MINUTES OF THE SENATE COMMITTEE ON COMMERCE AND LABOR Sixty-eighth Session February 23, 1995 The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 8:30 a.m., on Thursday, February 23, 1995, in Room 227 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator Randolph J. Townsend, Chairman Senator Ann O'Connell, Vice Chairman Senator Sue Lowden Senator Kathy M. Augustine Senator Raymond C. Shaffer Senator John B. (Jack) Regan Senator Joseph M. Neal, Jr. GUEST LEGISLATORS PRESENT: Senator Mike McGinness STAFF MEMBERS PRESENT: Scott Young, Senior Research Analyst Molly Dondero, Committee Secretary OTHERS PRESENT: Bob Getto, Raymond M. Ferguson General Contracting and Development, State Board of Architecture Mona S. Joplin, Public Member, Secretary-Treasurer, State Board of Architects M. Max Hershenow Jr., Hershenow and Klippenstein Architects, President, American Institute Architects of Nevada Michael Hillerby, Lobbyist, American Institute Architects of Nevada Jay Parmer, The Parmer Company, State Contractors' Board Margi A. Grein, Director of Finance, State Contractors' Board Kay Barber, Executive Officer, State Contractors' Board Douglas L. Dickerson, Lobbyist, City of Las Vegas Deborah L. Shelton, State Contractors' Board John Lindell, State Contractors' Board Alice Magdaleno, Office Manager, Bowman Drywall, Inc. Steve Kessinger, President, Nevada Society for Respiratory Care Thomas J. Scully, M.D., Secretary-Treasurer, Nevada State Board of Medical Examiners Harvey Whittemore, Lobbyist, Nevada State Board of Medical Examiners Christopher Logan, Manager, Cardiopulmonary Services, Northern Nevada Medical Center; Board of Directors, The Nevada Society for Respiratory Care Greg Rouldson, Chief Therapist, Saint Mary's Hospital; Nevada Society for Respiratory Care Leigh Parker, R.R.T., Chairperson, Licensure Committee; Manager, Respiratory Care, Washoe Medical Center Senator Mike McGinness introduced Senate Bill (S.B.) 125 expressing his support for the bill. SENATE BILL 125: Eliminates prohibition against certain members of state board of architecture from voting or acting on matters relating solely to architects. (BDR 54-1384) Bob Getto, Raymond M. Ferguson General Contracting and Development, State Board of Architecture, spoke on behalf of S.B. 125. He explained the board is composed of seven architects and one residential designer, and one public member. He stated the board would like to have the statute changed to allow the public member and the residential designer to vote on issues before the board. Mona Joplin, Public Member, Secretary-Treasurer, State Board of Architecture, stated the two nonvoting members listen to testimony, study information, and are prepared to vote on issues, but cannot do so. Senator Shaffer asked if Ms. Joplin has chaired the board. Ms. Joplin explained as secretary-treasurer of the board, she has chaired meetings in the past. She commented she would not feel comfortable, as a public member, making decisions of a technical nature. She stated as long as there was someone in attendance at the meeting versed in the technical information, she would feel comfortable chairing a board meeting. Senator Townsend questioned Scott Young, Senior Research Analyst, if the language presented in the bill is consistent with language for other boards. Mr. Young commented he noticed the other boards have similar existing restrictions. Senator Townsend explained Mr. Young will provide the board with information as to the language used for other board regulations. He asked Mr. Getto to contact the other boards who have restrictions on their voting members and determine if they would like the changes, also. He requested Mr. Getto to then report to the committee with the other boards' answers. Senator Townsend stressed he wanted all the boards to be equal. Ms. Joplin clarified for Senator Neal section 1, subsection 2, is the requested change. She explained the board wants the current language removed from statute. M. Max Hershenow Jr., Hershenow and Klippenstein Architects; President, American Institute of Architects of Nevada (NIA), spoke on behalf of S.B. 125. He stated the two currently nonvoting members bring expertise to discussions. He stated he feels they should be able to vote on matters relating to architecture. He stressed NIA feels four is a difficult number to require for a quorum. He suggested the quorum consist of five voting members. Michael Hillerby, Lobbyist, American Institute of Architects of Nevada (NIA), asked if the change requested could be effective upon passage and approval so as not to cause delay for the board. Senator Townsend closed the hearing on S.B. 125 and placed the bill into sub-committee. He opened the hearing on S.B. 71. SENATE BILL 71: Revises provisions relating to disciplinary actions taken by state contractors' board. (BDR 54-859) Jay Parmer, The Parmer Company, State Contractors' Board, stated S.B. 71 seeks to put into statute that which is currently in the administrative codes. Margi A. Grein, Director of Finance, State Contractors' Board, presented Exhibit C, an explanation of her testimony. She stated the bill increases public protection. She explained in many cases the law does not allow the board to order a contractor to fix a problem for a consumer. She said a supreme court decision stated the board does not have the authority to impose damages upon parties which are subject to the board's licensing authority. She stated the bill will allow the board to protect the consumer. She stated the court case was (Bivens vs. The Nevada State Contractors' Board). She presented Exhibit D. Senator O'Connell asked what would happen if the problem exceeds the $5,000 administrative fine allowed. Ms. Grein stated the bill requesting a fine simply adds another form of discipline to the existing regulations. Kay Barber, Executive Officer, State Contractors' Board, stated the bill allows the board to suspend the license of a contractor until the disputed work is completed properly. Senator Shaffer stated building inspectors may inspect a job, but cannot comment on the quality of the job. He pointed out the bill would allow the inspectors and the board to judge the quality of the work. Senator Regan asked about how to control the "gyppo" contractor. He stated if a contractor is not licensed, what can be done to censure them. Ms. Barber stated there has always been a problem with unlicensed contractors. She stated the State Contractors' Board was formed to protect the public from unlicensed contractors. She stated it is a criminal misdemeanor to work as an unlicensed contractor. She commented the board may issue a citation to the unlicensed contractor. Senator Neal asked if the cause for disciplinary action is currently in statute. Ms. Barber stated Nevada Revised Statutes 624 specifies grounds for disciplinary action. She stated a contractor can be disciplined for substandard work, for not following building codes, for failure to have financial responsibility, and for failure to pay when monies are due. She stated the discipline consists of reprimand, suspension of license, or revocation of license. She stated when a contractor is cited for a hearing, they must be cited under those particular charges which are grounds for disciplinary action. Senator Neal questioned the need for section 1, subsection 1, paragraph (e). Ms. Barber stated the board may order a contractor to make a repair, but the contractor may refuse to do the repair. The bill gives the board the authority to suspend a license until the work is completed properly. Senator Neal asked if the violation would be based on a specific act, or related problems. Ms. Grein stated the board develops guidelines for the members to follow. She stated they did a history on the different kinds of actions taken, based on specific violations. She pointed out the penalty list gives the board three options. They review the violation and apply the penalty, keeping it consistent with previous penalties. Senator Neal asked if the board can issue a fine on a daily basis if a contractor does not follow the order given by the board. Ms. Barber stated there would first be a hearing, then a fine might be imposed, but not on a daily basis. She commented the board has not yet taken action on any contractor for failure to pay a fine. She explained the fines are given out only during a formal board hearing, and those are only twice a month. Ms. Grein commented the board cannot issue a fine to an unlicensed contractor. The district attorney in the county where the contractor works prosecutes the unlicensed contractor. Senator Lowden asked if district attorneys aggressively prosecute unlicensed contractors. Ms. Barber responded they do prosecute unlicensed contractors, though, because it is not a violent crime, it may take longer. She explained in southern Nevada they are setting up a procedure where one person will handle all of the complaints. She commented in northern Nevada the response is faster. Senator Lowden asked how much has been collected in fines. Ms. Grein stated the fines collected go to the General Fund and the board is supposed to be reimbursed, but the board has not received the funds in a timely manner. She indicated the board has issued fines for $15,000, but, to date, has only collected one fine. She stated they are still trying to develop a standardized method for collection. Senator Lowden asked who receives the money collected by the district attorneys. Ms. Grein stated the money collected stays in the court system. She stated last fiscal year there were 822 criminal complaints. She explained if the courts had imposed the minimum fines on unlicensed contractors, $493,000 would have been generated by the fines. Only $75,000 in fines was assessed last year. She stated the courts keep the money. Senator Augustine complimented the State Contractors' Board for coming to her assistance several years before when she had a problem with a contractor. She commended the board for their work for the public. Senator Regan asked if there is a daily fine levied against a contractor. Ms. Grein stated the board does not have the authority to levy a daily fine, but would like to be able to establish such a fine. Senator Shaffer stated when there is a dispute there is an arrangement worked out with the contractor, wherein he agrees to comply to specified terms. If, when there is the next meeting, those terms have not been fulfilled, then, another fine could be imposed. He asked if the board has access to the deputy attorney general. Ms. Barber responded they do have access, but usually use their own attorney. She agreed with his suggestion for the imposition of the second fine. Senator O'Connell asked what the bond is for a contractor. Ms. Barber stated the bond ranges from $1000 to $50,000 and must be carried for 5 years. She stated there are two types of bonds, the surety bond and the cash bond. After 5 years the bond is reviewed and if the contractor has a good record and is financially sound, the bond may be canceled, but the money remains with the board for 2 more years. After the 2 years have passed without incident, the bond is then returned to the contractor plus interest. She stated if the bond is a surety bond, the homeowner with a claim contacts the bonding company. If it is a cash bond, they contact the board. A license will be suspended if a bond is canceled due to a claim against that bond. She stated there are limits on a license. Senator Neal asked why a home owner cannot sue the contractor. Ms. Barber stated the homeowner may sue the contractor. She commented the home owners will contact the State Contractors' Board first to get the job completed. She pointed out the expense of a lawsuit. Senator Townsend read from Exhibit E (letter from Michael W. Zech). He read paragraph three and requested it be placed into the record. As a member of the State Contractors' Board, I would like to voice my support of this bill. Currently, under the present law if there is a problem with a contractor in Nevada, the only course of action for the contractors' board is to either suspend or revoke a contractor's license. There is no mechanism whereby the board can cause the contractor to correct a condition resulting from something the contractor has done wrong. Douglas L. Dickerson, Lobbyist, City of Las Vegas stated the city is in favor of S.B. 71. Deborah L. Shelton, State Contractors' Board, and John Lindell, State Contractors' Board stated they are in favor of the bill. Alice Magdaleno, Office Manager, Bowman Drywall, Inc., presented Exhibit F and expressed her concern that the only qualifications for the board are that a person be a Nevada resident for 5 years and have an active contractors' license. She commented contract law in regard to real property is complicated to understand and a person without a contract law background would be deciding contractual law. She stated she feels a contractor, subcontractor, or home owner would suffer if a decision is made by someone without the proper background in contract law. Senator Lowden asked if the board has an attorney at the meetings. Ms. Barber stated there is an attorney present at the hearings. She said the board's attorney stresses to the investigators they are not allowed to give any legal opinion. Senator Neal asked who mediates between the general contractor and the subcontractor. Ms. Barber stated the general contractor is responsible for the subcontractors. She stated if a complaint is filed against a specific construction problem, then the board will contact the subcontractor first. If it is a housing development, they will contact the general contractor and give him the opportunity to handle the problem with the subcontractor. She stated the subcontractor is required to be licensed. Senator Lowden asked Ms. Magdaleno if these answers made her more comfortable. Ms. Magdaleno still questioned the language of the bill and stated she hoped: [it] would not allow them [the board] to go in and order something where their field of expertise in contract law [is not complete]... there are situations where in drywall...where the drywaller is affected by the framer. If the framer has not performed his job properly, then the drywall is placed on top of that, there might be trouble with the drywall stemming from the framing. I would not want to see the contractors' board come in and issue an order to keep continually fixing a drywall problem when, in essence, it was the trade behind it. In concrete the problem would be with the excavation, or with the soil. Ms. Magdaleno expressed her concern that another state agency is being given broad scope in an area in which they might not have expertise. Ms. Barber stated: If something does happen like that and you did something and it fell apart because of the result of the other subcontractor our investigators are very aware of what is going on, and all you would need to say is, well, the reason this happened is because the framer did not do this right, then, yes, we would look to the framer. Senator Neal stated the issue raised is that the "law permits you to initiate an action based on the licensure of the individual." Ms. Barber responded a sub-contractor has the right to file a complaint against another subcontractor. Senator closed the hearing on S.B. 71 and introduced Bill Draft Request (BDR) 54-17. BILL DRAFT REQUEST 54-17: Require each occupational licensing board to have two representatives of general public and prohibit service on such boards for more than two terms. SENATOR O'CONNELL MOVED TO DO PASS BDR 54-17. SENATOR TOWNSEND SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. Senator Townsend opened the hearing on S.B. 72. SENATE BILL 72: Requires regulation and licensure of practitioners of respiratory care by board of medical examiners. (BDR 54-1008) Senator Augustine presented S.B. 72. She stated 37 states have enacted legislation to regulate the practice of respiratory care, in the public interest. She stated 28 of those states have a strict licensure law. She presented Exhibit G, and Exhibit H. Steve Kessinger, President, Nevada Society for Respiratory Care, spoke on behalf of S.B. 72. He presented Exhibit I. He explained the job of the respiratory therapist. Mr. Kessinger expressed his concern over the practice of hiring a person without proper training and training them on the job. He outlined the responsibilities of the therapist and cautioned against using people who do not have formal, respiratory training, who have not had to pass a test or be licensed to perform their duties. He stated many medical centers have therapists who have been trained on the job. He stressed formal training is very important to the health of the public. Mr. Kessinger detailed the procedures a respiratory therapist handles. They treat all forms of pulmonary diseases, are responsible for maintenance of life support equipment, are on all trauma teams in the state, and are responsible for cardiopulmonary resuscitation (CPR) during cardiac arrests. They also do invasive procedures, including drawing blood from arteries for blood-gas recognition. They assist a physician in bronchoscopy procedures. Senator Neal asked if the bill is to organize the respiratory therapists. Mr. Kessinger replied it is to regulate and to check competency of therapists in Nevada. The bill will require therapists to pass a national board test called an entry level exam. He reassured Senator Neal it will not allow therapists to set up private offices. They will still have to practice under the license of a doctor. Senator Neal commented the bill would require those persons already working in respiratory therapy to obtain a license by January 1, 1996. Mr. Kessinger stated the exam is given in the San Francisco area. He stated the bill would grandfather in those currently practicing, but they would have to obtain their license within 18 months. He stated there are approximately 450 respiratory therapists in Nevada. Senator Neal asked why the bill is necessary. Mr. Kessinger explained physicians, nurses, pharmacists, physical therapists, and occupational therapists have all adopted some form of licensing procedure, requiring a form of competency either through a test or continuing education. He explained there are two ways in which a therapist may train; a 1-year program consisting of courses in anatomy and physiology, biology and chemistry along with a clinical training period in a hospital, which is the standard program, and a 2-year program at a community college with two tests required to attain their Registered Respiratory Therapist (R.R.T.) certificate. He stated the courses are not given in Nevada. He commented the tests are given three times a year and are given in San Francisco, California. In response to a question posed by Senator O'Connell, Mr. Kessinger stated the language in the bill was obtained from a model practice act provided by the American Association for Respiratory Care. Senator Lowden questioned if there are many therapists in southern Nevada who would not qualify under the proposed terms of the bill to continue with their work. Mr. Kessinger responded there are people whose competency is in question, but there is no documented proof of their inability to handle their job. He assured the committee southern Nevada is not the only part of the state where there are concerns. Senator Lowden expressed her concern for a lack of qualified nurses in a hospital could lead to understaffing problems. She wondered what will be done if they cannot find people to do the work. Mr. Kessinger stated short staffed competency is better than full staffed incompetency. He stated he feels making a person pass a minimum competency exam should not be viewed as an imposition. He hoped there would be few people who are incompetent. Senator Lowden asked if the therapists carry their own insurance. Mr. Kessinger stated they are covered under the hospital's liability insurance. Senator Lowden pointed out the wording of the bill on page 16, line 24-36, indicates the therapist will have to carry their own insurance. She expressed her concern over the cost of the insurance to the therapist. Mr. Kessinger stated he does not interpret the language as a requirement, only reporting it if they do not have the insurance. Senator Lowden stated the language must be clarified. Senator Shaffer asked where the therapists work. Mr. Kessinger stated all practice must be under the direction of a physician. He commented the work of the therapist is not the physician's responsibility, but there is an implied risk taken by the doctor whenever he writes an order for care. He stated the physician is ultimately responsible for the care, but not for monitoring the competency levels of the therapists. Senator Townsend asked if Mr. Kessinger had surveyed the members of the Nevada Society for Respiratory Care to see how much they would be willing to spend to license. Mr. Kessinger stated they did not conduct a formal survey, but conversations with various members indicated they do not want the expenses to exceed $200. He indicated there is a fiscal note through the Board of Medical Examiners indicating the cost would be $250, with a $50 per year renewal fee. Senator Townsend expressed his concern for the fee exceeding $200 and for the cost of requiring insurance. Senator O'Connell questioned what the cost of the test would be for the therapists. Mr. Kessinger indicated the test would cost approximately $150-$250. Harvey Whittemore, Lobbyist, Nevada State Board of Medical Examiners, expressed his concern over S.B. 72. He stated there are two areas at which to look. One, does the committee want to credential therapists. Two, does it want licensure and regulation of therapists. He suggested if these are a goal, then the board can develop language which would be appropriate. Thomas J. Scully, M.D., Secretary-Treasurer, Nevada State Board of Medical Examiners, presented his testimony (Exhibit J). He stated the board supports the idea that everyone who is hired by any health care institution has demonstrated a minimum competency. He stated the board does not feel there is a need for an elaborate licencing process or a respiratory therapist board. He stated requiring the credential exam and requiring no one could be hired by any health care institution without the exam would be less expensive and would take care of problems. The therapists would then be monitored by the health department, and statistics could be gathered over the next few years to determine if there are problems with unqualified therapists. He stated there is not enough data at this time to justify the development of a board to regulate therapists. He stressed there is a difference between a license and a credential. He stated start-up costs for a 2-year time period for a board would be approximately $200,000. He emphasized the Nevada State Board of Medical Examiners does not want to take over licensing of respiratory therapists. Mr. Whittemore stated there are varying degrees of responsibility by others over respiratory therapists. He explained hospitals are directly responsible and physicians are partially responsible. He suggested a form be required by the state board of health for each applicant stating where the applicant came from, where the applicant practiced, and whether the applicant was ever disciplined. These questions would be used in the credentialing process. Senator Augustine referred to Exhibit H, the map showing Nevada as the only state in the far west without a licensing process. She stated the disadvantage of an administrative act is that it can be changed at any time. Mr. Whittemore explained he would like to see a statute passed mandating the State Board of Health to adopt a regulation, or the Legislature can pass a law requiring the credential for employment. Dr. Scully emphasized he did not feel licensure is best for Nevada because there is not enough data to support the need. He expressed he thought credentialing would be enough because it assures a level of competency without the added expense of licensing. He agreed there must be control over who is hired as a respiratory therapist. Senator Lowden expressed her concern that it has taken so long for the issue of credentialing respiratory therapists to arise. Dr. Scully explained the rapid changes in technology have contributed to the rise in respiratory therapists. They have learned by doing as the technology has changed. Christopher Logan, Manager, Cardiopulmonary Services, Northern Nevada Medical Center; Board of Directors, the Nevada Society for Respiratory Care, presented his testimony (Exhibit K). Senator Lowden question Mr. Logan's statement that he cannot obtain information on a person's background or credential. Mr. Logan stated the opinion of their corporate attorney is that if anyone asks for information on a former employer, the former employer may only state the dates the employee worked. Greg Rouldson, Chief Therapist, Manager, Saint Mary's Hospital, Nevada Society for Respiratory Care, explained the problems in tracking the work history of therapists. He stated the same employee referred to in Mr. Logan's testimony who was using someone else's name applied for work at Saint Mary's Hospital. He commented he called the licensing board in California and discovered the person in Nevada was using the name of a person in California and was using the Californian's credential. Leigh Parker, R.R.T., Chairperson, Licensure Committee; Manager, Respiratory Care, Washoe Medical Center, commented on difficulties they have had due to the lack of licensing in Nevada. She stated over the past 5 years they have had two incidents of therapists' misrepresentation. In both instances the employees were terminated, but the employees were able to find employment at other hospitals in the area. She stated she is prevented by law to inform other employers of any particular employee problem or therapist misrepresentation. Mr. Whittemore read Nevada Revised Statutes 613.200 and commented the statute should be repealed. As it is written, it restricts any employer from saying anything against a former employee which might prevent that employee from obtaining employment anywhere else. The statute requires the employer to prove the reason for dismissal. Senator Townsend closed the hearing at 10:45 a.m. RESPECTFULLY SUBMITTED: Molly Dondero, Committee Secretary APPROVED BY: Senator Randolph J. Townsend, Chairman DATE: Senate Committee on Commerce and Labor February 23, 1995 Page