MINUTES OF MEETING
ASSEMBLY COMMITTEE ON COMMERCE
Sixty-seventh Session
June 7, 1993
The Assembly Committee on Commerce was called to order by Chairman Gene T. Porter at 3:45 p.m., on Monday, June 7, 1993, in Room 332 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda, Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Mr. Gene T. Porter, Chairman
Mr. Morse Arberry, Jr., Vice Chairman
Ms. Kathy M. Augustine
Mr. Rick C. Bennett
Mr. John Bonaventura
Mr. Val Z. Garner
Ms. Chris Giunchigliani
Mr. Dean A. Heller
Mr. David E. Humke
Ms. Erin Kenny
Mr. Richard Perkins
Mr. Scott Scherer
Ms. Myrna T. Williams
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Mr. Paul Mouritsen, Senior Staff Analyst, Legislative Counsel Bureau
OTHERS PRESENT:
Mr. Sam MacMullen, Nevada State Podiatric Medical Association; Marsha Berkbigler, Nevada State Medical Association; Mr. John Wiles, Consumer Advocate for Insurance Customers; Mr. Robert Barengo, Progressive Insurance Company; Mr. Robert Crowell, Farmers Insurance Company; Mr. Michael J. Griffin, Deputy Insurance Commissioner; Mr. Chuck Knaus, Property-Casualty Actuary, Department of Insurance; Mr. Mark Brown, State Farm Insurance Company; Mr. Jim Werbeckes, Farmers Insurance Company; Ms. Kimberly A. Bennion, American Automobile Association; Mr. Brian Herr, Nevada Bell; Ms. Margaret McMillan, Sprint, Central Telephone Company of Nevada; Ms. Pam Miller, Government Affairs Director, Nevada Chapter of Associated General Contractors; Mr. Dallas Penrod, Las Vegas Chapter of Associated General Contractors; Ms. Mona Sanchez Joplin, Secretary-Treasurer and public member, Nevada State Board of Architecture; Mr. John Breternitz, architect member, Nevada State Board of Architecture; Mr. Mike Hillerby, American Institute of Architects; Mr. Richard Heikka, Southern Nevada Home Builders; Ms. Pam Miller, Nevada Chapter of Associated General Contractors; Ms. Stephanie Tyler, Legislative Coalition of Interior Designers-Nevada; Mr. Bruce Goff, President, Legislative Coalition of Interior Designers-Nevada; Mr. Harvey Whittemore, Lionel, Sawyer and Collins; Mr. Steven Mack, President, Camco; Captain Randy Oaks, Legislative Liaison, Las Vegas Metropolitan Police Department; Mr. Bob Barengo, Nevada Collateral Loan Association; Ms. Joan Clements, Administrator, Manufactured Housing Division; Mr. Charlie Joerg, Nevada Manufactured Housing Association; Mr. David Reese, Nevada State Contractors Board (See also Exhibit B attached hereto).
AB 691 Clarifies that doctor of podiatric medicine is physician for statutory purposes.
Mr. Sam MacMullen, Nevada State Podiatric Medical Association, testified. He advised the main purpose of AB 691 was to clarify doctors of podiatric medicine were physicians and said AB 691 would amend NRS to substitute the designation "physician-surgeon D.P.M." for the designation "podiatrist" in each instance where the designation "podiatrist" was used.
He advised Sections 6 and 7 of AB 691 would amend NRS 635 to include the titles "Podiatric Physician" and "Physician-Surgeon D.P.M."
He provided a copy of an amendment to AB 691 proposed by the Nevada State Medical Association (Exhibit C) and said the proposed amendment was acceptable to the Nevada State Podiatric Medical Association. He pointed out item 2 of Exhibit C contained a typographical error in that the words "are used in" had been repeated.
Marsha Berkbigler, Nevada State Medical Association, testified. She indicated the association's only concern about AB 691 was that Section 9 would add "podiatrist" to those NRS statutes pertaining to physicians and by doing so, might allow podiatrists to practice medicine of all types. She advised the proposed amendment (Exhibit C) would eliminate that concern.
Chairman Porter closed the hearing on AB 691.
ASSEMBLYMAN WILLIAMS MOVED AMEND AND DO PASS AB 691.
ASSEMBLYMAN HELLER SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Assemblymen Augustine, Giunchigliani and Scherer were absent at the time of the vote.
Chairman Porter assigned AB 691 to Mr. Arberry for a floor statement.
AB 713 Requires that policy of liability insurance covering motor vehicle provide for partial rebate of premium for person who does not make claim for extended period.
Assemblyman Val Z. Garner, District 14, left his chair in the committee to testify in support of AB 713. He said the fact his automobile insurance premiums were continually increased, even though he had made no claim against his automobile insurance in many years, caused him to wonder why no provision was made by the insurance industry to give some rebate to those individuals who filed no claims and led him to request the introduction of AB 713.
Mr. Garner said he had not spoken with anyone in the insurance industry concerning AB 713. He contended members of the insurance industry would say insurance companies attempted to balance monies received from premiums with monies which must be paid out for claims, and if rebates were given to certain individuals, other individuals would have to pay an amount equal to those rebates in increased premiums. Mr. Garner suggested if insurance companies were going to increase insurance premiums, those increases should be imposed on those individuals who filed claims against their insurance policies.
Mr. John Wiles, Consumer Advocate for Insurance Customers, testified. He stated he was in favor of the principle expressed by AB 713. He advised during the past year, he had spoken with hundreds of insurance customers and said insurance customers who were "claims free" believed something should be returned to them by insurance companies. He indicated insurance companies had responded by offering discounts to good drivers, which discounts varied among insurance companies. He contended AB 713 would cause some uniformity in those discounts.
Mr. Wiles proposed AB 713 should be amended at line 6, on page 1, by replacing the language "who does not file a claim" with the language "if a claim has not been filed." He suggested such an amendment would deal with situations in which a claim was asserted against an insured's policy by a party other than the insured.
Chairman Porter asked how AB 713 could be reconciled with a bill passed by the legislature during the 1987 legislative session which provided an insurance company could not cancel, fail to renew or increase the premium of an insurance policy because a claim was filed against that policy by the insured as a result of circumstances which were not the fault of the insured. Mr. Wiles responded he did not believe there was a need to reconcile the two bills.
Mr. Robert Barengo, Progressive Insurance Company, testified in opposition to AB 713. He advised his company insured individuals who drove expensive cars and individuals who had bad driving histories. He said when those individuals removed themselves from those categories, they would seek insurance from other companies. He explained Progressive Insurance Company did not provide insurance based on both high and low risk. He contended his company would be (adversely) impacted by being required to give rebates to its customers because those customers would remain in the same (high) risk category while insured by his company. He also contended a three year (claim free) period was not a long enough period (on which to base rebates). He pointed out an individual with a "DUI" on his driving record remained in the high risk category for seven years.
Mr. Barengo referred to subsection 3 of Section 1 and said he was uncertain of its meaning but thought it meant "...you have to charge the guy the same premium you would charge him normally." He maintained subsection 3 of Section 1 was confusing.
Mr. Porter asked, "...if most of your clients are moving on-- since you are in the high risk category--how will you be impacted for three years?" Mr. Barengo responded he did not know how long some of his company's customers would remain its customers. He advised many of those customers were individuals who for many years, were unable to obtain insurance.
Chairman Porter asked if the statutory period "for an SR 22 on DUIs" was three years. Mr. Barengo replied affirmatively. Mr. Porter remarked for insurance purposes, a DUI record lasted for three years not for seven years.
Mr. Robert Crowell, Farmers Insurance Company (Farmers), testified. He stated Farmers was sympathetic with and, in general, concurred with Mr. Garner's concept of giving discounts to good drivers and did give a discount to good drivers. He provided a document setting forth Farmers' insurance rates (Exhibit D) and pointed out Farmers' discount plans were set forth on the bottom portion of that document. He contended Farmers' current discount program accomplished the same purpose as the purpose Mr. Garner proposed to accomplish through AB 713. Mr. Crowell said if AB 713 was passed by the legislature, Farmers might have to discontinue the discounts it currently gave "at the outset."
Mr. Crowell said while Farmers understood the desire of consumers to be given discounts on their insurance, it believed the rate of those discounts should be determined by the Insurance Commissioner rather than be established by statute.
Chairman Porter asked the amount of Farmers' current "good driver discount." Mr. Crowell advised the current good driver discount which Farmers gave to drivers age 30 years and older who procured a "30/60" policy of insurance was a discount of 30 percent on premiums for bodily injury, medical and collision coverage and a discount of 10 percent on premiums for comprehensive coverage.
Mr. Michael J. Griffin, Deputy Insurance Commissioner, testified. He stated the Department of Insurance opposed AB 713 because it could have a negative impact both on existing insurance discounts and, because of frequency and severity of losses, on the solvency of property/casualty insurers.
Mr. Chuck Knaus, Property-Casualty Actuary, Department of Insurance, testified. He advised Mr. Griffin asked him to discuss the manner in which AB 713 might impact insurers' solvency. He explained two components which determined how much money an insurance company paid in claims were the frequency of losses and the severity of losses. He said some insurance companies doing business in Nevada operated on very limited surpluses, and when the Department of Insurance reviewed rate filings, the department sometimes had to increase the amount of an insurance company's deposit as a condition of the company's doing business and had to advise the company it must increase its surplus as a condition of its doing business. He said, "What could happen to a company that is marginal, in a financial solvency circumstance, is that they could have a number of high severity losses that would take away more losses than they would save due to loss severity." He advised when insurer insolvency occurred, it had an impact on everyone in Nevada.
Mr. Mark Brown, State Farm Insurance Company (State Farm), testified. He said State Farm currently gave a discount of five percent on insurance premiums to individuals who had no accidents which were chargeable to them during a period of three years and a discount of ten percent to individuals who had no accidents which were chargeable to them during a period of at least six years. He advised if an individual had been a State Farm policyholder for nine years and had no accidents which were chargeable to him, State Farm would "forgive" such individual's first accident. Mr. Brown stated when a bill similar to AB 713 was passed in New Mexico, State Farm was forced to eliminate its "forgiveness provision." He said State Farm would be forced to eliminate that provision in Nevada also (if AB 713 was passed by the legislature) and State Farm would then be in the position of having to treat those who had held policies with State Farm for twenty years in the same manner it treated those who were new policyholders.
He declared State Farm opposed AB 713 and in general, had "a problem with" mandated reductions in its benefits.
Mr. Brown stated the bill similar to AB 713 which was passed in New Mexico was ultimately repealed because of its effect on the insurance industry and the insurance market.
Chairman Porter closed the hearing on AB 713.
AB 714 Requires salaried employee of insurer to be certified before he investigates or settles insurance claim.
Assemblyman Gene Porter T. Porter, District 8, testified from his chair in the committee. He explained the intent of AB 714 was to cause insurance adjusters to be licensed and trained. He advised the foremost complaint of consumers of insurance services concerned the manner in which claims were processed. He said AB 714 would require the Insurance Commissioner to certify adjusters to ensure they were familiar with the law and with the Unfair Claims Settlement Practices Act and were aware of the rules and regulations regarding time limits for settling and adjusting claims.
Mr. John Wiles, Consumer Advocate for Insurance Customers, testified. He said he supported AB 714. He explained under most circumstances, he would not appear before any legislative committee unless he believed the bill being considered by that committee had a direct impact upon the rates paid by insurance customers in Nevada, but he believed by its nature, AB 714 had an indirect relationship to those rates.
Mr. Wiles advised NRS 679B.400 declared it the public policy of Nevada to stabilize insurance costs and contended licensing and certification of adjusters would have an indirect benefit on such costs. He said currently, adjusters might or might not be qualified to adjust claims and as a result, claims were under-valued or over-valued, which circumstance tended to destabilize insurance costs.
Mr. Mark Brown, State Farm Insurance Company (State Farm), testified. He said State Farm believed it very important to have properly trained claims representatives and for that reason, provided an extensive training course for its claims representatives. He stated State Farm supported AB 714 but proposed it be amended to state "This bill shall not apply to employees of insurers who have completed the insurer's in-house training program."
Mrs. Williams asked if the insurance industry would absorb the fiscal impact of AB 714 in order to promote better public relations. Mr. Brown replied because he was not a spokesman for the industry, he could not answer Mrs. William's question.
Chairman Porter advised the fiscal note on AB 714 indicated it would cost approximately $3,408,000 per year "...to develop and maintain a suitable test and testing mechanism, establish in-house personnel to administer, monitor, collect records, etc., etc." He said the Department of Insurance advised there were approximately 32,500 employees of insurance companies who would fall under the provisions of AB 714 therefore, the cost per employee (to administer the provisions of AB 714) would be approximately $100. He asked what it cost State Farm to provide its in-house training. Mr. Brown replied State Farm estimated the cost of its in-house training program to be approximately $4,500 for each individual trained.
Chairman Porter asked Mr. Crowell if Farmers Insurance Company had an in-house training program for its adjusters. Mr. Crowell replied affirmatively.
Chairman Porter asked Mr. Barengo if Progressive Insurance Company had an in-house training program for its adjusters. Mr. Barengo replied affirmatively.
Mr. Jim Werbeckes, Farmers Insurance Company (Farmers), testified. He advised Farmers had three separate training programs for its claims adjusters. He said the training program for liability claims adjusters consisted of six weeks of in-house training at a claims office, followed by one week of policy schooling and two weeks of liability schooling at a regional office. He stated the training program for APD (auto physical damage) claims adjusters consisted of "12 weeks in-house, one week in the region, and three weeks at our home office" and the training program for property claims adjusters consisted of "five weeks in-house, one week in the region and two weeks at home office school."
Chairman Porter asked if Farmers' training seminar taught elementary negligence concepts. Mr. Werbeckes answered affirmatively. Chairman Porter asked if Farmers' also educated its claims adjusters concerning The Unfair Claims Settlement Practices Act. Mr. Werbeckes responded an entire day was devoted to educating claims adjusters regarding that act.
Ms. Kimberly A. Bennion, American Automobile Association (AAA), testified. She advised AAA had an extensive in-house training program in which all of its claims adjusters participated.
Mr. Michael J. Griffin, Deputy Insurance Commissioner, testified. He stated the staff of the Department of Insurance believed AB 714 would have a major fiscal impact on the department. He submitted a fiscal note on AB 714 which he had prepared (Exhibit E) and said Commissioner Rankin agreed with that fiscal note. Mr. Griffin advised the section of his fiscal note which addressed administering and maintaining a testing system was based on the assumption there were approximately 32,500 employees of insurers who were involved in claims or investigations. He said the remainder of the fiscal note (Exhibit E), which discussed additional employees the department would require, was very realistic.
Mr. Griffin indicated the department suggested additional language be added to AB 714 to allow the department to recover its costs in the event it was directed to administer the provisions of AB 714.
Chairman Porter asked why the department could not review the in-house training programs of insurers and if it determined an insurer's agents were being properly trained in its in-house program, certify all such insurer's adjusters at one time. Mr. Griffin replied when he wrote the fiscal note (Exhibit E), he assumed the department would initiate a new certification process to certify salaried employees of insurers.
A colloquy ensued between Chairman Porter and Mr. Griffin.
Chairman Porter closed the hearing on AB 714.
AB 715 Requires contractor who excavates street for construction project to post bond to ensure adequate restoration of street.
Assemblyman Gene Porter T. Porter, District 8, testified from his chair in the committee. He said it seemed each time many tax dollars were spent to build a nice street in Clark County, someone would dig the street up six months after it was built. He declared he had never seen a road repaired to a condition equal to the road's condition when it was initially built. He advised the intent of AB 715 was to require anyone who obtained a permit to dig a ditch across a street to post a bond to ensure he would properly repair that street.
Mr. Brian Herr, Nevada Bell, testified. He said he was uncertain whether public utilities were intended to be included under the provisions of AB 715. He advised Nevada Bell complied with a variety of city and county ordinances with respect to its construction work and to situations in which it did "street cutting." He stated none of those ordinances required bonding.
Mr. Herr advised Nevada Bell performed approximately 1,500 excavations per year of which approximately 600 involved cutting a street. He contended AB 715 would place a heavy administrative burden on both utilities and counties or cities if utilities were required to fulfill a bonding requirement in connection with all their excavations.
Mr. Herr proposed AB 715 be amended to add an additional section which would provide AB 715 did not apply to public utilities regulated under NRS 704.
Mr. Herr advised Reno had an ordinance relating to the cutting of streets which took into consideration the age of a street at the time it was cut. He indicated a much lower fee was paid to cut an old street which was in poor condition than was paid to cut a newly paved street. He contended there were severe financial penalties imposed on anyone, including utilities, who cut into new streets.
Ms. Margaret McMillan, Sprint, Central Telephone Company of Nevada, (Sprint), testified. She stated Sprint had the same problem as the one Mr. Herr had addressed. She advised when Sprint was aware new streets were being built, it worked with "those municipalities" (where the streets were being built) in an attempt to get its facilities installed at the time work was being done on those new streets. She said in the event it was necessary for Sprint to cut a street in order to repair Sprint's equipment, Sprint always used professional, bonded contractors to do so. She contended if such a contractor did not effect satisfactory repairs to a road, Sprint would rerepair the road.
She declared Sprint would support an amendment which would except public utilities from the provisions of AB 714.
A colloquy ensued between Chairman Porter, Ms. McMillan and Mr. Herr.
Mr. Herr advised a portion of the fees Nevada Bell paid when it cut a street went into city or county funds used for road maintenance.
Mrs. Williams asked if public utilities were made exempt from the provisions of AB 714, "... who's left to cut into the streets?" Ms. McMillan replied she was sure there were those, other than utilities, who cut streets but she did not know who they were. Mr. Herr said cable television companies would be one example of those who cut streets and who were not regulated by the Public Service Commission.
Ms. Pam Miller, Government Affairs Director, Nevada Chapter of Associated General Contractors, testified. She stated currently, contractors posted bonds in connection with jobs they performed in Reno, Sparks and Washoe Valley and with jobs they performed for the Nevada Department of Transportation. She said the association wished to know the amount of bond which would be required if AB 714 was passed by the legislature.
Mr. Dallas Penrod, Las Vegas Chapter of Associated General Contractors, testified. He advised most of the associations' contractors presently posted performance and payment bonds on their jobs and were required to complete those jobs "to a certain level" and have them inspected upon completion. He commented, "So basically, unless you're real careful, you could end up being a bonding agents' retirement fund, double-bonding the same work."
Chairman Porter stated it was not his intent to require a contractor who had posted one bond to post a second bond.
Chairman Porter closed the hearing on AB 715.
AB 716 Requires persons claiming certain exemptions from provisions relating to architects to file affidavit when obtaining building permit.
Ms. Mona Sanchez Joplin, Secretary-Treasurer and public member, Nevada State Board of Architecture, testified by reading from prepared text (Exhibit F).
Mr. John Breternitz, architect member, Nevada State Board of Architecture, testified. He indicated the board suggested the language proposed to amend NRS 623.30 (set forth in Subsection 2 of Section 1 of AB 716) be amended by substituting the language "A person who is eligible for the exemption described by paragraph (e) of Subsection 1" in place of the language "A person who is eligible for the exemption described by paragraphs (d) and (e)."
Chairman Porter asked if the intent of the amendment proposed by Mr. Breternitz was to remove contractors from the provisions of AB 716. Mr. Breternitz responded affirmatively. He indicated what remained of AB 716 after being so amended would assist the board in its enforcement activities.
Mr. Mike Hillerby, American Institute of Architects, testified. He stated the institute would support AB 716 if it was amended as proposed by Mr. Breternitz.
Mr. Richard Heikka, Southern Nevada Home Builders, testified. He said Southern Nevada Home Builders would support AB 716 if it was amended as proposed by Mr Breternitz.
Ms. Pam Miller, Nevada Chapter of Associated General Contractors, testified. She advised Associated General Contractors would support AB 716 if it was amended as proposed by Mr. Breternitz.
Ms. Stephanie Tyler, Legislative Coalition of Interior Designers -Nevada, introduced Mr. Bruce Goff, President, Legislative Coalition of Interior Designers-Nevada.
Mr. Bruce Goff testified. He indicated the coalition was concerned about subsection (e) of Section 1 of AB 716. He advised many small contractors and many individuals used the services of individuals who were educated, trained and cost-effective, to design remodeling projects which required or which should require building permits, and contended those who used such services would discover they must perjure themselves to obtain their building permits. He suggested most homeowners were not sufficiently educated to prepare remodeling plans, and those homeowners frequently used the services of interior designers.
Ms. Stephanie Tyler testified. She indicated the coalition was concerned about line 15 of AB 716 and asked that the word "prepares" on line 15 be replaced with the word "submits." She advised members of the coalition did not wish to be in the position of asking individuals to sign affidavits which were untrue.
Chairman Porter asked what position the sponsors of AB 716 took regarding the change proposed by Ms. Tyler. Mr. Breternitz replied the sponsors were opposed to that change.
Chairman Porter closed the hearing on AB 716.
AB 720 Exempts, under certain circumstances, pawnbrokers and secondhand dealers from civil liability for conversion.
Mr. Harvey Whittemore, Lionel, Sawyer and Collins, testified in support of AB 720. He said AB 720 would exempt pawnbrokers and secondhand dealers from civil liability for conversion under certain circumstances. He advised if a pawnbroker complied with the requirements of NRS 646 or a secondhand dealer complied with the requirements of NRS 647, AB 720 would provide such a pawnbroker or secondhand dealer exemption from civil liability (for conversion) when he received property in the normal course of business.
Mr. Steven Mack, President, Camco, testified, saying only that he supported AB 720.
Chairman Porter closed the hearing on AB 720.
ASSEMBLYMAN GARNER MOVED DO PASS AB 720.
ASSEMBLYMAN SCHERER SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; assemblymen Humke and Williams were absent at the time of the vote.
AB 722 Makes various changes relating to pawnbrokers and secondhand dealers.
Mr. Harvey Whittemore, Lionel, Sawyer and Collins, appeared on behalf of Camco. He introduced Captain Randy Oaks, Legislative Liaison, Las Vegas Metropolitan Police Department and Mr. Bob Barengo, Nevada Collateral Loan Association.
Captain Oaks testified. He said AB 722 was requested by the department to accomplish two purposes. He referred to Section 1, at line 4, and pointed out in order to provide the department's investigators additional time to locate stolen property, AB 722 would require a pawnbroker to retain property for a period of 30 days. He said language identical to the language to which he had just referred occurred on page 2 of AB 722, at line 31, and affected secondhand dealers. He referred to the language contained in Section 4, at line 30 on page 2, and explained an item of property might have no specific mark for identification on it but might be so unique it could be identified and therefore, should be reported to the department to provide the department an opportunity to determine whether or not the item was stolen.
Mr. Whittemore testified. He said currently, many pawnbrokers accepted motor vehicles as pledged property and advised this activity was unregulated. He said the industry, itself, had determined the sum of $3 per day to be the maximum sum appropriate to be charged as storage fees for pledged motor vehicles and indicated a provision to that effect was contained in Section 2 of AB 722, at lines 23 and 24 on page 1.
Mr. Whittemore stated Sections 6, 7 and 8 of AB 722 provided "necessary and correlative language with respect to county, city licenses" which required a pawnbroker to acquire a separate license in order to accept motor vehicles as pledged property.
Mr. Whittemore referred to Section 2, line 8, and advised that provision of AB 722 would increase the interest rate which could be charged by pawnbrokers for money loaned from six percent to seven percent. He contended the proposed increase in the period of time for which pawnbrokers must retain pledged property would increase pawnbrokers' costs of doing business, and therefore, Camco believed it appropriate to seek some relief from the legislature, which relief would be provided by the proposed increased rate of interest.
Chairman Porter closed the hearing on AB 722.
ASSEMBLYMAN BENNETT MOVED DO PASS AB 722.
ASSEMBLYMAN AUGUSTINE SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Assemblymen Humke and Arberry were absent at the time of the vote.
SB 388 Authorizes reciprocal insurer to own and hold real property.
Mr. Robert Crowell, Farmers Insurance Company (Farmers), testified. He advised SB 388 would clarify existing law to make clear reciprocal insurers, as well as stock insurers and mutual insurers, had the right to own, purchase, sell, lease or otherwise affect title of real property in Nevada.
He explained there were three basic types of insurers: stock insurers, mutual insurers and reciprocal insurers. He advised Farmers was a "reciprocal insurance company," which meant the company was comprised of a collection of individual subscribers who agreed to exchange insurance contracts and to operate through an attorney-in-fact. He said reciprocal insurance companies were regulated pursuant to NRS 694B.100, and the purpose of SB 388 was to clarify that an attorney-in-fact of a reciprocal insurance company could affect title to real property on behalf of the company's subscribers.
Mr. Crowell said legislation similar to SB 388 was enacted in Oregon and Idaho without opposition.
Mr. Bonaventura asked, "So essentially, you can put an attachment on someone's property?" Mr. Crowell replied SB 388 had nothing to do with attaching property. He explained, "For example, we have a branch claims office in Reno. If the attorney-in-fact wants to sell the branch claims office, the real property, to some other party, what this does is clarify to a title company who is going to issue title insurance to a buyer, that the attorney-in-fact has the ability, under law, to effect that transaction, to effect that sale. That's what this bill would do."
Mr. Michael Griffin, Deputy Insurance Commissioner, testified, saying only that the Department of Insurance supported SB 388.
Chairman Porter closed the hearing on SB 388.
ASSEMBLYMAN GIUNCHIGLIANI MOVED DO PASS SB 388.
ASSEMBLYMAN GARNER SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Assemblyman Humke was absent at the time of the vote.
AB 721 Making various changes relating to contractors.
Mr. Richard Heikka, Southern Nevada Home Builders, testified. He said Southern Nevada Home Builders was not prepared to comment on AB 721 in its entirety but did support the provision contained in subsection 4 of Section 2, which would provide the Nevada State Contractors Board the ability to issue citations. He contended such a provision was long overdue. He advised there were approximately 500 cases of "contractors board violations" pending before the Clark County District Attorney and contended the provision to which he referred would "go a long way toward cleaning that up."
He suggested with respect to the remainder of AB 721, those concerned should confer and determine workable language for the proper licensing of those who worked on mobile homes.
Ms. Giunchigliani asked, "Are independent contractors licensed by the contractors board as well?" Mr. Heikka replied they were.
Ms. Joan Clements, Administrator, Manufactured Housing Division, testified. She stated her greatest concern about AB 721 removing regulatory authority over servicemen (who repaired mobile homes and manufactured homes) from the Manufactured Housing Division was the effect the division's lack of such authority would have on the cooperative agreement the division had with the Department of Housing and Urban Development (HUD). She advised the division was approved as the state administrative agency for the state of Nevada to enforce those federal construction standards to which manufactured homes were constructed. She said the division received a fee for each section of a new manufactured home which was delivered into Nevada to be offered for sale. She declared the division was operating on a very limited budget and should lack of authority to enforce federal construction standards for manufactured homes affect the division's cooperative agreement with HUD and cause the federal government to rescind that agreement, the division would lose approximately $28,000 per year.
She suggested AB 721 would affect manufacturers of manufactured homes. She advised pursuant to federal construction standards, manufacturers of manufactured homes were required to give a one year warranty for specific items to each purchaser of a new manufactured home. She said as administrator of the Manufactured Housing Division, she was responsible for ensuring such purchasers received all of their rights under those warranties. She stated the servicemen (with which AB 271 was concerned) performed many warranty repairs on behalf of manufacturers of manufactured homes.
Mr. Charlie Joerg, Nevada Manufactured Housing Association, testified. He stated the association opposed those portions of AB 721 concerned with NRS 489 but was not concerned about the remaining portions of the bill. He contended if AB 721, as it was written, were passed by the legislature, it would create great turmoil, and suggested it was probable many servicemen who were currently licensed would go out of business. He asserted to the extent a problem (with regulating servicemen who performed repairs on manufactured homes and mobile homes) existed, it would be alleviated by the provisions of a bill sponsored by Assemblyman John C. Carpenter which "...you processed a couple of weeks ago."
Chairman Porter said he understood the quality of workmanship of a Nevada licensed contractor who did repairs on a "stick-built facility" was under the jurisdiction of the Nevada State Contractors Board. He stated if that same individual performed repairs on a mobile home, the quality of his workmanship was no longer judged by the Nevada State Contractors Board but was judged by the Manufactured Housing Division. Ms. Clements interjected, "If he has a license with the Manufactured Housing Division, yes sir."
Chairman Porter asked Ms. Clements how many people she could send into the field to handle complaints from contractors who performed work on mobile homes. Ms. Clements replied she had one inspector in the division's office in Las Vegas and one inspector in the division's office in Elko.
Chairman Porter asked how many mobile homes there were in Nevada. Ms. Clements replied there were approximately 70,000.
Chairman Porter asked Ms. Clements, "How is that one person going to get around to all these places and police this." Ms. Clements reiterated she had one inspector in Las Vegas and one inspector in Elko and stated the division had verified 427 complaints during the previous year. She said if a licensed contractor who performed work on a manufactured home or mobile home was not licensed by the Manufactured Housing Division, the division had authority to issue an order to cease and desist and the division did so. She advised the division would make such a contractor aware he did not have the appropriate license to perform work on mobile homes or manufactured homes and would advise him not to perform such work until he obtained the proper license. Ms. Clements advised individuals who were licensed by the division helped the division to police the manufactured home and mobile home repair industry.
Ms. Clements advised she had not experienced a large problem with "repeat offenders." She said once a contractor learned he was not properly licensed to perform work on manufactured homes or mobile homes, he either would decide not to perform such work or would apply for the appropriate license. She stated however, such contractors found it difficult to qualify for a license from the Manufactured Housing Division for those reasons explained in testimony given with regard to AB 582.
Chairman Porter asked who would stand in judgment of the workmanship of those individuals proposed to be licensed by the Manufactured Housing Division when the division had only one inspector in Clark County. Ms. Clements said the division performed inspections on repairs only when it received a complaint concerning such a repair. She advised with respect to alterations and reconstruction (to and of mobile homes and manufactured homes), the division approved plans for such alterations or construction before such work was done. Chairman Porter asked what the division would do if it determined an individual who performed repairs to a manufactured home or mobile home had done a very bad job of effecting those repairs. Ms. Clements replied the division would ensure such an individual corrected his work. Chairman Porter asked what power the division had to force such an individual either to correct his work or to reimburse the consumer who paid to have the repairs done. Ms. Clements replied the division had the power to revoke such an individual's license. She advised if a consumer obtained a court judgment against such an individual and "then files against the recovery fund," the consumer could obtain a monetary judgment from the recovery fund, and when he did so, the license of the individual who performed the repairs would be revoked until he reimbursed the recovery fund. Chairman Porter asked if only the license issued such an individual by the Manufactured Housing Division would be revoked but not also the license issued by the contractors board. Ms. Clements replied affirmatively.
Chairman Porter asked if an individual licensed by the Manufactured Housing Division to perform repairs on manufactured homes and mobile homes was required to post a bond with the division to ensure the quality of his workmanship. Ms. Clements replied he was not required to post a bond; she advised such an individual paid into the recovery fund. Chairman Porter asked if an individual who performed work "on stick homes" had to post a bond with the contractors board. Ms. Clements replied the recovery fund had been instituted in lieu of bonding.
Chairman Porter asked Ms. Clements how, taking into consideration the overlapping of the jurisdictions of the Manufactured Housing Division and the Nevada State Contractors Board, she would suggest those entities' efforts could be consolidated to ensure individuals who experienced problems because of bad workmanship on their manufactured homes or mobile homes would be able to obtain quick resolutions of those problems. Ms. Clements suggested, "...if we had some type of ability to cite them for working outside the realm of the license, so that - maybe that would help." but indicated she had no suggestion as to how the legislature might accomplish her suggestion.
Ms. Giunchigliani asked Ms. Clements, "Could you just refresh what the issue was regarding the loss of the federal dollars?" Ms. Clements replied she was responsible for enforcing federal construction standards in Nevada and explained the standards to which manufactured housing was constructed were different from the standards of the Uniform Building Code. She advised the servicemen (discussed in AB 721) performed any needed repairs to new manufactured housing sent into Nevada from out of state. Ms. Giunchigliani asked if and why Ms. Clements would lose federal funds. Ms. Clements responded if she lost her authority to regulate servicemen who performed repairs to manufactured housing, HUD could rescind its agreement with the Manufactured Housing Division which would cause the division to lose funds. Ms. Giunchigliani asked if Ms. Clements licensed the servicemen under discussion. Ms. Clements replied affirmatively. Ms. Giunchigliani asked if it was the license issued by the division which a serviceman would lose (if his license was revoked because of poor workmanship). Ms. Clements answered, "That's what this bill takes away from the Manufactured Housing Division."
Discussions were held among committee members, Ms. Clements and Mr. Joerg.
Mr. David Reese, Nevada State Contractors Board, testified. Mr. Reese said the board supported that portion of AB 721 which provided the board power to issue citations to individuals who violated NRS 624.230 but the board opposed the remainder of AB 721. He stated AB 721 broadened the definition of "contractor" contained in NRS 624.020 to include individuals presently governed by NRS 489, "the Manufactured Housing Division's statute."
Chairman Porter asked, "You want to be able to cite the people under your jurisdiction now, but you don't want the headache of mobile homes, right?" Mr. Reese replied affirmatively.
Chairman Porter closed the hearing on AB 721.
ASSEMBLYMAN GIUNCHIGLIANI MOVED TO AMEND AB 721 BY DELETING ALL PROVISIONS OTHER THAN THOSE PROVISIONS CONTAINED IN SECTIONS 2 AND 13 AND DO PASS.
ASSEMBLYMAN HUMKE SECONDED THE MOTION.
THE MOTION CARRIED; Assemblymen Porter and Scherer voted "no"; Assemblymen Augustine and Heller were absent at the time of the vote.
AB 716 Requires persons claiming certain exemptions from provisions relating to architects to file affidavit when obtaining building permit.
Discussions were held among committee members.
ASSEMBLYMAN SCHERER MOVED TO AMEND AB 716 BY DELETING SUBSECTION 1.(d) AND BY DELETING THE WORD "PREPARES" IN SUBSECTION 1.(e) AND INSERTING IN PLACE THEREOF THE WORD "SUBMITS" AND DO PASS.
ASSEMBLYMAN PERKINS SECONDED THE MOTION.
THE MOTION WAS CARRIED BY ALL THOSE PRESENT: Assemblymen Giunchigliani and Heller were absent at the time of the vote.
AB 715 Requires contractor who excavates street for construction project to post bond to ensure adequate restoration of street.
ASSEMBLYMAN BONAVENTURA MOVED TO AMEND AB 715 TO PROVIDE IF A CONTRACTOR HAD PREVIOUSLY POSTED A PERFORMANCE BOND, HE NEED NOT POST A SECOND BOND AND DO PASS
ASSEMBLYMAN ARBERRY SECONDED THE MOTION.
Discussions were held among committee members.
Mr. Scherer asked if the provisions of AB 715 would allow posting of some form of security other than a bond, such as cash. Chairman Porter replied affirmatively.
Mr. Perkins asked if the "percentage of bond" should be addressed. Chairman Porter said he would prefer to leave that issue to "the contracting party."
Discussions were held among committee members concerning the quality of inspection of road repairs.
Chairman Porter called for a vote on the motion before the committee.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Assemblymen Giunchigliani and Heller were absent at the time of the vote.
AB 570 Makes various changes relating to physical therapy.
A hearing having been held on AB 570 on May 19, 1993, and a motion to amend and do pass AB 570 having been made on June 2, 1993, and having failed, Chairman Porter called for a motion on AB 570.
ASSEMBLYMAN WILLIAMS MOVED TO AMEND AB 570 ON PAGE 2, AT LINE 13, TO ADD AFTER THE WORDS "OF THE PATIENT" THE WORDS "FOR THE PURPOSE OF DEVELOPING A PLAN OF CARE" AND ON PAGE 3, AT LINE 21, TO STRIKE THE WORDS "A PERSON WHO IS NOT A PHYSICAL THERAPIST" AND INSERT IN PLACE THEREOF THE WORDS "PHYSICAL THERAPY ASSISTANT" AND DO PASS.
ASSEMBLYMAN HUMKE SECONDED THE MOTION.
THE MOTION FAILED; Assemblymen Augustine, Kenny, Perkins and Scherer voted "no;" Assemblyman Bennett abstained from the vote; Assemblymen Giunchigliani and Heller were absent at the time of the vote.
AB 459 Makes various changes relating to health care records.
A hearing having been held on AB 459 on May 5, 1993, Chairman Porter called for a motion on AB 459.
ASSEMBLYMAN ARBERRY MOVED TO AMEND AB 459 TO STRIKE FROM SECTION 2, AT LINE 14, THE WORDS "WHICH ARE PRODUCED BY A COMPUTER MAY BE AUTOMATICALLY CREATED" AND TO INSERT IN PLACE THEREOF THE WORDS "MAY BE CREATED" AND TO INSERT IN SECTION 2, AT LINE 10, IMMEDIATELY FOLLOWING THE WORD "RETAINED," THE WORDS "IN WRITTEN FORM OR" AND DO PASS.
ASSEMBLYMAN SCHERER SECONDED THE MOTION.
THE MOTION WAS CARRIED BY ALL THOSE PRESENT; Assemblyman Heller was absent at the time of the vote.
AB 509 Regulates solicitation of older persons.
Discussions were held among committee members.
No action was taken by the committee on AB 509.
Chairman Porter called for committee introduction of the following bill draft requests:
BDR 22-2123 - Revises provisions governing selection of officers to fill certain positions in metropolitan police departments.
ASSEMBLYMAN ARBERRY MOVED FOR COMMITTEE INTRODUCTION OF
BDR 22-2123.
ASSEMBLYMAN PERKINS SECONDED THE MOTION.
THE MOTION WAS CARRIED BY ALL THOSE PRESENT; Assemblyman Heller was absent at the time of the vote.
BDR 40-1889 - Establishes safety requirements for amusement parks.
ASSEMBLYMAN WILLIAMS MOVED FOR COMMITTEE INTRODUCTION OF BDR 40 1889.
ASSEMBLYMAN HUMKE SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY.
BDR 54-2065 - Makes various changes relating to practice of medicine.
ASSEMBLYMAN ARBERRY MOVED FOR COMMITTEE INTRODUCTION OF
BDR 54-2065.
ASSEMBLYMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY.
There being no further business to come before the committee, Chairman Porter adjourned the meeting.
RESPECTFULLY SUBMITTED,
_________________________
SARA J. KAUFMAN
Committee Secretary
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Assembly Committee on Commerce
June 7, 1993
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