MINUTES OF THE
SENATE Committee on Judiciary
Seventy-second Session
February 11, 2003
The Senate Committee on Judiciarywas called to order by Chairman Mark E. Amodei, at 8:07 a.m., on Tuesday, February 11, 2003, in Room 2149 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to the Grant Sawyer State Office Building, Room 4406, 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 Mark E. Amodei, Chairman
Senator Maurice E. Washington, Vice Chairman
Senator Mike McGinness
Senator Dennis Nolan
Senator Dina Titus
Senator Valerie Wiener
Senator Terry Care
STAFF MEMBERS PRESENT:
Nicolas Anthony, Committee Policy Analyst
Bradley Wilkinson, Committee Counsel
Ann Bednarski, Committee Secretary
Barbara Moss, Committee Secretary
Lora Nay, Committee Secretary
OTHERS PRESENT:
Frank W. Daykin, Commissioner, National Conference of Commissioners on Uniform State Laws
Madelyn Shipman, Assistant District Attorney, Civil Division, Washoe County
Robert W. Teuton, Chief Deputy District Attorney, Office of the District Attorney, Juvenile Division, Clark County
Pamela Lawson, Attorney
John Sande, III, Lobbyist, Nevada Bankers Association
Kirby L. Burgess, Director, Department of Juvenile Justice Services, Clark County
Jamie Honicker, Department of Juvenile Justice Services, Clark County
Leonard Pugh, Director, Department of Juvenile Services, Washoe County, and President, Nevada Association of Juvenile Justice Administrators
Chairman Amodei:
I call the meeting to order. We will start the hearing with Senate Bill (S.B.) 43.
SENATE BILL 43: Adopts Uniform Child Witness Testimony by Alternative Methods Act. (BDR 4‑378)
Senator Terry Care, Clark County Senatorial District No. 7:
I will provide information this one time, for this and other uniform acts coming before this committee. In the past, this committee has considered uniform acts. The National Conference of Commissioners on Uniform State Laws, an organization in existence since 1892 with roughly 250–275 members, meets annually for 8 days. The commissioners have concerns about the diversity of statutes on critical issues among the 50 states and Puerto Rico. Things are not done overnight. Usually a group of commissioners determines if there is a need for a uniform act in a particular area. A drafting committee will then meet over a period of months, or even as long as 2 years, and come up with a proposed uniform act. That proposal goes before the full body and then to the states, which are free to adopt or not adopt. Often these committees are comprised of appellate court judges, law school professors, legislative council bureau members from across the country, some legislators, practitioners, and trial and federal appellate court judges. By the time a bill gets to a state legislature, it has been thoroughly reviewed.
The need for this bill stems from the extreme diversity among the several state jurisdictions with respect to alternative methods for taking the testimony of a child. Sections 4 through 7 of S.B. 43 are definitions. The work document (Exhibit C) indicates these are intended to be broad definitions of both criminal and noncriminal proceedings. The word “court” connotes both jury and nonjury actions. The definition includes quasi-criminal or equivalent proceedings before juvenile court, family court, or similar courts. In noncriminal proceedings the act may be invoked in civil cases, juvenile proceedings, family law proceedings, and administrative hearings.
In the context of physical or sexual abuse, the impact upon and risk to a child testifying in the courtroom on civil cases for damages, both in juvenile and family law proceedings, is potentially as real as in criminal proceedings. The testimony of a child may be relevant in administrative proceedings, for example, in revoking the license of a day care center.
“Child witness” is defined as an individual under the age of 13. There is diversity among the states and we are free to insert whatever age we want. We do have a statute in this State, a hearsay rule, which goes to children under the age of ten who have been abused sexually. Whether the State will allow testimony if the child is not present is not affected. Another statute not affected by Senate Bill 43 concerns a child under the age of 14. This bill does not impact a child testifying before a grand jury or in a preliminary hearing.
Alternative methods include audiovisual recordings to be presented later in the courtroom, close circuit television which is transmitted directly to the courtroom, and room arrangements that avoid direct confrontation between a witness and a particular party or the finder of fact. Also included are similar methods currently in use and future technologies.
Section 8 of S.B. 43 is applicable to criminal and noncriminal proceedings. In noncriminal proceedings this act would not preclude other procedures permitted by law for the presentation of the testimony of a child. For example, in Delaware the courts are authorized to interview the child in chambers to ascertain the child’s wishes as to their custodian. Using alternative methods is a two-step process.
Senator Care:
Section 9 goes to the hearing on whether to even authorize testimony by an alternative method. There are procedures for instituting or conducting a hearing to determine whether an alternative method for taking the testimony of a child should be authorized. This would be in the nature of a preliminary hearing or a motion in limine, a motion heard before trial about what is going to be allowed to be heard and not heard during the trial itself. These hearings are to determine only whether the testimony of the child should be taken by an alternative method. There has to be reasonable notice given to all parties. The child’s presence at the hearing is not required unless ordered by the presiding officer. At this hearing the presiding officer is not bound by rules of evidence except the rules of privilege.
Section 10 of the bill includes the standards for determining whether the testimony of a child witness maybe presented by an alternative method. The work documents stress that when talking about a criminal proceeding, there is a distinction between the child whose ability to communicate with the finder of fact is limited by trauma suffered simply by exposure to the ambiance of an open forum and the child whose ability to communicate with the finder of fact is limited by trauma caused by face-to-face exposure to the criminal defendants. The essential distinction between those two standards is that the child who cannot testify in an open forum will need only to suffer emotional trauma, while the child who cannot testify face-to-face with the defendant would need to suffer serious emotional trauma. The civil standard, being the preponderance of the evidence as opposed to the clear and convincing evidence, applies to noncriminal proceedings.
Section 11 of S.B. 43 provides determining factors for permitting the alternative method. The judge or presiding officer makes the determination and if he has decided section 10 has been satisfied, then what he has to do is look at the factors contained in section 11 to see if the alternative method applies.
Section 12, the order itself, regards testimony by alternative methods. There has to be a statement of the findings of fact and conclusions of law. Reasons must be given because there may be a matter on appeal. The order must also specify the conditions under which the testimony is to be taken, and if an alternative method is ordered.
In Section 13, defense counsel and public defenders may have some legitimate concerns on the right of confronting a witness. An alternative method, ordered by the presiding officer, must permit a full and fair opportunity for examination and cross-examination of the child witness. Work document (Exhibit C) indicates the requirements of the Sixth Amendment right of confrontation will be met in criminal proceedings as well as the right of examination and cross-examination of a child witness in noncriminal proceedings when applicable. I have to stress there is no attempt to loosen the defendant’s right under the Sixth Amendment.
I know some people thought S.B. 43 came up a little early. I just want to say to those people who have proposed amendments or who want to work with me; I am prepared to do that. There is no attempt here to jam something down somebody’s throat. The subject is too sensitive, especially when talking about a criminal setting concerning the rights of a defendant. This is an open invitation to whoever wants to approach me with whatever suggested changes they might have.
Senator Wiener:
In section 5, how was the age of 13 established? I have legislation concerning those under the age of 14 before the committee. How was 13 determined to be the appropriate age?
Senator Care:
When we got the draft, 13 was the age the National Conference of Commissioners on Uniform State Laws bracketed. This means we are not saying this is what every state needs to use. The age is different in the various jurisdictions, and we would like to see it a little more uniform. To be consistent with existing law in other areas, I do not have a problem with making the age either 13 or14.
Chairman Amodei:
We welcome back former legislative counsel and director Frank Daykin.
Frank W. Daykin, Commissioner, National Conference of Commissioners on Uniform Sate Laws:
The only substantive point I can contribute is this was carefully worked over by the drafting committee including the distinguished appellate judge C. Arlen Beam of Nebraska, who sits on the Unites States Court of Appeals for the Eighth Circuit, and Rhoda Billings, a professor at a university in North Carolina who is an expert on procedure.
Chairman Amodei:
Seeing no further questions, we will continue testimony from those who have expressed an interest in testifying on Senate Bill 43. Victoria D. Riley, Lobbyist for Citizens for Justice and the Nevada Trial Lawyers Association, will go on record as supporting this bill.
Madelyn Shipman, Assistant District Attorney, Civil Division, Washoe County:
In my role as chief civil attorney for the district attorney’s office in Washoe County, I have a division of five deputies working child welfare matters full time. The alternative method is of importance to us because we do utilize alternative methods in our court. I am second string and my chief deputy is in trial today, so I was unable to have her come down and testify. We are in support of this bill; we just have not had time to get our act together with our judges and the public defenders office. I am not sure this committee is aware the Washoe County Public Defenders Office has a civil division to handle the representation of children in child welfare matters. Therefore, if possible, I am asking the committee for a 7- or 10-day deferral before acting on this bill, to let us assess the impacts of this legislation.
One of the issues Senator Care brought forward was the issue of appeals. Under the Child Welfare Act we are required to follow very critical time lines. To see the effect of an independent appeal or what type of appeal, normally interlocutory decisions of the court, I would assume they were not going to be appealable except from a master to a judge. I thought that was the issue we were going to be dealing with; perhaps I need to ask Senator Care, in reading the uniform notes, whether that appeal means an appeal beyond the district court. Those are issues we need to look at to see how they would affect the program. The bottom line is, we are in support of the bill, but we need a little time to be able to work with our folks to see what the impact will be.
Robert W. Teuton, Chief Deputy District Attorney, Office of the District Attorney, Juvenile Division, Clark County:
I am here to testify in support of S.B. 43 and sent written remarks yesterday. We do not anticipate circumstances in which this legislation would be used to occur very often. First, the bill does have some heavy evidentiary requirements for criminal prosecutions in terms of establishing by clear and convincing evidence; there would be emotional trauma and a causal relationship between the trauma on the child witness and the ability of the witness to communicate information to the court. One of the deputies in my division has had 13 years both in the adult criminal division and in handling primarily sexual abuse or sexual assault cases involving child witnesses. When she reviewed the bill, it was her opinion one case she prosecuted would have been helped by having this legislation in the books. Defense attorneys cannot realistically state we are going to arbitrarily throw away people’s constitutional rights in every case. The application of this legislation is very limited with a high standard of proof that must be met.
The second thing involves two cases, one in Nevada where a prosecutor, without this legislation, effectively achieved the goal of this bill by precluding the defendant from being able to see the witness by positioning himself between the witness and the defense counsel, at least during direct examination, so there was no visual contact the defendant could make with the child witness. Our supreme court found this case did violate the right to confrontation under The Constitution of the United States of America. I think the procedures set forth in this bill by the Supreme Court of the United States have been ratified. I point out the case of Maryland v. Craig, a 1990 case, where essentially the evidentiary requirements in this bill were endorsed by the U.S. Supreme Court as being sufficient to establish the right to confront witnesses is not violated, provided the preliminary findings are made by the child court. I see this as a very narrow exception to the traditional notions of confrontation we have in the courtroom, one that probably will not be used very often. More likely than not, when it is necessary, it will be a very serious type of case.
Chairman Amodei:
It would be my intent to try and work this bill within the next 10 days for purposes of getting together with people for amendments. This will be called up for work session by the end of next week.
The hearing on Senate Bill 43 is postponed and the hearing on Senate Bill 48 is now open.
SENATE BILL 48: Adopts revision of Uniform Child Custody Jurisdiction and Enforcement Act. (BDR 11‑382)
Senator Care:
My opening remarks on Senate Bill 43 also apply to Senate Bill 48. Mr. Daykin will explain this bill.
Mr. Daykin:
This bill is a revision to the Uniform Child Custody Jurisdiction and Enforcement Act. The conference chose to proceed by wiping the slate clean and setting forth the new provisions in full instead of trying to work by amendment.
The first several sections of the bill are necessary definitions. A child for this purpose is a person who has not attained 18 years of age. The emphasis in this bill is upon the definition of “home state.” In section 10 a home state is defined as: The state in which a child lived with a parent or a person acting as parent for at least 6 consecutive months, including any temporary absence immediately before the commencement of a child custody proceeding.” In the case of a child who is not yet 6 months old, it is the state lived in from birth, except for any temporary absence. In case of any conflict among orders concerning child custody, the order entered in the child’s home state is the one which prevails. This is meant to resolve conflicts that result when one parent or another moves, or sometimes informally takes the child to another state, and a different order is entered there. Some children may have two or three orders hanging over them with respect to movement and something has to prevail.
In Section 21 there is considerable reference to the Indian Child Welfare Act and for purposes of this act, a court of this State will treat a tribe as if it were a state and accord the appropriate deference to its determination if it happens to be the home state.
Likewise, according to section 22 of S.B. 48, a court of this State shall treat a foreign country as if it were a state of the United States. If the child were from a foreign country, that country would be the home state of the child. The foreign country meets the requirements for being a home state.
Section 23 binds all persons who have been served or notified, in accordance with the laws of this state, or who have submitted to the jurisdiction of the court and been given an opportunity to be heard. The determination is conclusive. The section then discusses the manner of notification.
Senator Washington:
My concern refers to section 21 that deals with the Indian Child Welfare Act of 1978. What if you have a child with a parent who is actually an Indian, making the child half-and-half, and there is a custody battle on the tribal territory, which would have precedence? Would it be the State, or would it be the Indian tribal territory treated as a state?
Mr. Daykin:
The determination of which has precedence would be according to which was the home state where the child had lived for at least 6 months before the hearing. If the child had lived on the reservation, the tribe would have precedence; if the child had lived off the reservation, the State would have precedence.
Senator Washington:
The reason I ask is because I have heard of cases where a parent would actually take the child to Indian territory for refuge from State law by saying or indicating the federal statute would take precedence over State statute.
Mr. Daykin:
The key would be, if that sort of move occurred and the proceeding was dropped within 6 months, the tribe would not have become the home state. Therefore, the State in the ordinary sense would have precedence. One of the purposes of the act is to discourage forum shopping by migrating. They have to have actually established a home.
Senator Wiener:
Section 22 of S.B. 48 talks about the child custody determination having been made in a foreign country. There is a provision stating unless “the child custody law of a foreign country violates fundamental principles of human rights.” Since this is a uniform act, are there any countries that have been identified as uniformly not accepted or given jurisdiction over the child because of their human rights issues? Are these countries uniformly rejected because of their human rights position?
Mr. Daykin:
To the best of my knowledge, I am not aware of any such identification in a reported case. This act was put out by the conference about 2 or 3 years ago and this is the first opportunity we have had to act upon it. Several states have enacted it. Senator Care is looking through the comments; unless he finds something, my comment would be they were thinking about places such as Burma, which does not seem to recognize any laws except the whims of its dictator.
The comments indicates no countries have been identified. The fundamental is borrowed from the Hague Convention. The court of this State would have to deal with that situation if it arose. We might as well make the laws as anybody else.
Senator McGinness:
Mr. Daykin, I am wondering about these definitions. I am sure we have some definitions already in Nevada Revised Statutes (NRS), how do they track? Do they match or are we going to have some conflicts?
Mr. Daykin:
Our existing child custody determination act would be repealed if this bill were enacted. This would supercede the repealed sections of the existing bill. As far as definitions in other parts of NRS, trial is the same; child custody determination is just what the divorce courts or the like would be doing.
Senator McGinness:
What about home state, is that a new term of art?
Mr. Daykin
Home state is a new term of art. It is valuable because it clarifies an area of law. This is the key provision of the act. It goes on to authorize informal communication between courts of this State and courts of other states in establishing what status of orders, and how long, and so forth. That is the present practice of judges in family court; this would ratify what they are doing.
Senate Bill 48 is very convenient, as it also provides for the taking of testimony of parties of other states by easier means than we presently have. It asks other states, where appropriate, to hold an evidentiary hearing and then communicate with the court of this State. We are trying to make the whole thing as flexible as possible.
Section 30 addresses what Senator McGinness and Senator Washington were discussing, the operative law of home states. A court of this State has jurisdiction to make an initial determination, only if this State is the home state of the child on the date of commencement of the proceedings, or was the home state of the child within 6 months before the commencement of the proceedings.
When the child is absent from the state, but a parent or person acting as parent continues to live in this State, a court of another state does not have jurisdiction unless the court of the home state has failed to exercise jurisdiction. This is the more appropriate forum pursuant to sections later in the act. If the child and at least one parent are in this State, there is substantial evidence concerning the case jurisdiction.
A court which has made a child custody determination has continuing exclusive jurisdiction until a court of this State determines the child, or the child’s parents and any persons acting as parent, do not have a significant connection with this State. A court which has made a child custody determination and does not have exclusive continuing jurisdiction may modify its earlier determination only if it has the jurisdiction to make an initial determination.
Senator Nolan:
One thing I have learned about child custody cases is we have an imperfect system. It reminds me of a house of cards. Through our efforts in the legislature and court precedence, we have built the system we currently have. What will be the precedence for people, who are currently in the system and are dissatisfied with the outcome of their situation in custody hearings, to use some of the provisions and open up new appeals?
Mr. Daykin:
If the existing determination was made under the present house of cards, before we established the new one, it is res judicata as to a particular case. If there were otherwise substantively adequate grounds for bringing a new action, then the question would be, what is the home state of the child at the time the new action is brought? If Nevada is the home state of the child, the Nevada court has jurisdiction to enter a new order, but it also has jurisdiction to sustain an earlier one. I do not think we are upsetting the applecart totally by inviting everybody to come in. This act, if enacted, would not be grounds for trying to upset or repeal a decision under the old law, as long as the decision was valid under that law.
Senator Nolan:
There is nothing obviously precluding somebody who wants to take a new action under provisions within this standard. I know these cases quite often end up having appeal after appeal after appeal.
Mr. Daykin:
There is nothing which precludes actions, and I do not know how you could, by this act or any other.
Chairman Amodei:
Mr. Daykin, do we have any information regarding how many other states have already enacted this provision?
Mr. Daykin:
I should have looked in the yellow book before I came. By your leave, Senator Amodei, I will find out and telephone your office to tell you.
Chairman Amodei:
That is fine, thank you; I just wanted an idea of where we are in the process.
Mr. Daykin:
I can say, without giving a number, several states have ratified it, but it is relatively young and by no means have all states enacted it yet.
Chairman Amodei:
A member of the Nevada Bar in Clark County, Pamela Lawson, is shown as being in favor of S.B. 48; do you have any testimony you want to provide?
Pamela Lawson, Attorney:
I am very much in favor of this bill; I think it is sorely needed. I did not quite understand the testimony regarding Nevada as the home state of a child. If the child is permitted, through court order, to move with one parent to another state, but the other parent stays in Nevada; after 6 months does the home state of the child become the new state where the child has moved?
Mr. Daykin:
The state in which a child has lived with a parent, or person acting a parent, for at least 6 consecutive months immediately before the commencement of the proceeding is the home state. If, by permission of the court of this State, the child was taken out of the State by one parent and established a new home, after at least 6 months, that would become the home state of the child. That court would then be the one with the most recent evidence of the child’s circumstances. Information from Nevada could and would be sought by that court.
Ms. Lawson:
This could raise a problem as usually the parent, who remains in Nevada when the child moves, is normally the parent who pays child support. All states are not uniform in the amount of money they require to be paid.
I think this bill is much needed and it will help.
Senator Care:
Ms. Lawson practices with the firm from which I am currently on leave of absence. As you can tell, her practice in this area is extensive. Twice in my career, since being elected, I have had the judge call me to the bench and say, “Senator Care, what were you guys thinking?” If there is no need for a work session, that is fine with me. If it comes to my attention that the bench has concerns, I will find a way to address them.
Chairman Amodei:
We are going to move the bill today if there are four votes. What we need to do with respect to Ms. Lawson’s concern, if there is something that can be done, is to amend it between now and the floor. I certainly would have no objection to offering an amendment on the floor. Child custody is obviously emotional and is not a perfect endeavor. Mr. Wilkinson, it would be helpful, when this bill gets to the floor, if we had a comparison for what the present state of the law is and where this would make changes in respect to existing law. With that proviso, is there a motion?
Senator Nolan:
Perhaps the former speaker from southern Nevada might answer a quick question. Since we do not have the comparison in front of us, how exactly does this bill differ from current law? Give us an example of how it is going to be more beneficial than what is in statutes now.
Ms. Lawson:
I believe the bill is more specific and clear than current law. It is not particularly different as far as we still have the home state idea. We still have the 6 months. We still have the courts communicating with each other to decide who is best situated to handle the case. When there is a conflict, they informally get in touch with each other. At the present time, states do not always follow the 6‑month designation, particularly the state of Colorado.
Chairman Amodei:
I have received a note from my staff indicating 30 states have adopted this act with 9 states introducing it in 2002. This is a product of the uniform law commissioners. Senator Care has indicated he is willing to work throughout the process. Keep in mind we are in the second week of only about a 16‑week endeavor. When we have items where there is no opposition to testimony, we will go ahead and move legislation.
SENATOR WASHINGTON MOVED TO DO PASS SENATE BILL 48.
SENATOR WIENER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TITUS WAS ABSENT FOR THE VOTE).
*****
Chairman Amodei:
Ms. Lawson, if there is any material for which an amendment would be appropriate, please get with Senator Care and Mr. Wilkinson and we will generate a floor amendment.
Next we will open the hearing on Senate Bill 55.
SENATE BILL 55: Revises provisions governing power of settlor and beneficiary of trust to alter certain statutory duties, liabilities, privileges and powers of trustee. (BDR 13-874)
John Sande III, Lobbyist, Nevada Bankers Association:
I am a partner of the law firm Jones Vargas and I am here today representing the Nevada Bankers Association in support of Senate Bill 55. Chapter 163 of Nevada Revised Statutes provides certain powers and obligations of trustees. It deals with such things as loaning to the trust by a trustee, depositing money by the trustee with itself, selling property to the trust by the trustee, voting stock, as well as contracts of trustees, torts committed by trustees, withdrawals of mingled money of multiple trusts, and other matters.
Nevada Revised Statutes 163.160, and section 163.170 provide some of the obligations and powers of trustees which can be relieved by the settlor or beneficiary of the trust, even though they are set forth specifically in NRS. If a settlor of a trust specifically puts in language that relieves the trustee of certain obligations or alters or denies the obligations of a trustee or adds duties, restrictions, liabilities or privileges to a trustee, even though they are counter to NRS 163.010 through 163.200, that is authorized. Certain obligations set forth in NRS 163 et seq. can be relieved.
However, there are three specific sections under existing law that cannot alter the obligations of a trustee. They are NRS 163.030, 163.040, and 163.050; NRS 163.040 provides for deposits of money by a corporate trustee with itself, and cannot be altered. It sets forth certain requirements for corporate trustees on how they can deposit money. Nevada Revised Statute 163.030 also cannot be changed. It concerns the loaning of trust funds to a trustee. Nevada Revised Statute 163.050 deals with selling property by a trustee or an affiliate of a trustee to the trust, or purchasing trust property by a trustee or an affiliate of a trustee. We believe NRS 163.050 should be deleted. If a settlor of a trust or if a beneficiary of a trust wants to relieve a trustee from certain obligations, they can do so by putting specific language in the trust instrument when it is created. They can specifically allow a trustee to sell property to the trust or purchase property from the trust. A beneficiary can also waive those provisions.
Mr. Sande:
One of the banks would like, if the beneficiaries or the settlor specifically provides it in there, to have the ability to have an affiliate of the trustee be able to sell insurance to the trust. This is common in most states. Nevada is in the minority with only a couple of states even lacking this provision.
I will give you an example of why you would want to have the power to either sell or purchase property from a trust. Suppose there is a husband and wife who own the family cabin. One of the spouses dies. The other spouse is the trustee of a trust created in a will, which is a testamentary trust created during their life. When one spouse dies, the other spouse has a 50 percent interest in the cabin. The couple gave the cabin to their children in trust because they were minors. At a certain age the children will get the cabin, as the couple wanted to keep it in the family. What would happen if the surviving spouse wanted to sell their half to the trust? They wanted their children to have it and could not afford to give it, but would like to sell it.
Under existing law this action would be prohibited. If you specifically put language in the trust document or had the adult beneficiaries consent, it would make sense to allow the trustee to either purchase property from the trust or sell property to the trust. There are other provisions in the statute protecting the beneficiaries of the trust from a trustee who did this improperly. There are sections making it clear what a trustee who takes any action must do in the best interest of the trust. The specific provisions in NRS 164 say a court always has jurisdiction over a trust even if it is an inter vivos trust, created during life and not normally subject to probate. The courts still have the power under NRS 164 to decide if the beneficiaries of the trust have been harmed. What we would like is to have these two sections amended, so when creating a trust, a beneficiary or a settlor could specifically say they wanted their trustee or an affiliate of the trustee to have the power to sell or purchase trust property.
Senator Wiener:
When establishing a trust, would the person whose property is being considered need to, by direct notation in trust documents, set up the language permitting this after they die?
Mr. Sande:
Yes, yes.
Senator Wiener:
Their intent would have to be honored?
Mr. Sande:
Their intent would specifically have to be included according to section 1 of S.B. 55 to amend NRS 163.160. It would either have to be done at the time the trust was created or by an amendment. The beneficiaries could, if they were of majority, make approval even though the settlor did not include these powers. We think it is important for the trustee to be able to sell property to the trust or be able to purchase property from the trust.
Senator Wiener:
There are two ways this could be resolved according to what you are asking: either by intent written into a trust document or, if it was not so indicated, an agreement of all beneficiaries.
Mr. Sande:
Right.
Senator Wiener:
Therefore, if even one beneficiary protests, it would not occur.
Mr. Sande:
Yes, it would have to be all the beneficiaries. It needs to be unanimous.
Senator Nolan:
You indicated there is a “we” in this and you did not specify who “we” is with respect as to who is requesting the bill.
Mr. Sande:
It is the Nevada Bankers Association.
Senator Nolan:
If there is a joint trust between the primary trustee and the children, and upon the death of the primary trustee property is then transferred to the decedents, would this change allow the primary trustee to make the sole decisions as primary recipient of the property, without any input from the children who would eventually receive the property?
Mr. Sande:
If a husband and wife create a joint trust for their children and the surviving spouse is the trustee, usually you will have what is called a credit shelter trust. Usually this goes for the benefit of the surviving spouse, but you could have it for the benefit of the children. Let us assume you have a husband and wife and one of them dies. There is a trust for the children and in this case, there is a half interest in the family cabin. If you had language that relieved the trustee of the liability created by NRS 163.050, the trustee, the surviving spouse, could deal with the trust for the children. That trustee could either buy or sell property from the children’s trust and would not be violating the provisions of the statute. Obviously they have to do what is in the best interest of the trust. If they did something not in the best interest of the beneficiaries, the beneficiaries could go after the trustee. Responsibility is not relieved. It is just saying let us not have a rule that would prohibit some very sound transactions.
Senator Nolan:
By allowing the trustee to sell property, would this be an avenue by which if the survivors had debt, this could be a situation where they are compelled to sell property to satisfy debt and legal fees?
Mr. Sande:
If the children’s trust has a lot of debt that has to be paid off and the trustees have some property, the trustees could sell the property. At least the trustee of the trust could sell the property for the benefit of the children. However, if there is a lot of debt in the trust, and nobody anticipated that there would be the debt when the trust was created, the trustee could sell the children’s 50 percent interest in the cabin. They want to keep it in the family if they can. If the trust does not buy it, and tries to sell a half interest in the cabin, nobody is going to pay very much money for it. The trustee goes and pays more money and buys the cabin so the surviving spouse will end up with the whole cabin and the children’s trust has at least some money in it so it can pay off its debt. Without this provision, a trustee could not sell their half. This provision allows more flexibility and does not relieve the trustee from the normal fiduciary responsibilities a trustee has.
I should point out when I started practicing we did wills. That is all we did, we set up testamentary trusts and wills. Now we are almost committing malpractice if we do just wills because of the setting up of inter vivos, and revocable trusts for husbands and wives and for other people, so they may avoid probate.
We want to put as many powers for the trustee in trust documents as we can because it never can be anticipated what is going to happen. If the trustee wants to take some action and the trust power is not specified, they have to go to court and seek instructions, which can be a very costly thing. When we draw up trust documents, we usually throw in the kitchen sink. We give the trustee as many powers as a normal person, or the settlor of the trust, had at the time we created it. There is flexibility because provisions say we must act as a reasonably prudent person in the best interests of the beneficiaries of the trust.
Senator Care:
John, if the family cabin is located in Maine as opposed to Ely, is it still the trust itself that governs? Maine has nothing to do with it, correct?
Mr. Sande:
That is correct as long as it has been transferred into the trust.
Senator Care:
Trusts are like wills; if we do this deletion, people are free to come here to execute trusts even though none of the beneficiaries, the settlor, or the trustee, even live in Nevada, correct?
Mr. Sande:
They could set up a trust here. There is always a question of jurisdiction if something happens to them, as where they died or where the trust assets are located. Those are issues that vary from state-to-state, but you could set up a trust here even though you were a nonresident.
Chairman Amodei:
John, if I am looking at S.B. 55 correctly, this basically allows in two circumstances the ability to waive the statutory requirement in NRS 163. One is by the person who is creating the trust, the settlor in the trust document, if they elect to waive the requirement. The other one is if all the beneficiaries agree, despite its absence in the trust document.
Mr. Sande:
That is correct. We are not deleting the requirement that a trustee cannot loan trust funds to itself. We are leaving in NRS 163.030. We are also leaving in NRS 163.040, the requirements providing how a trustee must deposit corporate monies into accounts.
Chairman Amodei:
Would this provide flexibility for both the person who is creating the trust and for the beneficiaries of the trust?
Mr. Sande:
That is correct. If you did not have this language, and if it is important, you probably would have to go to court and try to seek instructions. A lot of times the courts will determine this is so important they are going to allow it, even though it is not specified, they are going to give you the power to do so.
Senator Wiener:
When you talk about the best interests of the beneficiaries, let us say the trustee, according to the documents on how the trust is established, makes an annual distribution of income. There are beneficiaries who are just receiving the monies, but do not have an active participation in the trust. Is there any requirement at the present time, so they know if their best interests are being served or not, for an accounting in the distribution check of where the monies came from or what transpired? They may not even be aware their best interests are not being served unless there is an accounting of where those monies came from. A check does not tell you much.
Mr. Sande:
If a beneficiary requests an accounting, the trustee would be so required or the beneficiary could go to court. If you have a testamentary trust, which is created by a will, you have to go to court. In addition, you have to file annual accountings with the court, which have to be approved. Unless it is a very large trust, it is very costly. In most cases, I would think a trust for your children requires you to distribute all the income. The surviving spouse, the trustee, would want to know where the money came from. They could go to court if the trustee did not give them an accounting, but to my knowledge, there is nothing in the statutes that requires an annual accounting to a beneficiary.
Chairman Amodei:
Are there other questions of Mr. Sande? Is there anyone wishing to testify in Clark County? Seeing none, is there anybody in Carson City who wishes to testify? The hearing on S.B. 55 is closed.
SENATOR CARE MOVED TO DO PASS ON S.B. 55.
SENATOR WASHINGTON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman Amodei:
We will put Senate Bill 55 on the regular calendar. The next item under consideration today is Senate Bill 57.
SENATE BILL: 57 Revises certain provisions governing program of restitution through work. (BDR 5-588)
Senator Valerie Wiener, clark county Senatorial district No. 3:
Today I appear before you to urge your support for S.B. 57, which revises certain provisions governing juvenile restitution work programs (Exhibit D). It is a modest statement to say S.B. 57 reflects an evolutionary process of this innovative program. This program involves a work ethics component and an employability skills component to help kids. It is primarily a diversion program providing the opportunity to help kids who have made bad decisions. It also provides an accountability, which many of our programs for juveniles do not, in the way a child does learn about employment and work ethics. The child goes to work and part of his paycheck goes to the victim of his delinquent act. Currently the law provides a 50-50 split between the juvenile and the victim. There is even compensation on both sides providing a dual-learning experience where the child learns accountability for his or her acts as well as learning what it is like to be compensated for a job well done.
The program in Las Vegas is called REAL (Restitution Earned, Accountability Learned) and I am so pleased to say REAL has become a reality. Senate Bill 57 has two modest changes to the program as it has been working. In section 1, subsection 3, paragraph (a), subparagraph (2), certain youths who are currently prohibited from participation would be allowed in the program if their probation officer determines they would benefit from REAL. Section 2, subsection 3, changes the formula for a 50-50 split. We allowed for children finding their own employment a reward of a 50-50 split. If the program assumes the burden of responsibility for finding employment, the child would receive 40 percent and the restorative portion to the victim would be 60 percent. It is an incentive plan to encourage young people to find their own employment.
It would be my hope this would be the third and final time I come before the committee to revise the bill and the law. It is working in Nevada. Mr. Burgess will explain how the program is working in the south. I urge committee support for Senate Bill 57.
Senator Washington:
Congratulations on your work on this bill. In section 2, subsection 3 of the bill, as to 60 percent of the wages of the child being deducted, is that an additional 10 percent for administrative fees or costs?
Senator Wiener:
The intent is for additional compensation to the victim. Right now it would be 50 percent to the juvenile, 50 percent to the victim. The 40 percent would be if the child gets employment through the program. I am hoping to create an incentive for the juvenile to find employment. If the child were to get 50 percent, that is 25 percent more compensation for going out and finding a job. If the program itself needs to seek the employment and recruit employers, then the additional 10 percent would go to the victim and not to the program itself.
Kirby L. Burgess, Director, Department of Juvenile Justice Services, Clark County:
We are pleased with the flexibility and the incentive provided by this bill (Exhibit E). We hired Mr. Honicker with grant funds from OJJDP, the Office of Juvenile Justice and Delinquency Prevention. His salary is fully covered and all the restitution owed by the youngsters goes directly to the victims. There are no administrative costs.
We conducted a pilot project of the REAL program from January to September of 2002 before its full implementation. During that time period, 88 percent of the youngsters we dealt with were males and 12 percent were females. They ranged in age from 14 to 18 with the majority being between 16 and 17 years old. They represented a cross section or array of offenses. We had outstanding results. Close to 93 percent of the youth participating in the program did not commit any additional offenses. Forty-two percent obtained jobs lasting anywhere from 3 to 6 months and we recovered restitution of about $2500 for the victims. Fifty-seven percent of the restitution orders were paid in full and the rest were either partially paid or we are continuing to seek payment at this time. This bill is another tool in our array of continuation of care. It allows us to provide services at the front end of our system, which is to turn youngsters around and hopefully keep them from penetrating the juvenile justice system anymore than they have already.
Jamie Honicker, Department of Juvenile Justice Services, Clark County:
I am a job developer and have been implementing the REAL program. It is my plan to carry the mission appointed to me by educating the youth, providing assistance in gaining work cards, recognizing employment as it is needed, and making them accountable for the restitutions they do owe to their victims.
Chairman Amodei:
Our records should also indicate Gloria Fenster, Management Analyst, Department of Juvenile Justice Service, Clark County is present. She does not desire to speak, but she is in favor of Senate Bill 57.
Leonard Pugh, Director, Department of Juvenile Services, Washoe county and President, Nevada Association of Juvenile Justice Administrators:
I am here today to offer support for Senate Bill 57. The program, as it is structured, is operated primarily in Clark County. Prior to this legislation we already had a job training program in Washoe County that was working well. Our program is in the same spirit as Clark County, in terms of providing job training and skill development to youngsters. They go out and work under our supervision and they can earn a stipend. The money is used to pay restitution to victims. Some of those kids participate in programs, others go out and find their own jobs. Last year we collected $47,000 in restitution. It is within the true spirit of restorative justice and it is working well within our county. The revisions add some flexibility, allowing more kids to participate in such a program and learn skills that can make them more productive members of our society, so we support the legislation.
Senator Wiener:
Do you allow any of the compensation to go to the juvenile in earnings or does it all go the victim?
Mr. Pugh:
The kids get a check and payment is their responsibility. We do not require a specific percentage. They have a case plan that says they owe restitution and there are certain deadlines by which they have to make restitution. The probation officer is aware of the fact they got a check. They answer directly to the probation officer as to whether they did or did not take care of their responsibilities. This has worked well for us to date, so we have not felt the need to put a special account into place.
Senator McGinness:
Is the juvenile responsible to actually go to the victim to make the payment?
Mr. Pugh:
No, we collect the payment and issue the check directly to the victim so the victim does not have any further contact with the perpetrator.
Senator McGinness:
Is it sort of a payment plan?
Mr. Pugh:
We set up a restitution account after the restitution is ordered, and the child is required to make payments to the account. Although there is some overlapping of calendar years, during the year of 2001–2002 we had 135 kids ordered to make restitution and had 140 kids complete their order. Though some of those were left over from the previous year, we are collecting the vast majority of their restitution responsibility and victims are getting paid through our process.
Senator McGinness:
Do you know if any rural counties are taking advantage of this program?
Mr. Pugh:
I believe all counties are making sure victims are getting compensated to the best of their abilities. They have similar programs. The smaller counties do not have the ability to run formal programs, but they are ensuring their children are getting jobs and paying off their victims.
Chairman Amodei:
The hearing on Senate Bill 57 is closed. What is the pleasure of the committee?
Senator Wiener:
There is a technical problem with the language in the bold, the word “or” appears. We need to get rid of the word because it is not an “or” situation. Those are stacked conditions, not alternatives.
Bradley Wilkinson, Committee Counsel:
On page 2, line 17, the word “or” simply should not be there.
SENATOR WIENER MOVED TO AMEND AND DO PASS S.B. 57.
SENATOR NOLAN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR CARE WAS ABSENT FOR THE VOTE.)
*****
Chairman Amodei:
We have some committee introductions for BDR 15‑319, BDR 14‑511, BDR 14‑603, BDR 1‑610, and BDR 1‑620.
BILL DRAFT REQUEST 15-319: Removes element of knowledge from crime of selling, giving or furnishing alcoholic beverage to person under 21 years of age. (Later introduced as S.B. 91.)
BILL DRAFT REQUEST14-511: Authorizes certain governmental entities to share certain records in their possession concerning defendants and offenders. (Later introduced as S.B. 90.)
BILL DRAFT REQUEST 14-603: Revises provisions governing determination of competency of defendant to stand trial. (Later introduced as S.B. 89)
BILL DRAFT REQUEST 1-610: Allows district judge to transfer certain civil actions to justice’s court under certain circumstances. (Later introduced as S.B. 88.)
BILL DRAFT REQUEST 1-620: Revises provisions pertaining to transaction of judicial business. (Later introduced as S.B. 87.)
I am looking for a motion to introduce these with the usual proviso a supportive introduction does not obligate anybody to support the bill in hearing or on the floor.
SENATOR MCGINNESS MOVED TO INTRODUCE BDR 15‑319, BDR 14‑511, BDR 14‑603, BDR 1‑610, AND BDR 1‑620.
SENATOR WIENER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR CARE WAS ABSENT FOR THE VOTE.)
*****
Senator Titus:
On behalf of the southern Nevada legislators, I request Monday morning meetings do not start until 9:00 a.m., at least while it is feasible, allowing us to fly back from Las Vegas on Monday.
Chairman Amodei:
Yes, it is my intention to make Monday mornings start at 9:00 a.m. unless something changes. We need committee consent to request a committee BDR.
Senator Washington:
The request for a BDR concerns interstate compact for juvenile movement between states. This is a supplement to the adult compact we worked on last session.
SENATOR NOLAN MOVED TO REQUEST A COMMITTEE BILL DRAFT PERTAINING TO AN INTERSTATE COMPACT FOR MOVEMENT OF JUVENILES BETWEEN STATES.
SENATOR WIENER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR CARE WAS ABSENT FOR THE VOTE.)
*****
Chairman Amodei:
The request will be submitted. There being no further business to come before the committee, the meeting is adjourned at 9:44 a.m.
Lora Nay,
Committee Secretary
APPROVED BY:
Senator Mark E. Amodei, Chairman
DATE: