MINUTES OF THE meeting
of the
ASSEMBLY Committee on Commerce and Labor
Seventy-Second Session
March 19, 2003
The Committee on Commerce and Laborwas called to order at 2:11 p.m., on Wednesday, March 19, 2003. Vice Chairwoman Barbara Buckley presided in Room 4100 of the Legislative Building, Carson City, Nevada, and, via simultaneous videoconference, in Room 4401 of the Grant Sawyer State Office Building, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Ms. Barbara Buckley, Vice Chairwoman
Mr. Bob Beers
Mr. David Brown
Mrs. Dawn Gibbons
Ms. Chris Giunchigliani
Mr. Josh Griffin
Mr. Lynn Hettrick
Mr. Ron Knecht
Mr. John Oceguera
Mr. David Parks
COMMITTEE MEMBERS ABSENT:
Mr. David Goldwater, Chairman (excused)
Mr. Morse Arberry Jr.
Ms. Sheila Leslie
Mr. Richard Perkins
GUEST LEGISLATORS PRESENT:
Mr. Bernie Anderson, Washoe County, District No. 31
Mr. Tom Collins, Clark County, District No. 1
Mr. Garn Mabey, Clark County, District No. 2
STAFF MEMBERS PRESENT:
Vance Hughey, Principal Research Analyst
Wil Keane, Committee Counsel
Diane Thornton, Senior Research Analyst
Sharee Gebhardt, Committee Secretary
OTHERS PRESENT:
Helen Foley, Legislative Advocate, PacifiCare and Nevada Association of Health Plans
Neena Laxalt, Legislative Advocate, Nevada Nurses’ Association
Larry Matheis, Executive Director, Nevada State Medical Association
Charles Duarte, Administrator, Nevada Division of Health Care Financing & Policy
Dr. John Nowins, President, Clark County OB/GYN Society
Dr. Jerry Hughes, Executive Director, Nevada Interscholastic Activities Association
Glenn Miers, Secretary, Football Chapter, Northern Nevada Officials’ Association
Karen Wright, Legislative Advocate, Clark County School District
Dana Bilyeu, Operations Officer, Public Employees’ Retirement System
Birgit Baker, Administrator, Employment Security Division, Department of Employment, Training & Rehabilitation
Mark Ratner, Commissioner of Officials, Las Vegas
Bruce Robb, Counsel, Nevada State Board of Professional Engineers and Land Surveyors; State Contractors’ Board
Noni Johnson, Executive Director, State Board of Professional Engineers & Land Surveyors
Terry McHenry, Legislative Advocate, Nevada Association of Land Surveyors
Margi Grein, Executive Officer, State Contractors’ Board
Vice Chairwoman Barbara Buckley called the meeting to order at 2:11 p.m. Roll call was taken. She advised that Chairman Goldwater was excused and that Mr. Oceguera was returning from Fallon and should arrive shortly. She instructed the Committee Secretary to mark the other members present as they arrived. She noted there were four bills on the agenda and opened the hearing on AB 261.
Assembly Bill 261: Requires certain policies of health insurance and health care plans to provide coverage for continued medical treatment by provider of health care under certain circumstances. (BDR 57-814)
Assemblyman Garn Mabey, District No. 2, introduced A.B. 261. He suggested the bill could be titled “Continuity of Care.” He stated continuity of care, from the medical perspective, was one of the most important factors to in promoting health and preventing disease. He noted that the ongoing relationship between health care providers and patients allowed for a more complete picture of an individual’s health care needs. With managed care and its reliance on contractual relationships, as well as increased movement in the work force, he said, the consistency of the physician/patient relationship had diminished. Contracts and costs had driven the success of the managed care industry and made health care benefits affordable to employers. He noted that often, however, health care providers and patients were caught in the middle when those relationships between managed care and the employer changed or ended.
Assemblyman Mabey cited a survey, released in March 2001, that had found 20 percent of physicians had left a health plan, voluntarily or involuntarily, within the previous three years. During the same period, 25 percent were denied entry at least once when they tried to join a managed care plan. On average, he said, physicians who participated in the survey estimated that 9 percent of their patients had left their practices as a result of changes in health plans. Nationwide, he said, 38 percent had lost more than 10 percent of their patients, although the number jumped to 46 percent in areas with numerous managed care plans. Mr. Mabey explained that some of the managed care plans had unpublished policies allowing continuation of care for ongoing treatment and upon written request from a physician. However, to protect constituents from potential turnover as a result of changes in health plans and other capitated arrangements, he said, state legislatures had begun writing new laws affecting continuity of care. He noted the history of this began in 1995 in Minnesota. Currently, he reported, 33 states had “continuity of care” statutes.
Assemblyman Mabey said A.B. 261 would help correct some of the problems that occurred when a patient’s provider no longer had a contract with the insurance company. He referenced amendments to A.B. 261 (Exhibit C). He said he had spoken with members of Sierra Health & Life and PacifiCare and he believed they agreed with the amendments. He offered to go through the bill in detail if the Committee desired.
Vice Chairwoman Buckley said she thought the bill and amendments were self-explanatory and asked whether there were any questions from the Committee. There were none. She thanked Mr. Mabey for his testimony and invited those who were in favor of A.B. 261 to come forward to testify.
Helen Foley, Legislative Advocate, representing PacifiCare and the Nevada Association of Health Plans, said she had worked closely with Assemblyman Mabey and supported A.B. 261 and the amendments.
Neena Laxalt, Legislative Advocate, representing the Nevada Nurses’ Association, spoke in support of A.B. 261. She said she had submitted a statement (Exhibit D), which advised the Committee of the Nevada Nurses’ Association’s strong support of the bill.
Larry Matheis, Executive Director, Nevada State Medical Association, said the Association supported Assemblyman Mabey’s proposal. He said the bill contributed to the Committee’s effort over the last few years to balance the changing health care system and to ensure it was responsive and responsible. He said A.B. 261 addressed what was a critical issue in the lives of some patients. He said that for some patients, in the course of their treatment, their physicians or hospitals were no longer on the list or there was a change in health plans. He said patients, under those circumstances, needed a break in getting a new health care professional, or having to go to a new facility.
Vice Chairwoman Buckley thanked him for his testimony. She asked for other testimony, in favor or opposed.
Charles Duarte, Administrator, State of Nevada Division of Health Care Financing & Policy, spoke in opposition to A.B. 261. He disclosed the Division was concerned about the bill’s impact on managed care organizations that contracted with the Division for Medicaid or Nevada Check Up services. He said he would summarize his written testimony (Exhibit E).
First, Mr. Duarte said, the contract requirements between the Division and the managed care Health Maintenance Organizations (HMOs) were more stringent than the commercial HMOs. He said they had requirements regarding enrollee eligibility, geographic location of residence, continuity of care standards, and access and availability of services. He suggested the provisions of A.B. 261 conflicted with those other requirements.
Second, Mr. Duarte advised, the bill allowed providers who were no longer part of an HMO network to continue to provide medical care to Medicaid and Nevada Check Up enrollees for up to 180 days after the termination of a contract. He said, in the case of pregnancy, it allowed 45 days after date of delivery or date the pregnancy ended. He said the HMO’s ability to monitor care would be severely diminished because a non-network provider would not be bound by HMO policies or procedures.
Mr. Duarte noted he had just had the opportunity to see the proposed amendment (Exhibit C). He said he believed the amendment addressed some of the problems. He advised that the Division was mandated under federal regulations to meet certain access-to-care standards and, in the event of a provider termination or closure, transition of Medicaid eligible recipients to another Medicaid provider was a requirement. Mr. Duarte noted that a significant portion of their clients were mothers, at-risk pregnant women, children, or people receiving Medicaid, who were required to have both medical and social case management services. He said the Division’s contract with HMOs required that a pregnant woman, in her first two trimesters, be transitioned to the care of a network provider in order to ensure the required case management services were available to her.
A fourth concern, Mr. Duarte said, was that some of the retention time frames were excessive, which might negatively affect the HMO’s ability to manage care. He said that in all but the most severe circumstances, a course of treatment for a specific episode should not extend more than 180 days. He said that most primary care episodes required less than 60 days for a complete course of treatment and also required follow-up care. He advised that for chronic care, including medication management, the time frame often extended beyond the 180 days. He said if the intent of the legislation was to give the provider adequate time to complete a course of treatment for a patient whose conditions were not chronic, a modification of the timeframes was desirable.
Mr. Duarte explained that one of the key ingredients of the Division’s contract was the ability to monitor and control utilization through protocols, formularies, and prior authorizations. He believed the terms in the amendment might address that.
Mr. Duarte advised another issue was if an individual became ineligible for the Division’s program, the Division could not pay the HMO and the HMO could not pay the physician. He said eligibility was a requirement under the state plan with the federal government for Medicaid and Nevada Check Up. He explained if an individual lost his eligibility, continuity of care was, unfortunately, no longer an issue because the Division could no longer pay for the services.
Additionally, Mr. Duarte said, if a state were to terminate a provider due to issues other than incompetence or misconduct, which he thought had been redefined in the amendment, the Division would exclude that provider from participating in Medicaid or the State Children’s Health Insurance Program (SCHIP). He added there could be a host of other reasons that the federal government would preclude a provider from participating with Medicare, Medicaid, or Nevada Check Up. He said the Division and the HMOs would then be required to terminate that provider. He cautioned that that represented a conflict with some federal regulations.
Mr. Duarte said the Division would like to propose adding language to A.B. 261 that would eliminate the impact on Nevada Medicaid and Nevada Check-Up. He said he had provided the Committee with his proposed amendments to sections 6 and 8.5 of the bill, concerning Nevada Revised Statutes (NRS) 695C.050 and 695G.090 (Exhibit F). He said the amendments basically excluded Nevada Medicaid and Nevada Check Up from the provisions of the bill.
Vice Chairwoman Buckley thanked Mr. Duarte for his testimony. She added that she had a concern. She asked if a patient were under Nevada Medicaid or Check Up and his provider were dropped from the list, and the patient wanted the continuity of care, why could that patient not get the same benefits of the bill as someone with commercial insurance. She asked, additionally, if the insurance companies were not opposing it, and if there was just a “small window” to provide continuity of care, why could that same benefit not be provided to a patient on Medicaid and Check Up.
Mr. Duarte responded that if A.B. 261 were drafted to limit the “window,” and defined it in a way that did not conflict with federal regulations, the Division would have no problem.
Vice Chairwoman Buckley said she was gratified to hear that. She asked if there were any other questions for Mr. Duarte. There were none. She thanked Mr. Duarte and called Dr. Nowins in Las Vegas to testify.
Dr. John Nowins, President, Clark County OB/GYN Society, testified, via videoconference from Las Vegas, in favor of A.B. 261. He said he believed the bill did not “go far enough.” Over the years, he said, the Clark County OB/GYN Society had struggled with problems in Clark County and he thought the bill was a “good first step.” He commended Assemblyman Mabey for his efforts on their behalf and said First Amendment rights, specifically “freedom of speech,” should apply to patients and doctors. He opined that freedom of speech carried a heavy price, but physicians should be able to voice their opinions to managed care companies. He asked why, if a physician advised that his patient needed a test, it was appropriate for the managed health care company to turn down the test as medically unnecessary. Dr. Nowins noted a physician’s protest could upset the managed health care company and the physician could be removed from the managed care list. He advised the patient would then have a further access-to-care problem.
Dr. Nowins reported that Clark County was experiencing a crisis for OB/GYN access to care. He said that in the middle of the crisis, managed health care companies were still terminating doctors, even OB/GYN doctors. Dr. Nowins said that on September 18, 2002, the Governor had invited members of the Clark County OB/GYN Society to meet regarding Nevada’s drop to 50th in the nationwide ranking of prenatal care. He noted that prenatal care in Nevada continued to deteriorate. The Society had presented the Governor with their red alert status from the American College of Obstetricians and Gynecologists. He said the Society had discussed issues with the Governor regarding access to care for pregnant women and ways to improve Nevada’s dismal status in Clark County. He explained the Society had given a PowerPoint presentation to the Governor to illustrate the national study of May 2002, showing outcomes of managed care Medicaid versus fee-for-service Medicaid from the Robert Wood Johnson Foundation. He said the study had concluded that managed care Medicaid increased the occurrence of poor outcomes, such as low birth weight and pre-term birth.
Dr. Nowins lamented they were filling up neonatal and intensive care units with those patients. He said Warren Volker, an M.D./Ph.D., presented the statistics for Clark County at the Governor’s meeting, which he said, were equally bad. He said the Society had thought the meeting would result in some improvements to the health care crisis. He said the Society had reviewed with the Governor a lot of problems Nevada doctors were experiencing and added they had hoped the meeting would result in some improvement to the health care crisis. He noted there were two insurance companies, Nevada Care, which managed the Nevada Health Solutions, and Sierra Health Plan in Nevada, which managed Smart Choice. He said shortly after the Governor’s meeting, Sierra Health Plan of Nevada had terminated many of the members of the Clark County OB/GYN Executive Committee. He said he called Sierra to inquire what had happened. He reported that Scott Cassano, Network Development Contracts Vice President for Sierra, had said they had to do it “because it is America.” He noted the doctors had lost their contracts and were terminated from the provider lists, most on Christmas Day.
Vice Chairwoman Buckley interrupted Dr. Nowins’ testimony to advise him that the Committee had a full hearing room and four bills on the agenda. She stated they usually only took testimony directly related to the need for the bill. She said that, based on his testimony, she would assume he thought the bill was necessary and it would be a tool that he would support.
Dr. Nowins responded that it would be a good first step.
Vice Chairwoman Buckley thanked Dr. Nowins for his testimony. There were no questions and no further testimony. Ms. Buckley then closed the hearing on A.B. 261. She asked Mr. Duarte to work with Assemblyman Mabey to clarify issues that he had addressed in his testimony.
Vice Chairwoman Buckley opened the hearing on A.B. 185.
Assembly Bill 185: Exempts certain sports officials from certain provisions governing compensation. (BDR 53-1110)
Assemblyman Bernie Anderson, District No. 31, introduced A.B. 185. He asked permission to have Dr. Hughes and Mr. Miers join him in testifying.
Vice Chairwoman Buckley encouraged him to proceed however he preferred.
Assemblyman Anderson said A.B. 185 was prepared at the request of Dr. Jerry Hughes, the head of the Nevada Interscholastic Activities Association. He said the bill was similar to one requested by Glenn Miers and heard in a previous session. He said the bill had been redrafted this session. He said that the educational system was facing “rather draconian” cuts in funding and budget, noting the high insurance premiums for athletic programs. He said Dr. Hughes would address the impact on the Nevada Interscholastic Activities Association and their member groups. He said the Department of Labor had indicated concerns about A.B. 185. He acknowledged some work was needed to amend the bill to better suit everyone’s needs.
Dr. Jerry Hughes, Executive Director, Nevada Interscholastic Activities Association (NIAA), testified in favor of A.B. 185. He said he had prepared a one-page synopsis (Exhibit G) stating why the proposed legislation should be enacted. He also provided the Committee with a brochure (Exhibit H) about the Nevada Interscholastic Activities Association. He said the problem was that insurance had been rated at 48 percent per $100, or $48 per $100, for officials who officiated football and wrestling in Nevada. He noted that was an exorbitant amount of money. He said the Association had attempted to reverse the number, but added the groups with whom they dealt had been very difficult. He said the groups advised that the rate was assessed on a national average. He said even scorers and timers were assessed the same fee. He suggested if they were still assigned the four to five percent, which they had enjoyed for many years, there would be no need for the legislation. He advised the Association’s officials were considered independent contractors and he questioned whether they even qualified for this type of coverage. He added that college officials in Nevada did not pay any worker’s compensation.
Vice Chairwoman Buckley thanked Dr. Hughes for his testimony.
Glenn Miers, Secretary of the Football Chapter, Northern Nevada Officials’ Association, testified in support of A.B. 185. He said he thought the handout that Dr. Hughes had prepared was very complete. He recalled that Assemblyman Anderson and he had worked on the legislation in 1999. He said he believed the Legislative Counsel Bureau was prepared, but in 1999, when SIIS (State Industrial Insurance Systems) was replaced by EICON (Employers’ Insurance Company of Nevada), a problem arose. He said, as an example, if one used a four-man football crew for an “A” game eight-man football game and the fees were $50, each game would cost $200, but one would be paying $47.35 per official in insurance. He concluded that not only “A” schools, but also all schools, could not afford that.
Vice Chairwoman Buckley thanked Mr. Miers for his testimony. She remarked that Exhibit G was an excellent handout because it clearly set forth the issues. There were no questions.
Assemblyman Tom Collins, District No. 1, testified in support of A.B. 185. He recalled that, from 1983 to 1989, he had coached sports, including Little League baseball, soccer, and basketball, as well as organizing tournaments and hiring officials. He said he had been receiving correspondence for over two years on this issue because of the dramatic rise in insurance premiums. He said the high cost of insurance coverage for sports officials was very detrimental to Nevada youth.
Karen Wright, Legislative Advocate, Clark County School District, testified in support of A.B. 185. She spoke from prepared testimony (Exhibit I) and explained that the enactment of the bill would save the Clark County School District a considerable amount of money. She noted that during the fall of 2002, the District paid $60,000 to independent sports officials, which included their fee plus worker’s compensation.
Vice Chairwoman Buckley thanked those who had testified and asked if there was anyone else who wished to speak in favor of A.B. 185. There were none. She invited those who wished to testify in opposition to the bill to come forward.
Dana Bilyeu, Operations Officer, Public Employees’ Retirement System (PERS), said the PERS had no opposition to the exemptions from the worker’s compensation provisions within A.B. 185, but advised that beginning at Section 5 of the bill there was language related specifically to the Public Employees Retirement Act. She said she had spoken with the sponsor of the bill and also with Dr. Hughes. She said PERS was unfamiliar with any issues that related to them and she did not believe the modifications to the Act were necessary. She said adding the sports officials to their exempt list of employees might actually be construed at a later date to be an example of how they truly were employees. She concluded that Sections 5, 6, and 7 should be deleted from the bill because that should not be the issue facing the sports officials’ associations.
Birgit Baker, Administrator, Employment Security Division, Department of Employment, Training & Rehabilitation, elaborated on her prepared testimony (Exhibit J) in opposition to Section 1 of A.B. 185. She noted that when a similar bill had been reviewed during the 1999 Legislative Session, the Division looked at just the officials’ organization and determined that those individuals were independent contractors. Ms. Baker advised that independent contractors were already exempt from the unemployment compensation laws. She said she had also distributed a letter from the U.S. Department of Labor (Exhibit K). She said the Division’s concern was that if the bill were passed in its current form retaining Section 1, it raised an issue of conformity with the Federal Unemployment Tax Act (FUTA).
Ms. Baker advised that all state unemployment insurance programs were joint federal/state partnerships, and, therefore, state law had to be consistent with federal law. She said the primary issue was that, according to the U.S. Department of Labor, the specific exclusion of sports officials from the state’s unemployment compensation law would create an issue of conformity with Section 3304 of the FUTA. She explained Section 3304 required that, as a condition for employers in a state to receive credit against federal unemployment taxes, state law had to provide unemployment benefits based on services performed for state and local governmental entities and certain nonprofit organizations in the same amount as benefits payable on other covered services. She said that if Nevada was determined to be “out of conformity” with federal law, the offset to the employers could be as much as $348 million per year. She advised that currently the law allowed a tax of 6.2 percent. She said if the state were in conformity, 5.4 percent of that ($348 million) would be forgiven or offset. Ms. Baker stated that the Department also received about $24 million dollars per year from the Department of Labor and administrative grants, and she cautioned additional sanctions could be placed on those grants were Nevada found to be out of conformity. She cited a provision in NRS 612.070, referred to as the “recapture” clause. She said the clause was intended to ensure that any service, required to be covered as a condition for receiving the offset credit, was covered under state law, regardless of any other provisions. She concluded that since A.B. 185 created an exception for sports officials at certain publicly sponsored events, it contradicted the recapture clause and would result in a conformity issue for Nevada. She said that the Division’s legal counsel, Tom Susich, had accompanied her and they were available to answer questions.
Vice Chairwoman Buckley clarified that Ms. Baker’s testimony regarded only the unemployment section and not worker’s compensation.
Ms. Baker confirmed that was correct.
Assemblyman Hettrick noted the NIAA handout (Exhibit G) stated that college officials were exempt. He asked how the college officials could be exempt, but not others that she referenced.
Ms. Baker responded that if the officials were independent contractors, they already were exempt from state unemployment compensation.
Assemblyman Hettrick inquired whether the problem was enacting it into the law and specifying it.
Ms. Baker confirmed it was.
Vice Chairwoman thanked Ms. Baker for her testimony. She asked Dr. Hughes to clarify if officials were exempt only under the worker’s compensation statute. She asked if it was the intent of A.B. 185 to deny coverage, under worker’s compensation law, to an official who had been injured at a game.
Dr. Hughes responded that was their intent.
Vice Chairwoman Buckley asked how the official would pay for his injuries.
Dr. Hughes advised the official would pay for his injuries, like any other independent contractor, with personal insurance.
Vice Chairwoman Buckley asked if there was a mechanism that enabled an independent contractor to obtain insurance through their association.
Dr. Hughes responded that some associations provided that as an option, but advised that was not something the NIAA would provide. He pointed out that the NIAA had attempted to get a legal interpretation whether officials were exempt from worker’s compensation in state statutes. He said their effort had failed, which explained why they were sponsoring A.B. 185. He said they just wanted clarity in the law whether officials were considered independent contractors. He said even though officials signed their applications as independent contractors, it was questionable to the two attorneys who reviewed the statutes whether they were exempt.
Vice Chairwoman Buckley clarified that officials obtained their coverage either through an association or through their businesses as independent contractors.
Dr. Hughes confirmed that was correct. He reported approximately 5 out of 100 officials did not have some type of insurance. He added they would work towards providing that.
Assemblyman Hettrick noted that the last bullet point item on Exhibit G stated that a compensation package had been proposed to compensate the officials for the loss of the benefit. He asked what the compensation package was.
Dr. Hughes answered that the compensation package was a “fee per game” that had been increased. He said it had nothing to do with insurance.
Assemblyman Hettrick asked how the rates had changed.
Dr. Hughes said it depended on the sport and the level of activity. He noted there were 13 different sports in their program including Junior Varsity freshmen. He said the average was a six percent increase. He offered to provide Mr. Hettrick with documentation of each sport, how it was broken down, and what the projected proposal would be.
Assemblyman Hettrick declined the documentation. He said he was more curious about the practice of deleting a cost of worker’s compensation to an official, and then giving them a “compensation package.” He asked whether the two were not just “criss-crossing” each other, which would negate the purpose of the legislation.
Dr. Hughes responded their reason was to “give back” something the officials had lost. He noted officials had enjoyed that coverage for many years. He said that some officials believed that was something to which they were entitled. He said he believed Nevada was the only state in the country that paid worker’s compensation to those individuals. He noted the compensation package was not a 48 percent increase; it was only a slight increase that would save the schools considerable expense.
Assemblyman Anderson said he believed the NIAA wanted a statement that verified their belief (and what their contract suggested) that officials were independent contractors. He said that would resolve the whole problem. He lamented, however, that no one from the state worker’s compensation system would make that affirmative statement. He offered to work with a subcommittee, if that was the desire of the Committee.
Vice Chairwoman Buckley said it seemed clear to her that the officials were independent contractors. She explained one of the tests was the ability of the employer to control the actions of employees, and, she opined, no one could control the actions of a referee or umpire.
Assemblyman Beers advised that Mr. Anderson’s statement clarified the matter.
Vice Chairwoman Buckley thanked Assemblyman Anderson for his testimony. She asked for other people who wished to testify.
Mark Ratner, Commissioner of Officials, remarked via videoconference from Las Vegas that he was just observing the proceedings.
Vice Chairwoman Buckley asked whether there was any further testimony. There was none. She closed the public hearing on A.B. 185 and announced they would address the bill at their next work session. She then opened the hearing on A.B. 146.
Assembly Bill 146: Revises requirements for licensure as professional engineer or land surveyor. (BDR 54-496)
Bruce Robb, Counsel, Nevada State Board of Professional Engineers and Land Surveyors, introduced A.B. 146. He introduced Noni Johnson, Executive Director of the Board. He explained the purpose of the bill was to clarify those licensure requirements for both engineers and land surveyors that required at least four years of active experience. He referenced a proposed amendment to A.B. 146 (Exhibit L), which had been prepared with the assistance of Wil Keane, Legal Counsel, and Vance Hughey, Principal Research Analyst. He said if the Committee desired, he would review the bill section by section.
Vice Chairwoman Buckley encouraged him to do so.
Mr. Robb advised that the first amendment to A.B. 146 appeared on page 2, paragraph 4, which deleted the statement “Graduation from a college or university in a field other than engineering is equivalent to 2 years of active experience.” He explained that, currently, one way an individual could get licensed in Nevada was to graduate with an engineering degree or a land surveying degree and have four years of active experience. The other way was if an individual who did not have a degree in either of those two disciplines had accrued ten years of experience. He told of an occasion when an individual came before the Board claiming he had a degree in engineering and English, and so, under the statute, he believed he only needed two years of active experience to get his license. Mr. Robb advised that had never been the intent of the statute or of the past history of the Board’s licensing procedure. He said the purpose of A.B. 146 was to delete that language. He noted that the bill clarified the matter by inserting subsection “c” which stated, “The completion of educational course work is not equivalent to active experience in engineering.” The amendment clarified, he said, when someone was going forward with the ten years of active experience, that he got credit for educational work. He said if a person did not have a degree, he could get up to four years of credit for active experience based upon completion of course work. He said the amendment then differentiated between course work that was involved with either land surveying or engineering. He explained that the amendments consistently treated land surveyors and engineers identically.
Looking at subsection 5 on page 2 of A.B. 146, Mr. Robb explained the language was replaced by the recommended changes in paragraph 1 of the proposed amendment (Exhibit L). He said the rest of the bill dealt with land surveyors. He said the previous language he had quoted dealt with equal validity to the professions of both engineering and land surveying.
Assemblyman Knecht said he could understand the concern about someone qualifying with a degree of English and then trying to substitute a degree in engineering for the experience. He acknowledged that he was a registered mechanical engineer in California. He said he would like to clarify just how the bill and its amendment would work. He asked if one had a degree in mathematics with a minor in physics and chemistry, would that qualify him to take the ”engineer in training” (EIT) exam in Nevada.
Mr. Robb deferred to Executive Director Noni Johnson.
Noni Johnson, Executive Director, State Board of Professional Engineers and Land Surveyors, confirmed that it would.
Assemblyman Knecht inquired whether it was either a pure engineering degree or the functional equivalent that was allowed for a qualification for the EIT before one began accumulating the four years of experience for the practice exam.
Ms. Johnson responded affirmatively. She said that currently they did not have mandatory education and a person could qualify by virtue of experience or credit for education and experience.
Assemblyman Knecht asked whether a technical degree or functionally equivalent degree allowed a person to qualify for the first exam, and whether a master’s degree, for example, in a further technical field such as engineering would then offset some of the four years of experience that was required to take the “P.E.” exam.
Ms. Johnson said it would not. She explained it could not be used unless the person had education that was not engineering. She said if a person had been given two years credit for a mathematics degree, and then he got a master’s, he would get an additional year. She acknowledged that it was rather confusing.
Assemblyman Knecht asked if the intent of A.B. 146 was to ensure that applicants did not meet the educational qualification with a non-technical degree and then substitute the technical degree for experience.
Ms. Johnson confirmed that was the intent. She said an applicant would be required to have four years of active experience regardless of how much education he had.
Assemblyman Knecht asked what would happen if someone had a Bachelor of Science degree in electrical engineering, which qualified him for the EIT, and then completed a Ph.D. in electrical engineering. He asked whether the person would still need four years of working experience in addition to the Ph.D.
Ms. Johnson confirmed he would.
Vice Chairwoman Buckley advised there were no other questions and thanked Ms. Johnson for her testimony.
Terry McHenry, Legislative Advocate, representing the Nevada Association of Land Surveyors, testified in support of A.B. 146. He said he spoke from a land surveyor’s perspective. He said the Association believed that education was extremely important, but there was a void in their field without some experience. He said he believed the bill represented a proper balance between educational credit and the necessary experience.
Vice Chairwoman Buckley thanked him for his testimony. There were no questions and no further testimony. She closed the public hearing on A.B. 146 and opened the hearing on A.B. 220.
Assembly Bill 220: Makes various changes to provisions governing contractors. (BDR 54-502)
Margi Grein, Executive Officer, State Contractors’ Board, introduced A.B. 220. She introduced Jerry Higgins, a public member of the Board, and Bruce Robb, Board counsel. She said Section 1 of the bill clarified when investigative information became public record and redefined investigative memoranda. She said the Board had received concerns from the public and advised the language needed more clarity. She said Section 2 clarified the jurisdiction, purpose and authority of criminal investigations when conducting investigations involving construction fraud. She advised that Section 2 also allowed for background investigations for applicants for employment. Section 3 clarified the law regarding referrals of complaints under NRS 624.335. She said it was never the intent of the statute to reduce the Board’s authority and refer a case to a third party; there had been several court cases regarding that issue. She noted that one judge had interpreted the statute to mean the Board should have sent a dispute to mediation rather than taking disciplinary action. She said that resulted in a number of subsequent lawsuits. Ms. Grein continued that Section 4 amended the language regarding the recovery fund so that assessments could be reduced when the fund reached a balance of 150 percent of the previous year, rather than completely suspending assessments. She said Section 5 dealt with petitions for judicial review. She noted that in a number of cases where a party had filed for an appeal on the Board’s decision, the licensee had named the homeowner as a party to the case. She said that required the homeowner to retain an attorney to get his name removed from the lawsuit and from an appeal. She mentioned that she had been named, personally, when a party appealed a Board decision. She said the Board did not want to incur legal fees. She also advised that the Board believed that the homeowner should be excluded as a party to a legal proceeding, noting that the homeowner was a witness.
Bruce Robb, Counsel, State Contractors’ Board, said Ms. Grein had adequately explained the goal of A.B. 220. He noted that Section 1 was trying to codify the concept that unless a document was introduced into a formal disciplinary hearing, it would remain confidential. He advised that in all circumstances, financial information concerning the licensee remained confidential. He stated that he thought Executive Officer Grein was referring to the language of subparagraph 3 of Section 1 as needing clarification. He said the attempt in that language was to keep the investigator’s notes, memoranda, and other information out of civil litigation, unless those documents were used in a disciplinary hearing. He noted that any information used in a disciplinary hearing was public record.
Vice Chairwoman Buckley observed that the language read, “unless disclosed under a public hearing” in contrast to stating, “unless used in a decision.”
Mr. Robb responded that all of the hearings and all of the decisions were conducted in public session. He said he did not believe there would ever be an exemption. He advised that every disciplinary action imposed by the Board was imposed at a publicly noticed hearing.
Vice Chairwoman Buckley asked whether he relied on material that was not discussed at the board hearing.
Mr. Robb confirmed he did if there was a resolution by stipulation with the licensee. He said there could be a great amount of material that was relied upon when first issuing the disciplinary complaint and then resolving it. He said that would be part of the public record, but would not necessarily be discussed at an open meeting.
Vice Chairwoman Buckley expressed concern if it was the intent to still have the meeting open, noting that the word “disclosed” would negate that.
Mr. Robb advised that was the language they had to follow. He said if there was a disciplinary matter brought before the board, the evidence induced at the hearing was a public record. He said the Board wanted to maintain the confidentiality of matters that were not brought forward in a public hearing.
Vice Chairwoman Buckley asked that he review that language and consider clarifying it.
Mr. Robb consented. He explained that Section 2 broadened the scope of work to be performed by the criminal investigators so that they were clearly authorized to perform background checks on applicants for employment with the board, and also to investigate any alleged occurrence of constructional fraud. Section 3, he advised, deleted the reference, on page 3, where the board, if it was unable to resolve the complaint, could refer the matter to some other jurisdiction or entity. He noted that the only time the Board ever referred a complaint was when it was outside the jurisdiction of the Board. He explained that Section 4 was to insert the words “not to exceed,” because as the Residential Recovery Fund grew, the Contractors’ Board did not want to cease assessing the appropriate charge to its licensees. Rather, he said, the Board wanted to reduce the charge until such time that the Recovery Fund became more active and funds were paid out to homeowners who had been damaged by contractors who had not been able to meet their obligations. He said at that point the Board could again raise those fees. Mr. Robb added that would provide flexibility to the Board. He said Section 5 dealt with NRS 233B, which governed the judicial review of disciplinary actions taken by the Board. He noted that often parties to that litigation included the homeowner or some Board employee. He said that was inappropriate and that the amendment would clarify the matter.
Assemblyman Brown asked if there was a statutory definition for “constructional fraud.”
Ms. Grein confirmed there was.
Assemblyman Brown asked, citing Section 4 regarding the change in language from suspension to reduction, whether the Board had any incident where the Fund had been suspended.
Ms. Grein responded they had not. She said the Board started having payments or claims on the fund in July 1, 2001. She said at that time they also adopted regulations. She said around January 2002, they started making payments or reimbursements out of the fund. She noted that they had not yet had a full year to review. She noted that the coming June they would be reviewing it again, and their licensees would be renewed on a staggered basis. She said the Board did not know, consequently, when to stop the suspension to make it fair to everyone. She said it was more logical to just reduce it.
Assemblyman Brown said he was considering the equity of it and said it seemed it should be apportioned across the board to be fair to everyone. He said he hoped they would consider that.
Assemblyman Beers asked whether the construction fraud fund was created in the wake of contractors who had gone out of business while holding clients’ earnest money, but not having performed work or having left projects uncompleted.
Ms. Grein inquired if he was referring to the Recovery Fund. Mr. Beers confirmed. She responded in the negative. She said the purpose was to compensate homeowners who had been harmed financially or were an injured party by a contractor. She said, for example, it could be because of abandonment or poor workmanship. She said most of the licensees for whom funds were being paid had either filed bankruptcy or left town, and the homeowners had no other recourse. She advised that by that time, the licenses were already revoked.
Assemblyman Beers inquired whether the fund had been accessed, and if so, how recently.
Ms. Grein responded affirmatively. Referencing her data, she advised that currently the Board had had a total of 45 claims filed against the fund; 22 of those were against pool contractors; the total funds requested were $560,123.16; and one claim was formally denied in a hearing, all of which did not include claims that were returned for lack of documentation. Ms. Grein reported that two claims were outside the statute of limitation; 5 claims were closed because of inadequate documentation; 7 claims were pending investigation or civil court proceedings; 6 claims were pending hearings; and 24 claims had been paid. She said the amount of paid claims totaled $142,888, and the average claim was $5,933.
Assemblymen Beers commented that it sounded very active.
Ms. Grein agreed and added that it was becoming more active.
Assemblyman Beers asked whether the provisions in Section 2, that authorized investigation of occurrences of construction fraud, were related to the Recovery Fund.
Ms. Grein responded in the negative.
Assemblyman Beers clarified that it was totally unrelated to the Recovery Fund. He asked who currently investigated occurrences of construction fraud.
Ms. Grein said that task fell to their criminal investigators.
Assemblyman Beers asked whether someone had alleged that the Board did not have the authority to perform those investigations.
Ms. Grein confirmed that had happened.
Vice Chairwoman Buckley clarified that the Recovery Fund was designed as an alternative to litigation to assist homeowners who had been damaged, and there was no bond. She noted it was a very good bill.
Assemblyman Beers asked what was the balance in the Recovery Fund.
Ms. Grein said she estimated it was $2 million.
Assemblyman Beers asked when the bill was enacted.
Vice Chairwoman Buckley advised it had been enacted two sessions ago. She said that before they allowed claims to be made, they had to have money collected. She said after it was enacted, the money was collected for a period of time, and the legislation allowed that once the monies reached a certain level, they would stop the collection if it were not being used. She said she approved of reducing assessments to allow every contractor a break.
There were no further questions or testimony. Vice Chairwoman Buckley closed the public hearing on A.B. 220. She asked Assemblyman Goldwater, who had arrived during the meeting, if he had any other business he wished to discuss. Mr. Goldwater advised there would be a large work session on the coming Friday’s agenda, which would be held upon adjournment of the Floor.
Vice Chairwoman Buckley adjourned the meeting at 3:15 p.m.
Sharee Gebhardt
Committee Secretary
APPROVED BY:
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Assemblywoman Barbara Buckley, Vice Chairwoman
DATE: