MINUTES OF THE
SENATE Committee on Commerce and Labor
Seventy-second Session
April 17, 2003
The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 7:00 a.m., on Thursday, April 17, 2003, in Room 2135 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to the Grant Sawyer State Office Building, Room 4412, 555 East Washington Avenue, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Randolph J. Townsend, Chairman
Senator Warren B. Hardy II, Vice Chairman
Senator Ann O'Connell
Senator Raymond C. Shaffer
Senator Michael Schneider
Senator Maggie Carlton
COMMITTEE MEMBERS ABSENT:
Senator Joseph Neal (excused)
GUEST LEGISLATORS PRESENT:
Assemblyman Marcus L. Conklin, Assembly District No. 37
Assemblywoman Ellen M. Koivisto, AssemblyDistrict No. 14
Assemblywoman Christina R. Giunchigliani, Assembly District No. 9
STAFF MEMBERS PRESENT:
Scott Young, Committee Policy Analyst
Laura Adler, Committee Secretary
Lynn Hendricks, Committee Secretary
OTHERS PRESENT:
Larry L. Spitler, Lobbyist, American Association of Retired Persons
Doris Alcorn, Lobbyist, American Association of Retired Persons
Ann Wilkinson, First Assistant Attorney General, Office of the Attorney General
Be-Be Adams, Lobbyist, Barrick Goldstrike Mines, Incorporated
John Sande III, Lobbyist, Nevada Bankers Association
Robert A. Ostrovsky, Lobbyist, Cox Communications Company
Melody L. Luetkehans, Lobbyist, General Counsel, Nevada Association of Realtors
Curry Jameson, Nevada Association of Realtors
Gary T. Canepa, RE/MAX Realty Professionals
Fred L. Hillerby, Lobbyist, American Council of Life Insurers
Don Neibauer, Nevada Association of Realtors
Mike West, Century 21 Money World
Bobbie Gang, Lobbyist, Nevada Women’s Lobby
Larry O’Leary, International Union of Bricklayers and Allied Craftworkers
Danny Thompson, Lobbyist, Nevada State American Federation of Labor‑Congress of Industrial Organizations
Thomas A. Morley, Lobbyist, Laborers Union Local No. 872
Tommy Ricketts, Lobbyist, Las Vegas City Employees’ Association
John E. Jeffrey, Lobbyist, Southern Nevada Building and Construction Trades Council
Elizbeth Sorenson, Lobbyist, Communications Workers of America
Michael Gillins, Lobbyist, Las Vegas Police Protective Association, and Nevada Conference of Police and Sheriffs
Gary H. Wolff, Lobbyist, Teamsters Local 14
Raymond C. McAllister, Lobbyist, Professional Firefighters of Nevada
John L. Wagner, Lobbyist, Nevada Republican Assembly
David K. Schumann, Lobbyist, Independent American Party of Nevada
Christina Dugan, Lobbyist, Las Vegas Chamber of Commerce
Mary Lau, Lobbyist, Retail Association of Nevada
David S. Noble, Assistant General Counsel, Public Utilities Commission of Nevada
Timothy Hay, Chief Deputy Attorney General, Bureau of Consumer Protection (Consumer’s Advocate), Office of the Attorney General
Kevin Higgins, Chief Deputy Attorney General, Fraud Control Unit for Industrial Insurance, Office of the Attorney General
Lori T. Ashton, Lobbyist, Southwest Regional Council of Carpenters
Terry Johnson, Labor Commissioner, Office of Labor Commissioner, Department of Business and Industry
James E. Sala, Lobbyist, Southwest Regional Council of Carpenters
Keith L. Lee, Lobbyist, State Board of Medical Examiners
Chairman Townsend:
We will open the hearing on Assembly Bill (A.B.) 232.
ASSEMBLY BILL 232 (1st Reprint): Requires establishment of registry of certain telephone numbers and prohibits telephone solicitors from making unsolicited telephone calls to telephone numbers included in registry under certain circumstances. (BDR 52-1073)
Assemblyman Marcus L. Conklin, Assembly District No. 37:
This bill is patterned after legislation enacted in Indiana. It requires the establishment of a State “do-not-call” list by the Bureau of Consumer Protection. The list will be available for purchase from the office of the consumer’s advocate. Telephone solicitors calling numbers on this list for the sale of goods or services will be guilty of a deceptive trade practice. This does not include calls on behalf of charities, political parties, or candidates for public office. Unsolicited calls are also allowed if the recipient gave permission or requested information. They are also allowed if the call is intended to terminate an established business relationship or the recipient’s account is delinquent. The consumer may allow businesses with which he has an existing business relationship to make calls. The list is to be published semiannually and purged every 3 years. The list was put under the jurisdiction of the attorney general’s office to simplify enforcement.
Larry L. Spitler, Lobbyist, American Association of Retired Persons (AARP):
We support this bill. I have prepared a written statement to this effect (Exhibit C).
Doris L. Alcorn, American Association of Retired Persons (AARP):
We support this bill. The public has waited a long time for legislation to correct this problem. Information gathered by AARP suggests that telemarketers target the elderly, minorities, and people living in the poorer communities. Over half of those receiving unsolicited sales calls are over 50 years of age. There are “do‑not-call” laws in 33 states. There are some 150,000 telemarketing firms making millions of calls daily, and approximately 10 percent of these calls come from fraudulent telemarketers. Congress estimates that the telemarketing industry costs American consumers more than $40 billion annually.
Senator O'Connell:
Does that $40 billion include enforcement costs?
Mr. Spitler:
No. This figure represents the cost borne by consumers as a result of both legitimate and fraudulent calls and includes items purchased. Telemarketers target people who have bought from telemarketers before. I have spoken with many elderly people who tell me they bought things they did not want because the solicitor was “nice.”
Senator Schneider:
Is there a provision in this bill covering calls from businesses with whom you have an existing relationship but which you forgot to put on the acceptable list?
Assemblyman Conklin:
Such businesses may only call if the consumer has agreed to accept calls from existing business relationships or has given the caller express permission to call.
Senator O'Connell:
Some of these calls originate from outside Nevada. How will the attorney general handle this situation?
Assemblyman Conklin:
It will be incumbent on the consumer to inform the attorney general’s office of calls that violate the statute. We are hoping for reciprocity with the 33 states with similar laws, particularly since so many telemarketing firms are based in Nevada.
Chairman Townsend:
Have you seen the amendment proposed by the Nevada Association of Realtors?
Assemblyman Conklin:
I have read the proposed amendment but have not endorsed that amendment.
Ann Wilkinson, First Assistant Attorney General, Office of the Attorney General:
The attorney general supports legislation such as A.B. 232. The attorney general’s office has reexamined the fiscal note on this bill and will absorb the related costs associated with this legislation. We will do this by utilizing monies deposited in the registry fund and the attorney general’s special fund, requiring more of existing staff, and seeking advice from the attorneys general from other states. Therefore the fiscal note will be removed.
Senator O'Connell:
Is this matter covered by the attorney general’s office in the other 33 states?
Ms. Wilkinson:
In some states it is handled by the Public Utilities Commission, in some states by consumer affairs, and in some states by the attorney general’s office. I do not know the exact breakdown. We have spoken to some attorneys general who enforce this matter, and they have agreed to assist us in implementation if this bill is passed.
Be-Be Adams, Lobbyist, Barrick Goldstrike Mines, Incorporated:
We support this bill on behalf of our employees. I have prepared a short statement (Exhibit D).
John Sande III, Lobbyist, Nevada Bankers Association:
Enforcement of this bill will create many problems. Tracing and prosecuting telemarketers in other states will be very difficult and expensive. California has not implemented its telemarketing statute because of the cost of enforcement. It would be more cost-effective for the State to simply adopt federal “no-call” legislation. The attorney general’s office could then focus its efforts on enforcing this federal legislation.
Senator Carlton:
Can you tell us how the federal legislation compares to this?
Mr. Sande:
I understand it allows preexisting business relationships. This is a crucial element to the success of this legislation, in my opinion.
Senator O'Connell:
Enforcement is of primary importance. We need to make sure there is uniformity of the way it is enforced among the 33 states. We also need to find out how it is being enforced in the states where it is not handled by the attorney general’s office.
Robert A. Ostrovsky, Lobbyist, Cox Communications Company:
I handed out a chart detailing the federal and state telemarketing laws currently in existence (Exhibit E). This packet also includes details about who administers the matter in each state and the text of the federal legislation.
We support this bill with the proviso that existing business relationships should be excluded. Legitimate businesses are helped when fraudulent telemarketers are put out of business. Keeping out existing business relationships does a disservice to Nevada businesses, particularly small businesses that cannot as easily absorb the cost of buying the list twice a year.
Senator Carlton:
Small businesses are not the worst offenders. Some of the most offensive calls come from very large businesses such as credit card companies and telephone companies.
Mr. Ostrovsky:
The big companies buy lists of consumers with whom they have no preexisting business relationship. I agree that they should be cut off. On the other hand, if I have an existing mortgage with a bank, they should be able to tell me if they can get me a lower rate. This is a very difficult problem. I hope you are able to solve it. Like everyone else, I hate getting those calls.
Melody L. Luetkehans, Lobbyist, General Counsel, Nevada Association of Realtors:
We basically support this bill, with the proposed amendment to sections 5 and 6 (Exhibit F). The amendment would define a solicitor as someone not licensed in Nevada. It would also exempt transactions requiring a face-to-face meeting to conclude.
Curry Jameson, Nevada Association of Realtors:
I support the amendment presented by Ms. Luetkehans. Licensed salespeople such as real estate agents use so-called cold telephone calls to develop a business relationship. I had a gentleman in my office who made 50 to 100 calls a day. Over the course of a year, I received 10 complaints from people who did not wish to be called; those people were immediately taken off our list. It is in our best interest not to antagonize the public.
Gary T. Canepa, RE/MAX Realty Professionals:
This bill as written would adversely affect the consumer by not allowing real estate agents to effectively market their property. The amendment would correct this.
Fred L. Hillerby, Lobbyist, American Council of Life Insurers:
I support the concept of the “no-call” list. I would add that national companies will find it very difficult to comply with 33 different sets of laws on this issue. We support the federal law so national businesses have one standard to follow.
Don Neibauer, Nevada Association of Realtors:
My wife and I have made our living in Carson City for 30 years by contacting owners to represent them in the sale of their property. In that time we have spoken with thousands of owners. Fewer than 1 percent have asked us not to call again. We are professional, ethical, and courteous. The telephone is one of our most basic tools of business. To impede our use of the telephone as proposed in A.B. 232 is unfairly limiting to my family and thousands of other real estate agents, who rely on this method of contacting future clients and maintaining contact with past clients. Please do not relate our professional real estate services with the standard telemarketing businesses who use computer dialing, recorded calls, and high-pressure sales techniques.
Mike West, Century 21 Money World:
I support the amendment proposed by Ms. Luetkehans. This bill as written restricts the free flow of information. Many people are intimidated by the complex and confusing world of home ownership and do not think they can own their own home until we call. In addition, every home sold generates thousands of dollars into the local economy. The housing market has an impact on many industries, including construction, mortgage banking, real estate, insurance, and household goods. Anything that hinders the opportunity to own a home and share in the American dream is a social injustice.
Bobbie Gang, Lobbyist, Nevada Women’s Lobby:
We support this bill.
Senator O'Connell:
Did you consider a preexisting business list?
Assemblyman Conklin:
Yes, we considered the pros and cons. I felt it would give an unfair advantage to the larger businesses by allowing them to share lists among departments of the same business. On the other hand, those who argue for a preexisting business list say their clients want to be called by them. It was for this reason we made the amendment to give consumers the option to allow calls from preexisting business relationships if they so desire.
Senator Schneider:
Does AARP support the amendment offered by Ms. Luetkehans?
Mr. Spitler:
No. We support a “do-not-call” list with the fewest possible exemptions.
Chairman Townsend:
I will close the hearing on A.B. 232 and open the hearing on A.B. 182.
ASSEMBLY BILL 182: Authorizes employer to enter into fair share agreement with labor organization. (BDR 53-1076)
Assemblywoman Ellen M. Koivisto, AssemblyDistrict No. 14:
This bill is a matter of fairness. It allows that workers who enjoy the benefits of a negotiated labor agreement should pay their fair share of the costs. It does not require them to join the union and has nothing to do with their right to work.
Larry O’Leary, International Union of Bricklayers and Allied Craftworkers:
I support this bill. I have prepared written testimony (Exhibit G). This bill would reduce conflict between union and nonunion workers.
Danny Thompson, Lobbyist, Nevada State American Federation of Labor‑Congress of Industrial Organizations:
We support this bill. The way the law is currently written, a labor organization representing a collective bargaining unit must provide coverage to workers in that unit even if they are not members of the union. Representing the case of a single individual can cost the local union thousands of dollars. Those who enjoy the benefits of a union should contribute to the costs.
Thomas A. Morley, Lobbyist, Laborers Union Local No. 872:
We support this bill. Several times last year I represented nonmembers in labor disputes and managed to get them reinstated with back pay. The members of the union had to pay for the litigation in those cases. I ask the members of the committee to be fair and let us have our fair share.
Tommy Ricketts, Lobbyist, Las Vegas City Employees’ Association (LVCEA):
I support this bill. I have prepared written testimony on this topic which includes information on similar legislation adopted in California on agency shops (Exhibit H). Of the 1530 employees of the City of Las Vegas, 1002 are members of LVCEA. Our dues are $20.33 biweekly, which comes to $320.58 per year. The cost of negotiating our 4-year contract averages $60,000, and the average cost of labor representation is about $108,000 per year. The fair-share cost to nonmembers will therefore be $80.39 per year, or $3.91 per payday. Under similar legislation adopted in California, those with religious objections to supporting a union are required to donate the fair-share amount to a charity of their choosing.
Senator Carlton:
I serve as a shop steward for one of the largest unions in the State. I want to point out that no worker, whether union member or not, is forced to come to the union for help. It is always their choice to be represented or not.
Just to let the committee know, there is a misrepresentation out there. A lot of people come up and ask me how much I make as a shop steward. I need it to be on the record that I am a volunteer. I do it for my coworkers because sometimes they just need someone to walk them through the process. As a shop steward, I am not paid.
Mr. Ricketts:
Chapter 288 of Nevada Revised Statutes (NRS) requires us to represent every member of the bargaining unit whether they belong to LVCEA or not. We are allowed to charge nonmembers $100 per hour to represent them. Fair share would replace that fee.
Chairman Townsend:
What are the federal laws on this?
Mr. Ricketts:
I represent public employees, so we fall under the jurisdiction of the Nevada Labor Relations Board. The United States Supreme Court has ruled that fair share is acceptable as practiced in California, Indiana, and I believe several other states.
Mr. Thompson:
City, county, and state workers are not covered by the National Labor Relations Act (NRLA). This type of arrangement is perfectly legal and is left up to the particular state.
Chairman Townsend:
Are there any governmental units in Nevada that do not have collective bargaining agreements?
Mr. Thompson:
The only employees left out of NRS 288 are state employees, who were simply not mentioned. When the Senator Dodge bill was enacted in 1969, S.B. No. 87 of the 55th Session, the right to collective bargaining was given to teachers, firefighters, police officers, city, county, and university employees, but not state employees.
Mr. Ricketts:
For state employees, this bill would not affect the collective bargaining agreement. It would in effect be a memorandum of understanding (MOU) when requested by 30 percent of the members.
John E. Jeffrey, Lobbyist, Southern Nevada Building and Construction Trades Council:
When the “right-to-work” laws were adopted in 1952, it was argued that some would choose not to join the union because of philosophical or religious differences. At this point, however, most nonmembers do not join because of economics. They get the same benefits without having to join. In one case in my experience, a nonmember was represented all the way to the district court. The nonmember got his job back and never did join the union. The cost of pursuing this one case almost bankrupted that union.
Elizbeth Sorenson, Lobbyist, Communications Workers of America:
We strongly support this bill. This bill is about fairness.
Chairman Townsend:
Please pass on my appreciation to the people who do directory assistance. They do a remarkable job of finding phone numbers with very little information.
Michael Gillins, Lobbyist, Las Vegas Police Protective Association, and Nevada Conference of Police and Sheriffs:
We support this bill. A recent Nevada Supreme Court decision allowed unions to charge nonmembers for representation. We see this issue as deeper than that. There are costs associated with contract negotiations, grievances, and all other services provided by labor organizations. In their decision, the Nevada Supreme Court referred to nonmembers as free riders and saw that as an inequity. This bill addresses an inherent unfairness.
Senator Hardy:
Are there any labor organizations which do not charge for these services?
Mr. Gillins:
Every organization sets its own scale of charges. Some do not charge, probably because they do not know they can. I do not know how many do not charge. The court decision is a fairly recent one.
Gary H. Wolff, Lobbyist, Teamsters Local 14:
We support this bill. It is unfair for union members to be forced to support freeloaders who are laughing at their coworkers who pay dues. I cannot understand why anyone would support the right of freeloaders to ride on the backs of the people who pay the bills.
Senator Hardy:
There are many reasons why people choose not to join a union. It is unfair to characterize them as freeloaders if they have a philosophical opposition to joining a union. Does your union charge nonmembers for representation?
Mr. Wolff:
I represent both State employees and private-sector groups. We charge the public-sector employees for services.
Mr. Thompson:
Public employee unions are not covered by the NLRA, so they are separate from this requirement. No union covered by the NLRA can charge a fee. Public employees are not covered by the NLRA, and there have been court rulings saying they can be charged.
Raymond C. McAllister, Lobbyist, Professional Firefighters of Nevada:
We support this bill. We recently negotiated a contract for the City of Las Vegas Firefighters. The cost of negotiating the contract was over $140,000. With 485 members, the cost was $288 per member, and the fair-share cost would be $72 per year. Members pay $679 in dues per year. Both members and nonmembers will get raises totaling $5459 over the next 4 years.
John L. Wagner, Lobbyist, Nevada Republican Assembly:
We oppose this bill. It is not fair to compel someone to accept services they do not want, then charge them for it. The unions basically want exclusive bargaining rights. This bill is an attack on the right-to-work laws.
David L. Schumann, Lobbyist, Independent American Party of Nevada:
I oppose this bill which seriously deletes the rights of association under the federal constitution. If there is a problem with the National Labor Relations Board, the national unions should either go to Congress to get the law changed or charge nonmembers without making them join. Employers come to Nevada because we do not require union contracts.
If you do pass this measure, I would recommend an amendment to section 6 to require unions be audited to determine the fair-share charges for each union. When this was done in California, at least one union was found to be charging more than three times the actual cost incurred by the union.
Christina Dugan, Lobbyist, Las Vegas Chamber of Commerce:
We oppose this bill which seriously damages Nevada’s right-to-work laws. At the heart of the bill is the individual’s ability to exercise free choice. While it is true that nonmembers may benefit from the union-negotiated contract without paying dues, it violates the principles of individual expression and free choice to require these employees to pay the union. The bill leaves it up to the employer and the union to decide whether to become an agency shop. Unions have the ability to negotiate or even strike to require nonmembers to pay their fee. This puts pressure on workers to join the union, since only members are allowed to vote and have a voice in union practices. The current right of workers to hold jobs without financially supporting an organization they do not believe in ensures their opinions are respected.
Mary Lau, Lobbyist, Retail Association of Nevada:
We oppose this bill. The Retail Association of Nevada wants to thank Assemblywoman Koivisto for bringing this bill forward. We feel this bill erodes right-to-work options. The issue of fair share is a very difficult one. For every situation in which people pay, there are those who choose not to. We support the right of employees to join or not join a union as they choose.
For the record, my union card is in abeyance because when I lived in Las Vegas I was a member of the union. When I came to Reno, I retired it or put it in abeyance because you never knew if you were going to need it again.
Mr. Ricketts:
I am a member of the Las Vegas Chamber of Commerce so that I can afford to provide my employees with adequate health coverage. If I was not a member of the chamber of commerce, I would not be able to purchase that insurance. I do not have to subscribe to what the chamber of commerce says, but if I want to offer insurance I must pay my dues. This situation is similar.
Chairman Townsend:
We will close the hearing on A.B. 182 and open the hearing on A.B. 139.
ASSEMBLY BILL 139 (1st Reprint): Exempts certain public utilities from provisions governing stocks, security transactions, mergers, acquisitions, changes in control, and disposal or encumbrance of property. (BDR 58-494)
David S. Noble, Assistant General Counsel, Public Utilities Commission of Nevada (PUCN):
As originally written, this bill had provisions dealing with exit fees. These provisions were taken out and added to S.B. 125. This was the part of the bill sponsored by the PUCN. The remainder of A.B. 139 concerns the Desert Inn Improvement Company's request to be exempted from PUCN oversight dealing with mergers and other transactions. We have no problem with the bill. We have had three applications dealing with these issues in the past 3 years. Desert Inn Improvement Company’s mill assessment to the PUCN was $250 last year. This means other utility companies are subsidizing our oversight of Desert Inn. We would still have jurisdiction over rate reviews and consumer complaints, which was the concern expressed by the 10 or 11 remaining customers of Desert Inn.
SENATE BILL 125: Makes various changes relating to utilities and providers of new electric resources. (BDR 58-488)
Chairman Townsend:
Let me give a little history. The Desert Inn Improvement Company is a small water company in Las Vegas with 11 customers, one of which is the Desert Inn property where the La Reve Hotel Casino is being built by Wynn Development. The water company once served 53 homes and the Desert Inn Golf Course, but now it serves only the 10 home owners who refused to sell to Wynn. During the financing process, questions arose regarding the PUCN’s oversight. This bill preserves the rights of these home owners while not interfering with the financial arrangements necessary for the construction.
Timothy Hay, Chief Deputy Attorney General, Bureau of Consumer Protection (Consumer’s Advocate), Office of the Attorney General:
At the request of the Assembly committee considering this bill, we looked at the contractual arrangements between the provider and the remaining customers. We have no objection to this bill.
Chairman Townsend:
There was a time when the PUCN spent a lot of time on complaints and issues with many small water companies. Ultimately the PUCN even had to take over some of the small companies because of the serious nature of the problems. Has there been any discussion of merging Desert Inn with Southern Nevada Water Authority (SNWA)?
Mr. Hay:
These are long-term residents who have contract rights. There are only one or two water companies this small left in the State. This bill does not interfere with their rights.
Mr. Noble:
One of the problems with these ten customers is the lines delivering water come from the rear of the houses and go through the golf course. For this reason, it would be difficult and expensive to switch them to the SNWA.
Senator Carlton:
What does section 3 actually do?
Mr. Noble:
It removes PUCN oversight of the sale or lease of any part of the Desert Inn Improvement Company and similar companies.
Mr. Hay:
This alleviates problems with financing on other parts of property. The PUCN’s involvement could be construed as an impediment to the business going forward.
Chairman Townsend:
I will close the hearing on A.B. 139 and open the hearing on A.B. 145.
ASSEMBLY BILL 145 (1st Reprint): Revises procedure for distribution of assessments collected on behalf of Consumer’s Advocate of Bureau of Consumer Protection in Office of Attorney General. (BDR 58-486)
Chairman Townsend:
This is the mill tax paid by all customers that the PUCN collects which supports the Bureau of Consumer Protection (BCP) office and operations, correct?
Mr. Noble:
Yes. Currently we send the mill assessment to the BCP quarterly. With the State’s Advantage System software, we have the ability to transfer these funds as they come in. We already do this with the universal energy charge and the telecommunications display device (TDD) surcharge. This bill is an attempt to be consistent with our accounting practices and get the money to the BCP as quickly as possible.
Chairman Townsend:
We will close the hearing on A.B. 145 and open the hearing on A.B. 140.
ASSEMBLY BILL 140: Provides penalty for failure to comply with order to cease business operations at place of employment for failure to maintain or provide industrial insurance. (BDR 53-437)
Kevin Higgins, Chief Deputy Attorney General, Fraud Control Unit for Industrial Insurance, Office of the Attorney General:
I have prepared a letter to explain this issue in more detail (Exhibit I). Investigators from my unit have the responsibility of finding and closing down uninsured employers. If the employer refuses to close down or reopens as soon as we leave, the only sanction we currently have is an administrative fine. Assembly Bill 140 would add a misdemeanor penalty to this violation, which would allow us to arrest an employer who refused to close the business or an employee who refused to vacate the premises. This bill would give us the tool we need to encourage businesses to comply with the requirement to provide health insurance. The Division of Industrial Relations supports this bill.
Senator Carlton:
So you will send the employees home and arrest the employer?
Mr. Higgins:
On occasion employees refuse to leave the premises as well. Sometimes it would be necessary to have the ability to enforce our orders. We would rather not arrest anyone and regard it as a last resort.
Chairman Townsend:
We will close the hearing on A.B. 140.
SENATOR O’CONNELL MOVED TO DO PASS A.B. 139.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS HARDY AND NEAL WERE ABSENT FOR THE VOTE.)
*****
SENATOR O’CONNELL MOVED TO DO PASS A.B. 145.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS HARDY AND NEAL WERE ABSENT FOR THE VOTE.)
*****
SENATOR O’CONNELL MOVED TO DO PASS A.B. 140.
SENATOR CARLTON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
Chairman Townsend:
We will open the hearing on A.B. 48.
ASSEMBLY BILL 48 (1st Reprint): Provides expressly that certain provisions related to labor include persons unlawfully employed. (BDR 53-601)
Assemblywoman Christina R. Giunchigliani, Assembly District No. 9:
This bill was originally requested by former Assemblyman Douglas Bache. The bill clarifies that the labor laws in the State are applicable to all employees regardless of whether they are lawfully or unlawfully employed.
Senator O'Connell:
Is there not a requirement for the employer to have proof of the employee’s social security number before hiring?
Assemblywoman Giunchigliani:
Yes. Federal law does require this, but not all employers comply.
Senator O'Connell:
Are these employers not turning in the information to the Division of Employment Security?
Lori T. Ashton, Lobbyist, Southwest Regional Council of Carpenters:
Employers are supposed to ask for a social security card, driver’s license, and other forms of identification. Employers do not always ask for this information. There are also workers with fake identification. The purpose of this bill is to protect workers from employers who use this as an excuse to avoid paying the employee’s wages.
Senator O'Connell:
When a complaint is filed with the labor commissioner, what is the penalty?
Terry Johnson, Labor Commissioner, Office of Labor Commissioner, Division of Business and Industry:
If the offense is something subject to the jurisdiction of the labor commission, we would impose a fine or penalty for violating the State’s labor laws. Actual penalties vary depending on the violation. For example, if the employer did not pay the correct wages, we could impose a fine or we could pursue criminal prosecution. We do not have jurisdiction over residency or immigration issues. We enforce State labor laws without inquiring into residency status. We do not assess a penalty on an employer for hiring undocumented workers. These matters are under the federal jurisdiction of the Immigration and Naturalization Service (INS) and are not enforced by the State.
Senator O'Connell:
If you are made aware of a situation like that, do you pass the information along to the INS?
Mr. Johnson:
No, we do not. We do not want to discourage people from coming forward when they have been victimized, regardless of their residency status.
Senator O'Connell:
What happens if an illegal employee makes a charge against an employer who has not received the proper information from the employee?
Mr. Johnson:
That would be a difficult situation for us to assert jurisdiction over. The employer should have the proper identification in hand before hiring the worker.
Senator O'Connell:
Would you still fine the employer in a situation like that?
Mr. Johnson:
Our first priority is to see that the workers get paid. It would be difficult for us to tell the employer to follow the State’s laws and violate the federal law. If the employer is acting in good faith, we would look at the situation very carefully before penalizing the employer.
Assemblywoman Giunchigliani:
There are employers who recruit foreign workers expressly because they do not intend to pay them for the work they do. We do not have any control over immigration issues. Many of these workers are recruited here for this very reason, especially in construction and landscaping. This bill attempts to ensure that workers will get paid for the work they do, regardless of their residency status.
Senator Hardy:
If an employer discovers one of his employees is working illegally, is he obligated to terminate the employee under federal law?
Mr. Johnson:
Yes. Ideally, of course, it would be better if the employer did not hire until the person’s eligibility is confirmed. The situation becomes tricky when the employee is owed wages.
Senator Hardy:
Perhaps we ought to direct the labor commissioner to notify the INS when this situation occurs. This bill protects the worker, but it also protects the honest contractor by cutting out a dishonest bid. There are people who will bid low on a job because they do not intend to pay their workers. Is there a reason we specifically included language about not infringing on federal law?
Assemblywoman Giunchigliani:
I believe that was drafting language. I would not have any discomfort if it was eliminated.
Senator Hardy:
My support of this bill is to discourage the hiring of illegal workers.
Assemblywoman Giunchigliani:
Mr. Johnson may have some clarifying language on that matter.
Senator O'Connell:
Mr. Johnson, we need to include language to ensure employers do not underbid by paying low wages or no wages, with a very heavy fine. Also, we need to protect the employer in cases where the employee has not produced the correct paperwork.
Mr. Johnson:
I will be happy to look at language that meets those objectives.
Senator Hardy:
We should take that a step further and get at employees who use forged documents.
Senator Carlton:
I have encountered situations in which the workers think their papers are legitimate when in fact they are not. Con men will tell people new to the country, “I can sell you what you need to work legally in this country.” They purchase the documents at a very high price and present them to the employer thinking they have done the right thing.
Senator O'Connell:
Mr. Johnson, can you set up a process to deal with this sort of situation?
Mr. Johnson:
Selling false documents is not under the jurisdiction of the State labor commission.
Senator O'Connell:
We need to research this matter to find out which office covers it and what penalties there are for selling false documentation.
James E. Sala, Lobbyist, Southwest Regional Council of Carpenters:
There are many employers in construction who hire workers either knowing or hoping they are not legal residents because they know it will be easier to exploit them. They work them 60 to 70 hours a week and pay them for 40, or they pay them in cash to avoid paying taxes, or they do not pay them at all. When they get caught, they say, “These workers are not legally employed, so I don’t have to comply with the labor laws of the State.” This bill is trying to make sure the unfair employers do not have an advantage over fair employers. I know of a situation in which an employer hired four men to work on drywall and worked them for 4½ weeks, fully aware of their residency status. When they tried to collect their wages, he said, “You’re not legal and I’m not paying you.” They came to us and we filed a lien on the work. They eventually got about half of their pay. This goes on daily in the construction business.
Chairman Townsend:
We will close the hearing on A.B. 48 and will open the discussion on S.B. 250.
SENATE BILL 250: Revises various provisions relating to regulated businesses and professions. (BDR 57-835)
Chairman Townsend:
We have done some preliminary research on section 45 of this bill, which requires the insurance commissioner put together an advisory group of professionals and others to find out trends and issues involved in the skyrocketing medical malpractice premiums. The bill says the cost of this group will be borne by the Board of Medical Examiners since the physicians they serve will be the major beneficiaries of their work. Mr. Lee requested a cap on this cost. We now have an estimate of the cost at $302,000 to $402,000 (Exhibit J). This fiscal note seems to be the cost of gathering the data only. We are making inquiries to learn of companies doing this sort of analysis.
Keith L. Lee, Lobbyist, State Board of Medical Examiners:
I spoke to James Wadhams on this matter, and he implied there was another source of funds to pay for this group.
Chairman Townsend:
We will contact Mr. Wadhams and will get you a cap. We will also give you the names of people we have come across to deal with this. We would like someone with experience who has an impeccable record. We would also like it to be someone based outside of Nevada for objectivity. If you have names to add to this list, please let us know.
Mr. Lee:
We will be happy to help in any way possible.
Chairman Townsend:
I also want to emphasize that the board needs to be part of the solution. It does not matter how many great physicians there are if the people do not have access to them. It may not be part of your statutory charge, but the board needs to evolve into a more proactive group.
Mr. Lee:
After our meeting yesterday, I met with the board’s president, executive director, and general counsel. We came up with some language I delivered to Kevin Powers this morning to deal with the critically impacted specialty situation.
Chairman Townsend:
There being no further issues, the meeting is adjourned at 10:01 a.m.
RESPECTFULLY SUBMITTED:
Lynn Hendricks,
Committee Secretary
APPROVED BY:
Senator Randolph J. Townsend, Chairman
DATE: