MINUTES OF MEETING
ASSEMBLY COMMITTEE ON COMMERCE
Sixty-seventh Session
June 23, 1993
The Assembly Committee on Commerce was called to order by Chairman Gene T. Porter at 2:10 p.m., Wednesday, June 23, 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:
Assemblyman Joseph E. Dini, Jr., District No. 38; Assemblyman Lynn C. Hettrick, District 39.
STAFF MEMBERS PRESENT:
Mr. Paul Mouritsen, Senior Staff Analyst, Legislative Counsel Bureau
OTHERS PRESENT:
Mr. Harvey Whittemore, Lionel, Sawyer and Collins; Mrs. Sandy Miller, Chairman, Nevada 2000; Mr. Max C. Montgomery, National Society of Professional Engineers; Mr. Duarte Batista, Assistant Secretary-Treasurer, Portuguese Union, State of California; Ms. Teresa Rankin, Insurance Commissioner; Dr. Tom Scully; Mr. John Pappageorge, Prime Cable of Nevada; Mr. Steve Schorr, Director, Nevada State Cable Television Association, and Director of Government Affairs, Prime Cable of Nevada-Las Vegas; Mr. Fred Schmidt, State Consumer Advocate; Judge John Mendoza, Chairman, Public Service Commission; Mr. Steven E. Tackes, Nevada State Cable Television Association, and MCI Telecommunications; Mr. Jim Endres, Assistant Vice President and State Manager, AT&T-Nevada; Mr. McLellan King, President and Chief Executive Officer, Nevada Bell; Ms. Diane Ursich, President, Central Telephone Company-Nevada, Las Vegas; Ms. Janice Gunderson, Communications Workers of America; Ms. Carol Ginthner, Assistant Business Manager; Ms. Amy Halley, State Board of Nursing; Ms. Marla Schuster, Nursing Assistant Coordinator, State Board of Nursing; Mr. Tom Susich, counsel, Nevada State Board of Optometry; Dr. Robert Pearson, Secretary, State Board of Optometry; Mr. Robert Barengo, Lenscrafters, Humana Insurance of Nevada, The Alliance of American Insurers and Progressive Insurance; Ms. Marsha Berkbigler, Nevada State Medical Association and Nevada State Ophthalmology Society; Dr. Katrina Van Patten; Mr. Dave Russell; Mr. Terry McHenry, Nevada Association of Land Surveyors; Ms. Collette Rausch, Office of the Attorney General; Mr. Charlie Joerg, Nevada Manufactured Housing Association; Ms. Joan Clements, Administrator, Manufactured Housing Division; Ms. Judy Matteucci, Budget Administrator; Mr. James Wadhams, American Insurance Association; Mr. Fred Hillerby, Blue Cross/Blue Shield, Hospital Health Plan and NML Insurance Company; Ms. Marie Saldo, Health Plan of Nevada and Sierra Health and Life Insurance Company; Mr. Jim Werbeckes, Farmers Insurance Group; Mr. William Prezant, FHP, Doctors Company and St. Mary's Health First; Ms. Kimberly Bennion, Nevada AAA (see also Exhibit B attached hereto).
Assembly Bill 333Clarifies that provisions governing trust companies are not applicable to person acting as trustee under mortgage if he is not otherwise engaged in business of trust company.
Chairman Porter advised the committee had previously passed AB 333, but there were problems with the bill and an amendment to AB 333 had been prepared to address those problems.
Mr. Harvey Whittemore, Lionel, Sawyer and Collins, testified. He advised the amendment to AB 333 (Exhibit C) provided certain fiduciaries from states which permitted Nevada banks or other Nevada fiduciaries to act as fiduciaries in those states could act as fiduciaries in Nevada.
ASSEMBLYMAN GIUNCHIGLIANI MOVED TO RESCIND THE COMMITTEE'S PRIOR ACTION TO DO PASS AB 333.
ASSEMBLYMAN WILLIAMS SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY.
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ASSEMBLYMAN GIUNCHIGLIANI MOVED AMEND AND DO PASS AB 333.
ASSEMBLYMAN WILLIAMS SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY.
Senate Bill 361 Establishes office of science, engineering and technology within the commission on economic development.
Mrs. Sandy Miller, Chairman, Nevada 2000, and wife of Governor Bob Miller, testified. She advised SB 361 sought to establish an office of science and technology advisor to the governor. She explained initially, it was proposed such office be under the jurisdiction of the Office of Economic Development, but it was now proposed the office of science and technology be placed directly in the Governor's office and that the science and technology advisor report directly to the Governor.
Mrs. Miller provided a chart concerning a skills gap (Exhibit D) and pointed out the chart reflected if current trends relating to skills of individuals aged 20 years to 24 years continued, in the year 2000, 56 percent of young adults in the United States would have little or no technical skills and only 4 percent of all jobs would require skills of those levels. She declared 84 percent of all jobs available in the year 2000 would require some degree of technical training or postsecondary training and only 33 percent of the nation's students would acquire such training.
Mrs. Miller indicated it was desired the proposed science advisor work in the area of education as well as in the area of economic development.
Mrs. Williams expressed the opinion the proposed office of science and technology should not be placed in the Office of Economic Development and said she supported Mrs. Miller's position in that regard.
Ms. Giunchigliani declared based on the governor's reorganization plan, the proposed office of science and technology belonged in the Office of Economic Development and contended so placing the proposed office would not restrict the governor from being able to work with whomever was in that office.
Mrs. Miller stated, "We do feel very strongly it needs to be a direct report to the governor."
A colloquy ensued between Mrs. Miller and Ms. Giunchigliani.
Mr. Max C. Montgomery, National Society of Professional Engineers, testified. He advised the society supported SB 361 and believed the proposed office of science and technology would be well located in the Office of Economic Development. He declared the society supported education and advised it gave yearly scholarships and sponsored the Math Counts Program.
Chairman Porter closed the hearing on SB 361.
Assembly Bill 745Revises fee charged fraternal benefit societies for certificate of authority to issue benefit contracts.
Assemblyman Joseph E. Dini, Jr., District No. 38, testified. Mr. Dini advised during the last legislative session, fees charged fraternal benefit societies were increased considerably. He submitted a packet of documents (Exhibit E) and pointed out information contained therein regarding fees charged fraternal benefit societies by other states. He indicated his proposal regarding fees was based on the sizes of the fraternal organizations and would allow small fraternal benefit societies to remain competitive.
Mr. Duarte Batista, Assistant Secretary-Treasurer, Portuguese Union, State of California, testified. He stated the Portuguese Union was a small fraternal organization which had 66 branches throughout California and Nevada. He said the organization had lodges in Yerington, Fallon, Reno and Lovelock. He explained there was a total of 152 certificates "with an insurance coverage of $496,000" for the four Nevada lodges. He stated the Portuguese Union had lodges in Nevada since 1911 and those lodges provided Portuguese communities in Nevada an opportunity to celebrate Portuguese traditions.
Mr. Batista advised three years earlier, the fee for the union's license in Nevada was $50.00, but the past two years, the union's license fee was $2,250 which amount was very burdensome based on the business the union conducted in Nevada. He said in the previous year, the total of the union's new business in Nevada was two certificates which totalled $6,000 of insurance. He indicated the union was finding it difficult to remain competitive.
He urged the committee to support AB 745.
Mrs. Williams asked Mr. Dini if AB 745 would have a fiscal impact and if so, what that impact would be. Mr. Dini replied AB 745 would have a fiscal impact but he did not know what that impact would be.
Ms. Teresa Rankin, Insurance Commissioner, testified in response to Mrs. Williams question regarding the fiscal impact of AB 745. She said it appeared AB 745 would cause a loss of income to the state's general fund of $30,500.
Chairman Porter closed the hearing on AB 745.
Assembly Bill 746Makes various changes relating to practice of medicine.
Mr. Harvey Whittemore, Lionel, Sawyer and Collins, testified in support of AB 746. He advised AB 746 would make substantive changes in Nevada's medical practice act and would phase in the United States Medical Licensing Examination, which would replace the current federal examination. He stated AB 746 would permit the Nevada State Board of Medical Examiners to approve graduate education courses, would require a licensee to notify the board if he closed his office in Nevada, would simplify certain licensing requirements for physicians coming into the state of Nevada and would allow the board to deny licensure to a physician who had not begun to perform the public service required as part of his medical education or who was not repaying a federal, state or local government loan for his medical education. He advised AB 746 also would prohibit a physician, except in a bona fide emergency, from administering, dispensing or prescribing controlled substances or dangerous drugs to any person with whom the physician's personal or emotional involvement rendered him incapable of exercising detached, professional judgment; he explained that provision was not intended to deny a physician the capacity to treat a family member.
Dr. Tom Scully testified. He referred to the provision of AB 746 which would prohibit a physician from administering, dispensing or prescribing controlled substances or dangerous drugs to any person with whom the physician's personal or emotional involvement rendered him incapable of exercising detached, professional judgment and indicated for a physician to do so would not be in the best interests of either the physician or his patient.
Mr. Whittemore gave further testimony. He stated AB 746 would allow the board's investigative committee to bring formal, disciplinary actions against a physician which actions then would be adjudicated by a remainder of the board's members. He said the purpose of such provision was to invest disciplinary hearings with due process by ensuring those individuals who initiated a disciplinary action did also sit in judgment of the individual who was the subject of the action.
Mr. Whittemore advised AB 746 would eliminate (from statute) certain educational requirements pertaining to licensure of physicians and would permit the board to exercise its discretion regarding the educational requirements to be imposed.
He said AB 746 also would eliminate requirements pertaining to the retaking of licensing examinations in Nevada in order to permit physicians to retake such examinations until they passed them.
Chairman Porter referred to page 8 of AB 746 and asked what would be substituted for the statutory list of courses. Dr. Scully replied nothing would be substituted for the statutory list of courses. He explained the current statutory provision requiring physicians to take such courses was unenforceable and said Nevada's requirement that physicians take three years of graduate courses following their medical school education satisfied the board's concern "...about the specifics of the hourly content of a curriculum." Mr. Whittemore commented Nevada had a shortage of physicians in some areas and suggested eliminating the statutory course requirement would assist Nevada in acquiring additional physicians.
Ms. Giunchigliani referred to Section 2, subsection (3), of AB 746 and asked if that provision was intended to bring Nevada into compliance with existing national standards. Dr. Scully replied it was. He advised the national board examinations and "federation exams" were being phased out and physicians throughout the world who wished to be licensed to practice medicine in the United States would be required to take "this one unified exam, given worldwide as of next year."
Ms. Giunchigliani asked, "And then if the board were to craft other regulations, different from the part that's repealed, that would be done through the regulatory process...?" Dr. Scully replied that was correct.
Ms. Giunchigliani asked for an example of a "dangerous drug." Mr. Whittemore replied a dangerous drug was a drug such as heroin or codeine.
Ms. Giunchigliani asked if a "dangerous drug" was different from a "controlled substance." Dr. Scully replied, "Controlled substance and certain mood-altering drugs, some of which are controlled, some of which are not, tranquilizers, anything that would affect a patient's mood or ability to make sound judgments."
Discussions ensued between Ms. Giunchigliani and Dr. Scully regarding the intent of the provision of AB 746 prohibiting a physician from administering, dispensing or prescribing controlled substances or dangerous drugs to any person with whom the physician's personal or emotional involvement rendered him incapable of exercising detached, professional judgment.
Ms. Kenny asked who sponsored AB 746. Mr. Whittemore replied the State Board of Medical Examiners sponsored AB 746.
Ms. Kenny referred to Section 9, subsection 4, of AB 756 and commented most professionals built their practices based upon referrals. She indicated she found the concept of "emotional involvement" to be a questionable concept. She suggested the provision in question detracted from a physician's discretion and was very vague. Dr. Scully suggested Ms. Kenny focus on the language immediately following the words "emotional involvement", to wit the language "renders him incapable of exercising detached, professional judgment in reaching diagnostic or therapeutic decisions." Ms. Kenny asked who had the burden of proof in situations governed by the provision under discussion. Dr. Scully reviewed the preliminary investigation procedures involved in a disciplinary action by the board and indicated if the investigation revealed a physician was quite capable of using the drugs in question appropriately, no further action would be taken against such physician.
A colloquy ensued between Ms. Kenny, Dr. Scully and Mr. Whittemore.
Ms. Kenny referred to Section 5 of AB 746 and asked why "homeopathic" was being deleted from NRS 630.257. Dr. Scully replied "homeopathic" was being deleted because the Nevada State Board of Medical Examiners had no jurisdiction over homeopathy. He advised a separate practice act governed homeopathy and contended it would not be meaningful to include practitioners of homeopathic medicine in the provision under discussion. Ms. Kenny asked if Dr. Scully's contention would remain true if a doctor of medicine also practiced homeopathy. Dr. Scully replied if a physician practiced under the medical practice act, the Nevada State Board of Medical Examiners would have jurisdiction over such physician, but if the physician (also) practiced homeopathy that practice would be under the jurisdiction of the Homeopathic Board. Ms. Kenny asked under whose jurisdiction a physician who practiced both medicine and homeopathy would fall. Dr. Scully said in a disciplinary arena, jurisdiction would depend on the nature of the "event" in question.
Ms. Augustine questioned the advisability of repealing those provisions of NRS set forth in AB 746 under the heading "Text of Repealed Sections," and discussions were held between Ms. Augustine, Dr. Scully and Mr. Whittemore in that regard. Dr. Scully maintained absent the provisions proposed to be repealed, the checks and balances contained in the law were sufficient to ensure physicians coming into Nevada to practice were well trained and met good standards.
Chairman Porter closed the hearing on AB 746.
ASSEMBLYMAN GARNER MOVED DO PASS AB 746.
ASSEMBLYMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Assemblyman Arberry was absent at the time of the vote.
Assembly Bill 773Revises provisions governing telecommunication services offered by community antenna television companies.
Mr. John Pappageorge, Prime Cable of Nevada (Prime Cable), testified from prepared text (Exhibit F) and presented an amendment to AB 773 (Exhibit H) to which, he advised, all parties had agreed.
Mr. Steve Schorr, Director, Nevada State Cable Television Association, and Director of Government Affairs, Prime Cable of Nevada-Las Vegas, testified. He advised the intent of AB 773 was to permit cable television companies to compete on the same basis as any other telecommunications provider in "...the emerging marketplace of discretionary communication services." He contended Nevada was the only state which excluded cable television companies from participating in providing telecommunication services. He stated Prime Cable was making investments to allow it to be a long-term, integrated telecommunications company. He declared Prime cable believed it and other cable companies in Nevada deserved the right to compete in new telecommunication service businesses, and he maintained both consumers and the state of Nevada would benefit from increased competition.
Mr. Schorr advised in order to address concerns expressed by telephone companies, by the Public Service Commission, and by the State Consumer Advocate, it was proposed the language of AB 773 be amended (as set forth in Exhibit G) to clarify cable television companies would be fully subject to the jurisdiction of the Public Service Commission (PSC).
Chairman Porter asked if he correctly understood the proposed amendment (Exhibit G) would amend the language of AB 773 to subject cable television companies to the jurisdiction of the PSC. Mr. Schorr advised it was always intended cable television companies would be subject to the jurisdiction of the PSC and indicated the proposed amendment (Exhibit G) defined that intent more clearly than the original language of AB 773.
Ms. Giunchigliani referred to the language in the proposed amendment (Exhibit G) "certificate of public convenience and necessity pursuant to NRS 704.330" and asked if the certificate referred to in that language was issued by the PSC. Mr. Schorr replied, "704.330 asks that."
Ms. Giunchigliani asked what standards there were for regulating cable television companies. Mr. Schorr indicated he believed such standards would be those set forth by the PSC and suggested the PSC could provide the best information regarding those standards.
Mr. Fred Schmidt, State Consumer Advocate, testified. He advised he was the advocate for consumers of all of Nevada's regulated public utilities. He advised he did not support AB 773 as originally written but did support the proposed amendment to AB 773 (Exhibit G). He indicated there was much controversy over AB 773 as it was originally written because it clearly provided for cable telephone companies to provide certain specific services in competition with existing telephone companies. He stated as amended, AB 773 would require cable companies to first ascertain from the PSC which of those certain specific services should be offered "in duplication" and under what regulations. He indicated at least three of the services discussed in AB 773, as originally written, were monopoly services and were fully price regulated by the PSC.
Mr. Schmidt declared there was significant competition to determine which major industry would replace its current infrastructure with fiberoptic technology. He said the investment involved in such replacement would be substantial. He contended it would be good public policy not to artificially prevent such competition, but suggested when such competition was allowed "...we ensure that consumers and our telephone companies aren't harmed in doing so." He said AB 773 as it was proposed to be amended would ensure a cable television company would apply (to the Public Service Commission) for a certificate just as a telephone company had been required to do when it developed the vast infrastructure which provided all of Nevada's present telecommunication services. He stated when a cable television company applied to the PSC for a certificate, there would then be a vehicle in place to protect consumers and to the extent telephone companies might have stranded investments, to deal with that problem.
Mr. Schmidt contended it was unfair to impose complete price regulation on telephone companies if the service which those companies presently provided as a monopoly was to become a competitive service. He stated however, because of the significant cost of fiberoptics, he believed ultimately, only one company would provide fiberoptic services, and therefore monopoly regulation would still be required.
Mr. Schmidt advised AB 773 provided additional protection to consumers by the requirement cable television companies who provided telecommunication services be regulated by the PSC.
He advised the second proposed amendment (set forth in Exhibit G), hopefully, would provide the Office of the Consumer Advocate and the PSC with tools to ensure those entities did not artificially favor either telephone companies or cable television companies in those companies' competition to provide telecommunication services.
Mr. Schmidt suggested AB 773 would place the two major competitors in development of fiberoptics in Nevada under the jurisdiction of state regulatory authorities in a manner which would provide consumer protection. prevent unnecessary increases in consumers' (telecommunication) bills and allow Nevada to progress rapidly in the telecommunications market. He suggested it was the telecommunications market which would determine economic advantages between states and would attract new businesses and new industries.
Mr. Scherer asked if either current law or the proposed amendment to AB 773 required out-of-state companies who came into Nevada and offered telecommunication services to obtain a certificate of public convenience and necessity. Mr. Schmidt replied they did not. He expounded on the types of entities which would and which would not have both the financial capability and the interest to invest in providing fiberoptic technology.
Judge John Mendoza, Chairman, Public Service Commission, testified after first introducing Ms. Sharon Thomas who he identified as the commission's telecommunications expert.
He stated the commission had no opposition to the provisions of AB 773. He indicated when AB 773 was first introduced it was vague and did not state, expressly, that the PSC would have jurisdiction (over cable television companies providing telecommunication services). He advised diligent efforts by those parties concerned resulted in the proposed amendment to AB 773 (Exhibit G). He suggested the language contained in the amendment represented a compromise among the parties and said that language went far to resolve most concerns of those who reviewed the proposed legislation.
Judge Mendoza stated the fact "cable operations relating to telecommunications" would subject themselves to the jurisdiction of the PSC would allow the PSC to help television cable companies make the transition necessary to enable them to be more competitive with respect to the telecommunication services those companies would wish to offer and would allow the PSC to determine whether the competition to provide those services would impact residential telephone rates.
Judge Mendoza said the PSC would like AB 773 to contain an express statement to the effect a cable company engaged in telecommunications would be considered a public utility, and he offered as language to accomplish that purpose the language "Any community antenna television company offering any telecommunication or related services is a public utility under NRS 704.020."
Chairman Porter indicated in the past, a company was required to have a county granted franchise in order to provide cable television services. He asked if, as a result of being granted such a franchise, such a company was now being elevated (through AB 773) to the position of a public utility and was completely subject to regulation by the PSC with respect to the rate it charged its customers. Judge Mendoza replied, "Just in the telephone area." Discussions ensued between Chairman Porter and Judge Mendoza regarding the jurisdiction provided the PSC by AB 773.
Discussions were held among committee members and Judge Mendoza regarding Judge Mendoza's proposed amendment to AB 773.
Mr. Steven E. Tackes, Nevada State Cable Television Association, and MCI Telecommunications, testified. He advised Nevada State Cable Television Association supported AB 773 as amended. He declared MCI Telecommunications was a vigorous competitor and believed consumers ultimately benefitted from such competition. He suggested competition resulted in lower rates for service and in a wider variety of services. He stated competition (to provide telecommunication services) was inevitable and asserted as competition among companies increased, regulation of those companies should diminish. He contended regulation was established to take the place of competition.
Mr. Jim Endres, Assistant Vice President and State Manager,
AT&T-Nevada, testified. He suggested AB 773 was a natural step in the evolutionary process of regulation (of the telecommunications industry) which commenced when the Bell telephone system broke up and was a step consistent with legislation passed since that breakup. He stated AT&T supported AB 773.
Mr. McLellan King, President and Chief Executive Officer, Nevada Bell, testified. He reiterated previous testimony concerning competition in the telecommunications industry. He advised "the cable interests," the Office of the Consumer Advocate and the PSC had worked together to generate an amendment to AB 773 (Exhibit G) which assured the Public Service Commission would have jurisdiction over the manner in which such competition was introduced into Nevada and contended the further amendment Judge Mendoza proposed be made to AB 773 was "already embedded in" that amendment (Exhibit G). He declared AB 773 should be amended as proposed and then passed by the legislature.
Ms. Diane Ursich, President, Central Telephone Company-Nevada, Las Vegas, testified. She reiterated previous testimony concerning competition in the telecommunications industry and the necessity of ensuring the transition to a competitive telecommunications market occurred "in a fair and impartial manner." She stated Central Telephone Company-Nevada supported the proposed amendment to AB 773 (Exhibit G)
Ms. Giunchigliani asked, "You're in price bans, and so what your hope is that, as they go through the process, that they'll look at the competitive pricing for that service. Is that what the issue is?" Mr. King replied it was.
Ms. Janice Gunderson, Communications Workers of America, testified. She advised the Communications Workers of America opposed AB 773 in its present form but supported adoption of the proposed amendment to AB 773 (Exhibit G). She said in its present form, AB 773 represented loss of revenues to companies, loss of the business market to companies and loss of jobs to workers.
Ms. Carol Ginthner, Assistant Business Manager, International Brotherhood of Electrical Workers Local 396, testified. She advised the union represented approximately 1,800 employees of Sprint Central Telephone of Nevada. She advised the union's
views regarding AB 773 paralleled those expressed by Ms. Janice Gunderson. She declared initially, the union strongly opposed AB 773 but would withdraw its objections if the proposed amendments to AB 773 (Exhibit G) were adopted.
Mr. Steve Schorr gave further testimony. He said in regard to the language Judge Mendoza requested be included in AB 773, he believed the language of the proposed amendment (Exhibit G) addressed the substantive issues and questions raised by all concerned parties and believed the language proposed by Judge Mendoza would raise more questions than it answered.
Chairman Porter closed the hearing on AB 773.
ASSEMBLYMAN PERKINS MOVED TO AMEND AND DO PASS AB 773.
ASSEMBLYMAN WILLIAMS SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Assemblyman Arberry was absent at the time of the vote.
Senate Bill 211 Repeals provisions authorizing state board of nursing to certify nursing assistants to perform designated acts in medical facilities which provide acute care.
Ms. Amy Halley, State Board of Nursing, introduced Ms. Marla Schuster, Nursing Assistant Coordinator, State Board of Nursing, who then testified. Ms. Schuster stated the board had jurisdiction over 14,000 registered nurses, licensed practical nurses and certified nursing assistants. She advised there were 4,000 certified nursing assistants in Nevada who practiced in a variety of settings, including long- term care facilities, acute care hospitals, psychiatric hospitals and home health agencies.
She declared the board requested the legislature repeal NRS 632.2854 which allowed an expanded level (of practice) of certified nursing assistants in acute care hospitals. She said the only opposition to SB 211 came from the Nevada Nurses Association who believed the repeal of NRS 632.2854 might expand the scope of practice of nursing assistants. She contended SB 211 would in fact do the opposite and would establish a uniform scope of practice for nursing assistants, regardless of their practice settings.
Chairman Porter closed the hearing on SB 211.
Senate Bill 247 Makes various changes to provisions governing practice of optometry.
Mr. Tom Susich, counsel for the Nevada State Board of Optometry, and Dr. Robert Pearson, Secretary, State Board of Optometry, introduced themselves and Dr. Pearson then testified.
Dr. Pearson stated SB 247 represented three separate goals. He said the first of those goals was to allow the board to use a national testing service rather than, itself, conducting testing as was presently mandated. He advised such testing service was presently used by all states except three. He advised such testing service would provide a valid and reliable means of testing which was free of bias and would be less costly than testing done by the board. He indicated use of a national testing service would benefit candidates for licensing as optometrists in Nevada because it would allow such candidates to be tested in "their own region" and have the results of their tests forwarded to the board rather than be required to come to Nevada to be tested.
Dr. Pearson advised the second goal of SB 247 was to appoint an Executive Director of the board. He said the Secretary of the Board was required by various statutes to handle certain routine, administrative functions and in order to centralize administrative activities, the board would like the proposed Executive Director designated to perform those functions.
Dr. Pearson said the third goal of SB 247 was to clarify certain sections of statute in which the present terminology was unclear and misunderstood.
Mrs. Williams referred to the areas of testing set forth in Section 23 of SB 247 and asked if the added areas of testing were added because of advances made in the field of optometry or were not, in fact, additions but rather, were redefinitions of courses. Dr. Pearson replied, "It, basically, reflects what the current education is in the field, yes."
Mr. Robert Barengo, Lenscrafters, testified. He stated Lenscrafters supported SB 247 and lent specific support to Section 7.5. He explained Section 7.5 was the result of a case which was heard in federal court and which arose when the board cited two optometrists, employed by Lenscrafters, for unfavorable practices. He indicated the citation resulted from the fact Lenscrafters had granted a sublease to the two optometrists. He advised the federal court had decided the case in favor of Lenscrafters. He said the language of Section 7.5 clarified "...that a sublease is not an unprofessional act of practice."
Mr. Barengo stated some optometrists had suggested Section 7.5 would violate certain Medicare provisions concerning "safe harbor acts for Medicare practitioners," but he contended SB 247 did not do so. He said he had researched the matter and found a court case which discussed a lease "...where space rental plus percentage arrangement for a pharmacy fell below percentages recited at hearings concerning exorbitant percentage lease arrangements involving Medicaid providers." He advised the court found in that case "...that it did not constitute a violation for which a felony could be granted." He pointed out the language of Section 7.5 was discretionary not mandatory.
Mr. Scherer asked Mr. Barengo, "I'd like to ask if you've read that case or the testimony apparently that was brought forth, I guess, at Congressional hearings...?" Mr. Barengo replied he, personally, had not read the case. Discussion ensued between Mr. Scherer and Mr. Barengo regarding "exorbitant lease arrangement." Mr. Scherer asked Mr. Barengo to ascertain what was considered "exorbitant" in the court case he discussed and to provide that information to the committee. Mr. Barengo indicated the board would define lease arrangements further by regulations but indicated he would be happy to provide the information Mr. Scherer requested.
Mr. Bonaventura asked what regulations (concerning lease arrangements) Mr. Barengo foresaw would be adopted by the board. Mr. Barengo replied he foresaw the board adopting "...the same kinds of things we talked about earlier in our laundry list of things we wanted to put into the statute." He discussed percentage leases required by business malls and indicated one factor to be considered with regard to such leases was whether they were similar to other lease arrangements for surrounding areas in the same mall.
Ms. Augustine quoted the language regarding the effective duration of a license set forth in that section of SB 247 entitled "Text of Repealed Sections" and asked, "What's going to happen now with licensing if you're taking that text out?" At Chairman Porter's request Dr. Pearson responded to Ms. Augustine's question and said most of the effect on licensing of NRS 636.225 was included in the provisions of Sections 33 and 24 of SB 247.
Ms. Marsha Berkbigler, Nevada State Medical Association and Nevada State Ophthalmology Society, testified. She advised the association and the society neither supported nor opposed SB 247 but did have some question and concerns regarding the bill.
She referred to page 2, Section 8, and pointed out subsection 3, regarding diagnostic pharmaceutical agents, was being deleted. She explained optometrists were currently allowed to use and prescribe diagnostic pharmaceutical agents and said, "...and they've not redefined it in the statute, and we were questioning why they are doing that."
She pointed out in Section 29 of SB 247, on page 7, both at line 4 and at line 25, the words "subnormal vision" were replaced by the words "visual disorders." She advised the optometry board had indicated it did not intend by that substitution of language to increase the scope of practice of optometrists, but lawyers for both the association and the society had determined the definition of the new language would effect an increase in the scope of practice of optometrists. She questioned why the scope of practice was being increased if the board did not intend that it be so increased.
Dr. Pearson gave further testimony in response to the questions raised by Ms. Berkbigler. He indicated the deletion of subsection 3 of Section 8 was done in error and said it was not the optometry board's intent to omit that subsection. He referred to the substitution of "visual disorders" for "subnormal vision" in Section 29 and explained "subnormal vision" was an old term meaning "low vision" and (use of that term) limited schools which had outside clinics in states other than Nevada to providing only one type of residency program or one type of clinic. He stated there was a move within the field of optometry to have many different types of residency programs. He advised the substitution of the words "visual disorders" for the words "subnormal vision" was intended to provide the flexibility necessary to develop different residency programs and was not intended to expand the scope of practice of optometrists.
Ms. Berkbigler stated the association and the society were concerned the definition of "visual disorders" might include treatment of diseases of the eye. She advised currently in the state of Nevada, the scope of practice of optometrists did not include treatment of diseases of the eye. Dr. Pearson responded until Nevada's statutes were changed, treatment of diseases of the eye by optometrists would be prohibited.
Dr. Katrina Van Patten testified. She stated she practiced optometry in Carson City and was testifying on her own behalf and on behalf of Dr. William Kanellos.
She advised she and Dr. Kanellos specifically opposed that portion of SB 247, contained on page one at lines 20, 21 and 22, which provided a lease might contain a provision which required (an optometrist's space) rent be based on a percentage of the revenue earned by an optometrist in his practice. She contended as written, the provision would violate the federal anti-kickback law, which stated giving a payment in exchange for business constituted a felony and such payments constituted violations of law even if those payments appeared to be primarily for a purpose other than the purpose of referrals.
Dr. Van Patten explained federal safe harbor regulations were created to provide for business arrangements which were legal and which would not result in the participants in those arrangements being involved in "a kickback situation." She indicated the safe harbor regulations addressed eleven aspects of business but said the only one of those regulations with which the provision of SB 247 being discussed was concerned was that regulation pertaining to space rental agreements. She said the safe harbor regulation pertaining to space rental agreements stated rental arrangements were banned which were merely a device used to make illegal payments to induce referrals or purchases.
Dr. Van Patten said, "Again I will remind you that this is an optical establishment that is not subleasing. Indeed if it was subleasing, I think it would be based on fair market value and on a percentage of the space being taken not on a percentage of the doctor's revenue." She quoted a set of guidelines for percentage leases established by the federal government and cited various examples of inappropriate percentage lease agreements. She proposed the sentence contained in lines 20, 21 and 22, on page one, of SB 247 be amended to be in accord with federal statutes and suggested if it was intended the board would adopt regulations regarding lease requirements, that sentence might be unnecessary.
Mr. Robert Barengo gave further testimony. He indicated he was surprised by Dr. Van Patten's testimony because the issue discussed in his testimony was litigated in federal court and the federal court made a dispositive ruling on that issue.
Mr. Dave Russell testified. He referred to the court case discussed by Mr. Barengo and advised the optometry board and Lenscrafters had arrived at a settlement in that case. He indicated the terms of the settlement pertained to the terms and conditions of an appropriate lease, including the reasonable rental value of the leased space.
Mr. Russell stated the purpose of the provision of SB 247 which provided for rent based on a percentage of revenue was to codify the court's finding in the lawsuit, to wit that it was not an improper lease arrangement to "have a percentage rent provision." He advised such a provision was fairly standard in leases for space in malls. He declared there was no reported case in the United States in which such a lease arrangement had been found to constitute Medicare or Medicaid fraud.
A colloquy ensued between Ms. Kenny and Mr. Russell.
Chairman Porter closed the hearing on SB 247 and assigned SB 247 to Mr. Scherer as a subcommittee of one.
Senate Bill 248 Increases certain fees and fines related to practice of optometry.
Dr. Robert Pearson, Secretary, State Board of Optometry, testified. He advised over the previous two years, the board had begun to operate at a deficit and to utilize its reserve fund. He advised the board was requesting (through SB 248) to increase its fees in order to restore itself to a firm fiscal base.
Chairman Porter closed the hearing on SB 248.
ASSEMBLYMAN ARBERRY MOVED DO PASS SB 248.
ASSEMBLYMAN SCHERER SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Assemblymen Heller and Williams were absent at the time of the vote.
Senate Bill 211 Repeals provision authorizing state board of nursing to certify nursing assistants to perform designated acts in medical facilities which provide acute care.
The committee having moved to indefinitely postpone SB 211 at the meeting of the committee held June 4, 1993, Chairman Porter called for a motion to reconsider the committee's action on SB 211.
ASSEMBLYMAN SCHERER MOVED TO RESCIND THE COMMITTEE'S PRIOR ACTION ON SB 211 AND TO RECONSIDER SB 211.
ASSEMBLYMAN KENNY SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Assemblymen Heller and Williams were absent at the time of the vote.
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ASSEMBLYMAN SCHERER MOVED DO PASS SB 211.
ASSEMBLYMAN KENNY SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Assemblymen Heller and Williams were absent at the time of the vote.
Senate Bill 396 makes various changes relating to professional land surveyors.
Mr. Terry McHenry, Nevada Association of Land Surveyors, testified. He advised Section 1 of SB 396 would provide the records of survey required under NRS 625 be certified.
He stated Sections 2 and 3 of SB 396 would enable local governing bodies to require, under certain circumstances, "...that on monuments and mapping, as a result of statute law, that the state plane coordinate values would be assigned according to ordinance to promulgate geographic information systems."
He said Section 4 of NRS 625 dealt with boundary line adjustments. He stated the current language of NRS 278.5692 and NRS 278.5693 could be interpreted as requiring all parcels of land involved in a boundary line adjustment be completely surveyed. He indicated in many cases, it was not necessary to completely survey all such parcels of land in order to effect an adjustment in a boundary line, and SB 396 would permit the surveyor to determine the extent of the survey in such situations. He advised Section 4 would also provide if all corners of a boundary could not be physically monumented, the fact a corner was not monumented and the reason therefore be recorded on the record of survey.
Mr. Arberry asked if the provision of SB 396 which required a record of survey reflect any corners of a boundary which were not monumented and the reason why they were not would apply only to future surveys or would also pertain to surveys already completed. Mr. McHenry explained the provision dealt only with records of survey pertaining to boundary line adjustments. He said in some instances it was not physically practicable to set monuments and SB 396 would provide when such a situation arose, the reason it was not physically practicble to set a monument be recorded on the record of survey.
Mr. Arberry asked, "If you can't locate the monument, then what happens when the new crew come in to try to do a new, additional survey?" Mr. McHenry replied the record of survey map would reflect the fact a particular corner of a boundary line was not physically monumented and the reason why it was not monumented but would also set forth the values (of the boundary corner), from which its location could be computed mathematically.
Mr. Bonaventura asked if the provision under discussion resulted from problems experienced with boundary lines in the northwest area of Clark County. Mr. McHenry replied it did not.
Chairman Porter closed the hearing on SB 396.
Senate Bill 499 Makes various changes relating to trade regulations and practices.
Ms. Collette Rausch, Office of the Attorney General, testified. She stated SB 499 was a housekeeping bill, drafted in response to a legislative commission request.
Chairman Porter asked if SB 499 had anything to do with telemarketing. Ms. Rausch replied it did not with the caveat all telemarketers were bound by deceptive trade practices.
Chairman Porter turned the meeting over to Vice Chairman Arberry for the purpose of conducting the hearing on SB 499.
Ms. Rausch resumed her testimony. She said the purpose of SB 499 was to clarify NRS 598 which was very difficult for consumers, businesses and regulators to understand.
Mrs. Williams asked what effect SB 499 would have on current laws dealing with health clubs and athletic clubs. Ms. Rausch replied there were two areas (pertaining to health clubs and athletic clubs) in which SB 499 would change existing law. She explained, "Right now, what we've got is an athletic club provision, which was the original, and we have a membership club provision. (The) membership club provision was adopted in 1989. At that time, the athletic club provision should have been repealed because the membership club provision took that over. So now we have two conflicting statutes that's very...and if you look at which one should be applied, really the athletic club, that's more specific. So that needs to be addressed by eliminating that provision. Then when you get to membership clubs, that was adopted at the end of 1989, and really the goal of that was to get to athletic club type industries but have a sliding fee scale to make it more equitable for small businesses breaking into the industry." She advised the existing statutory provision for membership clubs was very broad and the goal of SB 499 was to define those businesses which were dance and athletic clubs. She said "the other provision" was to assist consumers and make it easier for them to obtain restitution by permitting the Commissioner of Consumer Affairs to adopt regulations for disbursement of funds for consumer restitution.
Vice Chairman Arberry closed the hearing on SB 499 and turned the meeting over to Chairman Porter.
Assembly Bill 750Provides for registration of intermediary of exchange of real property which is tax free pursuant to Internal Revenue Code and prohibits certain acts by intermediary.
Assemblyman Lynn C. Hettrick, District 39, testified. He advised AB 750 dealt with "1031 exchanges," which under the IRS code, permitted taxes on property exchanges to be deferred. He said rules governing such exchanges required funds from an exchange of property be transferred to an intermediary. He indicated there were few controls over such intermediaries and problems had arisen as a result of intermediaries absconding with funds or becoming insolvent; he said AB 750 was an attempt to address those problems.
Mr. Hettrick submitted a proposed amendment to AB 750 (Exhibit H). He explained the proposed amendment would change the language of subsection 3 of Section 2 in order to clarify who was covered by the provisions of AB 750 and would change Section 4 to require the owners of businesses acting as intermediaries must be registered rather than the employees.
Mr. Hettrick said AB 750 would require those acting as intermediaries to register with the state, undergo FBI background checks, submit fingerprint cards and comply with the IRS code. He stated AB 750 also would permit the Real Estate Division to require intermediaries to post bond.
Mr. Hettrick advised the fiscal note on AB 750 was $1,450 per year. He indicated the Real Estate Division was willing to administer AB 750, but the division requested the effective date of AB 750 be postponed six months.
Mr. Bonaventura asked if the (revised) effective date of AB 750 appeared in the proposed amendment (Exhibit H). Mr. Hettrick said it did not.
Chairman Porter closed the hearing on AB 750.
ASSEMBLYMAN GIUNCHIGLIANI MOVED TO AMEND AB 750 IN ACCORDANCE WITH EXHIBIT H AND ALSO BY CHANGING ITS EFFECTIVE DATE TO JANUARY 1, 1994.
ASSEMBLYMAN BONAVENTURA SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Assemblyman Heller was absent at the time of the vote.
Chairman Porter again turned the hearing over to Vice Chairman Arberry.
Senate Bill 499 Makes various changes relating to trade regulations and practices.
Vice Chairman Arberry called for a motion on SB 499.
ASSEMBLYMAN GIUNCHIGLIANI MOVED DO PASS SB 499.
ASSEMBLYMAN SCHERER SECONDED THE MOTION.
THE MOTION CARRIED; Chairman Porter abstained from the vote; Assemblyman Heller was absent at the time of the vote.
Vice Chairman Arberry turned the meeting over to Chairman Porter.
Senate Bill 396 makes various changes relating to professional land surveyors.
Chairman Porter called for a motion on SB 396.
ASSEMBLYMAN ARBERRY MOVED DO PASS SB 396.
ASSEMBLYMAN SCHERER SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Assembly Bill 483Makes various changes concerning mobile and manufactured homes.
Mr. Charlie Joerg, Nevada Manufactured Housing Association, testified. Mr. Joerg submitted a proposed amendment to AB 483 (Exhibit I). He advised the amendment was in fact an entirely new version of AB 483. He indicated when the committee originally held its hearing on AB 483, the committee believed the provisions of AB 483 should be brought under NRS 461 rather than NRS 489 and said the bill had been rewritten accordingly. He stated in addition, Mrs. Williams had expressed concern mobile home park owners could use certain provisions of AB 483 to evict mobile home owners from their parks. He stated the proposed amendment addressed Mrs. Williams concern placing the provisions of AB 483 under NRS 461, which limited those who could file complaints (regarding the condition of a mobile home) to governmental agencies.
Ms. Joan Clements, Administrator, Manufactured Housing Division, testified. She said, "We're back to 461A, for reasonable cause rather than upon receiving a complaint." She indicated if a building inspector or other building official or someone from the health department reported a concern regarding a mobile home to the division, the division would investigate.
Ms. Giunchigliani asked for a definition of "commercial coach." Ms. Clements replied commercial coaches were small trailers on construction sites intended for use by construction workers.
ASSEMBLYMAN GIUNCHIGLIANI MOVED AMEND AND DO PASS AB 483.
ASSEMBLYMAN ARBERRY SECONDED THE MOTION.
THE MOTION WAS CARRIED BY ALL THOSE PRESENT; Assemblyman Heller was absent at the time of the vote.
Assembly Bill 509Regulates solicitation of older persons.
Chairman Porter turned the meeting over to Vice Chairman Arberry for the purpose of conducting the hearing on AB 509.
Ms. Giunchigliani left her chair in the committee to testify. She advised originally AB 509 was intended to protect senior citizens from certain forms of harassment and certain types of solicitation and to extend the "cooling off" period for senior citizens who were solicited. She submitted a proposed amendment to AB 509 (Exhibit J) through which, she advised, she had "...attempted to gut all that and take into consideration some of the various telemarketing." She advised the proposed amendment changed the time period during which seniors could not be solicited to coincide with FCC standards, defined "disabled person" and deleted all sections of AB 509 having to do with "the Maryland law." She indicated she spoke with Mr. Kuminecz of the Consumer Affairs Division and said Mr. Kuminecz felt the proposed amendment might eliminate the fiscal note on AB 509. Ms. Giunchigliani explained the amendment would also make it incumbent on an individual being solicited (by telephone) to advise the caller if the individual was aged or disabled.
Mr. Humke asked if Ms. Giunchigliani would object if a bill drafter changed the language in the proposed amendment (Exhibit J) which defined "disabled person." Ms. Giunchigliani replied she would not object.
A discussion was held between Ms. Augustine and Ms. Giunchigliani.
ASSEMBLYMAN WILLIAMS MOVED AMEND AND DO PASS AB 509.
ASSEMBLYMAN PERKINS SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Chairman Porter and Assemblyman Heller were absent at the time of the vote.
Assembly Bill 311Makes various changes relating to architecture.
Mr. Scherer testified from his place in the committee. He advised AB 311 was the subject of substantial debate among various parties. He said the American Institute of Architecture (AIA) had prepared a proposed amendment to AB 311 (Exhibit K) which amendment was agreeable to all parties who engaged in negotiations concerning AB 311. He stated he believed if amended as proposed, AB 311 would accomplish the board's purposes without unduly hampering interior designers and "other people who may want to engage in some of these services."
ASSEMBLYMAN BONAVENTURA MOVED AMEND AND DO PASS AB 311.
ASSEMBLYMAN HUMKE SECONDED THE MOTION.
Discussions were held among committee members.
Mr. Arberry asked if everyone concerned was satisfied with AB 311 as it would be amended by the proposed amendment. Mr. Scherer responded the building departments might not be satisfied but were "...willing to live with it in the interim, while a better solution is created for the next legislative session."
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Assemblyman Heller was absent at the time of the vote.
AB 778 Revises provision governing payment of tax on insurance premiums.
Ms. Judy Matteucci, Budget Administrator, testified. She advised AB 778 embodied a proposal included in the executive budget to cause insurance premium tax to be estimated for a current calendar year and prepaid rather than paid quarterly based on "the prior premium year." She indicated a similar measure was passed with regard to gaming taxes in the 1983 legislative session in order to bring taxes into the state treasury more quickly. She said numerous discussions were held with members of the insurance industry and with the exception of the provision which made the change in payment a temporary change, the Budget Division was able to agree to the language of AB 778. She advised the most significant change AB 778 would make in payment of insurance premium taxes was contained in Section 2, which provided a one-time credit be given insurance companies against loss of interest income on monies used to prepay insurance premium taxes. Ms. Matteucci advised she did not draft AB 778 and had questions regarding whether or not the payment to be made to insurers (under subsection 1 of Section 2) must be taken by insurers as a credit over 5 years.
Ms. Matteucci advised under reorganization, responsibility for collection of insurance premium taxes was transferred to the Department of Taxation and suggested perhaps references to the Insurance Commissioner contained in AB 778 should be changed.
Chairman Porter asked how much money would be raised by AB 778.
Ms. Matteucci replied $30.3 million in the fiscal year 1994-1995. She advised AB 778 would at some point, revert payment of insurance premiums taxes to quarterly payments and said in the year that occurred, there would be a loss (to the state) of $30 million, which loss she indicated caused the Budget Division its greatest concern regarding AB 778.
Chairman Porter asked if the division desired payments of insurance premium taxes not revert to quarterly payments but continue to be prepaid. Ms. Matteucci replied that was correct.
A colloquy ensued between Chairman Porter and Ms. Matteucci.
Ms. Matteucci referred to subsection 2 of Section 1 of AB 778 and indicated the language "each succeeding quarterly payment" should be changed to "each succeeding payment."
She advised the purpose of the proposed $1.7 million credit to insurers was to preclude insurance companies from having to increase their insurance premiums (as a result of AB 778).
Mr. James Wadhams, American Insurance Association, came forward at the request of Chairman Porter. Chairman Porter asked if Mr. Wadhams understanding of AB 778 concurred with the understanding expressed by Ms. Matteucci. Mr. Wadhams replied it did. He indicated the legislator who conceived AB 778 believed the credit to insurers provided in Section 2 would alleviate the financial impact on insurers of "the change in the payment stream." He explained AB 778 required tax on an insurance transaction be paid in advance of the transaction taking place. He indicated the amount of the credit set forth in Section 2 was calculated based on the amount of interest which would be earned by insurance companies on short-term investments for the period of time "that that money is lost on this one time shift."
Chairman Porter asked if insurance companies would make $1.75 million by investing $30.3 million. Mr. Wadhams replied that was correct and said he assumed at present, the yield on short- term investments was approximately three percent to three and one-half percent.
Chairman Porter asked if the clients Mr. Wadhams represented intended on increasing insurance premiums in order to compensate for their prepayment of insurance premium taxes. Mr. Wadhams replied based on the tax credit provided in Section 2 of AB 778, his clients would not increase insurance premiums and advised there were approximately 200 stock property and casualty companies in the American Insurance Association.
Chairman Porter asked, "How much, Mr. Wadhams, of a, for lack of a better term, a player are your clients in this $30 million figure?" Mr. Wadhams answered, "Just roughly, I would guess at least 30 percent." Chairman Porter asked if it was Mr. Wadhams testimony his clients' percentage of the $30 million being discussed would not be passed on to the buyers of those clients products. Mr. Wadhams said he felt comfortable making such a representation to the committee.
Mr. Fred Hillerby, Blue Cross/Blue Shield, Hospital Health Plan and NML Insurance Company, testified. He advised his only reservation about advising the committee his clients would make no increase in their premiums as a result of loss of investment income was based on the fact the credit to be given insurers (against such loss) was to be recovered by those insurers over a five year period. He said he was uncertain whether, if it took an insurance company five years to recover the amount of money it lost (by prepayment of insurance premium taxes), the company would recover the full amount it had lost. He said however, the credit would certainly help to offset such loss and would reduce the probability of a significant increase in insurance premiums.
Chairman Porter asked if insurance companies would in fact make $1.7 million dollars over a 5 year period (if they were able to invest the monies they would prepay for insurance premium taxes). Mr. Hillerby replied $1.7 million dollars was the amount which insurance companies would make over a seven month period rather than over a five-year period.
Chairman Porter asked Mr. Hillerby, "What percentage of this $30 million do you represent?" Mr. Hillerby replied he did not know what percentage he represented but speculated it was a small percentage.
Ms. Marie Saldo, Health Plan of Nevada and Sierra Health and Life Insurance Company, testified. She declared her clients would not increase any premiums as a result of the provisions of AB 778. She advised her clients insured approximately 12 percent of the citizens of Nevada.
Ms. Giunchigliani asked if she understood correctly there had been no resolution regarding whether prepayment of insurance premium taxes would continue in perpetuity. Ms. Saldo replied she believed Ms. Matteucci had requested an amendment to AB 778 (to provide for perpetual prepayment). Ms. Giunchigliani asked if the insurance industry's support of AB 778 was based on the premise insurance premium taxes would be prepaid only once; she indicated she understood Ms. Saldo might not be prepared to answer that question but she believed it a question the industry needed to deal with. Ms. Saldo answered, "We will deal with it in going forward at this point."
Discussions ensued among committee members, Ms. Saldo and Mr. Hillerby.
Mr. Jim Werbeckes, Farmers Insurance Group (Farmers), testified. He indicated Farmers' "lost time value of money" (as a result of AB 778) would be approximately $160,000.
Chairman Porter asked if Farmers intended to increase its insurance premiums to compensate for its prepayment of insurance premium taxes. Mr. Werbeckes replied he did not think Farmers would do so, but if it did, such increase would be minimal.
Mr. Robert Barengo, Humana Insurance of Nevada, The Alliance of American Insurers and Progressive Insurance, testified. He stated his testimony would be no different than that of the previous witnesses representing the insurance industry. He said, "I would remind the Chairman that the-short term investment here is probably substantially less than the return that the industry would gain when they would invest their money because they would be investing for the longer term." He indicated the companies he represented did not intend to raise their insurance premium rates as a result of the effects of AB 778.
Mr. William Prezant, FHP, Doctors Company and St. Mary's Health First, testified. He said he had reviewed AB 778 and based upon the provisions of Section 2, would recommend to his clients they seek no rate increases based solely on the effects of AB 778.
Ms. Kimberly Bennion, Nevada AAA, testified. She indicated her testimony would be the same as that of those other witnesses who represented property and casualty insurance companies. She said she had not been advised whether Nevada AAA would seek any premium increases as a result of AB 778 but stated she doubted it would do so.
Mrs. Williams said she wished to commend those insurance companies who made commitments to the state of Nevada at a time when the state was in crisis.
Chairman Porter closed the hearing on AB 778.
SENATE BILL 361 Establishes office of science, engineering and technology within the commission on economic development.
Chairman Porter provided copies of a proposed amendment to SB 361 (Exhibit M) which would place the office of science, engineering and technology within the governor's office.
Chairman Porter called for a motion on SB 361.
ASSEMBLYMAN WILLIAMS MOVED TO AMEND AND DO PASS SB 361.
ASSEMBLYMAN GARNER SECONDED THE MOTION.
Discussions were held among committee members.
ASSEMBLYMAN WILLIAMS WITHDREW HER MOTION TO AMEND AND DO PASS SB 361.
ASSEMBLYMAN GARNER WITHDREW HIS SECOND TO THE MOTION.
There being no further business to come before the committee, Chairman Porter closed the hearing on SB 361.
RESPECTFULLY SUBMITTED,
_______________________
SARA J. KAUFMAN
Committee Secretary
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Assembly Committee on Commerce
June 23, 1993
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