MINUTES OF THE

SENATE Committee on Commerce and Labor

 

Seventy-First Session

April 25, 2001

 

 

The Senate Committee on Commerce and Laborwas called to order by Chairman Randolph J. Townsend, at 7:05 a.m., on Wednesday, April 25, 2001, in Room 2135 of the Legislative Building, Carson City, Nevada.  This meeting was video conferenced to the Grant Sawyer State Office Building, Room 4406, 555 East Washington Ave., Las Vegas, Nevada.  Exhibit A is the Agenda.  Exhibit B is the Attendance Roster.  All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

 

COMMITTEE MEMBERS PRESENT:

 

Senator Randolph J. Townsend, Chairman

Senator Ann O’Connell, Vice Chairman

Senator Dean A. Rhoads

Senator Mark Amodei

Senator Raymond C. Shaffer

Senator Michael A. (Mike) Schneider

Senator Maggie Carlton

 

GUEST LEGISLATORS PRESENT:

 

Merle A. Berman, Clark County Assembly District No. 2

 

STAFF MEMBERS PRESENT:

 

John L. Meder, Committee Policy Analyst

Scott Young, Committee Policy Analyst

Laura Adler, Committee Secretary

 

OTHERS PRESENT:

 

Tami DeVries, Legal Administrative Officer, Real Estate Division, Department of             Business and Industry

Michael E. Buckley, Lobbyist, The Howard Hughes Corporation

Pamela J. Scott, Lobbyist, The Howard Hughes Corporation

Joan Buchanan, Administrator, Real Estate Division, Department of Business             and Industry

Jay Hutschnecker, Board President, Valley del Paradiso

William A.S. Magrath II, Director, Caughlin Ranch Homeowners Association

Betty Ravendo, Raven Management

Karen Brigg, Regional Vice President, Eugene Burger Management Corporation

Sara Barry, Community Associations Institute

Donna Barrows, Terra West Homeowners Association

Renny Ashleman, Lobbyist, Southern Nevada Homebuilders Association

Jim Flippen, Owner/Operator, Associated Management Inc.

David Walker, Real Estate Division, Department of Business and Industry

Karen D. Dennison, Lobbyist, Lake at Las Vegas Joint Venture

Melody Luetkehans, Lobbyist, Nevada Association of Realtors

Donna Erwin, Las Vegas Country Club Estates

William Feliz, Feliz Management

Maddie L. Fischer, Lobbyist, American Consulting Engineers Council of Nevada

Terry Johnson, Labor Commissioner, Office of Labor Commissioner, Department             of Business and Industry

Ann Price McCarthy, Concerned Citizen

Lucille Lusk, Lobbyist, Nevada Concerned Citizens

 

Senator Townsend opened the workshop on Senate Bill (S.B.) 421.

 

SENATE BILL 421:  Makes various changes to provisions governing common-interest communities. (BDR 10-446)

 

Senator Townsend stated the committee would pick up from the previous day’s reading of the revised Proposed Amendment for Senate Bill 421 of 2 p.m. April 24, 2001 (Exhibit E. Amendment text is on file with April 24 minutes.)  He inquired as to why section 40, requiring a meeting of units’ owners of an association be held at least once a year, was being deleted.

 

Tami DeVries, Legal Administrative Officer, Real Estate Division (RED), Department of Business and Industry, answered section 40 was taken out of the bill, but is being left in statute.

 

Senator Townsend continued reading the changes in the bill, and asked why, in section 41, subsection 7, paragraph (a), subparagraph (3), the word, “discussed,” was stricken.

 

 

Michael E. Buckley, Lobbyist, The Howard Hughes Corporation, responded they wanted to keep the minutes of an executive board of an association brief, and have them focus on the important thing of what actually happened.

 

Pamela J. Scott, Lobbyist, The Howard Hughes Corporation, stated the purpose was to keep the minutes a record of motions made and actions taken.

 

Senator O'Connell asked whether the meetings were recorded to provide additional information, if anyone wants it.

 

Ms. Scott replied her association does not tape its meetings.  She commented homeowners are intimidated by having meetings taped, and are reluctant to talk when they know they are being taped.  She offered some people tape the meetings, while others do not.

 

Senator Townsend commented the policy of the committee would have to decide the issue.  He suggested at the bottom of the minutes it could simply say, matters discussed, and then list the items discussed.

 

Ms. Scott noted the next subparagraph covers allowing for discussion.

 

Senator Townsend pointed out S.B. 421 says, the substance of remarks made by any unit’s owner who addresses the executive board.  He noted it only covers what the unit’s owner discusses, not what was discussed by the executive board.

 

Mr. Buckley claimed they were keeping in mind what every board in the state would have to comply with, and they were trying to keep it simple.

 

Senator Townsend conveyed what would come through if it were a telephone call.  “There was a 3½ hour board meeting.  At the beginning of the meeting, the minutes of the previous meeting were accepted.”  He remarked that was a decision, and would fit under the proposed language.  Continuing the example, he said, “They then had a 3-hour discussion on landscaping issues.  Nothing was decided, and nothing was proposed.  The meeting was adjourned.”  He queried what substance would the meeting minutes have to offer to anyone.  He contended he did not think that was the intent of the bill.

 

 

Ms. Scott insisted the landscaping issue would be in the minutes, because it would have been an agenda item, which would require the minutes to reflect what happened on that agenda item.  She maintained the minutes would reflect there was discussion and no action was taken.

 

Senator Townsend qualified he was not a minutes expert, but posed if a homeowner talked about landscaping for hours, there could be no mention in the minutes.  He contended it would not be unfair to ask one more line to be typed about what was discussed.

 

Ms. Scott responded she had no problem with putting the word, “discussed,” back in subparagraph (3), but she claimed it would be open to interpretation.

 

Senator Townsend elucidated the desired thing was for homeowners to find out what happened by reading the minutes, and if the only thing that happened was a discussion on landscaping, then the homeowners should be informed.  He expounded it might sound arbitrary, extreme or anecdotal, but no one on this committee wants to continue getting calls about the quality of the minutes.

 

Joan Buchanan, Administrator, Real Estate Division (RED), Department of Business and Industry, averred she has received numerous calls over the last couple of years about people not getting the right information in the minutes.  She said people who wanted to tape meetings were told they could not, and some were even escorted from the meeting by security guards.  She articulated there should be a provision allowing people to tape their homeowners association (HOA) meetings.  She continued she has heard complaints from homeowners who asked to be on the agenda, and were never successful in being put on the agenda.  She opined people should have the right to prove what did occur at a meeting.

 

Senator Townsend directed a statement granting a unit’s owner the right to tape record any HOA meeting, executive or otherwise, be added to the appropriate section in the bill.

 

Jay Hutschnecker, Board President, Valley del Paradiso, asked for clarification regarding whether the taping also includes executive meetings.

 

 

 

Senator Townsend replied it does not mean an executive session, just a meeting of the executive board.  He explained it would not apply to when an executive board goes into an executive session about issues over which they have appropriate statutory authority to discuss, such as personnel, legal, or other sensitive issues.  Taping applies only to the regularly scheduled executive board meetings.

 

Senator Townsend continued reading the bill with section 41, subsection 9.

 

Mr. Buckley stated the original language did not address whether the manager could act without board approval, but this language would allow that action to be put on the agenda so everyone could be informed as to what happened.

 

Senator Townsend conveyed the purpose of the next item was so everyone fully understands, especially the committee members.  It is Nevada Revised Statutes (NRS) 116.3115, subsection 9, striking, “For the purposes of this section, the administrator shall adopt regulations . . . whether an emergency affects the health, welfare and safety of the units’ owners of the association;” and replacing it with, “the executive board may do this.”  He explained the portion stating an association executive board may, for the health, safety and welfare of the members of the association, enter into litigation for construction defects and ratify it later, is being removed.

 

Mr. Buckley mentioned the term, “or other qualified person,” was added to the original language, because it might not be a contractor.  Continuing, he said subject was added to section 47.5 of the proposed amendment to S.B. 421.  He explained that was the section in the act which required approval for litigation, and that was how it tied back into litigation.  He clarified this was not NRS 116.3115, it was the board section, but the language was removed from NRS 116.3115.

 

Senator Schneider stated he would like it made clear on the record, in a construction defect lawsuit, the boards cannot use the health, safety, and welfare clause at all.  The boards must now always go for a vote of the people.  He expounded to the best of his knowledge, in the last 2 years in Las Vegas, there has not been a lawsuit by the vote of the HOA membership.

 

 

 

Senator Townsend posited the committee has always held the position that, if there were a health, safety, and welfare issue, it should be fixed now.  He said if litigation were needed later, there is a mechanism.

 

Senator Townsend moved on to read section 42, and section 43 of the proposed amendment to S.B. 421.

 

Mr. Buckley articulated, in the case of older associations with a 50 percent quorum requirement, the act allows for a 20 percent quorum on ownership meetings.  He explained this section would allow associations with higher quorum requirements to adjourn the meeting, so neighbors can be informed there is a meeting in process, to get the attendance needed for a quorum in order to continue with association business.

 

William A.S. Magrath II, Director, Caughlin Ranch Homeowners Association, stated, in practicality, Caughlin Ranch had never had more than 100 people out of 2000 members show up for the annual meeting, no matter how much it was publicized.

 

Senator Townsend read section 43, subsection 4, and asked why “or removing” was being taken out.

 

Mr. Magrath pointed out there was a separate section already in the bill dealing with the secret ballot process for removing a person.  He explained secret ballots are an expensive process and they must be returned to accounting firms or independent third parties, and only a small percentage of the electorate are returned.  He said this section states they only have to count the votes of those who voted, and a quorum is not needed to elect an officer.

 

Betty Ravendo, Representing Raven Management, stated she had a problem with that, because Senator Schneider really initiated a lot of the action in this bill to prohibit small groups of people controlling the board.  She stated going back to only accepting those returned ballots, puts everyone right back to where they started.  She averred she has not had a great problem in getting the ballots back, but sometimes they have had to call a second meeting for a reduced quorum.  She contended, in the event of electing officers, it is important to get as many people represented as possible.

 

 

Senator Townsend commented the point Ms. Ravendo is making is well-taken up to section 43, subsection 3, where it says, only the secret written ballots returned to the association may be counted.

 

Ms. Ravendo responded the law states the secret written ballots returned are the quorum for the meeting when electing officers.  She expounded, if there are only 20 secret ballots returned, that is the quorum for the meeting.

 

Mr. Buckley interjected maybe the confusion is there is no quorum necessary for electing somebody.  He said the election usually occurs at the time of the meeting.  He opined the point of this section is to say, whoever votes, those are the votes that count, and those who voted can elect the people.

 

Ms. Ravendo stated the Nevada Revised Statutes (NRS) says at a meeting where any directors are elected, only the secret written ballots will be counted as quorum.

 

Mr. Magrath stated he would like to express his understanding.  He said it was not the annual meeting itself or a quorum for conducting business at the annual meeting.  He said the discussion was the process by which secret ballots were counted.  He noted every member has an opportunity to be on the ballot, every member is given an opportunity to vote for everybody on that ballot.  He said when the ballots come in from only those people who choose to vote, those votes are counted, and the net result is, out of 2000 people, there might only be 200 people voting.  The person who gets the most votes out of those 200 ballots becomes the next director of the association, he added.

 

Ms. Ravendo commented she still stands by her interpretation of the law.  She opined everyone might be getting confused with very large or master associations.  She stressed she had long upheld the secret ballot quorum for any meeting at which election of directors takes place; only the returned written secret ballots would be counted as a quorum.  She expounded if that quorum were taken away, then there would be meetings without a quorum and there would also be, perhaps, five or six returns that would be counted, and that would mean people, again, controlling elections.

 

 

 

 

Karen Brigg, Regional Vice President, Eugene Burger Management Corporation, explained this quorum requirement was for the election process only.  She said if the election process, only, was held with the annual meeting, the secret ballots could not be counted as somebody being in attendance for the annual meeting; those people would have to sign proxies.

 

Ms. Ravendo stated she might be wrong, but the law states, at any meeting at which there is an election of directors, the quorum will be established by the secret ballots returned.

 

Mr. Magrath acknowledged under the current law, it might say that.  However, he added, this amendment to the bill was intended to change that.  He expounded the difficulty was when the secret ballots are counted, there would not be a quorum.  He asked, “Why go through the process of a second election?”  If the people wanted to vote, their vote counted the first time; and if the people choose not to vote, then their vote would not be counted, he explained.

 

Sara Barry, Community Associations Institute, stated her HOA consists of only 38 units.  She said their quorum requirement is 10 percent for an election, which means four people have to vote.  She pointed out, if the amendment was put in place, then only one person could vote and decide who was the board.

 

Senator Townsend articulated the speaker was confusing quorum with voting. He said one person could vote, and decide who was the board.

 

Ms. Barry interjected there has to be a quorum in order to count those ballots.  She expressed for smaller associations, instead of stopping problems, this would create more because one homeowner could vote and decide who would be the board.  She emphasized the need to keep the quorum in place in order to keep such things from happening.

 

Mr. Buckley noted the speaker was right, if only one person returned the ballot, then that would be the vote counted, as in any election.

 

 

 

 

 

Senator Townsend stated he understood the concern, but asked, “How do you make people vote?”

 

Donna Barrows, representing Terra West Homeowners Association, said at her association there has not been a problem in getting at least four people to vote, but if this amendment became law, then there would be a problem.  She explained her concern was with a lot of apathy and a lot of issues.  She emphasized if that amendment became law, then things would return to the way they were 20 years ago.  She iterated she has not had a problem, and if they have to call for a second vote, then great.  She stressed they would not accept 1 percent.

 

Ms. Ravendo surmised all the confusion stems from the law being set up to solve the problem of some very large associations or master associations, but in doing so, the effectiveness was totally being taken away from the current process with the smaller associations of fewer than 200 homes.

 

Mr. Magrath stated he respectfully disagreed.  He expounded, if there was an association of 30 members, and there was an annual election process for which everyone was noticed and told this was the time to vote on who would represent the association for the next year or 2 years, if one person chose not to vote because of apathy, then they had no complaint, by the fact everyone else in the neighborhood voted.  He said, with all due respect, in this legislative process, no one would want to be in the position where it was required to obtain 50 percent of the eligible electors for support.  Otherwise, there would not be elections in America.  He asserted this is a situation in which you have to make a decision.  If you choose to vote, your vote counts, he said.  In a 2000 unit association or a 30-unit association, or if there are apathetic members, they cannot complain about the fact somebody else chooses to vote.  He contended it was a democratic issue, and insisted, if only one person votes, then that vote should count.

 

Ms. Barrows inquired about a quorum requirement of 10 percent or even 5 percent.  She claimed some figure needs to be used so there is a guideline for a quorum.

 

Ms. Scott opined the confusion could be that so many of the HOA documents require the election at the annual meeting.  She explained if there were no quorum at an annual meeting, then, technically, there could be no action.  She contended, just as Mr. Magrath indicated, the President of the United States was not elected by a quorum.  She stated a quorum might be needed to conduct the rest of the business at an annual meeting, but the votes returned are the votes that count to elect the board.  She contended the confusion is most elections are held at the annual meeting, and with this amendment, the elections would not have to be at the annual meeting.

 

Renny Ashleman, Lobbyist, Southern Nevada Homebuilders Association, commented the opposite policy argument is if it were done the other way around and there were no quorum, then the old board would perpetuate forever, even though whoever did vote wanted somebody else.  He said it seems there is an equal policy choice, and it is not necessarily bad that they are only counting a few votes.

 

Senator Townsend suggested one solution might be to not have the garbage picked up for 2 weeks, and then everybody would show up at the meeting.  He claimed the intent was not to pit small associations against large associations, because it was the smaller ones with which everyone was concerned.

 

Ms. Barrows suggested if there were no quorum the first time, then they could go to a second quorum.  She contended that would alleviate a lot of problems for smaller associations, because most of the time they do make their quorums.

 

Mr. Magrath interjected it cost $7000 for Caughlin Ranch to conduct its election, and to ignore the individual votes of everyone who voted was wrong.  He said to ask the people to vote again would cause confusion and cause some to not vote again, and those who voted the first time should not be made to come back a second time.  Because, he emphasized, the message would then  be those who cared enough to vote the first time, their votes do not count, and that is not the way it should work.

 

Senator Schneider elucidated he did not necessarily agree with Mr. Magrath’s assessment of $7000 for elections, even though it is a very large association.  He noted the cost is the same per person regardless of the size of the association; therefore, he just wants to get on with it and go with the 20 percent.

 

 

 

Ms. Brigg stated she disagreed with the 20 percent quorum requirement, because no matter what size the association, at certain points in time there would be apathy in a community.  She emphasized those individuals who care enough about what is going on in their community would vote.  She articulated they were being given ample time to vote, they have secret ballots so they do not have to attend a meeting, if they choose not to, and they could still vote to elect persons to go onto the board.  She maintained there are problems, whether it is a 100-unit project or a 40-unit project.  Often, she stated, an association does not meet those core requirements at the annual meeting, so consent absenteeism mailings have to be done.  She expounded, in the meantime, the associations are without boards, because they cannot elect people into those positions.  Ms. Brigg stated what is left are old boards, and some of the members resign, because they have been there too long and know they should have gone off the board at term.  All of this causes a great deal of problems, she said.  She contended putting a percentage in, and then dropping it when the requirements are not met, does not solve any problem.  She insisted the secret ballot has worked very effectively when done properly, and a quorum requirement was not needed.

 

Senator O'Connell inquired if the objection is to the 20 percent, and that the requirement should be left at the 50 percent.

 

Ms. Brigg clarified for an election of officers, a secret ballot is mailed to every homeowner.  They all have a certain time to return the ballots, and maybe that should be stated, so people are not cut short.  The returned ballots are then counted.  She said those ballots returned and counted are the requirement for the election.

 

Responding to Senator O'Connell’s comment, Ms. Brigg stated the people must be given ample time to return the ballots.  She added the ballots are not opened until the scheduled meeting, so an extended period of time could be given, if wanted.  She remarked, maybe, the extended time is a way of getting more people to vote.  She stated she has not experienced a lot of problems since going to the secret ballot; it has worked very effectively.

 

Mr. Buckley questioned whether a meeting is necessary if they are using secret ballots.  Ms. Brigg responded a meeting is necessary when opening and counting the ballots.  Mr. Buckley surmised section 4 may need some work.

 

Senator Townsend voiced he is being told if the language were removed, then they do not have to have a meeting in order to count the ballots.

 

Ms. Brigg asserted there must be a meeting, because people might want to attend that meeting.  This would allow candidates the opportunity to speak.  A homeowner would not necessarily have to vote through the mail process; they could vote at the meeting.  She said people would have to be appointed to count the ballots in the open where everybody could see.  She explained this way there is no secrecy, there is an open counting of the ballots with others present, which requires having a meeting.

 

Mr. Buckley pointed out on page 29, lines 39 and 40 (section 44, subsection 6, of S.B. 421), it says, “Votes cast for the election or removal of a member of the executive board of an association must be counted in public.”  He stated it is already in the law.

 

Ms. Brigg commented the words, “at an election meeting,” could be added.

 

Mr. Magrath communicated there is no problem with opening the ballots at a public meeting.  He elucidated, if there were not the requisite number of votes being suggested, a 20 percent quorum, or something of that type, then the process would stop, and everything would have to be redone.  He stated the entire election process would have to be gone through again, including another meeting with a different group of people to count the ballots.  He posited if the proper procedure of conducting an appropriately noticed election were followed, and only a certain number of votes are received, then those are the votes that should count.  He maintained if 20 percent of the people do not want to make a decision, or there is less than 20 percent, then the 10 percent, or whatever it is, should be the people who make the decision.

 

Senator Townsend asked for clarification from the testifiers in Las Vegas whether they were saying they need a quorum of the board to count the votes, or whether they were saying they need a quorum of the total available votes in order to qualify.

 

Ms. Revendo answered it was a quorum of the total votes.  She stated the total votes establish the quorum for that meeting, according to the law.  She expounded anywhere there is an election of directors, the quorum is established by the secret written ballots returned; that was the way the law reads.  She said that establishes the quorum, as opposed to proxies or attendance.  She added that method has worked very well for her.

 

Senator Townsend commented he is having trouble with the word “quorum.”  Assuming there are nine members on the board, the annual meeting is for the purpose of electing two new officers, and ballots are mailed out, he asked whether the people could mail in their ballots or show up at the meeting to vote.  Ms. Ravendo replied they could do it either way.  Senator Townsend voiced if all seven of the remaining officers show up, then there is a quorum of the board to conduct a meeting.  He continued, what he understands Ms. Ravendo to be saying is, if there are 38 people, then she wants a minimum number of votes that day returned by mail or voted in person.  Ms. Ravendo answered he was correct.

 

Mr. Magrath interjected there cannot be an annual meeting to conduct business without a quorum of the members present.  He explained, at an annual meeting, the membership must be present to conduct business, that was a quorum of the membership at the annual meeting.  He stated to conduct a regular executive board meeting, a quorum of the board is the only requirement.

 

Senator Townsend commented that was all he was trying to get to.  He conveyed people were using these terms interchangeably.

 

Commenting further, Mr. Magrath stated his concern is having to have a quorum present to have an election be valid.  He contended there should not have to be a quorum of all the members participating to have the results of the secret election count.

 

Senator O'Connell queried if there was any language in the bill preventing voting by proxy.

 

Mr. Magrath responded voting for a member of the board cannot be done by proxy; it has to be by secret ballot only.  Therefore, if a quorum of the members is required, and if 20 percent, or whatever percent, of the members are not present, then the election is invalid.  He stressed his point was to let the votes of the people who do vote count.  He maintained if there is not a quorum of the people present at the annual meeting, then the business of the annual meeting cannot be conducted, but there could still be an election of the new members for the board.

Senator Townsend expressed his appreciation for everyone’s participation on such an important issue, but said everyone is using the term “quorum” interchangeably, and he is not picking up on the differences.

 

Senator O'Connell asked if the people in Las Vegas now had a better understanding of the language, and did they feel any different than when they first presented their concern.

 

Ms. Ravendo responded it had not changed her feeling of the effectiveness of the current process, and how it would undermine the process if it were changed to not require a quorum.  She contended a board could literally reelect itself.

 

Ms. Barrows agreed there are boards that continue to elect themselves, and they would continue to have this problem, and they would be back years from now to argue this point again.

 

Senator Townsend acknowledged they are correct, it can happen.  He explained in his association’s case there are 9 board members and 38 people, which means 20 plus people can throw the whole board out.  If those people choose not to participate in the electoral process, they have abrogated their responsibilities, he stated.  Therefore, they must be saying, in essence, they do not care or they think the board is doing an okay job.  He conveyed no one could guess what somebody wanted to do on his or her ballot.

 

Mr. Magrath offered to liken this situation to elections in Nevada.  He said, in November, we vote for our representatives to our legislature.  He said what happens is there is no quorum requirement to show up at the election booth.  If a small percentage of Nevadans show up to elect our legislators, those votes count.  He claimed what this group is suggesting should occur is we should have a minimum number of Nevadans vote before it counts.  He opined that should not occur; if only the board is interested and perpetuates itself, then that is the way it should be.

 

Answering Senator Townsend’s question as to whether they understand the problem now, with that explanation, Ms. Ravendo stated, it was her understanding a lot of the modifications that came about 2 years ago were to eliminate the control of the board by a few people, and thus control of the association.  She agreed with a lot of the changes made then because they did work in the direction of getting more people involved, and forcing more people to be involved.  She said now it seems as though we are going backwards.

Mr. Ashleman articulated the only problem with the argument the people in Las Vegas are making is if quorums are required and you do not get them, then the board perpetuates itself anyhow.  He commented that is getting the opposite results.  He said most of the associations have trouble getting quorums, and you would still have the same people on the board, because there is never a valid election.  He insisted that would be his concern, and that quorums are not sought at elections because it would generate the opposite results from what is desired.

 

Ms. Barrows stated hers was the typical association in which the homeowners were intimidated by the board, and they finally stood up and elected a board to better represent them.  She elucidated what was being said was the board members could reelect themselves every year.  She emphasized that is what they want to see prevented.

 

Senator Townsend commented all they need to do is make sure the same people who elected the new board keep voting and keep showing up.

 

Ms. Barrows remarked she understood that, but at this particular association, there are some people that used to sit on the board who are very intimidating to the homeowners.  She said until some interested people moved in, started rallying the people, and got them to attend meetings, the same board was in place for 20 years.

 

Ms. Ravendo stated since the homeowners required the ballots count as a quorum, it has increased the participation in the vote by a tremendous amount.  She said she represents 15 associations, but she could vouch each of those associations now has much more participation in the voting process, because it was impressed upon them it is required for a quorum.  She added the members are encouraged to return their ballots even if they are not voting.

 

Ms. Brigg asserted her position is to stay with the present language.  She opined she did not understand how quorum requirements were going to force people to vote.

 

Jim Flippen, Owner/Operator, Associated Management Inc., stated he agrees with Ms. Brigg.  He said a quorum requirement would not change an apathetic voter.

Senator O'Connell said she agreed with Senator Schneider’s suggestion to go with what was already there, and continued with review of amendments to the bill.

 

Senator Townsend commented section 45 is being removed because it is covered in another section of the law.  Mr. Buckley clarified the new language is being removed, and the existing statute would be left as is.  Senator Townsend moved on to section 46.

 

Mr. Buckley clarified, the first “board” was being removed from line 35 of Section 46.  He stated the new language on lines 31-32 was an attempt to broaden the requirements of who has to be certified in managing associations.

 

Senator Shaffer asked for clarification on the use of executive board and executive boards, if there were two.

 

Mr. Buckley claimed the terminology in the bill is “a bit clumsy” with all the amendments.  He stated the term is “a member of the executive board.”  He said normally it was said a director or board member, but that is not the way the act uses the terminology.

 

Senator Townsend remarked an executive board is actually the board of an association.  He claimed, in the corporate world, executive board means something entirely different.  He reviewed section 47, and noted the section referred to the very large developers who do developments in phases and might eventually sell off portions.

 

Mr. Magrath acknowledged section 47 is where it is being asked that the subsequent parties, who are now attempting to argue they should not do reserve studies and should not pay any required reserves, be brought into the original intent of the law.

 

Mr. Buckley noted the language in lines 5-6, on page 32 of the proposed amendment, where it says, “deliver to the association all reserves required by the reserve study.”  He opined there is another section in chapter 116 of NRS dealing with this.  He said it should more properly say, “tender the reserves required for the period in which the reserves that are then due.”  He commented it is not all of the reserves, but whatever is the current amount.

 

Mr. Magrath explained that was the intent.  He said they are not asking for all the reserves, just the reserves due from that particular developer.  He voiced if clarifying language is needed, it can be provided.

 

Mr. Buckley stated the wording is contained in NRS 116.31038, section 3, paragraph (a).

 

Mr. Magrath pointed out the proposed amendment does have a reference to NRS 116.31038, and says, “and tender to the association all reserves required by the reserve study.”  If we choose to change the language we can add, “and this statute,” to clarify further.  He added, in section 47, they are eliminating all reference to litigation and moving it to a later section.

 

Senator Townsend continued to review the bill.  Mr. Magrath commented in section 47.5, subsection 2, of the proposed revisions to S.B. 421, those five examples are the only types of litigation or civil action that could be commenced by a board without the 50 percent vote requirement.

 

Senator Townsend noted section 49 of the bill is about the foreclosure issue.  He recalled the situation with a woman who had draped a rug over her balcony, was fined and then foreclosed upon.  He noted this is where it says, the association may foreclose its lien by sale after the association has provided written certification to the ombudsman on a form prescribed by the administrator and notices have been given in accordance to NRS 116.3115 through NRS 116.3116 inclusive.  He said in other words, the individual has to be noticed, and if the person does not respond, then a filing is made with the ombudsman saying the association has done everything it can, and then it can proceed at that time.

 

Mr. Magrath pointed out lines 4-6 on page 37 provide additional protection.  He said the new requirement would be the certification has to be sent to the ombudsman at least 60 days before the sale occurs, so the ombudsman would have the certification for 2 months before the date of any sale, thus allowing the ombudsman’s office to contact the homeowner.

 

Senator Townsend asked whether the ombudsman’s office and the Real Estate Division understood the change regarding foreclosures, because it is a very sensitive issue, especially to the homeowners.

 

David Walker, Real Estate Division (RED), Department of Business and Industry, elucidated they were very involved in this portion of the bill.  He agreed it is important the ombudsman be advised of these proceedings and things are here.  He said the RED does not wish to have the ombudsman approve them, but the ombudsman should be advised so he or she can take action or contact the people so they would have a person, rather than just a letter contact, to help them understand the process.

 

Ms. Brigg commented on previous discussions about the foreclosure process, and said it needed to have further study.  She expounded, in doing further study, she found out an intent to lien indicates the homeowner is behind in dues, and a lien would be filed if that homeowner does not become current.  She averred Nevada statutes do not require it.  She noted, while it tends to be industry standard, there might be some cases in which it is not being done, which pushes that process up.  She contended it would not be necessary to send an intent-to-lien notice, but to simply go directly to the lien process.  She pointed out, although it is industry standard, nowhere does it state one must wait the 30-day period before filing a notice of default.  She mentioned there is cost behind each of these stages.  She noted when she talked with one of the title companies or foreclosure companies, she was told the cost of filing a lien averages $375 to $550.  She pointed out, if the homeowner is not given ample time of at least 30 days to respond before filing a notice of default, which was an additional $500 to $700, then there is a 60-day period before noticing for sale.  She said extending the notice for sale to 90 days could slow the process, because, again, it is an additional $500 to $700.  She urged, if some protection were put in the bill stating intent-to-lien notices are required, then 30 days after that period the property can be liened; and then another 30 days after that period, the notice of default can be done.  She maintained this method might slow the process down, and there would be fewer problems.

 

Senator O'Connell commented she thought there was talk of this intent to lien having to go before the commission.  She added, something as serious as this would not be done arbitrarily by the board or even through the ombudsman.

 

Ms. Scott responded most associations do send an intent-to-lien notice.  She pointed out it is a courtesy, because it is not required by law.  She stated it is not a recorded document, so nothing is placed against a property when they notice.  She expressed her concern, when an intent to lien is made, which is just a warning letter required by law with a waiting period, that there are situations in which an association needs to get it on record, because they know a home is going to be sold, and they need to get that lien recorded.  She surmised they could record an intent-to-lien letter, but it would be an expense.  For example, she said, she does about 300 intent-to-lien letters every month.  She explained these letters are sent 6 months out because they have a rather low dues structure.  She said when a home owner is 6 months delinquent in dues, then an intent to lien letter is sent saying the property owner needs to get on a payment plan to get caught up or, in 35 days, the lien would have to be recorded to protect the association’s interest.  She commented the intent letter usually clears up about 90 percent of the delinquencies.  She averred she would not want the intent to lien notice required by law, because there are times when she knows a property is being sold, and there is a lot of money owed.  Under those circumstances she knows she needs to record that lien now, so the title company can pick it up in the sale.

 

Karen D. Dennison, Lobbyist, Lake at Las Vegas Joint Venture, explained a lien is simply the notice of delinquent assessment which establishes a lien against the property.  She said a lien does not have to be foreclosed upon right away, but the statute does allow for a notice of default to be recorded simultaneously with a notice of delinquent assessment.  She commented that might be what Ms. Brigg was referring to with the 30-day period between those two.  She continued, the law then allows, after 60 days have elapsed from when the notice of default and election to sell was recorded and mailed, including a copy to the ombudsman, to advertise a notice of sale, which takes approximately 3 weeks.  She pointed out this process is shorter than the process in the deed of trust foreclosure statute.  She conveyed, the deed of trust foreclosure statute requires 3 months to have elapsed between the actual time of recording the notice of default and election to sell, and the actual notice of the sale.  This makes a total of a 120-day period, she stated.  She said it could, technically, be done in a little over 90 days.  She opined the lengthening of the time periods is the solution. 

 

Ms. Dennison opined the ombudsman’s involvement in deciding whether something should be liened is appropriate, because lenders rely on project documents allowing liens, and there is the Federal National Mortgage Association (FNMA) (Fannie Mae) selling guidelines.  She said every lender sells to Fannie Mae, and Fannie Mae requires any lien structure to be in place.  She expressed concern any interference in the lien process and foreclosure process would undermine project certification.  She noted if a project cannot be certified, then nobody would get a loan on a home or a condominium in that project.  She opined the answer is to lengthen the periods to, possibly, give a pre-lien notice, if that is the desire of the committee, which was a good idea.  She suggested it not be made any more complicated with other people involved.  She reiterated more notice time and maybe an additional pre-lien notice would be the answer.

 

Senator Townsend opined the goal of the committee is for the commission to be the ultimate arbiter and have some teeth to resolve serious issues and violations.  The ombudsman would be the person the average homeowners could go to for understanding of the law, the association declarations, and other situations they might encounter.  He remarked, perhaps liens are not the area for the ombudsman.  He commented, since there are liens, notices of default, and foreclosures, which are legal mechanisms on which a lot of things such as certification are based, the ombudsman should be notified of the process so they are informed in case there are inquiries.  He stated, instead of the process of liens and notices of default, there should be a time frame of, perhaps, 30 days.  He continued, this would take a lot of burden off the ombudsman and the office; otherwise they would have to become legal experts on foreclosures, financing, and everything else.  He expressed a desire to keep the ombudsman in a role the committee had predefined for that position, so people are not led to believe that office could do something for them it really cannot do.

 

Ms. Dennison explained the reason the certification to the ombudsman was put in the statute was someone would have to go back through the records of the foreclosure and actually certify the notices were given in accordance with the law.  She stated another reason for notifying the ombudsman would be, as suggested, should someone call the ombudsman’s office about improper notice, et cetera, then there would be something to reference which would also provide a contact person.  The ombudsman could call the contact person to clarify understanding of the situation for all parties.

 

Senator Townsend commented, if the ombudsman were left in the loop, it would be helpful, but the legal processes of notice to lien, notice to default, and notice to foreclose, have to be segmented.  He noted the law is not for those who deliberately default on dues and acquire assessments.  They deserve what they get.  It was for someone with an infirmity, or someone on fixed income or with extreme circumstances who violated a rule that set up this chain of events, and the intent is to stop something like that from steamrolling.

Ms. Brigg commented some of the companies expressed concern with the requirement of having to send the files to the ombudsman, because sometimes the files are simple with standard procedures, but other files are very full.

 

Mr. Buckley pointed out the intent is for the ombudsman to develop a form the association would complete and return to the ombudsman.

 

Senator O'Connell elucidated an example of her major concern was the situation in which a woman lost her son and husband at the same time.  Everything the woman owned was tied up and she could not pay the dues to the association.  She clarified the woman owned the home outright and lost the home to the association, which kept it for a rental before selling it.  She explained while the assets were in probate, the woman had no access to the money.  She expounded, because the woman owned her home free and clear, and it was just a matter of waiting until probate had cleared, it is inexcusable the law allowed her to lose the home.  Senator O'Connell asserted she did not want something like that to happen again.

 

Mr. Ashleman noted there is no reason the woman could not have gotten an order from the probate court to stay the sale.  He said that is very common.

 

Senator O'Connell responded she did not know all the details, but she wanted to make sure the law would not allow a situation like that to happen again.  She opined there has to be some protection for people who find themselves in very unusual circumstances.

 

Senator Townsend interjected that Mr. Ashleman was correct, but the problem was this woman was a bereaved widow who lost her child as well as her spouse at the same time, and she might not have understood all the options.  She might not have sought counsel, for whatever reason.  He noted that is why there is a market for prepaid grievance packages, so people do not have to think of everything during tough times.  He opined there are ways to handle situations such as that during the normal course of events.

 

Ms. DeVries pointed out the way this section was being amended, the ombudsman could have stepped in and assisted in a case like that.  She conveyed it was good to have this part in the law, and then the ombudsman could step in with explanations and offer information about recourse, such as getting an order from the probate court.  Responding to a comment, she stated this is a good example of the need to receive notice when this type of action is taking place, because the ombudsman would be alerted.

 

Mr. Buckley added, the ombudsman would be getting these notices of foreclosures, and the bill of rights card would automatically go out to people asking for a call back on any situation they might be experiencing.

 

Senator Townsend stated what has been put in the bill is good, and it helps the ombudsman notice these people so they can have their rights explained.  He asked whether there should be a time frame between the ability to lien and the ability to go to default.  He asked whether there should be a 30-day notice or a 30-day stay.

 

Ms. Dennison suggested the appropriate place in the law for the 30-day notice would be in NRS 116.31162, in section 49, paragraph (c).  She explained before the notice of default and election to sell is recorded and mailed in accordance with this section, 30 days must have elapsed after the notice of delinquent assessment was given, which is the first notice required by law in paragraph (a).  She said paragraph (a) would require the notice of delinquent assessment, and state in paragraph (c) that 30 days must have elapsed after the notice of delinquent assessment prior to mailing the notice of default and election to sell.

 

Senator O'Connell she said agreed there has to be enough time.  She said she still had a question as to whether an association, under certain circumstances, should be allowed to take a person’s home due to the lack of ability to pay dues and/or interest on fines.  She emphasized she has a hard time justifying that kind of action.

 

Mr. Magrath explained the law currently states that you foreclose for fines.  He said the only issue is foreclosure for dues and assessments.  He stated that was, in effect, asking a person who has already used the amenities, such as the swimming pool, for the last 6 months or more, to pay the dues associated with maintaining the common elements.

 

 

 

 

 

Senator O'Connell said she concurred with the principle for the dues since she is a resident in an association, but stated she still cannot justify it in her own thinking.  She remarked she does understand not making the mortgage payments, but there are certain circumstances, in her thinking, that do not justify taking a person’s home.

 

Ms. Brigg elucidated, in many cases, the homeowner would come to the board if it were a hardship case, and the board would enter into an agreement with these individuals who have hardships.  She said that would stop the foreclosure, unless the individual did not fulfill the agreement with the board.

 

Senator Townsend suggested a payment schedule be worked out between the board and the homeowner to reduce the burden of meeting the obligation.

 

Senator O'Connell expounded, hardship cases are being taken care of with assessors on taxes.  To give persons with hardships opportunity to not lose their homes, she suggested looking at the law that allows homeowners to work with the assessor for the solution to model a clause allowing homeowners in associations to work with their boards.

 

Senator Schneider acknowledged the discussion is a good one because part of his instructions to bill drafting was to address the issue of foreclosure.  He inquired of Ms. Brigg, who manages many associations, what percentage of the people are late with their dues.

 

Ms. Brigg responded, if the manager is doing an adequate job of sending statements and notification, a small number are usually delinquent in each association, from 5 to 10 percent, and those are usually cleared up within 30 to 60 days.  She commented, in her 20 years of management, she has only experienced five foreclosures.  She said two of those foreclosures were sold back to the owners, because of a misunderstanding and an inability to communicate with the owners.  Therefore, they started posting notices on the doors to make sure the owners understood, she noted.

 

Ms. Scott stressed she has never been involved in a foreclosure in the 20 years she has been a manager.  Senator Townsend remarked this is a less-than-humane experience.  Ms. Scott replied she understood.  She opined she did not know if anything done here would affect the Fannie Mae requirements, not being involved in that part of it, or if it is required when an owner requests a payment plan that it be offered, because that is a forbearance.  She cautioned those assembled to be very careful about the Fannie Mae issues.  She contended the 30 days could be put in and linked to after the notice of default to foreclose to 90 days, because associations are not into foreclosure on a regular basis, at least not the ones she has managed.

 

Senator Townsend stated an appropriate time frame needs to be developed, while being very sensitive to the total implications in the financial markets.

 

Mr. Flippen stated his company has never completed a foreclosure sale.  He expounded, all the steps discussed are increasingly severe notices of a situation asking the homeowner to understand there is a step that they have to take.

 

Senator Townsend asked Ms. Brigg whether people moving into an association are aware if they do not pay the dues as specified in the governing documents, their properties might be liened and ultimately foreclosed on.

 

Ms. Brigg contended some of the problems with foreclosures coming out of the Las Vegas area are because there are many absentee homeowners.  She said if there are no management company policies in place to change ownership names on the directories, then it could contain errors, so notices might not be getting to the owners in a timely manner.  She explained slowing the process might help senior citizens who might not understand the process to obtain an understanding, and it would give them an opportunity to see the manager and work out the process.

 

Senator Townsend requested the concerned parties come up with some appropriate time frames that do not jeopardize Fannie Mae or any other government financial relationships or certain other available processes.

 

Mr. Flippen, to further answer the question, said the associations generally have a collection policy, which is distributed to the owners.  He said it describes the late fee, when the late payment date is, and what that late fee would be.  He said it is generally a 30-, 60-, 90-day progression before the foreclosure procedure even begins.  He maintained all the home owners are aware of the steps leading up to foreclosure.

 

 

 

Senator Townsend continued to review the proposed revisions to S.B. 421.  Mr. Buckley commented subsection 3 of section 51 should be deleted because it is already repeated in other sections covering the issue of length of document retention.

 

Mr. Magrath elucidated section 52 would amend NRS 116. 4109.  He said this statute provides disclosure to buyers and sellers before a resale.  He explained this statute is the subject of tab B (Work Session Document of April 24, 2001, (Exhibit C. Document is on file with the April 24 minutes.), a proposed amendment by Senator Schneider, scheduled for later discussion.  He said if that amendment is included it would be in section 52.  He added the proposed amendment calls for more disclosure.

 

Senator Townsend read aloud the proposed amendment to NRS 116.4109.

 

Senator Schneider stated Assemblywoman Vonne S. Chowning, Clark County Assembly District 28, and he had worked during the interim, and her bill, which passed out of the Assembly on the previous day, was the exact same thing.  He said Assemblywoman Chowning reported real estate agents have a problem with this section; therefore, he recommended this committee do nothing at this time.  He said this would give everyone a chance to address issues in Ms. Chowning’s bill, which would come to this committee later.

 

Mr. Magrath articulated Ms. Chowning’s bill is Assembly Bill (A.B.) 484.  He said there are issues with the bill as amended because it would require every association to inspect every property before a sale occurs.  He conveyed there are indications the language can be worked out.

 

ASSEMBLY BILL 484:  Revises provisions governing disclosure statement required upon sale of unit in common-interest community. (BDR 10-584)

 

Melody Luetkehans, Lobbyist, Nevada Association of Realtors (NAR), stated she has talked with Mr. Magrath, and they came to an agreement with regards to the language, and the home owners associations group is willing to adapt the language to make it more palatable to the NAR.

 

 

 

 

Referencing subsection 6 of section 52, Mr. Buckley clarified the words were such that in an original disclosure, this would reference the resale certificate discussed earlier, which would now be referred to in the bill.  Commenting further, Mr. Buckley stated the part about there being no attorney at an arbitration was deleted.  He explained no attorney could see a situation in which a person should not have the right to be represented by an attorney in arbitration proceedings.

 

Ms. DeVries conveyed section 57 refers to the community managing agent, and the RED would like to request it become effective July 1, 2002, instead of January 1, 2002.

 

Donna Erwin, representing, Las Vegas Country Club Estates, voiced it was her understanding to strike the words “on or after January 1, 1992,” from line 13 of section 58.  Mr. Buckley interjected, on his draft, it would be line 47, and he indicated the date is bracketed for deletion.

 

Senator Townsend stated what is being said is to change to conform to those provisions.  He inquired if the only way the executive board could change, without the vote of the members, was to change their documents to conform to the law, but they cannot make any other changes.

 

Mr. Buckley affirmed Senator Townsend was correct.  He stated the only language added would allow the board to do it because, as originally proposed, it just said they could be changed.  It did not say how they would be changed, and this covers it, he said.

 

Senator Townsend cautioned he wanted to be sure this would not become a loophole for the executive board to start making other changes.

 

Ms. DeVries voiced she would like to ask for a new provision to be written in as section 7.9, on page 6, which is the section allowing the division to employ the necessary staff to carry out the functions of the commission.  She asked for the section become effective July 1, 2001, so the staff could be in place before the Governor appoints the commission.

 

Senator Townsend offered to make that section effective on passage and approval, which would still put it close to July 1.  Ms. DeVries accepted.

 

Ms. Scott explained the new section to chapter 116 of NRS is dealing with representative voting.  She expounded it was already in place with many associations in southern Nevada.  She stated the pre-1992 associations were grandfathered in at the last session to keep that type of voting.  She said it simply means neighborhoods or subdivisions elect a delegate, and the delegate casts the vote similar to the way we elect representatives who make our laws.  She averred this is for the large associations, and also addresses the quorum requirements.  She added without the delegate method, it would be very difficult to get a quorum.

 

Ms. Barrows commented she has two master associations under 1000 units, so she would request the reference to 2000 units be deleted.  She clarified one master association, currently under construction, is only 804 units, and the other is 917 units.  She stated a master association has subdivisions under it, which is what makes it a master association.

 

Senator Townsend responded there is no consensus from the committee on the master association.  He continued review of the amended bill with NRS 116.2105(1)(k).

 

Mr. Buckley pointed out lines 18 through 38 were just conforming to chapter 116 of NRS to the new master delegate.  Referring to the new section on construction fines, he said they are attempting to allow for construction fines, which are set out ahead of time, as to exactly what the timetable is, and what the penalties are.  He elucidated the extra language is because sometimes it is called a fine; sometimes it is called liquidated damages or other references.  He conveyed, some companies or declarants put it in the declaration, in other rules, or in the purchase agreement.

 

Senator Townsend clarified when a person purchases property with intent to build, construction must commence within a set period of time; and if that timetable is not honored, the association is allowed to take whatever action is afforded them in the documents.

 

Ms. Scott acknowledged that is correct.  She expounded, the key to this section is in southern Nevada, where liquidated damages are beginning to be interpreted as falling under that $100 penalty rule.

 

 

Mr. Magrath maintained this section also applies to the completion of construction.  He explained, when it is agreed in advance to complete construction within a certain period of time and they do not do so, then this allows the associations to impose those penalties, which they bought into at the time of purchase or by what they agreed to contractually.  He added there are a couple of cases in Reno in which construction is being drawn out because the law is being interpreted to mean they only have to do something every 90 days.  Therefore, every 89 days a truck shows up to move a few bricks.  He conveyed the associations want the ability to avoid the $100 cap, which is being argued currently.

 

Mr. Buckley clarified nonprofit corporations, which govern most associations, are organized under chapter 82 of NRS.

 

Mr. Magrath contended the new section recommended by Caughlin Ranch Homeowners Association fits in two different areas.  He said one of those areas obligates the subsequent developer to pay during the construction and development of the project, and also deals with the turnover.  He stated this should be cross-referenced with NRS 116.31038, and he would provide the information on where to place the amendment within that chapter.  In effect, he said, the subsequent developer would only be required to pay his portion of those reserves the reserve study identified.

 

Ms. Brigg suggested the language in this new amendment could be clarified.  She explained she experienced repercussions when she testified on this subject previously.  She elucidated, her property managers in Las Vegas attended a Nevada association conference last Friday.  She said the topics were reserve studies, budgets, non-judicial foreclosure, and proposed litigation.  When it came to proposed litigation, she said, the topic of discussion was her testimony on Friday morning regarding how her managers should be so disappointed in their bosses because they were taking kickbacks and not being honest.  She contended the whole thing was blown totally out of proportion.  She insisted the clarification in the law is very important, and this must be included, because of what those in her business are dealing with in these instances.  She elucidated she received a call from her district manager saying how disappointed and concerned a lot of the managers were, and she was asked what happened and what she said.  She said she told them all she was asking for was clarification in the law that any money, fees, commissions, credits, gifts, gratuities, things of value or compensation of any kind, should not be given to these property managers to preclude the possibility of litigation attorneys getting “their foot in the door” for construction defects.  She emphasized she stands on record, it is not that she does not trust the managers, but these gifts come in all different shapes and forms and are given to these managers from attorneys, and her fear is the managers may be too trusting of the attorneys’ knowledge of the laws.

 

Mr. Buckley suggested one thing everyone might want to do is to specify something of value.  He articulated this is an area in which the commission could develop regulations on what constitutes something of value.  He conveyed it might be an educational program, which would give managers additional insight, but then, an educational program might be considered something of value.

 

Mr. Flippen stated, under the current management regulations adopted March 15, 2001 by the Nevada Real Estate Commission:

 

“[The] duty of care for community managers, item 2, cannot solicit or accept compensation or gratuity which would improperly influence the decision making of the manager.  In the event of any such compensation, i.e., discounted fees, et cetera, full written disclosure must be required.”

 

Continuing, Mr. Flippen noted the issue had already been addressed regarding managers.

 

Ms. Brigg commented, it is in the Nevada Administrative Code (NAC), and people who hold real estate licenses are aware of it.  She asserted it needs to be clarified.

 

Senator Townsend opined the certification to be provided to community association managers should be identical to what is in the real estate chapter 645 of NRS.

 

William Feliz, Owner/Operator, Feliz Management, claimed in his company if there is any indication of taking a bribe of any kind, that person is immediately terminated because there is no question about conflict.  He stated the NAC clearly covers that issue.  He contended, when Ms. Brigg made her comments last Friday, he had the feeling she was protesting too much.

Senator Townsend clarified Ms. Brigg said it was appropriate clarity be brought to the language in front of everyone.  He insisted that was not an unreasonable request.

 

Mr. Feliz agreed it was not an unusual request, but stated again, he speaks to her motives.  Senator Townsend interjected no one’s motives are questioned in this hearing room.  He emphasized Mr. Feliz’s motives are not questioned, and no else’s are either.

 

Mr. Magrath called attention to the proposal in the law and said it was not generated by Karen Brigg.  He asserted it was part of the original bill, and had been discussed among the different parties in the entire work group.  He stated everyone, generally, agrees nobody should receive any compensation from any lawyers.  He elucidated he was not talking just about people covered by the NAC, but also board members, such as himself.  He pointed out the new law would include board members and officers.  He posited none of them should receive payola, compensation, et cetera, of any particular value to encourage somebody to commence construction litigation.  He concluded it was unfair, in any manner, to characterize Ms. Brigg’s limited testimony on this subject, to suggest she is doing anything wrong, or any of her managers are doing anything wrong.  He conveyed all anyone was trying to do was eliminate consideration being exchanged in order for these lawyers to commence litigation.  He is a lawyer, but, he said, he does not practice construction defect litigation to benefit.  Therefore, he articulated, it is unfair to criticize her or any of her testimony.  He said this is a general issue, and everyone has tried language to eliminate that in the statute.

 

Senator Schneider commented his name is on the bill, and language for this particular issue came from him, and not from any other individual.

 

Ms. Erwin suggested it not be limited to construction defect, and that it include all vendors that deal with association managers.

 

Senator Townsend stated he was in total agreement.  He declared there is the issue of perception when someone is retained for purposes of the benefit of all the members of the association, as well as the issues of maintaining property values.  He stressed it should not be limited to anything, whether it is contractors, pavers, lawyers, or whoever.  He directed Mr. Meder to use the language in the bill having to do with people who are providing management services to common-interest communities, to say they cannot accept anything from anyone.

 

Ms. DeVries testified the language in the NAC covers everything for managers not to accept anything that would improperly influence them in the decision-making process.  She averred what everyone was trying to do with the language in the bill was to also pull the board members in, because that was not covered in the RED’s regulations.

 

Senator Townsend reiterated it would be done for everyone from managers to board members, and if there was an incident, there would be no fine, just instant removal and loss of license or certificate.

 

Senator Schneider stated, in conversation with Ms. Brigg, there were some heavy things said about this committee and the laws written over the years, and he stressed it would be important for Ms. Brigg to elaborate further on the contents of the conference held in Las Vegas.

 

Ms. Brigg clarified the information she received was third party from her district manager in Las Vegas.  She continued, he was upset about the remarks made with regards to the situation just addressed.  She expressed her gratitude to Mr. Magrath for speaking on her behalf.  She elucidated there were no managers in her office about whom she was concerned.  She conveyed her district manager said, at the conference, it was mentioned how ridiculous the $5000 was versus the $5000 fine for board members, and yet we were limiting the board to only fining members $1000.  She responded the speaker was not keeping up with the developments in this committee.  She indicated her manager also told her it was said at the conference that there were too many loopholes, that the people involved in drafting this legislation really did not understand what was going on, and the attorneys would find loopholes for these different issues.  Ms. Brigg asserted, if this is what is called education for her managers, then she would not have them involved in that kind of stuff again.

 

 

 

 

 

 

Senator Schneider stressed a construction defect attorney said no matter what was drafted here, they would find the loopholes, and it would be “business as usual” in Las Vegas.

 

Ms. Barrows remarked she had attended the seminar in Las Vegas.  She stated the speaker said he had not been following the hearings, and did not know what was going on.  The seminar speaker based his comments on the original draft of the bill.  She claimed the seminar speaker never said anything derogatory against any of the senators or anyone working on the bill.

 

Senator Townsend commented, “Everyone has a right to say what they want.”

 

Mr. Buckley noted the proposed new section beginning on page 47, was the pink sheet introduced on the previous day (Exhibit G of April 24, 2001).  He explained the original language came from California, and it had been adapted to Nevada statutes.  He commented one problem with the original proposed language was it prohibited any transient commercial use. He noted Mr. Flippen has set up transient commercial use in Lake Tahoe.  Now, if the majority of the unit owners want to have transient commercial use, then that flexibility would be allowed.

 

Ms. DeVries stated her only concern with this section was what was referred to in this proposed section as the common-interest community.  She noted the RED commission would have original jurisdiction over any real estate licensee.  She surmised it could be cleared up procedurally within the division.  She stated she wanted to point out the real estate commission, not the common-interest community commission, would handle that type of issue.

 

Senator Townsend clarified Ms. DeVries was referring to page 2 of the exhibit, where it lists acting as an agent, real estate broker, real estate sales agent, property manager, et cetera.  Ms. DeVries confirmed he was correct.

 

Mr. Flippen stated he was comfortable with the language, because it allows the  association to regulate this activity in its governing documents.  Senator Townsend commented they should have the choice.

 

Ms. Erwin stated she did not have a copy in Las Vegas, but from what she heard, the language does sound acceptable for the problems they face.

 

Senator Townsend responded they had taken the proposals that came from Mr. Coultar and from Assemblywoman Christina R. Giunchigliani, Clark County Assembly District 9, and looked at it from a state viewpoint regarding the different community interests and the Lake Tahoe issue, where many of the units might be nonresidential.  He said they tried to accommodate those issues, and respect the interest of the homeowners as well as the overall interest of the development, and this was the resulting language.

 

Mr. Buckley pointed out somehow sections 36, 37, and 38 had been overlooked in the discussion.  He said, at the end of the previous meeting, language had been worked out regarding fines.

 

Senator Townsend commented the last thing he wrote down was on page 21, section 35, where he wrote “cumulative” next to “fines.”

 

Mr. Buckley noted they had skipped to section 39, because it was part of the discussion on fines.  Commenting on section 36, he said, from a lawyer’s point of view, he wanted to add limited liability companies to the laundry list on page 22 because it already included corporations.  He added, a neglected key point in the language in lines 33-34 on page 22 referring to a member appointed by declarant, should stay.  He explained a declarant does control the board during the declarant-control period, and the members cannot remove people, only the declarant has a right to appoint those people.

 

Ms. Erwin stated she had faxed suggested language for section 2 of the bill, requiring the board to have staggered 2-years terms.  She said although the language states they cannot exceed 2 years, she had encountered several associations in which the bylaws of the association actually referred to 1-year terms.  She claimed that inhibits any continuity in an association, if the entire board changes every year.

 

Mr. Magrath expounded, as he understood the comment, apparently the individual bylaws of a particular association limit the terms to 1 year.  He opined if a membership of an association wants to have 1-year terms, they could do so, or even 6-month terms.  He explained the law simply limits the terms to a total of 2 years, which is appropriate.  He claimed there should not be a law mandating boards to have 2-year terms, and it is up to the individual associations if they want shorter terms.

 

Senator Townsend queried if Ms. Erwin’s point was the lack of continuity, because the entire board all go off at the same time, and she has to educate an entire new board, as opposed to having them staggered every few months, so there is not the lack of institutional knowledge.

 

Ms. Erwin acknowledged the premise.  She opined she agreed with Mr. Magrath, except it is very difficult to change the governing document, because, typically, it takes 75 percent of the membership.  She stated she had discussed the issue several months ago with Senator Schneider and agreed; but it is easier to get it in the law than to get notarized signatures of 75 percent of the membership.  She insisted it does not make a lot of sense to have a whole new board, when it takes at least 6 months to educate them, and by then they are getting ready to go off the board.  She emphasized it really prohibits effective management of an association.  She added, typically, it is the older associations that have the 1-year terms, whereas the newer associations stagger the terms.

 

Senator Townsend commented it would be very difficult to stagger 1-year terms.  He read, under NRS 116.31034, section 2, the term of office of a member of the executive board may not exceed 2 years.  He discussed bringing all the associations up to 2 years, and then staggering them so there could be institutional knowledge.

 

Ms. Erwin responded the language should read “shall be 2 years” and the terms of the board members shall be staggered, the election of an odd number of directors takes place in odd numbered years, and the election of an even number of directors takes place in even numbered years.

 

Mr. Flippen averred there was nothing to prevent a current board from running consecutively.

 

Senator Townsend commented Ms. Erwin’s point was that at the end of a year, the entire board could decide not to run again, and that becomes a problem, particularly for a manager who is trying to balance the interests of the board and the homeowners, and show them what their rights and responsibilities are.  He noted board members are volunteers, and declarations and statutes are not easy to understand.

 

 

Mr. Flippen expounded he has a number of associations that have a complete board turnover annually, and some have a majority of the board members reelected along with a few new members each year.

 

Ms. Erwin voiced his comments were typically true, but she wanted to give everyone a worst-case scenario.  She said last year at the Las Vegas Country Club Estates, the entire board did terminate in March, and there was an entirely new board of directors with herself as a new manager.  She stressed it was a nightmare.  As a result, she said, the entire board of directors agreed to support this staggered-terms amendment, because it would be easier to have it in the law than to amend the documents.

 

Senator Townsend commented he sympathized with her situation, but that was not how things worked at the legislature.  He suggested her board consider a change in their controlling documents, because if the committee does something for one particular association, it affects everybody.  He maintained it was up to the committee, but he could not see a statutory mandate that everyone have a 2-year board if they do not want it.

 

Mr. Magrath asked to go back to page 21, and the cumulative effect of fines.  He stated he wanted to be sure everyone has the correct understanding, on lines 13 and 14, it would say, “but in no event may the ‘cumulative’ total amount of the additional fine exceed $1000 per calendar year for ‘each violation’.”  He contended this would better clarify to association members they cannot continue to accumulate violations.  He said he thought the most they would pay annually is $1000.  He noted he wants it understood it is a maximum of $1000 per each violation per calendar year.

 

Mr. Ashleman said he wanted to remind everyone Helen A. Foley, Lobbyist, Pardee Construction, submitted an amendment on uniform charges to sub‑associations by master associations (Exhibit H of April 24, 2001).

 

Mr. Buckley commented, as a result of yesterday’s discussions, language was worked on for section 39, dealing with additional notices for fines that would require an additional opportunity to cure before fines.  He stated Mr. Magrath had put that language together, and also put some language together for section 25, dealing with an exemption for the declarant that this committee had also discussed yesterday (Exhibit J of April 24, 2001).

 

Mr. Magrath elucidated the proposed changes to section 25 set up a stepped procedure whereby, before an association can fine anybody, it must send a notice, which specifies the alleged violation and a required corrective action and affords the person a reasonable opportunity to cure the alleged violation prior to imposition of a fine.  He said it also provides the right to a hearing before the imposition of a fine.  He opined this should address Senator O'Connell’s concerns mentioned earlier.

 

Mr. Flippen opined it was also stated the violator should be given some direction in how to correct the violation in the original notice, before the fine is instituted.

 

Senator Schneider stated he would like to clarify the issue of voting.  He said all votes taken by the association have to be counted in public by the board, including votes for litigation to be counted by the board in public.

 

Mr. Magrath stated that was not difficult to do.  He elucidated what his association did traditionally was to keep the board members that were up for election out of the counting process.

 

Senator Schneider stated any part having to do with voting, including litigation, should be in the open, because he has heard of cases in Las Vegas where ballots were mailed to someone who was involved in the litigation, and showed up at the meeting, just saying that it passed without producing any evidence.

 

Mr. Buckley noted the new language for section 25 prohibits contracts between an executive board member and the association.  He said it was pointed out, in the declarant control period, the declarant has board members and there will be contracts and services provided.

 

Maddie L. Fischer, Lobbyist, American Consulting Engineers Council of Nevada (ACEC), stated that proposed amendment was tab I in the Work Session Document of April 19 and 20, 2001, (Exhibit C. Original is on file in the Research Library ), and tab D in the Work Session Document of April 24, 2001, (Exhibit C.  On file with April 24 minutes.).    She said it was originally presented when S.B. 516 was considered.  She explained the committee suggested it would be more appropriate to present this proposed amendment during this work session on S.B. 421.  She voiced, just for everyone’s reference, the language under tab D had been discussed with representatives of the Nevada Trial Lawyers Association (NTLA), the Southern Nevada Homebuilders Association (SNHA), and the Nevada Subcontractors Association (NSA), all of which had suggested changes that are incorporated into that language.  She elucidated none of the three groups had any objections to the proposed amendment as it was currently presented.  She expounded the purpose of the amendment was to deal with a potential claim for professional negligence in a litigation action.  She said if it reaches litigation, the design professionals are appropriately named and should be identified early in the action.

 

Senator Schneider asked the committee if it was okay to include this proposed amendment in the bill.  The committee agreed it would be all right.

 

Mr. Buckley stated there was a point of clarification.  He said it was his understanding this proposed amendment is an amendment to section 40, and not an amendment to chapter 116 of NRS.  Ms. Fischer answered he was correct.

 

Ms. DeVries inquired if there would be any opportunity to review the budget and fiscal impact regarding the ombudsman’s office.  She said she was prepared to do so.  Senator Townsend replied it would be after they had finished with what remained on the bill.

 

Referring to Exhibit H of April 24, 2001, Mr. Ashleman said currently there are some associations with very old covenants, conditions, and restrictions (CC&Rs), which require the assessments be made on the square footage basis of the lots, which has absolutely nothing to do with the cost of providing services.  As a result, he expounded, some people in the same area are paying $12 a month, and others are paying $100 a month.  He said, in fact, in some cases, the association has a different rate of assessment on each individual member.  He asserted it did not make any sense, and requested it be modified so a uniform fee can be charged to everybody in a master association providing the same services to everyone.

 

Mr. Buckley opined the problem he would have with this amendment is that, currently, chapter 116 of NRS says the declaration should require spelling out how assessments are allocated.  He asked whether this would now make that fee something that could be foreclosed on.  He also asked whether it would overrule the documents that are recorded.  He conveyed it seemed to be giving carte blanche to a master association to overwrite recorded documents.  He maintained this is like property rights people can look up in the records.  He contended it would give freedom to the master association board to do what it pleased.  He emphasized there appeared to be a lot of potential for abuse here.

 

Senator Townsend wanted to know if the committee has the right to do something that would affect a property right.

 

Mr. Ashleman responded everyone had, certainly, assumed throughout their work over the last two sessions on these documentations, they could do so.  He stated it had been the operating principle, because many of the things adopted were intended to override CC&Rs.  He claimed he was not trying to alter assessments, but to address the routine operating fees charged.  He added this is only for the master associations that are controlled by the subassociations in an area.  He surmised it would not have much likelihood of abuse under those circumstances.  He offered to join with others to refine the language.

 

Ms. Barry said she was the president of Spring Valley Ranch, which has 4000 units, and 32 subassociations within it.  She stated the original documents were written so everything worked by square foot.  She continued the developer put in associations assessed at $9 a unit, and some of the other associations are paying up to $30 and $40 a unit.  She claimed, because of the 4000 units, those rates would never get to be changed.  She added they have turmoil in the association right now because everybody has access to exactly the same things in all the common areas, but some are paying more than others.  She concluded she would support that amendment, because it would definitely help her association solve its problems.

 

Mr. Buckley opined if it went forward, it would have to be done with an amendment to the existing declaration, and would have to be recorded.  He suggested, perhaps, it would only affect people who acquired their titles after the document was recorded.  He explained persons who buy into Green Valley Ranch get recorded documents saying they pay a certain amount a square foot.  He asked how they would now know they would have to pay more a square foot if it is not on record.  He contended there would have to be a mechanism in this process in which there would be a statutorily approved amendment, that would only apply to people who come in after the fact.

 

 

Mr. Magrath stated his concern with the proposed amendment is the documents creating this master association and subassociations, perhaps, were written improperly, thus creating a unique problem.  He stressed his concern the proposed statute would affect every other association in Nevada with existing reasons for different strata of dues.  He asserted someone could come to such an association saying the law states the dues are supposed to be uniform, and in effect, one unique problem would be remedied by changing the law for every other association.

 

Senator Townsend suggested everyone get together on this issue, and then let the committee know the resolution.

 

There being no further testimony, the work session on S.B. 421 was closed, and a recess was called at 9:42 a.m.

 

Senator Townsend reconvened the committee at 9:58 a.m., and opened the hearing on Assembly Bill (A.B.) 74.

 

ASSEMBLY BILL 74:  Prohibits employment of children under 16 years of age in certain activities relating to commercial sales. (BDR 53-659)

 

Terry Johnson, Labor Commissioner, Office of Labor Commissioner, Department of Business and Industry, stated last summer the commission started receiving complaints from citizens about children required to be employed in certain selling capacities, such as, magazines, candy, perfume, et cetera.  He said he directed his staff to take an examination of the matter and conducted two public hearings.  He explained chapter 609 of NRS, the provision relating to employment of minors, authorizes the labor commissioner, from time to time, to determine if a particular type of work is sufficiently dangerous to health, morals or welfare of children.  He stated at the public hearings it was surprising what was testified about, and what was uncovered as a result of the audit.

 

Mr. Johnson explained, since 1990, there has been a disturbing trend and pattern in the employment of minors in door-to-door sales.  For example, he said, in 1990 a 10-year old child, Raymond Lamar Curry, was placed in an unfamiliar neighborhood.  He continued, from the testimony of other children, the operators would punish the children for low sales by not giving them rides back home at night, and on one of those nights, as Lamar Curry was walking home, he was killed by a hit and run driver.  He acknowledged the child could have otherwise had a similar demise, but in this case he was deliberately placed in a situation not of his choosing.  He contended the trend and pattern over the last decade, with a plethora of instances, has been to place children in harm’s way.  He asserted his agency cannot be everywhere at all times, but the bill would be a progressive step forward in sending a message not to put children in harms way by this method.

 

Merle A. Berman, Clark County Assembly District No. 2, stated the bill targets for-profit businesses that exploit young children.  She said many of those groups mislead people into believing they are supporting a charity when, in reality, they are for-profit organizations.  She explained the bill was amended on the Assembly side taking into consideration everything they could possibly have.  She requested the committee’s support of A.B. 74.

 

Senator Rhoads commented he saw nothing in the bill excluding agriculture.

 

Mr. Johnson responded he did not know of an exemption for agriculture for this type of work of youth peddling or in commercial sales activity of that nature.  He contended the provisions in chapter 609 of NRS do not contemplate prohibiting minors from being employed in agricultural situations.

 

Senator Rhoads noted that is a problem, because there are a lot of farmers and ranchers who hire children under age 16.  He said he was pretty sure one of the statutes allows children to work in agriculture, but the bill appears to restrict that endeavor.

 

Senator Carlton stated under section 1, subsections 3 and 4, it identifies the child as an independent contractor in connection with the solicitation for sale and selling of any product, good, or service from a vehicle.  She asked if Senator Rhoads’ question was whether this language would also include truck farms, and the selling of produce from a truck, or whether the concern was for the actual working on the land.

 

Senator Rhoads replied those were concerns, but mostly the truck farms, because “either you have the children working for you or they are hanging around malls and fast food places.”  He contended the bill seemed overly restrictive, and discourages young people from going out and getting a job.  He said employers are going to be particularly leery of hiring a young person.

 

Mr. Johnson stated he found two sections of the child labor provisions in the NRS dealing with farm work.  He said under NRS 609.240, the maximum number of hours are referenced for employment of children under 16 years of age.  He voiced the statute has a provision that no child under 16 may be employed on a farm for more than 48 hours in 1 week or more than 8 hours in any 1 day.  Again, in NRS 609.245, he said, there is also a reference to farm work, describing every person who employs a child under 14 years of age in labor in connection with store, shop, factory, mine or any inside employment not connected with farm work, housework or employment as a performer in a motion picture.  He surmised it implies an exception for farm work under the provisions of NRS 609.245.

 

Senator Townsend wanted to know if one of the young people he saw in a show in Las Vegas was covered under line 10, because he provided a service by performing for an hour or so once a night as a singer and a dancer.

 

Assemblywoman Berman remarked that section 2, subsection 2, paragraph (d) would exempt farm workers.

 

Senator Rhoads commented there are a lot of corporations and non-family farms and ranches out there that also employ young people.  He said it occurred to him this would eliminate any young person from participating in the performing arts, according to line 10 of section 2.

 

Ann Price McCarthy, Concerned Citizen, stated usually she is lobbying on behalf of Nevada Trial Lawyers Association, but this is not one of their bills, and she is speaking on her own behalf.  She pointed out section 2, subsection 2, paragraph (c), exempts the employment of a child by a retail establishment at a fixed place of business in compliance with the provisions of the Fair Labor Standards Act of 1938, 29 U.S.C. Chapter 201 et sequentes (U.S. Code, Title 26, Section 501, paragraph (c), subparagraph (3), Tax-exempt organizations).  She contended it would be fair to say a farm is a retail establishment.  She said she also agreed with Mr. Johnson that it is clear in the other statute children under age 16 are allowed to work on farms.

 

Senator Rhoads interjected, the statute only refers to children 14 years of age or under, it says nothing about 15- and 16-year olds.

 

 

Ms. McCarthy concluded her concern was for children aged 14 and older.  She pointed out paragraph (d) covers it, in that children do not work without their parents’ permission.  She claimed employment is a rather broad word, and anything a parent or guardian might tell a child to do could come under the broad definition of employment.  She stressed, if it was desired to fashion something specifically exempting these children from working in agricultural areas, it was probably not a problem.  She emphasized the bill goes a long way toward exempting all kinds of volunteer work.  She pointed out almost every theater organization in Nevada is a 501(c)(3), at least all the ones she is familiar with in northern Nevada.  Further, there was no remuneration; it is all volunteer.  She contended she did not have a problem with children working at the Brewery Arts Center for the performing arts in Carson City, as part of the Backstage Kids.  She noted schools would be completely exempted; so, for example, the school could assign children to work on a campaign for their history class.  Ms. McCarthy stated the laws try to cover as many circumstances and as many entities and people as it can.  She opined A.B. 74 comes as close as it could, except for something to cover the agricultural area, which is out of her area of expertise.

 

Senator Rhoads said, for example, his two grandchildren, ages 7 and 9, could not get paid to do a commercial for television the way he reads this bill.  He said these agencies are not non-profits, yet children are regularly seen on commercials.

 

Ms. McCarthy testified it was the broad definition of employment by a parent or guardian.  She said she recalled a huge bill in one of the houses of this Legislature dealing specifically with children in the performing arts.

 

Senator Townsend noted the other question is the issue of the non-profit organization exemption on the 501(c)(3).  He said many organized churches in Nevada are not organized under a 501(c)(3).  He asked, if you hold to the strictness of the language, and if a child could keep 25 cents, and the church got 75 cents out of every dollar for a candy bar, whether the religious organization would then be held responsible at that point.

 

Ms. McCarthy stated, technically, if an organization is not a 501(c)(3), then it probably would come within this chapter, but she did not see prosecution happening there.  She posited what if this bill were amended, hypothetically, to include a broad-based language about volunteering for churches in general, and there is an involuntary servitude situation, very close to what Mr. Johnson described, because they could fit into those loopholes.  She articulated if churches that are not 501(c)(3), or any other truly good works volunteer organizations, are to be included, then she would suggest paragraph (d), about employment by a parent or guardian, be broadened and leave the other areas alone.  She added that parents and guardians are not perfect, either, but we trust the parents and guardians to do what is best for their children.  If something is to be broadened, put it on the shoulders of parents and guardians, she suggested.

 

Senator O'Connell asked how the public would know of this law.

 

Mr. Johnson replied, they would most likely become aware in the same fashion they are notified of other laws.  He said he has worked with the industries that would be affected by this as well, and they have been invited to participate in the hearings.  He remarked, as with any industry or type of commerce, there are key players who could be used to get the message out.  He added during the course of hearings and the staff working with some of those industries’ representatives, he felt confident, should the measure pass, the standards could be adequately communicated to the public.

 

Responding to Senator O'Connell, Mr. Johnson stated the enforcement and notification would come through the Office of the Labor Commissioner.

 

Lucille Lusk, Lobbyist, Nevada Concerned Citizens (NCC), stated A.B. 74 started out as, and contains within it, a very good idea.  She said she understood it was basically predator control, and the NCC agrees with it.  However, she said, the language in the original version went far beyond that, and there was still a remaining concern with regard to volunteer work.  She pointed out in section 2, there is the use of the words “employed” and “permitted to work.”  She voiced it goes so far as to affect a residence, a parking lot, et cetera.  Continuing, she said it also has a list of those things it does not apply to, and one of those is the employment of a child by the parent.  She noted “employment by” was not the same as “employment with permission,” those are two very different things.  She maintained, should they decide to change to subsection 1, it would not apply to employment with permission of the parent, then it is truly broadened, and you are right back to those very predators Mr. Johnson was trying to get off the street.  She said merely needing to get permission of a parent, who is often misled about what those predators have in mind, is misleading.  She maintained she could not endorse that suggestion; although, she agreed Senator Rhoads has a great concern.  She stated she would like to point out the bill then goes on to say it does not apply to the activities of a child who voluntarily and without remuneration acts in certain capacities, and there it also has a limited laundry list.  She noted when a laundry list is created, that list becomes exclusive, and so only those things listed are exempted, and other things are not.

 

Ms. Lusk insisted she disagrees with Ms. McCarthy with regard to the many small churches that are not 501 (c)(3), and there are many state-based nonprofit organizations, such as Nevada Concerned Citizens.  She said NCC is a state-based political action committee, and children often work with the NCC without remuneration and voluntarily, often along with their families, but sometimes not, with 14- and 15-year olds.  Continuing, Ms. Lusk noted she considers it a great value for young teens to be involved in political activities and to learn early of the importance of the effect politics has on all of us. 

 

Ms. Lusk stated she has offered an amendment (Exhibit C) to remove the words “permitted” or “required” and replace them with “no child under the age of 16 years may be employed for personal remuneration in any capacity, including in connection with the sale or selling of any product.”  She said there are two places where permits are required, and this removes it in both places.  She asserted the amendment also removes the entire laundry list as it relates to volunteer work.  She contended, if the intent of this bill was as it has been presented in both houses, to control the employment by those who prey on children by holding out the offer of remuneration, then there is no need to restrict the voluntary activities of children, in particular teenagers.  She opined if the committee wanted to go with Ms. McCarthy’s suggestion of saying with permission of parent or guardian, she thinks children should have their parents’ permission for volunteer work, but otherwise you totally undermine the bill by going in that direction.

 

 

 

 

 

 

 

 

Senator Townsend stated the committee was out of time, and the remainder of the bills would be taken up tomorrow.  The meeting was adjourned at 10:30 a.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

 

Laura Adler,

Committee Secretary

 

 

APPROVED BY:

 

 

 

                       

Senator Randolph J. Townsend, Chairman

 

 

DATE: