MINUTES OF MEETING
ASSEMBLY COMMITTEE ON LABOR AND MANAGEMENT
Sixty-seventh Session
June 22, 1993
The Assembly Committee on Labor and Management was called to order by Chairman Chris Giunchigliani, at 3:50 p.m., on Tuesday, June 22, 1993 in Room 321 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda, Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Ms. Chris Giunchigliani, Chairman
Mr. Bernie Anderson, Vice Chairman
Mr. Douglas A. Bache
Mr. John C. Bonaventura
Mr. John Carpenter
Mr. Tom Collins, Jr.
Mr. Peter G. Ernaut
Mr. Lynn Hettrick
Mrs. Erin Kenny
Mr. John B. Regan
Mr. Michael A. Schneider
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Donald O. Williams, Principal Research Analyst
Frank Krajewski, Senior Research Analyst
OTHERS PRESENT:
Mr. Dave Mercier, Millwrights Local 1827
Mr. Danny Thompson, AFL-CIO
Mr. David Reese, Nevada State Contractors Board
Ms. Margi Grein, State Contractors Board
Mr. John Sande, Attorney, Harrah's Hotel & Casino
Mr. Jim Wadhams, Nevada Association of Health Underwriters Mr. J. R. Clark, Chief of Finance, the State Industrial
Insurance System (SIIS)
Mr. Scott Young, General Counsel, the State Industrial
Insurance System (SIIS)
Chairman Giunchigliani opened the meeting and requested adoption of the following minutes: March 15, April 1, 6, 8, 12, 13, 15, 19, 20, 21, 22, 23, 26, 27, 29, May 3, 4, 5, 6, 8, 11, 12, 13, 14, 15, 17, 18, 19, 20, 21, 24, and 25, 1993.
ASSEMBLYMAN HETTRICK MOVED TO ADOPT COMMITTEE MINUTES.
ASSEMBLYMAN ANDERSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Chairman Giunchigliani opened the hearing on AB-772.
ASSEMBLY BILL 772 - Makes various changes relating to contractors.
Mr. Dave Mercier, Millwrights Local 1827, testified. Mr. Mercier stated he supported AB-772 and presented proposed amendments as follows:
Page 2, Section 1, subsection 5 - delete "sells or"
Mr. Mercier explained the problem with the contractor bill was NRS 624.330, paragraph 5 which was interpreted in such a broad fashion. If contractors were not building the foundation, the walls, the roof or another intricate part of the building, a license was not required. Mr. Mercier called attention to language in NRS 624.330, paragraph 6 and questioned the intent of the wording "personal property."
Mr. Danny Thompson, AFL-CIO, testified in support of AB-772. He also concurred with Mr. Mercier's proposed amendment.
Mr. Carpenter questioned what the purpose of AB-772 was. Mr. Mercier responded AB-772 would not allow contractors who were not licensed in Nevada to install machinery or other equipment inside a building. They would be required to get a Nevada license and pay the proper insurance to the state. He outlined a few situations where an unlicensed contractor was putting in a $5 million material handling system at the State Farm Insurance building in Reno and another was at the Service Merchandise building in Reno.
Mr. Collins explained a few months ago in a fast food restaurant in Las Vegas an out-of-state contractor put in a false roof and within a few days it fell down. He noted the job was proven to be substandardly performed.
After some committee discussion regarding what problems could result from using an unlicensed contractor, Mr. Thompson presented Exhibit C. He noted AB-772 required anyone installing equipment or machinery to be licensed and comply with Nevada law.
The Chair noted she would check to see if personal property was defined in the statutes. Mr. Mercier noted the contractor definition under NRS 624.020 was very well stated. The problem existed with NRS 624.330 where the personal property exemption applied.
Mr. Regan asked how commercial kitchen equipment would be classified. Mr. Mercier responded any installation of equipment in a commercial facility should be done by a licensed contractor.
After discussion between Mr. Mercier and Mr. Regan regarding the definition of personal property, Mr. Thompson explained personal property should be defined as property of a homeowner. In the statute it was defined as a stand-alone prefabricated system which was either bolted to the floor or hung from the ceiling, and might be removed, repaired or changed without affecting the structure.
Mr. Regan noted his disagreement because certain items could be depreciated for tax purposes.
The Chair explained an amendment had to be established to clarify personal property.
Mr. Hettrick explained a scenario when he purchased some very expensive equipment a few years ago. The manufacturer was located in California and Minnesota. The only way he would purchase the equipment was if the manufacturer sent someone to install the equipment. He noted a licensed Nevada contractor might not want to get involved with installing expensive equipment when they would be liable for a potential loss if the equipment was not installed properly. Mr. Hettrick questioned subsection 5(a) on page 2, "specially designed, manufactured or adapted to fit and function within a structure," and noted this statement was extremely vague. He explained everything was designed to fit into some type of structure and this language was so vague it sounded like a licensed contractor had to be hired to install just about anything.
The Chair noted language had to be established for situations where something was purchased and the installation was included as part of the contract.
Mr. David Reese, Nevada State Contractors Board, testified. Mr. Reese noted there were problems with AB-772 and the board felt some statutory change was necessary to avoid the interpretation of the Arizona statute. He noted Arizona law stated, "You don't apply the real estate definition of a fixture to determine whether or not you need a license." The proper test should be whether removal of the object prevented reuse or caused substantial damage to the structure. Mr. Reese noted the definition of contractor under NRS 624.020 was extremely broad, and he urged the committee to be reluctant to redefine contractor in AB-772 according to this statute. At present AB-772 would amend both the definition of the statute and the exemption statute. He explained what should be done was refine NRS 624.330, Section 5.
Mr. Anderson questioned if this was the first time this particular problem had been brought before the contractors board or had there been some historical precedence for this. Mr. Reese responded there were other problems with the exemption statute involving conveyor systems. There was a situation involving letters to the Governor which expressed great anger.
Mr. Anderson asked if the complaints were coming from larger establishments, doing major construction. Mr. Reese stated more often the complaints involved large projects and systems essentially prefabricated out of state.
Mr. Collins asked Mr. Reese if he knew when a permit was acquired to build. Mr. Reese replied he would not know if a permit was acquired, but obviously a building required a permit. Mr. Reese stated the Contractors Board was not necessarily involved with the Building Department and Health Department issuing permits. He noted if there was a complaint to the Contractors Board somebody had failed to comply with local building laws, then the Contractors Board would be involved, and possibly disciplinary charges would be brought against the contractor. After discussion between Mr. Collins and Mr. Reese, Mr. Reese commented he would be glad to draft language to change the exemption statute.
Ms. Margi Grein, State Contractors Board, testified. She noted the State Contractors Board would like to work with Mr. Mercier to develop the amendments to AB-772. The Board indicated they would support legislation if amended.
Chairman Giunchigliani appointed a subcommittee of Mr. Collins and Mr. Hettrick to meet with the Contractors Board and Mr. Mercier and to come up with the amendments by 5:00 p.m. on June 23, 1993.
Mr. Regan questioned if Mr. Reese had a copy of the Arizona conflicting laws. Ms. Grein stated she had a copy.
Mr. Collins noted Mr. Hettrick and he would be available at 8:00 a.m. on June 23, 1993.
Chairman Giunchigliani closed the hearing on AB-772.
SENATE BILL 346 -Provides that prohibition against discrimination against employee for use of product outside premises of employer does not prohibit employer from providing insurance that distinguishes between employees based on that use.
Mr. John Sande, Attorney, Harrah's Hotel & Casino, testified in support of SB-346. He noted SB-346 was requested by the Nevada Association of Health Underwriters. He explained the reason for SB-346 was to clarify existing law which was passed in 1991. In 1991 the tobacco industry introduced legislation which provided it would be unlawful for an employer to discharge or discriminate against any employee concerning his compensation terms, conditions, or privileges of employment because he engaged in the lawful use in Nevada of any product outside the premises of the employer during his non-working hours, if the use did not adversely affect his ability to perform his job or the safety of other employees. He explained Harrah's had a healthy lifestyle discount program which provided a $15 discount per month off an employee's health insurance premium if he did not smoke.
Mr. Sande suggested an amendment which provided lower premiums for certain employees who did not use any products which were adversely hazardous to their health.
Mr. Regan asked if there was a penalty for an employee who engaged in life threatening activities such as sky diving or scuba diving. Mr. Sande noted there was no penalty under Harrah's program.
Chairman Giunchigliani asked what was to prevent the employer from establishing a penalty down the road by the language in SB-346, subsection 5. Mr. Sande noted a reasonable distinction had to be established. If something was hazardous to the health of the employee and the employer wanted to encourage the employee not to engage in this type of activity, they had to establish a reasonable program. The Chair asked if subsection 5 was necessary. Mr. Sande noted he did not want to go before a court and argue what the intent of the legislature was. Subsection 5 was necessary for Harrah's or they would have to enact a new program.
Mr. Jim Wadhams, Nevada Association of Health Underwriters, testified in support of SB-346. He noted there were very few insurance companies who offered these types of programs.
Chairman Giunchigliani closed the hearing on SB-346 and called Mr. Clark, Chief of Finance, the State Industrial Insurance System (SIIS) to testify on the present financial standing of SIIS.
Mr. J. R. Clark, Chief of Finance, the State Industrial Insurance System (SIIS), testified. Mr. Clark submitted the unaudited interim financial statements (Exhibit D) and conducted a brief explanation of the different charts.
Mr. Scott Young, General Counsel, the State Industrial Insurance System (SIIS), testified. Mr. Young noted the figures in Exhibit D were currently projections. When the year closed out, exact figures could be obtained. Mr. Young commented although SIIS's problems were far from over, the projections did show some promising trends.
Chairman Giunchigliani opened the work session on AB-662.
ASSEMBLY BILL 662 - Requires issuance of identification cards to persons covered by industrial insurance.
The Chair asked Mr. Young if he was attempting to get at the fraud, and the concept of some sort of insurance card in proposed amendments to AB-662 (Exhibit E).
Mr. Young explained presently AB-662, Section 1 required SIIS to get the name, classification of employment, gross monthly wage and social security number of each employee, which would allow SIIS to identify a particular individual. Mr. Young noted a cross-reference with the Employment Security Department (ESD) was also established. The Chair noted she did not see this cross-reference language and asked if this was contained in SB-316. Mr. Young responded affirmatively.
The Chair asked if the gross wages were done quarterly. Mr. Young noted the larger employers tend to report on a longer period of time and the smaller employers a shorter period of time. Chairman Giunchigliani suggested initiating language based on a company's size so SIIS would be able to audit more quickly.
The Chair stated the insurance card gave the audit team the opportunity to check if someone was using a false social security number. Also, based on the indexing between Department of Industrial Relations (DIR), ESD, SIIS and self-insureds, SIIS could run a check on a monthly basis. Mr. Young noted SIIS presently sent monthly runs to ESD and a report went to the Contractors Board every 10 days.
Mr. Hettrick suggested removing "An employee, who has been issued an identification card pursuant to section 1 of this act, shall present the card to" on page 2, Section 2, subsection 1, and insert at the end "shall include the employees social security number on all forms required." The Chair responded this was a reasonable request and it clarified the necessary information which should be included.
Mr. Young concurred.
ASSEMBLYMAN ANDERSON MOVED TO AMEND AND DO PASS AB-662.
ASSEMBLYMAN KENNY SECONDED THE MOTION.
THE MOTION CARRIED WITH 9 VOTES.
ASSEMBLYMEN ERNAUT AND CARPENTER WERE ABSENT AT THE TIME OF THE VOTE.
ASSEMBLY BILL 671 - Makes various changes to provisions governing employers insured by state industrial insurance system and prohibits system from insuring certain employers.
Chairman Giunchigliani explained AB-671 regarded safety requirements for state and private sector. The Chair noted she would compare AB-671 to SB-316 and bring it up at the next meeting on Thursday.
Chairman Giunchigliani closed the hearing on AB-671.
ASSEMBLY BILL 673 - Requires state contractors' board to suspend license of contractor upon finding that contractor failed to maintain satisfactory record of safety in work place.
ASSEMBLYMAN REGAN MOVED TO INDEFINITELY POSTPONE AB-673.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED WITH 9 VOTES.
ASSEMBLYMEN ERNAUT AND CARPENTER WERE ABSENT AT THE TIME OF THE VOTE.
ASSEMBLY BILL 268 - Eliminates subsequent injury fund for industrial insurance.
ASSEMBLYMAN REGAN MOVED TO INDEFINITELY POSTPONE AB-268.
ASSEMBLYMAN ANDERSON SECONDED THE MOTION.
THE MOTION CARRIED WITH 9 VOTES.
ASSEMBLYMEN ERNAUT AND CARPENTER WERE ABSENT AT THE TIME OF THE VOTE.
ASSEMBLY BILL 285 - Prohibits payment of certain benefits relating to industrial insurance while employee is incarcerated.
ASSEMBLYMAN REGAN MOVED TO INDEFINITELY POSTPONE AB-285.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED WITH 9 VOTES.
ASSEMBLYMEN ERNAUT AND CARPENTER WERE ABSENT AT THE TIME OF THE VOTE.
ASSEMBLY BILL 524 - Makes violation of certain provisions concerning industrial insurance punishable as felony under certain circumstances.
ASSEMBLYMAN BONAVENTURA MOVED TO INDEFINITELY POSTPONE AB-524.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED WITH 8 VOTES.
ASSEMBLYMEN ANDERSON, ERNAUT AND CARPENTER WERE ABSENT AT THE TIME OF THE VOTE.
ASSEMBLY BILL 549 - Revises method for determining percentage of disability resulting from industrial injury and manner for payment in lump sum of compensation for that disability.
ASSEMBLYMAN COLLINS MOVED TO INDEFINITELY POSTPONE AB-549.
ASSEMBLYMAN BACHE SECONDED THE MOTION.
THE MOTION CARRIED WITH 8 VOTES.
ASSEMBLYMEN ANDERSON, ERNAUT AND CARPENTER WERE ABSENT AT THE TIME OF THE VOTE.
There being no further business to come before committee, the meeting was adjourned at 5:10 p.m..
RESPECTFULLY SUBMITTED:
JEANNE PEYTON
Committee Secretary
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Assembly Committee on Labor and Management
June 22, 1993
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