MINUTES OF THE meeting
of the
ASSEMBLY Committee on Commerce and Labor
Seventy-Second Session
May 9, 2003
The Committee on Commerce and Laborwas called to order at 1:01 p.m., on Friday, May 9, 2003. Chairman David Goldwater 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.
Note: These minutes are compiled in the modified verbatim style. Bracketed material indicates language used to clarify and further describe testimony. Actions of the Committee are presented in the traditional legislative style.
COMMITTEE MEMBERS PRESENT:
Mr. David Goldwater, Chairman
Ms. Barbara Buckley, Vice Chairwoman
Mr. Morse Arberry Jr.
Mr. Bob Beers
Mrs. Dawn Gibbons
Ms. Chris Giunchigliani
Mr. Josh Griffin
Mr. Lynn Hettrick
Mr. Ron Knecht
Ms. Sheila Leslie
Mr. John Oceguera
Mr. David Parks
Mr. Richard Perkins
COMMITTEE MEMBERS ABSENT:
Mr. David Brown
GUEST LEGISLATORS PRESENT:
Senator Maggie Carlton
Senator Dina Titus
STAFF MEMBERS PRESENT:
Vance Hughey, Committee Policy Analyst
Diane Thornton, Senior Research Analyst
Wil Keane, Committee Counsel
Patricia Blackburn, Committee Secretary
OTHERS PRESENT:
Roger Volker, Executive Director, Great Basin Primary Care Association
John Vergiels, Legislative Advocate, Nevada State Board of Cosmetology
Stephen Newman, Virginia, representing Barr Laboratories
Neena Laxalt, Legislative Advocate, Nevada Board of Veterinary Medical Examiners
Adam Levine, citizen
Fred Hillerby, Legislative Advocate, Nevada Veterinary Association
Debbie Machen, Executive Director, Nevada Board of Veterinary Medical Examiners
Melody Luetkehans, General Counsel, Nevada Association of Realtors/Reno
Tammy DeVries, citizen
Gary M. G. Deacon, Legislative Advocate, Battle Born Research Institute
Ann Wilkinson, Nevada Assistant Attorney General
Thelma Clark, Legislative Advocate, AARP
Chairman Goldwater:
We will bring the Assembly Commerce Committee to order as a subcommittee until there is a quorum present. We will open the hearing on S.B. 310.
Senate Bill 310 (1st Reprint): Makes various changes relating to certain occupational boards and commissions. (BDR 54-223)
Senator Maggie Carlton, Clark County, Senatorial District No. 2:
[Introduced herself] I bring before you today S.B. 310. This is the first reprint. You will notice there is a difference in thickness between these two bills. We condensed it a bit. Instead of inserting the language in each individual section, you will notice that there is a new first section with definitions. This bill is the omnibus board bill. It addresses some of the concerns that I, and other people, have had about how the boards do their job and what we would like to do is help them to do their job more effectively, and remind them that they are here to protect the public. You will notice all the definitions in the front. We get into what is an actual public member. We deal with possible appearances of impropriety on the board, where there may be outside relationships, in this bill. The very end of the bill deals with an audit provision, which allows our smaller boards to comply with the audit mandates that are there for them. An audit can be a very expensive proposition, so it gives our smaller boards an opportunity to do a balance sheet-type audit until they hit a certain level. The most important part of this bill to me is the "Safety Net" provider provision. Let me explain.
The face of health care has been changing drastically across the country, and we have a number of uninsured and underinsured people here in the state. There are many different regulatory schemes by which we can give Nevadans health care in this state. What I would like to do is have a person who is familiar with how the care is given and how the regulations work serve on the board so that when the licensing comes up for those professionals, that board has someone with a level of expertise to understand what we are trying to do in serving the people who need this health care. You get into all different types of exchanging of doctors. We understand how we need to address different parts of health care and so the intent in this bill was to say that on those particular boards that deal with the licensing of health care – except some of the smaller ones, we didn't feel it was necessary, such as Oriental medicine – that one of the licensees or one person on the board will be known as a "Safety Net" provider person, but that does not eliminate that person from being a licensee also. Originally we had not discussed that and there were some concerns about losing a learned professional on the board, so during the discussion we decided that the best thing to do was to say that the "Safety Net" provider person was licensed by that board. If there was not one, we still wanted to make sure that one of those people had a background in the "Safety Net" provider arena in this state.
Chairman Goldwater:
The five-year residency requirement for this "Safety Net" provider, is that okay? Are there enough people who will meet that?
Senator Carlton:
Yes, Mr. Chairman, there are. We mirrored the requirements with each board that the other members of the board would have. If there were a five-year residency requirement for the medical board, that person would have to meet the same criteria. It is meshing all the way through the bill.
Assemblywoman Giunchigliani:
I am looking for the audit language. I think that is an excellent idea on the smaller boards. My neighbor used to do the podiatry board, and they didn't have the income level, let alone the funding and the resources, to really know what kind of audit to present, let alone what kind of budget to present, in some cases. I think this will help. I just lost the section that dealt with the audit.
Senator Carlton:
You may be referring to page 20.
Assemblywoman Giunchigliani:
Thank you. That answers my question.
Chairman Goldwater:
Thank you for your work on behalf of boards and commissions. You are widely recognized in this body as an expert in this area and the people in the state benefit from your hard work.
Senator Carlton:
Thank you very much, Mr. Chairman. There are some people here to answer any "Safety Net" provider questions that you may need to pose. If you need to feel more comfortable with that provision, they are available to answer any questions you may have.
Roger Volker, Executive Director, Great Basin Primary Care Association:
[Introduced himself] I also serve as Chairman of the Governor's Maternal and Child Health Advisory Board and Chairman of the Board of Trustees for the Nevada Trust Fund for Public Health. In those roles I've come to learn how critical the health of our "Safety Net" provider system is and how in great need we are of more providers in the state of Nevada to serve patients who access their health care through the "Safety Net." I have given you a brief handout (Exhibit C) with six or seven points in support of S.B. 310 and will not take the Committee's time to read them this afternoon but would like to say that those of us who represent community health centers and others in the "Safety Net" are prepared to share with the Governor or the boards themselves a list of qualified individuals who would be willing to serve in the capacity, if this bill should become law.
Chairman Goldwater:
[There were no further questions or testimony.] I will close the hearing on S.B. 310. We will take action as soon as we have a quorum. I will open the hearing on S.B. 372.
Senate Bill 372 (1st Reprint): Revises provisions relating to cosmetology. (BDR 54-886)
Assemblywoman Chris Giunchigliani, Clark County, District No. 9:
Senator Michael Schneider was not able to be here today, so I offered to introduce his bill. S.B. 372 parallels the bill concerning the shampoo assistant. This bill essentially says that a cosmetological establishment may also employ other professions within that establishment. In this case, it deals with a person who is a provider of health care – and then it narrowly defines it. Apparently there are, in the creative business sector, establishments that wish to provide other services such as hair replacement. They are fully licensed by the board, and they want to be able to practice or set up their establishment. I guess you can get a massage and get hair follicles. That is the intent of this legislation, and it just allows for a business establishment to be able to do a better business plan, if that is what they choose to do. Senator Schneider and I will work on any amendments that may conflict with the bill that we already passed out of this house.
John Vergiels, Legislative Advocate, Nevada State Board of Cosmetology:
There is a place in this bill that requires the Health Department to do the inspections. That has been withdrawn. The rest of the bill is intact. The Attorney General said this is actually a little better than the Chris Giunchigliani bill, relative to professionals practicing and subletting out of a shop. We will bring you the amendments as soon as the amendments are worked out between Ms. Giunchigliani and Senator Schneider.
Chairman Goldwater:
Ms. Giunchigliani, we will remand you to work on Senator Schneider's bill. I'll close the hearing on S.B. 372. I'll open the hearing on S.B. 387.
Senate Bill 387 (1st Reprint): Revises provisions relating to drugs and prescriptions. (BDR 54-656)
Senator Dina Titus, Clark County, Senatorial District No. 7:
[Introduced herself.] I have a special guest with me today, Senator Stephen Newman from Virginia. Senator Newman will address this issue. He is a specialist in generic drugs. He has represented District 23 in the Virginia Senate since 1996 and serves on the education and health, local government, rehabilitation and social services, and the transportation committees in the Virginia Senate. We are very pleased to have him here. S.B. 387 revises provisions relating to generic drugs. I bring this to you as a way of helping address lowering health care costs by lowering prescription drug spending. It will help individuals, insurance companies, and the state via its Medicaid program by lowering those costs.
Today generic drugs count for approximately one of every two prescriptions dispensed in the United States. A generic drug must contain the same active ingredients and be identical in strength, dosage, form, and route of administration as a branded drug. It also must have the same indications, dosing, and labeling, and must meet the same batch-to-batch requirements for strength, purity, and quality. At the same time, however, the cost differentials are striking. While generics make up 47 percent of all prescriptions, they cost only 8 percent of all dollars spent on drugs. Brand names, on the other hand, comprise 53 percent of all prescriptions and consume 92 percent of all drug dollars spent. Put another way, the average cost of a generic drug prescription in 2002 was $24.63 compared to $80.12 for a brand-name drug, which is a savings of 69 percent. Yet, brand-name medicines continue to control the market, driving prices for consumers, employees, insurers, and government agencies higher and higher. This bill addresses that issue by closing some of the loopholes in existing law that can still be used to unnecessarily deter generic drug substitution. Basically, it strengthens the mechanism by which generic pharmaceuticals can be more readily substituted and it requires disclosure of some aspects of pharmaceutical industry operations, which could impact prescription drug writing.
Basically, it requires the doctor to write on a prescription "dispense as written"; otherwise a pharmacist can substitute a generic. I have a specialist here to walk through the bill for you, but I can tell you that if we pass this, Nevada will join a whole column of states that have moved in a similar direction. From 1997 to 2000, Arizona, California, Hawaii, Maine, Minnesota, South Dakota, Illinois, South Carolina, and Ohio all enacted similar legislation. In 2001, more than 30 bills were introduced and 11 states were added to the list, including Arkansas, Florida, Louisiana, Oregon, Rhode Island, Texas, Vermont, and Wyoming. It just makes good sense. Amendments were added in the Senate to accommodate Internet purchase of drugs, also to meet some of the concerns of the retail association and to meet some of the pharmaceutical company concerns that were brought to us with some evidence of action that has been taken at the federal level to help to complement the provisions of this bill.
Stephen Newman, Virginia, representing Barr Laboratories:
First of all, I want to make it very clear that although I happen to be a state senator, I am here representing Barr Laboratories, whom I work for, and I want to make sure that I distinguish those two.
[Mr. Newman continued.] The patron of the bill has done a remarkable job of describing not only the background, but also the efficacy and safety along with the intent of the bill. I'll go over a couple of matters, but I understand very well how it is to have to travel many hours on a Friday afternoon back home, so time is important. First, I want to make sure that I explain to you, if there is any question, about the sameness aspect of generic drugs. Clearly, a lot of consumers are unaware of the difference between a therapeutic substitution and a generic substitution. As you probably know, serving on this Committee, a therapeutic substitution can be the difference between Claritin and Allegra. A generic substitution is that which is a bio-equivalent, but also the same active ingredient of the drug, and the same efficacy. What we are dealing with here today with this bill actually can be a tremendous model. Although other states have considered it, you have put together what I think is a model bill for other states. That is what brings me here.
As you probably have noted, Nevada has for years been a pro-generic state. You have gotten it, you understood it, and you have taken advantage of many of those cost savings. This bill does close the loophole that was discussed by the patron. In the past it was required that a box be checked, which was usurped by someone being able to hand out a prescription that already had it checked and the physician would simply hand that to the patient. Now, the doctor will write out "dispense as written." The effect of that will be moving Nevada to one of the highest substitution rates on those non-monopoly drugs that are out there.
I want to make it also clear that at least for our industry, we are very appreciative of the brand drug industry. They are the goose that has laid the golden egg, that is, in many cases, providing the drugs that save our lives and keep us out of hospitals. We are very appreciative of that. Also, we are very appreciative that during the hearing on the other side of the aisle, they worked very closely on this bill as well and have no opposition, I understand, to the measure that is currently in front of you. I can go down the bill, word for word, or paragraph for paragraph, whatever you feel comfortable with. However, I would just like to say that S.B. 387 is clearly a forward-thinking bill. It will produce tremendous cost savings. It is pro-consumer, not only for seniors but also for Medicaid and for those that have their own insurance. Most likely where it will save the most money is [for] that individual who is working poor and has no insurance, who can go in and get that generic, exactly the same drug, for $8 instead of $48. Lastly, it is pro-competition. "Dispense as written" is a small change, but it will produce a tremendous savings.
[J. Thomas Wood, Legislative Advocate, Wyeth Pharmaceuticals, distributed Exhibit D but did not testify.]
Chairman Goldwater:
The bill is fairly self-explanatory. It seems like a good bill to me.
Please note for the record that a quorum is now present.
[There was no further testimony.] We will close the hearing on S.B. 387.
ASSEMBLYWOMAN BUCKLEY MOVED TO DO PASS S.B. 387.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED. (Mr. Beers, Mr. Brown, Mrs. Gibbons, Ms. Giunchigliani, Ms. Leslie, and. Mr. Perkins were absent.)
Chairman Goldwater:
Now that we have a quorum, we will entertain a motion on S.B. 310.
ASSEMBLYMAN HETTRICK MOVED TO DO PASS S.B. 310.
ASSEMBLYMAN GRIFFIN SECONDED THE MOTION.
THE MOTION CARRIED. Ms. Assemblywoman Buckley abstained. (Mr. Beers, Mr. Brown, Mrs. Gibbons, Ms. Giunchigliani, Ms. Leslie, and. Mr. Perkins were absent.)
We will open the hearing on S.B. 427.
Senate Bill 427 (1st Reprint): Makes various changes relating to veterinarians. (BDR 54-472)
Neena Laxalt, Legislative Advocate, Nevada State Board of Veterinary Medical Examiners:
[Introduced herself] With me I have the Executive Director [State of Nevada Board of Veterinary Medical Examiners], Debbie Machen, and Beverly Willard, the public member of the Board. S.B. 427 has three primary focuses. It revises the procedures for the disposition of consumer complaints, removes the requirement that the licensee notarize their renewal form on a yearly basis, and the rest are housekeeping issues related to changes to the title of examinations and issues relating to foreign graduates and accrediting bodies.
We did have three other provisions that are different from this revised bill. We had a section in the original version that provided for fees and costs that a board can recover. We also had a section regarding confidentiality that we have deleted. What we did was take out the "burden of proof" language but with the concerns that had been expressed in the Senate, we added it back in. "Satisfactory" we changed to "preponderance of the evidence." I have provided to you a section-by-section analysis [distributed to members prior to the meeting, not a part of this record], which I can go over, if you would like.
Chairman Goldwater:
I have no familiarity with some of the accrediting bodies. Are they reputable? Are they any good?
Debbie Machen, Executive Director, State Board of Veterinary Medical Examiners:
The accrediting body for veterinarians is the American Veterinary Medical Association, a very reputable association that has been around for 70 or 80 years.
Chairman Goldwater:
Are there sufficient schools that are accredited? They are not so lofty that there are only two schools that receive accreditation, are they?
Debbie Machen:
No. There are 28 accredited schools in the United States.
Adam Levine, Attorney:
I hope you received a copy of my letter (Exhibit E and Exhibit F) of May 5, 2003, regarding the proposed bill, as amended. I am here to testify against the bill, or at least with regard to certain provisions of the bill. Primarily, I am against the "burden of proof" provision of changing the standard of proof to "preponderance of the evidence." I would like to very briefly summarize the problem. The current version of the statutory text uses the term "satisfactory proof" which is an evidentiary standard, which is not utilized often, if at all, by the courts.
We really have three standards in law: 1) beyond a reasonable doubt, 2) clear and convincing evidence and preponderance of the evidence, and the lowest, which is 3) substantial evidence. There are due process problems that are raised by subjecting a licensee to discipline under a "preponderance of the evidence" standard. That is what I attempted to lay out in my letter. Preponderance of the evidence is fine in a civil proceeding, where the only thing at risk is money, you can't lose your license or your livelihood from an adverse jury verdict and the procedures afforded are much greater. You have a judge trained in the law and the evidence has to conform to the formal rules of evidence, which are designed to insure reliability.
In an administrative proceeding, you have a much more severe penalty. A person can lose their occupational livelihood, which they have invested years of their lives and tens of thousands of dollars on, and, of course, they could lose their future income from their chosen profession if their license is lost or revoked. Yet, this greater penalty can be imposed without a formal judge presiding over the hearing and based upon non-formal rules of evidence – hearsay or evidence that doesn't meet foundational requirements. If the procedural protections in a disciplinary proceeding before the Veterinarian Board are going to be less than what is available in a courtroom, the burden of proof should be correspondingly higher in order to protect the constitutional property interest. That is why a "clear and convincing evidence" standard is appropriate.
Neena Laxalt:
We would agree to that. We would go along with his suggestion.
Chairman Goldwater:
Change the evidentiary standard or delete the change?
Neena Laxalt:
The "clear and convincing evidence" would be fine.
Chairman Goldwater:
We have an indication from the Board that changing it to "clear and convincing evidence" would be acceptable. Would that be acceptable to you, [Mr. Levine]?
Adam Levine:
Yes, absolutely. I believe that it would probably be constitutionally mandated, and that is what I would urge the Committee to adopt.
Assemblywoman Buckley:
I am wondering what standard we use with all the other boards. It probably should be consistent and I am just wondering what we utilize in disciplinary proceedings in similar boards. You [Mr. Keane] may have to get back to us.
Wil Keane, Legal Counsel:
I would have to look at what the other boards do. With the Veterinary Board, as most other boards, you can appeal to District Court, so that ultimately you will be able to have that judge and they would use the appropriate standard at the court level. I would have to check if the other boards specify "clear and convincing evidence" or "preponderance of the evidence."
Chairman Goldwater:
Sir, would you like to build on Mr. Keane's answer?
Adam Levine:
Yes. I believe the other occupational licensing boards currently are not consistent. They are all over the place. As I noted in my letter of May 5, 2003, the Nevada Supreme Court has adopted the "clear and convincing evidence" standard for discipline imposed by the State Bar of Nevada on the professional license of an attorney and a similar standard for judicial discipline. That much I do know. With regard to a petition for judicial review, under the case law the court's ability to review is limited only to whether there is substantial evidence that the appropriate burden of proof was applied in the proceeding below. So, a petition for judicial review doesn't really provide the sort of necessary protections that I think just a straight out "clear and convincing evidence" standard in the statutory text would provide.
Fred Hillerby, Legislative Advocate, Nevada Veterinary Medical Association:
[Introduced himself] We had worked with the Board on a few of these sections. We are here in support of S.B. 427.
Chairman Goldwater:
In Las Vegas, sir, do you have anything further to add?
Adam Levine:
Only, perhaps a clarification with regard to Section 10. Section 10 revises the procedure the Board uses in initiating disciplinary proceedings. It makes reference under the new text of the proposed statute, that a Board member shall submit to the Board a written report of his findings and recommendations. However, another portion of the statute, which has been deleted, is the portion that indicates that the statement of findings must be provided to the person under investigation. As written, this could be construed to mean that the Board, as has sometimes been its practice in the past, can generate a report and recommendation regarding a professional licensee, a veterinarian, but the veterinarian would not have access to this report that the Board is utilizing as a basis for taking disciplinary action. I think the statutory text needs to be clarified to provide that the Board shall provide a copy of the Board members' report or findings and recommendations. Otherwise, you have a situation where you have a government entity generating secret reports about somebody that the person doesn't have access to. That would be Section 10. I don't know if the members wish to address that.
Debbie Machen:
The findings of fact that the Board members submit are the assessment of the complaint. They are not the actual accusation that is filed and is public and is given to the licensee. The findings are just for the purpose of the investigation to submit to the Board to deal with, if we are going to go further with discipline, or if we are going to dismiss the complaint. They are not the legal document, which is the accusation, that is public. Does that clarify that?
Chairman Goldwater:
I think it does. But I think that is different from what you said.
Adam Levine:
While what she describes is accurate, that it is the assessment, it is the assessment that under the statute the Board uses to hold and make a determination of probable cause to proceed. It would be somewhat akin to, in a criminal proceeding, having the state generate a report given to the judge at a preliminary hearing in support of a criminal indictment as to whether someone should be bound over to district court, but the accused wouldn't actually see what the court and the prosecution is relying on to make a probable cause determination. Under the statute, that is what the Board is going to review and vote on as to whether or not to proceed with the formal accusation. It should be available to the veterinarian.
Debbie Machen:
The problem with making the findings public, until the Board votes, is that all that information is confidential. Because, if it is dismissed, then the entire complaint is considered confidential. If we do make that a public document, then the confidentiality issue is . . .
Chairman Goldwater:
We have dealt with this issue before. Okay. Any further testimony?
Adam Levine:
Very briefly. Section 13, which deals with the proof of actual injury requirement. The statute as currently written requires proof of actual injury and need not be established where the charge is deceptive or unethical professional conduct. My belief is that it is fine as written. The proposed amendment states that the proof of actual injury, if it is an issue, need not be established by expert witness testimony. In a case where there are disciplinary charges brought against somebody for the practice of medicine per se, without an expert, if a lay person is not capable of understanding the medicine, how can that be proven? A judge, on judicial review, is not going to have a medical background and will be unable to properly evaluate the evidence in the record unless an expert presents it. Section 13 of the bill, providing for these additional provisions that you don't need an expert, should probably be deleted in order to make effective judicial review possible.
Chairman Goldwater:
I'd like to ask a question of our Committee counsel. Is this somehow different from all our other Boards and Commissions?
Wil Keane:
A lot of the Boards deal with similar issues. Not all of these chapters are put together in exactly the same way and these "proof of actual injury" sections are not ones that I see frequently. I could look into them and let you know what other Boards use them, if you would like.
Chairman Goldwater:
I would like to know if we are doing something here in the veterinary board that is atypical of other boards relative to confidentiality, evidence standards, and complaints. So, if we are not, then we will address your concerns as noted.
Chairman Goldwater:
Thank you Mr. Levine, I appreciate your help.
Assemblyman Beers:
It appears on pages 3 and 4, Section 6, that we are rejecting the examination promulgated by the American Veterinary Medical Association (AVMA). I am curious why that is.
Debbie Machen:
They no longer administer that exam.
Assemblyman Beers:
So there is no national . . .
Debbie Machen:
There is a national veterinary technician exam, but it is no longer administered by the AVMA.
Assemblyman Beers:
Who administers it?
Debbie Machen:
The American Association of State Boards actually administers that exam.
Assemblyman Beers:
The American Association of State Boards of Veterinary Medicine? [Ms. Machen confirmed.] Why is there no reference? Rather than delete the requirement that a nationally administered exam be given, why did we not just substitute the name of the new organization?
Debbie Machen:
We actually define it in regulation because they keep shuffling it between organizations, so it is just easier if we define it in regulation and leave “approved by the Board” in the statute.
Chairman Goldwater:
[There were no further questions or testimony.] I will close the hearing on S.B. 427. We will do some research on that and bring that back for work session before the deadline. I will open the hearing on S.B. 139.
Senate Bill 139 (1st Reprint): Makes various changes to provisions governing certain real estate practices. (BDR 54-663)
Melody Luetkehans, General Counsel, Nevada Association of Realtors:
[Introduced herself] S.B. 139 is basically a cleanup bill for NRS Chapter 645 [Nevada Revised Statutes]. There are two issues that are addressed in the bill. One is the inclusion of property management agreements. This reflects the changes that occurred in 1997 when we added property managers under NRS Chapter 645. The other one is just a language clean up, changing some of the words to reflect current industry practices. I am open for going through this section by section or taking any questions at your pleasure, Mr. Chairman.
Tammy DeVries, Nevada Real Estate Division:
[Testified from Las Vegas.] We just wanted to stop by today and make sure that you know that we are in support of this bill. We have worked with the Nevada Association of Realtors on the bill and can answer any questions, if you have any, about its implementation within our office.
Chairman Goldwater:
[There were no questions or further testimony.] I will close the hearing S.B. 139.
ASSEMBLYMAN HETTRICK MOVED TO DO PASS S.B. 139.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION CARRIED. (Mr. Brown, Ms. Giunchigliani, and Ms. Leslie were absent).
I will open the hearing on S.B. 255, with this proviso that for the vote we have heard a lot about "do call" and "do not call." This Committee has taken action and so we would like to hear, very briefly, what this bill is all about.
Senate Bill 255 (1st Reprint): Makes various changes relating to telecommunications. (BDR 52-133)
Gary M.G. Deacon, Legislative Advocate, Battle Born Research Institute:
[Introduced himself] Senator Townsend was tied up with Government Affairs and sends his apologies for not being here. The telemarketing industry operates on a guaranteed 2 percent response rate, which leaves 98 percent usually hanging up the telephones. The "do not call" list requires the person to call and follow up in writing to be placed on a list. This will eliminate a lot of seniors and others that do not want to be bothered in the first place. The cost of maintaining a "do call" list is a lot less than that of a "do not call" list. There is a lot of fiscal responsibility there. We all have received calls where you pick up the phone and nobody is there. An automated dialing device generates these calls and a computer determines whether it is a fax line, a computer line, or if picked up, a live body is at the other end. The picked-up call is routed to a bank of telemarketers and you receive a second unsolicited telephone call. This bill is a stand-alone bill. It is not dependent on the federal government. It is less cumbersome. You still have the option of putting your telephone number on a federal "do not call" list. This is a simple solution to a complex problem and will eliminate a majority of the unwanted calls. Pass a good law that doesn’t inconvenience the 98 percent of Nevadans that don’t want these unsolicited telephone calls. Short and brief.
Assemblywoman Buckley:
How many states have passed a "do call" legislation?
Gary M.G. Deacon:
I don't know the exact number.
Assemblywoman Buckley:
My understanding was that there weren't any [“do call” lists].
Gary M.G. Deacon:
I know it is in the Montana legislature right now.
Assemblywoman Buckley:
I think everybody shares the concern that we want the calls to stop for those that don't want to receive them. I think that is across the board. Everybody believes that is the right approach, but I think you also have to weigh in which [version of the bill] is likely to get the job done with the least risk of litigation. "Do not call" has been challenged constitutionally and upheld, whereas "do call" has not. I guess my concern with this is that this might be held unconstitutional and then people would receive no protection whatsoever, whereas "do not call" was tried and true. I understand we had our own legal counsel look at it and say we have a shot, but there is no precedent. Any comments on that?
Gary M.G. Deacon:
The merit of the issue of constitutionality of the "do call" versus the "do not call" is basically the same argument. It still comes down to side issues of life, liberty, and the pursuit of happiness. As far as the constitutionality of First Amendment [rights], there are challenges there, yes. The grounds for the challenges would be based on the same thing as the "do not call" list. It really is not too much different.
Assemblywoman Buckley:
Except, one has been tested and one has not.
Gary M.G. Deacon:
I understand that but the arguments are the same.
Assemblywoman Buckley:
They are two different mechanisms, but I won't argue the point. Could you talk about what exceptions are in this bill? Are there any?
Gary M.G. Deacon:
There are, with pre-existing business relationships.
Assemblywoman Buckley:
Describe what those might be. What type of pre-existing business relationships?
Gary M.G. Deacon:
Pre-existing relationships would be, for an example, you have bought a Ford automobile and there is a recall. Because you are a client of theirs, they have the right to call you to let you know. Exceptions of that nature. Exceptions for law enforcement, for example, to notify you that your house is on fire or that there is a gas leak or something like that. Utilities should be exempt. A pre-existing business relationship is one that is determined by the need.
Assemblywoman Buckley:
I didn’t think either of the bills that we are considering have anything to do with the police calling or fire calling. I think it is just for sales calls.
Gary M.G. Deacon:
I do believe that when this was in subcommittee over in the Senate side, the point was brought out that, under the provisions of the bill as it was written, there were no provisions for emergency calls and things of that nature.
Assemblywoman Buckley:
That has been fixed?
Gary M. G. Deacon:
That has been fixed, because there are law enforcement issues and homeland security issues, where the calls have to be made.
Assemblywoman Buckley:
Can you focus then on what is still allowed under this version for telemarketing calls? If, using the Ford automobile example, if they want to call you to get you to buy another car, when you are happy with your car, or if they have this subsidiary, and they sell insurance, can they still do these telemarketing calls under this bill?
Gary M.G. Deacon:
I can't answer that, right now. I really don't know.
Chairman Goldwater:
It was brought to my attention that the bill that we passed, Mr. Conklin's A.B. 232, was amended on the Senate side. How was that amended?
Gary M.G. Deacon:
Once again, I would have to defer to the Chair. I am not familiar with that.
Chairman Goldwater:
Being mindful that we have heard all these issues before, we would love to hear from you.
Ann Wilkinson, Nevada Assistant Attorney General:
[Introduced herself] Keeping those thoughts in mind, I would like to just let you know that I am here today primarily to indicate that the Attorney General's office supports enacting legislation such as S.B. 255 to protect Nevada citizens from intrusive and unwelcome phone solicitations and to help facilitate the passage of a telemarketing solicitation legislation this session. The Attorney General's office has pulled the fiscal notes, both on S. B. 255 and A.B. 232 and, although we recognize that this will result in a stretch of our resources, we also recognize that we must take on the challenge of absorbing the increased workload and costs associated with enforcing whichever version of this legislation is passed. We believe that Nevada's citizens deserve legislation that shields them from disruptive and unsolicited and potentially fraudulent telemarketing calls. We stand ready to enforce whatever legislation is ultimately passed by the Legislature.
Chairman Goldwater:
We are so pleased to see the Attorney General finally in support.
Assemblywoman Buckley:
Has your office evaluated both bills and do you have an opinion on which one would be a legally riskier course?
Ann Wilkinson:
To follow up on your prior question, the "do not call" legislation has been tried and tested in the courts and to our knowledge the "do call" legislation has not been tested. Also, it is my understanding that the "do call" legislation that was pending in Montana is no longer being considered by that legislature.
Assemblywoman Buckley:
Do you have any information as to why?
Ann Wilkinson:
I do not. That was just based on research I was able to check on the Internet.
Assemblywoman Buckley:
The other bill that was passed out, we did not have any exceptions in there to allow calls if there was some distant relationship or companies had a number of affiliates, because we think that people don't want the calls. If they want to get them, they can allow the person to get them. This has, I think, exceptions which would allow the business relationship calls. Does your office have an opinion as to whether you would like to limit the calls or allow exceptions?
Ann Wilkinson:
We actually believe that is a policy decision for the Legislature to make, and we stand ready to enforce whatever exemptions are put in place.
Melody Luetkehans:
We have presented a proposed amendment (Exhibit G) to this bill. It would be modifying the definitions of telemarketing, which is Section 10, and modifying some of the definitions of a telemarketing call, which is Section 11. Basically, of the approximately 35 states that have passed this type of legislation, in regards to telephone registries, our counterparts, the different associations of realtors, have had the ability to have those legislatures acknowledge that at times there is a difference between general telemarketing calls and the kind of calling that real estate licensees do. The language you have before you echoes the Texas language. I could provide you with copies of the actual language in Texas, should you so choose. What this says is that, if a person has been licensed by a state agency in the state of Nevada and is regulated by that agency, and the transaction that a call is made for cannot be concluded without a face-to-face transaction, then the person making the call does not become a telemarketer and the call does not fall within the definition of a telemarketing call.
Chairman Goldwater:
Thank you, Ms. Luetkehans. Thelma, recognizing we have been through this?
Thelma Clark, Legislative Advocate, AARP:
Yes. All I'm going to say is that AARP [American Association of Retired Persons] is in support of the original bill, the "do not call" bill, A.B. 232.
[A letter from Chris MacKenzie (Exhibit H) was distributed to the Committee members, but he did not testify.]
Assemblyman Oceguera:
I think that we should recognize the work of our colleague in the Assembly and what he did on this. I think that he did a yeoman's job in bringing all the people together and really worked hard on this. Now that we have heard from the Attorney General, it just seems clear to me that we should go with the "do not call" list. I would recommend that this Committee take a motion to replace this bill, S.B. 255, with A.B. 232.
ASSEMBLYMAN OCEGUERA MOVED TO AMEND AND DO PASS S.B. 255.
Assemblywoman Buckley:
I just wanted to say that I applaud Senator Townsend for wanting to get so tough that we would have a "do call" registry. I just don't think it would work constitutionally, and I think it is putting all of our legislative efforts at risk. I don't like the exceptions in it either. I liked our approach [with A.B. 232] where we said let the consumer decide whether they want to be called. Letting someone who had a business relationship call would mean someone who sold me a car 15 years ago can call me for another car when I don't need one; their insurance product, when I don't need one. Those are the calls we are trying to get out of people's houses. I am pleased that it seems that the entire Legislature wants these calls to stop. I think going with a "do not call" registry that has been tried and proven will really help the people we represent.
Chairman Goldwater:
I have just been informed by our Committee Counsel that A.B. 232 was amended [in the Senate] by deleting the entire bill and having the existing provisions of S.B. 255 inserted and that version will be on second reading on Monday.
Assemblyman Hettrick:
I probably agree with the comments of the Majority Leader, but in fact, had opposed A.B. 232 on the grounds that we did not need it because the federal government was doing the same thing. I don't disagree with the motion to amend, at this time. I will vote no, simply because I don't want to do an amend and do pass on A.B. 232. I am backing this bill.
[There was no further discussion.]
ASSEMBLYWOMAN BUCKLEY SECONDED THE MOTION.
THE MOTION CARRIED. ASSEMBLYMEN BEERS, HETTRICK AND KNECHT VOTED NO. (Mr. Brown was absent.)
[There was no further business to come before the Committee.]
Chairman Goldwater:
The meeting is adjourned [at 1:57 p.m.]
RESPECTFULLY SUBMITTED:
Patricia Blackburn
Committee Secretary
APPROVED BY:
Assemblyman David Goldwater, Chairman
DATE: