduced fee for site adapting. Ms. Tiffany explained if they owned public works and had to deal with it as if it were their money, they would do the process differently. Maybe privatizing the public works department was what would make sense ultimately. Mr. Hershenow indicated the architectural/engineering professions would offer their help. Nationally QBS was prevalent and if there were problems within the system in Nevada he thought everyone would be willing to cull them out. Ms. Giunchigliani asked if they had copyrights to their designs. Mr. Hershenow answered yes. She asked, at all times or just sometimes. He responded that was a legal question with which he was uncomfortable answering. He had been told by his counsel that all architectural designs were copyrighted because they were original works. Whether or not a copyright was specifically attached to them, they were by law copyrighted. Ms. Giunchigliani asked if the research staff could check on it. Mr. Tom Stephens, Director of the Nevada Department of Transportation (NDOT), and also the former manager of the state public works board for two-and-one-half years, indicated the Lovelock contract for design was done long before he got there. He was aware of it, however, and would touch on it. First, he said highways were much different from buildings and the way they selected engineers at NDOT was different than the way they were selected at the public works board. At NDOT they used the QBS process followed with competitive negotiations. "Competitive negotiations" was a term used in federal law. Since many of their contracts, and they had about $45 million worth of consultant contracts at the present time, were funded by the federal government, they followed their procedures. The Brooks Act had been referred to and it was federal law. Basically there was a detailed scope of work. For larger projects, they sent auditors in to look at the firm with which they were going to negotiate to ensure their prices were correct. A detailed cost estimate was done before sitting down to negotiate. If they could not come to an agreement they went on to the next person. He was not saying every negotiation was the very best deal they ever made, but if they ever sat across the table from him in a negotation they did not leave thinking they got a new Mercedes out of it. There seemed to be something about the bill that said they were doing something wrong. Eighty percent of the states used a qualification-based negotiation process. Nevada was in the main-stream of what was being done and the state had good professionals working for it. There were approximately 100 registered professional engineers and architects, he had never run up against a dishonest one, or anyone who wanted to "give away the store". He felt it was a case of not being as communicative as they should be and there were factual misconceptions about Lovelock that needed to be rectified. He had not brought the file on Lovelock. The Public Works Board should quote the actual cost. He had heard $600,000 recently, but that was heresay. The second subject addressed by Mr. Stephens was that no state DOT had a purely competitive process. He recognized they envisioned in the bill there would be qualifications and then competition, or some other basis. The bill looked like they were going to a purely competitive bid which would lead to poor design, numerous delays and excessive change orders. There were three things to remember when doing a project: schedule, quality and budget. Those things had to be in balance. He indicated they were worrying about budget at the present time. They could not just get the lowest budget at the sacrifice of quality or a long schedule. He indicated John Wyhie, former Governor of Hawaii, had been in his office that morning. They had talked about the issue at length. Last year the state of Hawaii had instituted a combination of qualifications based competitive bid process for procurement. Mr. Stephens had asked Governor Wyhie what he thought about it. He had been given some quotes which he brought to the Committee. One: "Tell them it's a mess!" Two: "It is actually contributing to a slow down in the economy!" Three: "There's lots of rebidding due to dissatisfaction with the process!" Mr. Stephens admitted he did not know the details of their process and hoped nothing would be adopted with that kind of detail. What it told him was not that a combination process would not work, it told him one had to take great care in what was adopted. There would not be what appeared as a disaster like in Hawaii. Mr. Stephens went on to say under A.B. 686 the public works board would set the procedures for NDOT contracting. He felt that would be a problem. NDOT should be able to set up procedures that mirrored the federal highway with a little adjustment rather than doing an architecture selection procedure similar to the Public Works Board. The point was made that this would be "penny wise and pound foolish" because the design cost was a small part of the whole cost of a project. It was probably only ten percent of the initial cost and a very small part of a long term highway cost. If somebody missed something in design which created a safety hazard and caused an accident, there could be a large lawsuit. They were sued every time somebody saw black ice. With poor designs there would be an even greater problem. The design competition idea had been tried at the architecture school at the University of Nevada Las Vegas (UNLV). It was something that delayed the architectural school for two years. Everybody was involved. There were awards and it seemed to him to be a mess. Although design competitions were used for major significant projects in other states, they were not used regularly for small routine or prison designs. Regarding Lovelock Prison, he agreed with plan ownership. One of the first things he had asked was why the state did not own the plans. He got all the legal arguments regarding plans. That had not been something he put on his agenda when he was at the public works board. It was something that probably should be looked into further by the attorneys. Another reason he did not do anything was there were very few designs being done that would be reused. The prison design was being reused, but there were many things designed that were not reused anywhere. Three- quarters of everything designed would never be reproduced. Schools would be reproduced. It must be remembered when talking about fees, they were not only talking about ownership of the plans, they were talking about adapting those plans to the site, orientation to where they were going and updating the codes. The Lovelock plans were started in 1989 and were pretty well out-of-date with all the latest codes, fire codes, earthquake codes, and so forth. Also the fee included construction inspection which was the same whether it was "cookie cutter" design or a brand new design. Mr. Stephens' last point was, if they decided to go ahead with the bill, he would urge them to set an effective date at some time in the future, maybe a year, in order for the regulations and the process to be worked out. They should not just try to jump into something because if it went into effect immediately, it would stop everything being done at NDOT until they figured out how to do it and went through some experiments. He was not in favor of the bill but advised an approach that would not create a disaster. He suggested the qualification base for bids should be narrowed down to the top three people. In that event they would know they had three good people. He indicated most of the big highway structures in the state were being designed by national firms, such as Parsons Bringerhoff or Louis Berger. They certainly did not want somebody who had been doing gravel roads in Austin to get the "Spaghetti Bowl". He asserted allow NDOT to set its own system and qualification- based procedures, do not subject them to the Public Works Board. He had the greatest respect for the Public Works Board but, they did not know a lot about highways as NDOT did not know a lot about buildings. They were two different areas. He said a dollar threshold should be usedwhen bidding construction. Do not have a competitive bid every time they needed a $10,000 design on pulling a fuel tank out of the ground. There should be a way to get somebody to do something in an emergency. He felt they were attempting to solve a problem relating to the ownership of plans and believed there was a misconception on the Lovelock Prison. He did not know what was presented on Lovelock after he departed in December 1994. Chairman Spitler reiterated Lovelock was not the reason the legislation had come about. Lovelock generated the discussion and the bill before them was not intended to criticize anyone. It was to gain understanding and security in the system that was being done. Mr. Stephens summarized by stating that to his knowledge nobody in private industry bid out architectural or engineering services. Ms. Pam Miller, representing the Nevada and Las Vegas Chapter of Associated General Contractors, brought up one point that had not been discussed. The contractor wanted the highest standards possible for the plans that came to him. The higher standard of plans, the less opportunity down the road to make mistakes. They were concerned if that type of policy change was implemented it could lower the standard of plans. She explained what happened in that event. If the standard of plans was lowered and the contractor guessed about contents, there would be more risk for the contractor, therefore, it would be appropriately reflected in the bid. If the contractor thought he had more risk, she was not saying he would "pad" the bid, but it would be appropriately reflected in the low bid for the project. Ms. Patricia Justice, representing Clark County, echoed the comments of Mr. Stephens. She indicated in the Hawaii situation, where they pre-qualified and then took the lowest bid, they found that their litigation increased. Because of that, it had been an illusionary economy which slowed down projects and ended up with more cost over-runs. Chairman Spitler asked the cost of the architectural design for the new government center. Ms. Justice did not know. Ms. Giunghigliani asked Mr. Stephens if QBS was the same as the Brooks Act used for the federal standards. Mr. Stephens said the "feds" had refined it and made more definitive parameters. It was a type of QBS modeled both by architects and engineers in the American Public Works Association. There were books indicating the procedures on how to do it. There were a number of acceptable ways to do it. Ms. Giunchigliani clarified Brooks was somewhat similar to QBS and asked if was more or less stringent. Mr. Stephens said the ones used by NDOT were tailored for highways. She said in the drafting of the bill the term "competitive" was used, and perhaps as the Committee discussed it, they could consider a Request for Proposal (RFP) process. The standards were outlined, it was not an issue of low bid, and then the expertise and the dollar amount would establish the parameters. If the Committee wished to move the bill it might be more appropriate terminology to use. She also suggested, they look at who served on Public Works. Her understanding was they were generally political appointments. She asked Mr. Stephens to explain how Public Works handled their bidding process and who served on Public Works. Mr. Stephens indicated they sent out an RFP and there were two committees who reviewed it, a review committee and an interview committee. The review committee narrowed it down to five or six individuals. The interview committee, which included completely different people, interviewed the people and ranked them one, two, three. It came to the manager who usually chose the number one person, and was taken to the board. During his tenure on the board he remembered only one case where they changed the number one ranked firm. It was not a political process. Ms. Giunchigliani asked if that was how it was done for professional services at the present time. That was how it was done at the public works board, answered Mr. Stephens. It was a little different at NDOT which was qualification-based but it came back to the director and he/she made the decision. It never went to the board in that case. Ms. Giunchigliani clarified for architectural and engineering services on public works projects they currently went through an RFP for the selection. Mr. Stephens replied, absolutely. Mr. Kurt Fritsch, Assistant City Manager of the city of Henderson, Nevada, indicated they had focused quite a bit on the state level. However, at the local level, which was included in the bill, there was a procedure that worked for them which was the RFP process. He did not advise the reuse of architectural or engineering plans because of the legal issues involved. They would find it difficult to find an architect or engineer to stamp those plans and just hand them over to be used again. If they were stamped, it would be difficult to find another architect or engineer to take those plans over and design to them. The city of Henderson had negotiated with architects up front in contracts with them when building fire stations or recreation centers. When they built additional facilities, they would renegotiate a price to reuse those plans. It was generally about one-fourth of what was paid for the initial plans because they did not have the work to recreate them. Any other contract services they wanted or desired from them would be an additional fee. Generally architectural services ranged from six to nine percent on their contracts, depending on the level of services and contract management throughout the process. If he could get the best architect on a project, it more than likely would come in under bid and the architect would have experience and watch the costs closely. Those were some of the things he looked at when sitting on a panel and interviewed engineers or architects. He emphasized they could lower the cost when reusing the plans and he thought the professional staff were letting them down by not negotiating the costs and reuse of the plans down the line. Mr. Jerry Higgins, State Board of Engineers and Land Surveyors, distributed a copy of their newsletter (Exhibit M) including the suggested guidelines for going through the process of QBS. They did it on a regular basis and sent it to all the local subdivisions of government. It was based on the QBS national standards. His board was concerned about an increase in the number of complaints for inadequate design if the legislation passed. They were presently registering about 500 out-of-state engineers and surveyors on an annual basis by reciprocity. They met Nevada's minimum standards. They all wished to come to Nevada because there was more activity than in the remainder of the country. They were qualifying people at minimum standards, and the people were competing in the marketplace. They could have a tendency to do inadequate design to meet the lowest cost bid. They felt the QBS was a better process in sifting it out. Mr. Tom Grady, of the Nevada League of Cities, indicated he would like to see local governments excluded from the legislation. He did not believe they had the same problem as the state in many of the projects. They were not redoing projects time and again as did the state. The Lovelock Prison problem had been mentioned numerous times, but he was not sure S.B. 686 would have corrected the problems. They still had to bid for the second phase, and, if it was not legally written, they owned the plans in the first phase. Mr. Bob Hadfield, Executive Director in Nevada of the Association of Counties, echoed the comments of Mr. Fritsch and Mr. Grady indicating they were very satisfied with how they had been able to bid projects and get expertise insofar as design and engineering under current law. He believed there were experts in the room who could resolve some of the issues and frustrations he had heard during testimony. They thought it could work. They had made it work at the local government level and wished to be excluded from the legislation. He said they would participate in helping with the dialog. Mr. Hettrick asked Mr. Fritsch when Henderson and/or other local entities bid the projects and requested reuse of the plan for 25 percent, did it cost more on the first bid, or was it negotiated after an agreement was reached. Mr. Fritsch did not believe it cost more but was part of the initial negotiations with the architectural firm. There were two firms, one doing a recreation center and one for the fire plans. Architectural fees would be in the six percent range so that was basically where they negotiated from. Mr. Hettrick asked if they had reused plans. Mr. Fritsch said, yes they had. Mr. Hettrick asked what they had paid over the 25 percent additional. Mr. Fritsch indicated it was difficult to guage because it went out to bid again and the bidding climate was different both times. They were about two years apart from the time they built the fire stations. They were surprised when the construction costs were higher than they had thought. Mr. Hettrick asked about the architectural fees. Mr. Fritsch indicated they were less; some for the plans and a minor amount for contract management. It was significantly less than the initial drawing up of the plans. Ms. Tiffany commented to Mr. Fritsch, city of Henderson, they had not done a great job on the library, convention center, or the public safety/administrative building. Ms. Tiffany gave additional examples of her unhappiness and took umbrage with the "perfect situation" he had related. Mr. Fritsch countered saying he was not trying to imply they were perfect. He was only speaking about architectural and engineering fees. In the cases where they had used a repeat design, they had been able to lower the architectural cost. He had not voted for her opponent. That situation, even though it was costly to the city, was corrected. There was a lawsuit against the architect and the city of Henderson had prevailed. There had been questions regarding some of the projects in the city of Henderson, he did not deny or run from them, they were attempting to make them better. Assemblyman Schneider said it was obvious that people from all walks of life, involved in the issue, were against the bill. In private industry over-runs, mistakes and change-orders occurred on a daily basis. He asserted government could not do it any better. He worked in private industry with architects and engineers and changes were constant. He did not feel they could sit in Carson City and legislate to make these conditions better. He felt it was working as well as could be expected. Mr. Henry Etchemendy, representing the Nevada Association of School Boards, indicated he had been asked to specifically mention Clark County District and Washoe County School Districts through their representatives. If there had been room at the table he would have joined his three other compatriots from local government and echoed what they had to say. He felt the system was adequate and should be allowed to continue what was being done at the current time. As Ms. Giunchigliani had said, there were many duplicate schools. In those cases, as explained earlier, a full architectural fee was not paid for each school. A smaller, much reduced fee was paid on each subsequent design to fit the site. The fee might include any desirable changes to be made. He felt the current procedures adequately served the public, and the school districts were saving every penny possible on architectural/engineering services. Mr. Ron Menken, a registered architect in the state of Nevada, indicated he had practiced privately for 20 years and was currently employed by the Washoe County School District as a project manager. He discussed the "cookie cutter" syndrome. He had designed schools for the district and presently was on the other side hiring architects for the district. Generally their fees ran seven to eight percent for the initial design, and when they re-sited the design, it usually cost about two-and-one-half to three percent of construction cost. The other issue was the low bid situation. They inevitably took the low bid on construction projects. He had seen numerous projects, and not particularly large ones, where the low bidder was not competent. It was almost impossible to get them "thrown off" and they were usually awarded the project. Invariably it ended up costing as much or more than the second low bidder because of time lost, their inexperience in managing a project, and cost over-runs. It was rarely cost effective. He was not in favor of the bill. Mr. Greg Erny, a registered architect in the state of Nevada, and a private practitioner who did work with the State Public Works Board, wished to look at opportunities where the state might save money versus where it had a chance to lose money in the scenario being proposed. In a $1 million construction project, with architectural fees of five to eight percent, there might be a $20,000 to $30,000 benefit in taking the lower architectural fee. He suggested looking at the places where money might be lost. In a typical architectural project, or in the scope of the work of a project, there was a programming phase where spaces were arranged properly so people could work efficiently. If the time was not spent properly and appropriately in the early stages of design, and people were not arranged in the most workable situations, there would be a loss of productivity and manpower over the life of the building. The state did not build buildings to throw them away in five years -- they were building twenty year buildings. Time was money in the architecture business. They were not putting together bricks, mortars and two-by-fours. They did not have material cost. Their expenses were their efforts, therefore, if one got $30,000 less a fee, one could bet they were getting $30,000 less effort. If that effort had not been obtained throughout the project, whether it be the initial design, the construction administration or the proper preparation of the documents, one could expect that $30,000 to be paid back elsewhere. As they heard in previous testimony, those costs could come back to haunt. If they were going to be forced into competitively bidding their services, it meant they would not be putting in any extra time to try to service them any better than in the past. They would be doomed to repeating what was done in the past because they could not afford to look for innovative and better ways for the future. Mr. John Loete, an engineer in the Engineering Maintenance Department of the city of Reno, stated his opposition was based upon a concern expressed by Tom Stephens that the bill, as is, reflected an intimidating process. An analogy had been made to the competitive bidding of products. If one bid a process to design a hauling vehicle, for example, that was a level of complexity. He felt intimidated and unsure about compliance and obtaining the expertise to prepare documents to competitively bid on services they dealt with on a regular basis, such as master plans for sewage treatment services and other types of major projects. Assemblyman Schneider asked if most projects cost more than actually bid because of change orders. Mr. Etchemendy said in most cases that was correct. There was always something that occurred to change the price. He recalled a project in Carson City many years ago where a determination was made that any change order was required to come out of the bid cost. In other words, some other item within the bid would have to be omitted. They ended up meeting the bid but there were some trade-offs. Mr. Schneider suggested in that event, although the price was right, the final product was not the same as originally bid. Mr. Etchemendy agreed it was not exactly as it began -- it was just as good, but there were trade offs. Ms. Giunchigliani asked Mr. Menken if he was a licensed architect, He answered yes. She asked if the Washoe County School District had a policy of hiring within their building division only licensed people from within the industry. Mr. Menken indicated the Director of the Plant Facilities was a registered engineer and the Director of Architecture and Buildings was a registered architect. She asked, to his knowledge, was there a requirement for those who dealt with the actual selection of bids to be licensed in the area of architecture or engineering. Mr. Menken said the job requirements for those positions required either registered engineers or architects. Ms. Giunchigliani expressed frustration with Clark County because their entire building/facilities division basically included individuals who were retired military, promoted teachers and/or administrators, not people who came from private sector business. Part of what had been discovered through the legislation was if correct specifications were not done on the front end, there would be problems down-the-road. If people were not properly qualified to make decisions on bonds or construction there would also be problems. There being no more questions or testimony, the hearing was closed on A.B. 686 and opened on A.B. 545. ASSEMBLY BILL 545 - Requires state board of nursing to issue licenses to practice nursing to certain applicants without examination. Bringing the Committee up-to-date, Chairman Spitler indicated Mr. Allard had been working with several people to address the needs of the Nevada Rural Hospital Project regarding Canadian nurses. They had decided it was not a workable remedy. Mr. Samuel MacMullen, Nevada State Board of Nursing, brought four BDR's from the State Board of Nursing and wished to testify. The plan was to gut the bill and use it as a vehicle to create a different piece of legislation. Mr. McMullen distributed copies of the BDR's (Exhibit N) and a document with a cover sheet explaining the origin of the bills with a work-through by the Executive Director of what the bills did versus current law (Exhibit O). Chairman Spitler asked if the BDR's were "housekeeping" issues. Mr. McMullen said it would be an understatement to call them housekeeping issues. They were products of a review over the last interim study done by 87 people who served on six task forces for the purpose of looking at every aspect of the nurse practice act and making revisions to it. Those that could be done by regulation had been handled. They had been broken down by the bill drafter into four categories: BDR 54-1241 was composition of the Board and relative "housekeeping"; BDR 54-1242 was authorization for advisory boards to pay only travel but nothing else. It had an allowance for nurse's assistants to do things that might be additional exercises, but only in conjunction with the regulations of the board; BDR 54-1243 was a normal policy statement which was housekeeping. It also had an unauthorized practice of nursing set of provisions which were basically two things, an administrative fine, and secondly, since the current law was a misdemeanor they were unable to get people to process it. In a discussion before the standing interim health care committee it was indicated processing was not done because it was a misdemeanor and perhaps it should be referenced a gross misdemeanor; BDR 54-838 encompassed a number of disciplinary provisions, the product of committees of nurses, hospital administrators, directors of nursing and the Nursing Board. The task force had submitted it to the group of Chairs consisting of 26 people. The bill draft put those concepts into place with the proper language. The Board had perused all of them, they basically reflected the work of the interim study. Chairman Spitler indicated he would like to amend the bill and bring it back to the committee and asked the pleasure of the Committee. ASSEMBLYMAN HUMKE MADE A MOTION TO AMEND AND REREFER A. B. 545. ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION. THE MOTION CARRIED. There being no further business, the hearing was adjourned at 7:15 p.m. RESPECTFULLY SUBMITTED: Barbara Moss, Committee Secretary Assembly Committee on Commerce June 12, 1995 Page