MINUTES OF THE

ASSEMBLY Committee on Commerce and Labor

Seventieth Session

March 8, 1999

The Committee on Commerce and Labor was called to order at 3:45 p.m., on Monday, March 8, 1999. Chairman Barbara Buckley presided in Room 3142 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Ms. Barbara Buckley, Chairman

Mr. Richard Perkins, Vice Chairman

Mr. Morse Arberry, Jr.

Mr. Bob Beers

Ms. Merle Berman

Mr. Joe Dini, Jr.

Mrs. Jan Evans

Ms. Chris Giunchigliani

Mr. David Goldwater

Mr. Lynn Hettrick

Mr. David Humke

Mr. Dennis Nolan

Mr. David Parks

Mrs. Gene Segerblom

GUEST LEGISLATORS PRESENT:

Assemblywoman Dawn Gibbons, Assembly District 25

Assemblywoman Vonne Chowning, Assembly District 28

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Following roll call, Chairman Buckley asked the committee to take action on the following Bill Draft Requests (BDR):

• BDR 54-339 – revises provisions governing practices of optometry (A.B. 432).

ASSEMBLYWOMAN EVANS MOVED FOR COMMITTEE INTRODUCTION OF BDR 54-339.

ASSEMBLYMAN HUMKE SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

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• BDR 54-1628 – revises provisions governing qualification of applicant for certificate of registration to practice interior design (A.B. 434).

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED FOR COMMITTEE INTRODUCTION OF BDR 54-1628.

ASSEMBLYMAN HUMKE SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

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• BDR 54-632 – clarifies exemption for certain governmental entities from certain provisions governing contractors (A.B. 433).

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED FOR COMMITTEE INTRODUCTION OF BDR 54-632.

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

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• BDR 52-182 – provides additional protections to individual buyers, lessees, borrowers, and recipients of workers compensation benefits (A.B. 431).

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED FOR COMMITTEE INTRODUCTION OF BDR 52-182.

ASSEMBLYMAN PARKS SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

Chairman Buckley opened the hearing on A.B. 279.

Assemblywoman Evans, Assembly District 30, introduced Colleen and Larry Struve and read Exhibit C into the record. Ms. Evans said Nevada Revised Statutes (NRS) 663.085 and NRS 673.373 explained the notification procedures to lessees, circumstances of opening safe-deposit boxes, and how the contents of a safe-deposit box was handled and disposed. Ms. Evans noted NRS 663 and NRS 673 did not cover the bank’s unauthorized opening of a safe deposit box, commonly referred to as "drilling."

Larry Struve, a private citizen, explained the safe-deposit box used by he and his wife was drilled without their permission, even though the rent had been paid in full. Total strangers inventoried their most private and sensitive items, which was discovered by the Struves after the fact. Their case was settled, but he thought the gap in the NRS should be brought the attention of the legislature so as to protect others. He explained when a box holder failed to pay the rent, a bank gave a 30-day notice notifying the box holder the rent had not been paid, the box would be drilled, and the contents seized. The bank held the contents of the box for 5 years, and if the items were not claimed, they were turned over to the state’s unclaimed property division. The items could ultimately be sold at public auction.

Exhibit D was referenced by Mr. Struve who explained it was a chronology of events that occurred to he and his wife beginning in 1980, when the Struves first rented their safe-deposit box.

Chairman Buckley inquired as to traditional tort remedies of negligence or invasion of privacy with regard to a bank making a mistake or intentionally violating the privacy of an individual. She noted the remedies applied to the Struve’s case and they received a financial settlement. Chairman Buckley asked why the traditional remedies were not good enough and why A.B. 279 was necessary.

Mr. Struve said the amount he and his wife settled the case for was relatively small. The Struves did not feel they suffered a great deal of financial harm in terms of lost items. The real harm occurred when some of their most private items, that did not have a monetary value, were subjected to the scrutiny of total strangers. The Struves paid for the box and felt they purchased security and privacy, which should be preserved at all cost. The Struves were seeking a neutral third party to consider what occurred, make sure a box holder received a complete explanation as to what happened, and if there was a dispute over whether items had been taken from the box, the third party could provide an independent assessment. If there had been an unwarranted invasion of privacy, the third party could guide the box holder in an appropriate way of providing remedy.

Chairman Buckley stated the lessor was required to submit to arbitration, mediation, or factfinding. She asked if factfinding was a "term-of-art."

Mr. Struve was not aware of the word factfinding being a "term of art." He said the National Judicial College was involved in training mediators and third party neutrals. A function of those individuals was to assess a situation where there was a dispute and provide findings of fact so as to allow the two sides to fashion a settlement. The procedure was a fairly inexpensive and informal procedure. The important element was a third party neutral who assessed where the truth was in terms of what occurred and provided the box holder a means of addressing the situation.

Mr. Struve referenced section 1, subsection 3, of A.B. 279 noting it addressed the problem encountered by he and his wife. He then explained a bank could refuse to submit a claim to arbitration, mediation, or factfinding if the bank gave notice to the box holder. It would be necessary for the bank to set up its own procedure for dealing with box holders whose boxes were improperly opened.

A key point was the right of privacy. He noted Exhibit E, an article in the California Law Review, written by William L. Prosser dealing with privacy. He closed his testimony by quoting from a 1936, New Jersey court case, "We regard the search here asserted as a violation of the natural law of the right of privacy in one’s own affairs, which exists in liberty loving peoples and nations. For no right is vital to liberty and the pursuit of happiness than the protection of the citizens private affairs, their right to be left alone. That right extends to records of his transactions from the unreasonable inspection examination thereof by unwarranted governmental search. If due protection of this natural right be denied him by the courts, his other rights and his citizenship lose their value." Mr. Struve said if there was a right to privacy against governmental intervention and intrusion, should there not be the same if the lessor of a safety deposit box made the same intrusion of an individuals right of privacy.

Colleen Struve noted concern over removed items from her safety deposit box and concern with individuals she was not aquatinted with knowing private information about her. Ms. Struve restated the experiences elucidated by Mr. Struve. She further noted she did not feel punitive toward the bank but noted a need to protect other individuals from enduring the same circumstances she and her husband underwent.

Mr. Dini explained he had four safe deposit boxes in the same bank for 22 years, and the bank always deducted the fees from his account. He was provided a free box when he and his wife were married and was now receiving past due notices on the free box, which prompted his interest in the bill.

Assemblywoman Dawn Gibbons, Assembly District 25, noted a similar situation occurring to a close family friend explaining the individual was a senior citizen whose safe deposit box had been drilled, even though there was no past due balance. The situation did not seem uncommon.

John Sande, Attorney at Law, Nevada Bankers Association, noted there was no question what happened to the Stuves was inappropriate and explained the situation was a violation of the law, negligence, and breech of contract. Yet, he questioned whether additional statutes were required when the common law appeared to cover the problem.

Mr. Sande referenced section 1, subsection 1, which said, "Except as otherwise provided in subsection 3, if a lessor opens a safe-deposit box without complying with subsection 1 of NRS 663.085 or opens it for any other reason without giving the lessee an opportunity to consent to the opening . . ." He asked how it would be resolved if the lessee and the lessor disagreed as to whether or not there had been compliance with the statutes. Mr. Sande continued to reference section 1, subsection 1, which said, "the lessee may demand the following relief in addition to any other relief appropriate under the circumstances" and asked if the section meant the lessee could refuse to use arbitration, mediation, or factfinding, and go to court instead. If such was the case, was it binding arbitration or nonbinding arbitration. The language was unclear.

Mr. Sande noted the issue of factfinding was confusing and said mediation could not establish facts or liability. He said if an individual went through the mediation or arbitration process, the individual would want to have an attorney. Ultimately someone had to pay the bill for the mediator or the arbitrator, which could be substantial. According to A.B. 279, parties waited until facts were found and then Mr. Sande assumed fault would be found on one party or the other. If it was determined the customer was at fault, costs would be assessed against such person. The customer had to understand they could be exposed to thousands of dollars in arbitration and mediation fees.

Mr. Sande mentioned A.B. 279 did not define what sort of notice must be given and asked if the arbitrator had the ability to award punitive damages. Under the due process system of government, if someone claimed punitive damages, notice pleading had to be provided stating rights were violated and there was subjection to punitive damages. Mr. Sande asked who determined issues of pain and suffering and if it was binding arbitration. He noted the amount was unclear, and under the current system in Nevada, if a lawsuit was filed, there was arbitration if the amount was $40,000 or less. Under circumstances presented in A.B. 279, an individual could claim millions of dollars and not be required to provide the bank notification as to the damages sustained until meeting with an arbitrator.

Mr. Sande did not know of any arbitrator or mediator who was willing to post the fees up-front. He asked what would happen if the award was against the customer and the customer did not have the financial resources to pay.

Any bank could be exempt from provisions in A.B. 279 by providing notice to customers that they did not agree to the statute and it did not apply. The statute was not forceful. Mr. Sande asked when the statute’s effective date would be noting many financial institutions would desire to provide notice to customers so as to not be bound by the law. He asked if the notice could be provided to existing customers informing them the law did not apply to them.

Ted Waking, Executive Director, Nevada Bankers Association, made it clear safety deposit boxes were provided for the convenience of customers. They were a loss to the bank, and A.B. 279 would create an imbalance. The customer paid a small fee for box rent, and the lessor could be subjected to possible unlimited exposure through the arbitration process.

Ms. Evans asked what Mr. Sande or Mr. Waking would propose as a minimum level of protection for customers. She asked about an alternative to A.B. 279 if Mr. Sande or Mr. Waking were uncomfortable with the bill.

Mr. Sande noted he would rely upon the common law. There were numerous situations that did not have prescribed statutory procedures. The situation of unwarranted drilling of safety deposit boxes was rare. If someone had a problem with a bank and felt they had been aggrieved, they should hire an attorney and prosecute. Under A.B. 279, a customer runs the risk of arbitrating or mediating a case with a bank and losing, thus being required to pay arbitration or mediation fees.

Ms. Evans asked why banks did not put forth a policy dealing with the issue. She noted Mr. Struve’s appeal to the institution to establish a policy versus having the government force them to act in a certain manner and stated the best form of discipline was self-discipline.

Mr. Sande said some of the larger banks instructed their attorneys to offer mediation to a claimant when a dispute arose. He was aware of one bank that paid for mediation services, and he did not believe it was always best for a customer to arbitrate. Mr. Sande said many banks did put forth a provision for arbitration or mediation, but customers did not always want to agree to arbitration or mediation, especially if the customer believed they had a good claim. Under such a situation, the customer might want to go to court.

Ms. Evans pointed out the Struve’s bank did not offer such services, nor did other banks they contacted. Some banks did not provide the services and did not want to.

Chairman Buckley noted many banks had standard arbitration language stating in the event of a dispute, parties would try to arbitrate as an alternative dispute mechanism. It was not normally spelled out in a contract all the situations that could go wrong. Many issues were left up to common law.

Chairman Buckley closed the public hearing on A.B. 279 and began working on the work session document (Exhibit F) and A.B. 193.

Vance Hughey, Committee Policy Analyst, stated there were four amendments proposed for A.B. 193 (Exhibit F). The first amendment considered page 3, line 39, of A.B. 193. He noted the time period during which a device for automatic dialing and announcing could not be used to disseminate a message in a telephone call was 9 p.m. to 9 a.m. Mrs. Segerblom thought the time period should be 6 p.m. to 9 a.m.

He stated Bob Barengo proposed two amendments changing the definition for a device for automatic dialing and announcing to read as follows:

• "Incorporates a storage capability of telephone numbers to be called and utilizes a random or sequential number generator producing telephone numbers to be called."

Mr. Hughey noted Mr. Barengo suggested the new provisions being added to NRS Chapter 598 regarding when a person who used a device for automatic dialing and announcing engaged in a deceptive trade practice be made consistent with similar provisions that currently existed in NRS Chapter 597. He suggested page 4, line 11, be amended to read as follows:

• "Message to solicit a person to purchase goods or services by telephone and he does not have a preexisting business relationship with the person being called unless a recorded or unrecorded natural voice" (Exhibit F).

Mr. Hughey then referenced Exhibit F, page 4, which was an amendment submitted by Barbara Teal Clark, representing the Nevada PTA in which she proposed adding a provision allowing a school district to use a device for automatic dialing and announcing for purposes other than notification of student attendance.

Chairman Buckley reminded the committee A.B. 193, in section 4, required the person who used the device for automatic dialing and announcing obtain a written authorization from the consumer advocate of the consumer protection bureau. The bill set forth penalties for using the device without authorization, times when an interest could not use the device, and additional exceptions.

Mrs. Segerblom noted the time period of 6 p.m. to 9 a.m. was in her original testimony. She stated she was unsure how the committee felt about the timeframe.

Mr. Beers was concerned A.B. 193 attempted to regulate interstate business activity. He asked what were the implications of a call that originated outside the state and came into Nevada as well as what were the implications of a call originating in the State of Nevada and going outside of the state.

Chairman Buckley noted NRS 597 and 598, the chapters A.B. 193 would amend, were already on the books.

Mr. Hughey agreed and thought Mr. Beers’ concern might require legal interpretation. He noted section 4 of A.B. 193, which said, "a person shall not connect the device for automatic dialing and announcing to any telephone line in this state."

Chairman Buckley stated the bill could be held and legal clarification obtained. She pointed out there was a fiscal note that appeared to deal with "any violators," which Chairman Buckley noted was zero. She did not see an additional fiscal note from any agency.

Mrs. Segerblom stated she introduced a similar bill during the 69^th session that went to the Assembly Committee on Ways and Means and an individual came to her from the Office of the Attorney General informing her they could "handle it as is."

ASSEMBLYMAN DINI MOVED TO AMEND AND DO PASS A.B. 193.

ASSEMBLYWOMAN EVANS SECONDED THE MOTION.

Due to concerns about regulating interstate commerce, especially electronic commerce, Mr. Beers noted he would vote against A.B. 193. He also thought the bill was unenforceable and superfluous noting calls were consistently made with a caller identification block thus there was no enforcement mechanism. He saw A.B. 193 as an extra law that would clutter up the books.

ASSEMBLYMAN DINI WITHDREW THE MOTION TO AMEND AND DO PASS A.B. 193.

Mr. Dini wanted a legal opinion from the Legislative Counsel Bureau Legal Division as to whether the bill was enforceable.

Chairman Buckley noted the:

WITHDRAWAL OF THE MOTION BY MS. EVANS.

Chairman Buckley said she would also like to have answers to Mr. Beers' questions. Ms. Buckley stated A.B. 193 would be held until a legal opinion was obtained. She continued the work session and Crystal Lesbo, Senior Research Analyst, explained Exhibit G covered A.B. 110, A.B. 111, A.B. 112, and A.B. 253. The four bills were the result of work done by the Commission on Workplace Safety and Community Protection, which was appointed by Governor Miller in response to the explosion occurring in January of 1998, at the Sierra Chemical plant.

Ms. Lesbo explained there were several amendments proposed regarding the definition of "explosive." The definition recommended by the commission was the United States Department of Transportation (DOT) definition. A.B. 110 used the Bureau of Alcohol, Tobacco, and Firearms (ATF) definition.

Ms. Lesbo noted Ray Bacon who represented the Nevada Manufacturers Association suggested amending A.B. 110 to include certain exemptions to the ATF definition, which was included as Attachment B in Exhibit G.

Ms. Lesbo pointed out Peter Krueger, representing AMS Governmental Affairs, requested the final definition of "explosive" exclude the use of certain consumer products including gasoline, diesel fuel, and propane. In addition, Mr. Krueger presented language changes on page 2 of Exhibit G.

Page 3 of Exhibit G considered a statement made by Major General Drennan A. Clark, Chairman of the Commission on Workplace Safety and Community Protection during his testimony on A.B. 110. Ms. Lesbo explained General Clark noted it was not the intent of the commission to deal with the mining industry.

Page 3 of Exhibit G considered the general scope of the bill and included:

• Assemblyman Hettrick’s proposal limiting the scope of the bill to exclude transportation or storage;

• Georgi Cody, representing Nevada Motor Transit Association, request that the bill exclude the term transportation;

• David Going, Deputy Chief, Occupational Safety and Health Enforcement Section, Division of Industrial Relations, proposal that the bill limit applicability of section 1, subsection 1, to manufacturing duties; and

• Verne Rosse, Deputy Administrator, Division of Environmental Protection, proposal to limit the scope of A.B. 112 to manufacturing. His proposals might also be applicable to A.B. 110 and A.B. 111 (Exhibit G, Attachment C).

The fiscal note for A.B. 110 was included as Attachment D in Exhibit G.

Mr. Hughey said he understood some of the involved parties came to an agreement as to a single definition of the term "explosive."

Ray Bacon, representative of the Nevada Manufacturers Association, explained the bill would be acceptable to the association if it strictly applied to manufacturing and included exceptions 4, 5, and 6 of Exhibit G, Attachment B. He noted the association did not care which definition was used pointing out bill drafters used the ATF definition because of its use elsewhere in statute. Mr. Baker explained the DOT definition had become the internationally accepted definition.

Peter Krueger, representing Petroleum Marketers Association, noted the association had no problem with the bill as long as the legislative intent was clear that it was designed for the manufacturing of explosives and did not include gasoline, diesel fuel, and other such products.

Chairman Buckley summed up discussion on A.B. 110 noting the intent was to limit language to manufacturing plants and not apply the language to mining or transportation, which was regulated by the Department of Transportation and other entities. She asked if section 1 was changed to clarify the bill covered manufacturing plants, and the definition was further clarified using either the DOT or the ATF definition, with the exemptions, would such action take care of the amendments on pages 2 and 3 of Exhibit G. Chairman Buckley then asked for clarification on the differences between the DOT definition and the ATF definition.

Ms. Lesbo said issues in A.B. 110 would be addressed if the scope of the bill was limited to manufacturing, the ATF definitions were used, and exemptions number 4, 5, and 6 were included (Exhibit G, Attachment B).

Chairman Buckley asked if Major General Clark, Chairman, Commission on Workplace Safety and Community Protection, was satisfied with the ATF definition.

Ms. Lesbo said Major General Clark informed her he did not have a preference for either definition. She referenced Exhibit H, which were definitions of "explosives" in NRS 484.057 and NRS 202.750 noting NRS 484.057 dealt with traffic laws and NRS 202.750 dealt with crimes against public safety.

Mr. Humke noted Mr. Bacon suggested the DOT definition comported with international commerce. Such a definition was important to Nevada manufacturers as it enabled them to manufacturer to an international market standard.

Chairman Buckley referenced testimony as to use of the ATF definition noting her desire to check the record for clarification.

Mr. Bacon stated it did not matter which definition was used noting there were only four plants in the State of Nevada.

Mr. Dini suggested amending A.B. 110 so as to allow for continuity of definition in the language in the bill, NRS chapter 482, and chapter 484.

Chairman Buckley stated research staff could consult with legal staff to see if such changes could be made to all three statutes. Because of the technical nature of the amendments, she would bring the bill back to the committee before sending it to the assembly floor so as to allow for committee review.

Mr. Hettrick referenced Exhibit G, Attachment C, which was a memorandum from Verne Rosse, Division of Environmental Protection. He suggested using Mr. Rosse’s language, which said, "as related to that manufacture." Mr. Hettrick also thought language stating "or to manufacturing of" an explosive would also be acceptable. He said the inclusion of such language would solve the problem with regard to mining and transportation, and the language would be consistent through A.B. 110, A.B. 111, and A.B. 112.

Chairman Buckley noted the dilemma dealt with explosive manufacturing plants, the definition of explosive, and the DOT definition versus the ATF definition.

ASSEMBLYMAN HETTRICK MOVED TO AMEND AND DO PASS A.B. 110.

ASSEMBLYMAN DINI SECONDED THE MOTION.

THE MOTION CARRIED.

Ms. Lesbo noted there were several amendments before the committee (Exhibit G, Page 4). The first amendment dealt with the DOT definition of explosive versus the AFT definition of explosive. She noted Major General Clark’s statement that the intent of the commission again was not to deal with mining but to deal exclusively with the manufacture of explosives. Ms. Lesbo pointed out Mr. Rosse’s amendment limited the scope to manufacturing only (Exhibit G, Attachment C). The final amendment was suggested by Ms. Giunchigliani and included the language "or videotape" after the word "document" on page 1, line 12 of A.B. 111.

Chairman Buckley stated section 2 of A.B. 111 changed the standards with regard to explosive manufacturing plants. She asked Ms. Lesbo if NRS 618.376 specifically applied to manufacturing plants. Ms. Lesbo understood section 2 of A.B. 111 dealt exclusively with manufacturing or handling of explosives.

Chairman Buckley referenced section 1 and noted the language, "establishing requirements for issuing the document in different languages," was deleted and language was added that said, "the document or videotape must be in a language and format that is understandable to each employee." Chairman Buckley questioned the tightness of the language and if such language weakened the law, or whether language stating "understandable to each employee" connoted the document or videotape would be in different languages.

Mr. Dini inquired as to forms being understandable to each employee. He asked about the possibility of transcribing a form into numerous languages and how the situation would be handled.

Assemblyman Hettrick noted he had the same concern, and he recalled testimony about employers not hiring based on the ability to produce forms in numerous languages.

Chairman Buckley said if there was a plant where 90 percent of the employees were Spanish speaking, the requirements would be different than a situation where once in every 10 years a company had an employee who spoke another language. Perhaps requirements should be different in explosive and manufacturing plants where there was greater danger.

Danny Evans, Chief Administrative Officer, Occupational Safety and Health Enforcement, stated under the guidelines of American Explosive Manufacturers, it was indicated that all employees working with explosives should speak English. A.B. 111 would require employers write and provide a training program in a language employees would understand.

Chairman Buckley asked if under current law, employers were obligated to provide information in the language utilized by the employee.

Mr. Evans noted that under the Process Safety Management (PSM) standard the employer was obligated to provide the information.

Chairman Buckley asked if the requirement was in all employment classifications.

Mr. Evans noted the requirement was for hazardous entities.

Mr. Nolan stated the language requirement was not unique to industries dealing with hazardous waste or unusually hazardous situations. The Federal Aviation Administration required all pilots flying in United States airspace have a command of English. He noted involvement with a taxicab service in Washington D.C., and explained there were about 32 nationalities and countries represented in the taxicab service. The company was subject to training all employees in all of the federal programs. Training was often conducted with one-on-one tutoring with other employees who had a better command of a particular language. In addition, videotapes were used where a script was given to an individual who understood a particular language who was then taped while reading from the script.

Chairman Buckley noted a possibility for the committee to consider was not changing existing law under NRS 618, section 1, of A.B. 111 and changing section 2, which she believed involved explosives or manufacturing plants, thereby limiting issues to hazardous materials.

Mr. Hettrick agreed with not amending section 1 of A.B. 111. He also agreed it was appropriate to limit the bill to explosives or dangerous product manufacturing.

Ms. Giunchigliani noted section 2, subsection 4, would still require a safety program be made available in the language and format understandable to each employee rather than upon hiring. She stated the safety plan would then be required to have the training available.

Chairman Buckley explained the employers written safety program had to meet all of the requirements in section 2, which were enhanced for any employee engaged in the manufacturing or handling of explosives. The language in section 1 would be enhanced and tightened, which was appropriate for hazardous materials.

Ms. Giunchigliani considered it best to delete section 1 and leave the current language.

Chairman Buckley referenced existing law, page 1, line 12, which said, "the division shall adopt regulations specifying the contents of such a document or videotape."

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO AMEND AND DO PASS A.B. 111.

"By eliminating the suggested deletion in section 1, but inserting after document on line 12 "or videotape."

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

Chairman Buckley noted the limitation to explosive manufacturing plants be consistent with the definition in A.B. 110.

THE MOTION CARRIED.

Ms. Lesbo noted the amendments to A.B. 112 (Exhibit G, pages 5, 6), which were:

• Amendment 1was the definition of explosive;

• Amendment 2 dealt with General Clark’s statement with respect to the intent of the Commission on Workplace Safety and Community Protection, which addressed manufacturing of explosives only and not the mining industry;
• Amendment 3 was from Marvin Carr, State Fire Marshall, Department of Motor Vehicles and Public Safety, and enabled the fire marshal to retain jurisdiction over the storage and use of explosives in any commercial construction but not in mining or the control of avalanches;
• Amendment 4 Exhibit G, Attachment C, considered limiting the scope of the bill to manufacturing; and
• Amendment 5 considered a letter provided by Ray Bacon of the Nevada Manufacturers Association (Exhibit G, Attachment E).

The letter in section:

• a) considered the requirement for certification of an employee;
• b) considered establishing a certification fee;
• c) considered limiting the scope to manufacturing only and deleting the phrase "used, stored or handled;" and
• d) deleted sections 13 through 23 of the bill.

The fiscal note was attached as Attachment F to (Exhibit G).

Chairman Buckley stated the value of consistency when considering the limitation of language to explosive manufacturing between A.B. 112, A.B. 110, and A.B. 111. She thought amendment 3 would be acceptable, which proposed to remove jurisdiction from the state fire marshal. Chairman Buckley thought the language was an unintended consequence of drafting. Amendment 4 was already included and the only new suggestions came from Mr. Bacon. Chairman Buckley asked Mr. Bacon if he would clarify for the committee whether every employee of every plant would have to be licensed.

Mr. Bacon noted the language was unclear, but his interpretation of the bill was an employer could end up requiring certification for every employee. In some programs, employers were allowed to certify individual employees once their management and training staff had been certified. If such was the intent, it was not spelled out in the bill. Certification of each individual employee went beyond the scope. In the bill, there was already a training program requirement. He thought it appropriate that certification, licensing, and fees be necessitated for key production management individuals as well as those involved in production safety training.

Mr. Evans desired employee certification and did not want to charge a fee for the certification.

Chairman Buckley asked Ms. Lesbo if in the commission study it was recommended every employee be licensed.

Ms. Lesbo did not recall such a specific recommendation.

Ms. Giunchigliani noted if the same definition were to be adopted, the number of employees that would be included in the certification process would be narrowed. She thought the training program and the individuals who did the actual production needed certification.

Mr. Evans said he served on the Clark commission and believed it was not their intent to license anyone. The commission sought certification so as to assure an employee understood the training received.

Chairman Buckley asked what would be included in the certification process.

Mr. Evans said there would be written and practical testing and on the job questions.

Chairman Buckley asked if the certification process would be developed further in regulation.

Mr. Evans thought a process could be developed without regulation, but if necessary, the process could be regulated.

Mr. Nolan believed the explosive manufacturing industry provided the committee with a booklet containing information about the training procedures, questions, and an example of a test. He asked if the industry was a source of information to provide the committee with standardized training and certification requirements.

Mr. Bacon said they were opposed to each individual employee having to apply to the state for certification and were concerned with entry level employees being required to go back and forth through the process. He also noted the chief financial officer in a plant did not need to be certified. The focus needed to be directed to those within the production division who dealt with the materials. The association had no problem with a state-defined test administered locally by plant owners and management.

Chairman Buckley said she would hold the vote on A.B. 112 to allow staff time to research the issues and allow Mr. Bacon time to obtain further information as to employees covered and employees not covered. She desired clarity as to what the certification process was and how it worked.

Ms. Lesbo noted there were no explicit references as to certification in the commission report from Major General Clark. Specifically the document recommended employers of facilities manufacturing explosives and other hazardous materials ensure facility employees receive all appropriate training and receive the training in an understandable language.

Chairman Buckley opened the hearing on A.B. 248.

She noted she was a former foreign language teacher, and in her current occupation, she dealt with many foreign speaking individuals. A.B. 248 stated a person who applied for insurance or contract of insurance or an individual who was already insured could be provided with a copy of the policy or contract written in a language other than English. Ms. Chowning noted businesses could be at risk when a contract, written in a language other than English, was considered the legal document.

A.B. 248 covered all types of insurance, and since the state mandated insurance coverage, the state mandated individuals sign documents with which they were not comfortable. It was not Ms. Chowning’s intent to mandate documents other than in English, since English was the official language. The bill was considered good consumer protection, as it allowed for a greater number of individuals to purchase insurance and sign documents in the language with which they were most comfortable.

Ms. Giunchigliani asked if currently there was anything preventing insurance companies from providing contracts in other languages.

Ms. Chowning replied there was nothing preventing insurance companies from providing contracts in other languages. She referenced section 1, subsections 2 and 3, of A.B. 248, which said, "The policy or contract of insurance written in English is the sole source of the rights and obligations of the parties to that policy. In the case of a dispute, the terms of the policy or contract of insurance written in English are controlling" and noted the above-mentioned sections clarified the bill’s intent indicating the English document took precedence if there was legal dispute.

Joe Guild representing State Farm Insurance indicated support for A.B. 248. He explained the bill was a marketing opportunity for insurance companies and provided a consumer service. State Farm promoted the same concept in other jurisdictions around the country thus affording consumers a policy or contract in their language with the protections afforded by A.B. 248.

Companies needed the protection set forth in section 1, subsections 2 and 3, so they could market insurance with confidence knowing the foreign language version of the contract would not be used in a court dispute. He pointed out the English language version would be the controlling translation. Mr. Guild explained many individuals who signed the contracts in question understood some English, spoke some English, but did not necessarily read English, which necessitated a contract the individual could understand.

Mr. Guild indicated consumer protection was located in the Fair Claims Practices Act or in a bad faith claim against the consumer’s insurer. If an insurance company defrauded a consumer or was misrepresenting information to the consumer, the consumer would have a clear first party bad faith claim against the insurance company. In order for companies to expand their services and provide education to consumers, companies needed the protection assigned by the language in A.B. 248 indicating the English version of the contract controlled in a dispute.

Mr. Hettrick noted he agreed with the intent of the bill but suggested changing section 1, subsection 1, to say, "if an insurer provided to an insured or annuitant, or to a potential. . ." He preferred the use of the word "if" to the word "may." He noted it was not against the law to provide a copy of a policy or contract in a language other than English.

Mr. Hettrick then referenced section 1, subsection 2, noting the language should refer to the original policy or contract of insurance written in English. The use of the word "original" clarified the same policies were being discussed, one contract or policy translated into a foreign language and the original contract or policy being in the English language. He noted under such circumstance, there would be no doubt the same contract was at issue.

Mr. Guild thought Mr. Hettrick’s suggestions helped shed light on the language in the bill.

Ms. Giunchigliani asked about consumer benefits other than providing a policy or contract in the consumer’s language. She noted if misinterpretation occurred, the English contract would be the controlling document. The situation was good for the company, but she was concerned about protection for consumers. Ms. Giunchigliani thought the language suggested by Mr. Hettrick was closer to what was acceptable and recommended the use of the word

"shall." She thought the translated document could be attached to the original English document.

Mr. Guild reflected on the benefits of A.B. 248, which expanded opportunities for persons not fluent in speaking or reading the English language. Provisions in the bill would enable such individuals to better understand what they were receiving when they purchased insurance. Mr. Guild noted automobile insurance was mandated in the State of Nevada and often individuals did not understand what they purchased. Companies were reluctant to provide the consumer a translation because the consumer might believe the translation to be the official contract. The company was concerned with the translation being used in court if there was a dispute. Mr. Guild further noted there were individuals who did not buy insurance because they did not understand the policies.

Ms. Chowning explained consumers had no opportunity to see a policy or contract in any language other than English, and she encouraged the committee to take the bill into consideration because it would encourage businesses to provide documents in other languages. Under current conditions, there was no opportunity because businesses were reluctant to provide the documents due to conditions surrounding the second part of the bill.

Danny Lee, representing Nevada General Insurance Company, noted he agreed with the general concept of A.B. 248, but had concerns with the bill. Mr. Lee stated he sold insurance for 34 years and pointed out very few individuals ever read an insurance policy in any language, and an explanation of benefits provided to the consumer in simple language achieved the best results. Another area of concern was the bill referred to a policy or contract, and he understood a policy to be a contract. He was unsure if both were necessary.

Mr. Lee pointed out NRS 687B questioned readability of policies. If the language in the bill referred to a policy, instead of an explanation of benefits, certain tests must be met and there could be problems with the statute.

Mr. Nolan stated the threshold of liability might be heightened. Technical and legal concepts provided in English contractual law did not exist in many other languages. It would be impossible to have a direct translation of languages unless the language was put forth in conceptual form. He stated the situation could open up an entirely new liability issue.

Chairman Buckley pointed out if an individual signed a document in English, the person was generally bound by the laws and presumed to have understood the

document. She closed the public hearing on A.B. 248 and opened the hearing on A.B. 258.

Assemblywoman Vonne Chowning, Assembly District 28, noted A.B. 258 came from the Automotive Motor Vehicle Repair Advisory Board and noted there were business, consumer, education, and legislative governmental representatives on the board. Motor vehicle repair issues were a major consumer complaint in the State of Nevada and the board sought to address such issues as pertained to the complaints.

Section 1 of A.B. 258 was the customer bill of rights, which mandated a business post a customer bill of rights so customers could be made aware of what their rights were. As an enhancement for businesses and customers, the bill of rights listed the statutes.

Section 2 mandated estimates be written for repairs for $25 or more. Under current law, if a consumer requested an estimate, it had to be provided, even for small repairs. If the estimate was for diagnostic purposes, then the estimate must include the cost of the diagnosis, disassembly, and reassembly of the vehicle.

Section 3 explained if it was determined additional charges were required to perform an authorized repair and such charges were exceeded by 20 percent or $100 whichever was less, of the amount of the estimate, the garageman was required to notify the customer.

Section 4 set up a waiver section. Ms. Chowning noted there were businesses with long relationships with customers and stated she would work with interested parties on section 4 so as to allow "early-bird" customers and others to waive the estimate as well as the additional charge. There were customers who had total confidence in the automobile repair business they utilized and Ms. Chowning did not desire to change such a business relationship.

Ms. Chowning noted section 6 was the self-enforcing section. She stated if a business refused to register, they would not be able to enforce a lien or sue for the repairs on the vehicle.

Section 7 required a business submit to binding arbitration. If a business did not desire to submit to arbitration, the business must post a bond. Ms. Chowning explained section 7 was proposed by responsible businesses. Ten percent of the businesses caused 90 percent of the problems, and the only method a consumer had of handling problems was through litigation. Binding arbitration set up another layer of communication remedies. If the business was a member of the Better Business Bureau, there would be no cost for the arbitration. If the business was not a member of the Better Business Bureau, the Department of Motor Vehicles would refer the business to a panel of arbiters, and the cost of arbitration would be decided in the process. If the business desired to not submit to binding arbitration, they were required to post a $10,000 bond.

Ms. Chowning noted she would like to see the advisory board continue for another session so issues pertaining to consumer problems could be addressed. She desired to know how many complaints were put forth as a result of binding arbitration and how the problem was diminished.

Ms. Chowning stated the $25 fee remained and was sufficient to handle the activities of the board. She further noted the Department of Motor Vehicle was not submitting a fiscal note. The only fiscal note was included in the Consumer Affairs Division Budget, and the amount was included for education. She noted there were positive results regarding motor vehicle consumer rights due, in part, to statewide television spots performed by Patricia Jarman-Manning, Commissioner, Consumer Affairs Division.

Chairman Buckley thanked involved individuals for their hard work in bringing the bill back to the legislature and commended those who worked together to clean up the industry without harming those who operated within the framework of the law.

Mr. Hettrick noted concern about necessitating authorization for repairs that were more than $25. He pointed out a garageman could not diagnose a problem and provide an estimate for $25 and thought the level should be higher. He Hettrick noted $100 made more sense.

Ms. Chowning said she would like to work on Mr. Hettrick’s area of concern. She explained if a customer asked for an estimate, a business must provide it for any amount. The usual hourly rate was $65 and stated the section was not tied to diagnosis; it was for any repair.

Mr. Hettrick explained consumers often believed any charge was part of the repair, and the section might say, "estimate of charges for any repair not including diagnostics."

Mr. Goldwater referenced section 7 of A.B. 258 and noted it referred to a bond or corporate surety. He stated such bonds were not always available and asked if such a bond was available to vendors, and if a bond was not available to a vendor, was there an alternative plan.

Ms. Chowning said business members on the board requested section 7. The Department of Motor Vehicles assured her such a bond was available and noted the bond was required only if the business did not agree to binding arbitration.

Chairman Buckley noted her experience with the bonds was not positive. Even if bonds were available, the claims process was anti-consumer. She explained when a claim was made with the bonding company, but there were more claims than bonds, the consumer was often sued. The situation often required all parties obtain the services of an attorney who then collected their money, leaving nothing for the consumer. The only one who benefited was the attorney.

Mrs. Segerblom referenced section 2, subsection 3, which said, "the provisions of this section do not require a garageman to reassemble a motor vehicle." She noted concern about the section pointing out a garageman could decide not to put a vehicle back together if such person thought the vehicle was unsafe to drive.

Ms. Chowning said the section was a protection for businesses. Under section 2, subsection 3, a business was not required to reassemble a vehicle if the business determined the reassembly would render the vehicle unsafe to operate. She noted there were customers who would require a business put a vehicle back together, even if the business considered the vehicle unsafe to operate.

Pete English, Chief, Registration Division, Department of Motor Vehicles and Public Safety, noted he was on the advisory board as a representative of the Department of Motor Vehicles and the department supported the bill. The department thought A.B. 258 set an example for other industries in Nevada.

Patricia Jarman-Mannning, Commissioner, Department of Business and Industry, Consumer Affairs Division, noted her participation on the advisory board and the advisory committee. The division supported A.B. 258 and worked with the industry in framing the bill.

Chairman Buckley referenced section 3, noting omitted language, which said additional charges "exceeding 20 percent of the estimate, or $40, whichever is less" was changed to "additional charges exceed, by 20 percent or $100, whichever is less." She noted if a big job was done on a vehicle, the 20 percent or $100 was considered nothing, but in other situations, such as a consumer having a small adjustment on their vehicle, being off by $100 was considered a lot of money. Chairman Buckley asked for explanation of the change with regard to consumers.

Ms. Jarman-Manning said the section was a concession. Initially the industry wanted the figure to be $200. Consumer Affairs wanted the amount to be $100. She noted she met with all members of her staff, especially those members who regularly talked with consumers and discovered the $100 figure was roughly the amount spent by a consumer for a minor repair. She thought the division could adequately continue to educate the public with regard to questioning businesses and adamantly insisting vehicles not be worked on unless there was consumer approval. The cost of doing business was continuing to grow, and $40 was an antiquated figure.

Fred Hugelmann, representing Cashman Cadillac Inc., stated he was a committee member and supported A.B. 258. The committee worked hard in attempting to address business and consumer concerns.

John Sande, representing the Nevada Franchise Auto Dealers Association, noted support for A.B. 258. The association agreed there were issues that needed to be addressed. One such issue related to customers who left a vehicle with a garage early in the morning, thus not receiving a written estimate.

Mr. Sande referenced section 3, noting the language called for 20 percent or $100 whichever was less. He explained if there was a $100 estimate and a $20 increase, the garageman would be required to obtain consent from the customer.

Steve Yarbarough, representing the Nevada Gasoline Retailers and Garage Owners Association, spoke in favor of A.B. 258. He noted there were language issues that needed clarification. Mr. Yarbarough showed a current required sign to the committee and pointed out language stating, "A customer, upon request, may require an estimate and that estimate may not exceed the $40 or 20 percent, whichever is less." He explained if a garage bill was $50, the 20 percent would be $10, which was the maximum the estimate could be exceeded by. He then stated $100 was the maximum amount with which the bill could be exceeded.

Section 1 had two parts, which included existing language requiring an estimate and the bill of rights. To put both on a sign not less than 22 inches by 28 inches in size would be cumbersome to the consumer. He suggested the first section of the sign be eliminated and placed into the language of the bill of rights, noting the bill of rights contained language on estimates. That would allow for greater readability for the consumer.

Mr. Yarbarough addressed Mr. Hettrick’s question on estimates and stated California had no minimum for the estimate. The estimate provided was for diagnoses only, and the customer was informed they would be contacted after diagnoses was performed. The shops explained to customers that estimates were exactly that. If a job could be done for fewer dollars in a reduced amount of time, the customer would be billed the lower rate. The shops in California also advised customers if additional time was required. Mr. Yarbarough addressed the issue of the $10,000 bond noting its use was to press those in the industry into arbitration. Requiring a high bond would encourage businesses to choose arbitration over bonding. He noted there were problems regulating bonding and the payment of bonds. Bonds were rarely attached and through arbitration, many problems could be eliminated. Mr. Yarbarough noted his membership with the Better Business Bureau, and as a member, he pledged to arbitrate. He gave customers the option to use arbitration noting he would abide by the findings.

Mr. Yarbarough referenced Mrs. Segerbloom’s question as to reassembly of a vehicle and noted there were times when a vehicle would fall apart upon disassembly. If a shop put the vehicle back together without repairing it, the shop became liable. They did not want to be required to put an unsafe vehicle back on the highway.

Daryl E. Capurro, Managing Director, Nevada Motor Transport Association, Inc., offered testimony in support of A.B. 258, with amendments. The association’s concern was addressed by Mr. Sande regarding "early bird" customers. He noted his desire to work with interested parties to provide for a waiver provision for those who did not want the repair estimate.

Mr. Capurro pointed to section 2, subsection 2, and informed the committee there was no recourse with respect to individuals who wanted a defective vehicle put back together, which was a difficult situation for shop owners.

Mary Lau, Executive Director, Retail Association of Nevada, noted she was on the advisory committee and later the advisory board. She stated the association supported A.B. 258 but was concerned with the issue of bonding. An additional concern dealt with an established retail price for an item when installation was included in the retail price. She noted it would be redundant to provide the customer a written estimate also.

John Genzler, Broker Manager, The Rentmaster, spoke as a concerned citizen. He said he was in favor of the bill noting experience with taking an automobile repair shop through the court system. Mr. Genzler explained he lost the court case because the repair shop maintained they would have repaired his vehicle if Mr. Genzler brought it back. Mr. Genzler said he had a vehicle in a shop for 45 days for a transmission repair. He had to take the vehicle back three times because it was never repaired. The court said it was his obligation to take the vehicle back again, and Mr. Genzler asked how many times was one more time, when did it end. Mr. Genzler also addressed the issue of the cost of parts for repairs pointing out inequity in amounts charged to individuals compared to repair shops.

Jim Norris, member of the Automobile Advisory Repair Committee, offered support in favor of A.B. 258. He noted the issue surrounding the estimate was the most powerful part of the bill. Mr. Norris noted some of Mr. Genzler’s concerns would have been addressed if he had a complete estimate.

There being no further testimony on A.B. 258, Chairman Buckley closed the hearing and adjourned at 6:20 p.m.

RESPECTFULLY SUBMITTED:

Jane Baughman,

Committee Secretary

APPROVED BY:

Assemblywoman Barbara Buckley, Chairman

DATE: