MINUTES OF THE
SENATE COMMITTEE ON JUDICIARY
Sixty-seventh Session
June 25, 1993
The Senate Committee on Judiciary was called to order by Chairman Mark A. James, at 2:10 p.m., on Friday, June 25, 1993, in Room 224 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Senator Mark A. James, Chairman
Senator R. Hal Smith, Vice Chairman
Senator Lawrence E. Jacobsen
Senator Mike McGinness
Senator Dina Titus
Senator Raymond C. Shaffer
Senator Ernest E. Adler
GUEST LEGISLATORS PRESENT:
Assemblyman James W. McGaughey, Clark County Assembly District No. 13
Assemblywoman Jan Evans, Washoe County Assembly District No. 30
STAFF MEMBERS PRESENT:
Dennis Neilander, Senior Research Analyst
Marilyn Hofmann, Committee Secretary
OTHERS PRESENT:
Pat Coward, Nevada Land Title Association
Dave Evans, President, Nevada Land Title Association
Charles Cook, Past President and Legal Counsel, Nevada Land Title Association
Anne Cathcart, Deputy Attorney General, State of Nevada, Office of the Attorney General
Larry Matheis, Nevada State Medical Association
Sharon Guidera, State of Nevada, Department of Human Resources, Mental Hygiene and Mental Retardation Division
Marsha Berkbigler, Nevada State Medical Association
May S. Shelton, Director, Washoe County Department of Social Services, Washoe County, Nevada
David J. Reese, Attorney at Law, Cooke, Roberts and Reese, Ltd.
Margi A. Grein, Director of Finance and Public Relations, Nevada Sate Contractors Board
The first bill on the agenda was Assembly Bill (A.B.) 669.
ASSEMBLY BILL 669: Makes various changes relating to title to real property.
The first persons to appear before the committee were Pat Coward, Nevada Land Title Association, Dave Evans, President, Nevada Land Title Association and Charles Cook, Past President and Legal Counsel, Nevada Land Title Association. Mr. Coward introduced Mr. Cook, who explained the bill to the committee.
Mr. Cook said sections 2 through 6 of the bill were definitions, the purpose of which was to distinguish between the products and evidence of title insurance on the one hand and abstracts of title on the other hand. He indicated section 7 was a "housekeeping measure" to add agents of title insurers, as well as the insurer, and to allow an independent certified public accountant audit to suffice in place of an audit by the Division of Financial Institutions. Mr. Cook reviewed the remaining sections of the bill, together with suggested amendments, for the benefit of the committee. He explained the various changes have been approved by representatives of the mortgage banking institutions. Mr. Cook said after conferring with Assemblyman Robert Sader, it was agreed to remove section 12 from the bill in its entirety. Senator James asked if Assemblyman Gene T. Porter, chairman of the Assembly Committee on Commerce, had been advised and it was indicated he had not, but Mr. Coward said he did not feel it would be a problem.
The next to appear was Assemblyman James W. McGaughey, Clark County Assembly District No. 13, who referenced section 12 of the bill. Mr. McGaughey disagreed with the omission of the section, saying he felt it was a very important part of the bill. He said he believed an amendment could be prepared regarding that section to address Mr. Sader's concerns. Mr. McGaughey said when a developer begins work on a tract of land, the "clock starts running on mechanics' liens on that tract...he would have recorded his construction loan prior to the beginning of construction, which is a title company requirement." He said later when the developer sells a portion of the tract to a home builder, that builder will attempt to get a construction loan. Mr. McGaughey said the question is then one of "first rights." He said the bank who finances construction of the home wants to have first mortgage rights to the lot; however, the way the law now exists, since "the clock started running at the beginning of the project... do the workmen on the job have a right to file mechanics' liens which will predate the first mortgage on the construction of the home?" Mr. McGaughey said the problem of "two clocks on the job" was what he was trying to clear up in section 12 of A.B. 669. He elaborated:
The clock runs all the way through for those trades involved in the development of the project, but the clock stops on that development of a lot, providing notice is provided, and gives the bank guaranteed first mortgage rights so they can make the loan to someone to build a house on that lot.
Mr. McGaughey said this section addressed "one of the more important aspects of the bill" and it should be cleared up by way of amendment. Senator James said he believed this section could be amended, since there were other amendments to the bill. The chairman explained to Mr. McGaughey that amendments were taking a very long time to be prepared but hopefully the bill could be passed before the end of the session. Senator James pointed out the amendment Mr. McGaughey was suggesting was complicated, since it would have to be crafted "to protect the mortgage banker rights, vis-a-vis the lien claimants." Mr. McGaughey said he appreciated the committee's consideration and added if the amendment could not be obtained in time, "...the law should be left alone rather than clouded." Mr. Cook stated, "From the standpoint of the industry, we would rather see the bill without section 12 and have it passed, than we would to have section 12 remain in and have the bill not make it through the session." Mr. McGaughey said he would meet with the bill drafters right away. Senator James said the problem would be to determine if the amendment was satisfactory, and it would have to be brought back to the committee to do so.
Mr. McGaughey then agreed to the removal of section 12 of the bill. Mr. Coward said in the interim there would be considerable work done on mechanics' liens and the matter could be addressed in 1995. Mr. Cook said there may be a "revamp of the mechanics' lien law altogether." Mr. McGaughey said that will be a satisfactory solution.
SENATOR MCGINNESS MOVED TO AMEND AND DO PASS A.B. 669.
SENATOR SMITH SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS TITUS, ADLER AND SHAFFER WERE ABSENT FOR THE VOTE.)
* * * * *
The next bill before the committee was Assembly Bill (A.B.) 678.
ASSEMBLY BILL 678: Authorizes department of prisons to confine in infirmary of department certain offenders who refuse medical treatment.
Anne Cathcart, Deputy Attorney General, State of Nevada, Office of the Attorney General, appeared to request the bill not be pursued.
SENATOR JACOBSEN MOVED TO INDEFINITELY POSTPONE A.B. 678.
SENATOR MCGINNESS SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS TITUS, ADLER AND SHAFFER WERE ABSENT FOR THE VOTE.)
* * * * *
Senator James opened the hearing on Assembly Bill (A.B.) 705.
ASSEMBLY BILL 705: Precludes admission in evidence of proceedings and records of committees for review of medical or dental care except under certain circumstances.
The first to appear was Larry Matheis, Nevada State Medical Association. Mr. Matheis said the bill made a "very small change in the law." He said the bill drafter had pointed out that the law which had been in place for years was inappropriately placed in the "privilege statute," when it should have appeared in the "admissibility statute." Mr. Matheis said only the words, "...and are not admissible as evidence in any proceeding...," have been added. He said it has always been presumed that peer review proceedings and information, because they were non-discoverable, were protected as confidential. He said in one particular case, material from the review proceedings was removed from the hospital facility and was used as the sole basis for a claim of malpractice. Mr. Matheis said that action resulted in an appeal to enjoin the using of the material, which is now before the Nevada Supreme Court. He said the supreme court justices have indicated the statute does not say the material is inadmissible. Mr. Matheis added, "For the first time in the 15 years the peer review information has been on the books, an issue has arisen where the material actually went from the hospital...and has appeared as the sole basis for a proceeding." He stated the bill would propose to "make it clear what everybody has always thought...which is that the information within a peer review committee is confidential, non-discoverable and inadmissible."
Senator James pointed out, "In the law generally, privileges are waivable...if we make a blanket rule it is not admissible in evidence, what about the situation where there is a waiver?" Mr. Matheis said any member of a peer review committee may waive a privilege, but added the bill "would prohibit the information from within the peer review committee from being used...the individual may testify...what is protected is the actual peer review process." He said the medical records which are reviewed by a committee are admissible.
Senator Adler said he shared the chairman's concerns. He indicated even if the person being reviewed wished to bring out matters which were discussed by the peer review committee, under A.B. 705 that information would be inadmissible in court. Mr. Matheis said there would be no "documents generated" which would not be available. He stated what they were talking about "was the peer review proceeding itself...not medical records or documents which are discoverable."
Senator James asked Mr. Matheis how the documents in question were removed from the peer review committee; and Mr. Matheis answered, "That is still being speculated." Senator James stated, "You can always say the privilege was not properly waived." He added if a document is stolen or "taken surreptitiously" it is clearly not admissible as evidence. Senator James said he is worried about the approach of "taking a privilege and converting it into a carte blanche, hard and fast evidentiary rule that can't be changed under any circumstances, even if the evidence would exonerate the doctor...." Senator James indicated it might be better to say, "It is confidential...it is a privilege...you will never get to discover it...but you can allow it to be used if the person voluntarily waives the privilege and wants to use it for exoneration." Mr. Matheis indicated the attorneys who have worked on the legislation have indicated A.B. 705 would accomplish that situation. He reiterated the matter being raised by the supreme court in the case referred to was, "Since the particular statute did not specifically preclude admissibility of something which may have been inappropriately obtained...that was the issue in question."
Mr. Matheis stated the issue is the way the peer review committees operate. He said it is not the material submitted to the committee which becomes unavailable, but rather the specific information coming from the peer review committee meeting itself, such as minutes and comments of members of the committee.
The next person to appear was Sharon Guidera, State of Nevada, Department of Human Resources, Mental Hygiene and Mental Retardation Division. Ms. Guidera provided a prepared statement, which is set forth in Exhibit C. She added she felt some of the earlier concerns were addressed in the exceptions set forth in the bill, which allow certain things to be admissible under certain circumstances. Senator James stated her point was well-taken. He said the only thing A.B. 705 would allow a doctor to have entered in evidence would be "his own impeaching statement" not his prior consistent statement, or any other statement by another doctor which might be exonerating evidence. Senator James asked Marsha Berkbigler, representing the Nevada State Medical Association, why an attorney was not here to explain "why this is something the medical profession wants."
Ms. Berkbigler said the language of the legislation was put together by the attorneys for the association but indicated the Legislative Counsel Bureau moved the bill from one statute to another. Senator James asked Ms. Berkbigler to have the association's attorney call him to discuss the legislation.
There was no further testimony and the hearing was closed on A.B. 705 and opened on Assembly Bill (A.B.) 718.
ASSEMBLY BILL 718: Permits county to establish and maintain program which allows donation of certain fees of jurors to specified agencies which provide protective services for children.
Appearing on behalf of the legislation were Assemblywoman Jan Evans, Washoe County Assembly District No. 30, and May S. Shelton, Director, Washoe County Department of Social Services, Washoe County, Nevada.
Ms. Evans stated the legislation was developed to address "the ever-growing problem of child abuse and neglect and the fact there never seem to be enough resources for prevention and/or treatment." She said the bill would provide that jurors would be given the option to donate their jury pay to child protective services. Ms. Evans said the bill was patterned after a law in effect in the State of Texas, which has proved to be very successful. She stressed the legislation was permissive and each county would have the option of implementing the law. Ms. Evans added questions have been raised concerning
"expanding the list of worthy causes" and she said that was possible, but said she was "worried about the size of the pot." Ms. Evans stated, "Even with the best effort, I don't think this will generate vast sums of money."
Ms. Shelton stated the statute affected would refer to counties with 100,000 or more population having responsibility for child protective services. She said in Clark County, Juvenile Court Services handles child protection, while in Washoe County, the Washoe County Social Services is responsible. Ms. Shelton said in the rural areas, the matter is handled by the Nevada State Division of Child and Family Services. She provided to the committee a graph with statistics regarding child abuse and neglect, which is attached as Exhibit D. Ms. Shelton pointed out the "numbers have grown at an alarming rate from 1986 through 1992, and never go down." She concluded:
If we can do something to prevent child abuse, that is the best strategy. We as a society must make a concerted effort to reduce child abuse. As you know, prevention programs are much more cost-effective than treatment programs. More important is the human side of child abuse. We must do whatever we can to eliminate the human suffering and indignity that children have to endure at the hands of people who are supposed to be taking care of them. This is one of the most creative bills [introduced] this session.
Senator Jacobsen asked how the jurors would receive information regarding the donation of their fees. He said he would not like to see a juror be intimidated if he or she really needed to retain those fees for his or her own use. Ms. Evans responded she agreed there should be no social stigma connected with donating or not donating the money. She indicated the counties would have to conduct awareness programs and notices could be included in the letters sent to prospective jurors.
There was no further testimony on A.B. 718.
SENATOR MCGINNESS MOVED TO DO PASS A.B. 718.
SENATOR TITUS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
* * * * *
The chairman opened the hearing on Assembly Bill (A.B.) 721.
ASSEMBLY BILL 721: Making various changes relating to contractors.
The first to appear before the committee were David J. Reese, Attorney at Law, Cooke, Roberts and Reese, Ltd., and Margi A. Grein, Director of Finance and Public Relations, Nevada State Contractors Board. Mr. Reese said he was the attorney for the Nevada State Contractors Board, and would testify in favor of the bill. He said the bill was designed to give certain of the board's employees the ability to issue citations to persons who contract or bid to contract without licenses. Mr. Reese stated there has been a lot of input from the industry and the public who have asked for a solution to the significant "contracting without a license problem."
Senator James asked how enforcement was taken care of at this time. Mr. Reese answered the district attorney's office would be encouraged to file a complaint but indicated "they have quite a backlog...and are unable to process these things." He said passage of A.B. 721 will allow the board to issue a citation to take a person into justice court. Mr. Reese stated the crime of contracting without a license is a gross misdemeanor and is punishable by a fine of $500,000 for the first violation and up to a year in jail for the second violation.
Senator Shaffer said he has been a building official for 15 years in southern Nevada and he understands the problem. He said, "By the time you return with someone who can actually cite the individuals, they are gone...it is usually some fly-by-night outfit." Mr. Reese said "it was not a high priority" for the sheriff's office to go out and serve this type of citation.
Senator Jacobsen said he was opposed to the legislation and indicated "it could become a Gestapo deal in a sense...just to assign someone to do those things...power sometimes goes to your head." Mr. Reese said he was against the concept when it was addressed in the last session "as a peace officer situation" and was concerned at that time about the same type of situations mentioned by Senator Jacobsen. He said he would not want to be in the position of defending the board for violations involving the peace and safety of citizens. Mr. Reese said he felt A.B. 721 was "a relatively safe statute." He said the investigators would write a citation and if the offender became agitated or violent, the investigators would be instructed to back away and call a law enforcement officer. Mr. Reese agreed the people who are designated as investigators "should be trained and put on a very short leash."
Senator Shaffer said in some cases the citation issued would be contingent upon the offender obtaining a license, at which time the citation would be forgiven.
Senator McGinness asked how many employees would be authorized as investigators with the power to issue citations. Mr. Reese said there were two investigators with law enforcement experience in the Reno office who would be empowered, and approximately three or four in Las Vegas.
There were no further questions from the committee and the hearing was closed.
SENATOR SHAFFER MOVED TO DO PASS A.B. 721.
SENATOR ADLER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR JACOBSEN VOTED NO.)
* * * * *
Senator James opened the work session on the following bills: Senate Bill (S.B.) 352 and Assembly Bill (A.B.) 494.
SENATE BILL 352: Creates lien upon earnings and property of offender for costs of incarceration.
Senator James asked for a reconsideration of prior action on the bill, which was indefinitely postponed.
SENATOR ADLER MOVED TO RESCIND THE COMMITTEE'S ACTION TO INDEFINITELY POSTPONE S.B. 352.
SENATOR SHAFFER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TITUS WAS ABSENT FOR THE VOTE. SENATOR SMITH VOTED NO.)
* * * * *
Senator James discussed an amendment to the bill with the committee. Senator Adler said the income of the offender's spouse would be exempt and the offender would have a $50,000 per year exemption. He also pointed out the offender would be allowed an exemption in an amount reasonable to pay support to minor children, disabled children and disabled parents. Senator Adler indicated there was also allowed an $80,000 per child trust for education, plus all standard exemptions set forth in the law. He stated, "The only people they will be hitting are very wealthy offenders."
SENATOR ADLER MOVED TO AMEND AND DO PASS S.B. 352.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TITUS WAS ABSENT FOR THE VOTE. SENATOR SMITH VOTED NO.)
* * * * *
ASSEMBLY BILL 494: Provides for registration of securities exchanges located in Nevada.
Senator James stated he had discussed his concern regarding the limitation to companies which provided five full-time jobs in Nevada with the secretary of state. He said the purpose of the bill was the development of a capital market and that provision would limit that development. Senator James said the secretary of state agreed with the chairman that the bill would be better without that restriction.
Senator Adler indicated he would moved to delete that provision which was set forth in lines 11 through 18, section 4 of A.B. 494.
SENATOR ADLER MOVED TO AMEND AND DO PASS A.B. 494.
SENATOR SMITH SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR TITUS WAS ABSENT FOR THE VOTE.)
* * * * *
There was no further business to come before the committee, and the hearing was adjourned.
RESPECTFULLY SUBMITTED:
Marilyn Hofmann,
Committee Secretary
APPROVED BY:
Senator Mark A. James, Chairman
DATE:
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Senate Committee on Judiciary
June 25, 1993
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