MINUTES OF THE SENATE COMMITTEE ON COMMERCE AND LABOR Sixty-eighth Session April 6, 1995 The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 8:35 a.m., on Thursday, April 6, 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 Dina Titus, Clark County Senatorial District No. 7 STAFF MEMBERS PRESENT: Scott Young, Senior Research Analyst Vance Hughey, Senior Research Analyst Molly Dondero, Committee Secretary OTHERS PRESENT: L. Mark Balen, President, Professional Fire Fighters of Nevada Danny Thompson, Political Director, Nevada American Federation of Labor and Congress of Industrial Organizations (AFL- CIO) Paul H. Aakervik, Account Executive, W.R. Gibbens Inc. Cecilia Colling, Assistant General Manager, State Industrial Insurance System (SIIS) Jan Meyers, Northern District Manager, Industrial Insurance Regulation Section (IIRS), Division of Industrial Relations Donald O. Williams, Chief Principal Research Analyst, Research Division, Legislative Counsel Bureau Galen Denio, Commissioner, Public Service Commission of Nevada Frederick Schmidt, Consumer Advocate, Office of Advocate for Customers of Public Utilities, Office of the Attorney General Margi A. Grein, Director of Finance, Nevada State Contractors Board David J. Reese, Attorney, Nevada State Contractors Board Jim Wadhams, Lobbyist, Nevada State Board of Architecture The hearing was opened with introduction of Bill Draft Request (BDR) 54-1437. BILL DRAFT REQUEST 54-1437: Raises fees for embalmers, funeral directors and apprentice embalmers. SENATOR REGAN MOVED TO INTRODUCE BDR 54-1437. SENATOR SHAFFER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. ***** Senator Neal presented Senate Bill (S.B.) 233. SENATE BILL 233: Revises provisions governing determination of percentage of disability resulting from occupational disease of the lungs. Senator Neal explained the need for the bill. He illustrated how difficult it is for a fireman to be rated under the American Medical Association (AMA) rating guide for the State Industrial Insurance System (SIIS). He explained the bill will require SIIS to use the guidelines from the American Thoracic Society (ATS) to rate firemen and others who work in situations where their lungs may be damaged. Senator O'Connell asked what guidelines are used currently. Senator Neal explained they used the AMA guidelines and they judge a person on the whole-body basis regardless as to what the ailment may be. Senator O'Connell questioned if there is extra coverage for lung and heart diseases as they pertain to police and fire professions currently in the law. L. Mark Balen, President, Professional Fire Fighters of Nevada, spoke on behalf of S.B. 233. He commented that diseases of the heart and lung are automatically considered job related ailments for fire and police officers. He explained that outside of the fire and police departments, heart and lung ailments are not automatically considered job related. He pointed out the problem with the current statute is that if a person has a lung problem, he is rated by the AMA guide book. He explained in the guide book there are references to the Thoracic Society. Senator Townsend asked for an explanation of line 12 of the bill. He asked if there is a change in how a person will be rated. He indicated it is his understanding there is a treating physician and a rating physician. He said he thinks the rating physician is separate and is there only to apply the rating for SIIS. Mr. Balen stated the bill will not change the way the rating is conducted. The treating doctor and the insurer's doctor will rate a person. The difference will be that the AMA guideline will not be used. The ATS guideline will be used. Scott Young, Senior Research Analyst, explained lung cases have always been rated differently than other injuries. The rating has always been done, jointly, by the treating physician and the rating physician. Senator Townsend commented the new AMA guideline has not yet been adopted. He stressed he does not want to see the issue of "unlawful delegation of authority" as a problem for the bill. Mr. Balen stated the AMA guidebook currently refers to the ATS guidelines. Senator Regan pointed out that in line 16 of the bill it clarifies the situation with the words "shall consider." Danny Thompson, Political Director, Nevada American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), explained he is currently the vice president of the Division of Industrial Relations (DIR) advisory board. He stated the division is holding hearings on the fourth edition of the AMA guidelines. He stated the fourth edition is more consistent than the second edition. He commented there would be more consistency in the ratings, if reference is made to the ATS guidelines in the law. Senator Neal explained the bill asks to bypass the AMA guidelines as a reference for the thorax region of the body, and to use the ATS guidelines for the thorax region of the body. The thorax region is the area between the neck and the diaphragm, encased by the ribs. Senator Townsend clarified if line 17 of the bill is not accomplished, then line 18 and 19 of the bill will be in effect. Paul H. Aakervik, Account Executive, W.R. Gibbens Inc., commented there is no reference to a rotating list physician. He asked if the thoracic physicians will be licensed by the Industrial Insurance Regulation Section (IIRS) to assure they understand the guides and how to rate them. Senator Townsend stated the bill does not address the thoracic physicians because it relates to any rating physician using the thoracic guideline. Senator Augustine asked why there is $75,000 fiscal note. She read the fiscal note on the bill to the committee. Cecilia Colling, Assistant General Manager, State Industrial Insurance System (SIIS), explained she is not aware of the reasons for the fiscal note. She stated she understands there may be a 5 percent increase in the ratings. Senator Lowden asked if there are other societies other than the American Thoracic Society which can give ratings and if there are other specialties which need to be addressed for special ratings. Jan Meyers, Northern District Manager, Industrial Insurance Regulation Section (IIRS), Division of Industrial Relations, explained they are currently reviewing the fourth edition AMA guides. She stated the new guide is very complete for rating specific body parts. She indicated she is not aware of any other society who rates the specific body parts indicated by the American Thoracic Society. She stated all the specialties have contributed to the fourth edition of the AMA guides. She explained it will be more difficult to regulate if there are special ratings guides used for each body part. She stated the fourth edition of the AMA guide is nationally recognized as a very complete guide. Senator Lowden stated a specialist should be the one doing the rating for a specialty body part. She indicated her feelings that she would not want someone doing a rating who is not a specialist in the field. Ms. Meyers said there is a problem obtaining rating physicians in some of the specialties. Many specialists are not interested in being rating physicians. She indicated her concern there could be a problem with blanket adoption of different guidelines without review. She stated, at one time, they had reviewed the third and third edition revised versions of the AMA guides and determined they were not appropriate for use in Nevada. She commented the majority of states use the AMA guidelines and some states have developed their own guidelines. She stated the only doctors on the list are medical doctors or doctors of osteopathy. She indicated there are no chiropractors on the list. Senator Neal asked what opposition Ms. Meyers has to the bill. He stated a person is rated on the chest based on the whole body rating. Ms. Meyers stated there is a section in the AMA guide which is exclusive to the respiratory system. She indicated that system makes reference to the American Thoracic Society. She read from the fourth edition of the AMA guide. She indicated there will be some changes from the second edition to the fourth edition of the guide. She pointed out the fourth edition is more complete than the second and is a better guide. It has not, yet, been adopted. Senator Neal explained why he feels the bill is necessary. He shared the story of a painter who received a "0" rating for lung capacity based on the AMA guide. Ms. Meyers said it is possible to receive a "0" rating. She clarified she does not oppose the bill, though she does have some concerns about it. She stated the American Thoracic Society has not adopted their guidelines. She said IIRS does not know whether the guidelines will be beneficial or detrimental to rating diseases of the lung. Ms. Colling stated the AMA guides are based on the whole body. The ATS guides base their rating to the degree of impairment to that part of the body. She indicated it is difficult to do ratings by specialty, because a doctor is supposed to do a rating as it pertains to the whole body. Senator Neal stated the bill does not ask for a rating to be done by a specialist, it calls for adopting the ATS guides. Senator Regan explained: We covered the question of the AMA fourth edition when it comes on and the use of the thoracic by looking at lines 3 and 10 [of the bill] where it speaks of the occupation disease of the heart and lung. S.B. 7 [of the Sixty-seventh Session] on fire and police was a unique situation... this bill is primarily aimed at the firemen and the police, where we have always made a protection by Legislative intent to provide them with additional medical protection. If the thoracic only looks at the basic, primarily the lung, or the rib section, this covers only the firemen and policemen and the occasional occupational disease. SENATE BILL 7 Makes various changes relating to industrial insurance OF THE SIXTY-SIXTH and other rights of employees. SESSION: Senator Lowden asked how long it will take to adopt the fourth edition AMA guides. Ms. Meyers stated it takes about 9 months to adequately judge the guides after they are released. Senator Townsend closed the hearing on S.B. 233 and opened the hearing on S.B. 268. SENATE BILL 268: Revises provisions governing plan concerning electricity which must be submitted triennially by certain public utilities to public service commission of Nevada. Senator Dina Titus, Clark County Senatorial District No. 7, presented the bill and explained why it is needed. She explained there is an interest in promoting the use of renewable sources in the state. She stated the goal is for them to become economically feasible and competitive. She said the bill will clarify what the Public Service Commission of Nevada (PSC) can consider when it looks at energy plans, forecasts for future demands, and tries to assess what the best combination of resources will be. She stated the utilities have requested the word "competitive" be inserted into the phrase "economic [,competitive] and environmental impact", and she has no objection to their request. Senator Townsend asked how "indigenous [resources], environmentally sensitive, clean... how does that fit into the competitive mode which is about to be forced upon us by the Federal Energy Regulatory Commission (FERC) decision on wholesale wheeling." Senator Titus stated there is a $3 million grant from Department of Energy which is expected within the next few weeks to do the start-up for the solar project for the test site. She stated: We realize with "wheeling" and with the price of geothermal, and the price of solar, right now, it is more expensive, and we realize that. If you put this in place [so] that when it is competitive, and when you are looking down the future, suddenly, you do not have to start from square one. You have been planning for that, you are ready to move into that area as opposed to being reactive... recognizing economic impact and competition is something that we do. Senator Regan stated, "there might be a very great asset sitting in Yucca Mountain in the future and I would like to make certain that is also considered. We do not know what that will be in the future with strides being made in research." Senator Townsend commented that "demand-side management" is crucial. Donald O. Williams, Chief Principal Research Analyst, Research Division, Legislative Counsel Bureau, presented Exhibit C and explained the language in the bill. He stated other states have used their integrated resource planning process to encourage renewable resources. He referred to the language adopted in 1989 on economic and environmental considerations which lead the commission to adopt the environmental externality rules which are known as the Public Service Commission General Order 65. He explained that during the course of the study, many people came to the study committee from the renewable energy industry to testify the rule is not as effective as they had hoped it would be. Their concerns lead to the proposals addressed in S.B. 268. Galen Denio, Commissioner, Public Service Commission of Nevada (PSC), presented Exhibit D (Original is on file in the Research Library.) Mr. Denio further explained the PSC's unanimous support for the bill. He stated electric resource planning has worked for Nevada's benefit, resulting in a diverse blend of energy sources used by Nevada's electric utilities. He stated the commission believes the bill provides clear policy direction without compromising the ability of the commission or utilities to respond to a rapidly changing electric utility environment. Senator Regan asked if Sierra Pacific Power's current power mix will change with the new merger plans with hydroelectric power coming out of the Pacific northwest, and will it bring the usage far south into Nevada. Mr. Denio stated the new Tuscarora pipeline will bring gas into the Truckee Meadows area and into Tracy. Senator Regan asked if the addition of the word "competitive" on line 12 will meet approval with the PSC. Mr. Denio stated the PSC recognizes the reality of the situation as it has changed over the past year. He stated the companies go through the plans and develop a load forecast which is a projected forecast. Senator Townsend instructed Mr. Denio to take into consideration the future growth in the southern portion of the state because the summer months frequently produce tremendous energy consumption which leads to frequent power brown-out problems. He asked Mr. Denio to carefully project the needs of the area so that they may do all they can to address the problem. Senator Neal asked if any of the purchases of power include nuclear power. Mr. Denio stated that the other purchases section in Exhibit E may include power from a nuclear power plant. He indicated they purchase power from the Palo Verde Plant, Southern California Edison, and with Pacific Gas and Electric Company. He stated some of the power purchased from southern California may come from nuclear power. He stated he cannot determine exactly how much power comes from nuclear power. Senator O'Connell asked how the language on lines 10, 11, 12, and 13 of the bill is different from current law. Mr. Denio stated the language better reflects the current environment, and reflects the maturation of demand-side management. He commented the language change recognizes the load forecasting projected future demands. It provides additional language in terms of economic and environmental impact, and encourages the development of indigenous resources which will include both the solar and geothermal industry and future resources yet to be developed. Frederick Schmidt, Consumer Advocate, Office of Advocate for Customers of Public Utilities, Office of the Attorney General, expressed his support for the bill. He commented he does not feel the language makes a significant change to the current law, but he feels the use of the words "environmental impact" is different from anything specific identified in the current law. He stated: I would clarify that I agree with Commissioner Denio's brief statement that I think that the term resources does include supply and demand-side, and I think the legislative history of this bill should reflect that in the testimony, so that is clear, and no one can come back and argue [that] because we took out "the best method to reduce them" phrase we walked away from demand-side measures. That is important because demand-side measures have not escalated significantly for our utilities and investment in the last year or two. He stated Nevada Power Company has asked to eliminate the load management control system for air conditioners. He pointed out in southern Nevada it has produced 30 to 40 megawatts of peak reduction savings. He said 50,000 southern Nevadans subscribe to the program and receive a credit of about $60 each summer to allow Nevada Power Company to use radio control to turn off air conditioners for as long as one-third of an hour during the peak summer peak months' hottest hours of the day. He stated there will be a hearing on this issue. He stated the program has some value. Senator O'Connell asked if there will be cost added to the rate payer by considering what the Environment Protection Agency (EPA) will do in this circumstance. Mr. Schmidt stated the rate impact on utility consumers is one impact, but is not the only impact which should be considered in determining whether a new utility plant should be built. He stated if there is an economic impact in building a new plant, that should be considered in the equation, too. He stated: Under the way we originally started to develop resource planning we merely considered the rate impact. I do not think that is... appropriate and is too narrow a consideration. ... sometimes, arguing for consideration of economic impact on a county or on the state, or on the environmental impact, may cause some increase in price to the consumer. If the overall increase in cost to that Nevadan is less, then [it] is sometimes appropriate to consider that as the best, or least-cost decision... Senator O'Connell asked if it will be expected for the utility to pick up that cost without consideration of the cost to the utility. Mr. Schmidt stated the cost is always passed on to the rate payer if they are able to increase the rate. Mr. Schmidt referred to the question on nuclear power asked earlier by Senator Neal. Mr. Schmidt said there are two ways to buy power. One is to contract directly for a resource in which you are gaining a right to the output of a particular plant. He stated there is no utility in Nevada which contracts directly with the utility for a portion of a nuclear plant. He stated the only way nuclear power is consumed by electric companies in Nevada is through a system sale where a source is not identified. He stated buying directly from nuclear power plants is too unreliable for Nevada's needs. Senator Neal asked if he has had complaints about load reduction to specific areas where damage was caused to appliances. Mr. Schmidt responded there have been complaints. He said complaints are filed with the utility and sometimes the claims are upheld and sometimes they are denied. Senator Townsend closed the hearing on S.B. 268. The work session was opened on S.B. 71. SENATE BILL 71: Revises provisions relating to disciplinary actions taken by state contractors' board. Senator Regan requested that the words "at his cost" be added to line 9. David J. Reese, Attorney, Nevada State Contractors Board, expressed his agreement to the proposal by Senator Regan. Senator Townsend asked what authority the board has over non- licensed contractors. Margi A. Grein, Director of Finance, Nevada State Contractors Board, stated they have no authority other than to prosecute them. She stated the board cannot order a non-licensed person to do work. SENATOR O'CONNELL MOVED TO AMEND AND DO PASS S.B. 71 WITH SENATOR REGAN'S AMENDMENT. SENATOR SHAFFER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. ****** Discussion was held on Senate Bill (S.B.) 125. SENATE BILL 125: Eliminates prohibition against certain members of state board of architecture from voting or acting on matters relating solely to architects. SENATOR O'CONNELL MOVED TO DO PASS S.B. 125. SENATOR REGAN SECONDED THE MOTION. Senator Augustine reminded the committee that during previous testimony it was indicated there would be an amendment making the bill effective upon passage and approval. She indicated on page 2, line 1, the membership will be increased to five members instead of four members. Jim Wadhams, Lobbyist, Nevada State Board of Architecture, stated the purpose of line 1 on the second page of the bill is that if everyone is voting, then the quorum shall be five to vote on any matter. He explained it is an attempt to simplify it and to take out the calculation of who is sitting on what issues. SENATOR AUGUSTINE MOVED TO AMEND AND DO PASS AS AMENDED. SENATOR NEAL SECONDED THE MOTION. Senator O'Connell agreed to the amendment. The changes are, "five members constitute a quorum", "upon passage and approval" to be inserted in the bill. THE MOTION CARRIED UNANIMOUSLY. ***** There being no further business, the meeting adjourned at 10:00 a.m. R ESPECTFULLY SUBMITTED: Molly Dondero, Committee Secretary APPROVED BY: Senator Randolph J. Townsend, Chairman DATE: Senate Committee on Commerce and Labor April 6, 1995 Page