MINUTES OF THE ASSEMBLY COMMITTEE ON COMMERCE Sixty-eighth Session June 21, 1995 The Committee on Commerce was called to order at 3:50 p.m., on Wednesday, June 21, 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 Ms. Chris Giunchigliani Mr. Lynn Hettrick Mr. David E. Humke Mr. Michael A. (Mike) Schneider STAFF MEMBERS PRESENT: Mr. Paul Mouritsen, Senior Research Analyst OTHERS PRESENT: Ms. Lonna Burress, Nevada State Board of Nursing, Las Vegas Office Ms. Margaret Stanish, Attorney General's Office Mr. David Horton Mr. John Gibbons, Real Estate Division Mr. Don Soderberg Ms. Kathy Apple, Nevada State Board of Nursing, Reno Office Ms. Terry Beusley, Nevada Nurses Association Ms. Ana Aebi, American Counsel of Life Insurance Ms. Alice Molasky, Insurance Commissioner Mr. Sam Sorich, NAIT Ms. Paula Treat, Desert Springs Hospital Ms. Janis Pollard, Saint Mary's Regional Medical Center Ms. Janice Pine, Saint Mary's Health Network Mr. John Sande, Nevada Banker's Association Mr. Jim Baumberger, Nevada Banker's Association Mr. Scott Walshaw, Financial Institutions Division Mr. Sam McMullen, Nevada State Board of Nursing Mr. Wayne Wilson, American Insurance Association Mr. Joe Guild, State Farm Insurance Mr. Jim Wadhams, Nevada Rural Hospital Project, Nevada Association of Hospitals and Health Systems Mr. Jay Meierdierck, Citizen Ms. Brook Neilsen, Assistant Attorney General Mr. Gary Milliken, Direct Sales Association Mr. Jim Smith, Office of the Attorney General Mr. Dick Rottman, CEO, Bell United Insurance Company and Western Insurance Company Following roll call, the hearing was opened on A.B. 545. ASSEMBLY BILL 545 - Required state board of nursing to issue licenses to practice nursing to certain applicants without examination. Chairman Spitler indicated there was an error when the bill was printed wherein the Canadian nurses had been included. Therefore, section 10 in its entirety had been deleted by amendment. Ms. Lonna Burress, Executive Director of the State Board of Nursing, introduced Kathy Apple, the Associate Executive Director of the State Board of Nursing, and indicated they would be presenting the bill. Basically the bill was the outgrowth of a five year project by the Board of Nursing. Their practice act had not been completely revised since 1947. Under the auspices of the interim health care committee an 87 member task force had convened and were referred to the law and legislative committee. They had reviewed every section of their practice act and those places on which they could not reach compromise had not been brought forward. Therefore, most of the information had been worked through a 14 month process. The variance from that were the five areas with which they had been dealing. The first was delegation. They were going to bring a very broad delegation to the Committee, modified to deal only with Certified Nurses Assistants (CNA's). It had not been voted upon by the 87 member committee. The other modifications were added by the legislative health care committee when the bill was presented to them. Chairman Spitler asked why the CNA's had been added later. Ms. Burress indicated (Exhibit C), the legislative tool, which indicated the areas agreed upon to bring to the legislature, the first of which was delegation. The delegation, brought forward to the legislature, said a nurse could delegate a nursing act to a CNA as long as the nurse thought the CNA had the knowledge, skill and ability. There would have been no limit on what they could delegate. It had to match the CNA's need and the nurse's desire to delegate. The Board held special public forums in the north and south and received overwhelming requests from nurses not to bring it forward. Therefore, they did not bring it forward. At the same time, industry, particularly acute care, came to the Board in the open forum and spoke at length about health care reform and the need to be able to have flexibility in how staff was utilized. The Board, listening to that, believed it was appropriate to accept a friendly amendment so that change could occur in the sunshine. It was clearly in the best interest of the public, and reflected a legislative process. It was on page 2, section 5, line 16 through line 21. Ms. Giunchigliani asked Ms. Burress to clarify it was not the result of the forum but at the request of some of the acute health care providers, which meant the hospitals wished to deal with the issue of CNA's. The Board made a recommendation, at least for the purposes of discussion, to allow it to be part of the bill. Ms. Burress indicated that was accurate. The Board, believing there was change in the country, felt the process would put it in regulatory format so any potential rule, change or training had to go through the rule-making process done by the Board which required public hearing and input. Ms. Giunchigliani asked how that changed from the issue of the delegation of the CNA's in the minds of the nurses. Ms. Burress stated as delegation was proposed by the law and legislative committee of the whole, it would have allowed any nurse to delegate any act they thought the CNA or unlicensed person had the knowledge, skill and ability to safely perform. They were trying to deal with the issue of the disabled as well as in the hospitals. It was much more narrow in that it only dealt with the certified person and not with the unlicensed person. It kept it within the chain of command in nursing. The Registered Nurse (RN) and Licensed Practical Nurse (LPN) would delegate directly to a CNA. If there was inappropriate behavior there would be adverse consequences for the CNA who had a certificate from the Board, as well as the administrator who had designed the policies and procedures, and the nurse who had made the delegation. Ms. Burress explained the bill and stated on page 1, section 2, the most relevant part was the last line. The Board and the committee of 87 felt it was important during the health care change to say clearly the Board's purpose was to regulate the practice of nursing and enforce the provisions of the chapter. Section 3 allowed the Board to take adverse action against a person who was holding himself/herself out as a nurse. It was brought up in the interim health care committee by Assemblywoman Tiffany who wanted adverse outcome for people who held themselves out as nurses. Discussion had occurred about a gross misdemeanor. That section came directly from the Private Investigator (PI) chapter which would allow the Board to cite and fine people who held themselves out as nurses. Chairman Spitler asked if they had the same language in terms of the dollar amount on the fine. Ms. Burress indicated they had taken the exact language. He asked if they were comfortable with the fines? He felt they were very high. Ms. Burress said it was their desire to stop people from holding themselves out as nurses. The documented cases went beyond the office nurse who was holding herself out as a nurse who had not been properly credentialed. There were more advanced practitioners of nursing who did not have credentialing and they wanted it stopped. When they were running their own business, it was very serious. Section 4, page 2, took a section of the statute that said the Board would have a CE advisory committee who would be paid, removed that language and put in the Board would have advisory committees, all on the same level, who would do volunteer work and their transportation would be paid. Section 5, the controversial section, would allow the board to authorize additional acts beyond what was being done by CNA's at the present time. CNA's were put in the law in 1989 and were prepared in 75 hours. Other sections of the law would limit what they could do regarding things that did not require the unique knowledge and skill of a registered nurse (RN) or practical nurse (PN). There was a limitation on what the Board could authorize. For the record, she had put together (Exhibit D) outlining their general thoughts and plans about how it would be dealt with should it be authorized, including the acts discussed, how it would fit in with current law and how they would go about rule making unless they received other direction from the Committee. Ms. Tiffany recalled the purpose of the fines were to raise the elevation of seriousness. If they were reduced to $500, would there be an impact on paying the expenses of the Board? Ms. Burress indicated any fine levied by the Board went to the general fund. Section 6 reflected a process that had been going on since 1987, particularly dealing with those people who were impaired because of alcoholism or drug abuse problems. They were put on a five- year contract. It was originally discipline. What they had been doing for the last few years was having them voluntarily surrender their license, leave the profession of nursing until they could demonstrate behavior that showed they were clearly and cleanly in recovery. They were then allowed to come back into nursing under a limited license on a five-year contract and were very carefully monitored. There was a four-and-one-half percent relapse rate which had been one of the lowest in the country last year, the same the year before, and 12 percent before that. It was a successful program. They wanted to reflect what had evolved in dealing with that type of condition. They wished to make clear what could happen. If those individuals did not adhere to the contract, they would be reported and would move to the disciplinary phase. They had found in looking at other states, when it was not disciplinary, more people entered the program. Section 7 was a fingerprint law generated when CNA's were given a state certificate. The Oregon Board of Nursing ran a correlated data base from their CNA's with the police files and found 40 percent of the CNA's had records. They began to find the same problem. When they began running fingerprints last year it was found there was a problem in nursing when people were not truthful. It was an important section to protect the public. Section 8 reorganized the structure of the Board of Nursing. Currently there were seven members of the Board, four RN's, two licensed practical nurses (LPN), and one consumer. This would change it so there would be one consumer, one LPN, and five RN's. The majority of the decisions were about RN's and their practice subsumed everyone else. There was a diminishing number of LPN's in the state and, in fact, there were no LPN's being produced in Nevada. Ms. Kathy Apple indicated she ran the Reno office and was in charge of disciplinary matters relating to the Board. She had been co-chair on the discipline focus group that had looked at all the discipline statutes and regulations. The theme running through the remainder of the proposals had to do with the goals of the sub-group, which was to make the revisions "user friendly" so they made sense to the lay person. They tried to eliminate duplication where there was one law for LPN's and one law for RN's which were the same, or one law for CNA's and one law for nurses which were the same. They also addressed what would allow the Board to do its job efficiently but not be abusive in its authority. Section 9, NRS 632.130 was exactly what she had been describing. NRS sections 632.130 and 632.260 were two separate laws about practicing without a license. They combined those into one and added subsection 3 which clearly stated the Board had authority to send a cease-and-desist letter to someone practicing without a license. It also clarified a report would be forwarded to the appropriate law enforcement agency. The revision was recommended by Assemblyman Tiffany that the criminal penalty be elevated to the level of gross misdemeanor from a misdemeanor. Section 10 was eliminated from the bill. Section 11 pertained to CNA's and addressed who had to report violations of the nurse practice act. There was not a well articulated version for nurses. They had thought it should cover nurses so it was combined, and a provision was added that people who reported were protected from civil liabilities. There was a process wherein a person filing a complaint did so in writing, signed his/her name, and were known to the person about whom they complained. It was felt that protection was needed. Chairman Spitler referred to page 5, line 24, "the clerk of each district court shall notify the Board of any person who holds a license", and asked if she knew of any instances where the clerk of a district court notified a Board of any sort of action where someone had been found guilty of something. Ms. Apple indicated it was put in because of two cases wherein a judge had ordered the licensed person to do something with their license. The Board had discovered it when the probation officer had informed them. Chairman Spitler said he could understand if a judge ordered it, but they were asking a clerk to notify the Board if the person was adjudicated mentally incompetent, found guilty of a felony or gross misdemeanor, any offense relating to a dangerous drug, violating the sections of NRS 484, abuse or fraud. He had never heard of a clerk doing that, was unsure how it would be handled mechanically, and was unaware of any law requiring a clerk to do it. He felt it should be looked into further. Section 12 was a "user friendly" revision which tried to articulate what a prima facie case was so people did not have to look it up in the law books. It also stated the statute applied both to licensees and holders of certificates. Section 13 was a combined section and described the grounds by which the Board could take disciplinary action. There were two statutes, one for nurses and one for CNA's, and they had been combined. They had deleted NRS 632.323 which referred to nurses aids. Chairman Spitler, referring to page 6, line 11, asked for an explanation of the term "substantially". Ms. Burress indicated because of the ADA, the Board had developed, with help of other agencies in the state, a statement regarding the qualifications to be a nurse. It included such things as being free from hallucinations, as well as being able to carry weight. There were minimal things required and all applications, when answered "yes" to a physcial or mental disability, were judged on what was determined to be the basic rudimentary things to practice nursing. Chairman Spitler asked if in their regulations they had defined "substantially". She indicated it would be put into the regulations in the next rule-making session. Mr. Perkins asked if it would be cleaner to say "is related to the qualifications". Why did it have to be substantially related and open it up to interpretation of what was substantial and what was not? Ms. Burress thought they chose the substantial language because it was ADA language but indicated she had no problem with "is related". Section 14 described the disciplinary actions the Board could take. Section 15 was a revision to give the Board some discretion regarding how soon a person could return for reinstatement after their license had been revoked. Section 16 added nursing assistant to the nurse statute on who was exempt from required licensing. Section 17 added license to a statute that only applied to certified nursing assistants regarding when they could renew when their license had been suspended. Section 18 was a statute that only applied to CNA's and they wanted it to apply to every licensee and certificate holder. Section 19 had to do with process of the Board. Somehow during bill drafting there was a section left out. Language needed to be inserted after line 5, "issue subpoenas", so it would relate to investigation or hearing. The line would read, ". . Board may certify to all official acts and issue subpoenas relevant to any investigation or hearing for attendance of . ." Section 20 was a revision that simplified how people were notified when action was taken on their license or certificate. It was modified to be more expedient. They had found the old statute allowed nurses, who violated the practice act in a way that caused revocation of their license, to continue to practice anywhere from two to three months based on how the statute was written. Section 21 added the Board or their designate could send forward to the appropriate agency complaints that were violations of practicing without a license. Section 22 accommodated the change made in NRS 632.130 regarding practicing without a license. Section 23 went along with the fingerprint statute proposal by adding the Board of Nursing to the criminal repositories list. Section 24 was the section that had been repealed. Mr. Sam McMullen, representing the Nevada State Board of Nursing, indicated section 15 was a transition section relating back to the provision that the Governor could appoint an additional person and clarified the transition. Basically, it allowed him to allow the fifth member on October 1, 1995, when that term was created. Ms. Giunchigliani referred to section 5. She saw it potentially as a means to not hire nurses if they could find assistants on which to "push off" jobs and duties. She asked how they viewed section 5 impacting the profession. Ms. Burress referred to (Exhibit D), page 2, and explained there were two sections of the law. The key part of the statute was in NRS 632.127 which said the CNA could not do things that required the substantial knowledge and judgment and skill of an RN or LPN. Therefore, the hospitals with which she dealt, were saying they wanted to cross-train and use multi-skilled employees. They wanted to "chunk" tasks that came out of various unlicensed people who worked in hospitals at the present time. Those tasks were listed on the first page of (Exhibit D). A CNA who was licensed by the Bureau of Licensure and Certification (BLC) as a phlebotomist could draw blood from a patient. The CNA who possessed a license from the BLC and a certificate from the Board could do the phlebotomy. The Board had decided to accept the amendment and go forward with it because by allowing the Board to change the regulations to allow it as scope of practice meant if there was adverse outcome due to the behavior of the CNA, the Board of Nursing could deal with it within the whole care continuum. They saw it as change in the industry and felt there needed to be more flexibility. It provided them an orderly, up-front way to do it with a lot of public scrutiny. It meant they would end up having very laborious public hearings and there was a lot of fear about it. Ms. Giunchigliani clarified their position was that even though they were accommodating another group with another issue, it could give them some control on how to define what tasks and/or duties were given to CNA's. She had received a number of calls on the phlebotomy issue regarding people not being properly trained. She asked if there was a limit to the number of CNA's for which delegation could occur. Ms. Burress indicated currently they had 5,000-plus CNA's in the state. It was more than the number of RN's and was moving up on the number of LPN's. It was the fastest growing level of nursing. Ms. Giunchigliani stated, "Sure, it's cheaper!" Ms. Burress pointed out there were also people doing other tasks who had no real relationship to a regulatory board. Therefore, when a phlebotomist, currently licensed by the BLC and a CNA, "messed up", they ascertained it was within their continuum and jurisdiction which gave better safeguards to the public. They could then ascertain what the Chief Nurse had done about adequate training, documentation and regular evaluation. They could ascertain if the facility's policies and procedures supported safe and effective care. Then, if it was deemed the nurse had delegated inappropriately and CNA performed it appropriately, the Board had authority to do something about it. Ms. Giunchigliani asked if it was the Board's opinion if they did not accommodate putting it in, the hospitals may have done it anyway and the Board would not have oversight. Ms. Burress agreed and said the essence was the unlicensed versus the certified and control of same. Ms. Giunchigliani asked if there would be less hiring of uncertified non-CNA types because the Board would have regulation over them, or would those individuals, the CNA's and nurses, continue doing all the other things. Ms. Burress did not have a good answer to that and suggested it was a question better answered by the hospitals regarding their hiring practices. Ms. Giunchigliani referred to section 7 regarding fingerprints and asked who would do it. She expressed concern in section 11, page 5, about the clerks. She indicated section 13, subsection 5, was a presumptive clause and had nothing to do with what they did on the job. Ms. Burress indicated it would have to impair the person's ability to practice otherwise they did not have jurisdiction. Mr. McMullen interjected it had to effect it in a manner dangerous or injurious to any other person, which was the first standard. The second standard was, ". . or which impairs his or her ability to conduct the practice authorized by a license or certificate . ." She asked how they would find out if it was dangerous or injurious. Miss Burress said currently unless they had a blood test indicating it, they looked to the person's behavior. Were they acting irratically? Were they frequently disappearing to the bathroom? It was a pattern of behavior that went on over a period of time that would be documented by the hospital. It would also give probable cause, if they had the ability, to ask for a test. Ms. Giunchigliani asked who evaluated the nursing staff -- the Board of Nursing or the hospital that employed them. Ms. Apple said typically they received a complaint from the facility. Facilities were becoming more sophisticated about how to address it appropriately. They received a description of what they did in the practice, as Ms. Burress had described. They also drew either a urine or blood and alcohol drug screen. There were two pieces of evidence: one, how they acted; and two, what was in their system. Ms. Giunchigliani asserted there was "just cause" and asked if they would object if that language was to be inserted. Chairman Spitler, referring to page 5, line 31, proposed a scenario of a clerk providing information about a person who had received a DUI and was not at work, and asked what they did with that information. Ms. Burress indicated there was a formal process but deferred to Ms. Apple since it was developed by her committee. Ms. Apple said it was an elaborate process by which prior convictions were evaluated and criteria outlined at staff level by the Board, including what could be cleared at their level and what had to go before the Board for review. For instance, a nurse applying for licensure who had a DUI conviction over five years old, no other criminal convictions, and had met all the legal requirements, would be cleared for licensure and that would be the end of it. Chairman Spitler understood what they were doing in clearing for licensure, however, the bill stated that after someone was licensed, the clerk was to inform them if that person was arrested or convicted of DUI. What was done in that circumstance after a person already had their license? Ms. Apple indicated a complaint file would be opened, and it would be evaluated on whether or not it met their grounds. Chairman Spitler asked if it would in any way impact the person's license if it happened at a time when the person was not working. Ms. Apple stated if the DUI was not related to the practice of nursing the person's license would not be impacted. Chairman Spitler asked what was done with the information. Was it filed away and used against the person when there was a host of them? She said they would "close it out". Ms. Brower referred to section 6 and asked to what types of conditions, limitations and restrictions were they referring. Ms. Apple referred to progressive discipline. The Board already had in statute authority to place conditions, limits and restrictions on licensees as disciplinary action. The number of complaints submitted to them had increased exponentially. In 1993 they doubled from 1992; in 1994 they doubled from 1993; and it looked as if 1995 would triple 1994's. They had to have an expeditious way in which to investigate complaints adequately and in a timely manner in order to resolve them. Part of it came out of the work done by the Citizen's Advocacy Center, which was the national consumer group that had worked with other national regulatory groups, and their recommendations on how to expedite consumer complaints. They were encouraging regulatory bodies to look at nondisciplinary ways in which to handle it. She reiterated the great success experienced with nurses with chemical dependency who entered into recovery. They were monitored, licensed and practicing during recovery and there had been an extremely low relapse rate. That was an example of how it could be implemented. Ms. Brower asked if any part of their practice would be limited. Ms. Burress answered, yes, it would be. She gave an example of a nurse who was chemically dependent on Demorol and had been diverting from her place of employment. The nurse would be restricted from access to any controlled substances for the first year of probation. Ms. Brower referred to section 11, subsection 2, where a paragraph had been omitted saying the physician might notify the superintendent, manager or person in charge of a facility. She wondered why it was taken out. Ms. Apple indicated the bill drafter had taken it out. Ms. Burress said it was addressed later in section 11 (a). Therefore, they would still be reporting because there was a significant number of nurses working in doctor's offices. Ms. Brower clarified they would be reporting to the superintendent, manager or person in charge of the facility. It seemed to her they would be bypassed and the person would go directly to the Board. Mr. McMullen "crystal balled" what the bill drafter's intention might have been. The physician usually was licensed, but it was not always clear that the superintendent or manager of the facility had the responsibility as stated in statute. They may have thought by adding "physician" in that section and requiring them to report directly to the Board, the action was present. What happened between them and the superintendent of the facility would be governed by their internal operating procedures. Ms. Tiffany asked if the fines were reduced would it impact the strength of the bill. Ms. Burress said they did not care. Ms. Tiffany asked where did CNA's normally practice. Ms. Burress answered they practiced everywhere. The largest concentration was in licensed medical facilities, referring to the health facility laws in NRS 449, which would be acute care, long term care, and/or home care. CNA laws were structured in such a way that there were places they did not cover. Ms. Tiffany said, if she was reading the bill correctly, it gave the Board ability to regulate CNA's. Ms. Burress said they already had ability to regulate them; the bill would add additional acts. Ms. Tiffany asked if the Board also licensed Nurse Practitioners. Ms. Burress replied Nurse Practitioners in the state had licenses as RN's, and they were certified, in addition to their license, as Advanced Practitioners of Nursing. Ms. Tiffany indicated she wished to change the composition of the Board from five RN's, one LPN and one general public. She felt it was rather heavily loaded toward the RN's. She felt if there were 5,000 CNA's, they should have representation, as well as nurse practitioners. If that were to be proposed, would they prefer adding members to the Board or subtracting existing members? Ms. Burress referred to page 3, line 23 (c), where it said an advanced practitioner of nursing (APN) was one of the groups from which the Governor could choose. In one of the earlier bill drafts every kind of nurse practitioner was named and there was concern it gave them an unnecessary advantage. In the Governor's selection over the last ten years there had been an APN on the Board. When they received authority to regulate CNA's in 1989 there was concern because they were a group who may or may not have their high school diploma and only 75 hours of training. They would be sitting on the Board and making disciplinary decisions about advance practice, registered nurse practice and LPN practice. A hard fought compromise had been worked out to give them a standing committee, which would not be affected by the bill. Her only concern about CNA's was their knowledge base, since one of the primary functions of the Board was to listen to cases and regulate the entire practice. Ms. Tiffany was insulted by that comment indicating the state had a citizen legislature and not all members had degrees and advance degrees. Some of them even had GED's, and they made very important decisions! She asserted she still wished to put at least one CNA on the Board, and, if it was put in the amendment, would it impact the bill? Mr. McMullen indicated it would not be their "druthers" and pointed out the need for a level of real expertise in terms of experience in the facilities or areas represented. He thought CNA's by definition were clearly represented in terms of the scope of their practice. It was not an effort to load it up with RN's. It was an effort to ensure that people who had the full range and depth of experience and education to act on the cases that would come before them. Ms. Tiffany reiterated she wished to have one CNA on the Board and compared it with the jury system where people made life-and-death decisions. She felt the CNA's were certainly capable of sitting on a Board of seven people. Ms. Burress indicated her comments were not meant to say CNA's were not educated. In looking at the demographics for CNA's, there were Ph.D. psychologists who had been certified. There was a variety of people within that scope. She was only describing what had gone on in the 1989 legislative session and how they had arrived at the decision not to put a CNA on the Board. Ms. Giunchigliani indicated there were many nurses brought in from out-of-state and asked how they were governed. Ms. Burress said if a nurse entered the state for one week, on a one-time assignment, the nurse was exempted. If the nurse did anything else the nurse was required to be licensed. Ms. Giunchigliani asked if they were fingerprinted. Ms. Burress said yes. Ms. Giunchigliani queried what was the make up of the Board at the present time. Ms. Burress answered there were currently four RN's appointed by the Governor from different geographic localities which gave a wide dispersion of kinds of practice, two LPN's and one consumer member. Ms. Giunchigliani had no problem with not having CNA's on the Board as long as they had a voice. It was a licensing and regulatory Board, and she felt they would be mixing issues. She asked if the CNA advisory committee was given voice in matters regulatory to them. Mr. McMullen declared the committee was there for input on matters affecting CNA's. Ms. Giunchigliani asserted that gave her a comfort level, but she did not wish to see them on the actual licensing and disciplinary part of the Board. Mr. McMullen referred to page 6, the issue of just cause with respect to the use of a controlled substance, dangerous drug or intoxicating liquor. He wished to clarify it was not a search- and-seizure or a subpeona section, it was their ultimate disciplinary section relating to that. The reason for the change was because they wanted to add additional elements besides intemperate use or addiction. Therefore, if one looked at the elements, they were the things that had to be proved for a disciplinary violation involving the use. Number one, there had to be demonstrated use; number two, it had to be a substance defined in the law; third, it had to be something that affected their work life or performance on the job; and fourth, it had to be dangerous or injurious to a person, or impair their ability to conduct practice. All four elements would have to be found to discipline an individual. The findings would have to be subject to the administrative procedure act for review and appeal under judicial review. Mr. Hettrick wondered if the bill should address and clarify illegally obtained controlled substances which could impair ability. Ms. Burress said a concern regarding nurses was "doctor shopping" wherein they might ask more than one doctor for prescriptions. One of the premises of nursing, because their performance affected people's lives, was to be extra aware of what medications they were taking and what effect it had on their patient care. Therefore, they had to be responsible and accountable for that in protecting the public. Mr. Hettrick said it was a valid point but felt the words "illegally or improperly obtained" should be in the bill. He felt it was illegal to go to three doctors in one day and obtain three prescriptions for an illegal drug or controlled substance. Even if it were not illegal and they had a right to the prescription, but obtained three when it was not needed, it might be improperly obtained. He stated it was important to protect the person who was rightly and legally taking a controlled substance that had been legally prescribed by the doctor. However, he did not have a problem with it if they felt it was careful enough. Ms. Janice Pine, representing St. Mary's Health Network, was present to speak in favor of the amendment version of A.B. 545. She introduced Janis Pollard, the Project Director Systems Redesign for St. Mary's Regional Medical Center, who testified specifically in relation to the CNA's and section 5. Ms. Janis Pollard submitted prepared testimony in the form of a letter (Exhibit E) she had written to the Commerce Committee which gave an overview of the reasons St. Mary's was interested in having the ability to provide a different type of cross- training than in the past for CNA's. Chairman Spitler asked her what precluded them in the statute from doing what she had addressed. Ms. Pollard indicated they had been instructed by the Board of Nursing that current policy, due to the definition in the nurse practice act of what a nursing assistant could do, limited it to basic nursing skills, which was the content of their basic training course. In that situation they had discussed training them for activities not part of the basic 75 hour training course received by a nursing assistant. They needed additional training to be competent in those skills. Chairman Spitler asked if the Board of Nursing precluded them from giving CNA's additional training at the present time. Ms. Pollard's understanding was they felt the legislative environment created a barrier. She deferred to Ms. Burress on that point. Ms. Burress stated during the last legislative session, in the original bill for CNA's, there was a section that allowed CNA's to do additional acts beyond the basic in acute care. When they developed the regulations, nobody liked them and they were told to take them out. Therefore, they repealed the section that would allow them to do additional acts, and, at the same time, Senator Townsend required a written letter saying they would not expand the scope of practice in any way. Not only did they have a legislative action repealing additional acts, there was legislative intent not to go further. They had taken the position that only what was in the basic curriculum was within the scope of practice. Chairman Spitler asked what would change should the bill go to the Senate. Senator Townsend, during the current session, had said he would no longer hold them to the letter or intent as long as the legislature agreed. Ms. Giunchigliani asked who currently did the tasks the cross- training would address. Ms. Pollard answered an EKG technician would be brought in and receive a month of training using equipment and proper placement of leads. It might be a person "off-the-street" who would be trained in the hospital to perform technical tasks. Ms. Giunchigliani asked if the lists of tasks on Exhibit E were the ones to which she was referring. Ms. Pollard said yes. Ms. Giunchigliani queried if the "off-the- street" individuals would be hired by the hospitals. Ms. Pollard said their intent was to train them as CNA's. A discussion ensued. Ms. Pollard indicated it was possible they would make some adjustments in the skill mix. At the present time they utilized nurses in a variety of tasks which took them away from bed side and nursing duties. By allowing others to pick up some of that work, a higher percentage of their time would be spent in direct patient care. One of the studies done at St. Mary's addressed how their staff actually spent time on the units. It was found that only 30 percent of the RN's time was currently spent on clinical and technical duties and much of what took them away from that was coordinating with other departments to get other services brought forward. Part of what they wished to accomplish with redesign was to help with those issues. Ms. Giunchigliani wished to make sure they did not end up with uncertified, untrained people taking jobs away from the nursing staff who were the most qualified. Ms. Pollard stated they were also concerned, had discussed those issues, and had not yet made specific decisions regarding what they would do with skill mix. However, whether or not it was changed, hospitals could bring in CNA's with the current basic nursing scope of practice and have some change in percent of skill mix. The cross-training part did not effect RN's. It only effected the other unlicensed categories. Ms. Paula Treat, representing Desert Springs Hospital, agreed with the previous testimony and submitted (Exhibit F) to the Committee. In support of section 5 of the bill there had been a great deal of consultation between Winnie Fritz, of the nursing staff, Desert Springs and the RN's. There had been many meetings to discuss what was acceptable and not acceptable to their nurses who were union. They found a great deal of interest in having RN partners helping with tasks that did not require the same kind of education, but in certain areas it would be available for people to learn more. She had asked Desert Springs, if the bill passed, what did they foresee as the role of RN's. They felt there would be more RN's as the hospital continued to grow and more responsibilities of the critical care RN's would be taken over by CNA's so the RN could spend more time caring for patients. She urged the Committee to support section 5. Ms. Giunchigliani asked if section 5 had not been added on by the Board of Nursing, would they have brought another bill. Ms. Janice Pine said it had been their intention to do so. They had the support of the Hospital Association and the other hospitals. Ms. Stephanie Tyler, representing the Nevada Nurses Association, indicated strong support for amended A.B. 545 and directed her comments to section 5. Their concerns were based on the fact that the Board could repeal the section of regulation that dealt with cross-training. They viewed it as clearly a broadening of the scope of practice of CNA's. She referred to page 2, lines 16 and 17 language, "performed certain acts in addition to basic nursing services". Their concern was the broadening into those additional services. She introduced Teri Beasley, the President of the Nevada Nurses Association, District 1, who had remarks regarding the depth and breadth the change could bring to the quality of nursing. Chairman Spitler asked if he understood her to say the Board of Nursing could, in fact, do it by regulation. Ms. Tyler answered, "With regard to the cross-training that could allow CNA's in the current setting to perform multiple tasks." Their concern was broadening the scope of what those multiple tasks could be. Their understanding was the prohibition against cross-training was codified in regulation. They would support the Board's effort if the Board desired to repeal that part of the section. It would not take a legal change, it would merely be a repeal of that part of the regulation. Ms. Teri Beasley submitted her prepared testimony (Exhibit G). Mr. Jim Wadhams, representing the Nevada Rural Hospital Project that originally requested A.B. 545, and the Nevada Association of Hospitals and Health Systems, confessed a lack of technical information on the issue and was somewhat perplexed by the testimony. From the standpoint of his clients, he did not understand the opposition. He pointed out that having adequate health care professionals was critical. Rather than diminishing an individual's role they had attempted, in the original bill, to bring in qualified people to augment the staff so they could use the best quality people for the highest level of function. That was the intent of section 5 and both his clients supported it from the viewpoint that the State Board of Nursing was the body to which the legislature had entrusted evaluation of quality of care. They had confidence the Board was well intentioned, well informed and would not diminish the quality of care. They would allow cross-training of personnel to give the highest level of care to patients by using ancillary personnel for the functions of the CNA. Mr. Jay Meierdierck, speaking on behalf of himself, indicated in section 2 the purpose of the committee should be to provide for the welfare of the public as opposed to just regulating the practice of nursing. He would have liked to see it added. There being no more testimony or questions, the hearing on A.B. 545 was closed. The hearing was opened on S.B. 561. SENATE BILL 561 - Provides for interstate and international banking. Mr. John Sande, representing the Nevada Banker's Association, indicated their strong support of S.B. 561. He introduced Mr. Steve Kalb, Director of Sun State Bank; Mr. David Funk, President/CEO of Sierra Bank of Nevada; Mr. James Baumberger, President of First Republic Savings Bank; Mr. Thomas Grovey, Senior Vice President and Senior Credit Officer of U.S. Bank; Mr. Stan Wilmeth, Vice President and Manager of Northern Nevada Commercial Loan Center of Nevada State Bank; Mr. Thomas Needham, Executive Vice President and Chief Credit Officer of First Security Bank; Mr. Tom Mangione, Area Manager for Southern Nevada of First Interstate Bank; Peter Thomas (not present), Director of Bank of America; Ms. Mindy Cavenaugh, Vice President of Community and Corporate Affairs Officer of First Interstate Bank; Mr. Buzz Allen, Executive Vice President of Bank of America/Nevada; and Mr. Ted Waking, Executive Vice President of the Nevada Banker's Association. Mr. Scott Walshaw, the Commissioner to the Financial Institutions Division, explained that S.B. 561 had been requested by his office. It came after the passage of legislation in the fall of 1994 by the United States Congress of a bill that had come to be known as the Reigle-Neal Interstate Banking Bill. He submitted his prepared testimony (Exhibit H). Ms. Giunchigliani summarized it complied with the federal act that would be coming in place but allowed Nevada to establish the regulations before the "feds" did. Mr. Walshaw said it gave Nevada two opportunities to craft optimum legislative interstate branching. If the state did not do anything between the present time and June 1997, federally chartered banks would be able to branch on an interstate basis. State chartered banks would be prohibited from doing so. S.B. 561 would control how it was to be done and level the playing field so, in effect, what they would allow was the opportunity for state chartered banks to both branch outside of Nevada as well as for banks chartered in other states to come to Nevada and put in interstate offices. Essentially, what was being done was to protect the dual banking system. She asked if any bank after September 28, 1995, would not be allowed to convert to interstate branching unless it was five years old. Mr. Walshaw agreed and said an out-of-state bank holding company not in Nevada at the present time could make an acquisition after that date. If they acquired a bank that had been in existence for five years, they could convert it. If it was a newly chartered bank, after that date they had to wait five years after making the acquisition in order to convert it. They could also create a new bank and go about normal banking services through that office but it had to be a separate charter. Ms. Tiffany asked where the state was going with the idea of being a "host state". Mr. Walshaw said insofar as interstate branching was concerned, it was a non-event. The key decision had been made ten years ago to allow interstate banking to occur. Any change that would come as a result of interstate branching activity was really a form versus substance issue that would probably be seen more by the consumer and was regulatory. In theory what happened under the changes was if Bank of America or First Interstate Bank wanted to operate branches on an interstate basis, it would allow the customer to go to any state in which they were operating that permitted interstate branching to occur and transact business at that particular office. Whereas at the present time it could not be done. An individual could access their account through an ATM machine but could not make deposits, apply for a loan, or do any of the activities normally done through the local office. Ms. Tiffany asked how things would change in the next five years should the bill pass. Mr. Walshaw indicated at the present time about 90 percent of the deposits in the state of Nevada were already controlled by out-of-state bank holding companies. The change in corporate culture in Nevada banking had already occurred. If there was a change, it would be seen from the standpoint of customer service. The regulatory aspects were if Bank of America, as an example, converted its offices in Nevada to branches, he was empowered by the bill to go into a joint agreement with the state of California if it so happened the Bank of America had a state charter that was the lead bank. If it did not, the office of the Comptroller of the Currency was the one responsible to enforce the provisions of the federal legislation that would apply to national banks operating on an interstate basis. Essentially what was being done was to create an opportunity for out-of-state holding companies already owning a significant part of Nevada banking to convert to branches and do it under a state charter as well as a federal charter. It enabled Nevada to have ability to influence how it would happen. It was a regulatory issue more than a customer service issue. The customer service part of it would continue as it was. Mr. Sande indicated there was a conflict amendment necessary. The Committee previously passed a limited liability banking bill which made certain technical changes to include limited liabilities, and there were approximately six sections that had language regarding limited liability banks that were in S.B. 404. He had talked with the Legislative Counsel Bureau and they said it would be a simple over-night amendment. Mr. David Horton indicated he had problems with S.B. 561 and distributed (Exhibit I), a clipping from Las Vegas Review Journal, to illustrate. In 1992 Nevada had the fastest growing economy in the country so its bank deposits collapsed by over 26 percent, the most severe contraction of any of the 50 states. All the interstate banks decreased their loans. At the same time all of the smaller unit or community banks that were meeting the growing needs of Nevada's economy increased their loans by up to 74.8 percent. Nevertheless, interstate banks that controlled 90 percent of all Nevada deposits contracted their loans to the extent that there was a net overall loss of available purchasing power in the state of 26.8 percent. In one year because most of Nevada's bank deposits were controlled from out-of-state, literally billions of dollars of Nevada capital was exported to the primary markets of the interstate banks. A 26 percent drop in available purchasing power in an economy at other times had proven enough to cause a major depression. One could find that described in Adams Law of Civilization and Decay, the New York Edition, or in Delmar's History of Monetary Systems, the London Edition. The effect of the violent contraction of purchasing power in 1992 was softened somewhat by the infusion through the casino industry of large sums of new money for construction. Next time when the international bankers, as provided in the bill, raid Nevada's bank credit we may not be so lucky. If Nevada's economy was to be built up and the infrastructure needed to make it stronger and more versatile, more capital would be needed, not less. It had been suggested that the horse was already out of the barn and nothing that could be done about it. He mentioned an article in Barrons supplied by the Independent Banker's Association, the small bankers. In Nevada those banks were expanding their loans and meeting the economy's needs while the interstate banks were exporting Nevada capital. Nationwide banking was making some states "haves" at the expense of the "have nots" and it pointed out that what they called, "economic colonization" was taking place with interstate and international banking. Big and still expanding super regional and money center banks, headquartered in colonizer states, drained funds from colonies to lend elsewhere. The states who had lost their major banks to outsiders could become economic colonies. The top five colonies would be Florida, Arizona, Nevada, Washington and Maine. The major economic decisions would be made elsewhere. The expression "Florida banking" would become an oxymoron. It pointed out it was not a conspiracy or outright discrimination, it made perfect economic sense for the banks to lend money where they already had the people and where they were the most comfortable. It was something experienced in Nevada even with branch banking. It was represented that everyone was happy with branch banking before the door was opened to interstate banking. That was not true in rural Nevada nor in the red-lined areas where the same thing was happening on a small scale. Capital was being exported out of rural Nevada and moving into bank centers where one could make a $20 million casino loan instead of a $3,300 home improvement loan. It meant home improvement did not get made and it caused entire counties to be red-lined, as were certain areas of the cities. What happened as a result of interstate banking was going to be made worse by inviting international bankers in. It was suggested there was nothing could be done and we should take our lumps and try to live with it. He left the Committee with another communication from the Small Banker's Association regarding why community bankers should be interested in opt-out legislation. It was already described that this was an opt-in measure. The possibilities which should be explored were of softening the effect because it was a situation where Nevada created a lot of bank credit that was used elsewhere. When that happened it had adverse effect on the Nevada economy. He had some examples, if the Committee wanted to hear them, on how it might be subtitled "The International Bankster Bank Stealing Bill". His principal concern was it facilitated the export of Nevada credit and he suggested doing whatever could be done to reverse the trend. The small banks were already doing a fine job and were growing rapidly, but they controlled only ten percent of the deposits. Therefore, when something happened that caused a contraction, his clients ended up in bankruptcy, which was why he had a personal interest in trying to arrest the outflow of Nevada capital. There being no further testimony, the hearing was closed on S.B. 561, and opened on A.B. 647. ASSEMBLY BILL 647 - Makes various changes regarding provisions of health care services and supplies by health maintenance organization. Chairman Spitler asked if there was testimony for or against A.B. 647. There being none the hearing was closed on A.B. 647 and opened on A.B. 667. ASSEMBLY BILL 667 - Requires verification of registration of qualified intermediaries in certain real estate transactions. Mr. John Gibbons, an investigator with the Nevada Real Estate Division, explained the bill was basically a Division bill. Assemblyman Hettrick had agreed to introduce it, and they had run into a couple of "stale" Bill Draft Requests (BDR) on the Senate side which had to be reintroduced. It was too late so Senator Townsend suggested they amend it to include the two BDR's. The first section of the bill allowed the Director of the Department of Business and Industry to designate the primary office of the Real Estate Division, either in the north or the south, and then designate where the administrator would primarily conduct business. Section 2 prohibited the Division from issuing a license to a person who had either been convicted of, entered a plea of guilty or nolo contendre to one of the following charges: forgery, embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, engaging in a real estate business without a license, possessing for the purpose of sale any controlled substance or any crime involving moral turpitude in any court of the United States or competent jurisdiction. That person would be precluded from applying for a real estate license until three years after either the person paid the fine or restitution order by the court, or the expiration of the period of the person's parole probation or sentence, whichever was later. Section 3 was basic clean-up language. Section 4 dealt with the qualified intermediary as it applied in the 1031 tax deferred exchange. Line 5, paragraph 2, referred to a tax free exchange and it was really a tax deferred exchange, and the language needed to be clarified. Section 5 dealt with the appraiser's licensing law in NRS 645C. It was at the request of the Legislative Audit that the language be changed that set the examination fee by statute and they wanted it set by regulation. There was a problem when fees arose. They were unable to increase their fees to justify the increase in the fees by the testing companies. They wanted to be able to adjust the regulation to reflect that. Section 7 dealt with qualifying intermediaries also and would prohibit any title insurer, title agent or escrow officer from handling a tax deferred exchange until they had verified the facilitator had registered with the Division. There was a procedure for the Division to publish a quarterly list of facilitators and supply them to the escrow officers, title insurers and title agencies. He had checked with the Insurance Commissioner and they had no problem with it. It was just a simple matter of obtaining the list from a computer printout. Chairman Spitler asked if there was anyone who wished to speak to the bill who had not signed in. He indicated Mr. Gibbons had gone over all the things they wanted in the bill and all that was needed was reprinting and to give people an opportunity to testify on it. Ms. Tiffany referred to section 1, and asked the purpose of designating an office. Mr. Gibbons said the original statute, NRS chapter 645, designated the Carson City office as the primary office and that was where the administrator was to practice. Because of the work load that had occurred in Las Vegas, the Director of the Department of Commerce felt it would be better the administrator be located there. Chairman Spitler asked for questions, there being none he entertained a motion. ASSEMBLYMAN BUCKLEY MADE A MOTION TO DO PASS A.B. 667. ASSEMBLYMAN ALLARD SECONDED THE MOTION. THE MOTION CARRIED. Chairman Spitler assigned Mr. Schneider to handle the floor statement for A.B. 667. The hearing was opened on S.B. 70. SENATE BILL 70 - Makes various changes to provision governing occupational licensing boards. There being no one to testify, the hearing was closed on S.B. 70 and opened on S.B. 488. SENATE BILL 488 - Makes various changes to provisions governing trade practices. Ms. Brook Neilsen, Assistant Attorney General, indicated support of the bill. The bill basically accomplished the following things: 1. Provided additional regulatory authority to go after telefunding fraud which was the main thrust of the bill. 2. Clarified the new funding mechanism for both the Ways and Means and Senate Finance Committees. They were now required to turn over all funds collected in those efforts to the general fund to offset the general fund appropriation which had now been provided to the Consumer Affairs Division and the Attorney General's office for that type of enforcement activity. Margaret Stanish would speak to the specifics and provide a long and detailed history. Ms. Margaret Stanish, Senior Deputy Attorney General, indicated the bill impacted the budgets of both the AG's office and the Consumer Affairs Division, and those provisions were contained in sections 1 and 18 which mandated that the recoveries from telemarketing lawsuits went to the general fund. The major changes were to add telefunding, which was pretty much a spin off of telemarketing where consumers were duped into donating money on the premise they had won a major prize. The second addition was to extend jurisdiction over recovery rooms which was yet another spin off of telemarketing that was probably the most dispicable form. After a person was "ripped off" by a telemarketer, a recovery room notified them and for a fee of about $500 to $1,200, promised to get their money back. Of course, the consumer never saw it! There were additions to the definitional section of "seller" contained in section 5 that added recovery rooms and telefunders. They had worked with several nonprofit organizations in both north and south to ensure they had language acceptable to the nonprofit sector and which would not impinge upon legitimate operations. They also cleaned up one of the exemptions relating to the media exemption on page 5, lines 13 through 16, paragraph (d), which was currently in litigation in the Supreme Court, and the change clarified the original intent. Beyond that the changes were housekeeping. There was a section that let the state recover cost during the distribution of the bonds. Telemarketers were required to post a $50,000 bond, and they had several bonds that had to be distributed to consumers across the country. It was quite an expense for the state to do that function and they were hoping to recoup some of the cost for it. Chairman Spitler asked if section 5 had the most substantive changes. Ms. Stanish indicated section 4 was the definitional section, specifically page 4 which had several additions that added telefunding and recovery rooms, beginning at line 23 which added recovery room, and lines 24 through 25 which added the telefunder. Mr. Gary Milliken, representing the Direct Sales Association, indicated they were in favor of the language in S.B. 488. ASSEMBLYMAN BUCKLEY MADE A MOTION TO DO PASS S.B. 488. ASSEMBLYMAN SCHNEIDER SECONDED THE MOTION. THE MOTION CARRIED. The hearing was opened on S.B. 505. SENATE BILL 505 - Makes various changes in regulation of insurance. Ms. Alice Molasky, Commissioner of Insurance, indicated S.B. 505 was a bill requested by the Division of Insurance, Department of Business and Industry. She gave her testimony (Exhibit J). Ms. Molasky said there were 105 sections in the bill and Chairman Spitler asked her to touch upon the substantive changes in the major areas. Ms. Molasky submitted an outline of S.B. 505 (Exhibit K) , and a summary of S.B. 505 from the Department of Business and Industry Division of Insurance (Exhibit L) and gave her testimony on them. Ms. Buckley, referring to section 2, wondered why it was necessary to change the standard of liability for the Division. Had there been any lawsuits against the Division and why was the sovereign immunity cap of $50,000 insufficient to protect the state? Ms. Molaski believed the $50,000 cap would apply. She was not familiar with any cases in Nevada. Certainly there had been cases across the nation where either the Commissioner, or especially the examiners, who were delegated with the Commissioner's authority were challenged. It was essentially the examiner's job to objectively report data. It offered them a certain amount of protection in the course of their work. Ms. Buckley indicated a problem with it and did not think it appropriate to begin to change standards of liability for different folks, especially when there was protection provided by the sovereign immunity cap. Ms. Buckley, referring to page 2, section 3, asked if there was a reason the documents were to be held confidential until a hearing was held and did it violate the provision that all public record should be open. Ms. Molaski said, no, it did not. It pertained to working papers. There was a report, however, which effectively allowed due process to the person examined to come forward and discuss any differences of opinion they had as to the content of the report. It also provided for a hearing mechanism before the report was made public. Through the hearing the information that had been collected and contained in the report would be made public. The accuracy of it, however, would be tested through an administrative proceeding. Ms. Giunchigliani clarified those records would be made public, but the working papers of the examiners or documents of the company which could have grade secrets would remain confidential. Ms. Molaski said the work papers of the examiners continued to be maintained in confidence. They were similar to an attorney's work product and contained, in many instances, the impressions of the examiners. From those working papers they found the basis for what was in their examination report which was what was reported to both the Commissioner and the person examined. There may not be a hearing if the report was accepted by the Commissioner and the insurance company as accurate. Mr. Jim Smith, with the AG's office, responded to section 2, subsection 2, on the immunity of examiners. The idea was to protect examiners who acted in good faith and people who acted in good faith to get information to examiners. It was designed to give them protection for material given to them. Oftentimes people tried to intimidate examiners with threats of litigation, and this gave them protection to do their job. Of course, they were not protected in any way for fraudulent intent or intent to deceive or gross negligence. There was very much a good faith standard on it. Ms. Buckley asked if he was referring to the new standard on lines 8 or 9, or the standards on line 15 and 16. Mr. Smith said he was looking at section 2, lines 15 and 16, but lines 8 and 9 were still the standard, and he did not think there was immunity for those types of things at the present time. Ms. Buckley said the standard at the present time was simple negligence, and it was changing it to a gross negligence standard. Mr. Smith understood what she was saying. Ms. Ana Aebi, representing the American Council of Life Insurance, was present in support of the bill. They felt the NAIC accreditation would be made more possible if the bill was passed. She submitted (Exhibit M) to the Committee. Mr. Sam Sorich, stated he was with the National Association of Independent Insurers, an association of property and casualty insurance companies, responsible for about 25 percent of the property casualty premiums written in Nevada. They supported the bill and said it was strong, progressive, modern, and tough. Regulation of the financial solvency of insurance companies was good for everyone, and ultimately it was good for the insurance consumer because it provided great assurance that companies would be financially sound when claims were filed. Mr. Wayne Wilson, the Vice President for the American Insurance Association, which was a national trade association with approximately 270 companies writing property and casualty insurance both in Nevada and nationwide. They had worked on insolvency improvements in laws throughout the nation over the past two to five years, depending on the state legislatures. They believed improving solvency regulation in every state was very important. There had been problems that had occurred in the past five years and the bill remedied many of the situations leading to those insolvencies. Therefore, they felt it was an important piece of legislation and encouraged the Committee's support. Mr. Dick Rottman, the CEO of Bell United Insurance Company and Western Insurance Company, two local domestic insurance companies, indicated he was in support of the bill. However, he had a couple of amendments which he had discussed with the Insurance Commissioner and she had concurred that the amendments would be fair for the bill. Page 5, line 44, subsection 2, after the word "determines" there would be a comma, and then "after a hearing" a comma, which provided for due process in the hazardous financial condition section. Chairman Spitler asked if he had testified in the Senate, and if so, did he offer the amendments at that time. Mr. Rottman said yes, on both accounts. He indicated the Senate had concurred with the amendments but wanted to get the bill out of the Senate so they would ask the bill drafter to print up the amendments and have them delivered to the Assembly. He had found that had not been accomplished. Therefore, he was at the mercy of the Committee and asked for their help. He continued, on page 23, line 40, extending over to lines 1 and 2 on page 24, the entire section 74 would be deleted. The reason for the deletion was that the risk based capital standards established by the National Association of Insurance Commissioners discriminated strongly against a small insurance company. It would be difficult, at that point and the way the standards were set up, to meet them as a practical matter. In all probability the NAIC would alter the standards over the next couple of years. He had committed that in 1997, if they had altered those standards to be fair and reasonable he would be delighted to support them. At the present time they discriminated strongly against a small insurance company. Ms. Molasky had reservations because she had not had an opportunity to extensively research and review the existing standards adopted by the NAIC. However, her Chief Examiner, when attending the National Association of Insurance Commissioners, told her there was still a fair amount of dissension over the model act and there were questions as to the fairness of a small company. Much as she desired strong regulation, much of the industry was relatively small. She did not want to take a chance of adopting anything that could injure those companies beyond the strength they were trying to achieve through regulation, especially where it was not necessary to achieve consumer interest in the state. Mr. Rottman pointed out page 27, lines 40 and 41 would be deleted. There would be a period after management and it would read "an agreement for management," and the balance of that sentence would be deleted. It dealt with the sharing of costs between an insurance company and an affiliate. The problem he had with it was that several of their domestic companies had situations where they shared employees, a copy machine, a coffee pot, and other things, and it was impossible to justify every single division of expense at that point. The standard was that it should be fair and reasonable and that was already in the code and in the bill. They could live with that, however, it was the detail and notifying the Commissioner on every cost sharing item that concerned them. The next item was on page 30 which dealt with the same type of thing, transactions with an insurer or its affiliates, and he asked that lines 34 and 35 be stricken. It had to do with documenting the various information with regard to those particular divisions of expenses. In terms of operating a small insurance company in conjunction with an insurance agency or another affiliate of any kind, if those provisions were left in they would be violating the law every day. He liked to stay within the boundaries of the law. Chairman Spitler asked if it was discussed in the Senate so all the others who gave support to the bill also supported the amendments. Mr. Rottman said to the best of his knowledge. Ms. Molasky indicated she did not know if everyone was present at that time who was present on this date. Chairman Spitler asked her if anyone had indicated to her they did not support the amendments. She replied they had not. Mr. Joe Guild, representing State Farm Insurance, added he was at the Senate hearing and what Mr. Rottman related to the Committee was accurate about shoving it off to the "better house". He wished to testify on behalf of State Farm Insurance that the proposed amendments Mr. Rottman mentioned on page 23 related to risk based capital. State Farm was a large insurer but they had some problems with that section as well, for different reasons, but for the reasons related by the Commissioner. They concurred with that proposed amendment. Apparently there was some dissension nation-wide related to that and State Farm had a problem with it, but otherwise supported S.B. 505. There being no further testimony, the hearing was closed on S.B. 505. ASSEMBLY BILL 649 - Provides for certification of inspectors of re al es ta te . Chairman Spitler asked Mr. Schneider for an update on A.B. 649. Mr. Schneider indicated on the home inspector bill there would be an update in a couple of days. Mr. Anderson was in possession of some amendments. Chairman Spitler asked Mr. Schneider to inform Mr. Anderson the amendments were needed by Friday, June 23, 1995, or the Committee would not act upon the bill. The hearing was opened on A.B. 655. ASSEMBLY BILL 655 - Converts housing division of department of business and industry into Nevada housing agency. Chairman Spitler said A.B. 655 was originally heard on June 9, 1995. Ms. Tiffany indicated she and Ms. Buckley had hammered out a reasonable agreement with Ms. Rose McKinney-James (Exhibit N). Mr. Schneider asked Ms. Buckley to define affordable housing advocate and from where one would come. Ms. Buckley explained an affordable housing advocate was one who attempted to ensure that housing was built for those individuals at or below 100 percent of median income was built. There were a number of them in southern and northern Nevada. For example, in the past year an affordable housing resource center was set up. It was a nonprofit group that supported a lot of the financial institutions in the state, based out of United Way, that had provided free office space. There was a similar one opened in Reno. They tried to bring the private sector and the nonprofit sector together in an attempt to get more affordable housing built. ASSEMBLYMAN TIFFANY MADE A MOTION TO AMEND AND DO PASS A.B. 655. ASSEMBLYMAN BUCKLEY SECONDED THE MOTION. THE MOTION CARRIED. Ms. Tiffany was assigned the floor statement for A.B. 655. Chairman Spitler assigned the floor statement on A.B. 488 to Ms. Brower. ASSEMBLY BILL 545 - Requires state board of nursing to issue licenses to practice nursing to certain applicants without examination. Chairman Spitler asked for a motion on A.B. 545. ASSEMBLYMAN TIFFANY MADE A MOTION TO AMEND A.B. 545 ON PAGE 2, LINES 2,3,4, FOR THE FIRST VIOLATION TO BE $500, THE SECOND VIOLATION TO BE $1,000, THE THIRD VIOLATION TO BE $1,500. THE BOARD WOULD BE CONFIGURED TO FOUR REGISTERED NURSES AND ONE CNA. ON PAGE 4, LINE 7, REDUCE A GROSS MISDEMEANOR TO A MISDEMEANOR. DELETE SECTION 10. Chairman Spitler referred to page 5, and stated there had been an unsatisfactory answer on line 24, and wondered if the clerk should be mandated to perform the task. He had not seen in any bill, anywhere, where the clerk did that task. He asked if there was a satisfactory solution, and how should it be handled. Ms. Giunchigliani suggested deleting the section. ASSEMBLYMAN TIFFANY ADDED TO THE AMENDMENT TO DELETE THE NEW LANGUAGE IN SECTION 11, SUBSECTION 2, LINES 24 THROUGH 37. Mr. McMullen stated through line 33 would be the language that was objectionable. Line 34 allowed a report to be filed by another person and lines 35 through 37 related to the civil liability for filing a report. Therefore, he felt 3 and 4 were consistent with subsection 1 and would have to be renumbered. Chairman Spitler asked if he would remove the brackets from line 19. Mr. McMullen stated the brackets would be removed from line 19 and line 24, lines 24 through 33 the new language would be removed and the remainder would be renumbered and retained. Mr. McMullen indicated it would be good if they had the ability to reference it and the authority to access it. Chairman Spitler said they did not wish to "fix the problem" at that time but would issue the authority to look into the matter. Chairman Spitler referred to page 6, line 11 to take out "substantially" and put in "is related". Mr. Hettrick had indicated a concern on line 19 on "illegally obtained" and Mr. Spitler asked if anyone wanted that included in the amendment. The Committee agreed not to amend it. Mr. McMullen suggested on page 9, line 6, before the period and after "papers", if it was clarified by saying "in any investigation or hearing" which did not break up the flow of the language. The Committee agreed. ASSEMBLYMAN TIFFANY MADE A MOTION TO AMEND AND DO PASS THE CLARIFIED AMENDMENT TO A.B. 545. ASSEMBLYMAN BROWER SECONDED THE MOTION. THE MOTION CARRIED. * * * * * * ASSEMBLYWOMAN GIUNCHIGLIANI MADE A MOTION TO AMEND THE AMENDMENT TO A.B. 545 TO DELETE SECTION 5. ASSEMBLYMAN BUCKLEY SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMEN PERKINS, SPITLER, BUCKLEY, GIUNCHIGLIANI AND SCHNEIDER VOTED YES. Mr. Allard indicated the reason for section 5 was to allow the rural areas to utilize the nursing assistants which was the whole thrust behind the Canadian nursing bill. The amendment was a compromise. He hated to see it deleted because the rural areas needed that kind of help. They were in desperate need of nursing staff. He did not think it was right! Ms. Tiffany supported section 5. Their concern was whether it was a scope of practice expansion and she was convinced it was not. She indicated in managed care at the present time they were readjusting the use of technicians and nursing staff and felt it was appropriate. Therefore, she was not concerned it was the expansion of the scope of work. She felt that was the major discussion. She agreed with Mr. Allard that if section 5 was removed it defeated the purpose of the Canadian nurses. She supported retaining section 5. Ms. Giunchigliani said she appreciated the concerns of the Committee. She did not see it as impacting the rural areas and understood their need. After five years of work the 87 member committee had chosen not to make the recommendation to deal with CNA's. Later, in order to work with the hospital association, the Board subsequently agreed to allow the language into the bill. It was not their language but in the light of understanding it probably would be done around them, the language was recommended to be put into the bill. She appreciated the dilemma of redesign because it was not for rurals, it was for redesigning structure of hospitals and how care was given throughout. She still felt it was expansion of scope. Ms. Buckley was assigned to handle the floor statement. There being no further business the hearing was adjourned at 6:30 p.m. RESPECTFULLY SUBMITTED: Barbara Moss, Committee Secretary Assembly Committee on Commerce June 21, 1995 Page