MINUTES OF THE SENATE COMMITTEE ON JUDICIARY Sixty-eighth Session May 12, 1995 The Senate Committee on Judiciary was called to order by Chairman Mark A. James, at 8:35 a.m., on Friday, May 12, 1995, in Room 224 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator Mark A. James, Chairman Senator Jon C. Porter, Vice Chairman Senator Maurice Washington Senator Mike McGinness Senator Ernest E. Adler Senator Dina Titus Senator O.C. Lee GUEST LEGISLATORS PRESENT: Assemblywoman Jeannine Stroth STAFF MEMBERS PRESENT: Allison Combs, Senior Research Analyst Marilyn Hofmann, Committee Secretary OTHERS PRESENT: William A. Bible, Chairman, State Gaming Control Board Harvey Whittemore, Lobbyist, representing Nevada Resort Association P. Gregory Giordano, Attorney at Law, representing Shuffle Master, Inc. Ellen Whittemore, Attorney at Law, representing International Technical Systems Julie Foley, Vice President of Public Affairs, International Technical Systems Richard A. Wright, Attorney at Law, Nevada Attorneys for Criminal Justice Mike Specchio, Office of the Washoe County District Attorney Morgan Harris, Office of the Clark County District Attorney Senator James opened the hearing on Assembly Bill (S.B.) 133. ASSEMBLY BILL 133: Makes various changes to provisions governing regulation of gaming. The first to appear was William A. Bible, Chairman, State Gaming Control Board. Mr. Bible indicated S.B. 133 was an "omnibus measure," which makes a number of minor changes to the Gaming Control Act. He first indicated that section 1 provides the mechanism for the Nevada Gaming Commission to remove from its records the names of individuals from whom taxes are uncollectible, principally from bankruptcy filings. Mr. Bible stated section 2 of the bill will delete the reference to Nevada Revised Statutes (NRS) 453.500. He said section 3 will provide additional flexibility in NRS 453.172, which allows a licensee or individual who owns an interest in a gaming establishment to place that interest into a trust, without having to re-qualify with a background investigation. Mr. Bible indicated an approval would relate back to the date on which the trust was executed. He said sections 4 and 5 of the bill relate to refunds. Mr. Bible indicated section 6 contained certain bill drafting corrections in language. He indicated that section also provides in the Gaming Control Act the ability to require an individual who owns or has a beneficial ownership interest in a debt security of a publicly traded corporation, to stand for suitability. He said the definition of "debt security" appears on page 8 of the bill. Mr. Bible outlined the technical changes in the remaining sections of the bill. With respect to section 11, he indicated there were two "repealers," one being the repeal of NRS 453.500, which currently provides that articles of incorporation of a Nevada corporation engaged in gaming activities contain specific language which indicates gaming is one of the legal focuses for which the corporation was chartered. Mr. Bible stated there was "no particular reason" for that language and indicated he had discussed the matter with the secretary of state. He said the other "repealer" dealt with the issuance of work permits on a limited basis to individuals who had been convicted of misdemeanors or gross misdemeanors. Mr. Bible stated that provision was given a "sunset," and they would ask that the board retain that authority, and the changes approved during the last session of the Legislature be made permanent. The next person to testify was Harvey Whittemore, Lobbyist, representing the Nevada Resort Association (NRA). Mr. Whittemore indicated the industry supports A.B. 133. He indicated the only unresolved issue was that regarding placement of the definitional section. Mr. Whittemore said the definition of "debt security" should have general application, because the way the bill now exists, it may be read as having "debt security" apply only to one particular section. He wanted to be sure the record was clear that the NRA would like the phrase to have general application throughout the statutes. Senator James asked why the definition would be codified elsewhere in the statutes. Mr. Whittemore answered there could be an amendment preceding a definition section, which would have application throughout the act, or in the alternative, to place the definition with respect to publicly traded corporations. However, he reiterated, to make it perfectly clear, it should be added as a definitional section to chapter 463 of NRS. Appearing to speak to this issue was P. Gregory Giordano, Attorney at Law, with Lionel, Sawyer & Collins, Las Vegas. He said in the statutes at the present time, there were a number of definitions regarding corporations and publicly traded corporations which are set forth in NRS 463.482 et seq. Mr. Giordano said the problem regarding the definition of "debt security" was that it may be limited only to NRS 463.643, and general application would be preferable. He stated, "Debt security means any instrument generally recognized as corporate security, representing money owed and reflected as debt on a financial statement of an entity, including, but not limited to, bonds, notes and debentures." There was no further testimony on A.B. 133. The chairman closed the hearing on the bill and opened the hearing on A.B. 131. ASSEMBLY BILL 131: Provides for regulation of inter-casino linked systems related to gaming. The first to speak was William A. Bible, Chairman, State Gaming Control Board. Mr. Bible stated the bill would "provide a regulatory environment for table games, in a very similar manner to the existing regulatory environment for linked slot machines." He used as an example of a "linked slot machine," the "Megabucks" machines. Mr. Bible said when a person plays the machine in one casino, he or she is in fact playing a network which is operated throughout the state. He said there have been requests to link table games with progressive "pots" between properties. Mr. Bible said this would increase the amount of prizes available on these games. He said the intent was to "add more sizzle" to such table games. Mr. Bible indicated table games over the years have not grown as rapidly as slot revenues. He said the technology exists today to develop a statewide Keno game, with the numbers being drawn at one location, with players being able to participate in other locations. Mr. Bible stated this would result in increased prizes because of larger participation. Mr. Bible reviewed the bill, section-by-section. He pointed out section 9 relates to gross revenue in terms of tournament play. Mr. Bible stated the statute would allow an operator of an inter-casino linked system to deduct losses in tournament play to the extent of payments for that play, so there would be revenue gains to the state, but no revenue loss. He said tournaments at this time are excluded from taxation, both for revenue and payouts. Mr. Bible said this provision of the bill, which was agreed upon by the industry, states if there is a tournament entry fee of, for example, $100, and a payout of $10, $90 would be subject to taxation. Also, he said, if the payout in that situation was $100, there would be no taxation. Mr. Bible stated, however, losses could only be deducted to the extent of revenues. He said in section 10 of A.B. 131, relating to licensure requirements, indicates it will be unlawful to conduct an interlinked casino system without appropriate licensure, except for interlinked systems between affiliated properties. Mr. Bible pointed out section 12 of the bill provides that revenues from the activities, instead of being reported by the operator of the inter-casino linked system, will be reported by the licensee, which is similar to reporting requirements for slot route operators. He stated section 13 indicates when calculating gross revenue, a proportional share of losses would be distributed throughout the system. Mr. Bible stated he had expressed concerns with respect to interlinked casino systems violating the anti-lottery provisions of the Nevada constitution, but he said he was advised by the Office of the Attorney General that was not the case. Senator James asked a question regarding the fiscal impact of the bill, and Mr. Bible stated he believed revenue to the state should be increased, and there should be no impact. The next to speak were Ellen Whittemore, Attorney at Law, representing International Technical Systems (ITS) and Julie Foley, Vice President of Public Affairs for ITS. Ms. Whittemore indicated Ms. Foley would speak on the issue of interlinked Keno games. Ms. Foley indicated ITS was fully owned by Si Redd, "a leader in gaming innovation for the past several years." She said Mr. Redd is in support of linked table games. Ms. Foley stated, "Keno is dying all over the state...in a Keno lounge where there once were 100 chairs...now there may be 10 to 14 chairs." She said Mr. Redd has developed an interlinked game in order to "spruce up the game of Keno." Ms. Foley indicated revenue would increase, while casino overhead is decreased. She thanked the NRA and the gaming control board for working on the bill to make sure it is a "win, win, win" for the casinos, for the state and the distributors of gaming devices. Senator Washington asked if it would be advantageous to allow persons to play Keno on their "Internet" computer systems, which would allow people to play from their homes. Ms. Whittemore answered Keno play in hotel rooms has been discussed, and in the future it may be considered. Senator Adler asked why an interlinked system would increase Keno play. Ms. Foley answered they envision jackpots of $5 to $7 million, with jackpots being hit more frequently. Senator Adler stated he knew why people did not play Keno: "You pick 12 numbers and the casino picks 12 different numbers...I don't know why it has taken people so long to catch on." The next person to speak was P. Gregory Giordano, Attorney at Law, representing Shuffle Master, Inc. Mr. Giordano offered a prepared statement and an explanation of the game, "Let it Ride,." and how tournament play will be structured. That statement is attached hereto as Exhibit C. Senator Adler asked for information regarding the "Shuffle Master." Mr. Giordano stated the machine deals the cards totally at random every time, and provides maximum security. He said the shuffler is part of the "Let it Ride" package, and a casino cannot run such a game without utilizing the Shuffle Master. Mr. Giordano said the "Let it Ride" tournament will offer $1 million jackpots. He explained that people playing the game at selected casinos, will pay an extra $1 fee per hand to qualify for entry into the tournament. Mr. Giordano stated those bets are tallied by computer, at each participating casino, as are hands high enough to qualify. Harvey Whittemore, representing the NRA, stated the organization supports A.B. 131. He said there was an industry-supported amendment in section 11(4), wherein a sentence would be added at the end of the new language: "An inter-casino linked system shall not be used to link games other than slot machines, unless such games are located at an establishment that is licensed for games other than slot machines." Mr. Whittemore stated this language will clarify the intent and purposes of the bill. There was no further testimony, and the chairman closed the hearing on A.B. 131. Senator James then opened the hearing on S.B. 401. SENATE BILL 401: Revises provisions governing regulation of gaming. Mr. Whittemore introduced his sister, Ellen Whittemore, Attorney at Law, as someone "who is brighter and more articulate in the gaming area than I...." Ms. Whittemore provided the committee members with a packet regarding the amendments to the bill (Exhibit D. Original is on file in the Research Library.) and spoke from a prepared statement (Exhibit E). Senator James indicated the bill includes a raise in salary for gaming commissioners, and that provision will not be heard nor voted upon in the Senate Committee on Judiciary. He stated he would later request a motion to amend and do pass all other sections without recommendation as to commissioners' salaries, and re-referral to the Senate Committee on Finance. Ms. Whittemore read to the committee from her statement set forth as Exhibit E, which contains a section-by-section explanation of the bill. Senator Titus asked a question regarding "debit cards." She asked for clarification that a bank automatic teller machine (ATM) card could be placed into a slot machine "...and whatever amount of money you could get from a bank machine will be forwarded to that slot machine." Senator Titus asked if a bank charge (VISA) card could be placed into the machine. Ms. Whittemore confirmed that could not be done. Mr. Whittemore confirmed with respect to an ATM transaction, that it would be subject to the bank's overdraft agreements. Ms. Whittemore completed her review of the bill with her prepared statement (Exhibit E). Mr. Whittemore read into the record a statement from Brian McKay, Vice President and General Counsel, International Game Technology (IGT). That statement is set forth herein as Exhibit F. There was no further testimony on S.B. 401, and the chairman closed the hearing on the bill. He then opened the committee work session. SENATE BILL 375: Prohibits performance of act or neglect of duty in willful or wanton disregard of safety of persons or property. Senator James identified this as the "fan man bill." He stated the bill was to be amended to clarify the felony class as category C. SENATOR WASHINGTON MOVED TO AMEND AND DO PASS S.B. 375. SENATOR TITUS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR PORTER WAS ABSENT FOR THE VOTE.) * * * * * SENATE BILL 400: Limits civil liability of gaming licensee, its affiliate and employer for certain communications regarding employee, former employee or applicant for employment. Senator James indicated the bill would statutorily adopt a privilege which already exists in common law regarding communication between employers in good faith, under certain circumstances which do not result in liability for defamation or constitute grounds for recovery. He stated he wished to include language indicating that it is not a legitimate purpose to exchange information unlawfully obtained or to blacklist an employee in connection with lawful union activities. The chairman said amendatory language needed to be added at line 15 which says, "...it is privileged to the extent it does not impose liability for defamation or constitute grounds for recovery." He continued, "You could take a deposition...and have them communicate to you in deposition what they said, and there would not be a privilege against that disclosure; there would just be a privilege against predicating liability upon that communication between two employers...." Senator Adler said he was unsure about the use of the word "privilege, " because it has a specific meaning in the law. Mr. Whittemore indicated they would take another look at the language when the amendment is returned from bill drafting. He added he saw no real problem with the direction the committee was going regarding this issue. Senator Adler and Mr. Whittemore disagreed on the necessity for (2) and (3) in the bill. Mr. Whittemore said if the language was watered down too much, substantive changes would be made which would lessen what is present with respect to the common law. Senator James agreed (2) and (3) should remain in the bill. SENATOR WASHINGTON MOVED TO AMEND AND DO PASS S.B. 400. SENATOR McGINNESS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR TITUS ABSTAINED FROM THE VOTE.) * * * * * Senator James called for a motion on S.B. 401, discussed earlier. SENATOR McGINNESS MOVED TO AMEND AND DO PASS S.B. 401. SENATOR LEE SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * The chairman referenced A.B. 133. He reminded the committee of amendatory language regarding "debt security, which should have general application and appear in the definitional sections of the bill. SENATOR ADLER MOVED TO AMEND AND DO PASS A.B. 133. SENATOR LEE SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator James stated the next bill to be discussed was S.B. 314. SENATE BILL 314: Abolishes criminal defense of insanity. Senator James indicated the bill had been approved with an amend and do pass vote on April 13, 1995. He said he wished to discuss the amendment at this time. He asked Ben Graham, Nevada District Attorneys Association, to explain the amendment. Mr. Graham stated a defendant will be able to enter a plea of "guilty, but mentally ill." However, he said, prior to that plea being accepted by the court, there would be a hearing to determine whether or not there was sufficient evidence to accept the plea. Mr. Graham said if the plea was accepted, the sentencing process would continue, with a presentence report, advice from the Division of Parole and Probation, input from the defendant and his counsel. He indicated if the defendant were incarcerated, he would be sent either to a mental health facility or to a correctional institution. Mr. Graham stated the defendant would be subject to treatment within that correctional institution to the extent it exists. He said the insanity aspect was still available, and evidence could be offered in order to reduce the mens rea in specific intent crimes. Mr. Graham stated the insanity defense as a "complete defense" has been removed from the bill. Senator James pointed out there was no mandate in the bill for development of new treatment. Senator James said he would request an interim study of criminal insanity and the treatment available. Senator Adler stated the mental health institute in Reno was "on the edge of losing its accreditation," but the mental health treatment provided in the Department of Prisons is fully accredited and has been approved by the courts. He continued, "Ironically, these people would, I believe, receive as good or better treatment in the Department of Prisons...so this bill puts them where they should go." There were no further questions regarding the amendment, and the chairman announced S.B. 314 would be reported to the floor of the Senate. Senator James requested committee introduction of two bill draft requests (BDRs). BILL DRAFT REQUEST 3-1965: Revises provisions governing civil liability for wrongful acts and revises provisions relating to punitive damages. BILL DRAFT REQUEST 14-1852: Provides for release of presentencing reports to Immigration and Naturalization Service of United States Department of Justice. SENATOR ADLER MOVED FOR COMMITTEE INTRODUCTION OF BDR 3- 1965 AND BDR 14-1852. SENATOR PORTER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator James opened the work session to a discussion of A.B. 151. ASSEMBLY BILL 151: Requires criminal defendant to serve notice to district attorney of witnesses defendant intends to call at trial and allows criminal defendant and district attorney to discover certain matters. Senator James stated the bill had been voted out of the committee, but was brought back based upon a question regarding the fiscal impact concerns. Appearing in front of the committee was Assemblywoman Jeannine Stroth, the bill's sponsor. Ms. Stroth presented suggested amendatory language, set forth on Exhibit G. She indicated that amendment was agreed upon by the Office of the Clark County Public Defender. Ms. Stroth referenced an article appearing in the Las Vegas Sun regarding the same issue as set forth in A.B. 151. A copy of the article is attached as Exhibit H. She referred to the trial mentioned in the article as "trial by ambush." Ms. Stroth said the witness set forth in the matter should have been disclosed to the prosecution prior to the trial. Senator Porter stated he knew there were many discussions between the public defender's office and the district attorney's office, in order to develop a compromise. He pointed out there was no agreement on the part of the public defender's office. Senator Porter said he was on record as supporting the bill, but he had fiscal concerns. Ms. Stroth pointed out the language of the amendment, "...shall be on or before calendar call...," and stated that should address any fiscal concerns. She said she felt this was "more than fair and more than a compromise." Senator Adler stated he still had problems with the bill, because it requires a defense attorney to supply information, but does not require the prosecution to do the same. Ms. Stroth said the bill was amended to say that "upon request, the prosecution will provide information, and upon request the defendant will provide...." Ms. Stroth also made a reference to the amendment to S.B. 166, a bill linked to A.B. 151. (See Exhibit I). SENATE BILL 166: Requires notice of expert witnesses who are expected to testify at criminal trial and allows criminal defendant and district attorney to discover certain matters. Senator Lee stated in light of making a motion to bring the bill back to the committee with reference to a fiscal impact, he was personally satisfied there would be no such impact in the bill, as amended. Senator James asked if there was anyone present from the Office of the Clark County Public Defender's Office. Mr. Morgan Harris was present. Mr. Richard Wright, Nevada Attorneys for Criminal Justice (NACJ) approached the committee. He said considering the amendments he heard concerning "calendar call" for Clark County and "10 days" for Washoe County, as the date witness information must be turned over, there was a problem with the "equal protection clause." Mr. Wright stated there could not be a criminal procedure that differs between the accused and the prosecution. He said there was also a problem with Article 4, sections 20 and 21 of the Nevada constitution, which state "you can't have special legislation for criminal procedure...you can't have a defendant having one set of rights in Washoe County and another set of rights in Clark County." Mr. Wright added an opinion by the Nevada Office of the Attorney General stated, "Criminal law must be of general application." Mr. Wright stated the reality of the dynamics of criminal trial practice, is that the Clark County Public Defender has 39 trials set every week. He said of those 39 trials which are set, one- third of the defendants plead guilty, two-thirds are continued and only 2 cases go to trial. Mr. Wright stated the public defender will not know at the time of trial setting, which cases will actually go to trial. He said under the "calendar call rule" a defense attorney would have to have the case fully prepared, all witnesses interviewed, and ready to turn over at calendar call, "...when [the case] probably isn't going to go to trial." Mr. Wright reiterated, "When you take the public defender's office...tell him to be trial ready on 39 cases...this financial impact is going to remain." He said if at the time the defense case begins, the names and addresses of defense witnesses who will testify are turned over, there will be no fiscal impact. Senator James asked if those names were originally submitted, and other witnesses were discovered, could those names be turned over within 24 hours of a trial beginning. Mr. Wright answered, "Yes...if you have prepared and interviewed them...and gone over with your client. The first time you turn over the name of a witness...and he provides evidence detrimental to your client...you are going to have a constitutional problem...a malpractice problem...and an ethics problem." Senator Porter asked Mr. Wright if he would support A.B. 151 if there was no fiscal impact. Mr. Wright answered he believed the bill was unconstitutional, even as amended. Senator Porter indicated there were "at least 15 attorneys in the room...and 7 1/2 agree with one side, and 7 1/2 agree with the other." He added, "We are at a definite disadvantage...we put our trust and faith in the opinions that are put before us...when 7 1/2 say one thing, and 7 1/2 say another, we have to make a judgment call." Senator Porter indicated there was support for the bill to go forward, but he felt it was incumbent upon him to bring forward the financial information which was presented to him. He said he would like to further discuss that point. Responding to Senator Porter was Mike Specchio, Washoe County Public Defender. Mr. Specchio stated the impact on Washoe County would be as follows: "It would require...whether 10 days or 21 days...our office to interview witnesses for all cases that are going to be set for trial...that means we would have to hire additional investigators." He said he "did not have the bodies" to send to interview witnesses that are set for trials, which he would have to do under the provisions of the bill. Mr. Specchio stated he would need three or four more investigators, at a minimum, and "...probably another attorney or two...or three." He reiterated, "The financial impact is...I cannot comply." Mr. Specchio said the public defender's office does not have the luxury of preparing cases months ahead of time. He said each attorney in the office has approximately 200 defendants in the county jail that they are working with. Mr. Specchio stated Washoe County utilized a "motion to confirm trial," which is held approximately four days before trial. Senator Porter asked, "So you are comfortable with 24 hours, but you are not comfortable with 3 or 4 days?" Mr. Specchio answered there were many trials "...in which you don't know who you are going to call until the state rests their case...sometimes you may be forced to give up a name which is not going to help you, but is going to help the state." Mr. Specchio indicated he agreed with Mr. Wright that there were "all kinds of constitutional problems...but if I were forced to give it up, I would love to give it up 24 hours before I put the witness on the stand...and I could probably live with giving them up the Friday before." Mr. Specchio continued, "The 10 days that is proposed is really of no benefit...I can't comply with the statute...we cannot provide those names. He pointed to a statement by Ms. Stroth that a district attorney advised her "it only takes a secretary 20 minutes to type a list." Mr. Specchio stated, "That is not the point...it is not the issue of typing up the name and delivering it over...it's having to interview those people...." Morgan Harris, Clark County Public Defender, stated: It is interesting to me that the Clark County delegation, the Clark County Manager's Office, and Clark County lobbyists...we all say there is a fiscal impact. Mr. Bell [Stewart Bell, Clark County District Attorney] does not run my office. I confronted Mr. Bell with that and he said, `I am not going to say any more.' Mr. Bell is not saying there is not a financial impact at this time. Mr. Morgan said he had 2,097 trials set last year, and 78 of those cases actually went to trial. He stated, "If this bill goes in...even at calendar call...the financial impact will require at a minimum seven attorneys and seven investigators...with their supplies it is $844,000." Mr. Morgan stated they can "live with 24 hours," because 24 hours...there is no fiscal impact." Senator Titus stated: I want to put this into perspective. This committee has probably been the toughest on crime than any in recent history. We have enhanced penalties...we have created new crimes...we have added aggravated to the death penalty...we have tightened up for habitual criminals...there is no bill that has come before this committee we haven't passed to be tough on crime. A number of those have been sponsored by Ms. Stroth...so we certainly have been receptive to those...but let's look at this one bill. Only two...maybe one other state in the country does it...that is California. Let's look at California's court system...we see it every day on TV...we know how that is going. We hear this is going to cost over $1 million, from the public defender's point of view...we have heard from Washoe County that it is not a problem in 90 percent of the cases...only in the other 10 percent do they want this information. The origin of this comes from a case that didn't even occur in Nevada...and on top of that, you have the possibility that it is unconsitutional. This seems to me to be a number of pretty clear-cut reasons why we wouldn't want to go forward with this bill. I will vote against the bill unless we have that 24-hour compromise. Otherwise, I won't vote for the bill and I will argue against for all of those very obvious reasons. Senator Adler asked if there was agreement on the issue of documentary exchange, and Mr. Specchio and Mr. Wright answered they had no problem with that provision. Senator Adler specified there was agreement regarding documents and expert witnesses. He indicated the issue remaining had to do with prospective witnesses, and disagreement regarding the 24-hour compromise. Senator James stated he agreed with testimony that it was wrong to have different rules for different parts of the state, such as "calendar call" in one place and "10 business days" in another. He said those on the committee who supported the bill needed to make a motion to move the bill with the 21-day requirement, the 10-day requirement, the 24-hour requirement or "calendar call" requirement. SENATOR LEE MOVED TO AMEND AND DO PASS A.B. 151, TO INCLUDE THE CALENDAR CALL REQUIREMENT. SENATOR PORTER SECONDED THE MOTION. Senator Adler brought up the fact that some of the rural counties did not have a "calendar call." THE MOTION CARRIED. (SENATORS ADLER, JAMES AND TITUS VOTED "NO.") * * * ** There being no further business to come before the committee, the hearing was adjourned. RESPECTFULLY SUBMITTED: Marilyn Hofmann, Committee Secretary APPROVED BY: Senator Mark A. James, Chairman DATE: Senate Committee on Judiciary May 12, 1995 Page