MINUTES OF THE SENATE COMMITTEE ON COMMERCE AND LABOR Sixty-eighth Session May 8, 1995 The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 9:30 a.m., on Monday, May 8, 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. STAFF MEMBERS PRESENT: Scott Young, Senior Research Analyst Vance Hughey, Senior Research Analyst Molly Dondero, Committee Secretary OTHERS PRESENT: Douglas Dirks, General Manager, State Industrial Insurance System (SIIS) Bob Ostrovsky, Lobbyist, Nevada Resort Association Douglas Dirks, General Manager, State Industrial Insurance System (SIIS), explained Exhibit C. He stated he lowered the estimated number of claims discussed in the previous meeting held on May 5, 1995. He explained the figures represented in box 3 of each section of Exhibit C represent the increments in the average monthly wage. He stated the boxes show the steps year-by-year had there not been a freeze. He explained though the analysis is identical, pages 2 and 3 assume there will be a decrease in claims. Senator Townsend commented currently the bill states to remove the freeze and go forward. Mr. Dirks stated the difference will be the $5,996,044 million if the bill simply removes the freeze. He stated he recommends lifting the freeze and using the $1,997 number starting in 1995. He stated there will be a permanent lag in the Temporary Total Disability (TTD) average monthly wage. He said he understood the rate would be taken back to the 1995 rate, not the 1994 rate. He stated, "On July 1, 1995 the average monthly wage cap will go from $1,880 to $1,997...I interpreted Mr. Whittemore's presentation to look back 1 year. I interpreted that as to taking us back to 1995 instead of 1994. That may be my misunderstanding of that proposal." Senator Neal stated understood Mr. Whittemore's interpretation from last Friday's hearing that there will always be a 2-year rolling freeze where they will always be 2 years behind and never catch up. Mr. Dirks stated there will be 1-year lag in average monthly wage. Bob Ostrovsky, Lobbyist, Nevada Resort Association, commented the intent of Mr. Whittemore's testimony from the previous hearing, is to go back 2 years, then to move up 1 year at a time. This will always leave the injured worker 2 years behind. Senator Townsend asked if the $2.9 million is the figure used if they go back 2 years and then move forward. Mr. Dirks stated $2.9 million will be the cost to the system. Senator Townsend requested a different reference chart which will clarify the discussion. Mr. Ostrovsky stated the language takes out what was previously in the bill. He stated: Essentially, it says, people who have claims after the effective date of this bill, or those sections, which are probably July 1, would be assessed at the current, average monthly wage of the state, the one established on July 1, 1995. Everyone in between that 2-year period who have claims have an artificial rate established for them, which is the 1993 capped rate. Senator Townsend commented everyone between 1993-1995 is at $1,880. Mr. Ostrovsky stated that is the maximum. Senator Townsend asked what that cost will be to the system. Mr. Dirks responded it will be a difference over the biennium of $3 million. SENATOR O'CONNELL MOVED TO INTRODUCE BDR 53-1292. SENATOR REGAN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. ***** BILL DRAFT REQUEST (BDR) 53-1292: Makes various changes to provisions governing workers' compensation. There being no further business, the hearing was closed at 10:00 a.m. RESPECTFULLY SUBMITTED: Molly Dondero, Committee Secretary APPROVED BY: Senator Randolph J. Townsend, Chairman DATE: Senate Committee on Commerce and Labor May 8, 1995 Page