MINUTES OF THE
SENATE Committee on Commerce and Labor
Seventy-second Session
May 16, 2003
The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 7:21 a.m., on Friday, May 16, 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 Thomas (Tom) J. Grady, Assembly District No. 38
STAFF MEMBERS PRESENT:
Scott Young, Committee Policy Analyst
Courtney Wise, Committee Policy Analyst
Kevin Powers, Committee Counsel
Makita Schichtel, Committee Secretary
Maryann Elorreaga, Committee Secretary
OTHERS PRESENT:
Robert A. Ostrovsky, Lobbyist, Employers Insurance Company of Nevada
Ann W. Nelson, Lobbyist, Employers Insurance Company of Nevada
John E. Jeffrey, Lobbyist, Southern Nevada Builders & Construction Trades Council
Danny Thompson, Lobbyist, Nevada State American Federation of Labor‑Congress of Industrial Organizations
Raymond Badger, Jr., Lobbyist, Nevada Trial Lawyers Association
Don Jayne, Lobbyist, Nevada Self Insured Association
Dean Hardy, Lobbyist, Nevada Trial Lawyers Association
Margi Grein, Lobbyist, Nevada State Contractors' Board
George Lyford, Director, Investigations, State Contractors' Board
Ivan R. "Renny" Ashleman, Lobbyist, Southern Nevada Homebuilders Association
Michael S. Lynch, Lobbyist, Builder's Association of Northern Nevada
Judy Stokey, Lobbyist, Nevada Power Company, and Sierra Pacific Power Company
Thelma Clark, Lobbyist, AARP
David Noble, Assistant General Counsel, Regulatory Fund, Public Utilities Commission of Nevada
Jack Kim, Lobbyist, Nevada Association of Health Plans
Alfredo Alonso, Lobbyist, Lionel Sawyer and Collins
Courtney Alexander
Rose E. McKinney-James, Lobbyist, Clark County School District
John L. Wagner, Lobbyist, Nevada Republican Assembly
Fred L. Hillerby, Lobbyist, Nevada State Board of Pharmacy
Tom R. Skancke, Lobbyist, Nevada Society of Oriental Medicine, Cashman Equipment Company, and Caterpillar
Doug Walther, Chief, Office of Business Finance and Planning, Department of Business and Industry
L. Scott Walshaw, Commissioner, Division of Financial Institutions, Department of Business and Industry
John Sande III, Lobbyist, Nevada Bankers Association
Chairman Townsend opened the work session on Assembly Bill (A.B.) 168.
ASSEMBLY BILL 168 (1st Reprint): Revises provisions governing industrial insurance. (BDR 53-255)
Robert A. Ostrovsky, Lobbyist, Employers Insurance Company of Nevada, said representatives from Employers Insurance Company of Nevada, the Nevada Resort Association, the Nevada Trial Lawyers Association, the Division of Industrial Relations, the American Federation of Labor-Congress of Industrial Organizations, the Nevada Self Insured Association, and others had met and agreed upon amendments to A.B. 168.
Ann Nelson, Lobbyist, Employers Insurance Company of Nevada, read from the proposed amendment in the work session document (Exhibit C. Original is on file in the Research Library.).
Mr. Ostrovsky said the proposed amendments incorporated amendments previously submitted by the Division of Industrial Relations and by the Risk Management Division of the Department of Administration.
John E. Jeffrey, Lobbyist, Southern Nevada Builders and Construction Trades Council, said he supported the amendment.
Danny Thompson, Lobbyist, Nevada State American Federation of Labor‑Congress of Industrial Organizations, said the proposed amendment was a good compromise, which solved several problems.
Raymond Badger, Jr., Lobbyist, Nevada Trial Lawyers Association, said the deletion of section 3 was controverted for a while. Finally the decision was made to not list any rules and let the Division of Industrial Relations hold public hearings to determine the rules regarding managed care.
Don Jayne, Lobbyist, Nevada Self Insured Association, said he agreed the amendment represented a good compromise and supported the amendment.
Dean Hardy, Lobbyist, Nevada Trial Lawyers Association, said he had dealt with a lot of good people on the issue and he felt good about the outcome.
Senator Carlton asked why the term "seniority" had been deleted from section 10, subsection 8, paragraph (c).
Mr. Jeffrey said the term was deleted because seniority systems vary from occupation to occupation. He said there was no seniority system in the construction trade. He said rather than try to sort out seniority issues, it was determined to just address employment benefits.
Senator Carlton asked if the provision only applied if there were no seniority system within a corporation.
Mr. Ostrovsky said the broad term "employment benefits" would include seniority, which is a benefit of employment. He said employee benefits were more of an issue than seniority.
Mr. Jayne said there had been concerns about making the section apply to workers' compensation. It was decided seniority was an employment benefit and did not need to be listed separately in the amendment.
SENATOR O'CONNELL MOVED TO AMEND AND DO PASS A.B. 168.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS SHAFFER AND NEAL WERE ABSENT FOR THE VOTE).
*****
Chairman Townsend opened the work session on A.B. 182.
ASSEMBLY BILL 182: Authorizes employer to enter into fair share agreement with labor organization. (BDR 53-1076)
Chairman Townsend said the bill addressed two separate issues. He said tab A of the work document (Exhibit C) addressed the premise of the bill; tab B specifically addressed noncompetitive agreements. The chart under tab C was the National Conference of State Legislatures' list of states that participated in noncompetitive agreements. Chairman Townsend read sections 4 through 7. He said the intent of the amendment was to codify the decision in the matter of Cone v. Nevada Service Employees Union in the Supreme Court of the State of Nevada.
Chairman Townsend asked if the language in the proposed amendment in the work session document (Exhibit C) was a codification of the Cone decision.
Kevin Powers, Committee Counsel, said:
You are correct. The mock-up in the rainbow format that's presented to the committee does, in effect, codify the rule of law determined by the Nevada Supreme Court in the Cone decision. So it does not alter the existing state of the law, it simply codifies, as a matter of statute, the holding by the Nevada Supreme Court in the matter in Cone.
Chairman Townsend said the opinion was only written by Justices Rose, Maupin, and Shearing.
Mr. Powers said:
During the 1997 Legislative Session, the Legislature authorized the Nevada Supreme Court to sit in panels of three on certain cases. They can hear a case en banc, or all seven members hear the case, but this is one of the cases where they heard it as a panel of three.
Chairman Townsend asked if it had helped for the Supreme Court of the State of Nevada to be able to hear some cases with a panel of three.
Mr. Powers said:
I believe in the State of the Judiciary address that the chief justice gave to the Legislature at the beginning of this session, she indicated that the panels of three have helped reduce the caseload backlog for the Nevada Supreme Court.
Senator Carlton said she had said everything that she had to say on A.B. 182 in a prior hearing.
SENATOR CARLTON MOVED TO AMEND BUT WITHOUT RECOMMENDATION A.B. 182.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTIONED CARRIED. (SENATORS HARDY AND O'CONNELL VOTED NO. SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
Chairman Townsend opened the work session on A.B. 220.
ASSEMBLY BILL 220 (1st Reprint): Makes various changes to provisions governing contractors. (BDR 54-502)
Senator Carlton said the proposed amendment under tab A in the work session document (Exhibit C) was the product of a subcommittee meeting. She said the amendment gave the Nevada State Contractors' Board more authority when dealing with contractors.
Margi Grein, Lobbyist, State Contractors' Board, presented the proposed amendment under tab B of the work session document (Exhibit C).
Senator O'Connell asked how diversion of was different from theft, forgery, fraud, or embezzlement.
George Lyford, Director, Investigation, State Contractors' Board, said diversion of funds occurred when money set aside for upgrades was used for something other than upgrades.
Chairman Townsend asked if the amendment would affect current construction. He said the original bill did not say upon passage and approval and asked when the bill would take effect.
Mr. Powers said, "October 1."
Chairman Townsend asked if the effective date were moved to passage and approval, would current construction be affected. Mr. Lyford said enforcement would begin as soon as the bill became effective and would cover current construction.
Chairman Townsend asked if fraud were perpetrated, would there be dual jurisdiction under both the Attorney General and the District Attorney.
Mr. Powers said:
If there was any sort of fraud or illegal diversion of funds, it's possible that could give rise to a deceptive trade practice under chapter 598 of Nevada Revised Statutes (NRS) and then both the Attorney General and the District Attorney have jurisdiction to prosecute a violation of the Deceptive Trade Practices Act.
Ivan R. "Renny" Ashleman, Lobbyist, Southern Nevada Homebuilders Association, said he supported both proposed amendments.
Senator O'Connell asked if fines imposed for diversion of funds were for each instance or an overall fine. Ms. Grein said the fines would be imposed per occurrence.
Senator O'Connell asked if it would be necessary to state per violation in the bill.
Mr. Powers said, "It would normally be interpreted to apply only to each separate violation. However, additional language could easily be inserted making it clear that the fine applies per violation."
Senator O'Connell said she was considering the instance when one contractor had been involved with the construction of several homes. Would that contractor be fined one time or for each house involved?
Mr. Powers said:
Since this is a criminal penalty, it would be up to the District Attorney to charge that individual contractor with as many counts as the District Attorney believed that they could prove and prosecute. And then, each count, if you could prove separate acts, then you can convict a person under multiple counts.
Senator Schneider asked if the funds for upgrades would go into one account per builder or would it be set up per project or per house.
Mr. Ashleman said the amendment contemplated the use of an outside construction controller. A separate control account would be set up for each upgrade.
Senator Hardy said anyone could and should request the services of a construction control company when hiring a contractor to build a home.
Senator Schneider asked if money collected for upgrades by salespeople in large construction projects was turned over to construction control companies by the salespeople or by the contractor. Mr. Ashleman said contractors, which had not been found by the State Contractors' Board to be governed by the bill, used various methods of handling the funds.
Senator Hardy said Senator Schneider brought up an important point. A home buyer should ask what construction control mechanism is used by the contractor.
Michael S. Lynch, Lobbyist, Builder's Association of Northern Nevada, said the issue of prompt pay should be addressed in the bill. He said NRS 624.622 exempted a contract between a residential contractor and a natural person buying a home from the prompt payment provisions in NRS 624.609 and NRS 624.610.
Senator Carlton said the issue of applying prompt pay to residential construction had been discussed during the last Legislative Session. At that time there was concern over a subcontractor getting paid before a homeowner.
Mr. Ashleman said he understood Mr. Lynch's concern, but there were several reasons for excluding residential construction from the prompt-pay provisions in the law.
Mr. Lynch said the intent of the proposed amendments was to protect home buyers but would not apply to contracts between home buyers and residential contractors.
Mr. Ashleman said the provisions set up a separate statutory scheme. The language referenced by Mr. Lynch would not prevent setting up accounts.
Chairman Townsend suggested Mr. Lynch, Mr. Ashleman, and Ms. Grein meet and discuss the proposed amendments then return to the hearing for further discussion.
Chairman Townsend opened the work session on A.B. 352 (Exhibit C).
ASSEMBLY BILL 352 (1st Reprint): Makes various changes relating to manufactured home parks. (BDR 43-970)
Chairman Townsend read from sections 1 and 2 of the bill. He said he did not support the provisions in section 2.
Senator Hardy said he did not support section 2 and was not sure of the need for section 1. He asked if there was a compelling need or evidence of a systemic problem, which needed to be addressed.
Chairman Townsend said although he understood the concept in section 1, he could not support the amendment as it was written. He said it was important that a seller have maintenance information available for a prospective buyer but the language, "dates, if known, of last maintenance," was not sufficient.
Senator Hardy said a seller should not have the responsibility to provide notification that a buyer should seek legal advice and know where free advice would be available.
Senator O'Connell said a requirement for posting information regarding the availability of the services of the Manufactured Housing Division, Department of Business and Industry, had been included in A.B. 498, therefore, the provision did not need to be included in A.B. 352.
ASSEMBLY BILL 498 (1st Reprint):Makes various changes to provisions governing manufactured home parks. (BDR 10‑1296)
Chairman Townsend opened the work session on A.B. 369 (Exhibit C).
ASSEMBLY BILL 369 (1st Reprint): Revises provisions governing trade practices between suppliers and dealers of certain equipment and machinery. (BDR 52-1059)
Senator Hardy said he could not support putting specific contractual requirements into the NRS.
Chairman Townsend opened the work session on A.B. 431.
ASSEMBLY BILL 431 (1st Reprint): Establishes program to provide incentives for installation of certain solar energy systems. (BDR 53-723)
Judy Stokey, Lobbyist, Nevada Power Company, and Sierra Pacific Power Company, read from the proposed amendment in the work session document (Exhibit C).
Mr. Thompson said he agreed with the Solar Energy Systems Demonstration Program in net metering in the proposed amendment.
Thelma Clark, Lobbyist, AARP, asked if a provision that the Public Utilities Commission (PUC) of Nevada conduct an annual review of all customers which had left the system could be included in the bill.
Chairman Townsend asked if the PUCN had the authority to implement a program for tracking the effects of customers leaving the system.
David Noble, Assistant General Counsel, Regulatory Fund, Public Utilities Commission of Nevada, said there was no statutory requirement to do an analysis after the fact, but it was within the investigative power of the PUCN to determine the effect on the system of one or more eligible customers leaving the system. He said the PUCN could do such an analysis, if requested by the committee.
Chairman Townsend asked if it would be sufficient if the committee submitted a letter requesting the analysis. Mr. Noble said a letter would suffice.
Chairman Townsend asked if Nevada Power Company or Sierra Pacific Power Company would find it problematic to conduct an analysis after eligible customers had left the system. Ms. Stokey said there were already analyses done prior to customers leaving the system; doing another after the fact should not present a problem.
Ms. Clark said it was important that a customer leaving the system injured neither the customer nor the utility provider.
SENATOR O'CONNELL MOVED TO AMEND AND DO PASS A.B. 431.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS HARDY AND NEAL WERE ABSENT FOR THE VOTE).
*****
Chairman Townsend opened the work session on A.B. 502.
ASSEMBLY BILL 502 (1st Reprint): Requires certain policies of health insurance and health care plans to include coverage for certain medical treatment provided in clinical trial or study. (BDR 57-1196)
Chairman Townsend read briefly from the proposed amendments under tabs A and B of the work session document (Exhibit C) and referred to the proposed amendment submitted by Charles Duarte, Administrator, Health Care Financing, Division of Health Care Financing and Policy, Department of Human Resources, (Exhibit D). He asked Mr. Powers if he had seen the proposed amendment.
Mr. Powers said, "I have, Mr. Chairman, and that's the effect of the amendment. It excludes the State plan for Medicaid from having to provide the coverage that's included in the bill for clinical trials."
Jack Kim, Lobbyist, Nevada Association of Health Plans, presented the amendment under tab A.
Senator Carlton said information provided to her established patients receiving Ampligen for treatment of Chronic Fatigue Syndrome (CFS) needed substantially fewer inpatient hospital treatment days. The 24-week study period showed 101 hospital days for patients who received placebos and 15 hospital days for those who received Ampligen. She said the decrease in hospital days translated into an annualized decrease of $5806.78 per patient. She said if patients were allowed to receive Ampligen, total costs for care would be significantly decreased.
Alfredo Alonso, Lobbyist, Lionel Sawyer and Collins, said in Nevada there were less than 30 patients involved in clinical trials. The patients who would be affected by the bill would be a fraction of that number.
Senator O'Connell said imposing mandates would increase the cost of insurance. She asked if anyone had proposed a way of implementing the amendment proposals without mandating them through insurance. She said it was already difficult for employers to provide health care insurance.
Mr. Kim said on a national average, an insurance premium of 1 percent would result in 100,000 uninsured people. He said mandates and increased coverage had a cost; small employers paid that cost.
Courtney Alexander said her husband was one of the patients that had testified at a previous hearing on the bill. She said she had located a study that established if CFS were treated with Ampligen, insurance costs would be lower. She said Ampligen is the only treatment available for CFS.
Chairman Townsend said insurance issues and mandates should be reviewed on a regular basis to determine their impacts. He said the possibility of a research hospital in Nevada should also be explored.
Senator Carlton said section 1, subsection1, paragraph (f) read, "The clinical trial or study is conducted in this state." She asked if that would mean ancillary services would be provided for in this state. Mr. Kim said his understanding was if a contract provider gave the ancillary services, the costs for those services would be covered.
Mr. Powers said, "The bill in its current form limits the clinical trial or study to be conducted in this state."
Rose E. McKinney-James, Lobbyist, Clark County School District, said the Clark County School District was self-insured and had concerns about the cost impacts of insurance coverage for clinical trials.
Chairman Townsend reopened the work session on A.B. 220.
Chairman Townsend asked if Ms. Grein, Mr. Ashleman, and Mr. Lynch had reached an understanding regarding the proposed amendment.
Mr. Lynch said Mr. Ashleman had dispelled his concerns about the amendment. He said he supported the proposed amendment and thought it would help protect home buyers.
Senator O'Connell said she would like for the language under section 1, subsections 3 and 4, to conform to the disclosure language in S.B. 250 and to be effective upon passage and approval by the chairman.
SENATE BILL 250 (1st Reprint): Revises various provisions relating to regulated businesses and professions. (BDR 57‑835)
SENATOR O'CONNELL MOVED TO AMEND AND DO PASS A.B. 220.
SENATOR CARLTON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE).
*****
Chairman Townsend reopened the work session on A.B. 502.
Senator Schneider asked if a bill he had sponsored, S.B. 375, could be incorporated into A.B. 502.
SENATE BILL 375: Revises provisions governing authority of certain physicians to possess, prescribe, administer and dispense controlled substances, dangerous drugs and other drugs. (BDR 40-1055)
Chairman Townsend said there were three elements to be considered under A.B. 502. The original bill dealt with clinical trials for treatment of cancer; the submitted amendment that would include CFS; and the issue brought by Senator Schneider. He said the issues would be dealt with separately. Chairman Townsend asked if it would be possible to include Senator Schneider's proposed bill in A.B. 502.
Mr. Powers said:
We do have an issue of germaneness and I don't think at this stage I can comfortably conclude. I'd need to run this by legislative counsel. So if the chairman will give me a moment, I certainly can. She's going to have to physically see the actual language.
Chairman Townsend introduced Assembly Joint Resolution (A.J.R.) 4.
ASSEMBLY JOINT RESOLUTION 4: Urges President of United States and Congress to support free trade agreement between Republic of China on Taiwan and United States. (BDR R-1213)
John L. Wagner, Lobbyist, Nevada Republican Assembly, said the Republic of China and Taiwan were good trading partners with the U.S., whose economies were the most stable in Asia. He urged the committee to pass A.J.R. 4.
Senator Hardy said Taiwan had not only been a significant trading partner, it had been a significant geopolitical ally of the United States. As China emerged as a global economic power the relationship between Taiwan and the United States would become even more important.
SENATOR HARDY MOVED TO DO PASS A.J.R. 4.
SENATOR O'CONNELL SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS NEAL AND CARLTON WERE ABSENT FOR THE VOTE.)
*****
Chairman Townsend said the committee would deal with the pilot project from S.B. 375.
Fred L. Hillerby, Lobbyist, Nevada State Board of Pharmacy, said the bill had been written more broadly than intended by Senator Schneider. Mr. Hillerby said Senator Schneider had asked if the State Board of Pharmacy could meet with him and help reword the bill. Mr. Hillerby said Keith L. Lee, Lobbyist, State Board of Medical Examiners, had researched pilot project language from other states. He said the pilot project was directed at prescribed medications dispensed in a controlled environment.
Chairman Townsend opened the work session on A.B. 21.
ASSEMBLY BILL 21 (1st Reprint): Makes changes related to practice of Oriental medicine. (BDR 54-226)
Tom R. Skancke, Lobbyist, Nevada Society of Oriental Medicine, Cashman Equipment Company, and Caterpillar, referred to a proposed amendment (Exhibit E) and said language in section 2, subsection 1, paragraphs (b) and (c), had been deleted. He asked for the committee's support of the bill.
SENATOR CARLTON MOVED TO AMEND AND DO PASS A.B. 21.
SENATOR SHAFFER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE).
*****
Chairman Townsend asked if Mr. Powers had an answer from legislative counsel regarding the proposal for a pilot project for alternative medicine to be included in A.B. 502 as requested by Senator Schneider.
Mr. Powers said:
I've consulted with legislative counsel and she has concluded under Joint Standing Rule 14.7 that the proposed amendment would not be germane, under that rule, to this particular piece of legislation and therefore would not be appropriate for an amendment. However, legislative counsel will determine what other bills that are available that could be an appropriate vehicle for this amendment.
Chairman Townsend asked that Senator Schneider be notified right away, when the appropriate bill was identified.
Mr. Powers said, "Legislative counsel will, and obviously her staff will, work to find that vehicle and it can be done through a floor amendment with the appropriate vehicle."
Chairman Townsend asked which NRS addressed which chapters or titles would be germane.
Mr. Powers said:
Under Joint Standing Rule 14.7, it's not the chapter of NRS or the Title of NRS but it relates to the specific subject matter of the bill as it's presently constituted and whether the amendment relates to that specific subject matter in a germane way. So, it's not simply a connection between chapters and Titles of NRS but there is a review of the actual subject matter. And Joint Standing Rule 14.7 specifically provides that the rules should be construed narrowly to … so that it does not subvert the rules established for the deadlines of the Legislative Session.
Chairman Townsend reopened the work session on A.B. 502. He referenced the proposed amendment under tab B of the work session document (Exhibit C).
Senator Hardy said he had consistently opposed mandated insurance benefits throughout his legislative career. Although he had close friends treated for cancer who could benefit from the proposed amendment, he could not support mandated insurance benefits. He said he would, however, vote to put the amendment to include CFS on the bill.
SENATOR HARDY MOVED TO AMEND A.B. 502.
SENATOR CARLTON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS O'CONNELL AND SHAFFER VOTED NO. SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
Chairman Townsend addressed the proposed amendment under tab B and the proposed amendment submitted by Mr. Duarte (Exhibit D).
SENATOR HARDY MOVED TO AMEND A.B. 502.
SENATOR CARLTON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR O'CONNELL VOTED NO. SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
Chairman Townsend asked if there were any other proposed amendments.
SENATOR CARLTON MOVED TO DO PASS AS AMENDED A.B. 502.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS HARDY AND O'CONNELL VOTED NO. SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
Chairman Townsend reopened the work session on A.B. 369.
Senator Hardy said he had spoken with some of the sponsors of the bill but did not fully understand the contractual relationship between suppliers and dealers of farm equipment. He said the only way he could support passage of the bill was if it was narrowed to farm equipment, only because he was against statutory mandates involving contracts.
Chairman Townsend asked if the intent of the bill would be changed if the definition of "inventory" were limited to farm equipment.
Mr. Powers said:
It would be helpful if we had someone who is supporting this bill to really discuss the specific intent behind it. But essentially, the bill is only directed at dealer agreements that involve farm equipment. So, I don't know what other contracts Senator Hardy is referring to.
Chairman Townsend said the bill could be sent to the floor without amendments or recommendations.
Senator Hardy asked for clarification of the definition of "dealer" in section 3 and "inventory" in section 5.
Mr. Powers said:
For Senator Hardy, if you look in, indeed inventory is drafted broadly but section 4 is the type of agreements that the bill is addressed to; "dealer agreements." So there has to be an agreement between that dealer and a supplier and has to involve those types of matters that are listed in the inventory definition, as one of the components.
Chairman Townsend asked if the bill could be limited to "farm equipment."
Mr. Skancke said because Cashman Equipment Company and Caterpillar had been exempted from the bill, he did not know whom the bill protected. Chairman Townsend said the sponsor of the bill would testify before the committee.
Chairman Townsend opened the work session on A.B. 493.
ASSEMBLY BILL 493: Provides for money collected by Commissioner of Financial Institutions and Division of Financial Institutions of Department of Business and Industry to be deposited to and expended from the Fund for Financial Institutions. (BDR 55-463)
Doug Walther, Chief, Office of Business Finance and Planning, Department of Business and Industry, presented a proposed amendment (Exhibit F. Original is on file in the Research Library.).
L. Scott Walshaw, Commissioner, Division of Financial Institutions, Department of Business and Industry, said the proposed amendment addressed the issue of setting up an Account for Financial Institutions instead of a Fund for Financial Institutions.
Chairman Townsend asked if the process of legislative technical adjustment would be handled on a more up-to-date basis.
Mr. Walshaw said the allocation costs to be implemented onto the budget for the next biennium were based on a figure developed from actual hours expended by the two and one-half positions assigned to the office; added to that was a cost allocation factor for overhead expenditures. He said the assessment represented a prospective estimate. Mr. Walshaw said his office had requested the Office of the Attorney General provide a breakdown of billed hours so costs could be properly apportioned to the correct industry.
John Sande III, Lobbyist, Nevada Bankers Association, said he supported the amendment as proposed.
Chairman Townsend asked what the proper motion would be.
Mr. Powers said:
The motion would be someone who voted in favor of the bill to amend and do pass, which I believe was the entire committee, would then have to move to reconsider the committee's action on A.B. 493 and then after that reconsideration, you could take a motion to amend.
Chairman Townsend said an amendment would not have to be taken to the Senate Floor.
Mr. Powers said, "That is because the amendment hasn't been delivered back to the chairman yet."
SENATOR O'CONNELL MOVED TO RESCIND THE PREVIOUS ACTION TAKEN ON A.B. 493.
SENATOR HARDY SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS NEAL AND SCHNEIDER WERE ABSENT FOR THE VOTE.)
*****
Chairman Townsend said the new motion would be to amend with the new amendment and the amendment previously processed by the committee.
SENATOR O'CONNELL MOVED TO AMEND AND DO PASS A.B. 493.
SENATOR HARDY SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS NEAL AND SCHNEIDER WERE ABSENT FOR THE VOTE.)
*****
Chairman Townsend said he was a shareholder in a bank and sat on the board of a bank but the bank was treated no differently from other banks.
Senator O'Connell said she had already submitted a letter, which explained her affiliation with a bank.
Assemblyman Thomas (Tom) J. Grady, Assembly District No. 38, said the intent of A.B. 369 was to aid small dealers in recovering costs for work performed under a warranty and to ensure a supplier of equipment would repurchase the equipment in the event of a franchise cancellation.
Chairman Townsend explained the similarities between the provisions in A.B. 369 and what had occurred when a major automobile manufacturer discontinued producing one of its lines of vehicles.
Senator Hardy asked why warranty and repurchase concerns were not addressed in original contracts.
Assemblyman Grady said large manufacturers dealt fairly with the small dealers. It was the small suppliers and manufacturers that caused the difficulties.
Senator Hardy said he was still uncomfortable with statutory mandates involving contracts, but would agree with moving the bill forward for further discussion.
Senator O'Connell said she had strong feelings about statutory mandates as well and could not commit to voting for it on the Senate Floor but would support getting the bill to the Senate Floor.
Assemblyman Grady said he appreciated the committee's support and it was up to his group to convince the rest of the Senators.
Senator Hardy said he had a level of discomfort about killing a bill when he did not fully understand the ramifications and how his colleagues in rural Nevada would be affected.
Chairman Townsend asked that Senator Hardy's motion be explained to Assemblyman Grady.
Mr. Powers said:
This is to clarify what I had said earlier, when the chairman suggested that line 17 was the key area, that was correct. Section 5 defines "inventory" and the definition of inventory is fairly broad including more than simply farm equipment but utility equipment, industrial equipment, construction equipment, outdoor power equipment. It's much broader than simply farm equipment so I believe Senator Hardy's motion would be to limit the definition of "inventory" specifically to the term "farm equipment."
SENATOR HARDY MOVED AMEND TO AND DO PASS A.B. 369.
SENATOR SHAFFER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS NEAL AND SCHNEIDER WERE ABSENT FOR THE VOTE.)
*****
There being no further business before the committee, Chairman Townsend adjourned the hearing at 10:03 a.m.
RESPECTFULLY SUBMITTED:
Maryann Elorreaga,
Committee Secretary
APPROVED BY:
Senator Randolph J. Townsend, Chairman
DATE: