MINUTES OF THE ASSEMBLY COMMITTEE ON LABOR AND MANAGEMENT Sixty-eighth Session April 6, 1995 The Committee on Labor and Management was called to order at 3:30 p.m., on Thursday, April 6, 1995, Chairman Dennis Nolan presiding in Room 321 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Ms. Saundra (Sandi) Krenzer, Chairman Mr. Dennis Nolan, Chairman Mr. David Goldwater, Vice Chairman Mr. Lynn Hettrick, Vice Chairman Mr. Bernie Anderson Mr. Douglas A. Bache Mr. John C. Carpenter Mr. Pete Ernaut Mr. Mark Manendo Mr. Brian Sandoval STAFF MEMBERS PRESENT: Mr. Vance A. Hughey, Senior Research Analyst Mr. Fred W. Welden, Chief Deputy Research Director OTHERS PRESENT: Mr. David Going, Deputy Chief, Occupational Safety and Health Enforcement Mr. Lawrence Semenza, Associate General Counsel, Circus Circus Mr. Bob Webber, Director, Department of Building, Clark County Mr. Scott Langsner, Secretary/Treasurer, MGM Grand, Inc. Chairman Nolan stated the committee would be hearing A.B. 322 today. He introduced Assemblyman Bernie Anderson who would be presenting the bill. ASSEMBLY BILL NO. 322 - Makes various changes regarding safety of certain amusement rides. Assemblyman Anderson, Assembly District No. 31, testified he was presenting A.B. 322 based upon discussions held during the 1993 session. This bill appeared in the Committee on Labor and Management with amendment as A.B. 781 and was passed. Due to time constraints it did not make its way out of the Senate. The bill attempts to place safety guidelines on a growing part of the tourism business in the state, namely amusement rides. In the last session, a question concerning the operators of these rides was addressed as was the question of safety. These questions were addressed by local entities in the jurisdiction where the greatest number of amusement rides were situated. Mr. Anderson stated his expectation of this bill is to set out a minimum standard of behavior, that such rides should have, in turn providing the public with a reasonable expectation of safety. He is open to accommodate operators of such amusements who pass the minimum inspections of a local government entity, so the need for duplicate inspection is not required. This would not be necessary provided the governmental entity has an approved inspection plan on file with the Department of Industrial Relations (DIR) and that plan meets the required guidelines. It is his understanding the amusement rides in Clark County do meet these standards. Chairman Nolan inquired about a fiscal note being there is mention in the bill of conducting inspections and delegating a hearing officer or panel for the potential of disciplinary action. He pointed out the inspection and documentation of plans would also create additional costs. Mr. Anderson explained someone from DIR would be better suited to answer this question. Assemblyman Bache questioned in section 2, line 7, "A ride that is erected for not more than 30 days in one location", why are we excluding them. He stated he has concern for the transitory rides, probably more so than the permanent rides. Mr. Anderson replied this concern has been put forth before and the general feeling was it would be best addressed in a separate bill, dealing only with the non-permanent rides. To broaden the scope of this bill, attempting to cover both types of rides, would damage the likelihood of it moving forward. Assemblyman Krenzer referring to Mr. Anderson's comment that he does not want to over-regulate or over-inspect if local or existing inspections and laws cover an amusement park ride, inquired if he would like to place language to that effect in the bill. Mr. Anderson responded yes, he would. He stated it his intent, provided a standard is set, an amendment is drafted stating if an inspection plan is filed with the Occupational Safety and Health Association (OSHA) for the county, the state would not have to re-inspect. He pointed out he is afraid of amusement rides being erected in small areas close enough to large, urban areas to create the false perception of being covered by that county's standards. Actually they would be outside of the county's confines and therefore they would not have to meet the safety requirements when the public would assume they did. He wants to establish minimum standards exceptable for permanent amusement rides within the state as a whole. Assemblyman Goldwater clarified rides in his district such as the rollercoaster at Circus Circus and the rides at the MGM Grand would not be effected by this bill. Mr. Anderson stressed they are effected but currently they are being inspected by the county. A.B. 322 reflects the standards which are being used by Clark County, therefore the only additional responsibility these rides would have to Clark County would be to have their plan on file with the state. Chairman Nolan referred to a provision, 455B.100, of this statute passed in 1993. NRS 455B.100 states "the chapter does not prohibit a county, city or unincorporated town from adopting ordinances that regulate amusement park rides which are consistent with the provisions of this chapter." He inquired if this provides for those local entities to develop their own safety regulations. Mr. Anderson replied as long as they are consistent with the minimum standards that are being proposed here. Assemblyman Carpenter questioned if the county is currently following these standards why does the state also have to be involved. Mr. Anderson reiterated it is his intention to have all counties in conformity. If the county chooses not to adopt the amusement ride standards, the state would have the responsibility to make sure those rides meet the state standards. Some counties might not have the expertise within the county to provide this kind of technical inspection. Mr. Anderson in an attempt to provide further explanation, clarified he does not want to see one county being able to slip by with a lower standard of behavior than another in terms of liability. He wants the standards clearly articulated whereby there is at least one annual inspection to a minimum standard. Mr. Carpenter referring to section 16, asked what the cost is of an initial permit to operate an amusement ride. Mr. Anderson replied he was not sure of the exact cost. He explained the reason for this permit is since 1993 when this issue was last discussed, many rides have become operational. The date, March 1, 1996, is merely a starting date for all to be "on-line". Assemblyman Hettrick declared he has some major concerns with the drafting of this bill. Referring to page 1, line 18, "Plans and diagrams of the proposed construction", he stated he has not heard of many things being diagramed anymore. It might be better to state, "architectural drawings" or something similar making it more appropriate. Referring to line 19, "All applicable fees set by the division", he explained he would like to see that changed so that the division could not just set the fee and never have to return. On line 20 it states, "Any other information and documentation required". Mr. Hettrick believes this is too vague and wide open. The division could demand anything they want to allow them to build. Referring to page 2, lines 1 and 2, "Within 60 days after receipt of a notice of intent, the division shall issue...", he asked what happens if they do not issue. He further asked if this issuance was tantamount to an approval. Referring to page 2, lines 32 through 34, "fees must not exceed the actual cost to the division of the inspection, including the reasonable salary, travel and per diem expenses of employees of the division", he stated the language is poor. He asked how many employees and for how long. This is very vague and needs to be addressed. On page 3, lines 1 and 2 state, "The division may delegate to a hearing officer or panel the authority to take any disciplinary action", continuing later to say one can summarily suspend the permit. Mr. Hettrick is concerned with delegating that authority to a hearing officer who may not know the first thing about rides and also about the fact of who this officer is. Referring to lines 29 and 30, "An injunction may be issued without proof of actual damage sustained by any person, this provision being a preventive as well as a punitive measure", he expressed his belief this seems to lack due process. Mr. Hettrick summarized what the committee should do with this bill is state if they do not have appropriate inspection then they should demand a filed liability policy. Then the insurance company can see to it that the ride is safe and the government would not have to be involved at all. Let them provide a one or two million dollar liability policy or whatever is appropriate, from the insurance agency that shows they have built the ride properly and if they have not they do not receive a policy. He has no problem with the intent of the bill but has many problems with the bill as drafted. Mr. Anderson explained most of the bill is boilerplate language relative to Occupational Safety and Health Association (OSHA) questions. The verbiage reflects the kinds of needs of the department in order to move in a swift and sure manner. He has a different view than Mr. Hettrick in part about the ability of building inspectors in local counties having the expertise or the background to meet this. He pointed out he has another bill draft coming forward that he has been pushing for several sessions about qualifications of people who are building inspectors. He tends to believe that the expertise of people at the state level is higher than those at a county level. Mr. Anderson reiterated the public deserves to have a good reliance on amusement rides and in order for this to be so there has to be a minimum standard of behavior for all counties. Mr. Hettrick followed up by inquiring if the only rides in the state now are in Clark County and we are not going to inspect Clark County because they already have an ordinance, should and is the Division of Business and Industry going to have a person on staff who would be an expert on these rides and be able to judge whether or not they are safe. He feels this could be done in a more simple fashion. He suggested if the county does not have a person who can do this then they can bring it to the state and something else can be worked out. He stressed his concern of getting a state agency involved, fines and hearings. Mr. Anderson felt those questions might be better handled by the people from OSHA and the county who will be here today to testify. Mr. Anderson again reiterated his intent. Ms. Krenzer suggested requiring they file a safety plan, require they be checked by the DIR and also require they establish a bond for liability of one or two million dollars. This would place the responsibility of paying for the safety with the paying of the bond. Mr. Anderson stated he does not disagree with this suggestion as long as minimum standards have been set, are clearly guided by some state statute and the authority is within the DIR. Ms. Krenzer stated the bill says standards must be followed but she does not see where the bill actually establishes the standards. Mr. Anderson replied he would try to do that. Chairman Nolan asked if anyone else would like to testify in favor of A.B. 322. Mr. David Going, Deputy Chief of the Occupational Safety and Health Enforcement section (OSHE), testified. He pointed out the Consumer Product Safety Commission reported there were nine fatalities and 241 serious injuries from amusement rides during 1992. These numbers point to a recognized hazard. He explained while Legislative Counsel Bureau (LCB) developed this from a California statute, he also has a few problems with the language used, particularly in section 8. This was something new to the bill. Agreeing with the committee, he has concerns about duplication. He stated for them to be able to properly regulate these rides they would need to have on staff a qualified engineer to review the plans and to do these type of inspections. Many other states regulate rides very thoroughly. Chairman Nolan inquired if the fatalities were worldwide or nationwide to which Mr. Going replied those figures applied to the whole country, not only Nevada. Mr. Goldwater asked if those fatalities were due to operator negligence. Mr. Going responded most of them were due to the riders' misconduct and this is why the liability bill, A.B. 744, was enacted. The ride operators wanted the authority to ask those appearing to be intoxicated or behaving improperly to leave the grounds. Mr. Goldwater further asked if there were any incidences in Nevada where this particular type of regulation would have helped. Mr. Going stated he knew of none but this would be a good question to ask those people who were going to testify from Clark County. Chairman Nolan questioned if an injury occurred at one of the theme parks would his office be notified. Mr. Going replied only if it was an employee. Mr. Nolan followed up by clarifying OSHE investigates injuries only when it involves an employee of the park. Mr. Going stated he was correct. Chairman Nolan asked if there were any other questions for Mr. Going. Being there were none he invited those wishing to testify in opposition to A.B. 322 to come forward. Mr. Lawrence Semenza, attorney and Associate General Counsel for Circus Circus Enterprises, testified. He began his presentation by stating in the 1993 session, he helped in passing the liability legislation referred to by Assemblyman Anderson and Mr. Going. It set forth the rights and responsibilities of the owners of amusement parks as well as for the riders. Subsequent to the enactment of the legislation, one of his first reponsibilities with Circus Circus Enterprises was assisting in the assessment of the safety and liability aspects for Grand Slam Canyon, an indoor amusement park. He became very familar with the Clark County ordinance which he believes is the most stringent amusement and transportation ordinance in the United States. It is the model for all other amusement ride ordinances in the country. He pointed out before a manufacturer can sell a ride in Clark County they must register with Clark County and meet certain standards. One of the most important aspects of the ordinance is the obligation upon the owner of the facility to hire an independent specialist in the area of amusement rides to act as a third-party individual or company to assess the safety of the rides and ensure the plans and specifications presented to the county meet the county's requirements. They work directly with the engineers in order to ensure the calculations have been done correctly. As a result, the company installing the ride is responsible for those costs. The responsibility of that third-party is to the county and to a lesser degree, the individuals of the company who have employed them. In addition to the attention given to the rides and the structures they are housed in, there has to be an evacuation plan prepared by the third-party consultant submitted to the county for their review resulting in either acceptance or rejection. There are maintenance procedures which must be performed on a daily basis, weekly basis, bi-weekly basis, monthly and yearly basis, all having to be approved by the Clark County Building Department before the ride is even considered for certification. Clark County ensures that the ride operators are sufficiently trained in not only operation of the ride but evacuation in case of emergencies. They require an annual inspection and re-certification process. In addition to all that, Circus Circus' insurance carrier requires an independent, yearly examination by a ride certification company. This company reports to Clark County as well as Circus Circus. Mr. Semenza stated, in essence, Clark County has a procedure in place that not only satifies the requirements of the protection of the public but the safety concerns of companies such as his, Circus Circus. He emphasized that if there is any strange noise or question of safety the ride is shut down until the problem is fixed. Mr. Semenza continued the question is whether or not it is necessary, at this juncture, to include minimum standards. He admitted he is unsure of what those are because each and every ride is different. Each ride must be looked at from the standpoint of an engineering concept, of the ride operation and whether or not they can be controlled by any one particular agency. Should a state agency set minimum standards when there are not minimum standards to be set being there must be variable standards per each individual ride. The expertise involved is not something normally possessed by one particular individual. From the standpoint of OSHE, he commented their concern is the employee injured on the job. This legislation seems to broaden their responsibilities to include ride participants. Mr. Semenza stated he believes Clark County has adequately handled this particular problem and has provided not only for the accessibility of the operators but also the health and safety standards of those who ride the rides. Mr. Anderson expressed his appreciation to Mr. Semenza for being here. He explained he is concerned with the inspectors. He asked if there are many people who qualify or are we limited to four or five companies who conduct these inspections. Mr. Semenza replied there are a number of companies that do ride inspections and certifications. The company he has dealt with seems to possess a great deal of expertise in this area because they have been employed by numerous insurance companies to conduct yearly examinations for insurance purposes and liability assessments of various amusement parks around the country. Mr. Anderson commented other counties will probably end up relying on those same companies in the future. He reiterated his main concern is the public's protection as a whole. Mr. Semenza explained he does indeed understand his concern. He added there is a large sum of money which goes into maintaining and inspecting an amusement park facility. It is not normally contemplated by management prior to the installation and the opening of the rides. As a consequence, he believes we will see in the future some type of limitation or reassessment of a variety of amusement park rides in Nevada. Mr. Bob Webber, Director of the Clark County Building Department, further explained the program in Clark County. He pointed out Mr. Semenza did an excellent job providing an overview from a developer and operator's standpoint but it might also be helpful to have a regulator's standpoint. First of all, the reason his department got involved with amusement park rides is because the 1987 Legislature passed a bill which placed this responsibility on local government, city and county. In 1991, through technical review, with input from the industry and various other people including American Society of Testing Materials (ASTM), they drafted an ordinance to develop amusement ride and transportation ride standards. One of the objectives was, with the industry, to look at creativity and flexibility in regards to amusement rides, being one of the purposes of these rides is for the entertainment and thrills. In 1988 and 1989 they began to look at the ASTM standards which at that time were not published. The standard Clark County has adopted is the ASTM standard for amusement rides and devices. This was created by people in the industry; those operating the parks, safety inspectors and third- party inspection groups such as Kulter, who is one of the companies he deals with. His department was also able to make recommendations and comments in regards to how things should be evaluated. Mr. Webber explained the program is nationally accepted and it ties in with the people who manufacture and design. The ordinance was adopted in June, 1991. Design, manufacture, testing, inspection, maintenance, operations, injury reporting and a variety of other activities are all rolled into the program covering both ordinary and unique rides. Mr. Webber declared it has worked well. Mr. Anderson questioned who covers the costs involved in doing the inspections, primarily the cost of the technical expert. Mr. Webber began to explain the process his department follows. Mr. Semenza interjected when the manufacturer files with Clark County they pay a fee. The plans submitted then go through a plan check for which there is a fee. When the ride is permitted there is a fee based upon the costs of the ride to the end user. This is another fee which goes to the county and defrays some of the inspection costs the county has to incur. The third-party inspector such as Kulter, is paid soley by the amusement park operator on behalf of the county. Mr. Webber stated his fees are established such that the developer is paying for those appropriate costs. He reiterated there are fees for plan review and annual inspections. In order for a renewal each year an inspection is required by both his staff and a third-party. He pointed out these are self-paying and so, for example, Circus Circus would be paying those appropriate rates. Mr. Webber continued with his presentation. When his department receives injury reports, they are for serious injuries and deaths. An evaluation of the ride occurs immediately whereby it will be determined whether the ride is functioning appropriately, are the operators following procedures and is maintenance being done properly. This is standard procedure. He explained the industry has grown significantly being there are now over 60 rides in Clark County. They range from rollercoasters to carousels. Go-carts are also included. In fact, his department has more problems with those than with any of the more sophisticated operators which have the good quality insurance programs in place. Mr. Webber stated the city of Las Vegas has adopted these standards and Reno and Washoe County have looked at them. At this point in time, they have taken no action to adopt because the need has not been there. He concluded his presentation by stating they are obviously in favor of safety but there is a great deal of creativity which comes with the rides. Each rollercoaster is unique, each one of them is a different animal and therefore they have to be evaluated on their own merits. This concept has to be developed into the program but then all the standard issues such as site development, utilities, amusement buildings should be intergrated as well. When evaluating the bill he was unsure as to how all these things would work together. The new rides are creative and complex therefore posing a challenge for Clark County in regards to making sure the public is protected. Chairman Nolan commented he sits on an ASTM committee to develop and standardize first aid rooms at theme parks. He has asked the chairman of that committee if there were ASTM standards for amusement rides and he did not know that there were. Mr. Nolan expressed his enthusiasm that there are and he would be interested in obtaining a copy. Mr. Scott Langsner, Secretary and Treasurer of MGM Grand, testified next. Representing MGM Grand, he stated he is opposed to A.B. 322. He feels this extra layer of legislation is unnecessary. In 1991, they began construction on the largest hotel/casino and theme park in the world and they began working very closely with Clark County to meet the then current standards and to develop the new standards which were necessary in implementing this huge project. Mr. Langsner stated a world class set of safety requirements evolved. He stated he is responsible for the current monorail project between MGM Grand and Bally's, reiterating the concept that every ride is a different ride, requiring different rules and safety regulations. He expressed doubts if at a state wide level the responsiveness by the authorities would have been there to develop the standards necessary and to understand the difference between rides. The county has a very strong set of standards and they are being met along with the stringent ASTM standards. They must pass their reviews by the fire department and OSHE. The system is working and sufficient, therefore why change or alter it in any way. Mr. Anderson concurred with the hope of not creating double layers of bureaucracy. He explained if the MGM Grand met the requirements for Clark County, they would not have an additional responsibility to the state. The responsibility would be on Clark County to report to the state. Reiterating, his intent is to try to establish uniform standards. He expressed his appreciation for the uniqueness of rides and this is why the proposed legislation is nonspecific. He is concerned with standards of behavior because it is a new industry and one that the public needs to have some level of confidence in. His concerns lie not only in Clark County but with the state as a whole. Mr. Anderson queried of Mr. Webber if he believes there is any reason for the state to become involved with this outside of Clark County. Mr. Webber responded the feedback of other entities has been it is best addressed by the local jurisdictions because of the additional activities inherently involved. Mr. Greg Jensen, General Counsel and Secretary of Primadonna Resorts, recognized the sincerity of Mr. Anderson's intent but expressed his concurrence with the opinions of the previous witnesses. He drew attention to some of the rides his company has built. At Stateline, they have three hotel/casino projects. The newest one and best known is Buffalo Bill's. It is home to the Desperado rollercoaster. It is touted as the fastest and tallest rollercoaster in the world. It is 225 feet high and can exceed speeds of 80 miles an hour. On a very busy day, there have been as many as 4700 people ride it. He continued to describe the other rides on the property emphasizing their unique functions. Mr. Jensen emphasized the amount of interaction between his company and Mr. Webber's department which occurs when trying to get these rides up and running. There are adequate minimum standards which are probably the highest safety standards in the world for rides which exist in Clark County but it is really an amalgam of various pieces of safety assurance. Mr. Jensen drew attention to nine different levels or expressions of these type of standards: a customer complaint mechanism for feedback on your rides, the Clark County building code, the Clark County fire code, extensive manufacturing specifications and installation quality assurance requirements, insurance companies, OSHE, ADA, and third-party inspectors. All of these things together form a system of standards that compose a very adequate system of quality assurance and safety. In conclusion, Mr. Jensen expressed that in Clark County and under existing law there exists a comprehensive and effective system which is calculated to deliver physical safety and to assure public confidence in these rides. Chairman Nolan thanked Mr. Jensen for his testimony and recognized Clark County for their existing world class safety program. He stated one avenue which might be explored is for the counties who are interested in developing rides and attractions to take a good look at their program, perhaps adopt it. Being there were no others wishing to testify he closed the hearing on A.B. 322. Mr. Nolan pointed out the amendments for A.B. 59 and A.B. 62 which the committee voted amend and do pass in an earlier meeting. The committee agreed the amendments looked fine. The last order of business before the committee was a committee introduction. Mr. Nolan and Ms. Krenzer have been working on it and after meeting with Mr. Hughey, Alice Molasky and Senator Townsend, Mr. Nolan stated he would be asking for a bill draft request which will address five issues. The first issue will be the type of groups which would be allowed to group insure underneath the new regulations in the event no moratorium is provided for. The second portion of the bill will address the financial requirements of those groups. The next portion would address the net worth requirements of businesses wishing to group self insure. There will be another for exclusion for bad experience and the last issue will address repealing a section under NRS 616.113 referring to service companies. ASSEMBLYMAN GOLDWATER MOVED FOR A BILL DRAFT REQUEST. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. THE MOTION PASSED. ASSEMBLYMAN ANDERSON ABSTAINED. Mr. Goldwater stated he also would like to request a bill be drafted. He summarized the issues it would address and while germane to Mr. Nolan's, stated it is justified to ask for a separate BDR. ASSEMBLYMAN GOLDWATER MOVED FOR A BILL DRAFT REQUEST. ASSEMBLYMAN BACHE SECONDED THE MOTION. Mr. Anderson questioned if this proposed legislation passed this session, would it not be subject to legislative action by the next legislative session. Mr. Goldwater replied if it passed, the next legislative session would absolutely be able to take action on it. Ms. Krenzer disclosed she works for Sierra Health Services, a managed care organization. She is advocating neither for nor against this and will be voting on the committee introduction because it is not a bill before the committee. Chairman Nolan clarified Senator Townsend's bill will not be addressing these issues but they will have to be addressed at some point. THE MOTION PASSED. Being there was no further business before the committee, Chairman Nolan adjourned the meeting. RESPECTFULLY SUBMITTED: Jennifer Carnahan, Committee Secretary APPROVED BY: Assemblyman Saundra Krenzer, Chairman Assemblyman Dennis Nolan, Chairman Assembly Committee on Labor and Management April 6, 1995 Page