MINUTES OF THE
SENATE Committee on Judiciary
Seventy-second Session
April 4, 2003
The Senate Committee on Judiciary was called to order by Chairman Mark E. Amodei, at 8:16 a.m., on Friday, April 4, 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 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
Barbara Moss, Committee Secretary
OTHERS PRESENT:
Jim Werbeckes, Lobbyist, Farmers Insurance Group
Janice A. Wright, Deputy Treasurer, Office of the State Treasurer
John Fowler, Chairman, Executive Committee,Business Law Section, State Bar of Nevada
Scott Anderson, Deputy, Commercial Recordings, Office of the Secretary of State
ELizabeth MacMenamin, Lobbyist, Retail Association of Nevada
Marta Hall, Education Consultant, Department of Corrections
R. Ben Graham, Lobbyist, Nevada District Attorneys' Association/Las Vegas
Chairman Amodei:
The hearing is open on Senate Bill (S.B.) 378.
SENATE BILL 378: Revises provisions relating to cancellation or nonrenewal of policy of insurance issued to common-interest community. (BDR 10‑1053)
Jim Werbeckes, Lobbyist, Farmers Insurance Group:
Senate Bill 378 is a very simple bill that arose from a problem with a homeowner’s association in Las Vegas. Farmers Insurance Group (FIG) tried to nonrenew a policy based on approximately 3 losses in a 1‑year span. Prior to canceling the policy, the homeowner’s association filed a complaint with the Division of Insurance citing Nevada Revised Statutes (NRS) 116.31133, stating it was improper notice to the homeowners’ association. The complaint indicated FIG needed to not only inform the association, but every homeowner and every homeowner’s lien holder, in order to have proper notice. The Division of Insurance in Las Vegas upheld it and FIG ended up staying on the risk for another year. It is difficult for an insurance company to get off any type of risk if it has to notify every homeowner and homeowners’ association, especially homeowners’ associations with up to 500 units.
Therefore, S.B. 378 would require insurance companies, when nonrenewals are sent, to notify homeowners’ associations and any homeowners or lien holders who had requested a copy of the master policy.
Chairman Amodei:
Did the Division of Insurance tell you that under existing statute you had to …
Mr. Werbeckes:
Under existing statute we had to notify every homeowner and every lien holder in order for the nonrenewal to be a proper notice of cancellation. The statute was changed in the 2001 Legislative Session in one of those big homeowner common-community bills. All cancellation notices for insurance companies fall under NRS 687B, which is the statute normally perused for cancellations and where cancellation notices are found. Therefore, we never looked under common‑interest communities. Senate Bill 378 attempts to clarify when an insurance company sends a cancellation notice to a homeowners’ association, it is the responsibility of the homeowners’ association to notify the homeowners and lien holders who have requested a copy of the master policy.
Senator Care:
It seems to me it is the obligation of the homeowners’ association board to notify the members of a cancellation.
Mr. Werbeckes:
Farmers Insurance Group does not keep track of who owns the units, and units change hands quite often in a 500-unit complex. It also does not have input as to who refinances a unit.
Senator Care:
It also seems to me communication is between the lien holder and the homeowners’ association board itself, not the carrier. You could go outside of that, but then again if you already gave them a certificate, under this you would still have to give notice to just those who had been issued a copy of the certificate.
Mr. Werbeckes:
Correct. We are just trying to clarify who receives the notice.
Senator Wiener:
Would it be requested through the homeowners’ association board for specific members, or would they be given notice that to obtain the information they would have to request it of the insurance company?
Mr. Werbeckes:
Most of the time the homeowner or lien holder will request a copy of the master policy from Farmers Insurance Group or the particular carrier directly and the insurance company provides the policy.
Chairman Amodei:
Is there any more testimony on S.B. 378? Seeing none, the hearing on S.B. 378 is closed. What is the pleasure of the committee?
SENATOR CARE MOVED TO DO PASS S.B. 378.
SENATOR WIENER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TITUS WAS ABSENT FOR THE VOTE.)
*****
Chairman Amodei:
The hearing is open on S.B. 434.
SENATE BILL 434: Exempts from execution by creditors certain money held in trust forming part of qualified tuition program. (BDR 2-303)
Janice A. Wright, Deputy Treasurer, Office of the State Treasurer:
I am attending the hearing on behalf of State Treasurer Brian K. Krolicki, and will read his written testimony (Exhibit C).
Senator Care:
The distinction between what is requested and all the other protected assets is those other assets actually belong to the judgment debtor himself or herself. Here you have assets that arguably would later go to a beneficiary. Right? This would be the child or grandchild, or it could be a child outside the family.
Ms. Wright:
All the assets in either a prepaid tuition program or a college savings program belong to the purchaser, they are not under the control of the beneficiary. It is the responsibility of the purchaser to make the determination whether or not those assets can be released for higher education cost. In terms of the prepaid program, those dollars are sent directly to the school upon approval by the beneficiary. Therefore, it is viewed as an asset of the purchaser, not the beneficiary, nor is it under the control of the beneficiary. One of the big selling points of 529 programs is purchasers have the ability to make the determination when and if those assets are used for the purposes of the beneficiary, but the beneficiary does not have control of these.
Senator Care:
What happens if, after judgment, the purchaser puts the money into a trust? Could that be touched?
Ms. Wright:
If the money is withdrawn from the prepaid tuition program?
Senator Care:
No. Let us say there is a judgment against me and I do not want anybody to get my money, so I put it into the prepaid tuition program. Can that money be touched?
Ms. Wright:
Those dollars are only available to pay for higher education costs. They cannot be withdrawn for any other purpose. Should the money be withdrawn for any purpose other than qualified higher education costs, there is a 10 percent penalty on the earnings and income tax must be paid on the earnings as well.
Senator Care:
I understand. Let us say a judgment is brought against me and I would rather my children have the money than the creditor, therefore, in order to evade execution on that portion of my money, I decide to put it into the prepaid tuition program. Can that money be reached under S.B. 434? Can it be used to evade execution on a judgment?
Ms. Wright:
If the date of that activity falls after the judgment, I would recommend an individual consult not only his or her tax accountant, but also his or her attorney. If the date occurs after the time of the judgment, the money could not be transferred into a 529 program and protected under that provision.
Senator Care:
Can the purchaser name himself or herself as beneficiary?
Ms. Wright:
The purchaser cannot name himself or herself as beneficiary under the prepaid tuition program, however, under the college savings program he or she could do so because assets can be put in that would include education for him or herself. The benefit is the earnings are not subject to federal income tax.
Senator Care:
Would I be able to use money I put into a prepaid program for myself? Could I later use the money that would otherwise be touched by someone attempting to execute on a judgment?
Ms. Wright:
Any dollars you put into the prepaid tuition program must be used for the beneficiary, or you may transfer from one beneficiary to another beneficiary, but it may not be used for your own higher education.
Senator Care:
What happens to the money should the beneficiary never attend college?
Ms. Wright:
The purchaser would request a refund or transfer it to another beneficiary up through first cousins.
Senator Care:
I guess arguably you could execute on that money although there might be a period of years between the time of the entry of the judgment and the refund.
Senator Wiener:
Does the purchaser determine in which educational institution the money will be placed?
Ms. Wright:
That is correct. The purchaser always retains control of where the money goes. The beneficiary must apply for a college, be accepted, and transmit that information to the purchaser indicating he or she wants the purchaser to pay the tuition for a particular school. Upon notification by the purchaser of the contract, the payment is transmitted directly to the school.
Senator Wiener:
In regard to Senator Care’s query about the 10 percent penalty, what would happen should the money be invested in anticipation of a judgment that predates the court action? Even if the money were reachable, the 10 percent penalty would still be imposed. Is that correct?
Ms. Wright:
That is correct.
Chairman Amodei:
Obviously nobody has a problem with protecting these assets as long as they are used for the purpose of the program. I think Senator Care’s question was, should somebody foresee a judgment situation on the horizon, there is concern the prepaid tuition program could be used as a shelter for assets from judgment. Have there been any instances thus far in the program in which assets were attached by creditors?
Ms. Wright:
Since the inception of the program in 1998, the bankruptcy court took the assets of two purchasers. Those two purchasers actually had four separate beneficiaries and the total amount was approximately $11,300 for all four accounts.
Chairman Amodei:
I assume you have set regulations through which you administer the program.
Ms. Wright:
Yes. We have adopted Nevada Administrative Code (NAC) 353B regulations for both the prepaid tuition program and the college savings program.
Chairman Amodei:
Please confer with State Treasurer Krolicki and inform the committee whether or not he would consider adding a provision aimed at prohibiting or discouraging the use of the program as a shelter for funds by debtors. Is there regulatory language that could be crafted which would address a time limit or something like that? I can foresee creative individuals using this as a shelter for up to $500,000 worth of assets. As Senator Care indicated, even with a 10 percent penalty, it is a better deal than losing the whole thing. Please ask the treasurer how to prohibit this in regulation from being used as a shelter by those who have no intent of sending children to college.
Ms. Wright:
I am confident Treasurer Krolicki would be receptive and willing to work with counsel to develop that type of language.
Chairman Amodei:
If we could get this in writing it could be used for the Legislative record should the issue come up on the Senate floor.
Ms. Wright:
We would be happy to provide it.
Chairman Amodei:
Are there any further questions or testimony on S.B. 434? Seeing none, the hearing is closed on S.B. 434 and opened on S.B. 436.
SENATE BILL 436: Makes various changes to provisions pertaining to business. (BDR 7-982)
John P. Fowler, Chairman, Executive Committee, Business Law Section, State Bar of Nevada:
In all the Legislative Sessions throughout the 1990s, the Business Law Section proposed bills changing, for the most part, Title 7 of NRS governing business organizations of all types. The Business Law Section executive committee this year, as in other years, attained endorsement of the Board of Governors of the State Bar of Nevada for this bill. The changes are mostly technical with one set of exceptions. I will describe the rather large scope of technical changes.
Our mission is not to propose controversial huge changes in policy, but to refine corporate and other business laws to make Nevada a better place to do business. To be more specific, to attract business people doing business throughout the United States to form entities in Nevada. This effort has been in close conjunction with the efforts of the Office of the Secretary of State to make its office friendly, up to date, and technologically advanced, which for the most part, has been done. A wonderful job has been done through a succession of secretaries of State, starting in 1990 and moving forward to the present day. It is a very customer-oriented office with quick response and friendly help. The Web site is among the best in the business. It is the effort to have the Web site be the place where the Office of the Secretary of State does business that is the impetus for most of the bulk seen in S.B. 436.
The vast bulk of S.B. 436 are the same changes made to many of the sections in Title 7 of NRS governing corporations, limited liability companies, partnerships, and the like. I submitted a written memorandum entitled, “Introduction to Senate Bill 436” (Exhibit D. Original is on file in the Research Library.), which describes the changes made and lists the names on the executive committee and others who helped draft S.B. 436.
Electronic filing of documents is the future. It is already done on a national level with the U.S. Securities and Exchange Commission (SEC) and will increasingly be something customers will expect and demand from filings at State offices, the filings being the papers that begin the existence of business organizations. In order to bring the day sooner, the Business Law Section changed the word “execute” to “sign.” The idea is to allow electronic signatures and filings.
Although the Office of the Secretary of State is not yet capable, they will be able to do so as their interface with the Internet becomes more sophisticated. The system will be analogous to the EDGAR system with the SEC whereby corporations can be formed, filed, and signed electronically, without papers sent by mail or Federal Express. This will vastly shorten transaction time and make it possible to charge fees electronically. No bounced checks. It will make things run faster and is expected these days.
Global changes, first described in the memorandum, are an effort to bring this day sooner rather than later. The word “sign” is defined in all the chapters. The word “record,” which is a substitute for the word “document,” indicates it is information on a tangible medium stored in electronic, or other medium, retrievable in perceivable form. Although it is a strange way to define the word “record,” the definition comes largely from existing statute called the Uniform Electronic Transactions Act at chapter 719 of NRS, and part comes from a federal act on the same subject. The idea was to make the definitions in Title 7 of NRS fit with the Uniform Electronic Transactions Act and some of the provisions in the Nevada Uniform Commercial Code (UCC) so the meanings and concepts are the same. Lawyers and business people in the future will be presented with one set of concepts rather than several different, and fighting, systems of concepts to govern the same subject matter.
Mr. Fowler:
Corporations will be allowed, but not required, to use electronic record keeping. This is important. Large corporations have quantities of records, minutes of the boards of directors, financial records, and there should be nothing in our statutes that can be read as requiring data be kept in paper form. The one caveat is they must be able to print everything out, and this requirement is also contained in the statutes.
That is the bulk of the statutory changes. Most of the changes are putting in those definitions and terms throughout Title 7 of NRS. The other changes to Title 7 of NRS are truly technical this year. There are no big policy changes. We are tinkering to clarify and answer questions to make the statutes more understandable and eliminate duplicative language. The business combination statutes, for instance, are a complex set of statutes which are basically a public corporation takeover-slowdown statute. We are tinkering with the statutes to make it a little easier to opt in and opt out of the Act should the boards of directors and stockholders deem it wise. Other specific technical changes are described in the memorandum (Exhibit D).
There are also some changes in S.B. 436 to the UCC in one instance, and to chapter 602 of NRS on fictitious firm name statements. I want to talk about the UCC because it is an important statutory change. When article 9 of the UCC was revised and put into place in 1999, Nevada adopted the uniform changes with one exception. The exception was the portion of the bill that would threaten the use of a financing device. The financing device was threatened by a case decided in Oregon in 1993 that revised the portion of 9318 of the UCC placed to basically overturn the case, and did not make it into our revision for one reason or another. We are proposing that provision be installed, and article 9 would then be uniform with most of the rest of the states.
The fall 2002 edition of the Nevada Law Journal, published by the William S. Boyd School of Law, had a well-written article in English, which is nice for law review articles, by a student at the Boyd School of Law. It is the best article written on the subject matter, is understandable, does an excellent job of discussing the issue, and highly recommends section 9318 of the UCC be amended as we recommend. Read the article in order to understand why the Boyd School of Law is of great benefit to the State and why the students are truly excellent, even though they are in their first formative years.
There are two other non-Title 7 changes, one is a technical change to the requirement that meets-and-bounds descriptions appearing in deeds must have the authors of the meets-and-bounds description reflected on the document being filed. It is a good idea. We want to clarify the statute to ensure when an author is unknown, a person can refer back to the document where the description was found. In a deed you may have found the description in 10 years ago, all you have to do is refer to the previous document in the new document and you comply with the statute. Although identifying the author with the description was the intent of the statute, it is not worded quite that way. The other change was made to the fictitious firm name statement statutes in response to a change made in the 2001 Legislative Session which put a 5‑year time limit on fictitious firm name statutes. We wanted to change the statutes to require information that would allow county recorders to send out reminder statements every 5 years to remind businesses their firm name statements are about to go away. The statute did not require the information to make it easy for the recorder to do reminder statements. Those are the bulk of changes in chapter 602 of NRS.
Regarding S.B. 436, we discovered some technical glitches on which I need a few days to collate and supply to the committee. I would also like to work with the Office of the Secretary of State, who sponsored Assembly Bill (A.B.) 536, which touches on many of the same statutes. In a few instances, we need to make sure the changes in S.B. 436 and A.B. 536 fit. There are few typographical errors as well. I will supply the committee with the technical information before the bill is passed.
ASSEMBLY BILL 536: Makes various changes to filing requirements for business entities. (BDR 7-454)
Senator Wiener:
Page 3, lines 12 and 13, section 4, subsection 1, paragraph (i) of S.B. 436, says, “… a record encrypted or similarly processed in whole or in part … .” I am concerned about the words “in part” in regard to fraud. A person’s signature, mark, or whatever, is recorded and protected. If only part of it can be used for a transaction, it might open it to fraud.
Mr. Fowler:
This comes from one of the uniform acts. In order to tell you exactly why they used “in whole or in part” I would have to go back to the comments to the uniform act. In general, the term “signature” must include verbiage to allow both a traditional pen‑and‑ink signature as signed on a check, and an electronic signature that is encrypted. It is a complicated process that I do not understand. The idea is to allow encrypted information to travel across the wires to stand in the stead of a signature. The idea is to give comfort that the person submitting the document has, in an electronic sense, signed the document. I can only suppose at this point if one were to submit a signature part electronically and part in writing, although I do not know how it would work, it would give the option to the filing office, in this case the Office of the Secretary of State, to accept the signature part in writing and part electronically. Does it make sense to me? No. To give the full reasoning behind why it says “in whole or in part” I would have to refer back to the definition from the Uniform Electronic Transactions Act, which is in chapter 719 of NRS. I will e-mail the answer to you.
Senator Care:
The overall impression I have of this is it strengthens the role of the directors … I do not want to say at the expense of the shareholders … maybe efficiency is the argument. Please explain the following sections of S.B. 436: section 20, subsection 2; section 26, subsection 1; section 29; section 35, subsection 7; section 37, subsection 5; section 44, subsection 2; section 46, the definition of “interested stockholder”; section 103, the accurate description of a corporate action; sections 141 and 142, which apply to a limited liability company (LLC), what constitutes business in this State; and section 260, which is the change to article 9 of the UCC. In regard to section 260, I would be satisfied with a copy of the article from the Boyd School of Law.
Mr. Fowler:
I will send you an e-mail with the answers to those questions.
Scott Anderson, Deputy, Commercial Recordings, Office of the Secretary of State:
I am present on behalf of Secretary of State Dean Heller. We have a few minor issues with S.B. 436 and would welcome the opportunity to meet with the State Bar of Nevada to go through the minor disparities between our bill, A.B. 536, and their bill, S.B. 436, to arrive at language that would reconcile the two bills to something acceptable to both parties and this committee.
Mr. Fowler:
We have been working with the Office of the Secretary of State every session since 1991 and reconciled bills, in fact many years we combined them. This year we probably will not do that since they are in different Houses. We want to make sure they fit together and we will accomplish the task Monday or Tuesday next week.
Chairman Amodei:
Please note Thursday is the committee’s last scheduled meeting and your comments must be submitted to Mr. Wilkinson in time to craft an amendment for a work session on that day.
Mr. Anderson:
We will try to set our schedule as early in the week as possible, preferably Monday.
Chairman Amodei:
The hearing is closed on S.B. 436. The work session is open beginning with S.B. 50.
SENATE BILL 50: Authorizes state agencies and local governments to adopt more stringent restrictions governing tobacco and products made from tobacco than restrictions imposed pursuant to state law under certain circumstances. (BDR 15-260)
Chairman Amodei:
A proposed amendment is found at tab D in the Work Session Document (Exhibit E. Original is on file in the Research Library.), which, if adopted, would allow school districts to impose more stringent restrictions on the smoking use, sale, distribution, marketing, display, or promotion of tobacco. Mr. Wilkinson, I see no language that indicates on school property, or is it left open-ended?
Bradley Wilkinson, Committee Counsel:
I think it is assumed they would not be able to regulate anything they did not have the authority to regulate.
Chairman Amodei:
Please add language that clarifies the law only applies to the property over which they have jurisdiction for those purposes.
Mr. Wilkinson:
Certainly.
Chairman Amodei:
Under the existing statute, some supermarkets have until January 1, 2010 and the date is being moved up 36 months to 2007. I understand it is not a problem to those concerned. A second proposed amendment provided in skeleton form by Helen Foley, Lobbyist, Clark County Health District, found under tab E (Exhibit E), represents more significant action than the amendments under tab D. Obviously, neither of the amendments allow for local control. I want it put on record I requested Mr. Anthony to provide information on what has been done at the State level.
I also want to make certain the record contains the fact the Nevada Legislature has not been inactive in terms of smoking measures. In the 1993 Legislative Session, S.B. No. 421 of the 67th Session prohibited placement of vending machines in public elevators, waiting rooms, medical facilities, medical‑professional offices, stores that sell food, childcare facilities, and buses, if minors have access to those areas.
In the 1995 Legislative Session, A.B. No. 622 of the 68th Session required the attorney general to inspect for and force compliance with laws pertaining to sale of tobacco and report upon those inspections.
In the 1995 Legislative Session, A.B. No. 637 of the 68th Session provided an appropriation of money to enforce prohibiting sale of tobacco to minors, the “sting program.”
In the 1997 Legislative Session, the Senate passed S.B. No. 33 of the 69th Session, which prohibited a minor from possessing and using tobacco on school property.
In the 1999 Legislative Session, S.B. No. 421 of the 70th Session dealt with grocery stores and the segregation of areas, which the present amendment will make quicker.
In the 2001 Legislative Session, S.B. No. 551 of the 71st Session prohibited the sale of tobacco products to minors through the Internet.
In the 2001 Legislative Session, S.B. No. 527 of the 71st Session revised provisions concerning contraband cigarettes.
The records reflect, contrary to testimony received on this matter, the Legislature has been anything but inactive in the area of health and safety regarding tobacco products. With that, what is the pleasure of the committee on S.B. 50?
SENATOR WASHINGTON MOVED TO AMEND AND DO PASS S.B. 50.
Chairman Amodei:
Senator Washington moved to amend and do pass with the amendment at tab D of the Work Session Document (Exhibit E). Is there a second?
Senator Care:
Would the mover of the motion consider adding video arcades in tab E (Exhibit E)?
Chairman Amodei:
I do not recall testimony on video arcades, therefore, to be fair to those who testified on record before the committee, I am reluctant to add it. However, should the record be established in the Assembly and it returns to the Senate in that context, I would be amenable.
SENATOR CARE SECONDED THE MOTION.
Chairman Amodei:
The amendment would be modified to more specifically define the area over which school districts have control. Is that understood between the maker of the motion and the second?
Senator Washington:
Yes, it is.
Senator Care:
Yes, it is.
Chairman Amodei:
Is there any discussion on the motion?
Senator Washington:
I would like to ask Ms. MacMenamin whether or not they can comply with the reduction of the date from 2010 to 2007?
ELizabeth MacMenamin, Lobbyist, Retail Association of Nevada:
I thought the amendment was for December 31, 2007, which gave us a little time. We contacted our members in regard to some of the changes. It was my understanding the committee considered this an expense incurred by slot-route operators. This is not the case. In further checking, it came to our attention our members would be paying this expense. Therefore, in an attempt to comply, we understood there was an amendment for December 31, 2007, and that is how we advised them. I know it will impact our grocery stores.
Senator Washington:
I recall the legislation from the 2001 Legislative Session mandating a store that retrofit or remodeled its facilities must retrofit for ventilation, and any new store must put in those modifications. Senate Bill 50 would affect stores that provide restricted gaming, and should they not build the windows or ventilation system by 2007, the cost would be incurred by them.
Ms. MacMenamin:
That is correct, the cost would be to the store. New stores built at this time already provide ventilation in the areas for gaming. There are a few older stores that have not yet set dates for remodeling, however, at the time of remodeling they know they must establish walls for the gaming areas.
Senator Washington:
Would it be improper to move the date to December 31, as opposed to January 1?
Chairman Amodei:
We will see whether or not there are four votes for the existing motion, and if you choose to oppose it on that basis, I will understand. If not, I will accept a new motion.
Senator Washington:
I am not opposed to moving the date up, however, I understand there is now cost to the owner.
Chairman Amodei:
I understand and respect that. What is processed is of a scope much less than that proposed in the original bill. Ms. MacMenamin’s clients can make their case in the Assembly and it would not offend this committee should they be successful.
Is there any other discussion on the motion? Seeing none, all those in favor of do pass and amending S.B. 50 with the amendment found at tab D of the Work Session Document (Exhibit E), please signify by saying aye, opposed no.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman Amodei:
The work session is open on S.B. 264.
SENATE BILL 264: Makes various changes to provisions pertaining to Department of Corrections. (BDR 16-1182)
Nicolas Anthony, Committee Policy Analyst:
Senate Bill 264 was heard in committee this week. Dorothy Nash Holmes, Mental Health Programs Administrator, Department of Corrections, submitted an amendment which is attached at tab F in the Work Session Document (Exhibit E), as well as an amendment submitted March 28, 2003 by Ms. Holmes. The two amendments are identical. Both amendments are provided for your comparison. They are minor technical amendments to the language and there was no opposition to them. There was some debate among committee members on a future interim study on halfway houses. That was the extent of the testimony on S.B. 264.
Chairman Amodei:
What is the pleasure of the committee on S.B. 264?
SENATOR MCGINNESS MOVED TO AMEND AND DO PASS S.B. 264.
SENATOR WIENER SECONDED THE MOTION.
Senator Washington:
Will the request for an interim study on halfway houses and transitional homes come out of this committee, or the Senate Committee on Legislative Affairs and Operations?
Mr. Wilkinson:
This committee could request the interim study, however, ultimately it would probably be referred to the Senate Committee on Legislative Affairs and Operations.
Chairman Amodei:
Senator Washington, should it be your desire, this committee would be happy to request the interim study of your committee, the Senate Committee on Legislative Affairs and Operations.
Senator Washington:
Please do so.
Chairman Amodei:
Mr. Anthony, please draft correspondence for the vice chairman of this committee to sign on behalf of the committee to send the request for an interim study on halfway houses and transitional homes to the Senate Committee on Legislative Affairs and Operations.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman Amodei:
The work session is open on S.B. 299.
SENATE BILL 299: Prohibits prisoners from manufacturing or possessing certain tools or items adapted, designed or commonly used for purpose of escaping or attempting to escape from custody. (BDR 16-433)
Mr. Anthony:
Senate Bill 299 relates to prisoners possessing certain items to be used in an escape attempt. The bill was heard in committee this week and there was no opposition. There was discussion about the amendment, submitted as tab G in the Work Session Document (Exhibit E), from Gerald Gardner, Office of the Attorney General, which clarifies certain prisoners under the authority of the director, such as prison work programs or inmate services, would be allowed to have such tools and not be charged under the statute. There was no opposition, but tab G would be needed to move the bill forward.
SENATOR NOLAN MOVED TO AMEND AND DO PASS S.B. 299.
SENATOR WASHINGTON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman Amodei:
The work session is open on S.B. 317.
SENATE BILL 317: Makes various changes relating to incarcerated persons. (BDR 34-594)
Mr. Anthony:
Senate Bill 317 was heard in committee March 26, 2003. There were a number of proponents for the bill relating to education for incarcerated persons. There was no opposition, however, several amendments were offered. Tab H in the Work Session Document (Exhibit E) contains: minor technical amendments from the University and Community College System of Nevada (UCCSN), section 8 of S.B. 317 regarding tuition waivers discussed by committee members, and a letter from Chancellor Jane Nichols explaining the fiscal impact for at least the first 2 years the bill is effective would be absorbed by the system.
Tab I of the Work Session Document (Exhibit E) is an amendment originally proposed by the Nevada State Education Association (NSEA). It is a follow-up version, but substantially the same, and submitted by James J. Jackson, Lobbyist, NSEA, dealing with section 7 of S.B. 317 relating to employees’ rights afforded under chapter 288 of NRS and chapter 391 of NRS.
Finally, tab J of the Work Session Document (Exhibit E) is a written amendment following up the oral comments of Ernie McKenzie, Director of Adult Education, Carson City School District. He suggested a few minor technical corrections, and expressed concern about good-time credits granted a general education diploma (GED) versus a high school diploma, and making sure there is a distinction for a greater level of participation by the inmate.
Senator Washington:
I would like to amend and do pass S.B. 317 with tab H and tab J (Exhibit E).
SENATOR WASHINGTON MOVED TO AMEND AND DO PASS S.B. 317.
SENATOR MCGINNESS SECONDED THE MOTION.
Chairman Amodei:
Is there any discussion on the motion?
Marta Hall, Education Consultant, Department of Corrections:
The Department of Corrections does not oppose any of the amendments with the exception of some technical corrections in tab J. We have not seen the amendment, however, the Department of Corrections wants it to remain the same as the bill draft regarding the high school diploma and GED merit time being the same, and the inmates receiving one or the other, not both. We had no objection to the other technical changes.
Chairman Amodei:
Am I to understand from your testimony you are opposed to that provision in Mr. McKenzie’s amendments?
Ms. Hall:
Yes.
Chairman Amodei:
The motion before us is to include tab H and tab J (Exhibit E). Ms. Hall has made it clear she is in opposition to the testimony of Ernie McKenzie in terms of his concern regarding the GED versus a high school diploma. Is there any other discussion?
Seeing none, all those in favor of the motion before us to amend and do pass S.B. 317 with the amendments at tab H and tab J (Exhibit E), please signify by saying aye, opposed no.
THE MOTION CARRIED. (SENATORS CARE, TITUS, AND WIENER VOTED NO.)
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Chairman Amodei:
The work session is open on S.B. 339.
SENATE BILL 339: Makes various changes relating to use of tobacco products. (BDR 15-1126)
Mr. Anthony:
Senate Bill 339 relates to the use of tobacco products. The bill was heard March 28, 2003. All the individuals who testified were neutral on the bill and after discussion, the parties agreed that should section 3 of S.B. 339 be deleted, it could move forward. Tab K of the Work Session Document (Exhibit E) is an amendment by John Albrecht, Chief Deputy Attorney General, Department of Human Resources, to specifically exclude children used in tobacco stings. Also for consideration would be a separate oral amendment to delete section 3 of S.B. 339 which would require store owners and clerks to physically detain someone. So, it is actually two amendments, tab K and the oral amendment.
Chairman Amodei:
What is the pleasure of the committee?
Senator Titus:
It seems to me S.B. 339 is one of those bills on which I said it is sometimes better to kill it rather than try to fix it. Is that accurate? Am I remembering that right? What are we left with if we do those amendments? Why are we doing this?
Chairman Amodei:
I recall you said something like that, Senator Titus.
Senator Titus:
What is the point of the bill if we make those amendments?
Mr. Wilkinson:
Senate Bill 339 would provide that a child under the age of 18 years cannot falsely represent himself or herself as 18 years or older and purchase cigarettes. It would then be an act that would bring the child within the purview of the juvenile court.
Senator Titus:
If the child pretends to be 18, how will he or she be punished?
Mr. Wilkinson:
The child would be admonished by the court. On the second offense the child would be ordered to perform community service, as well as any other actions the juvenile court would deem appropriate.
Senator Titus:
For using a fake identification (ID)? I think the court has better things to do.
SENATOR TITUS MOVED TO INDEFINITELY POSTPONE S.B. 339.
THE MOTION FAILED FOR LACK OF A SECOND.
*****
Chairman Amodei:
Your point is well taken, Senator Titus.
Senator Titus:
Perhaps we should sit on it awhile.
Senator Washington:
May I work with Senator Cegavske on this before we move on it?
Chairman Amodei:
We will open the work session on S.B. 397.
SENATE BILL 397: Revises various provisions governing sex offenders and offenders convicted of crime against child. (BDR 14-441)
Mr. Anthony:
Senate Bill 397 relates to various provisions governing sex offenders. The bill was brought forward by the Office of the Attorney General and there was no opposition. Testimony indicated S.B. 397 merely brings Nevada into compliance with federal law. There was discussion in the committee regarding the definition of “campus community,” but I think those concerns were alleviated. There were no proposed amendments to the bill.
SENATOR TITUS MOVED TO DO PASS S.B. 397.
SENATOR WIENER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman Amodei:
The work session is open on S.B. 433.
SENATE BILL 433: Revises provisions governing admissibility of certain evidence. (BDR 4-427)
Mr. Anthony:
Senate Bill 433 was heard this week in committee. It was brought forward by Bruce Nelson, Clark County deputy district attorney, and there was no opposition. Mr. Nelson’s testimony indicated the bill only makes a few minor corrections to the process of filing driving under the influence (DUI) blood reports and declarations. He also stated S.B. 433 does not in any way impact a defendant’s rights. There was no opposition and no proposed amendments.
SENATOR MCGINNESS MOVED TO DO PASS S.B. 433.
SENATOR WASHINGTON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman Amodei:
The work session is open on S.B. 38.
SENATE BILL 38: Makes various changes regarding certain acts relating to terrorism, weapons of mass destruction, biological agents, chemical agents, radioactive agents and other lethal agents, toxins and delivery systems. (BDR 15-89)
Chairman Amodei:
Please go to tab B of the Work Session Document (Exhibit E), we will walk through S.B. 38 and discuss the amendments. The staff compiled the testimony and concerns, therefore, new language is in blue in the original bill, green is new language proposed for the amendment, and strike through is language struck from the original bill.
The first item is the one-or-more persons standard in section 1, subsection 2 of S.B. 38 suggested by the American Civil Liberties Union (ACLU).
Senator Care:
I note the comments from counsel regarding one-or-more persons being consistent with case law in existing statute. I recall a bill in the 2001 Legislative Session that had something to do with aiming or firing a weapon into a school ground where one-or-more persons congregate. I think the “one-or-more persons” language is consistent with established case law in statute, so we should probably stick with it.
Senator Washington:
Would that mean in the case of the Oklahoma bombing, even though Timothy McVeigh was the sole perpetrator, he may have had several other agents helping him?
Senator Care:
We are talking about harm to more than one person, as opposed to ten or more persons. It is harm to your target. I guess it is fair to say oftentimes terrorists seek out crowds, but I do not know whether they necessarily discriminate crowds, as opposed to one, two, or three persons, depending upon whether or not it is a public official, or whatever. We are in a war against terrorists and I do not think we should limit an act of terrorism to where the target appears to be ten or more as opposed to nine or fewer. I do not think we need to discriminate that way.
Chairman Amodei:
Is there any objection to going back to the “more than one person” language that is struck out? For purposes of going forward, we will be keying off the language of “more than one person,” as opposed to “ten or more.”
Is there any discussion on tab B, page 2, of the Work Session Document (Exhibit E)? How about page 3? Page 4, section 6, of S.B. 38, is the definition of terrorism. Senator Care had some thoughts on this section.
Senator Care:
This language is lifted from the USA Patriot Act in 18 U.S.C. 3077. There already is a federal statutory definition of terrorism, therefore, I thought it might do well to ascertain that definition and put it in here. I would add, however, that section 6, subsection 1 of S.B. 38, is the language “any act of undeclared war.” I suggested additional language, “against the United States,” because we had a discussion about what constitutes declared war, as opposed to undeclared war, meaning whether or not Congress has declared war. It might be better to strike subsection 1 altogether. An act of terrorism could occur whether or not somebody is at war with us, or we are at war with somebody. Declared or undeclared, an act of terrorism is simply an act of terrorism. We also had a discussion regarding whether an act of terrorism was something committed by a foreign agent, as opposed to some sort of domestic anarchist group. By deleting subsection 1, we would get away from the discussion of whether it is an act of war, declared or undeclared.
Chairman Amodei:
Are there any objections to the language in section 6 of S.B. 38 that tracks with the USA Patriot Act in 18 U.S.C. 3077, but omitting section 6, subsection 1, with the language of undeclared war. Hearing none, we will go forward on that basis.
The proposed changes in section 7 of S.B. 38, the “ten or more persons” will be changed.
There were no changes in section 9 of S.B. 38. I would like the committee to look at “material support” in section 9. I am concerned when things are listed in this manner. I am unsure whether or not there is a better generic description of support, but I want to call it to your attention to make sure you are comfortable with this description.
Senator Care:
I ran into the same problem when we were listing exemptions in certain tax measures. It is a difficult thing. I guess a definition for “material support” is needed because it is referred to elsewhere in the act.
Senator Titus:
Could we just have a general definition of “material support” and leave it to the discretion of the court?
Chairman Amodei:
That is what I would like to see. Mr. Wilkinson, do you have any thoughts on the definition?
Mr. Wilkinson:
The definition used is substantially similar to definitions used by New York and Michigan for “material support.” I think defining the term makes it stronger against any sort of constitutional challenge as to vagueness. I think without definition there certainly could be questions raised as to the meaning of the term. I am unsure whether or not the federal statute has a provision about providing material support to terrorists. I know this is something passed by several states, but I am uncertain whether or not it is part of the USA Patriot Act in 18 U.S.C. 3077.
Senator Wiener:
Does it require intent or knowledge? I am thinking of a landlord who might lease or rent a room with no knowledge, but it turns out the person to whom he or she rented is a terrorist. Is that incorporated in this bill?
Mr. Wilkinson:
Yes, in section 14, subsection 1, paragraph (c), of S.B. 38, the requirements are:
A person shall not knowingly provide material support with the intent that such material support be used, in whole or in part, to (1) Commit, cause, aid, further or conceal an act of terrorism; or (2) Aid a terrorist or conceal a terrorist from detection or capture.
Senator Titus:
Related to this, and the section just mentioned, is the problem with putting “material support” in there, and then give a person who provides any of the things on this list the same penalty. I think providing somebody with information may not be as serious as providing them with materials to make anthrax, or giving somebody a ride is not as serious as helping them load a bomb. All these things are listed under the same penalty.
Mr. Wilkinson:
The ACLU suggested differentiating the penalties for those acts and it is one of the proposed changes to section 14 of S.B. 38.
Senator Care:
“Material support” means any financial, logistical, or other support intended to further an act of terrorism.
Senator Washington:
Would that include the logistical apparatus to perform the act, whether it be housing, transportation, written or electronic communications, licenses, passports, documents, identification, etcetera?
Senator Care:
I think it would include the apparatus. Perhaps we could add the words “other support or assistance intended to further an act of terrorism.”
Senator Titus:
I would prefer a general definition to a list.
Senator Care:
Try this: any financial, logistical, informational, or other support or assistance intended to further an act of terrorism. That phrase brings in communications and intelligence.
Chairman Amodei:
Mr. Wilkinson, please consider Senator Care’s suggestion and peruse other language in order to inform the committee whether or not it would be a problem in terms of vagueness or enforceability.
Senator Washington:
How would the district attorney prosecute under that definition?
R. Ben Graham, Lobbyist, Nevada District Attorneys' Association/Las Vegas:
I like the idea of some notice rather than a long laundry list, which you could argue leaves something out. At least a general notice we know is not supporting terrorism, something rather limited, but enough to give notice of the type of thing you are seeking.
Senator Titus:
What is in the federal statute?
Mr. Graham:
I do not know.
Senator Titus:
Let us look at the federal statute.
Senator Care:
Let me try this: Material support means any financial, logistical, informational, or other support intended, directly or indirectly, to further an act of terrorism.
Senator Titus:
That includes just about everything.
Chairman Amodei:
Mr. Wilkinson, please peruse the federal statute to ascertain whether it has the potential to click in with Senator Care’s suggestions in passing the muster test.
There are no proposed changes to section 10 of S.B. 38. Section 11 would go from 10 or more to more than 1 person. Section 13 would go from 10 to 1 person. Are there any concerns in view of what we did in section 9?
Mr. Wilkinson, please differentiate between the proposed amendments which distinguish between the level of felony for these acts.
Mr. Wilkinson:
Section 14 of S.B. 38 splits the punishments for committing or causing an act of terrorism, or attempting to commit or cause an act of terrorism, from the acts of aiding, furthering, or concealing, or attempting to aid, further, or conceal an act of terrorism, assisting, soliciting, or conspiring, or providing material support. The act of actually committing or causing an act of terrorism is punishable by life without the possibility of parole, life with the possibility of parole, eligibility after 20 years, or a definite term of 50 years with eligibility after 20 years, and a fine of $50,000 to $100,000. The penalty is then reduced for aiding, furthering, or concealing, assisting, soliciting, conspiring, or providing material support to life with the possibility of parole with eligibility for parole after 10 years, or a definite term of 25 years with eligibility after 10 years, and a fine of $25,000 to $50,000. Therefore, roughly, the penalty is cut in half as to eligibility for parole, and the fine is cut in half.
Chairman Amodei:
Are there any further questions in regard to section 14 of S.B. 38? Are there any comments on section 15 of S.B. 38?
Senator Care:
I think I make a distinction between an act of terrorism and subsequent acts of attempting to hinder a prosecution. I looked at option 2 and understand why members of the committee might disagree, but I ultimately concluded section 15 of S.B. 38 ought to be deleted. There are other existing measures to handle the scenarios pondered in section 15.
Chairman Amodei:
When you say existing measures, there are existing measures on the books about tampering with court process, witnesses, and all those sorts of things. Is that to what you are referring?
Senator Care:
That is correct. I see Mr. Graham has stepped out, but I know already you cannot do the acts listed here. I am sure the penalties are not as severe as those contemplated here. If something like this were to ever happen and it was prosecution for terrorism, the gravity of the situation would be such the court might well be induced to invoke the maximum, or close to it.
Chairman Amodei:
Is there any objection to removing section 15 of S.B. 38? Seeing none, we will remove section 15.
Are there any changes or comments on section 16 of S.B. 38? The change in section 17 will be “one or more persons.” Section 19 has the “one‑or-more persons” change. Senator Titus, section 20 gets to the different levels based on the nature of the act, which were your concerns in section 14. Are there any comments on sections 21, 22, or 23 of S.B. 38?
Senator Titus:
Section 23 of S.B. 38 says an involved child would automatically be tried as an adult, however, it does not specify the age of the child. I think we should use existing law that specifies a child can be certified an adult, if it is deemed he or she should be tried as an adult. There is a procedure in place for trying a child as an adult and I do not see why it could not apply in this situation as well.
Mr. Wilkinson:
That would be option 1, which deletes section 23 of S.B. 38 in its entirety.
Chairman Amodei:
Are there any other thoughts about deleting section 23 of S.B. 38?
Senator Care:
I agree with Senator Titus. Depending upon the gravity of the situation, I think, the court can consider all the circumstances and then make the appropriate call. I would also like to remind the committee Senator Wiener’s bill, S.B. 197, basically overhauls the procedures in juvenile court. I believe there is a measure in the bill addressing this subject.
SENATE BILL 197 (1st Reprint): Repeals, reenacts, reorganizes and revises certain provisions relating to juvenile justice. (BDR 5-633)
Chairman Amodei:
Are there any more thoughts on the proposed omission of section 23 of S.B. 38 and using existing certification procedures for juveniles? If there is no objection, we will omit section 23. Are there any comments on sections 24 and 25? Section 26 is effective upon passage and approval. Are there any other thoughts on the measure? What is the pleasure of the committee?
Senator McGinness moved to amend and do pass S.B. 38 with the amendments discussed in the work session.
SENATOR MCGINNESS MOVED TO AMEND AND DO PASS S.B. 38.
SENATOR SECONDED THE MOTION.
Mr. Anthony:
Did you want to reference Janine Hansen’s amendment at tab C of the Work Session Document (Exhibit E)?
Chairman Amodei:
Tab C of the Work Session Document (Exhibit E) contains a proposed preamble that provides transitory language to indicate we are concerned about terrorism, but also concerned about the constitutional rights of people in the State.
Senator Titus:
This preamble could use a little editing, however, I support the concept.
Chairman Amodei:
The maker of the motion amends the motion to amend and do pass to include the transitory language found at tab C in the Work Session Document (Exhibit E) subject to the approval of Senator Titus. The seconder of the motion agrees. Is there any further discussion?
THE MOTION CARRIED UNANIMOUSLY.
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Chairman Amodei:
There being no further business to come before the committee, the hearing is adjourned at 10:03 a.m.
RESPECTFULLY SUBMITTED:
Barbara Moss,
Committee Secretary
APPROVED BY:
Senator Mark E. Amodei, Chairman
DATE: