SENATE DAILY JOURNAL

NEVADA LEGISLATURE

Sixty-ninth Session, 1997
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SENATE DAILY JOURNAL
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THE ONE HUNDRED AND SIXTH DAY
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Carson City (Monday), May 5, 1997

Senate called to order at 11:10 a.m.
President pro Tempore Jacobsen presiding.
Roll called.
All present.

Prayer by The Reverend Dave Ditolla:
Father God, we pause just for a minute to reflect on the awesome responsibility that is in our hands. God, I pray that we never take for granted that responsibility as we gather here to represent the people of the State of Nevada. Lord, give us wisdom and clarity of thought as we serve not only the people of this great state, but as we serve You in this task. It's in Your Name that we pray.

Amen.

Pledge of allegiance to the Flag.

Senator Raggio moved that further reading of the Journal be dispensed with, and the President and Secretary be authorized to make the necessary corrections and additions.
Motion carried.

REPORTS OF COMMITTEES

Mr. President pro Tempore:
Your Committee on Commerce and Labor, to which was referred Senate Bill No. 267, has had the same under consideration, and begs leave to report the same back with the recommendation: Amend, and do pass as amended.

Randolph J. Townsend,

Chairman

Mr. President pro Tempore:
Your Committee on Finance, to which was referred Senate Bill No. 229, has had the same under consideration, and begs leave to report the same back with the recommendation: Amend, and do pass as amended.

William J. Raggio,

Chairman

Mr. President pro Tempore:
Your Committee on Finance, to which were referred Assembly Bills Nos. 231, 261, has had the same under consideration, and begs leave to report the same back with the recommendation: Do pass.

William J. Raggio,

Chairman

Mr. President pro Tempore:
Your Committee on Human Resources and Facilities, to which were referred Senate Bills Nos. 169, 295, has had the same under consideration, and begs leave to report the same back with the recommendation: Amend, and do pass as amended.

Raymond D. Rawson,

Chairman

Mr. President pro Tempore:
Your Committee on Human Resources and Facilities, to which was referred Assembly Bill No. 362, has had the same under consideration, and begs leave to report the same back with the recommendation: Do pass.

Raymond D. Rawson,

Chairman

Mr. President pro Tempore:
Your Committee on Judiciary, to which was referred Senate Bill No. 264, has had the same under consideration, and begs leave to report the same back with the recommendation: Do pass.

Mark A. James,

Chairman

Mr. President pro Tempore:
Your Committee on Judiciary, to which were referred Senate Bills Nos. 231, 277, 285, has had the same under consideration, and begs leave to report the same back with the recommendation: Amend, and do pass as amended.

Mark A. James,

Chairman

MESSAGES FROM THE ASSEMBLY

Assembly Chamber, Carson City, May 2, 1997

To the Honorable the Senate:
I have the honor to inform your honorable body that the Assembly on this day passed Senate Bill No. 65.
Also, I have the honor to inform your honorable body that the Assembly on this day passed, as amended, Senate Bill No. 125, and respectfully requests your honorable body to concur in said amendment.
Also, I have the honor to inform your honorable body that the Assembly on this day passed, as amended, Assembly Bills Nos. 5, 77, 114 and 214.
Jacqueline Sneddon

Assistant Chief Clerk of the Assembly

INTRODUCTION, FIRST READING AND REFERENCE

By Senator Titus:
Senate Bill No. 356--An Act relating to children; requiring an applicant for the issuance or renewal of certain licenses, certificates or permits to submit a statement indicating whether the applicant is subject to a court order for the support of a child and whether he is in compliance with that order or a plan for repayment of the money owed pursuant to the order; prohibiting the issuance or renewal of such a license, certificate or permit if the applicant indicates on the statement that he is subject to a court order for the support of a child and is not in compliance with such an order or plan; requiring certain agencies to suspend a professional, occupational or recreational license, certificate or permit issued to a person who has failed to comply with a subpoena or warrant relating to a proceeding to determine the paternity of a child or to establish or enforce an obligation for the support of one or more children or issued to a person who is in arrears in the payment for the support of one or more children; requiring that the social security numbers of applicants for certain licenses, certificates or permits be included in the applications therefor; and providing other matters properly relating thereto.
Senator Titus moved that the bill be referred to the Committee on Human Resources and Facilities.
Motion carried.

By Senator Jacobsen:
Senate Bill No. 357--An Act relating to crime; including within the crime of involuntary manslaughter the violation of certain laws resulting in the death of another person; providing a penalty; and providing other matters properly relating thereto.
Senator Rawson moved that the bill be referred to the Committee on Judiciary.
Motion carried.

By the Committee on Judiciary:
Senate Bill No. 358--An Act relating to securities; authorizing the electronic delivery of documents, applications and fees to the securities division of the office of the secretary of state; authorizing the administrator of the division, by order, to exempt certain securities and transactions from the requirement for registration; increasing the penalty for violating an order denying, suspending or revoking the effectiveness of registration or an order to cease and desist issued by the administrator; and providing other matters properly relating thereto.
Senator James moved that the bill be referred to the Committee on Judiciary.
Motion carried.
By the Committee on Judiciary:
Senate Bill No. 359--An Act relating to statutes; ratifying technical corrections made to sections of NRS and to multiple amendments of sections of NRS; correcting the effective date of, correcting certain provisions in and repealing certain provisions in Statutes of Nevada; and providing other matters properly relating thereto.
Senator James moved that the bill be referred to the Committee on Judiciary.
Motion carried.

Assembly Bill No. 5.
Senator Rawson moved that the bill be referred to the Committee on Government Affairs.
Motion carried.

Assembly Bill No. 77.
Senator Rawson moved that the bill be referred to the Committee on Natural Resources.
Motion carried.

Assembly Bill No. 114.
Senator Rawson moved that the bill be referred to the Committee on Commerce and Labor.
Motion carried.

Assembly Bill No. 214.
Senator Rawson moved that the bill be referred to the Committee on Government Affairs.
Motion carried.

MOTIONS, RESOLUTIONS AND NOTICES

Senator Raggio moved that Senate Bill No. 215 be taken from the General File and placed on the General File for the next legislative day.
Remarks by Senator Raggio.
Motion carried.

Senator Rawson moved that Senate Bill No. 220 be taken from the General File and placed on the General File for the next legislative day.
Remarks by Senator Rawson.
Motion carried.

SECOND READING AND AMENDMENT

Senate Bill No. 131.
Bill read second time.
The following amendment was proposed by the Committee on Human Resources and Facilities:
Amendment No. 151.
Amend the bill as a whole by deleting sections 1 through 5 and adding new sections designated sections 1 through 6, following the enacting clause, to read as follows:
"Section 1. Chapter 200 of NRS is hereby amended by adding thereto a new section to read as follows:
1. A person who causes to be administered to another person any controlled substance without that person's knowledge and with the intent thereby to enable or assist himself or any other person to commit a crime of violence against that person or the property of that person, is guilty of a category B felony and shall be punished by imprisonment in the state prison for a minimum term of not less than 1 year and a maximum term of not more than 20 years.

2. As used in this section:
(a) "Controlled substance" includes flunitrazepam and gamma-hydroxybutyrate and each substance for which flunitrazepam or gamma-hydroxybutyrate is an immediate precursor as defined in NRS 453.086.
(b) "Crime of violence" means:
(1) Any offense involving the use or threatened use of force or violence against the person or property of another; or
(2) Any felony for which there is a substantial risk that force or violence may be used against the person or property of another in the commission of the felony.
(c) "Without a person's knowledge" means the person is unaware that a substance that can alter his ability to appraise conduct or to decline participation in or communicate an unwillingness to participate in conduct has been administered to him.
Sec. 2. NRS 200.405 is hereby amended to read as follows:
200.405 [A] Unless a greater penalty is provided in section 1 of this act, aperson who administers to another person any chloroform, ether, laudanum, or any controlled substance, anesthetic, or intoxicating or emetic agent, with the intent thereby to enable or assist himself or any other person to commit a felony, is guilty of a category B felony and shall be punished by imprisonment in the state prison for a minimum term of not less than 1 year and a maximum term of not more than 10 years.
Sec. 3. NRS 453.336 is hereby amended to read as follows:
453.3361. It is unlawful for a person knowingly or intentionally to possess a controlled substance unless the substance was obtained directly from, or pursuant to, a valid prescription or order of a physician, physician's assistant, dentist, podiatric physician or veterinarian while acting in the course of his professional practice, or except as otherwise authorized by the provisions of NRS 453.011 to 453.552, inclusive.
2. Except as otherwise provided in subsections 3 , [and] 4 and 5 and in NRS 453.3363, and unless a greater penalty is provided in NRS 212.160, 453.3385, 453.339 or 453.3395, a person who violates this section shall be punished:
(a) For the first or second offense, if the controlled substance is listed in schedule I, II, III or IV, for a category E felony as provided in NRS 193.130.
(b) For a third or subsequent offense, if the controlled substance is listed in schedule I, II, III or IV, or if the offender has previously been convicted two or more times in the aggregate of any violation of the law of the United States or of any state, territory or district relating to a controlled substance, for a category D felony as provided in NRS 193.130, and may be further punished by a fine of not more than $20,000.
(c) For the first offense, if the controlled substance is listed in schedule V, for a category E felony as provided in NRS 193.130.
(d) For a second or subsequent offense, if the controlled substance is listed in schedule V, for a category D felony as provided in NRS 193.130.
3. Unless a greater penalty is provided in NRS 212.160, 453.337 or 453.3385, a person who is convicted of the possession of flunitrazepam or gamma-hydroxybutyrate, or any substance for which flunitrazepam or gamma-hydroxybutyrate is an immediate precursor, is guilty of a category B felony and shall be punished by imprisonment in the state prison for a minimum term of not less than 1 year and a maximum term of not more than 6 years.
4. Unless a greater penalty is provided in NRS 212.160, a person who is under 21 years of age and is convicted of the possession of less than 1 ounce of marihuana:
(a) For the first and second offense, is guilty of a category E felony and shall be punished as provided in NRS 193.130.
(b) For a third or subsequent offense, is guilty of a category D felony and shall be punished as provided in NRS 193.130, and may be further punished by a fine of not more than $20,000.
[4.] 5. Before sentencing under the provisions of subsection [3] 4 for a first offense, the court shall require the parole and probation officer to submit a presentencing report on the person convicted in accordance with the provisions of NRS 176.195. After the report is received but before sentence is pronounced the court shall:
(a) Interview the person convicted and make a determination as to the possibility of his rehabilitation; and
(b) Conduct a hearing at which evidence may be presented as to the possibility of rehabilitation and any other relevant information.
6. As used in this section, "controlled substance" includes flunitrazepam, gamma-hydroxybutyrate and each substance for which flunitrazepam or gamma-hydroxybutyrate is an immediate precursor.
Sec. 4. NRS 453.337 is hereby amended to read as follows:
453.3371. Except as otherwise authorized by the provisions of NRS 453.011 to 453.552, inclusive, it is unlawful for a person to possess for the purpose of sale flunitrazepam, gamma-hydroxybutyrate, any substance for which flunitrazepam or gamma-hydroxybutyrate is an immediate precursor or any controlled substance classified in schedule I or II.
2. Unless a greater penalty is provided in NRS 453.3385, 453.339 or 453.3395, a person who violates this section shall be punished:
(a) For the first offense, for a category D felony as provided in NRS 193.130.
(b) For a second offense, or if, in the case of a first conviction of violating this section, the offender has previously been convicted of a felony under the Uniform Controlled Substances Act or of an offense under the laws of the United States or any state, territory or district which, if committed in this state, would amount to a felony under the Uniform Controlled Substances Act, for a category C felony as provided in NRS 193.130.
(c) For a third or subsequent offense, or if the offender has previously been convicted two or more times of a felony under the Uniform Controlled Substances Act or of any offense under the laws of the United States or any state, territory or district which, if committed in this state, would amount to a felony under the Uniform Controlled Substances Act, for a category B felony by imprisonment in the state prison for a minimum term of not less than 3 years and a maximum term of not more than 15 years, and may be further punished by a fine of not more than $20,000 for each offense.
3. The court shall not grant probation to or suspend the sentence of a person convicted of violating this section and punishable pursuant to paragraph (b) or (c) of subsection 2.
Sec. 5. NRS 453.3385 is hereby amended to read as follows:
453.3385Except as otherwise authorized by the provisions of NRS 453.011 to 453.552, inclusive, a person who knowingly or intentionally sells, manufactures, delivers or brings into this state or who is knowingly or intentionally in actual or constructive possession of flunitrazepam, gamma-hydroxybutyrate, any substance for which flunitrazepam or gamma-hydroxybutyrate is an immediate precursor or any controlled substance which is listed in schedule I, except marihuana, or any mixture which contains any such controlled substance , shall be punished, if the quantity involved:
1. Is 4 grams or more, but less than 14 grams, for a category B felony by imprisonment in the state prison for a minimum term of not less than 1 year and a maximum term of not more than 6 years and by a fine of not more than $50,000.
2. Is 14 grams or more, but less than 28 grams, for a category B felony by imprisonment in the state prison for a minimum term of not less than 2 years and a maximum term of not more than 15 years and by a fine of not more than $100,000.
3. Is 28 grams or more, for a category A felony by imprisonment in the state prison:
(a) For life with the possibility of parole, with eligibility for parole beginning when a minimum of 10 years has been served; or
(b) For a definite term of 25 years, with eligibility for parole beginning when a minimum of 10 years has been served,
and by a fine of not more than $500,000.
Sec. 6. The amendatory provisions of this act do not apply to offenses that are committed before October 1, 1997.".
Amend the title of the bill to read as follows:

"An Act relating to controlled substances; increasing the penalty for the administration of a controlled substance to aid in the commission of a crime of violence; increasing the penalties for certain offenses involving flunitrazepam; making it unlawful to possess, possess for sale or traffick in gamma-hydroxybutyrate; providing penalties; and providing other matters properly related thereto.".

Amend the summary of the bill to read as follows:

"Summary--Makes various changes to offenses and penalties related to controlled substances. (BDR 15-311)".

Senator Rawson moved the adoption of the amendment.
Amendment adopted.
Bill ordered reprinted, engrossed and to third reading.

Senate Bill No. 167.
Bill read second time.
The following amendment was proposed by the Committee on Commerce and Labor:
Amendment No. 216.
Amend the bill as a whole by deleting sections 1 through 5 and adding new sections designated sections 1 through 25, and the text of repealed sections, following the enacting clause, to read as follows:
"Section 1 Chapter 598 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 8, inclusive, of this act.
Sec. 2 As used in sections 2 to 7, inclusive, of this act, unless the context otherwise requires:
1. "Commissioner" means the commissioner of the consumer affairs division of the department of business and industry.
2. "Division" means the consumer affairs division of the department of business and industry.
3. "Registrant" means a credit service organization, an organization for buying goods or services at a discount, a dance studio or a health club which is required to register and post security with the division pursuant to the provisions of this chapter.
Sec. 3 1. Each credit service organization, organization for buying goods or services at a discount, dance studio and health club regulated by the provisions of this chapter shall apply for registration on the form prescribed by the division.
2. At the time of application for registration, the applicant shall pay to the division an administrative fee of $25 and deposit the required security with the division.
3. Upon receipt of the security in the proper form and the payment of the administrative fee required by this section, the division shall issue a certificate of registration to the applicant. A certificate of registration is not transferable or assignable.
Sec. 4 1. Each registrant shall deposit with the division:
(a) A bond executed by a corporate surety approved by the commissioner and licensed to do business in this state;
(b) An irrevocable letter of credit for which the registrant is the obligor, issued by a bank whose deposits are federally insured; or
(c) A certificate of deposit in a federally insured financial institution doing business in this state, which may be withdrawn only on the order of the commissioner, except that the interest may accrue to the registrant.
2. The term of the bond, letter of credit or certificate of deposit, or any renewal thereof, must be not less than 1 year.
3. If the registrant deposits a bond, the registrant shall keep accurate records of the bond and the payments made on the premium. The records must be open to inspection by the division during business hours. The registrant shall notify the division not later than 30 days before the date of expiration of the bond and provide written proof of the renewal of the bond to the division.
4. The commissioner may reject any bond, letter of credit or certificate of deposit which fails to conform to the requirements of this chapter.
5. A registrant may change the form of security which he has deposited with the division. If the registrant changes the form of the security, the commissioner may retain for not more than 1 year any portion of the security previously deposited by the registrant as security for claims arising during the time the previous security was in effect.
6. If the amount of the deposited security falls below the amount required by this chapter for that security, the registrant shall be deemed not to be registered as required by section 3 of this act for the purposes of this chapter.
Sec. 5 1. The security required to be deposited by a registrant pursuant to section 4 of this act must be held in trust for consumers injured by the bankruptcy of the registrant or the registrant's breach of any agreement entered into in his capacity as a registrant.
2. A consumer so injured may bring and maintain an action in any court of competent jurisdiction to recover against the security.
3. The division may bring an action for interpleader against all claimants upon the security. If the division brings such an action, the division shall publish notice of the action at least once each week for 2 weeks in a newspaper of general circulation in the county in which the organization has its principal place of business. The division may deduct its costs of the action, including the costs of the publication of the notice, from the amount of the security. All claims against the security have equal priority. If the security is insufficient to pay all the claims in full, the claims must be paid pro rata. If the registrant has posted a bond with the division, the surety is then relieved of all liability under the bond.
4. The division may, in lieu of bringing an action for interpleader pursuant to subsection 3, conduct a hearing to determine the distribution of the security to claimants. The division shall adopt regulations to provide for adequate notice and the conduct of the hearing. If the registrant has posted a bond with the division, distribution pursuant to this subsection relieves the surety of all liability under the bond.
Sec. 6 1. If no claims have been filed against the security deposited with the division pursuant to section 4 of this act within 6 months after the registrant ceases to operate or his registration expires, whichever occurs later, the commissioner shall release the security to the registrant and shall not audit any claims filed against the security thereafter by consumers.
2. If one or more claims have been filed against the security within 6 months after the registrant ceases to operate or his registration expires, whichever occurs later, the proceeds must not be released to the registrant or distributed to any consumer earlier than 1 year after the registrant ceases to operate or his registration expires, whichever occurs later.
3. For the purposes of this section, the commissioner shall determine the date on which a registrant ceases to operate.
Sec. 7 Before advertising its services or conducting business in this state, an organization for buying goods or services at a discount must register pursuant to section 3 of this act and post security in the amount of $50,000 with the division pursuant to section 4 of this act. The security must be conditioned on compliance by the organization with the provisions of NRS 598.840 to 598.930, inclusive, and this section, and the terms of the contract with the buyer.
Sec. 8 1. A person, in planning, conducting or executing a solicitation for or on behalf of a charitable organization, shall not:
(a) Make any claim or representation concerning a contribution which directly, or by implication, has the capacity, tendency or effect of deceiving or misleading a person acting reasonably under the circumstances; or
(b) Omit any material fact deemed to be equivalent to a false, misleading or deceptive claim or representation if the omission, when considering what has been said or implied, has or would have the capacity, tendency or effect of deceiving or misleading a person acting reasonably under the circumstances.
2. Notwithstanding any other provisions of this chapter, the attorney general has primary jurisdiction to investigate and prosecute a violation of this section.
3. Except as otherwise provided in NRS 41.480 and 41.485, a violation of this section constitutes a deceptive trade practice for the purposes of NRS 598.0903 to 598.0999, inclusive.
4. As used in this section:
(a) "Charitable organization" means any person who, directly or indirectly, solicits contributions and who:
(1) The Secretary of the Treasury has determined to be tax exempt pursuant to the provisions of section 501(c)(3) of the Internal Revenue Code; or
(2) Is, or holds himself out to be, established for a charitable purpose.
The term does not include an organization which is established for and serving bona fide religious purposes.
(b) "Solicitation" means a request for a contribution to a charitable organization that is made by:
(1) Mail;
(2) Commercial carrier;
(3) Telephone, facsimile or other electronic device; or
(4) A face-to-face meeting.
The term includes solicitations which are made from a location within this state and solicitations which are made from a location outside of this state to persons located in this state.
Sec. 9 NRS 598.0925 is hereby amended to read as follows:
598.0925 1. Except as otherwise provided in this section, a person engages in a "deceptive trade practice" when , in the course of his business or occupation , he:
(a) Makes an assertion of scientific, clinical or quantifiable fact in an advertisement which would cause a reasonable person to believe that the assertion is true, unless, at the time the assertion is made, the person making it has possession of factually objective scientific, clinical or quantifiable evidence which substantiates the assertion; or
(b) Fails upon request of the commissioner or attorney general to produce within 6 working days the substantiating evidence in his possession at the time the assertion of scientific, clinical or quantifiable fact was made.
2. This section does not apply to general assertions of opinion as to quality, value or condition made without the intent to mislead another person.
Sec. 10 NRS 598.096 is hereby amended to read as follows:
598.096When the commissioner , [or the] director or attorney general has cause to believe that any person has engaged or is engaging in any deceptive trade practice, he may:
1. Request the person to file a statement or report in writing under oath or otherwise, on such forms as may be prescribed by the commissioner [or the director,] , director or attorney general, as to all facts and circumstances concerning the sale or advertisement of property by the person, and such other data and information as [he] the commissioner, director or attorney general may deem necessary.
2. Examine under oath any person in connection with the sale or advertisement of any property.
3. Examine any property or sample thereof, record, book, document, account or paper as he may deem necessary.
4. Make true copies, at the expense of the consumer affairs division of the department of business and industry, of any record, book, document, account or paper examined [, as provided in] pursuant to subsection 3 , [of this section,] which copies may be offered into evidence in lieu of the originals thereof in actions brought pursuant to NRS 598.097 and 598.0979.
5. Pursuant to an order of any district court, impound any sample of property which is material to the deceptive trade practice and retain the property in his possession until completion of all proceedings as provided in NRS 598.0903 to 598.0999, inclusive. An order may not be issued pursuant to this subsection unless [the commissioner or the] :
(a) The commissioner, director or attorney general, and the court give the accused full opportunity to be heard ; and [unless the commissioner or]
(b) The commissioner, director or attorney general proves by clear and convincing evidence that the business activities of the accused will not be impaired thereby.
Sec. 11 NRS 598.0963 is hereby amended to read as follows:
598.09631. Whenever the attorney general is requested in writing by the commissioner or the director to represent him in instituting a legal proceeding against a person who has engaged or is engaging in a deceptive trade practice, the attorney general may bring an action in the name of the State of Nevada against that person on behalf of the commissioner or director.
2. The attorney general may institute criminal proceedings to enforce the provisions of NRS 598.0903 to 598.0999, inclusive. The attorney general is not required to obtain leave of the court before instituting criminal proceedings pursuant to this subsection.
3. If the attorney general has reason to believe that a person has engaged or is engaging in a deceptive trade practice, the attorney general may bring an action in the name of the State of Nevada against that person to obtain a temporary restraining order, a preliminary or permanent injunction, or other appropriate relief.
4. If the attorney general has cause to believe that a person has engaged or is engaging in a deceptive trade practice, the attorney general may issue a subpoena to require the testimony of any person or the production of any documents, and may administer an oath or affirmation to any person providing such testimony. The subpoena must be served upon the person in the manner required for service of process in this state or by certified mail with return receipt requested. An employee of the attorney general may personally serve the subpoena.
Sec. 12 NRS 598.097 is hereby amended to read as follows:
598.097If any person fails to cooperate with any investigation, as provided in NRS 598.096, or if any person fails to obey a subpoena issued by the commissioner [or the director,] , director or attorney general pursuant to NRS 598.0963 or 598.0967, the commissioner , [or the] director or attorney general may apply to any district court for equitable relief. The application must state reasonable grounds showing that the relief is necessary to terminate or prevent a deceptive trade practice. If the court is satisfied of the reasonable grounds, the court may:
1. Grant injunctive relief restraining the sale or advertisement of any property by the person.
2. Require the attendance of or the production of documents by the person, or both.
3. Grant other relief necessary to compel compliance by the person.
Sec. 13 NRS 598.2825 is hereby amended to read as follows:
598.2825 1. [An organization shall not advertise its services or conduct business in this state unless it has filed an application for registration on a form prescribed by the division, and has received a certificate of registration from the division. A certificate of registration is not transferable or assignable.
2. The application for registration must be accompanied by a $25 fee and a bond in compliance with the requirements of NRS 598.285.
3.] Before advertising its services or conducting business in this state, an organization must register pursuant to section 3 of this act and deposit security in the amount of $100,000 with the division pursuant to section 4 of this act. The security must be conditioned on compliance by the organization with the provisions of NRS 598.282 to 598.286, inclusive, and the terms of its contracts with buyers.
2. If an organization has deposited the required security, a salesperson, agent or representative of the organization who sells its services is not required to deposit his own separate security. For the purposes of this subsection, a person is a salesman, agent or representative of an organization if:
(a) He does business under the same name as the organization; or
(b) The organization and the issuer of the security certify in writing that the security covers the salesperson, agent or representative.
3. The division shall adopt such regulations as it deems necessary to carry out the provisions of this section.
Sec. 14 NRS 598.283 is hereby amended to read as follows:
598.283 1. Before the execution of a contract between the buyer and an organization or before the receipt by the organization of any money or other valuable consideration, whichever occurs first, the organization [shall] must provide to the buyer, in writing:
(a) A statement:
(1) That the buyer has a right pursuant to 15 U.S.C. §§ 1681g and 1681h to receive disclosure of all information, except medical information, in any file on him maintained by a consumer credit reporting agency;
(2) That 15 U.S.C. § 1681j requires that this disclosure be made free to the buyer if he requests it within 30 days after receipt of notice of a denial of credit;
(3) Of the approximate cost to the buyer of receiving this disclosure when there has not been a denial of credit; and
(4) That the buyer has the right pursuant to 15 U.S.C. § 1681i to dispute the completeness or accuracy of any item contained in any file on him maintained by any consumer credit reporting agency.
(b) A detailed description of the services to be performed by the organization for the buyer and the total amount the buyer will become obligated to pay for the services.
(c) A statement that the buyer has a right to proceed against the [bond filed] security deposited with the division by the organization under the circumstances and in the manner set forth in [NRS 598.285.] sections 5 and 6 of this act. The statement provided pursuant to this paragraph must include the name and address of the [corporate surety executing the bond.] issuer of the security.
(d) A statement that the buyer may cancel a contract for the services of an organization within 5 days after its execution by written notice mailed or delivered to the organization.
(e) A statement identifying the availability of any nonprofit association which provides services similar to those offered by the organization. The statement provided pursuant to this paragraph must include the association's telephone number, including the association's national toll-free telephone number, if any.
2. The written information provided pursuant to subsection 1 must be printed in at least 10-point bold type and must include the following statement or a similar statement approved by the division:

RIGHTS OF CONSUMERS REGARDING CREDIT FILES

PURSUANT TO STATE AND FEDERAL LAW

You have the right to obtain a copy of your credit file from a consumer credit reporting agency. There is no fee if, within the past 30 days, you have been turned down for credit, employment or insurance because of information in your credit report. The consumer credit reporting agency is obligated to provide someone to help you interpret the information in your credit file.

You have a right to dispute inaccurate information by contacting the consumer credit reporting agency directly. However, neither you nor any credit service organization has the right to have accurate, current and verifiable information removed from your credit report. Generally, under the Fair Credit Reporting Act, the consumer credit reporting agency is obligated to remove accurate, negative information from your report only if it is more than 7 years old and bankruptcy information can be reported for 10 years. If you have notified a credit reporting agency that you dispute the accuracy of information in your credit file, the consumer credit reporting agency is obligated to make an investigation and modify or remove inaccurate information. The consumer credit reporting agency may not charge a fee for this service. Any relevant information and copies of all documents you have concerning the disputed information should be given to the consumer credit reporting agency. If the investigation does not resolve the dispute to your satisfaction, you may send a brief statement to the consumer credit reporting agency to keep in your credit file, explaining why you think the information in the credit file is inaccurate. The consumer credit reporting agency is obligated to include your statement or a summary of your statement about disputed information in any report it issues about you.

RIGHTS OF CONSUMERS REGARDING

CANCELLATION OF A CONTRACT

You have a right to give written notice of your intent to cancel a contract with a credit service organization for any reason within 5 working days from the date you signed it. If for any reason you do cancel a contract during this time, you do not owe any money. You have a right to sue a credit service organization if it misleads you.

3. The organization shall retain a copy of the written information it provides pursuant to the requirements of subsections 1 and 2 for not less than 2 years.
Sec. 15 NRS 598.289 is hereby amended to read as follows:
598.289 1. The provisions of NRS 598.282 to 598.287, inclusive, are not exclusive and do not relieve the parties or the contracts subject thereto from compliance with any other applicable provision of law.
2. The remedies provided in NRS [598.285,] 598.286 and 598.287 for violation of any provision of NRS 598.282 to 598.286, inclusive, are in addition to any other procedures or remedies for any violation or conduct provided for in any other law.
3. Any violation of NRS 598.282 to 598.286, inclusive, constitutes a deceptive trade practice for the purposes of NRS 598.0903 to 598.0999, inclusive.
Sec. 16 NRS 598.840 is hereby amended to read as follows:
598.840 As used in NRS 598.840 to 598.930, inclusive, and section 7 of this act, unless the context otherwise requires:
1. "Business day" means any calendar day except Sunday, or the following business holidays: New Year's Day, Martin Luther King, Jr.'s Birthday, Washington's Birthday, Memorial Day, Independence Day, Labor Day, Nevada Day, Veterans' Day, Thanksgiving Day and Christmas Day.
2. "Buyer" means a person who purchases by contract a membership in an organization for buying goods or services at a discount.
3. "Commissioner" means the commissioner of the consumer affairs division of the department of business and industry.
4. "Organization for buying goods or services at a discount" or "organization" means a person who, for a consideration, provides or claims to provide a buyer with the ability to purchase goods or services at a price which is represented to be lower than the price generally charged in the area.
Sec. 17 NRS 598.875 is hereby amended to read as follows:
598.875 Each contract for membership in an organization must:
1. Be in writing, legible and have all spaces filled in before the buyer signs it;
2. Be in the language in which the sales presentation was given;
3. Contain the addresses of the buyer and the organization;
4. Be given to the buyer when he signs it;
5. Disclose that the security required by [NRS 598.850] section 4 of this act has been obtained and deposited with the commissioner;
6. Specify the term of the membership of the buyer, which may not be measured by the buyer's life; and
7. Clearly specify the buyer's right to cancel the contract pursuant to NRS 598.885.
Sec. 18 NRS 598.930 is hereby amended to read as follows:
598.930 1. The remedies, duties and prohibitions of NRS 598.840 to 598.930, inclusive, and section 7 of this act, are not exclusive and are in addition to any other remedies provided by law.
2. Any violation of NRS [598.850] 598.855 to 598.900, inclusive, constitutes a deceptive trade practice for the purposes of NRS 598.0903 to 598.0999, inclusive.
Sec. 19 NRS 598.944 is hereby amended to read as follows:
598.944 1. Each owner of a dance studio or health club shall register with the division [,] pursuant to section 3 of this act, listing the full name and address of the studio or club and any other description of its facilities or activities the division requires.
2. At least one member of the governing body of the dance studio or health club must live in the county where the studio or club is located. He is the agent of the studio or club and its owner for receipt of process served.
Sec. 20 NRS 598.946 is hereby amended to read as follows:
598.946 1. Except as otherwise provided in subsection [11, before contracting with a buyer,] 5, before advertising its services or conducting business in this state, the owner of a dance studio or a health club [shall deposit with the division:
(a) A bond executed by a corporate surety approved by the commissioner and licensed to do business in this state;
(b) An irrevocable letter of credit of which the owner of the dance studio or health club is the obligor and issued by a bank whose deposits are federally insured; or
(c) A certificate of deposit in a federally insured financial institution that may be withdrawn only on the order of the commissioner, except that the interest may accrue to the owner,] must register pursuant to NRS 598.944 and section 3 of this act, and deposit security with the division pursuant to section 4 of this act. The security must be conditioned on compliance by the owner with the provisions of NRS 598.940 to 598.966, inclusive, and the terms of the contract with a buyer.
2. Except as otherwise provided in subsection [9,] 3, the amount of the [bond, letter of credit or certificate of deposit] security to be deposited must be:
(a) Ten thousand dollars, if the dance studio or health club has less than 400 members;
(b) Fifteen thousand dollars, if the dance studio or health club has 400 members or more but less than 800 members;
(c) Twenty thousand dollars, if the dance studio or health club has 800 members or more but less than 1,200 members;
(d) Twenty-five thousand dollars, if the dance studio or health club has 1,200 members or more but less than 1,500 members;
(e) Thirty-five thousand dollars, if the dance studio or health club has 1,500 members or more but less than 4,000 members; and
(f) Fifty thousand dollars, if the dance studio or health club has 4,000 or more members.
3. [Except as otherwise provided in subsection 11, any buyer who is injured because of breach of contract or bankruptcy may bring and maintain an action to recover against the bond, letter of credit or certificate of deposit.
4. Except as otherwise provided in subsection 11, the liability of the surety does not exceed the amount of the bond regardless of the number of claims filed or the aggregate amount claimed. If the amount claimed exceeds the amount of the bond, the surety shall deposit the amount of the bond with the division.
5. The division may bring an action for interpleader against all claimants upon the security. If it does so, the division must publish notice of the action at least once each week for 2 weeks in a newspaper of general circulation in the county where the organization has its principal place of business. The division is entitled to deduct its costs of the action, including publication costs, from the amount of the security. Claims against the security have equal priority. If the security is insufficient to pay the claims in full, they must be paid pro rata. In the case of a bond, the surety is then relieved of all liability under the bond.
6. The division may, in lieu of bringing an action for interpleader pursuant to subsection 5, conduct a hearing to determine the distribution of the security to claimants. The division shall adopt regulations to provide for adequate notice and the conduct of the hearing. Distribution pursuant to this subsection relieves the surety of all liability under the bond.
7. Except as otherwise provided in subsection 11, the dance studio or health club shall maintain the bond in full force while it is doing business and shall keep accurate records of the bond and the payments made on the premium. These records must be open to inspection by the division during business hours. It shall notify the division no later than 30 days before the date of expiration of the bond and provide written proof of the renewal of the bond to the division.
8. Except as otherwise provided in subsection 11, the division may apply for injunctive relief to require the dance studio or health club to register or to deposit and maintain the security required by subsection 1.
9.] If a dance studio or health club conducts any pre-sale of dance lessons, the use of facilities or other services, the amount of the [bond] security required by [subsection 2 must be $100,000.
10.] this section is $100,000.
4. A dance studio or health club shall report to the division on a quarterly basis the size of its membership and shall, on the basis of any change in the size of that membership, adjust accordingly the amount of the [bond, certificate of deposit or letter of credit] security deposited with the division.
[11.] 5. If a dance studio or health club has actively conducted business for not less than 4 consecutive years and has not changed ownership or, in the case of a corporation, not more than 25 percent of its authorized shares have been transferred, it is not required to deposit [a bond, letter of credit or certificate of deposit] security with the division pursuant to [subsection 1.] section 4 of this act. If a dance studio or health club does not deposit [a bond, letter of credit or certificate of deposit,] such security, it shall obtain a written acknowledgment from each member and prominently post a notice on its premises stating that no security for refunds or reimbursement has been deposited with the State of Nevada.
Sec. 21 NRS 598.948 is hereby amended to read as follows:
598.948 Each contract between the buyer and the dance studio or health club must:
1. Be in writing, legible and have all spaces filled in before the buyer signs it;
2. Be in the language in which the sales presentation was given;
3. Contain the addresses of the buyer and the studio or club;
4. Be given to the buyer when he signs it;
5. Disclose whether security has been obtained and deposited with the division pursuant to [NRS 598.946;] section 4 of this act;
6. Specify the term of membership of the buyer, which must not be measured by the life of the buyer;
7. Clearly specify the right of the buyer to cancel the contract pursuant to NRS 598.950;
8. Not contain a clause by which the contract is automatically renewed; and
9. Specify the number of lessons and the cost of each lesson, if the contract is for dance lessons.
Sec. 22 NRS 598.285 and 598.850 are hereby repealed.
Sec. 23 The provisions of section 8 of this act apply only to a solicitation for or on behalf of a charitable organization which occurs on or after July 1, 1997.
Sec. 24 The provisions of subsection 1 of NRS 354.599 do not apply to any additional expenses of a local government that are related to the provisions of this act.
Sec. 25 This act becomes effective on July 1, 1997.

TEXT OF REPEALED SECTIONS

598.285Bond: Amount; actions; liability of surety; enforcement by division.
1. An organization shall obtain and deposit with the division a bond executed by a corporate surety approved by the commissioner and licensed to do business in this state.
2. The amount of the bond must be $100,000, and the bond must be conditioned on compliance by the owner with the provisions of NRS 598.282 to 598.286, inclusive, and the terms of the contract with a buyer.
3. A buyer who is injured because of breach of contract or bankruptcy may bring and maintain an action to recover against the bond.
4. The liability of the surety does not exceed the amount of the bond regardless of the number of claims filed or the aggregate amount claimed. If the amount claimed exceeds the amount of the bond, the surety shall deposit the amount of the bond with the division.
5. The division may bring an action for interpleader against all claimants upon the bond. If it does so, the division must publish notice of the action at least once each week for 2 weeks in a newspaper of general circulation in the county where the organization has its principal place of business. The division is entitled to deduct its costs of the action, including publication costs, from the amount of the bond. Claims against the bond have equal priority. If the bond is insufficient to pay the claims in full, they must be paid pro rata. The surety is then relieved of all liability under the bond.
6. The division may, in lieu of bringing an action for interpleader pursuant to subsection 5, conduct a hearing to determine the distribution of the bond to claimants. The division shall adopt regulations to provide for adequate notice and the conduct of the hearing. Distribution pursuant to this subsection relieves the surety of all liability under the bond.
7. The organization shall maintain the bond in full force while it is doing business and for not less than 2 years after the organization ceases doing business in this state. The organization shall keep accurate records of the bond and the payments made on the premium. These records must be open to inspection by the division during business hours. It shall notify the division no later than 30 days before the date of expiration of the bond and provide written proof of the renewal of the bond to the division.
8. The division may apply for injunctive relief to require the organization to register or to deposit and maintain the bond required by this section.
598.850Security required; action for interpleader against claimants; hearing; records.
1. Each organization shall deposit with the commissioner:
(a) A bond executed by a corporate surety approved by the commissioner and licensed to do business in this state;
(b) An irrevocable letter of credit of which the organization is the obligor and issued by a bank whose deposits are federally insured; or
(c) A certificate of deposit in a federally insured financial institution, doing business in this state, which may be withdrawn only on the order of the commissioner, except that interest may accrue to the organization.
2. The amount of the bond, letter of credit or certificate of deposit must be $50,000, and it must be conditioned on compliance by the owner with the provisions of NRS 598.840 to 598.930, inclusive, and the terms of the contract with the buyer. Any buyer who is injured because of a breach of contract or bankruptcy may bring and maintain an action to recover against the bond, letter of credit or certificate of deposit.
3. The liability of the surety does not exceed the amount of the bond regardless of the number of claims filed or the aggregate amount claimed, and does not include treble damages allowed by NRS 598.920. If the amount claimed exceeds the amount of the bond, the surety shall deposit the amount of the bond with the commissioner.
4. The consumer affairs division of the department of business and industry may bring an action for interpleader against all claimants upon the security. If it does so, the division must publish notice of the action at least once each week for 2 weeks in a newspaper of general circulation in the county where the organization has its principal place of business. The consumer affairs division is entitled to deduct its costs of the action, including publication costs, from the amount of the security. Claims against the security have equal priority. If the security is insufficient to pay the claims in full, they must be paid pro rata. In the case of a bond, the surety is then relieved of all liability under the bond.
5. The consumer affairs division may, in lieu of bringing an action for interpleader pursuant to subsection 4, conduct a hearing to determine the distribution of the security to claimants. The consumer affairs division shall adopt regulations to provide for adequate notice and the conduct of the hearing. Distribution pursuant to this subsection relieves the surety of all liability under the bond.
6. The organization shall maintain the bond in full force while it is doing business and shall keep accurate records of the bond and the payments made on the premium. The records must be open to inspection by the consumer affairs division of the department of business and industry during business hours. The organization shall notify the commissioner no later than 30 days before the date of expiration of the bond and provide written proof of the renewal of the bond to the commissioner.
7. The commissioner may apply for injunctive relief to require the organization to deposit and maintain the security required by this section.".

Amend the title of the bill to read as follows:

"An Act relating to trade practices; revising provisions governing the registration of, and the posting of security by, credit service organizations, organizations for buying goods or services at a discount, dance studios and health clubs; providing that certain activities related to the solicitation of charitable contributions constitute deceptive trade practices; authorizing the attorney general to issue subpoenas and make investigative demands for the purpose of investigating deceptive trade practices; providing penalties; and providing other matters properly relating thereto.".

Amend the summary of the bill, first line, by deleting "investigation of ".

Senator Townsend moved the adoption of the amendment.
Remarks by Senators Townsend and Neal.
Amendment adopted.
Bill ordered reprinted, engrossed and to third reading.

Senate Bill No. 294.
Bill read second time and ordered to third reading.

Senate Bill No. 313.
Bill read second time and ordered to third reading.

Assembly Bill No. 32.
Bill read second time and ordered to third reading.

Assembly Bill No. 102.
Bill read second time and ordered to third reading.

Assembly Bill No. 134.
Bill read second time and ordered to third reading.

Assembly Bill No. 159.
Bill read second time and ordered to third reading.

Assembly Bill No. 328.
Bill read second time and ordered to third reading.

GENERAL FILE AND THIRD READING

Senate Joint Resolution No. 14.
Resolution read third time.
Remarks by Senators James and O'Connell.
Roll call on Senate Joint Resolution No. 14:
Yeas--21.
Nays--None.
Senate Joint Resolution No. 14 having received a constitutional majority, Mr. President pro Tempore declared it passed.
Resolution ordered transmitted to the Assembly.

Assembly Bill No. 9.
Bill read third time.
Roll call on Assembly Bill No. 9:
Yeas--21.
Nays--None.
Assembly Bill No. 9 having received a constitutional majority, Mr. President pro Tempore declared it passed.
Bill ordered transmitted to the Assembly.

Assembly Bill No. 29.
Bill read third time.
Remarks by Senator Adler.
Senator Adler moved that Assembly Bill No. 29 be taken from the General File and placed on the Secretary's desk.
Motion carried.

Assembly Bill No. 34.
Bill read third time.
Roll call on Assembly Bill No. 34:
Yeas--21.
Nays--None.
Assembly Bill No. 34 having received a constitutional majority, Mr. President pro Tempore declared it passed.
Bill ordered transmitted to the Assembly.

Assembly Bill No. 58.
Bill read third time.
Roll call on Assembly Bill No. 58:
Yeas--21.
Nays--None.
Assembly Bill No. 58 having received a constitutional majority, Mr. President pro Tempore declared it passed.
Bill ordered transmitted to the Assembly.

Assembly Bill No. 80.
Bill read third time.
Roll call on Assembly Bill No. 80:
Yeas--20.
Nays--Neal.
Assembly Bill No. 80 having received a constitutional majority, Mr. President pro Tempore declared it passed.
Bill ordered transmitted to the Assembly.

Assembly Bill No. 87.
Bill read third time.
Remarks by Senators James and Neal.
Roll call on Assembly Bill No. 87:
Yeas--21.
Nays--None.
Assembly Bill No. 87 having received a constitutional majority, Mr. President pro Tempore declared it passed.
Bill ordered transmitted to the Assembly.

Assembly Bill No. 162.
Bill read third time.
Roll call on Assembly Bill No. 162:
Yeas--19.
Nays--None.
Not voting--O'Connell, Regan--2.
Assembly Bill No. 162 having received a constitutional majority, Mr. President pro Tempore declared it passed.
Bill ordered transmitted to the Assembly.

UNFINISHED BUSINESS
Signing of Bills and Resolutions

There being no objections, the President and Secretary signed Senate Concurrent Resolutions Nos. 33, 34.

GUESTS EXTENDED PRIVILEGE OF SENATE FLOOR

On request of Senator Adler, the privilege of the floor of the Senate Chamber for this day was extended to the following students from the E. W. Fritsch Elementary School: Ben Adler, Jessie Badger, Anthony Bass, Jill Birba, Crystal Brown, Allan Chavarria, Deborah Duffy, Jenny Edwards, Ernesto Espino, Kelsey Green, Monique Harrill, Kiersten Johnson, Sal Kinder, Victoria Lombardo, Fabricia Maldonado, Ashley Mather, Stephany Seeley, C.J. Smith, Mark Sulezich, Kasse Weikel, Lucas Whitson, Allie Williams, Joel Wortman, Angelina Hahne, Adrian Munoz, Andrew Kapczynski, Kristine Ayers and Johnathan Summers; teachers: Mrs. Berry, Mrs. Lutz and chaperone, Mrs. Badger.

On request of Senator Mathews, the privilege of the floor of the Senate Chamber for this day was extended to the following students from the Grace Warner Elementary School: Jacob Wharton, Amanda Reid, Caitie Perry, Tegan Fraser, David Kim, Amanda Wright, Stephanie Puente, Athena Llamas, Hayley Kirkham, Ashley Patterson, Allisan Granville, Russell Mandell, Chris Mordendi, Fan Wu, Daniel Berner, Troy Millicr, Mary Felicia, Ryan Cristando, Jahhatlan Drayton, Trevor Stacy, Tyley Jackins, Steven Biggs, Richard Cough, Kassie Dickinson, Jillian Voolker, April Herandez, Jessica Navarra and Tonia Higginbotham and teacher: Ms. Montague; chaperone: Mrs. Dickinson.

On request of Senator Raggio, the privilege of the floor of the Senate Chamber for this day was extended to Mrs. Barbara Mullard and Mrs. Anne Burgess.

Senator Raggio moved that the Senate adjourn until Tuesday, May 6, 1997 at 11 a.m.
Motion carried.

Senate adjourned at 12:02 p.m.

Approved:

Lawrence E. Jacobsen

President pro Tempore of the Senate

Attest: Janice L. Thomas
Secretary of the Senate