MINUTES OF THE ASSEMBLY COMMITTEE ON JUDICIARY Sixty-eighth Session May 2, 1995 The Committee on Judiciary was called to order at 8:03 a.m., on Tuesday, May 2, 1995, Chairman Anderson 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. Bernie Anderson, Chairman Mr. David E. Humke, Chairman Ms. Barbara E. Buckley, Vice Chairman Mr. Brian Sandoval, Vice Chairman Mr. Thomas Batten Mr. John C. Carpenter Mr. David Goldwater Mr. Mark Manendo Mrs. Jan Monaghan Ms. Genie Ohrenschall Mr. Richard Perkins Mr. Michael A. (Mike) Schneider Ms. Dianne Steel Ms. Jeannine Stroth STAFF MEMBERS PRESENT: Dennis Neilander, Research Analyst Joi Davis, Committee Secretary OTHERS PRESENT: George L. Cotton, Office of the County Manager Robert R. Barengo, Attorney at Law Bill Hamilton, disabled citizen Paul Gowins, disabled citizen Scott Youngs, disabled citizen Coni Longero, Administrator, State of Nevada Unclaimed Property Division Doug Walther, Senior Deputy Attorney General, Department of Commerce John Butterworth, disabled citizen Donald J. Reis, Deputy Secretary of State for Securities Regulation Chairman Anderson opened the meeting with a quorum present. He announced and provided for committee distribution a letter dated April 25, 1995 from Westar Management Group regarding an anti-discriminatory zoning bill. A copy of the letter is attached hereto as (Exhibit C). ASSEMBLY BILL 502 - Makes various changes relating to discriminatory practices. Assemblyman Barbara Buckley, District 8, primary sponsor of A.B. 502, stated the bill deals with discriminatory housing practices. Ms. Buckley announced George Cotton, Clark County Affirmative Action Manager, would be assisting her in presenting A.B. 502. Ms. Buckley stated A.B. 502 would bring the laws in the state of Nevada regarding persons with disabilities in compliance with some of the federal acts regarding allowing persons to have access to public accommodations. Ms. Buckley declared one of the problems with the existing statutory language is that it does not provide as much opportunity as it could. Additionally, because it fails to comply with federal law, Housing and Urban Development (HUD) has decertified Nevada as a substantially equivalent agency. That means HUD investigates housing discrimination complaints in Nevada instead of a private sector employer dealing with someone from the Nevada Equal Rights Commission (NERC). HUD gets involved in Nevada claims from their San Francisco, California, office which elevates the cost to the employer. Ms. Buckley pointed out that if this legislation passes, Nevada's statutes will then be consistent with federal law thereby allowing for Nevada claims to be processed in Nevada. HUD would give the state $1,300 per case to investigate the claims. Ms. Buckley informed that because these statutes were not amended properly in 1991, several hundred thousand dollars have been lost. Ms. Buckley noted she received a letter from HUD dated March 8, 1995 pertaining to the $1,300 Nevada would receive for each investigated claim. An analysis from the last legislative session is also contained within the letter from HUD. The letter is attached hereto as (Exhibit D). Ms. Buckley expounded that previous attempts have been made to amend the statutes in this regard but have failed due to incompetence. She would like to rectify this problem and believes the passage of A.B. 502 will accomplish the same. Ms. Buckley began a section by section analysis of the bill commencing with Section 2 which sets forth a provision that a person may not refuse to authorize a person with disabilities to make reasonable modifications to the unit if the person pays for the modifications and they are necessary. In addition, this section provides that the landlord may require the person to restore the interior of the unit upon departure. Section 3 has to do with multi-family dwellings and governs the construction designs contained therein. Ms. Buckley added this section is already being complied with most often. Section 4 deals with "familial status" as it relates to discriminating housing based on familial status only. George Cotton, Clark County Affirmative Action Manager, Office of the County Manager, testified in support of A.B. 502. He stated he worked with Ms. Buckley on A.B. 502. Mr. Cotton informed the committee he was the Assistant Director Nevada Equal Rights Commission under the O'Callaghan Commission a few years ago. In his present position, he responds to complaints filed against Clark County by various agencies. Mr. Cotton stated one of their concerns have been that in the last three years they have had to deal extensively with Equal Employment Opportunities Commission (EEOC) which is a federal agency enforcing employment law. They have found their interface with the federal agencies has been very difficult as the remedies they seek are unreasonable, the subpoenas issued are over-broad, and this becomes very costly for the office to respond. They would prefer to deal with a state agency thereby eliminating some of the "heavy-handedness" they currently are dealing with. Mr. Cotton commented last legislative session he spoke in opposition to granting just strictly subpoena power at the investigative stage to NERC. Since then, they have experienced many difficulties with the federal government. He concluded by stating they would prefer to deal with the state agency rather than the federal government. Upon Mr. Goldwater's inquiry, Ms. Buckley stated in her previous discussions of federal law pertaining to A.B. 502, she was referring to the Americans with Disabilities Act (ADA) and the Fair Housing Act. Mr. Goldwater asked if the definition of disabilty for the purpose of A.B. 502 would be utilizing the ADA definition or perhaps a state definition. Ms. Buckley stated the state definition is set forth in Chapter 118 of the Nevada Revised Statutes and that is the definition utilized herein. Upon Ms. Ohrenschall's inquiry, Ms. Buckley stated the existing law with regard to exemptions would be left intact as set forth in NRS 118.060 which defines dwelling. The exclusions contained are in effect for the single person selling their home. There are also exemptions that would involve the individual renting just one room. Ms. Buckley added two other exemptions include senior complexes for 62 year olds and older. All other adult complexes not falling under these perviews would be illegal based on federal law. Ms. Steel asked Ms. Buckley to check into any requirement necessary for a bonding mechanism when the unit is changed and then the landlord wants the unit changed back. The bill currently does not address who would pay for that expense. Ms. Buckley stated she would research that area more for the committee. A discussion was held regarding accessibility relating to the common area in a housing unit. Mr. Carpenter inquired of Mr. Cotton if A.B. 502 passes, will Nevada be just enforcing federal regulations or will Nevada get some latitude on enforcement at the local level. Mr. Cotton stated if the laws are changed at the state agency once the case is deferred to them, we will have the right to process the case in the manner in which they chose. The federal enforcement agency will only look at the remedy at the conclusion of the case. Chairman Anderson asked Ms. Buckley if buildings being constructed as of March 13, 1991, the date set forth in the bill, meet the criteria outlined in the bill. Ms. Buckley stated yes she believes Las Vegas is complying with those provisions. Further discussion was held between Ms. Buckley and Chairman Anderson regarding elevator requirements and the terminology "use and enjoy the dwelling." Additional discussion was held regarding the term "reasonable accommodations" as brought forth by Mr. Manendo. Ms. Buckley stated these are terms of art used by the bill drafters and assist in Nevada's compliance of federal law. Mr. Schneider addressed his concerns about Section 4 of the bill and the effect of this provision on the average person with rental properties and the many housing units in Las Vegas renting to adults only. Ms. Buckley stated under current state and federal law it is illegal to discriminate against the rental of property because of children alone. She added there are exemptions for those individuals only renting out a couple of homes. Ms. Buckley stated the other exemption addresses the over 62 years or over 65 years of age categories. Upon Ms. Monaghan's inquiry into how HUD would be invovled in the process, Ms. Buckley replied if A.B. 502 passes, NERC would be eligible to process claims and investigations. HUD would be forced to defer to the state agency to conduct the investigations and HUD would pay the state to do the same. Mr. Cotton clarified if the complaint is filed with the state agency, the complaint remains with the state agency. If the complaint is filed directly with HUD, HUD will be required to defer the case back to the state agency to process without their initial investigation. Ms. Buckley stated this could occur if the state enacts the law and then apply to the federal government. Ms. Buckley continued with Section 5 of the bill which is a requirement of the federal agency. Section 6, she stated, was simply clean-up language. Ms. Buckley addressed Section 7 of the bill which provides procedural clarifications and sets forth a time for filing complaints. Further, Section 7 allows for the award of punitive damages and provides for the exhaustion of all administrative remedies prior to filing a complaint in district court. Further discussion was held regarding the time available for filing a complaint. Mr. Cotton clarified with regard to Mr. Sandoval's comparison of Section 7 to Section 10, if the agency has completed its process of investigation within one year then you can move forward with a complaint in district court. If the agency has not completed their process within a year, then you can still file a complaint even though they have not completed their investigation because the one year has expired. Mr. Carpenter asked where the punitive damage awards would go if awarded. Ms. Buckley replied they would go to the person bringing such complaint, the person so injured. Mr. Carpenter stated he would like to see some of those funds go toward an agency that assists the disabled community. Ms. Buckley continued to Section 9 stating that provision brings the law in compliance with the federal laws. Section 10 governs the procedural process in filing complaints. Mr. Cotton commented on Section 11 in that the director is eliminated in the outside activities they can engage in as far as income. He added historically that position has been substantially underfunded. Section 11 would allow the director to have some type of outside income. Chairman Anderson asked if the director is allowed to have outside employment, would there be sufficient amount of time left to conduct the duties in the normal course of the director? Mr. Cotton stated no there probably would not be any time to pursue outside employment but they could have an interest in a business that would not require their actual physical appearance. Ms. Buckley stated Section 14 deals with procedural requirements on mediation and conciliation and the remedies available. Ms. Buckley concluded the remaining sections of the bill clean up the language and address "service animals" to reflect current terminology. Ms. Ohrenschall asked about the language contained at page six, line 20, ". . . In a court of competent jurisidiction at the expense of the commission" wondering if the commission had that type of money. Ms. Buckley concurred that that language was odd and she would research the area further prior to the work session on the bill. Mr. Sandoval inquired into Sections 13 and 14 and the notice provided to a person upon whom a complaint is made. Specifically, he asked if notice was typically served by a process server or certified mail since no provision is elaborated in the bill. Mr. Sandoval's concern directly relates to another provision in the bill which requires a 10-day reply to a complaint. Mr. Cotton stated historically complaints that have gone out from the NERC have been certified mail, return receipt requested. Ms. Buckley stated she would also research that area further prior to a work session. Further discussion was held regarding notice, filing of complaints, and the time for filing a response. Scott Youngs, Disabled Community, read his prepared testimony in support of A.B. 502, attached hereto as (Exhibit E). Mr. Youngs is concerned with continued enhancement and protection of civil rights for the disabled community. Paul Gowins, Disabled Community, commented Section 2 of A.B. 502 would put Nevada consistent with federal acts and he believes it is important to support those standards. Mr. Gowins stated he brought the ADA for review by the committee if so necessary. Chairman Anderson informed Mr. Gowins that would not be necessary as the committee members have access to the entire act in the research library. Mr. Gowins stated his understanding of the bill would not require "retrofitting" in that it only applies to new construction. Mr. Gowins elaborated further regarding the standards reasonably accustomed to in accommodating accessibility requirements. Mr. Gowins pointed out the area regarding filings in Section 7, line 3, needed further investigation and perhaps more clarification. He added people with disabilities need quick resolutions. Mr. Gowins concluded by discussing briefly the term "service animal" as the preferred term since it would encompass a more broad spectrum of providing services to disabled persons. Mr. Gowins provided for the record the Nevada Housing Study for Person with a Disability, dated December, 1994. This Study is attached hereto as (Exhibit F). Mr. Gowins stated he would support the passage of A.B. 502 and the Disabled Community was happy to see this legislation come along. Mr. Butterworth, Disabled Citizens, testified in support of A.B. 502 and presented an area for consideration by the committee. His suggestion is to Section 5 which expands the remedies and relief available pursuant to litigation--specifically temporary and immediate relief. Mr. Butterworth's language consideration is attached hereto as (Exhibit G). Chairman Anderson asked Ms. Buckley to take into consideration the testimony and concerns presented today and come back to the committee with some proposals prior to the work session on the bill. Mr. Humke asked Ms. Buckley to also consider the fiscal impact and the participation of the Nevada Equal Rights Commission. Specifically, Mr. Humke asked Ms. Buckley to seek a letter from NERC stating they understand this bill is currently pending and they would participate and do what is needed from a fiscal aspect to carry out the provisions required under the bill. Chairman Anderson announced a break at 9:25 a.m., and the committee reconvened at 9:45 a.m. SENATE BILL 154 (FIRST REPRINT) - Makes various changes to provisions governing securities. Donald J. Reis, Deputy Secretary of State for Securities Regulation testified S.B. 154 was brought forth in the Senate by his office. He stated one issue remains after Senate debate. In the Senate, Section 1, line 1 of the bill was changed to exempt sales representatives and broker dealers from licensing as investment advisor representative. Mr. Reis stated they would like to see them included in the definition of investment advisor representative. Mr. Reis acknowledged that Mr. Barengo, also testifying on S.B. 154, opposed that change. Mr. Reis clarified that to not license these people as investment advisor representatives would take them out of the growing body of regulations concerned with investment advisors and money losses to the public. He concluded that they need to be within the definition so some regulatory standards can be set and they will have jurisdiction to police the situation. He added there would be a revenue impact if they were removed from the licensing requirements. Having no exact figures, Mr. Reis estimated this may result in a loss of $100,000 in licensing fees if the exclusion is made within the definition. Mr. Reis stated compromise language is being worked out amongst all interested parties to exclude those brokers/dealers and sales representatives who should be excluded and to include the ones who should be added. Chairman Anderson asked if the estimate of loss of income in licensing fees was anticipated considering they are not now collecting these fees anyway. Mr. Reis replied they are now collecting revenue from any sales representatives not working in certain areas. Robert R. Barengo, Attorney at Law, representing the Security Industry Association, a trade association of all the security firms such as Merrill Lynch and Dean Witter, testified in support of S.B. 154. Mr. Barengo stated the specific language under discussion now is found at line 3, page one "sales representative." They feel that language does not need to be in there because it does not add anything to have these persons licensed since they are still regulated by the industry. They view the inclusion as only a revenue function. In fact, Mr. Barengo stated the inclusion of these persons in the definition would only cause an added burden on the industry. He informed the committee that he and Mr. Reis are trying to work it out so Mr. Reis can continue his job of protecting the public. Upon Ms. Steel's inquiry, Mr. Reis stated sales representatives currently work under the licensure of another party. He clarified they are licensed as sales representatives with brokers/dealers. The reason they want them licensed as investment advisor representatives is because there is a different standard of competency that is tested and there are different sales practices that are regulated. Mr. Reis declared acting against the licensing of the sales representative working under a broker/dealer by imposing conditions that are posed on an investment advisor representative is not right since at the same time we are telling them they do not have to register as an investment advisor representative. He added it goes against public policy to tell someone they will be required to comply with standards set forth in registration but they do not have to be registered. Mr. Barengo concluded he and Mr. Reis will be working together to amend the bill with some language changes to the bill or to the regulations. Chairman Anderson asked their proposals be presented to the committee in a timely fashion. SENATE BILL 155 (FIRST REPRINT) - Revises certain provisions governing unclaimed property. Coni Longero, Administrator, State of Nevada Unclaimed Property Division, stated the function of her division is two-fold: 1) Consumer protection in that their first obligation is to the owner of the funds they receive; and 2) Regulatory. They have auditors who audit the "holders" who are the businesses that report to the division. The unclaimed property division has been operating under those two functions since the division was created by the legislature in 1980. Ms. Longero stated they would like to see some changes to the bill. One area of concern was in the postcard mailing procedure. This procedure has been a waste of time and money and they would prefer another method to locate owners such as Equifax, Transworld, or some similar type of credit bureau. This would enable them to use more up-to-date information. Ms. Longero stated that amendment was completed in the Senate and they are satisfied with the outcome. Another amendment they requested was to get the publication of notices in the newspaper for one week rather than two weeks adding that most all the responses they receive is within the first week of publication. Chairman Anderson asked if that meant it would be published one time only in various newspapers throughout the state. Ms. Longero stated yes that was so. Ms. Steel inquired about the cost of a credit bureau such as Equifax versus the cost of mailing postcards. Ms. Longero stated the cost would be more; however it would be more effective in locating persons of unclaimed property. Upon Mr. Sandoval's inquiry, Ms. Longero stated examples of unclaimed property are mostly in the form of cash, intangible. For instance, unclaimed wages, security deposits in housing situations, utility deposits, abandoned checking and savings accounts, stocks. Mr. Sandoval noted the bill mentioned if property is unclaimed it may then be destroyed. Ms. Longero stated the tangible property that is taken in is from safety deposit boxes. After those items have been held for one year, they are destroyed except for the valuables such as heirlooms, etc. The valuables are auctioned and the funds received thereby are credited to the owner. Ms. Longero confirmed that the paper property is held one year and then destroyed, including such items as Wills. Mr. Sandoval expressed his concern for destroying Wills. Chairman Anderson clarified that was a practice currently being done by way of existing law. Upon Mr. Sandoval's further inquiry, Ms. Longero stated the money that is held and tangible items sold at auction that remain unclaimed after the holding time will then be placed into the General Fund. She clarified the laws of Nevada pertaining to unclaimed property provide that the owner has perpetual rights to claim their property. Ms. Longero stated the next amendment they requested was regarding safekeeping and the safety deposit box contents in the banking industry. Presently, the law states the administrator can dispose or refuse property. However, they have never refused any property from a bank but do refuse property from hospitals. This property is usually "soiled" so that property is refused. That amendment, requested by the Nevada Banking Association, is set forth in Ms. Longero's memo dated May 2, 1995 which amends NRS 120A.330. Ms. Longero's memo is attached hereto as (Exhibit H). Douglas E. Walther, Senior Deputy Attorney General, Department of Commerce, testified with regard to Ms. Longero's requested amendment. He commented the same thing could be accomplished by taking out the phrase "or other safe-keeping repository" on line 3 of page 3 of the reprinted bill. Ms. Longero stated that suggestion was fine. Mr. Walther stated after S.B. 155 was heard and amended on the Senate side, it came to their attention that there was some conflict between the unclaimed property law and some banking statutes in relation to contents of safety deposit boxes. Mr. Walther explained the conflict in greater detail adding the proposed change is contained in the handout attached hereto as (Exhibit H). Mr. Sandoval asked how often Wills are brought into the unclaimed property division and if there would be a problem in retaining them. Ms. Longero stated they do not see Wills too often. She added they have been holding, out of courtesy, birth certificates and marriage licenses for the LDS church for their genealogy research and library. Mr. Sandoval stated typically a Will is not recorded so there would be no other way to trace it. Therefore, he would like to see an amendment to S.B. 155 allowing for the retention of Wills. Mr. Walther stated the existing law may be adequate to address Mr. Sandoval's request to retain Wills in that it is permissive for the administrator to retain items for longer than the one year holding period, at their discretion. Mr. Sandoval stated if it was more appropriate to let the existing law remain he would be satisfied with that as long as they produced a letter of intent to promulgate a regulation internally. Further discussion was held regarding the destruction and maintaining of records that are unclaimed property. ASSEMBLYMAN HUMKE MOVED TO AMEND & DO PASS S.B. 155 BY INCLUDING THE AMENDMENTS PROPOSED BY THE UNCLAIMED PROPERTY DIVISION MEMO (EXHIBIT H) ATTACHED HERETO AND ADDING LANGUAGE TO REQUIRE THE DIVISION TO RETAIN COPIES OF WILLS AND OTHER IMPORTANT DOCUMENTS THEY COME UPON. ASSEMBLYMAN BUCKLEY SECONDED THE MOTION. Mr. Walther asked for clarification on the time limit in which Wills would be required to be held before being destroyed. Upon discussion, the committee decided an additional five years would be adequate. Ms. Longero asked for clarification on the language used in the motion "and other important documents they come upon." Further discussion was held regarding other types of documents that may be important to retain such as property deeds not previously recorded. Mr. Humke withdrew that portion of his motion. Chairman Anderson brought the motion back to the floor for a vote. THE MOTION CARRIED. ASSEMBLYMEN BATTEN AND STEEL WERE NOT PRESENT FOR THE VOTE. Mr. Humke announced he had a bill draft request brought forth by the district attorney's office in Pershing County arising out of a situation there while prosecuting a murder case. B.D.R 1-1810 Revises provisions governing private practice by attorney who is appointed as special prosecutor for limited duration with limited jurisdiction. ASSEMBLYMAN HUMKE MOVED FOR COMMITTEE INTRODUCTION OF B.D.R 1-1810. ASSEMBLYMAN BUCKLEY SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMAN STEEL WAS NOT PRESENT FOR THE VOTE. Mr. Humke recalled Ms. Steel's request for an Assembly Concurrent Resolution surrounding the subject of child custody cases requiring both parents to execute an application for a passport for an infant. ASSEMBLYMAN HUMKE MOVED TO REQUEST BILL DRAFTING OF AN ASSEMBLY CONCURRENT RESOLUTION PERTAINING TO THE APPLICATION OF PASSPORTS FOR AN INFANT. ASSEMBLYMAN OHRENSCHALL SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMAN STEEL WAS NOT PRESENT FOR THE VOTE. Chairman Anderson announced the committee had received amendments for review prior to floor session. There being no further business before the committee, the hearing was adjourned at 10:33 a.m. RESPECTFULLY SUBMITTED: __________________________________ Joi Davis, Committee Secretary APPROVED BY: Assemblyman Bernie Anderson, Chairman Assemblyman David E. Humke, Chairman Assembly Committee on Judiciary May 2, 1995 Page