MINUTES OF THE meeting
of the
ASSEMBLY Committee on Judiciary
Seventy-Second Session
May 6, 2003
The Committee on Judiciarywas called to order at 8:24 a.m., on Tuesday, May 6, 2003. Chairman Bernie Anderson presided in Room 3138 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. Bernie Anderson, Chairman
Mr. John Oceguera, Vice Chairman
Mrs. Sharron Angle
Mr. David Brown
Ms. Barbara Buckley
Mr. John C. Carpenter
Mr. Jerry D. Claborn
Mr. Marcus Conklin
Mr. Jason Geddes
Mr. Don Gustavson
Mr. William Horne
Mr. Garn Mabey
Mr. Harry Mortenson
Ms. Genie Ohrenschall
Mr. Rod Sherer
GUEST LEGISLATORS PRESENT:
Senator Terry John Care, District No. 7, Clark County
Senator Barbara Cegavske, District No. 8, Clark County
STAFF MEMBERS PRESENT:
Allison Combs, Committee Policy Analyst
Risa B. Lang, Committee Counsel
Deborah Rengler, Committee Secretary
OTHERS PRESENT:
Dennis K. Neilander, Chairman, State Gaming Control Board
William Bible, President, Nevada Resort Association
Bob Faiss, Adjunct Professor, William S. Boyd School of Law, University of Nevada, Las Vegas
Jennifer Stallard, former law clerk, Eighth Judicial District Court; and member, William S. Boyd School of Law Legislative Team
Jeremy Aguero, Captain, William S. Boyd School of Law Legislative Team
Douglas Walker, Operations Controller, Mirage Casino Hotel; and member, William S. Boyd School of Law Legislative Team
Steven Johnson, Professor and Faculty Advisor, William S. Boyd School of Law, University of Nevada, Las Vegas
Denise Quirk, Private practitioner
Sharon Atkinson, Executive Director, Board of Examiners for Alcohol and Drug Abuse Counselors
Carol O’Hare, Executive Director, Nevada Council on Problem Gambling
Helen Foley, representing marriage and family therapists
Tom Murtha, President-elect, Nevada AADAPTS (Alliance of Alcohol and Drug Abuse Prevention and Treatment Service)
Chairman Anderson:
[The Chair reminded the Committee members and those present in the audience of the Standing Rules and appropriate meeting etiquette. Roll called.]
Due to the volume of bills remaining to be heard and acted upon before the deadline, which remember is a week from Friday, on May 16, 2003; it is necessary to schedule additional work sessions. The measures the Committee has yet to hear include bills that address four major topics of the session:
In addition, the Committee has heard but not yet taken action on 18 measures, some of which are “on the board,” which means, of course, that unless there is some dramatic evidence, they will not see the light of day again.
I have decided to schedule two additional work sessions this week to try to clear out the workload before the May 16 deadline for Committee passage. The first of these work sessions is scheduled for the evening of Thursday, May 8, at 7 p.m. The second work session is up to you; I am considering either Friday afternoon at 4 p.m., which I was rather hoping for, or Saturday at 8:30 a.m. The Committee preference would be Friday afternoon or Saturday morning; I need to get some input from you before the end of the session today.
We just don’t have the luxury of saying, “If we can make a decision on a bill, we want to try to move it along unless someone sees an obvious problem where we need to work out a compromise.”
I am going to start with Senate Bill 432.
Senate Bill 432 (1st Reprint): Makes various changes pertaining to regulation of gaming. (BDR 41-490)
Dennis K. Neilander, Chairman, State Gaming Control Board:
[Introduced himself and submitted Exhibit C.] What you have in front of you today is the Board’s omnibus bill. As you may know, we come every session with at least one bill that tries to clean up any matters that have caused us any concern over the interim; that bill is in front of you today. The bill contains four different substantive areas, and because it is amending the entire Gaming Control Act, it hops around from section to section. To make it easier to explain, I will hit the subject matters as opposed to doing a section-by-section analysis.
Chairman Anderson:
Remember, the people in the front row with the exception of Mrs. Angle have not been exposed to the Gaming Control bills in the past. And while Mr. Brown and Mr. Mortenson are not freshmen, they fit into that category relative to gaming issues.
Dennis Neilander:
The first substantive provision in the bill is contained in Sections 1 through 5 and picked up again in Sections 15 through 18. Existing law requires that if you have an option to purchase a security in a licensed gaming establishment, that option itself has to be approved by the Nevada Gaming Commission. Then when you exercise the option, there is a separate approval process; right now, there are two sets of approvals.
Senate Bill 432 would allow the Board to administratively approve, under certain circumstances, the granting of the option. The exercise of the stock option would still be subject to prior Nevada Gaming Commission approval. Principally, the reason for this is to streamline the process. In the cases of some private and public companies, it will allow them to extend stock options to their employees, which currently is a difficult thing to do because you have to file an application for each and every granting of an option and then file a separate application for the exercise of the option.
Section 6 is the next substantive area of the bill. It clarifies that the Commission has regulatory authority to prescribe the manner in which taxes are to be paid. The reason we bring that to your attention is that, at some point in the future we would phase this in, we would like to shift into an electronic filing mode for tax returns. That’s an option currently and we do have some licensees that file electronically, but as we would like to move towards a mandatory electronic filing of tax returns, this clarifies that we would have rulemaking authority to go in that direction. We would set up workshops and public hearings to determine the best way to do that.
The next substantive area is Section 19, which addresses the provisions in the Gaming Control Act that require a distributor’s license in order to distribute slot machines. Senate Bill 432 creates the ability for us to adopt regulations that would exempt antique slot machines from the mandatory licensing provisions. As you can see in the bill, it is defined as “a machine that was manufactured prior to 1951”; we are talking about mechanical slot machines. Generally, what we see are [slot machine] devices that old [manufactured prior to 1951] are of museum quality. Individuals are unable to distribute them without a license. This allows us, by regulation, to create an exemption for those antique slot machines.
Chairman Anderson:
1951 is the cutoff year between mechanical and [electronic machines]? I thought mechanical machines were still being produced into the 1960s.
Dennis Neilander:
There are some that were produced later, but we wanted to go with a conservative date to start this out. We did a survey of other state legislation to determine the cutoff date being used in other states and 1951 was the most common we found, so we decided to go with that.
Finally, the remainder of the bill has to do with what was the old work permit system. Those of you who were here last session will remember that under the provisions of Assembly Bill 466 of the Seventy-First Legislative Session, this Legislature required the Board and Commission to adopt regulations to create a uniform work permit system. We did that during the Interim and we had several public hearings where we took testimony from all interested parties. In the course of implementing that regulation, Clark County determined that they were no longer going to issue work cards and they repealed their ordinances in respect to gaming work permits.
Under the old system, essentially, the local government, as a matter of law, had the ability to issue work permits. The Gaming Control Board was not in the business of issuing work permits, except in the small town of McDermitt, where we did a few work permits from time to time; the counties had the primary responsibility. The law was written in 1977 and it allowed for counties to opt out if they choose. Clark County in this interim did opt out and their ordinances were repealed. Las Vegas Metropolitan Police Department (LVMPD) agreed to continue to issue the work permits through the end of this calendar year.
Consequently, the law requires the Board to pick that up if the cities and counties do not, so we began to look at ways to address this. The first stab at this was to just pick up Clark County; we would continue to issue a physical work permit in Clark County. As we began our budgeting process, it became fairly clear that we were not going to be able to do that without affecting the General Fund. We could not figure out a way to make it revenue-neutral. We regrouped, went back to the drawing board, and came up with what is in front of you today, which is a replacement of the work permit system with a worker registration system. There will no longer be a physical card; the card will instead be replaced with this registration. The reason that has become more cost-effective for us is because we eliminate the need to have satellite offices and things of that nature.
[Dennis Neilander continued] I will explain how that system works. Again, as I said, it is statewide; cities and counties will no longer be involved in the work permitting process. Under the old system, the gaming employee would go down to the sheriff’s office, fill out the work permit application, and get their fingerprints rolled. The sheriff would then make an initial decision as to whether or not to grant a temporary permit based on a quick search of criminal records, a SCOPE search. They would then send the fingerprint cards to the Central Repository for Nevada Records of Criminal History as well as the Federal Bureau of Investigation (FBI) and wait for the FBI background check to come back. They could then, at that point in time, object to the permit or issue the permit. The state also had a second ability to look at the permits. The duration of the work permit card was left to the discretion of the local government; they varied from jurisdiction to jurisdiction.
Under this bill, there will not be physical card. The applicant will pick up his or her application upon seeking employment at the licensee. The Board will provide a standard application to each licensee in Nevada and it will also be available via the web on our Web site <http://gaming.state.nv.us>. That individual then has the responsibility to fill out the application and have their fingerprints rolled. They can get their fingerprints rolled at the place of their choice; there are private fingerprint services or the individual can go to the sheriff’s office. The individual would have to pay a fee to get their fingerprints rolled. At that point in time, they would submit the application, the fingerprint cards, and the fee in an envelope to the licensee.
The licensee has a twofold responsibility. The Board will maintain a list of all persons who are registered as gaming employees and the licensee will have the responsibility to check the list to ensure the person is eligible. Also [the licensee must] provide [the Gaming Board] with the application materials.
There is an amendment (Exhibit C) that clarifies to some extent our ability to have regulations that will allow for alternate methods of submission in the future. What we see could happen in the future is that we may be able to accept applications via our Web site and complete the process over the Internet. But for now, the licensee is responsible to provide the completed application to the Board.
[Upon submission of the application package], the person is temporarily registered and the Board has 120 days to object to a permanent registration. Then what happens is similar to what occurs now; there is a series of due process in place. The Board sends the fingerprint cards to the Repository as well as the FBI. We will get those results back and will either register the person or object. If we object, the person has an opportunity to go before an administrative hearing officer for a hearing. If the hearing officer sustains the objection, the record or the person can then appear before the full Board for review. If the Board continues to object, then it can go to the Nevada Gaming Commission. If the Gaming Commission continues to object, then it can be appealed in court.
If an existing employee currently has a work card, he or she is automatically going to be registered in the system. These registrations are good for five years. We will allow the individual to change jobs or go from jurisdiction to jurisdiction without having to reapply or pay any additional fee [during that five‑year period]. They would have to provide a change of employment notice, but no new application nor new fee.
Assemblyman Horne:
On the granting and exercising of options, I don’t understand why there are two investigations. You said you were streamlining; what are you looking for in the second investigation that you weren’t looking for in the first one?
Dennis Neilander:
The existing law requires that you first file an application for approval to grant the option; we investigate the individual to ensure that person is suitable to hold an option. The way the law is written you then hold the option. As you know, an option is triggered by some kind of a strike price. Once the option is no longer “under water,” it is exercisable, and the person has to apply again to get a second approval to exercise the option. That is where you actually turn the option into a share of stock.
Assemblyman Horne:
I don’t understand. You have already approved them to hold the option, but you can tell them they cannot exercise it. Theoretically, that turnaround time could be a year. What has happened in that period between the time that you said I could hold the option and now you say I cannot exercise it.
Dennis Neilander:
Some stock options last, in duration, for ten years. The theory behind that was the initial investigation would be stale if you allow ten years to pass before you permitted an automatic exercise of that option. Under this bill, the initial review of the issuance of the option would be done on an administrative basis, so the person would not have to appear before the Board and the Commission.
Assemblyman Horne:
What happens to the value if you deny him the ability to exercise that option?
Dennis Neilander:
If they were denied the ability to exercise the option, there are provisions in the Gaming Control Act that address what happens if someone is found to be unsuitable and how they are to divest of their interest. Those provisions exist now and essentially require the licensed company to compensate the individual to some extent to take them out of the position of being a security holder.
Assemblyman Horne:
On the work permit, I thought the purpose was to get rid of work permit cards. It seems that all that is replacing it is just another name. It’s only good for five years. They can change jobs or change jurisdictions, but after the five years they must reapply again?
Chairman Anderson:
One of the principal concerns about the multiple work cards was that we had people who were paying a fee in Reno, Sparks, Lake Tahoe, and Douglas County, thus paying again and again for the same service. The person was paying the same processing fees to multiple entities. It was hoped that by coming up with a single work card that they would be able to move throughout the state without too much trouble.
Dennis Neilander:
In addition to the portability of the card, being able to move around, a concern was expressed that the local governments were not utilizing uniform criteria for an objection to a permit. The way the law was written, they were allowed to establish their own criteria. You had two sets of criteria: the state criteria and the local criteria. Part of the regulations that we adopted in the last interim was to establish uniform criteria; we did that within the regulations, so that the local governments would have a standard set of criteria to use. During the course of these workshops with 33 different cities and counties, we found everybody was doing it differently. We had a great deal of discussion about how 33 different local governments could get together to do it the same way and have it work for everyone.
In the course of that, Clark County decided they were not going to issue work permits. The City of Reno and Washoe County both had it on their local government agendas to repeal their provisions, as did North Las Vegas and Henderson. It became evident to the Board that it was a situation where we were going to have to come in and establish a uniform system because we could not continue to operate not knowing if a city or county was going to drop out of the program at any minute without any notice to us.
Assemblyman Horne:
And the five-year time limit, theoretically, you could be working in a casino for 5-15-20 years and every 5 years you have to reapply? Is there a different standard if you stay at the same place the entire time as opposed to moving around?
Dennis Neilander:
No, it is five years for everyone. There was no limitation in the previous law prior to last session. Last session, Assembly Bill 466 of the Seventy-First Legislative Session established the five-year limit; we just kept it the same.
Assemblyman Mortenson:
What is the length of the process between when a person files an application and they are able to get their job? What is the fee for the registration?
Dennis Neilander:
Under the existing law or under the proposed bill?
Assemblyman Mortenson:
Under the new law.
Dennis Neilander:
Under the new law, when you go to get hired, you finish filling out all the things your employer requires, and your package is ready, not just the gaming permit; that person is eligible to be hired immediately. They are temporarily registered for up to a 120-day period. If the Board does not take any action within the 120-day period, they are automatically registered permanently. But that 120‑day period gives us an opportunity to get the criminal history information back from the Repository and the FBI. That process varies if those agencies are backlogged; it can take up to 60 days and perhaps even longer to get the information back. If we don’t act within 120 days, it is automatically deemed a registration.
Assemblyman Mortenson:
And the fee?
Dennis Neilander:
The fee is statute set for $75. What we have proposed, and I have presented this matter at great length before the money committees, is to delete the $75 cap and replace it with a provision that stipulates the actual cost. That actual cost is going to be $75. The difference under this scenario is that the gaming employee will pay the $75 processing fee and whatever the prevailing rate is to get their fingerprints rolled in the jurisdiction where they reside.
Assemblyman Mortenson:
How much is that, generally?
Dennis Neilander:
It varies; some jurisdictions are as low as $5. When we last did our survey, which is somewhat dated now, the average was about $10.
Assemblyman Carpenter:
On page 5, right at the bottom, where it talks about change of employment, it looks like when somebody changes employment that it constitutes an application for registration. That means that each time you change employment you must register again.
Dennis Neilander:
No. It is treated as an application for legal purposes because you need to have that “application”; that’s a legal term defined in the statute. But there will be no fee charged at the time, and the person does not reapply; it’s just a form that says he or she changed employment.
Chairman Anderson:
Any further questions from the Committee on the initial bill? Let’s take a look at the suggested amendments (Exhibit C).
Dennis Neilander:
The major proposal is to allow the Board and Commission to adopt regulations at a future date that can address the method in which we accept the information. Ultimately, we would be web-enabled to the extent where we could actually take the applications over the web. Section 7, page 5, lines 12 and 13, required the information to be submitted within one business day. In discussions with the industry, it appeared that date would be too short, so we have gone to five business days with the ability to extend, not waive, beyond five days if there is good cause.
The rest of these [provisions] were defining and making consistent what constitutes a complete application. A complete application means it is the application fully filled out plus the fingerprint card and the fee.
[Next we propose to] delete lines 18 through 30, in Section 7, page 11. This was something we discussed in the Senate Committee on Judiciary and, as a matter of drafting, it didn’t make it into the amendment but it was something the Senate Committee on Judiciary voted on. Because this bill was not exempt and it was one of the last ones to come out, the Chairman of the Senate Committee on Judiciary indicated that this amendment should be handled in the Assembly rather than pull the bill off the Floor. All that it does is take out some provisions that would have required the licensees to report certain terminations. Upon further review, we felt it was not a workable provision. It would have required somebody to report something without a legal basis regarding facts they might not have complete access to.
The remainder of the amendment sets forth the effective date. In essence, the registration process would be effective January 1, 2004, but the ability to adopt the regulations would kick in before that so that we would have six months after the session is over to prepare to changeover to the registration system.
Chairman Anderson:
What is the difference between an “incomplete” document and a “deficient” document? Seems to me you are wordsmithing, are you not?
Dennis Neilander:
We are wordsmithing there. We have debated this, but the reason we went with the term “deficient” was that in that sentence the word “incomplete” is already used. It appeared confusing, so we changed it to “deficient.” The bill drafter may look at that and decide to go back to “incomplete.”
Assemblyman Carpenter:
Will this save the local governments any money since they don’t have to do this anymore?
Dennis Neilander:
The existing law says that the local governments will only charge the actual costs. If there is a local government gaining revenue from this, that was not the intent of the law. The local governments should be charging exactly what it cost them to implement the program. It will be saving them some work because most local governments had a station with one employee responsible for not only taking this application but also to register sex offenders, do the Brady Law permits, or combined it with other administrative activities. It certainly will reduce the time spent accepting these applications, taking the person’s picture, running them through SCOPE, and physically issuing the card to the person.
Assemblyman Carpenter:
In areas such as McDermitt, Wendover, and Jackpot, will you have agents there to review these applications or will you do it all in a central location?
Dennis Neilander:
We are going to do this all in a central location and the licensees in Jackpot, for example, will be responsible for mailing this information to our office in Las Vegas. We are planning on having training sessions, where we will ensure that the licensees and applicants understand what their responsibilities are. We will do workshops and training in the north and the south, and will be available to answer questions as we go along.
Chairman Anderson:
Many of the people who work in the gaming industry are short-term, summer employees, kids who come out from college to work in casinos in Lake Tahoe and other remote locations. Is this going to slow down their application time by this extension? By removing that one section [Section 7, lines 18 through 30] you don’t make the temporary employees responsible for putting somebody in a job without a card for a couple of days?
Dennis Neilander:
The original concern was that there was a specific provision indicating it would be an unsuitable method of operation to employ somebody without checking the list. Rather than putting that in the statute, we felt it was best to handle that in the existing regulations.
Chairman Anderson:
Any other amendments that need to come forward for this bill?
William Bible, President, Nevada Resort Association:
[Introduced himself and submitted Exhibit D.] We are supportive of S.B. 432 and the amendments that have been presented by the Board. They deal with four areas and I believe the Board is to be commended for the manner in which they have chosen to deal with these areas. The options expedite the Board’s work, as well as that of the licensees. The tax and antique slot requirements were long overdue.
The work permit process was a very difficult process for the Board to resolve and I can tell that the workload has shifted from the counties and the Board to the licensees. The licenses will be more involved with this process in terms of collecting paperwork from applicants for positions as gaming employees and submitting it to the state for review. A number of licensees rely extensively on the work permitting process of the state to determine an employee’s suitability for their particular positions of employment. I believe that the amendment and the original bill now reflect a joint sharing of responsibility between the state and licensees for the work permit process; it will be a workable solution.
I have presented to the Committee two unrelated matters (Exhibit D) to the format contained in this bill for potential consideration as amendments to S.B. 432. Nevada Revised Statutes 463.302 was enacted in 1997 at the request of the City of Sparks to accommodate a licensee that was having his property condemned, and he wanted to be able to move the license outside of the area that was being condemned without having to either re-qualify or meet some of the statutory criteria, particularly the room requirement, which would have required him to build 200 hotel rooms. The statute contained an exception in Section 4, which indicated that the provision of subsection 1 that allowed the movement of a license does not apply to either “a resort hotel” or to “a city which has established one or more gaming enterprise districts.” In reviewing this statute it appeared there was an omission; it should read “a city or county.”
Those of you from Clark County will recognize that gaming enterprise districts are established not only in the city but also in the county. If you would allow the movement to take place in the county, they would not be required to come back and relocate under the provisions of Senate Bill 208 of the Sixty-Ninth Legislative Session, which establishes the neighborhood gaming provisions and has a fairly complicated set of notice requirements to citizens that would be affected by the location of a gaming establishment in their neighborhood, a supermajority voting requirement by the county, and some other noticing and procedural requirements, so that the citizens have a lot of input into that particular process. This particular amendment would rectify that situation.
On the second page, we are requesting an amendment to NRS 171.1235, a section of law that was enacted in 1973 and has not been amended since that time. It indicates in the title that a “gaming licensee may detain person suspected of having committed felony in gaming establishment.” Section 4 requires that the gaming licensee post a sign that indicates that “any gaming licensee, its officers, employees, or agents who have reasonable cause to believe that any person has committed a felony may detain such person in the establishment for the purpose of notifying a police officer.” Yet when you read the body of the bill, the language we are suggesting be stricken would indicate that a licensee or its agents “may take into custody and detain any person when: (a) such person has committed a felony, whether or not in the presence of such licensee or his officers, employees, or agents; or (b) a felony has been committed, and such licensee, his officers, employees, or agents have reasonable cause to believe such person committed it.”
The problem with this particular language is that, in a lot of cases, the licensee does not know that a felony has been committed. An individual comes and reports to an agent of the licensee, typically a security officer, that a purse was stolen. First, the licensee does not independently know the value of the theft, the value of the purse, or how much money was in the purse. There is a threshold for commission of a felony, which I believe is $250. Secondly, you don’t even know if the actual act occurred. There could potentially be difficulty, if based upon the information conveyed by the patron, the licensee detained the individual and a felony had not been committed in terms of liability. This [amendment] would indicate that the licensee would detain an individual if there were reasonable cause to believe the person had committed a felony. This is mostly a housekeeping issue.
Chairman Anderson:
It may end up narrowing the scope of the ability to hold in some way?
William Bible:
I don’t know if it would necessarily narrow the scope; I think it gives the licensees sufficient protections to detain a person even though they may not know that the crime has been committed or is a felony. My concern would be that you would want your licensees to do something…
Chairman Anderson:
…to have reasonable cause.
William Bible:
Correct.
Assemblyman Horne:
On the phrase “reasonable cause,” I am used to “reasonable suspicion” and “probable cause”; is there a blending, is there a difference, or is this minutiae? If you are going to have a standard, it should be understandable.
William Bible:
We used “reasonable cause” because “reasonable cause” is the notice that’s required by law to post in Section 4. So if you change the standard, you would want to also change the notice of reasonable cause. It seems like sufficient grounds for holding someone.
Risa Lang, Committee Legal Counsel:
I think that you can do it either way; you want to be consistent with what you decide to go with.
Assemblyman Mortenson:
Did I understand correctly that if somebody snatches a purse and is caught, what he is charged for depends on how much money was in the purse? If it is a lesser amount, it is a lesser [crime], and if it is over so much, it becomes a felony?
William Bible:
Yes, the way crimes are categorized; it has to be over $250 in order to be a felony. If it is under $250, it is a misdemeanor. I believe, if it is over $500, it is a Class B felony. I haven’t worked in that area for some time, but the amount that is stolen determines the classification of the crime.
Assemblyman Mortenson:
It is a hazardous business, snatching purses.
Chairman Anderson:
We are looking that up for you, Mr. Mortenson. Nevada Revised Statutes 205.0835 stipulates that:
· If the value of the property or services involved in the theft is $250 or more but less than $2,500, the person who committed the theft is guilty of a Category C felony…
· If the value of the property or services involved in the theft is $2,500 or more, the person who committed the theft is guilty of a Category B felony…
Any questions on the bill? Additional questions on S.B. 432? Anybody else wishing to be heard on S.B. 432? Anybody in the south wishing to be heard on S.B. 432?
[Chairman Anderson accepted into the record without testimony Exhibit E, submitted by Peter Sidlow, Victorian Casino Antiques, Las Vegas.]
Close the hearing on S.B. 432.
ASSEMBLYMAN BROWN MOVED TO AMEND AND DO PASS S.B. 432.
ASSEMBLYMAN HORNE SECONDED THE MOTION.
THE MOTION CARRIED. (Ms. Buckley and Mr. Oceguera were absent for the vote.)
The Chairman will take the bill [to the Floor].
Open the hearing on Senate Bill 134.
Senate Bill 134: Repeals prohibition on assignment of right to periodic payments of winnings from gaming. (BDR 41-1105)
Senator Terry John Care, District No. 7, Clark County:
[Introduced himself.] Senate Bill 134 is not the sort of thing you go looking for, that you grab the NRS books and read from cover to cover. I don’t recall how last summer I became aware of a conflict between Article 9 [of the Uniform Commercial Code] as adopted in Nevada and NRS 463.3669, which goes to the prohibition of the assignment of gaming winnings. Realizing the inconsistency there, I actually submitted a bill draft request to do the opposite of what you will hear testified here today, and that’s just fine, basically the repeal.
I assumed the industry would want to keep the prohibition and we would have to amend Article 9. But it turns out, I discovered, that some students at the William S. Boyd School of Law, University of Nevada, Las Vegas (UNLV), had been working on this project for some time. I am certainly agreeable to what they are going to offer.
I think certain members of the Committee know Mr. Bob Faiss from past sessions. Last session, it was the testimony by the students on college betting at the national level. Mr. Faiss, as adjunct professor for the Boyd School of Law, is back again this session. I am going to allow Mr. Faiss to testify from Las Vegas and introduce the students; they will explain why the repeal is necessary and the rationale behind it. They did an excellent job on the Senate side and I am sure they will do equally well today.
Bob Faiss, Adjunct Professor, William S. Boyd School of Law, University of Nevada, Las Vegas:
[Introduced himself and submitted Exhibit F.] We thank you for the courtesies you have extended in connection with S.B. 134 and for your continuing support of gaming legal education in Nevada. My partner, Tony Cabot, and I, under the direction of Dean Richard Morgan, teach gaming law and policy, with the assistance of our associate, Joe Cain.
One of the goals Dean Morgan set for us was not just to teach our students about gaming law and policy but also to provide the opportunity for them to influence creation of law and policy. Accordingly, one of the class assignments this school year was to identify and bring forward a necessary amendment to the Nevada Gaming Control Act. The students identified and wrote that amendment, which appears before you this morning as Senate Bill 134.
It is necessary for me to say that we are not here as official spokespersons of the law school. Our remarks are as individuals. This event has a special meaning for us because your Vice Chairman, John Oceguera, is a stellar member and Assemblyman William Horne is an honored graduate of the institution we represent. We thank Senator Care for making the introduction of S.B. 134 possible and for his guidance in the matter. We also express appreciation for the cooperation and support of Chairman Dennis Neilander of the Gaming Control Board.
One thing our students learn early in the year is that the primary forces shaping Nevada gaming law and policy over the years are the Nevada Assembly and Senate Judiciary Committees. Other law classes study how courts have interpreted law and policy. Our class looks at the creation of law and policy in the Legislature and those who have been instrumental in creating it. Other law students learn about judges; our students learn about the chairs and members of the Assembly and Senate Judiciary Committees.
I want to submit my remarks for the record with a list of the students’ names so that they will be a lasting part of legislative history. In addition to the witness team present, they are: Kevin Bumstead, Anthony Celeste, Zachary Fritz, Edward McGaw, Nathan Miller, and Shannon Okada, all of whom are present in support of their classmates. I would also like it noted that our faculty advisor is with us, Professor Steven Johnson, one of the leading authorities in the United States on tax law.
We are pleased to have with us as a resource witness Mark Lerner, who is a former deputy attorney general for gaming and the Senior Vice President for Law and Government and General Counsel for Alliance Gaming Corporation, a leading manufacturer of gaming devices. We asked Mr. Lerner to join us just in case the Committee has some general questions in the field of wide-area progressive slot machines or periodic jackpot payments that may be beyond the research conducted by our student witnesses.
Our student witnesses have worked hard in preparation for today. I believe you will find their testimony to be succinct and persuasive. The captain of our legislative team is Jeremy Aguero, who has been named to Who’s Who in Southern Nevada Business and recognized as one of the Top Business People Under 40 in Las Vegas. He is a principal of Applied Analysis. Mr. Aguero was the principal analyst for the Governor’s Task Force on Tax Policy and is co-author of its 1,200-page report. He will be our closing witness and will coordinate the responses to any questions you may have.
Our second witness will be Douglas Walker, who holds a master’s degree in business administration from UNLV. He is a former adjunct professor at the UNLV College of Hotel Administration. A 21-year executive in the gaming industry, he serves as Operations Controller of the Mirage Casino Hotel.
It is my pleasure to introduce our opening witness, a former law clerk in the Eighth Judicial District Court, Jennifer Stallard.
Jennifer Stallard, former law clerk, Eighth Judicial District Court; and member, William S. Boyd School of Law Legislative Team:
[Introduced herself.] I feel it is both a pleasure and a privilege to have the opportunity to testify here this morning. I will outline what S.B. 134 would accomplish. Senate Bill 134 seeks to repeal NRS 463.3669, which prohibits a gaming patron from assigning periodic payments of mega-slot machine jackpots, with the exception of the estate of a deceased patron or a divorce settlement. This statute has not been necessary since the 1998 adaptation of Internal Revenue Code Section 451(h), which eliminated federal income tax liability for patrons who had the option of assigning jackpot winnings.
Nevada Revised Statutes 463.3669 also conflicts with Nevada’s 1999 adoption of the Uniform Commercial Code provisions. By prohibiting the assignment of periodic payments, NRS 463.3669 is contrary to NRS 104.9406. Nevada Revised Statutes 104.9406, among other things, is concerned with restrictions on assignment of accounts, which include gaming winnings. Subsection 6 specifically renders any rule, statute, or regulation prohibiting, restricting, or requiring governmental consent for assignment ineffective. This conflict with the Uniform Commercial Code has impliedly repealed NRS 463.3669 by invalidating the prohibition on assignment.
My colleagues Jeremy Aguero and Doug Walker will address the following three issues in their comments:
1. What gave rise to NRS 463.3669 in 1995?
2. What changes have occurred since 1995, which have eliminated the need for NRS 463.3669?
3. Why is Senate Bill 134 necessary to eliminate a conflict of existing laws?
I will now turn the testimony over to Jeremy Aguero, who along with Doug Walker will address what gave rise to NRS 463.3669, as well as the two compelling reasons for repealing it. We will then be happy to answer any questions you may have.
Jeremy Aguero, Captain, William S. Boyd School of Law Legislative Team:
[Introduced himself.] In my comments, I will attempt to briefly address what gave rise to NRS 463.3669 and what changes have occurred since 1995, eliminating its need.
The intent of NRS 463.3669 was to protect jackpot winners against incurring unintended federal income tax consequences when receiving installment payments over an extended period of time, for example, 20 years. Perhaps the easiest way to demonstrate the problem is through an example of what might have happened to a hypothetical jackpot winner prior to the enactment of NRS 463.3669.
Suppose a patron won a $10 million jackpot payable in 20 annual installments. If this right was assignable, the patron could be deemed to have had a “constructive receipt” of the present value of the entire $10 million. Thus, although the patron would receive only $500,000 in the first year, that same patron would potentially have a federal income tax liability of $2 million. Recognizing that the state had an interest in protecting casino patrons from facing this dilemma, NRS 463.3669 was passed in 1995. The theory of constructive receipt turns on the concept of “unqualified demand.” By eliminating the patron’s right to assign his or her payments to a third party, demand to the funds became limited or qualified, and thus no intended tax liability was created. Similar statutes were passed in a number of states where lottery prizewinners were facing similar problems.
So, what changes have occurred since 1995, which have eliminated the need for NRS 463.3669? The tenuous nature of this distinction, which effectively elevated form over substance, was, at least in part, a driving force behind the development of Internal Revenue Code Section 451(h) in 1998. Section 451(h), which was an element of the 1998 Tax and Trade Relief Extension Act, provides that a jackpot winner who is granted the option of choosing between a lump sum or periodic payments is not required to include the winnings as gross income merely because the option to take a lump sum exists.
In a 2000 Private Letter Ruling, the Internal Revenue Service (IRS) noted that Section 451(h) is not affected by the mere presence of a state law permitting a prize winner to assign award payments. The IRS explained that constructive receipt requires the amount credited to the winner’s account be subject to unqualified demand. Where a winner’s right to receive payments are not accelerated or otherwise altered by state law, a jackpot is not subject to unqualified demand and no federal income tax liability follows.
If a state law allowing the assignment of winnings did not trigger the unintended federal income tax consequences giving rise to NRS 463.3669, the repeal of a statute prohibiting such assignments would clearly not lead to the emergence of such consequences. Thus, NRS 463.3669 has served its purpose well, but is no longer required. I will now turn the testimony over to Doug Walker, who will analyze the conflict of laws that exist between NRS 463.3669 and the Uniform Commercial Code.
Douglas Walker, Operations Controller, Mirage Casino Hotel; and member, William S. Boyd School of Law Legislative Team:
[Introduced himself.] I will explain the conflict of laws that Senate Bill 134 eliminates and conclude our testimony with some closing remarks. Why is Senate Bill 134 necessary to eliminate a conflict of existing laws? As Jennifer noted earlier, a second reason supporting the repeal of NRS 463.3669 is that it currently conflicts with NRS 104.9406. Nevada Revised Statutes 104.9406, which was adopted in 1999, updated Nevada’s statutes to reflect the most current provisions of the Uniform Commercial Code. Subsection 6 of the statute, however, provides that any law prohibiting the assignment of an account is void to the extent of the prohibition. The definition of “account” includes gaming winnings, and thus, any law prohibiting the assignment of gaming winnings is void.
Nevada Revised Statutes 463.3669 prohibits the assignment of gaming winnings on its face. Thus, not only is the statute no longer required, it also stands opposed to a more recently adopted statute. While this conflict may invalidate NRS 463.3669, it certainly adds confusion and uncertainty to Nevada law. For this and other reasons addressed by my colleagues, we respectfully recommend that the Nevada State Legislature repeal NRS 463.3669.
With your indulgence, I would like to conclude by taking a moment to thank the Legislative Counsel Bureau’s Research Division, which was remarkably helpful in support of our efforts. Additionally, I would also like to publicly thank Professors Bob Faiss and Tony Cabot. These two gentlemen, who I think we all recognize as being instrumental in the development and refinement of modern gaming law, very clearly demonstrate a long-run commitment to our community by taking time out of their extraordinary schedules to impart the value of their wisdom and experience on a generation of Nevadans who aspire to work alongside them, and hopefully, will do an equal service to our great state. I would like to thank Mr. Lerner; his counsel and insights were of great benefit to this process.
I would also like to thank Senator Care for sponsoring S.B. 134. Finally, I would like to thank Dean Richard Morgan, who epitomizes the dean of a law school, for encouraging us to pursue this type of practical application of the law. With that, we conclude our presentation. We thank you again for your time and we would be pleased to address any questions or comments the Committee may have.
Chairman Anderson:
As usual, Mr. Faiss, your students are well prepared and are clearly concerned about following the example set for them; it was an excellent presentation.
One of the earlier bills that we dealt with that addressed the assignment of winnings. Does the same kind of problem happen in gaming as it occurs with insurance settlements where winnings are assigned and then people are held out against so that they have to draw against them [the winnings] at a higher rate? Or is that only is certain types of cases, if we remove this prohibition?
Senator Care:
That’s an issue I haven’t even pondered. I don’t know if Chairman Neilander or somebody here wants to testify to that. If I am thinking of the same bill, the judicial approval of structured settlements, I don’t know. You get into assignments; these are freely assignable. You just raised a scenario that I had not considered.
Chairman Anderson:
Have any of the witnesses contemplated the issue of payments and assignments of [structured] insurance settlements? I don’t know if this carries over to gaming. [For example,] a person receives or is promised large sum [a settlement to be distributed in structured] payments. Then someone [a factor] comes along and exchanges it for a certain percentage over time and holds that payment or pays them late and then they [the factoring company] acquire it as a percentage of the overall [settlement amount]. Does this cut down on the actual exposure, if we were to remove this statute; the amount of money that the person would receive from the gaming establishment losses. Have I misinterpreted or overly simplified it?
Senator Care:
You have reminded me again that there is no such thing as a simple bill. This is the briefest, shortest bill we have had this session, but nonetheless, here we are. As I recall the testimony, the problem with the structured settlements was that you got some plaintiff that would be receiving periodic payments over a term of 5 years or 10 years and then he or she becomes financially…the testimony related to someone wanting to start a business so he was willing to discount the future payments he had coming to him. The new bill would require judicial approval before doing that sort of thing. When addressing assignments, they are freely assignable. I guess the distinction is that we are not dealing with someone who has prevailed in a lawsuit and had attorneys along the way. I guess what you are really asking is whether we need to protect the winner who wants to assign payments. That was not something that was discussed previously. We are talking about megabucks here.
Chairman Anderson:
Mr. Aguero, was there any kind of quandary about the tax liabilities on assignments that have come in where people pay the big taxes at the front of their winnings and then, because they are going to receive those payments over a time period, assign a percentage of the payment to avoid taxes and lost money as a result?
Jeremy Aguero:
That is not an issue that we have taken up specifically. I believe it would largely be a fact–specific question that would deal with whether or not there was unqualified demand to the monies that were being transferred. If the patron had an unqualified demand to the dollars, there would be an inclusion to income. Where they don’t have that unqualified demand, whether there is some restriction on those monies, there would not be an inclusion to income. It is certainly something that we could look at with greater detail and get back to the Committee.
Chairman Anderson:
The unqualified demand question is the central key issue.
I want to congratulate members of the faculty for acquiring the accreditation of the William S. Boyd School of Law in its first attempt, which is, if not unheard of, pretty close to remarkable. It is clearly indicative of the quality of instruction at the School of Law.
Questions from members of the Committee? Is there anyone else who feels they need to get on the record for S.B. 134?
Senator Care:
As the sponsor of the bill, if the students at UNLV, Boyd School of Law, decide that they want some additional language addressing the issue that you raised, I am perfectly comfortable with whatever they come up with.
Chairman Anderson:
Let me hold this bill, just to make sure it conforms and we do not end up with a conflict in some other area.
Anybody else wishing to be heard on S.B. 134? [Chairman Anderson closed the hearing on S.B. 134.]
Senator Care also has Senate Bill 266.
Senate Bill 266 (1st Reprint): Revises various provisions pertaining to gaming. (BDR 41-1280)
Senator Care:
By way of background, last session we passed a bill that created the international gaming salon, so if you see “gaming salon” and you don’t know what that’s about, it’s the same thing as the international gaming salon that we created last session. I have never been to international gaming salon and I have never seen one, but in essence a licensee is permitted to seek a license from the Board to operate, under surveillance, with regulations, and known to the Board, certain types of gaming for more lucrative patrons who come from all over the world to play in Las Vegas, but they don’t wish to do so for various reasons in public view. Last session, we agreed to that, taking into consideration the market here. The reason that I had requested Senate Bill 266 through the Senate Committee on Judiciary was for two reasons, one of which is not in the bill as it reads today.
When we had the discussion on international gaming salons last session, Chairman Neilander testified before the Senate Committee on Judiciary. We discussed that if we did this, how would the public ever know what goes on inside? The public can’t view them, that’s fine, but at least the public ought to be entitled to know about winnings, number of visits, visitors, and that sort of thing. Senate Bill 266, as originally drafted, had a provision that said the Board would periodically release that sort of information—not the countries of origin, not the identities, and no identification of the particular licensee. It would at least let the public have some idea of the kind of cumulative winnings, then we could see if these salons were working or not. [After all,] we gave up, through statute last time, the right of the public to be present where [this] gaming was taking place.
I had a discussion with Chairman Neilander, however, before the bill was heard on the Senate side. He pointed out to me that there have only been three licensees that have sought a license to do this. In actuality, there is only one resort in Las Vegas that is doing any type of activity this way at all. So, it would be premature to request that information to be disclosed publicly because to do so would be very easy for one licensee to discover what is going on at the premises of the other resort. For that reason, that’s been deleted from the bill.
What we are left with, as it applies to a gaming salon, is Section 2 where we are simply changing the name from “international gaming salon” to “gaming salon.” You can be an American citizen and, if you qualify, play in a gaming salon.
Section 3 of S.B. 266 says that once the State Gaming Control Board has that information, we all see that information on a monthly basis in the newspaper—how the winnings go in Clark County, which is downtown and along the Strip, and the same information for Washoe County—to give the public an idea of what is going on with the transient industry. All this [S.B. 266] does is say that once the State Gaming Control Board has that information available, it has to release it to everybody because it is, after all, public information. The bill, in fact, stems from what happened last summer; there was a time where the Executive Branch held on to the numbers for a period of five or six days. My feeling was, especially as a former reporter, that once information is public then it ought to be available to everybody.
That’s basically what we are left with. I did not bring along any witnesses; all we are doing again is changing the name from “international gaming salon” to “gaming salon” and clarifying by statute that once the Board has the monthly tallies available and ready for release, they ought to be released. I will be glad to entertain any questions and then I am going to the Senate Committee on Judiciary; the Majority Leader is back, which means that we must be taking up the restoration of rights of convicted felons. That was next on the agenda; I would like to get back to that.
Chairman Anderson:
I have only one question relative to the term change. We currently have gaming salons; are they still going to be closed to other patrons as they are currently? How are we going to differentiate between a high-end card room, which is not quite shut off from everybody’s view, and a gaming salon?
Senator Care:
We aren’t actually changing anything except the name. On January 24, 2002, the Gaming Commission adopted regulations for gaming salons; I don’t have a copy of them with me, but the Chairman [Neilander] is here. This [S.B. 266] does not change any of that [regulations]. I know the rooms you are talking about where sometimes as you walk through a resort you might assume that a particular room is off-limits, when, in fact, it is not. We’re still talking about rooms that are created, I don’t think they are in existence 24 hours a day, on special occasions that the licensee notifies the Board, they are told the visitors are coming, then they go ahead, set it up, and the visitors come. That part doesn’t change.
Chairman Anderson:
Questions from members of the Committee for Senator Care before we excuse him to return to the Senate Committee on Judiciary? I see no further questions for Senator Care. Anybody else wishing to testify on S.B. 266?
Mr. Neilander, let me ask a question just because you are here and Senator Care made reference to the Gaming Commission. The problem with releasing information in a timely fashion, does S.B. 266 create a problem for the Commission?
Dennis Neilander:
No, just so long as you understand that the word “immediately” means when it is ready. That’s a lot of information to compile; it takes us a few days once we get the tax returns to run the numbers. Once it’s ready, we do release it right away; the bill does not change that practice at all. Senator Care made reference to the Executive Branch that had some numbers that they may have delayed at one point in releasing. That circumstance occurred because there was a proposal under review by the Governor’s Office that would consolidate the sales tax and gaming numbers in one release that would allow a better opportunity to look at the impact of those trends on the overall state budget.
As you may know, the sales tax numbers and the gaming tax numbers come out a couple weeks apart. There was a move to try to consolidate those, but ultimately the Executive Branch determined not to do that. We don’t believe that this bill changes what we do in practice right now.
Chairman Anderson:
You don’t think that we need to modify S.B. 266 in any way to make sure that reflective language is tighter?
Dennis Neilander:
I don’t know what other term… We do release [the information] now as soon as we are done calculating the numbers. We go on that date; it generally runs somewhere between the 8th and 13th. Anywhere within that 5-day frame is when we do release the numbers. That’s just a function of getting all the tax returns in, calculating the numbers, and then running them.
If you would like, I could give you an update on the other portion of the gaming salon. For those members who are new to the Assembly Committee on Judiciary, the Legislature in the last session, as Senator Care indicated, did pass a bill that allows for private gaming. It was done in order to allow the industry to maintain its competitive edge in the sense that there are other jurisdictions that allow private gaming.
One of the things that we were concerned about at the time, and what I wanted to update you on, is the surveillance system. We have had three licensees that have come forward with applications for salon gaming and there are currently three that are licensed. The surveillance systems, I am happy to report, work very well. We actually have the ability from the State Gaming Control Board’s offices in Las Vegas to direct the camera ourselves. We have a set of regulations in place that address this activity. While we haven’t had a lot of experience because the rooms have not been opened to a large extent, what we have seen so far is that the system is working well.
Chairman Anderson:
Anybody else wishing to testify on S.B. 266? Let’s close the hearing on S.B. 266 and bring it back to Committee.
VICE CHAIRMAN OCEGUERA MOVED TO DO PASS S.B. 266.
ASSEMBLYMAN CARPENTER SECONDED THE MOTION.
THE MOTION CARRIED. (Ms. Ohrenschall was absent for the vote.)
Let me assign this to Mr. Oceguera. Then we have the final bill of the day.
I understand that Mr. Johnson is still in Las Vegas, willing to answer questions relative to my concerns about S.B. 134. Let me reopen the hearing on S.B. 134 again, since we had not taken a vote on it.
Senate Bill 134: Repeals prohibition on assignment of right to periodic payments of winnings from gaming. (BDR 41-1105)
My questions related to whether there was a problem in assigning dollars in these types of winnings for tax purposes.
Steven Johnson, Professor and Faculty Advisor, William S. Boyd School of Law, University of Nevada, Las Vegas:
No, there would not be a problem here. The one concern might be whether there would be a tax advantage that would motivate folks to change their decision; the answer to that is no. The other concern might be whether there would be a tax detriment if subsequently there were no receipt of the money, which was previously taxed. The answer in both of those situations is that the imposition of federal income tax would be correlated to the receipt of payments. So there would be no situation in which either there would be a tax advantage or a tax detriment followed by an economic disadvantage.
Chairman Anderson:
I am asking legal counsel to also look at it as to what the advantages would be from either side of this issue. I am going to be holding on to S.B. 134 for just a while, maybe we will be able to get it out by the end of the day.
Steven Johnson:
If I could be of help to you or your staff in this regard, I would be delighted.
Chairman Anderson:
[Close the hearing on S.B. 134.] Let’s turn our attention to the final bill of the day, which is Senate Bill 351.
Senate Bill 351 (1st Reprint): Requires certification for persons who counsel problem gamblers. (BDR 54-123)
I asked for this particular bill to come to the Assembly Committee on Judiciary since it seems to me that since we deal with the gaming folks that we should deal with their problems.
Senator Barbara Cegavske, District No. 8, Clark County:
[Introduced herself.] I am here representing the Chair of the Senate Committee on Human Resources and Facilities, Senator Rawson, who is chairing a subcommittee, which I am on also; we are closing budgets. Senate Bill 351 has concerns for persons who counsel problem gamblers, and in summary of this bill, I will give you a brief overview and there are others who will go into detail for you. I would like to thank Senator Maggie Carlton who was the subcommittee Chair on the Senate side and did an outstanding job of reviewing this bill, which brought us to the first reprint.
[Senate Bill 351 proposes the following:]
· Changes the name of the Board of Examiners for Alcohol and Drug Abuse Counselors to the Board of Examiners for Alcohol, Drug, and Gambling Counselors.
· Provides for the certification by the Board of a person to act as a problem gambling counselor or problem gambling counselor intern.
· Defines the necessary experience and educational requirements for a person to obtain such certification.
· Sets caps for fees pertaining to these certificates and includes technical provisions pertaining to the new certificates.
· Expands the Board from five to seven members.
· Authorizes the Board to adopt regulations pertaining to the practice of counseling problem gamblers.
With that, if you have any questions, I would be more than happy to try to answer them for you. We do appreciate your support in this issue; I think it is really important for us in the state of Nevada.
Assemblywoman Buckley:
Could you give us a little information on who currently provides such counseling in our state and what the counseling consists of? Is it a set term? Is it peers? Is it one-on-one? I am not that familiar with how it works.
Senator Cegavske:
We do have somebody that can give us more in-depth [information] than what I have.
Denise Quirk, private practitioner:
[Introduced herself.] I am a master’s-level counselor, I have a license in marriage and family therapy in alcohol and drug counseling, and I am nationally certified as a problem gambling counselor. I can speak to my private practice, which is here in Reno; to my knowledge, I am the only person specialized to treat problem gamblers in Reno at this time. There are several in Las Vegas who are also nationally certified. I come in support of this bill to encourage more counselors to be certified and for the state of Nevada to have a special certification for counselors to treat problem gamblers.
Essentially, I work in an outpatient, private practice setting, and it seems to me that your question is about what kind of treatment is provided. In Reno, if a person presents with problem gambling issues, they can either be treated in a hospital or in an outpatient, private practice setting. That level of treatment is determined by the assessment that they receive when they first present for treatment. It ranges from outpatient sessions, which could be six to eight weeks, to inpatient treatment, which essentially they would be presenting for other issues such as depression, suicide, drug, alcohol, etcetera.
Assemblywoman Buckley:
I think I recall that some insurance will pay for this. But for those who aren’t working, are there any facilities available in the state to provide help when someone has no insurance coverage or means?
Senator Cegavske:
At least in the south, I do know of WestCare, which is a facility that I do work for. They provide [services] at a graduated [cost], depending on what your income is or if you don’t have any income at all; we do the same for drug and alcohol along with the gambling. Usually we see that those are somewhat related and go hand in hand. If you can’t afford it, that’s one of the benefits of a nonprofit; you have money that comes in to help offset that. If you do have any money or insurance, then we do utilize that also. I think they have some programs in the north also, but I could not tell you the names and exactly which ones they are.
Sharon Atkinson, Executive Director, Board of Examiners for Alcohol and Drug Abuse Counselors:
[Introduced herself and submitted Exhibit G.] I am here on behalf of Dorothy North, President of the Board, who is unable to be in attendance today. Senate Bill 351 with the amended language is the consensus of everyone who has an interest in gambling certifications. The Marriage and Family Therapy Board, the Board of Examiners for Alcohol and Drug Abuse Counselors, the Board of Examiners for Social Workers, the State of Nevada Psychological Examiners’ Board, and the Nevada Resort Association all came to an agreement on this bill through the efforts of Senator Carlton. We respectfully ask for your support of S.B. 351 and request that you vote to pass without further amendments.
Assemblyman Carpenter:
People who have a problem with drug and alcohol, do they usually have this gambling problem also?
Denise Quirk:
I would say that in my experience a very large percentage of the clients that I deal with who have drug and alcohol problems have either had in the past or currently have gambling problems as well.
[Tim Crowley, Nevada Resort Association, submitted Exhibit H, without testimony, in support of Ms. Quirk’s answer.]
Assemblyman Carpenter:
It seems to me there is a connection because I know that Dorothy North treats alcoholics. I was wondering how the two relate.
Chairman Anderson:
This is an area that we have been concerned about for some time. I know that former Nevada Senator Mark James and I served on a task force, five or six years ago, that first began to look at the possibility of moving forward with treatment in this area. I know that several of the national gaming groups and the industry itself have looked at this issue. Do you find that it is becoming a larger issue since more states are involved in gaming? Is that the reason why it has become a more acceptable practice for your profession?
Denise Quirk:
I would like to defer my comments to my colleague in Las Vegas, Ms. Carol O’Hare, who has both numbers and experience in that area.
Carol O’Hare, Executive Director, Nevada Council on Problem Gambling:
[Introduced herself.] To answer your question about the need for this and the growing field, I think what we are seeing is that problem gambling is not necessarily a new issue but it’s one that is being recognized more as the treatment, research, and gaming industries begin to look at this issue as something that needs to be addressed. We have had a prevalent study in the state of Nevada recently that indicates an estimate of approximately 2 percent of our adult population have gambling problems.
I would also add to the previous comments that one of the issues of great concern is co-occurring disorders. It is rare that addiction or mental health issues exist in isolation, so we do see that the population we are concerned about is a population that may already be encountering difficulties in other areas. That’s why it is so important that we have the same quality of care for this particular issue as we would for drugs, alcohol, and other problems.
I would like to briefly state the Council’s position in support of S.B. 351 and I would be happy to answer any further questions.
Chairman Anderson:
[Is there] any correlation between problem gaming and abuse problems of domestic violence, a higher propensity or not?
Carol O’Hare:
I would comment only anecdotally; we certainly don’t have a lot of research in that area. We do know that there are the same kinds of concerns in this addiction as there is with others. Domestic violence is of concern. I can tell you that the Council operates a 24-hour help line in the state of Nevada. Of the interesting calls we have received, we have calls from law enforcement who have responded to a domestic violence situation only to find out that what was prompting the disturbance was a disagreement over someone in the family and his or her gambling.
Assemblywoman Angle:
I am going to opine. Those fees charged, [listed] on page 9, for certification, means that you as the caregiver or the person offering the counseling are going to be paying these fees. I am opining that the industry responsible for this is not coming in to help with some of this. I think that we need to do more since we are dependent upon that industry and it pulls in people that have these problems. Since we seem to attract [these people], we should do more in this area as far as the financial burden.
Assemblywoman Buckley:
Kind of a clarification, if someone were both an alcohol and drug counselor and a problem gambling counselor, would he or she have to pay two fees?
Sharon Atkinson:
Yes.
Assemblywoman Buckley:
…and that’s OK with the industry. Obviously you are familiar with the industry; the industry supports that?
Sharon Atkinson:
At this time, yes.
Assemblywoman Buckley:
…and what was the thinking there, that the Board would have that amount of work so they would need it double [fees]? Could you elaborate on that?
Sharon Atkinson:
Individuals that would become certified as gambling counselors would indeed have as much paperwork as somebody who is an alcohol and drug abuse counselor. They would still have to take the examinations and they would still have to serve an internship prior to being qualified to take the examination. There is a lot of paperwork and time involved in the tracking and examinations.
Assemblyman Horne:
What about minors? I recall when I was in undergrad, there were these studies that were done on gambling among our juveniles. That was also linked to drug and alcohol abuse. The question was, “Why are we intervening after they become legal gamblers instead of before, if they indeed have the problem as high school students.”
Carol O’Hare:
Certification of the counselor does not limit that counselor to provide treatment for an individual of legal age. Certainly, there would be concern related to treatment for underage people as well.
To identify the Nevada Council on Problem Gambling, we are a nonprofit information referral agency. Our mission is to generate awareness, promote education, and advocate for quality treatment of problem gambling in the state of Nevada. The Nevada Council on Problem Gambling supports S.B. 351 and recognizes it as an important and effective step toward achieving the goal of ensuring quality treatment of problem gambling in our state. Specifically, we believe that this bill accomplishes several goals, which should be maintained in any gambling counselor certification system.
· The system that is being provided for in S.B. 351 is consistent with current certification processes in Nevada, but flexible enough to take into account the very diverse backgrounds of personnel that might be interested in becoming active in this field.
· The expansion of the current Board of Examiners for Drug and Alcohol Counselors to include the problem gambling professionals provides benefit to this Board of the knowledge of current professionals in the field. This is a growing and emerging field, so that knowledge can be changing on a regular basis.
· The certification criteria reflect the highest standards of clinical competence as we have seen emerging in the field of problem gambling.
· The system as defined in S.B. 351 is consistent with problem gambling certification efforts nationally. This can become a benefit in a variety of ways, one of which being the possibility of reimbursement for care through the insurance providers who will require certain standards to be met by the providers of care.
· Senate Bill 351 is also beneficial to the counselors in Nevada should they become certified in the state of Nevada and then move on to another state or province to provide that same professional care. This standard that we maintain needs to be consistent with what they would be expected to maintain in another area, which will enhance their professional mobility as they move on to benefit the field of problem gambling overall.
Chairman Anderson:
Thus, Senate Bill 351 fits with the current standards that are being set up nationally, in other states, and that are already in place?
Carol O’Hare:
The standard contained in S.B. 351 mirrors the standard that is required by the National Council on Problem Gambling (NCPG) Certification Board and actually takes it slightly one step higher in that we [Nevada] require a certified counselor to maintain a minimum of a bachelor’s degree. At this time, the national certification would permit a lesser education standard. So, [S.B. 351] actually meets and exceeds the national standard that is recognized today.
Senator Cegavske:
I just wanted to thank the Nevada Resort Association for their positive input on S.B. 351. The Association has been very supportive and we have been working closely on this for quite some time.
William Bible, President, Nevada Resort Association:
I previously served as the Chairman of the State Gaming Control Board, and I was also a member of the National Gambling Impact Study Commission as appointed by the President to the Commission. We studied those issues on a national level. In the late 1990s, the Board considered a number of regulations that dealt with problem gambling and required education of gaming employees so that they could recognize and recommend individuals that were perhaps experiencing problems in dealing with gambling in a responsible manner with a variety of options.
The National Council on Problem Gambling, where Carol O’Hare handles the problem help line, also requested and the Legislature approved an appropriation to conduct a prevalence and incident study of gambling within Nevada. That contract eventually was given to Rachel Volberg, Ph.D., who is a national authority on problem gaming. She performed two surveys of Nevada citizens, one for adolescents and one for adults. The survey results for adolescents somewhat surprised everyone because they indicated that Nevada had a lower prevalence amongst adolescents for gambling than similar states. In the adult survey she conducted, there were two particular norms they used; Nevada had somewhat higher than the national average in terms of problem gamblers.
Interestingly enough, when she probed a little further and tried to determine where the people were gambling, she found varying incidents of private gaming at golf courses, in the home, sporting events, or places of that nature. Also, there were a lot of problem gamblers in lotteries, traveling to adjacent states to play, and quite a lot of bingo, not necessarily bingo in Nevada-licensed establishments, but also in tribal operations. Surprisingly, casino activities had lower incidents of problem gaming. The problem people are having with gambling in a responsible manner is probably more a community problem than an industry problem, because there are other outlets for gambling.
In terms of Ms. Buckley’s question about treatment, John Wilhelm served on that Commission with me. After he returned from his work on the Commission, at his insistence, the Health and Welfare Fund of the Culinary [Union], which I also serve as a management trustee on, incorporated treatment as part of its health coverage. It was fairly controversial at the time. The industry, in effect, provided coverage to its employees, not only where those licensees have collective bargaining agreements, but also instances where licensees are not subject to collective bargaining agreements. They have incorporated a number of these programs as part of their plans.
This particular piece of legislation, in my opinion, is a step in the right direction because it will create some regimen for certification of problem gambling counselors. It seems appropriate to me that Nevada, which is the Mecca of gaming, should also be the central point of treatment for these types of individuals. There is a companion piece of legislation in the Senate Committee on Finance, which hopefully Senator Cegavske will nudge along, that contains money for some of these programs. I would be happy to respond to questions.
Assemblyman Carpenter:
What kind of success do you have in treating these people? Do they go “cold turkey” and stay away or can they learn how to gamble responsibly?
Denise Quirk:
My personal experience has been that the success that I see is over a long period of time. It is very similar to drug and alcohol recovery in some situations where people start and fail and start again; they need lots of support along the way. I would also like Ms. O’Hare to answer.
Carol O’Hare:
Denise speaks well to the practical application of treatment theories. As with any other addiction, there is no guaranteed outcome. The goal is to move the client along in such a way that they can find better coping mechanisms, so that they are not simply trying to stop one behavior but learning healthier living techniques. I think that truly is the goal of any addiction treatment and would be consistent with what we are trying to provide for the gambling clients. I would say the current theory mirrors drug and alcohol treatment in that abstinence is considered to be the more reliable approach to treatment and carries the higher level of success.
Helen Foley, representing marriage and family therapists:
[Introduced herself.] I have to congratulate everyone involved with the development of the bill; we worked very hard with Senator Carlton. As a representative of marriage and family therapists, we also had someone representing the psychologists and social workers at the meetings. As discussed by many of your Committee members, problem gambling is not isolated. Many times when you have an addiction, you have multiple addictions and problems. Marriage and family therapists, along with social workers and psychologists, deal with problem gambling in the course of counseling their clients. You may have a father who drinks too much, gambles too much, and has difficult times at home with domestic violence issues; a family will come forward and need some counseling.
Under this bill…we adopted this on a similar basis as we did with the development in 1999 of the Board of Alcohol and Drug Abuse Counselors. If any of those other disciplines, during the course of their treatment, are treating people with these addictions, they certainly can continue to do so. If on the other hand, they hold themselves out as a drug and alcohol abuse counselor, or now under this bill, as a problem gambling counselor, they would have to go back to that respective board and become certified. The requirements are not as stringent; you will see in the bill where under normal situations there would be someone with a minimum of a bachelor’s degree, 2,000 hours of supervised counseling, and 60 hours of training. If you are a marriage and family therapist, social worker, or psychologist, you would only have to have 1,000 hours of supervised training, and the board can look at the other experience coursework you have had, take that into consideration, and make modifications.
We think it is quite appropriate. Never was it the intention of either one of these groups when they began their specialized area of counseling to eliminate that type of counseling from others, especially when these other organizations have a minimum of a master’s degree. So we support the legislation, we think it is a very good law for Nevada.
Chairman Anderson:
Is there anybody else who needs to give testimony on this bill?
Carol O’Hare:
I would like to add, along with others who have testified, my thanks to Senator Carlton, Senator Cegavske, and the representatives of all the various professional boards who I think showed their true professional ethics and concerns for the citizens of Nevada by coming together and drafting something that I think is an excellent piece of legislation to move us forward in the state.
Chairman Anderson:
Anybody else wishing to testify in support of S.B. 351?
Tom Murtha, President-elect, Nevada AADAPTS (Alliance of Alcohol and Drug Abuse Prevention and Treatment Service):
[Introduced himself.] I concur with what has been said so far. Our membership, which include Dorothy North as our legislative committee chair and WestCare, are firmly in support of this measure. Some of our membership also provides problem gambling treatment.
Chairman Anderson:
This bill will not harm your ability to do treatment in this area?
Tom Murtha:
No, not at all; we are very supportive of this.
Chairman Anderson:
Anybody else? Anybody wishing to testify in opposition to S.B. 351? Neutral? Close the hearing on S.B. 351. Chair will entertain— no, let’s hold on for a second. I need to hold this one for a work session.
For the members of the Committee, this interesting group of people that have snuck in the door are Jason Seville’s American Government class from Reed High School. They have come down today to see the Legislature at work.
Before we close the hearing on S.B. 351, I need to make these 100 constituent letters of support (Exhibit I) part of the official record of the day.
I see that I have two people here from Douglas and Storey Counties who were neutral on S.B. 432. We have already passed the bill; it was Amend and Do Pass, out this morning. It was the first bill heard.
We are going to a work session; we have just finished dealing with gaming issues. We have approximately 20 to 30 minutes today. This Committee exists for another week and a half; a week from Friday it has to be finished with its work and therefore we are going to move to a work session. I am going to take short 10-minute break for the Committee.
[The Work Session Document (Exhibit J) was distributed to the Committee members.]
Let’s take a look at S.B. 186.
Senate Bill 186: Imposes fee upon obligor of child support who is subject to withholding of income by his employer. (BDR 3-446)
Assemblyman Gustavson had some questions on this bill and we had held it. [Mr. Gustavson agreed his questions had been answered.] Anybody have any problems with S.B. 186? [It is] on page 1 of the Work Session Document (Exhibit J). If you are looking in your bill book, this is the bill that the Welfare Division, Nevada Department of Human Resources, and the Office of the Attorney General proposed relative to the collection of [child support from] deadbeat dads and setting up the imposition of fees for withholding child support payments.
Assemblyman Gustavson:
I still do have some problems with the bill, not the information I requested, as far as the fees being charged. I know there are different pay periods for different people; some people may pay $2 a month, while others will pay $8 a month. There is inconsistency there…and the fee itself.
Assemblyman Horne:
I still have the problem with the potential effect this would have on those we are trying to protect in Assembly Bill 117 that we passed out of here.
Chairman Anderson:
This is the one where the people, every time there is a job change, somebody immediately decides whether you are a delinquent payor or not, thus they are making you a deadbeat dad.
Assemblyman Horne:
That’s correct. If that bill, for some reason, did not pass out of the Senate, then those individuals would also be paying this fee for no other reason than to change [jobs]. That’s the problem I have.
Assemblyman Mabey:
I still support it. Basically, I feel, if they would just pay their child support, they would not have the $2 fee. That’s the bottom line.
Assemblyman Claborn:
I cannot support this bill. As long as they are making money off of this, I will not support this and give them another $2.
Chairman Anderson:
I thought the only two counties that actually made any money off of this last time were Elko and Humboldt Counties and that was because they vigorously went after the deadbeat dads, whereas the counties of Clark and Washoe indicated that the taxpayers were supporting this issue relative to the overall condition. I recall there was a chart provided that showed in part that in Washoe County, for example, it cost them $889,564, and Clark County, it cost a mere $3,527,000 to carry out this kind of program. Elko County made $99,000 and Humboldt County made $12,000 out of this program. Actually, it appears that Mr. Carpenter’s county is doing well by it.
Assemblyman Claborn:
You said they vigorously collected the money. I would like to see Clark County vigorously collect money. There is a lesson to be learned here and I am still not going to come off of that as well.
Assemblywoman Angle:
I have some concerns especially with the charging of this fee where there is no restriction on it. I think it should be no more than twice a month. Also, there is a potential for making money here because they testified that their actual costs were about $1.74; so here we have an extra quarter above the actual costs. I am with Mr. Claborn; I think these should be vigorously sought after. We shouldn’t be allowing people to escape their responsibilities for their children.
Chairman Anderson:
I appreciate the fact that if we didn’t put this type of program in place, apparently the counties wouldn’t be following it at all. Therefore, if we are trying to encourage them into it, it seems to me that we should at least cover the cost for the program. I am concerned about the fact that the person who is being hit by this is the one least able to pay. If you are a weekly or daily employee, you are paying $8 as compared to the monthly salaried person, who only has to pay $2. So I share that concern. I think we need to step up to the line to make sure the program is in place.
Assemblyman Geddes:
I will be supporting this. I think those people who have required this program to be put in place should be paying for the program—those not paying their child support. I agree with Mr. Horne regarding the other piece of legislation, but I don’t think we should hold this up because of that. In regard to the fees, this is what the counties are paying; they should be able to get that money back. The odds of them getting 100 percent…if everybody is complying with it, they would have the potential to make money, but I don’t think they will ever get that compliance rate. I think the $2 would help them cover their costs.
In regard to the incentives, those were federal incentives based on hitting certain performance indicators for compliance. I don’t think there is anything in there that should prevent passage of this bill. Basically, this is a very good program, the burden is falling on the taxpayers to cover this program, and the burden should fall on those people who have created the problem. I fully support this bill and would encourage everybody to vote for it.
Assemblyman Horne:
The rationale and theory behind this piece of legislation, I don’t have a problem with that. I have a problem with any type of legislation that we pass that would have a negative effect of unintended consequences. Assembly Bill 117 was heard in the Senate today. I will be voting no today, but will reserve my right to change that vote when it comes to the Floor.
Chairman Anderson:
Let me anticipate Mr. Horne’s concern that rests with the fact that you were hopeful to amend this bill with your bill [A.B. 117] into it [S.B. 186] in the event that it fails to receive a Do Pass out of the other house? You see this as a subsequent vehicle for the carrying of this piece of legislation?
Assemblyman Horne:
That could be a possibility since A.B. 117 removed the garnishment for those who were not in arrears. Right here we are talking about, those who are supportive of the bill, if you are not paying, like Dr. Mabey said, then they should pay it. We have already shown in A.B. 117, and everybody voted for it, that if you are paying you should not be garnished. If that were the case and we amended that [concept] into this [S.B. 186], should it [A.B. 117] not pass out of the Senate…
Chairman Anderson:
If I am to understand Mr. Horne’s concern, he would like us to hold this bill for a couple of days until we see the outcome of his bill [A.B. 117] on the Senate side. I was going to suggest that we take a Do Pass motion on the bill and that I would hold it and I would put it on the Chief Clerk’s desk.
Assemblywoman Buckley:
I was going to say the same thing. The other choice would be to amend A.B. 117 into this [S.B. 186]. I know what Mr. Horne is saying; if someone didn’t do anything wrong, then why do they have to pay too? Why don’t we try to gear it toward those people who are causing the whole system to be? I could support that too, if you wanted to combine them or hold them.
Chairman Anderson:
I have been trying to keep the Legal Division from doing too many amendments so that they can concentrate on the ones that we have coming.
Assemblywoman Angle:
I was wondering if we might be able to amend this [S.B. 186]. I would be able to support this bill if we could amend it to limit it to the fee being charged twice a month, since the testimony was that was the original intent. I would like to keep those that we discussed that would be getting a weekly or daily paycheck from having to incur that cost.
Chairman Anderson:
Let me suggest to the Committee, that we pursue the development of an amendment that would guarantee that one person would not be charged a fee more than twice in a single pay month. While that amendment is being developed, we will hold off to see how Mr. Horne’s bill [A.B. 117] fares in the other house. I would ask Ms. Combs to work on the potential amendment along those lines with Ms. Lang.
Let’s move to the next bill, Senate Bill 297.
Senate Bill 297: Makes various changes relating to personal identifying information. (BDR 15-28)
Allison Combs, Committee Policy Analyst:
Senate Bill 297 is a bill relating to measures to help prevent or work with identity theft. The testimony indicated that the measure was designed to strengthen those provisions. There is a proposed amendment from the Retail Association of Nevada to try to address concerns raised in the bill regarding Section 22 and its application to machines that electronically print receipts. That section would have required those machines to not print the expiration date and only include the last five digits of a credit card. The provisions would apply to machines, as the bill is currently written, that were in use before October 1, 2003, and it would apply after January 1, 2006. The proposed amendment is to change the 2006 date to January 1, 2008, to allow retailers more time to get machines that will comply with these provisions.
Chairman Anderson:
Mr. Carpenter, you had raised a question relative to the machines. Are you pleased with the bill now?
Assemblyman Carpenter:
Yes, I had some concerns. One of my machines only has five digits and the other one has them all, so I think that if we go with the amendment to extend it two more years, it will give us time to get the machines that do what we want them to do.
Chairman Anderson:
So, we see the amendment as it is printed on the green piece of paper (Exhibit J, page 10).
ASSEMBLYWOMAN BUCKLEY MOVED TO AMEND AND DO PASS S.B. 297.
ASSEMBLYMAN CONKLIN SECONDED THE MOTION.
THE MOTION CARRIED. (Mr. Oceguera was absent for the vote.)
Madam Secretary, please indicate that Ms. Ohrenschall voted in favor of Senate Bill 432. Would you make that statement for the record please?
Assemblywoman Ohrenschall:
That is correct.
Chairman Anderson:
Please amend the record to show Ms. Ohrenschall in support of S.B. 432.
Senate Bill 298 (1st Reprint): Makes various changes to provisions pertaining to business. (BDR 7-987)
[The Chair tabled S.B. 298.] The Chair is very doubtful about Senate Bill 298 at this particular moment in time, so, it is not likely to be appearing in the near future. It is going back to the board. Questions from members of the Committee?
It is my intention to do a Thursday evening meeting at about 7 p.m. in this room, and possibly Friday evening. I asked you to indicate to me whether you wish Friday evening of this week or Saturday morning, which is your preference. Okay, we will try to do it after the Assembly Committee on Commerce and Labor on Friday. Please don’t plan on going home early on Friday, May 16, 2003; we will probably be running up to the gunwale. I need to set those times aside, recognizing because of the problems in the Assembly Committee on Taxation and in the Assembly Committee on Commerce and Labor, those committees are taking up the late afternoons and evenings, so we need to keep ourselves going until midnight of May 16, 2003.
Questions? Problems? We are adjourned [at 11:01 a.m.].
RESPECTFULLY SUBMITTED:
Deborah Rengler
Committee Secretary
APPROVED BY:
Assemblyman Bernie Anderson, Chairman
DATE: