The Committee on Commerce and Labor was called to order at 3:45 p.m., on Wednesday, April 7, 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. 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

COMMITTEE MEMBERS ABSENT:

Mr. Morse Arberry, Jr. (Excused)

GUEST LEGISLATORS PRESENT:

Assemblyman Mark Manendo, Assembly District 18

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Chairwoman Buckley opened the meeting stating they would work as a subcommittee until enough members arrived to work as a committee. Chairwoman Buckley explained they had three bills on the agenda that evening and several bills on work session. Chairwoman Buckley opened the meeting on A.B. 555.

Reynolds Cafferata, President, Nevada Planned Giving Roundtable, read his testimony and submitted a written copy (Exhibit C) to the committee. He informed the committee he was an attorney whose practice focused on tax exempt organizations and charitable giving. He explained the Nevada Planned Giving Round Table was an organization promoting charitable giving. He acquainted the committee with the background of the bill, outlined the bill, and proposed two technical amendments.

Mr. Cafferata said A.B. 555 would remove a barrier for Nevada donors and charities, so they could use charitable gift annuities. A charitable gift annuity allowed a donor to contribute to a charity, receive a charitable income tax deduction, and receive an annuity from the charity. The annuity the donor received would have a fair market value of less than the donor’s contribution to the organization. The charitable gift annuity would be a plan which allowed the donor to receive some income while making a charitable gift.

Mr. Cafferata explained Nevada insurance law currently prevented donors and charities to create gift annuities. The law’s broad definition could include a charitable gift annuity. Since insurance statutes were drafted for profit entities, a nonprofit could not obtain a certificate of authority even if it attempted to do so.

Mr. Cafferata suggested A.B. 555 would exempt charity from meeting certain requirements. A.B. 555 was based on model legislation drafted by the National Association of Insurance Commissioners (NAIC). The Nevada Planned Giving Roundtable had been working with Commissioner of Insurance Alice Molasky-Arman on the issue of gift annuities. He reported she had agreed there was a need for legislation and the proposed language. The Nevada Planned Giving Roundtable was also assisted by Jim Wadhams in its conversations with the commissioner.

Mr. Cafferata conveyed A.B. 555 allowed charities, which had operated for at least 3 years and were tax exempt charitable organizations under the internal revenue code, to issue gift annuities. A.B. 555 required those types of charities to have a net worth, in the form of liquid assets, of at least $300,000. Prior to issuance of any annuities, the charity would have to notify the commissioner of insurance of their intentions. Finally, all of the annuities would have to satisfy the requirements under the internal revenue code to qualify as a charitable gift annuity.

Mr. Cafferata insisted the bill protected donors by requiring the annuity agreement to advise the donors the annuity was not insurance, it was not regulated as insurance, and it was not protected by any insurance guarantee association. Under A.B. 555, charities, which issued annuities without compliance, would be subject to a $1,000 fine for each noncomplying annuity.

Mr. Cafferata recommended two minor amendments to A.B. 555. He reported the amendments were discussed with Commissioner Molasky-Arman and she concurred with the recommendations. He supplied the committee with copies of the proposed text on Exhibit D.

Mr. Cafferata outlined the proposed amendment on page 3 of Exhibit D. The first change was to section 2, paragraph 1. They deleted the phrase "the difference in value was deductible as" and replaced it with "a deduction was allowable for the transfer." They changed it because in a variety of circumstances under the internal revenue code, a donor’s tax deduction for a gift annuity would not always be equal to the difference of the payment the donor made and the value of the annuity. It would just continue to protect the annuity in those circumstances.

Mr. Cafferata explained federal security laws appeared to prohibit the payment of commissions on gift annuities. Commissions were not appropriate in a charitable gift context. For that reason, the bill should prohibit the payment of commission by adding subparagraph (c), to section 2, of paragraph 3, to read

The amendment would make clear that commissions were not to be paid, but would allow charities who chose to reinsure their obligations to do so.

Mr. Cafferata concluded A.B. 555 cleared the way for Nevada donors and charities to take advantage of important federal tax benefits.

Assemblyman Mark Manendo, Assembly District 18, thanked the committee for hearing A.B. 555. He had prepared to testify, however, Mr. Cafferata covered everything he wanted to say. Mr. Manendo concluded, saying he agreed with Mr. Cafferata’s testimony and the proposed amendments.

Chairwoman Buckley thanked Mr. Manendo for introducing such an important piece of legislation. The committee had received a number of letters of support from nonprofit organization and others who thought the bill would facilitate more donations in the state.

Assemblyman Goldwater inquired if the federal tax code made a differentiation between charitable gift annuities and charitable remainder trusts which could hold an annuity. Mr. Cafferata told the committee the federal tax code did make a differentiation between the two. Mr. Goldwater wanted to confirm the proposed amendment to section 3 would not prohibit the paying of commissions on the annuity held by charitable remainder trust. Mr. Cafferata stated Goldwater’s statement was correct.

Russel Kost, Director of Gift Planning, University Nevada Las Vegas Foundation, Government Liaison, The National Society of Fundraising Executives, testified on behalf of the charitable organizations in southern Nevada to express their support for the bill. He submitted a packet (Exhibit D), which included letters from other charitable organizations.

Alice Molasky-Arman, Commissioner of Insurance, Division of Insurance, assured the committee that Mr. Cafferata testified very well on her behalf. She reiterated they drafted A.B. 555 after model legislation adopted at the December meeting of the NAIC. She restated her full support of the proposed amendments. She felt they would assist in guarding against irregularities that should not exist.

Scott Dockswell, Nevada Regional Director, B’nai B’rith International, supported the bill. It would give their members the opportunity to make substantial contributions to the organization without going through a charitable remainder trust.

Paula Berkley, representing Truckee Meadows Human Services Association, explained she represented 45 nonprofit organizations in northern Nevada who supported the bill. She submitted written testimony from Vickie Wright, legislative chair, Truckee Meadows Human Services Association, (Exhibit E) for the committee.

Ms. Wright’s testimony stated charitable gift annuities were a valuable tool to secure funding for nonprofit organizations. She argued they were not insurance transactions, but donation agreements, which involved financial and tax planning. The bill would create regulations, which would strengthen charitable gift annuities, giving nonprofit organizations a clear direction and protecting potential donors.

Janice Pine, Director of Governmental Relations, Saint Mary’s Regional Medical Center, Saint Mary’s Health Network and Foundation, also supported the bill.

Chairwoman Buckley closed the public hearing on A.B. 555. She thought the bill appeared to be well written and the two technical amendments appeared to have unanimous support.

ASSEMBLYMAN BEERS MOVED TO AMEND A.B. 555 BY DELETING AND ADDING PHRASES IN SECTION 2, PARAGRAPH 1, LINE 2, AS WELL AS ADDING SUBPARAGRAPH C TO SECTION 2, PARAGRAPH 3, AS SUGGESTED BY MR. CAFFERATA AND DO PASS.

ASSEMBLYMAN DINI SECONDED THE MOTION.

Chairwoman Buckley opened the public hearing on A.B. 674. She welcomed the sponsor of the bill, Secretary Heller.

Dean Heller, Secretary of State, State of Nevada, stated he brought a video in place of his testimony.

The video, "Signing on The Dotted Line," began by stating how computers had changed the way society conducted business. Hand written signatures had been the standard to authenticate and validate written word and the messages they conveyed. With the passage of time, those important messages have been delivered in a multitude ways, getting faster, more efficient, and seemingly more trustworthy. However, businesses still waited when it came to obtaining a signature to authenticate a document. Today, society had gained e-mail, the internet and the Worldwide Web. With each new technology, more possibilities were created for fraud, forgery, and deception.

The video explained digital signatures were a convenient timesaving way of electronically authenticating a document. A signed document could be verified by the attached person’s digital signature, as well as confirmed the recipient intact content. The video used the recent legislation passed in Washington state, which legalized the use of digital signatures in 1998 changing the way they conducted business, as an example.

The video discussed how Washington’s Department of Information Systems (DIS) tackled the overwhelming task of making digital signature technology a reality. Following a carefully orchestrated plan, they tested the technology and defined an infrastructure. Within the computer services division, the Washington DIS used service digital signatures to electronically process card key applications, reducing their workload.

The video also cited the use of digital signatures in the private industry. Boeing found a variety of uses for digital signature technology. They were able to change their slow time from being measured in days and weeks, or sometimes months to hours. However, they were not able to use digital signatures effectively until they had the laws to provide protection. Boeing hoped it would become international law sometime in the future.

The video highlighted the benefits of digital signatures as follows: One authentication; two nonrefutations; and three integrity. The unique properties of a digital signature made them nearly impossible to forge. A digital signature was unique as hand written signature. As such, it identified who signed the document. Therefore, the signer could not claim later it was signed by someone else. It provided a means of insuring the document arrived intact and unaltered in any way.

The video detailed how a digital signature worked. A digital signature would be generated by a program designed to provide the user with a unique pair of digital codes, know as key. The key pair, identified as the private key and the public key, related to one another through a complicated math formula. In Washington, a trusted third party of certification authority was responsible for identifying a person’s key pair record insurance certificate. Once the identification was established, the user could place their certificate in either an internal or external depository certified by the government. The user created a secret pass phrase to protect their private key.

The video explained when the user was ready to sign a document with their private key; they would simply follow the digital signature software instructions. Within moments, the software would scan the entire document creating a math function unique to that document. The resulting message digest would be transformed using the sender’s private key, which identified their message. In incorporating the transformed message digest, a zoom digital signature would be stamped on the end of their document creating an electronic seal.

According to the video once their document arrived, the recipient software would use the sender’s public key to quickly verify the signature and authenticate the contents. The public key would perform a math function with the digital signature to determine whether the corresponding private key was used to create the signature. Using the same math formula, it would verify the message was not altered since it was signed.

The software would scan the document calculating its message digest. Then the software would de-transform the message digest from the digital signature and would compare the two. The confirmation of the match would verify the signature. If however the relationship of the public and private did not match, the document would not verify which would generate a bad signature message. Furthermore, if the document had been altered in any way the message digest would not match. Again, the receiver would receive a bad signature message on their screen.

The video expressed by holding authenticated key pairs, the certification authority would become the keepers of the public key providing investors and buyers alike with a renewed sense of trust and security. Thus, the doors of electronic commerce could be thrown wide open and the future of digital authentication and verification of documents and contracts could have large implications for both the public and private sector.

Secretary Heller reported A.B. 674 was a follow up to A.B. 386 passed in the 1997 session of the legislature. His team went through the process of adopting regulations. He thanked the Department of Information and Technology (DIT), Director, Marlene Lockard and her staff as well as Attorney General Frankie Sue Del Papa and her staff, along with his staff, for putting the regulations together. Upon completion of the regulations and having submitted them to the Legislative Council Bureau (LCB), they thought it was necessary to put those provisions into Nevada statutes.

Secretary Heller went through some definitions of the process in the bill. There was an optional licensing fee in section 16. There were penalties attached to forgeries and providing false information to the Secretary of State’s Office. Then section 19 referred to adopting regulations, which had already occurred.

Chairwoman Buckley explained how in the 1997 session they passed innovative legislation, which allowed work in the electronic commerce area to advance. She related how exciting it had been when the governor signed A.B. 386 digitally in the 1997 session. She was pleased A.B. 674 would specifically clarify, in statute, how it would work. Along with the importance of electric commerce, was the importance of facilitating the business world to use it by guaranteeing it reliability. The committee appreciated the time and work the agencies had done.

Marlene Lockard, Director, Department of Information and Technology explained the Secretary of State's Office was one of the first pilot agencies implementing electronic commerce for the work they did with the business communities within the state. DIT also implemented an electronic commerce pilot program with the Department of Industrial Relations (DIR) for some three-way requirements. Soon the DIT hoped to implement it in many state agencies.

Brett Kandt, Deputy Attorney General, Office of the Attorney General, read his written testimony (Exhibit F). He was a member of the group, which drafted A.B. 674. He discussed the history of A.B. 386. He argued the law needed to be expanded to allow any party to enter binding, enforceable agreements in cyberspace.

Mr. Kandt discussed the historical precedent of requiring a signature as authentication of a written document. He also argued a signature could include any symbol executed or adopted by a party with the intention to authenticate writing. He believed A.B. 674 would create a legal framework for the recognition and enforcement of transactions in electronic commerce.

Mr. Kandt explained how the private key would apply legally, similar to the way a written signature applied. He concluded by citing the Federal Government and other states had passed similar laws.

Chairwoman Buckley closed the public hearing of A.B. 674 and asked for the pleasure of the committee.

ASSEMBLYMAN HETTRICK MOVED DO PASS ON A.B. 674.

ASSEMBLYMAN DINI SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

Chairwoman Buckley thanked the drafting group, the Secretary of States office and Marlene Lockard for working on the bill. It was nice to have a couple of good business bills. In addition, it was nice to be on the cutting edge. Chairwoman Buckley opened the hearing on A.B. 486 calling for a couple of small business regulatory reforms sponsored by Mr. Goldwater.

Assemblyman David Goldwater, Assembly District 10, submitted written testimony (Exhibit G). He explained A.B. 486, also known, as the Small Business Regulatory Relief Act of 1999, would regulate the commerce, health, and safety of the great State of Nevada. He felt it was important and necessary to protect Nevada’s citizens. He discussed the debate of the value of regulations. He felt A.B. 486 attempted to help Nevada’s workers and employers get their money’s worth from the regulatory process.

Mr. Goldwater explained regulation did not always affect all businesses equally. All-encompassing regulations imposed the heaviest burden on small and medium size business. According to the U.S. Small Businesses Administration, the average annual cost of regulation, paperwork, and tax compliance for firms with fewer than 500 employees was about $5,000 per employee, compared with about $3,400 for firms with more than 500 employees.

Mr. Goldwater explained the proposed legislation required economic analysis and risk assessments would informed, but not dictated, the development of all new regulation. He warned economic studies and risk assessments were not a panacea. Not every cost or benefit could be quantified, much less monetized. However, under A.B. 486, the requirement for economic analysis satisfied a basic need to know. When understandable regulation passed it caused sensible regulation, which extended to more lives and improved environmental outcomes at lower cost.

Mr. Goldwater said A.B. 486 promised to bring openness and accountability to the regulatory process by adding common sense to bureaucratic decision making while increasing the opportunity for public participation.

Mr. Goldwater summarized the key provisions of the bill. Assured everyone was familiar with the regulatory process, he explained how the legislation would affect the process locally. When the agencies proposed a regulation they had a workshop. Before the workshop, the agency would determine if a regulation would have a significant impact on small business. The agency would work with the affected small businesses trying to achieve some consensus of how best to regulate. Those meetings would include, but were not limited to, simplifying the proposed regulation, lowering any fees, and differentiating any specific regulation that was particularly adverse to small business.

Mr. Goldwater explained A.B. 486 also required an impact statement by the regulatory agencies. That impact statement would include the manner in which comment was solicited for affected small businesses, a summary of their responses, and additional explanation. It would contain the estimated economic effect, explanation and rationale, explanation of how the agency tried to help the small business, the estimated cost of the proposed regulation, the amount collected by any new or additional fees, and an explanation of why a regulation may be duplicative with any federal or state regulation.

Mr. Goldwater assured there was a provision for aggrieved parties. If someone felt the process did not work, they could file petition with the agency. The agency would determine if the petition had merit and if so, they could amend the regulation to live up to the provisions of the petition.

Mr. Goldwater described how A.B. 486 required the benefits and burdens of a rule would be considered (both quantifiable and nonquantifiable). It further required reasonable alternatives, including flexible regulatory option also be considered.

Mr. Goldwater thanked the committee for considering the Small Business Regulatory Relief Act of 1999. He believed it was an important step in helping government work in partnership with business and with policymakers toward effective regulations. Communication and understanding were important parts of policy making and A.B. 486 would improve regulatory reform.

Chairwoman Buckley stated there were no questions from the committee. She agreed it was a good bill and thanked him for bringing it.

Judy Jacoboni, Co-owner, Tahoe Pool and Spa Construction, explained her company built swimming pools in northern Nevada and northern California. They had been in business for 10 years in northern Nevada. She spoke in support of A.B. 486.

Ms. Jacoboni came to testify before the committee to explain her recent negative experience with the emergency regulations, which were enacted shortly after the adjournment of the 1997 session regarding swimming pool contractors and swimming pool contracts. The license board and the governor decided there should be informational brochures supplied to residential homeowners who wanted to contract for a swimming pools. They mandated the pool builder had to design those brochures and distribute them to everyone with whom they contracted to build a swimming pool. That put a great burden on their staff.

Ms. Jacoboni explained the regulations also required they finish each phase of the swimming pool within 15 days. Their contracts usually had four building phases for swimming pools, which meant they would have to be finished in 60 days. It was just about impossible to finish in 60 days in northern Nevada.

Ms. Jacoboni objected to onerous regulations. The paperwork burden was cumbersome. There were only 5 pool builders in northern Nevada, which only build approximately 60 to 70 pools a year cumulatively. She felt regional problems with swimming pool contractors in southern Nevada caused the trampling of the few swimming pool contractors in northern Nevada.

Ms. Jacoboni concluded saying her story was an example of how regulations passed by governing bodies sometimes adversely affected small businesses. She thought A.B. 486 would relieve some of the burden her company went through.

Larry Osborn, Executive Vice-President, Carson City Area Chamber of Commerce, testified he represented over 1000 local businesses and firms, most of which were small business. He expressed his support for A.B. 486. He viewed it as one of the most needed and sensible pieces of legislation he had seen in years. It provided additional protection for the small business community. Furthermore, the increased efficiency, productivity, and growth of the small businesses in Nevada could offset any fiscal impact.

John Lindell, Owner, Lindell’s Painting Service, said he was in favor of A.B. 486. He had been in business since 1955 and felt the bill gave a small business person relief. He concurred with Ms. Jacoboni’s and Mr. Osborn’s testimony.

Carol Vilardo, President, Nevada Taxpayers Association, spoke in support of the bill. She commended Mr. Goldwater for his graciousness during conversations with herself and with Ardel Jorgensen from the Clark County Business License Department. The state had been very good about constantly updating the provisions with which local governments and state agencies in Nevada Revised Statues (NRS) 233B work. Mr. Goldwater brought forth something never before attempted at a local level. There was not a process at a local level, which came near to what NRS 233B did in the administrative procedure act.

Ms. Vilardo reported Ms. Jorgensen had some amendments to offer which she supported. She assured the committee all the proponents would also support them. The amendments would make the bill even better because they had nothing at a local level.

Ms. Vilardo reported they would like the provisions going into chapter NRS 237 to apply to all businesses, not just to small businesses because there was nothing for a larger business or a medium size business at that level either. She concluded by thanking Mr. Goldwater and local governments for being receptive to their view.

Ardel Jorgensen, Director, Clark County Business License, supported the bill. She understood intent of the bill. Clark County did have processes in a number of departments and agencies, which promulgated ordinances and regulations. Whereby they did meet with individuals and organizations affected by particular ordinances and regulation. They met with them and tried to get their input when drafting ordinances and regulations.

Ms. Jorgensen explained Clark County had a hearing process. At public meeting, they made information available and extensively discussed many of the bills. Channel 4 broadcast such hearings. They adopted bills based on those discussions. Although Clark Count currently practiced many of the procedures in A.B. 486, she felt local governments needed an official process statewide.

Ms. Jorgensen submitted copies of a mockup bill with her proposed amendments added to the committee (Exhibit H). She had discussed them with Mr. Goldwater.

Ms. Jorgensen explained the amendments started at the local level. She referred to section 11, line 3-33 in the submitted mockup bill (see Exhibit H). It deleted the word "small", leaving business defined as business conducted for profit regardless of the numbers of employees. She felt determining whether a business was a small business using employees was difficult because the Clark County Business License did not keep that type of information. They did not know whether a business had 150 employees or 3,000 employees.

Ms. Jorgensen recommended the bill apply to all business at a local level regardless of their size. However, she suggested a few exceptions listed in the handout of the proposed amendment at line 3-34 (see Exhibit H.) The list of exemptions included privileged businesses, determined as such in NRS 224, which were generally liquor and gaming operations. Such businesses paid room tax. She also included businesses requiring regulations to protect the health, welfare, safety, and morals of the citizens of the jurisdiction, such as security guards, locksmiths and childcare. The county commissioners believed such businesses needed regulation because of their effects on the community. Seasonal or short-term business activities appeared on the exemption list, as well as, franchisees governed by franchise agreement, and any business which operated in conjunction with any of the above.

Ms. Jorgensen pointed out the Clark County Business License licensed the vast majority of businesses in the state. She believed they were the largest licensing agency in the state. Clark County had about 33,000 to 35,000 businesses in the unincorporated area. Therefore, the bill effected them a great deal

Ms. Jorgensen also recommend inserting "organizations representing" in section 11, on line 4-6. She felt various industrial organizations represented many of the affected businesses her office consulted and licensed. She would like to continue communicating with those organizations. Clark County categorized 365 to 366 different licenses. With 33,000 business about 30,000 fell under the provisions A.B. 486 and therefore were affected by it. It benefited businesses and local government if they could deal with several organizations as opposed to hundreds of businesses at one time.

Ms. Jorgensen recommend filing the impact statement, mentioned in section 12, line 4-15, with the clerk of the governing body at least 3 days before the hearing. That was a formal process requiring them to leave a document with the county clerk. It would be available to the public for 3 working days before the hearing.

In section 13, line 4-24, Ms. Jorgensen recommended the phrase "insofar as practicable," language used earlier in the bill. She explained the difficulties of monitoring the indirect effects of the bill. However, she promised Clark County Business License would assess the indirect effect to the greatest extent they could.

Ms. Jorgensen related the conversation she had with Mr. Goldwater before the committee meeting concerning section 14. She originally recommended deleting the section because she believed the Clark County public hearing process was sufficient. However, the thought of unlimited petitions against a particular ordinance, which could carry on forever, concerned her. They talked about applying a deadline for aggrieved parties to file a petition.

Chairwoman Buckley pronounced she liked the bill in its original form. The bill seemed to provide some needed relief. Grievances from exempted businesses could be just as legitimate as grievances from other businesses. She questioned the fairness of not providing them the same feeling of empowerment and the same right to contest. The county commissioners could dismiss any complaint they found frivolous or felt was not meritorious. She felt everyone deserved a voice.

Ms. Jorgensen contended many of the privileged businesses already had a voice. They mainly consisted of the hotel resort industry and liquor and gaming establishments, which employed attorneys to represent them. Their attorneys constantly reviewed every proposed ordinance. Her office would research the impact of the ordinances on the industry. They would incorporate suggestions of the industry’s attorneys before the county adopted ordinances. In her opinion, the privileged industries retained excellent representation. Chairwoman Buckley disagreed. The exemption affected any business in which the room tax applied, not just the privileged businesses. After all, the hotel resort industry’s attorneys would not represent someone who owned a small hotel. Chairwoman Buckley asserted Ms. Jorgensen’s original intent to represent all businesses was a better concept.

Ms. Jorgensen expressed her concern for how the bill effected room tax, which her office collected on the behalf of other agencies. Privileged businesses had to pay the room tax set by the state legislature, as provided for NRS 244 and NRS 364. Chairwoman Buckley admitted she thought Mr. Jorgensen’s amendment meant any business in the exempted categories would not fall under the coverage of the bill as amended. However, it appeared she wanted to prohibit the exempted businesses from contesting tax ordinances, over which the Clark County Business License Office had no control. Chairwoman Buckley clarified the intent of the amendment was not stopping small businesses who collected room tax to submit grievance petitions, but to limit the subject matter of the complaints. Ms. Jorgensen explained it was not the tax itself. Every hotel, motel, campsite, RV park, mobile home park, or any business which allowed transient lodging was subject through state legislation to pay room tax. Therefore, there were no regulations pertaining to room tax.

Ms. Jorgensen asked Ms. Vilardo to clarify the two divisions of local ordinances. Ms. Vilardo explained the first area were ordinances the state required, such as the room tax. A local government lacked jurisdiction over the specifically identified provisions. The other area was local ordinances. The hotel owners with complaints in that area of business licensing would have the right to protest. She suggested a bifurcation in that section explaining exempted businesses, identifying locally controlled ordinances, and expounding tax obligation. Accordingly, an aggrieved person could file a petition as long as the regulation was of general affectability for which there was no statutory requirement.

Chairwoman Buckley pointed out the intention of the amendment was clear. However, the language of the amendment was not. Assemblyman Humke agreed and indicated a similar vein in section 11, line 3-34, subsection (e). He inquired about her intention to exempt franchisees from the benefits of the proposed law. He indicated many franchisees were unhappy with their franchise agreements. By exempting them, they also would not benefit from the bill.

Ms. Jorgensen defined franchisee as a business with an agreement with a local government. Instead of an ordinance, it was agreement they entered into for use of local government right away. They got a franchise. The reference in the bill was not to a fast food franchises. It only referred to franchisee which entered a franchise agreement after negotiating the agreement with local governments. Mr. Humke asserted it did not articulate that connotation in the bill. Ms. Jorgensen agreed the wording needed revision. She repeated franchisee referred to businesses with a negotiated agreement with the local governments.

Chairwoman Buckley emphasized the bill only referred to county regulations. She disliked unnecessarily exempting any of the listed businesses. She explained an ordinance would not affect the franchise agreement any differently just because it said franchise in the bill. It was the same with each of the listed exemptions. After all, the business with a high price attorney would lobby the county commission exerting their influence, not use a petition. The bill benefited the small businesses, without such options. It gave them a needed process and voice.

Ms. Jorgensen contended, in Clark County, when a county commissioner received complaints from businesses regarding an adopted ordinance or regulation pursuant to any particular department, they referred it the department in question. They told the department to review it for problems hindering its purpose. Her office used the informal process discussed above.

Tom Grady, Nevada League of Cities, expressed his apprehension towards A.B. 486. He thought Mr. Goldwater's opening statement summarized the feelings about all-encompassing regulations. However, he felt the bill would not work for small local government either. For example, in the city of Yerington, Speaker Dini’s family operation was one of the major businesses, 55 employees. Anything implemented by the city council affecting a business would effect all the businesses. Unfortunately, there were few businesses with over 150 employees, which was a common struggle for most rural areas. He expressed his concern about how that would tie the hands of smaller communities.

He announced he did not see the amendments before the hearing. The amendments put an end to some of their problems. However, he still had reservations. He commended both Chairwoman Buckley and Mr. Humke for addressing the contradictions in the amendment, which confused him as well. For the small local governments, the rural governments, it would be difficult to apply the original bill. He agreed with the intent, but he was unsure how small local government would comply with it.

Kara Kelly, Las Vegas Chamber of Commerce, reported, Warren Hardy, Nevada Federation of Independent Businesses, asked her to put on the record he supported the bill. She extended her compliment to Mr. Goldwater for his efforts.

She felt if the bill made it more difficult and limited government’s ability to generate additional rules and regulations on businesses, her organization favored it. She pointed out the major complaints received from her members, as a whole, emerged from rules and regulations promulgated by small municipalities and cities. Of the businesses she represented, 85 percent had 85 employees or less. The biggest obstacle their small businesses faced was contending with overwhelming regulations. It was a considerable concern.

David Howard, Reno Sparks Chamber of Commerce, echoed the thoughts expressed by his colleague from Las Vegas. His office represented 1800 small businesses in northern Nevada. He hoped to resolve some business licensing issues in the northern part of the state in the 1997 session, but was unsuccessful. He agreed with Ms. Kelly’s statement concerning burdening local government to make them more responsive. He urged passage of the bill.

Ray Bacon, Nevada Manufacturers Association, liked the bill. It reminded him of Ms. Giunchigliani’s bill A.B. 151 in 1993. However, he offered an amendment to section 5, subparagraph, 3. Summarized, it read a business could petition. However, it did not mention any penalties for an agency who ignored the petition. He suggested the agency would have to report to the petitioner, saying whether they would resolve the situation. Annually, the agencies would submit a numerical list of petitions not resolved to the elected officials. He believed the amendment encouraged action instead of inaction.

Mr. Bacon submitted written testimony to the committee (Exhibit I), which illustrated small business frustration as they tried to keep up with all the government regulations. He explained why he liked the bill. He described how his proposed amendment would improve it. Finally, he discussed how it would encourage government agencies to not only listen to the small business owners but also respond to their complaints.

Russ Best, Home Financial, felt Mr. Goldwater created a good bill. He supported it as originally written without the proposed amendments.

Assemblyman Perkins inquired whether the bill affected gaming regulations on businesses affected by the bill. Mr. Goldwater replied, to his understanding it would affect gaming regulations, although he was not positive, He promised to supply the committee with the correct information.

Chairwoman Buckley closed the hearing on A.B. 486. She asked Mr. Goldwater for any comments on the proposed amendments.

Mr. Goldwater understood the concepts of the county’s amendment were different from what they wrote down. His discussion with Ms. Jorgensen regarding the amendments was hurried. He asked if he could work with the amendments to achieve the concept that was acceptable to the committee and distribute a copy to them the next day. Chairwoman Buckley found his request acceptable and announced the committee would hold the bill until the next work session.

Mr. Goldwater asked for clarification concerning Mr. Bacon’s proposed amendment. Chairwoman Buckley reopened the hearing on A.B. 486.

Chairwoman Buckley worried Mr. Bacon’s amendment could hinder passing the bill. She asked if Mr. Goldwater had an opportunity to review the amendment before the hearing. Mr. Bacon sent Mr. Goldwater the amendment before the hearing, however, Mr. Goldwater did not review it.

Chairwoman Buckley explained her apprehension for the second part of the amendment. She communicated her approval of the amendment if the local agencies just had to file a report of no action petitions, as opposed to taking a particular action, which was satisfactory. She deferred to Mr. Goldwater as sponsor of the bill whether to take additional time or proceed with it now. Mr. Goldwater requested additional time. He did not want to offend Clark County who worked in good faith with him. He felt he owed them the same courtesy. Chairwoman Buckley asked him to keep the concerns of the committee members in mind as he worked because they liked the bill. Mr. Humke added if the Clark County amendments were inserted by the proponents of the bill would have to take out the "small" and call it the Business Regulatory Relief Act of 1999.

Chairwoman Buckley closed the discussion on A.B. 486, which concluded their hearings for the three bills on the agenda. She reported on the status of A.B. 418 before the work session. She reminded them it was Assemblywoman Orenchall’s bill about mobile home parks, rent justification and other substantive provisions. The committee passed it without amending it on a divided vote. The committee did not try to explore further detailed amendments during the hearing.

Chairwoman Buckley said Mrs. Orenchall asked her before the vote to remove all provisions that created a fiscal note. Upon listening to the testimony, she felt those provisions no longer made sense. Chairwoman Buckley confessed she forgot to ask for the amendment. So she put the bill on the desk and requested an amendment deleting the fiscal provisions. Before she proceeded, she wanted to bring it back to the committee and inform them of the reasons for her actions. She wanted to allow the members the opportunity to voice their opinions. She figured it would not make a difference to those who voted no, and it would probably be reasonable to those who voted yes.

With that, Chairwoman Buckley asked the committee turn to the first bill on the work session document.

Vance Hughey, Committee Policy Analyst, read from the work session document (Exhibit J) about the first bill, A.B. 64 regarding mortgage companies. The committee had decided to amend and refer the bill due to the large amendments proposed. He reminded the committee they decided to consider the differences between A.B. 278 and A.B. 64. Moreover, they addressed issues of what was exempt from the bill and the bifurcated net worth requirements included in A.B. 64. In addition, he pointed out A.B. 676 on page 9 of the work session document, which was the mortgage investment bill from the financial institutions division. He suggested the committee consider both bills.

Chairwoman Buckley recalled the committee discussed A.B. 64 extensively in their last work session. Given the length of the amendments, the committee asked for a clean version so the committee members could review it. She asked Mr. Goldwater if he would care to comment. Mr. Goldwater replied he liked the bill and the committee’s decision would satisfy him. He warned there were some members of industry concerned about it not containing more clarification on certain things. However, if it needed additional work, he would continue to work through the process.

Chairwoman Buckley thought the last point discussed at the last work session was the suggestion by Mr. Hettrick, allowing more staggered financial reserve requirements if companies agreed to use trust companies. She thought it was the only thing left to consider. Mr. Goldwater agreed.

Mr. Goldwater believed the issue was whether a company who handled trust accounts needed a net worth requirement placed on them as well as placed on companies who did not handle trust accounts. Chairwoman Buckley clarified his argument as the net worth requirements assisted in other regards such as insuring the stability of the company and other things besides just being tied to the trust requirements. He confirmed the accuracy of her statement.

Mr. Goldwater explained the net worth, the current standard, was a growing concern. Regardless of whether the company handled trust accounts, they indirectly handled people’s money. If they did not have any substantive worth, they could have incentive to handle the money irresponsibly. The net worth requirement would allow legitimate companies, companies that had substantive net worth, to handle people’s money directly or indirectly. The amount of that net worth was a debatable item. The subcommittee on mortgage investments suggested phasing in over 5 years up to the 100,000 threshold.

Mr. Beers asked if the subcommittee determined the net worth of the Harley Harman Agency. Mr. Goldwater answered they tried, but the net worth was still in question. The subject of net worth came up in regard to Harley Harman Agency when the subcommittee looked at escrow and title companies. There was no substantive net worth of the title and the escrow company. In fact, when the Harley Harman Mortgage Company split the company they split their company in two. The company handling the mortgage investment possessed the least amount of assets. They were licensed under that company.

Mr. Beers asked if the requirement would prevent the Harley Harman situation, which he thought was the thrust of the legislation. Mr. Goldwater replied the one requirement would not have prevented it. However, along with the other requirements cumulatively, it made the industry better and more reputable, giving people confidence in it.

Ms. Giunchigliani knew they were creating a new regulatory process for brokers. She wondered what exactly they needed to prevent another Harley Harman situation happening again. Mr. Goldwater explained a number of different things would prevent such a situation. Disclosure was one of them. He argued the bill addressed and required a great deal of disclosure. Additionally, it addressed the abuse of the power of attorney. It changed how a mortgage company could use the power of attorney. Some of the mandatory provisions and compelling action required by the commissioner in A.B. 64 would have hastened the shut down of the mortgage company in the Harley Harman case. Furthermore, the bill clarified and justified regulatory action taken by the financial institutions division. The simple clarification of who had criminal and civil jurisdictions in such matters. It was ambiguous up until that bill. A.B. 64 stated jurisdiction rested with the Attorney General’s Office. Among other things, the capital requirement and the licensing requirement would have brought the issues in the Harley Harman case out when they had audits. The bill would give the division more basis when forced to audit. Finally, some sections referring to title and escrow companies addressed a natural safeguard system in A.B. 64.

Ms. Giunchigliani thanked Mr. Goldwater for clarifying those points. She explained it would help when she explained the bill’s benefits her constituents. She indicated part the problem was investor naiveté. Unfortunately, the committee could not legislate in that respect.

Mr. Beers indicated he received communications from constituents and others who felt their businesses could not meet the net worth requirement. Whereas, the agencies’ causing the high profile cases, both in 1999 and 3 years ago, could have met all the requirements and still could have caused all the problems. In the cases covered by the media, existing laws were clearly broken, but they were not effectively enforced. His constituents worried the net worth requirement would prevent them from engaging in the refinancing of home mortgages, which was not quite what Mr. Goldwater was attempting but fell under the bill. Chairwoman Buckley asked if Mr. Beers could suggest an amount for the reserve, which was the debate’s source as Mr. Goldwater mentioned before. She referred to pages 28 to 29 in the work session document as a starting point, and asked for any discussion along that line.

First, Mr. Goldwater addressed Mr. Beers comment. The bill was not specific to the people in the home mortgage business of refinancing home mortgages. He said it was another chapter created under the bill. It would not affect them, it affected mortgage investment companies and mortgage brokers. He asked Mr. Beers if he could suggest another to raise the industry’s standards, to facilitate prevention of misrepresentation made when fraud occurred and insure there was something to prosecute. He worried about the legitimate businesses involved in suspicious and sometimes illegal practices and getting away with it because the laws were not there to protect the investor. Mr. Goldwater was open to suggestions on the item of debate. The committee drafted A.B. 64.

Chairwoman Buckley wished the committee had another couple of weeks to continue the debate. She reminded the committee Mr. Goldwater had agreed to continue to work with people as the bill proceeded to the other house. She suggested Mr. Beers, upon further research or consultation, add specific proposals, as she was sure Mr. Goldwater would happily consider it on the other side. She asked for the pleasure of the committee

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO DO PASS AS AMENDED ON A.B. 64.

ASSEMBLYMAN HETTRICK SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY

Chairwoman Buckley thanked Mr. Goldwater for the hearings and his continued work. She stated they would step out of order of the work session document and go to another financial institution bill, which was on page 9, A.B. 676.

Chairwoman Buckley explained when the commissioner presented the bill to the committee, he realized A.B. 64 made many of the policy choices for A.B. 676. Therefore, it made sense to consider those together. She recommended the committee indefinitely postpone the bill.

ASSEMBLYMAN PERKINS MOVED TO INDEFINITELY POSTPONE A.B. 676.

ASSEMBLYMAN GOLDWATER SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

Chairwoman Buckley had the committee turn to A.B. 236.

Mr. Hughey read from the work session document about A.B. 236, providing for contracts by local governments for nonprofit or charitable organizations to perform certain governmental services. He summarized A.B. 236 would allow Douglas County to enter cooperative agreements for participating in a coordinated transit system at the south shore of Lake Tahoe. He told the committee a legal opinion was provided in the work session document as attachment A from the Douglas County district attorneys office which stated no general statutory authority allowing counties to enter such agreements existed and special legislation was required. Mr. Hettrick had proposed amending the bill by deleting essentially the entire bill and inserting some new provisions (see Attachment B). Those provisions designed the specific statutory authority mentioned to in the legal opinion and limited the scope of the bill to the coordinated transit system in the Lake Tahoe Basin.

Chairwoman Buckley explained the initial hearing contained a great deal of misunderstanding about the intent of the bill thinking it was a general privatization bill. However, with Mr. Hettrick’s testimony and with the very narrow amendment, it accomplished a public good for Douglas County. Mr. Hettrick commended chairwoman’s summary of the bill and thanked her on for her comments.

ASSEMBLYMAN HUMKE MOVED TO AMEND AND DO PASS A.B. 236.

ASSEMBLYWOMAN BERMAN SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

Chairwoman Buckley asked the committee to consider A.B. 326.

Ms. Lesbo, Committee Policy Analyst, stated A.B. 326 made various changes concerning industrial insurance benefits, including restoring certain benefits.

Ms. Lesbo summarized Ray Badger’s proposed amendments which have been denoted as items 1 through 3 in attachment C of the work session document.

Ms. Lesbo explained the first item addressed in Mr. Badger’s proposal deleted several sections of the bill. This proposal removed from the bill provisions that allow an injured employee to participate in the selection of the physician or chiropractor who will determine the injured employee’s disability rating.

Ms. Lesbo continued by stating that Mr. Badger’s second proposed change amended Section 10 of the bill. The proposed amendment added a new provision which provided that the rating physician or chiropractor used to determine the percent of the injured employee’s disability must be selected from the rotating list maintained by the Division of Industrial Relations (DIR), unless the insurer and the injured employee have agreed to a different rating physician or chiropractor selected from the list of qualified physicians and chiropractors.

Ms. Lesbo stated the third item addressed in Mr. Badger’s proposal amended Section 14 of the bill to provide that a claimant who has not accepted the benefit penalty may pursue a cause of action against an insurer, or third party administrator, who has denied or unreasonably delayed payment of compensation or accident benefits. However the amendment stipulated that a claimant pursuing such an action must establish that the insurer or third-party administrator knowingly denied benefits without a reasonable cause. Ms. Lesbo stated that she had spoken briefly with Mr. Badger prior to the meeting in order to clarify the intent of this particular provision. During that conversation, Mr. Badger clarified that not accepting the benefit penalty, as specified in the proposed amendment, was not contingent on being eligible for the benefit penalty.

Chairwoman Buckley asked Mr. Thompson to testify on who worked on the amendments and who reviewed them.

Danny Thompson, Nevada State AFL-CIO, asked if their attorney, Mr. Badger, could answer the committee’s questions.

Ray Badger, Trial Lawyers Association, began to recount the evolution of the amendments when Chairwoman Buckley interjected asking him simply to answer her question. He disclosed they worked with the DIR and Sam McMullan’s group.

ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO AMEND AS OUTLINED IN THE WORK SESSION DOCUMENT AND DO PASS.

ASSEMBLYMAN PERKINS SECONDED THE MOTION.

THE MOTION CARRIED (ASSEMBLYMAN HETTRICK VOTED NO).

Ms. Lesbo summarized A.B. 334 from the work session document which provided for industrial insurance coverage for persons employed in casual employment. It previously came up in work session on March 29, 1999. Attachment D in the work session document included a mockup of the bill with the amendments reviewed by Cliff King and Mr. Hettrick.

Ms. Lesbo explained the first amendment provided coverage through an endorsement to a homeowner’s insurance policy, a comprehensive personal liability policy, or another policy, which provided personal liability coverage. The second amendment also included a definition of domestic worker. The bill changed the reference from casual laborer to domestic worker. The third amendment insured the exclusive remedy provision of NRS 616A.020 were applicable to worker’s compensation coverage provided by the bill. Fourthly, the amended bill specified a deemed wage of $150.00 per month for a part-time domestic worker for determining the amount of indemnity benefits paid in the case of an industrial injury. Also included in the work session document as attachment E was an example of the worker’s compensation and employers liability endorsement which would be attached to a homeowner’s insurance policy to ensure that type of coverage. Also, she talked to Mr. King and found out the approved rate for part-time domestic help in Nevada was $115.00 annually.

Mr. Hettrick explained the amendments were the same as presented to the committee at the hearing. He reminded the committee they felt substantial change from the original bill required time to allow everyone a chance to review it. He discussed a memo he sent all the members of the committee regarding the impact of the bill. It was not mandatory. It was the choice of the homeowners. Many other states allowed that type of endorsement on a policy as common practice. He believed it provided fair coverage on both sides. The homeowner could choose nothing, and the employee could file a lawsuit. If the homeowners took out a policy, the employees received guaranteed medical benefits, the rest of the worker’s compensation and did not need to sue. Without the bill, many small employees could not afford to pursue any recourse. He thought it was a fair solution for both and asserted his support for the bill.

Chairwoman Buckley expressed concerns with the construction of the bill, specifically the endorsement on homeowner’s insurance. Under the present system, if someone was injured he or she could make a claim on the homeowners’ insurance without an attorney. They would be limited to the value of the policy, approximately $100,000. Then they could avoid the worker’s compensation system altogether. She remarked she was uncomfortable putting someone in the worker’s compensation system when the person may not have even been paying minimum wage. For example, someone paid the neighbor’s kid $10 to mow the lawn. Then something happened to the neighbor’s kid and the homeowner was negligent. The neighbor’s kid accumulated $2000 in medical bills. The homeowner did not pay into the worker’s compensation system, yet their recovery was limited and the homeowner did not even pay minimum wage. She asked how other states addressed similar issues.

Mr. Hettrick explored the question regarding minimum wage. He observed if the neighbor’s kid took 20 minutes to mow the homeowner’s lawn for $10, he would make $30 and hour instead of minimum wage. Then he addressed the question of using the homeowner’s policy itself. In terms of having the accident, it was true he could sue, or he could try to access the homeowners’ policy. Even if he did sue, he would still receive the medical treatment which would be billed to him immediately. He would need to pay them promptly or the creditors would send his account to collections. If he, or if a minor, his family, did not have the money to pay the bills, someone would need to pay the bills until the insurance company agreed to pay. Mr. Hettrick thought the bill was a compromise, as were all worker’s compensation negotiations. In his opinion, it worked for all parties. He contended the chances of a lawsuit against homeowners was probably low. The homeowners were not at risk either way. A.B. 334 would provide the benefits to the injured worker immediately without them having to sue the system.

Mr. Goldwater understood Mr. Hettrick’s intent and thought it was a good intent. However, he wanted to consider the worst case scenario. He illustrated an example of a lawn boy, paid $10, to mow the lawn. Gruesomely, the lawn mower blade sliced off his arm. If the homeowners had the endorsement on their title policy, the lawn boy’s remuneration was he would get medical care, but at best, that was negligible. The youth, disabled, was stuck in the worker’s compensation system. Mr. Goldwater questioned the exclusive remedy. If the claimant could choose whether he would rather go with homeowners policy or worker’s compensation. If that was a choice, he could support the bill.

Assemblywoman Segerblom asked if the worker’s compensation people testified at the public hearing. Chairwoman Buckley answered they testified on the original bill and they helped rewrite it with Mr. Hettrick. Mrs. Segerblom asked Mr. Hettrick how much it would cost. Mr. Hettrick informed her the endorsement cost $115 a year in California, and it was estimated Nevada would be the same.

Mr. Humke posed a question concerning the exclusiveness of the endorsement of the homeowner’s policy. If there was a endorsement in the homeowner’s insurance policy the remedy was exclusive, one must pursue either the Employers Insurance Company of Nevada (EICON) system or a private carrier of worker’s compensation. He wondered if the injured worker had the option to move under the homeowner liability insurance policy. Mr. Hettrick deferred the question to Mr. King.

Cliff King, Division of Insurance, explained a homeowner’s policy did not exclude injuries to employees in the Nevada standard form for either medical payment or personal liability. However, the personal liability did require the homeowner negligent for the liability policy to respond. If the homeowner was not negligent the liability portion would not respond. The worker’s compensation system had no fault medical payment. It usually had a low limit to preclude lawsuits.

Mr. Humke clarified in the event the homeowner was negligent, it would be an option for the part-time employee to either go under the homeowner’s liability or underwriter or worker’s compensation. Mr. King answered no, explaining it was an either-or situation. The worker’s compensation coverage would replace liability. If there was a product liability suit, the injured party could still proceed to sue. For example, if there was a defective product, he could sue the lawn mower manufacturer. The worker’s compensation system had a lien against payments, which would go to him under the standard course. If there was a product liability exposure, the endorsement would not preclude a suit against the manufacturer.

Mr. Humke inquired if the homeowner was negligent, did his homeowner’s liability coverage provide the option for the injured person. Mr. King replied it did not. It would replace the liability portion. He remarked many of the liability limits for a homeowner’s policy were approximately $25,000, a relatively low limit. Purchasing an additional policy with a higher limit was an option for any homeowner. The medical payments under worker’s compensation was unlimited. The indemnity portion under worker’s compensation was the structured part.

Chairwoman Buckley asked if there were any plans offered allowing an option of either. Mr. King responded he considered it adverse selection to suffer an injury then determine which route to go. He declared it was not the intent. Chairwoman Buckley thanked him for clarifying it for the record.

Mr. Humke wanted to confirm the cost of the rider as $150. Mr. King corrected him. It was $115, which was the National Council on Compensation Insurance (NCCI) average rate nationwide. As it turned out, it was also what California charged. It was used in Nevada for a part-time employee, 20 hours or less a week on average. He told the committee they could find the cost in section (e).

Mr. Humke asked if any of the premiums went to EICON or to a private carrier of worker’s compensation. Mr. King explained a carrier of workers' compensation underwrote it. Many homeowners’ carriers were worker’s compensation carriers, such as Allstate, Hartford, Farmers, and Statefarm. Most of those also provided worker’s compensation. In a situation of a company such as Geico, who could not provide worker’s compensation, the homeowner would have the option of going to someone who did or they could partner with a worker’s compensation carrier to reinsure that portion. He disapproved of a non-worker’s compensation carrier trying to handle worker’s compensation losses. However, it was very common coverage. The major carriers throughout the country freely underwrote it.

Chairwoman Buckley asked how many other states had looked at such optional method. Mr. King believe 23 other states, but he was not sure.

ASSEMBLYMAN HUMKE MOVED TO AMENDED A.B. 334 AS OUTLINED IN THE WORK SESSION DOCUMENT AND DO PASS.

ASSEMBLYMAN BEERS SECONDED THE MOTION.

THE MOTION CARRIED (CHAIRWOMAN BUCKLEY, ASSEMBLYMAN GOLDWATER AND ASSEMBLYWOMAN GIUNCHIGLIANI VOTED NO).

Chairwoman Buckley asked the committee to consider A.B. 397, which made various changes to the provisions concerning landlords and tenants, also known as the tenants’ bill of rights.

Mr. Hughey explained Jon Sassor, Legal Services, Statewide Advocacy Coordinated, proposed several amendments to the bill, included as attachment F in the work session document. The proposed amendments addressed various concerns during the hearing. According to Mr. Sassor, the parties agreed to the proposed amendments.

Chairwoman Buckley indicated after the original hearing the committee asked Mr. Coward, Mr. Howard, Mr. Sassor and representatives of the apartment associations as well as the tenants to meet and work out some amendments. The parties reported to Chairwoman Buckley and in conjunction with Mr. Goldwater, they had achieved some consensus. They had furthered agreed to work over the interim as the mobile home park owners and residents had done. She believed both parties had agreed to the amendments.

Mr. Goldwater commented the amendments were good. He explained he obtained only a fraction of what he wanted from the amendments. However, he would take it. He commended the hard work of Mr. Coward, Mr. Sassor and Mr. Howard. They worked in good faith, and he thought it was better than nothing.

Chairwoman Buckley explained the amendments deleted the no cause eviction, which caused a great deal of consternation. It also deleted the security deposit bifurcated system. It eliminated the provisions and instead clarified remedies on habitability concerns, retaliatory conviction evictions, and clarified defenses. She also commended the parties for working together. She believed the committee knew what hard work it was after such a contentious hearing.

ASSEMBLYMAN PERKINS MOVED TO AMEND A.B. 397 AS OUTLINED IN THE WORK SESSION DOCUMENT AND DO PASS.

ASSEMBLYMAN PARKS SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY

Mr. Hughey read from the work session document about A.B. 431 which was Chairwoman Buckley’s bill regarding protections to individual buyers, leasers, borrowers, and recipients of worker’s compensation benefits. he understood she had some amendments to present to the committee.

Chairwoman Buckley supplied the committee with copies of her proposed amendments (Exhibit K). She asked the committee to recall the bill was another rather contentious issue. She explained deferred deposit was also colloquially referred to as check cashing loans or payday loans. She summarized the focus of the amendments and the discussions with the parties involved.

Chairwoman Buckley explained her constituents and her observations of individuals who were, due to the excessive interest rates charged by some of those entities, repaying $1,000’s on a $200 or $300 dollar loan. Her concern and the concern of other nonprofit organizations in Clark County were these individuals were setting up perpetual treadmills of debt. Since the original hearing, she worked with Morgan Baumgartner, USA Cash Stores, and Kit Cashmore and Jim Wadhams on behalf of Nevada Independent Check Cashing Association. They had worked on the amendments up to 5 minutes before the hearing. She presented them to the committee in a conceptual form.

Chairwoman Buckley pointed out the amendment in paragraph 4 removed the interest rate cap, which caused a great deal of controversy. Instead of the interest rate caps, they focused on the problem happening upon default. Chairwoman Buckley expressed concern about people knowingly writing bad checks, the deferred deposit businesses threatening criminal prosecution for bad check charges, as well as putting the check through, all causing the debt to spiral until it was a $1000 on a $100 debt. The individuals with whom she worked said approximately 70 percent paid their debts on time and willingly paid the extremely high interest rates to have access to the capital. The rollovers accounts and defaults were truly the problems and dangers. The amendment did not eliminate the interest rate cap. Instead, it focused on the issues of rollovers accounts and cohesive practices.

Chairwoman Buckley continued with the next amendment in paragraph 5. First, they tentatively worked up a proposal allowing only three rollovers for a 2-week duration. Some states allowed much less. It permitted the same amount of interest charged during the rollover period. If the two parties agreed upon 1000 percent for the check loan, the agreed interest rate continued over the rollover period. The second component happened upon default. If an individual defaulted on the third rollover a system would allow the customer to pay the original principle and all of the interest owed on a payment agreement. She actually fashioned the procedure after what Mr. Cashmore’s business currently used. She thought it was a good practice to allow someone the opportunity to pay off the debt and the interest.

She explained the procedure in section 5. If the borrower defaulted, he would pay a rate of interest equal to the prime rate plus no more than 10 percent. In the time between default and ultimately small claims court action, the registrant would make a fair rate of return but would not end up, due to the 1000 percent interest, owing $1000 on a $100 loans. Additionally, in paragraph 6, they modified the underwriting criteria from one fourth to one third.

Chairwoman Buckley extended her appreciation to the individuals working with her. Both sides did not obtain everything they wanted, but by focusing on the real abuse, they made significant progress to help individuals get out of the continuous spiraling debt situation. She informed the committee the amendments were conceptual and if inclined she would allow them to review them. In addition, Chairwoman Buckley voiced her concern about how the repayment agreement period would work. It was businesses’ goals to collect the money and interest. They did not want someone in bad faith, who would not repay, to receive a 60-day free ride. The concept and that language to achieve both of those goals still needed tinkering.

After commending Chairwoman Buckley’s efforts, Mr. Goldwater asked if they considered any caps on the total amounts loaned after eliminating the interest rate. For example, the interest and penalties could not exceed the amount borrowed plus 50 percent. Chairwoman Buckley explained they discussed the idea at all of their meetings because the original concept of the bill capped the interest rate and fees. However, it was necessary to relinquish the concept to facilitate discussions on perpetual rollover and abusive business practices between the two sides. She asserted if interest-rate caps were not removed, none of the parties could have agreed upon bill. Mr. Goldwater suggested a dollar amount cap. Chairwoman Buckley reiterated the parties strongly disagreed on caps, which prevented further negotiation on other issues.

Mr. Hettrick appreciated Mr. Goldwater’s intent. However, he found two problems with it. First, the interest rate cap would appear punitive to the customer who paid early, even if it was not. Secondly, a fixed amount of dollars would simply encourage the borrower to come back in, pay some small portion, and take out another loan. Those people were willing to pay for that. The interest rate was insignificant to them because of the short-term of the loan. He thought a move to a fixed rate was too similar to actually borrowing money on a long-term basis. He agreed with Chairwoman Buckley, the issue was the rollover, which became punitive to the person who took out the loan in good faith and thought they would honestly be able to pay the money back. The payment agreement made sense at that point because the lender and the borrower both wanted to see it paid off. It was a fair way to get it accomplished.

Chairwoman Buckley declared states all across the country were considering that issue. Ten years ago, no one had heard of the industry. She hypothesized on how the industry evolved from check cashing stores holding a paycheck for a good customer to payday lending. Approximately 22 to 29 states by virtue of their small loan acts or other usury limits had banned the industry. Since Nevada did not have a usury limit, they became one of states considering those issues. The other states used varying approaches. All of them considered legislation. She informed the committee the document provided at the hearing presented a summary of the issues and the state legislatures were considering similar legislation. Various lawmakers considered it a timely issue because of where the industry was going.

Mr. Beers wondered if prohibiting the industry altogether increased the probability of criminals operating short-term money lending rings. At least the legitimate industry did not collect with guns, they collected with the courts. He contended the committee approached the issue by regulating the provider of the service. However, the provider of the service was not the source of the demand for the service. He agreed with Mr. Humke, there were plenty of people out there who needed and used those services. Furthermore, they would continue to need and use those services whether it was illegal or not. Chairwoman Buckley agreed the demand existed. The arguments made by the states that prohibited the service included the legitimate businesses who practiced illegal methods. The other argument included the moral obligation to stop consumers from falling victim of the perpetual debt allowed by legitimizing the industry. The choices were to ban it altogether or regulate it. The model looked at regulation with a particular view towards the rollover, the debt treadmill, and the course of practices as opposed to a capped usury.

Mr. Humke questioned the intent of the amendment on page 2, number 6 and 7, of the handout (Exhibit K). Number 6 increased the amount of the net income from one fourth to one third, which was a part of the allowable loan. He asked if she wanted the courts authorized to interpret circumstances of an unconscionable loan on a case-to-case basis. Chairwoman Buckley contended the change in paragraph 2 to one third, tried standardizing the industry with some underwriting. From the testimony it became clear many businesses threatened their patrons with criminal prosecution and civil litigation. With the provisions and underwriting criteria, the proposed amendment attempted to transform it into a loan process. It would prohibit the registrant from making an unconscionable loan. The standard for the loan could not exceed one third of the borrower’s expected net income unless justified. For example, if the registrant could say the borrower presented evidence of more income, then they could write the loan.

Mr. Humke indicated the clause encouraged court interpretation and lawsuits. Chairwoman Buckley responded the registrant could try to collect from the court. The borrower could plead saying he did not have the income at the time of the loan. He could certainly make a good argument. The underwriting was a part of the regulatory scheme, which would go under financial institution. In terms of being unlawful, that was a regulatory matter for the commissioner. Mr. Humke argued deferred deposit businesses were currently regulated now under the scheme. Chairwoman Buckley countered they were under NRS 603, but with no details.

Next, Mr. Humke turned to number 7, a reference to NRS chapter 675. He asked what a liquid asset requirement did to improve the industry Chairwoman Buckley discussed the liquid asset requirement of $50,000 currently in NRS chapter 675 which was Nevada Small Loan Act. Prior to their first hearing on the bill, one of the financial institutions suggested to her they raise the chapter’s limit to $100,000 to secure the legitimacy of the businesses. She reminded the committee she made the suggestion in her original testimony. It related less to the course of practices and other items regarding deferred deposits. However, it was a suggestion made to her by a financial institution. Mr. Humke did not understand the increase since they were not regulating financial institutions. He implied they emanated the suggestion to force some of those deferred deposit shops out of business. Chairwoman Buckley contended they would still be able to be licensed under NRS 604. She believe most of them were already licensed under NRS 604. She maintained it was a prudent suggestion. Chairwoman Buckley recommended looking up the statute to see if it mentioned a liquid asset requirement in NRS 604. Whether or not there was one, it was not addressed in the bill. Whatever was in existing law would remain the same.

Mr. Beers inquired whether they designed provision 7 to keep the deferred deposit industry in NRS 604 as opposed to escaping onerous regulation by moving it under NRS 675. Chairwoman Buckley agreed with his reasoning. Then Mr. Beers asked about amendment number 5. He wondered whether assuming a period of a payday of 2 weeks was wise. He explained occasionally employers paid twice a month. He speculated if it made sense to look at that instead of 2-week duration as cycle of pay. Chairwoman Buckley explained the industry currently practiced the 2-week duration.

After looking up NRS 604 the committee determined there was reserve requirement in the statute. In contrast NRS 675 stipulated a $50,000 liquid asset requirement. Every licensee would maintain assets of at least $50,000 either used or readily available for use in the conduct of each licensed office.

Mr. Humke asserted the intent of the suggested increase of liquid assets by the small loan industry, regulated under NRS 675, was they did not want the deferred deposit industry to change their chapter. He disagreed with the motives of the suggestion. The deferred deposit industry could find themselves at an advantage operating under NRS 675 instead of under NRS 604. Chairwoman Buckley stated she would not comment on the desirability of chapters. The decision as to under which chapter they preferred to operate was their decision. She proposed another possibility was removing number 7 and saying any deferred deposit transaction would fall under NRS 604.

Mr. Humke stated he was inclined to suggest NRS 675 people should attend to their own business because he did not see how the NRS 604 people were a threat. He could not connect how the liquid asset requirements for the NRS 604 people had any bearing on that industry whatsoever. Chairwoman Buckley agreed and explained she did not add it. She observed it could insure the people conducting deferred deposit business did not change chapters to avoid regulation. Mr. Humke concluded the people in the deferred deposit industry could want to change licensing from NRS 604 to NRS 675 because they could find less of the "shark" practices the proponents of the bill described under NRS 675. Therefore, licensing under NRS 675 would carry a more socially acceptable business status.

Mr. Beers asked what consumer interest was protected by requiring NRS 675 companies to have a $50,000 net worth in the first place, much less the $100,000. Chairwoman Buckley did not intend to contend with existing law without the testimony of the individuals on the value of the net reserve in NRS 675. She would rather remove the amendment than venture into that debate.

Chairwoman Buckley felt individuals could avoid the regulations by changing chapters. She proposed an entity could choose licensing under either chapter they wanted depending on whether they met the requirements. However, they would still follow the substantive consumer protection ultimately determined by the legislature if they conducted deferred deposits. She advised the committee she would post the bill on the next work session if they were not comfortable with it. Otherwise, she would take a motion from the committee.

Carl Hull, President, Post-Dated Check Express and Nevada Auto Title Loans, submitted a letter (Exhibit L) illustrating how a cap on the amount of interest rate or the amount loaned would significantly reduce profits forcing deferred deposit establishments out of business. The letter also argued deferred deposit businesses granted higher risk loans than the loans granted by banks; therefore they needed to charge higher interest rates to secure their loans. In conclusion, he suggested they should wait until the 2001 session to change the statute allowing more time to see if they needed such legislation since the legislature just changed NRS 604 in the 1997 session.

ASSEMBLYMAN PERKINS MOVED TO AMEND A.B. 431 AS SUGGESTED IN EXHIBIT K WITHOUT THE NUMBER 7 AND DO PASS.

ASSEMBLYMAN GOLDWATER SECONDED THE MOTION.

Mr. Beers stated he was still uncomfortable with the amendments. He inquired what options he had. Chairwoman Buckley explained he could vote yes and reserve his right to vote no on the floor based upon his subsequent research and his discussion with other people. Alternatively, he could just vote no. She reminded the committee about the looming deadline. She assured Mr. Beers he could certainly reserve his right to change his vote upon further discussion. He just needed to notify the chair. Mr. Beers stated he would vote no but reserved the right to yes.

THE MOTION CARRIED (ASSEMBLYMAN BEERS, AND HETTRICK VOTED NO BUT RESERVED THE RIGHT TO CHANGE THEIR VOTE UPON CONSIDERATION).

Mr. Hughey informed the committee the next bill was A.B. 432, on page 3 of the work session document. It revised the provisions governing the practice of optometry. Fred Hillerby, Nevada Optometric Association, proposed amending the kinds of therapeutic agents that optometrist could administer and prescribe. The proposed amendment would allow optometrists to administer and prescribe Tylenol #3, Vicodin, and Darvocet. It was attachment G in the work session document.

Although it was self explanatory, Chairwoman Buckley asked Mr. Hillerby to explain the amendment.

Mr. Hillerby explained, in discussions with the members of the committee, there was some concern about the scope of the controlled substances. The amendment narrowed the scope to only three drugs. The first two fell in schedule 3 and the last one, Darvocet, in schedule 4. The committee felt that gave some choices. Some people were allergic to codeine, therefore they could not use Tylenol #3. The committee thought that gave enough drugs to address the issues the members felt were important.

ASSEMBLYWOMAN SEGERBLOM MOVED TO AMEND AND DO PASS A.B. 432.

THE MOTION WAS SECONDED BY ASSEMBLYMAN PARKS.

THE MOTION CARRIED (ASSEMBLYWOMAN GIUNCHIGLIANI VOTED NO).

The next bill considered was A.B. 433, which clarified exemption for certain government entities from certain provisions governing contractors. Mr. Hughey explained Mike Baughman, representing Lander County, stated that the Lander County manager and the Lander County district attorney had advised him they wanted to withdraw this bill.

ASSEMBLYMAN HUMKE MOVED TO INDEFINITELY POSTPONE A.B. 433.

ASSEMBLYMAN DINI SECONDED THE MOTION.

THE MOTION CARRIED UNANINMOUSLY.

Ms. Lesbo explained the next bill, A.B. 470, made various changes concerning organizations for managed care that provided medical and health care services to injured employees who were entitled to worker’s compensation. The first amendment, proposed by Paula Berkley, representing the Chiropractic Physicians’ Board of Nevada, was attachment H in the work session document. In section 7, it added a reference to chiropractors, allowing chiropractors in addition to physicians to determine to not authorize coverage of medical or health care service under certain circumstances that had been recommended for the injured employee.

Ms. Lesbo noted the second amendment proposed by Jack Kim, Sierra Health Services, deleted the bill as a whole with exception of sections 17 and 18, and added several new sections to the bill. Those were included in attachment I of the work session document. She outlined the six main changes outlined on page 4 of the work session document.

First, letter (a) added a new section to the bill to provide an insurer, organization for managed care, or third party administrator must respond to a request for prior authorization for treatment, diagnostic testing, or consultation within 5 days of receipt of the request. Letter (b) would amend NRS 616C.090 to provide if an injured employee, whose insurer had contracted with an organization for managed care, was not satisfied with his first physician or chiropractor he selected for treatment, an alternative physician or chiropractor may be selected within 90 days of the date of injury.

Third, letter (c) amended NRS 616C.305 to provide that if a dispute of decision by an organization or managed care was not resolved within 30 days, instead of 14 days, it could be appealed to an appeals officer. Under (d), the amended NRS 616C.330 would provide a hearing officer may refer an employee to a physician or chiropractor to resolve a medical question concerning the necessity of medical treatment. Currently, the statute provided that they could refer an employee to a physician or chiropractor to resolve a medical question concerning the injured employee’s condition only, not necessity of medical treatment.

Ms. Lesbo continued to explain letter (e) would amend NRS 616C.345 to provide that an appeals officer may refer an injured employee to a physician or chiropractor, selected by the appeals office to resolve a medical question concerning an employee’s condition or necessity of treatment. The proposed amendment also provided an appeals officer could refer an injured employee to a rating physician or chiropractor to resolve a medical question regarding the rating of the permanent disability. However, the physician or chiropractor must be selected from the list of physicians and chiropractors maintained by the DIR unless the insurer and the injured employee had agreed otherwise Letter (f), the amended section 18 of the bill deleting the reference to "capitation."

Ms. Lesbo concluded explaining the final amendment, proposed by Assemblyman Goldwater, which retained the language in section 16 in addition to the amendments proposed by Mr. Kim. Section 16 of the bill prohibited an organization or managed care from interfering with any communication between a provider of health and an injured employee regarding certain information.

Mr. Goldwater commended Ms. Lesbo on an excellent summation of the amendments. He thought passage of the bill would greatly assist the injured worker. Additionally, he informed the committee Mr. Kim changed the days from 14 to 30 in section 21. The original bill deleted the 14 days and changed it 30 days. They wanted to remove the deletion. He also relayed Mr. Potrosky requested to keep section 16 in the bill, which was accepted by the parties as well.

Mr. Hettrick inquired if any of the people who initially opposed the bill contributed to the amendments. He also wondered if they were happy with the amendments. Chairwoman Buckley noted Mr. Kim indicated the opposition agreed with the amendments.

Bob Ovstrovsky, representing Nevada Resort Association, reported they did agree with and helped write the amendments. He stated the amendments also removed the fiscal note. He felt the fiscal note hindered the process of the bill as originally drafted.

Mr. Dini questioned the necessity of Paula Berkley’s amendment. Mr. Goldwater explained the amendment was not necessary. However, the amendment ensured chiropractors who treated the same type of patients requested equal treatment as physicians in that limited capacity. Mr. Goldwater expressed the amendment did not harm the intent of the bill.

ASSEMBLYMAN DINI MOVED TO AMEND AS SPECIFIED IN THE WORK SESSION DOCUMENT AND DO PASS A.B. 470.

ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.

Mr. Beers called attention to the fact amendment 2, deleted sections 1 through 23, but amendment 1 amended section 7, which was deleted by amendment 2. Chairwoman Buckley explained if construed together they canceled each other out. If one section was out then they were both out. She thanked him for the clarification.

THE MOTION CARRIED (ASSEMBLYMAN NOLAN VOTED NO).

Mr. Hughey announced the next bill, A.B. 680, was on page 10 of the work session document. It made various changes relating to insurance. Alice Molasky-Arman, Commissioner of Insurance, proposed two amendments to the bill. One was a wording change which clarified the commissioner may exempt from risk-based capital provisions of the NRS 681B.290 insurers who transacted business only in Nevada. According to Commissioner Molasky-Arman the Division of Insurance already performed in-depth analysis of the domestic insurers annually, and no other state would demand the risk-based capital report of an insurer which transacted insurance only in Nevada. The second amendment amended the bill by deleting section 66 (beginning on page 46). According to testimony, the association mentioned in lines 36 through 43 of the bill could have difficulty finding additional people to serve on the screening panels. Finally, various representatives of the insurance industry proposed the amendments which were included in attachment O.

Chairwoman Buckley mentioned the minor amendment to the original bill on the last page of attachment O was proposed by Nationwide Insurance and concurred by Nevada Trial Lawyers Association. In her opinion the other two amendments were more substantive and not related to the original bill. She recommended a motion to amend and do pass, if the committee was inclined, with the insurance commissioner’s amendments and the last one summated.

ASSEMBLYMAN DINI MOVED TO AMEND A.B. 680 AS SUGGESTED BY CHAIRWOMAN BUCKLEY AND DO PASS.

ASSEMBLYWOMAN SEGERBLOM SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

Mr. Hughey explained A.B. 633 was a contractor bill. A mock-up of the bill, attachment J in the work session, included the proposed amendments which Margi Grein, Executive Officer, State Contractors’ Board, provided at the last meeting.

Chairwoman Buckley asked Ms. Grein to come forward and answer the committee’s questions. Chairwoman Buckley started with a question relayed to her from Irene Porter, homebuilders’ association. She explained Ms. Porter liked and supported the expedited license program.

Turning to the mockup on page 4, Chairwoman Buckley questioned the monetary license limit. She wanted to know if there would be an unlimited category. Ms. Grein, Executive Officer, State Contractors’ Board, answered there were many licenses which qualified for an unlimited licensing provided they could support it financially. Chairwoman Buckley inquired if it was her intent to include an unlimited category. Ms. Grein related they would not change anything they currently did not have. They had many inquiries about their processes and wanted to establish their procedure. The law currently determined the amount. Chairwoman Buckley wondered if the law currently provided an unlimited category or would provide an unlimited category. Ms. Grein stated it would not change existing law.

Chairwoman Buckley asked about renewal licenses, if all the applicant’s provisions needed reprove to comply with section 6, even if the licensee had a good record. Ms. Grein explained the bill did not intend to mandate every applicant provide the information to gain approval. If someone had a large amount of complaints from suppliers or subcontractors the needed information would be requested and reviewed at that time.

Chairwoman Buckley wondered if a person who was not a journeyman, for example someone who had degrees in structural, electrical, or mechanical engineering could not be licensed according to the new provision in section 6, paragraph 5. Ms. Grein voiced it was not the intent to exclude qualified applicants. She believed they required 4 years experience as a workman. They wanted to license quality contractors. She agreed to allow for an educational certification comparable to the experience requirements in the provision. Chairwoman Buckley clarified if they would consider an engineer with the required level of experience as a contractor. Ms. Grein said depending on the type of license for which they applied and the other qualifications for the license. Chairwoman Buckley asked if she could clarify the requirements in an amendment. Ms. Grein said she would.

Next, Chairwoman Buckley asked if the deletion in section 7 on the mockup was correct. Ms. Grein confirmed it needed deleting because it was a duplicative of number 5. Chairwoman Buckley inquired what the financial projection of the board was with regard to fees. She wanted to know how the increased fees related to the board’s budget presented to the Assembly committee on Ways and Means and the Senate Finance Committees. Ms. Grein stated the bill placed a cap on the fees, as opposed to raising the fee. They could only raise the fee through regulations under Nevada Administrative Code (NAC) 624. They wanted to raise the cap so if an increase was necessary, they could raise them. They recently increased fees, and they should suffice for a couple of years.

The last question Chairwoman Buckley asked on behalf of Ms. Porter was for financial projections on what implemented fees raised rates. Ms. Grein did not have the projections with her. Chairwoman Buckley called for further questions of Ms. Grein.

Mr. Dini questioned the need to raise the caps if they did not plan to raise the fees. Chairwoman Buckley explored the reasoning behind raising the fee caps. Currently, no fee could exceed $300. She asked Ms. Grein why they needed to raise the cap if they did not plan to raise the fees. Ms. Grein responded all the changes the board made as well as the provisions the legislature passed created a need for funds to operate. The current fees remained low for a number of years. They wanted to keep them low, but at same time, they needed funds to enforce effective licensing efficiently. Chairwoman Buckley outlined the current fees.

There were three categories, the application, the license, and the exam each of which capped at $300. Ms. Grein declared they used an independent testing service for examinations. They did not increase the testing fee because the testing service did not raise its fees. The license fee was $300, which included all types of licenses. However, some people had multiple licenses. The application fee remained the same. The cost to process the application was about $456, which did not include the expense for background investigation, which was costly. Chairwoman Buckley thought the committee was uncomfortable increasing the fee to $400 for an application and $200 for a license, without a justification of the amount of the increase as well as knowing how it would assist the board.

Mr. Dini voiced his objection to fee increases. He represented many small contractors, with little operations of two or three employees. He thought an increase of any kind would hurt them, especially if they had multiple licenses. He stated he did not know whether it was wise to raise the cap at that time. Ms. Giunchigliani thought the argument came up during hearing. She wondered if the contractors took a position regarding the issue. She thought a self-funded agency had a right to raise the fee with the concentrated duties performed. However, they should contact the industry to hear any objections or suggestions.

Ms. Grein exclaimed they had to go through the public hearing process through NAC 233B, so the industry would have an opportunity to come forward and speak for or against, before they raised fees. She reiterated the bill did not raise fees. It raised the fee caps. Ms. Giunchigliani repeated she thought they should contact the industry before they raised any fees. Sheryl Bloomstrom, Nevada Chapter Association of General Contractors, interjected their support for the fee cap increase. They asked Ms. Grein’s organization to increase their workload. Chairwoman Buckley related her conversation with Ms. Porter who asked if the committee could hold A.B. 634 until the next work session allowing her time to review the amendments. However, she did not express any concerns over processing A.B. 633.

Mr. Hettrick agreed with Speaker Dini regarding raising the fee caps. The expense for the small county contractors also bothered him. If a contractor in the smaller counties needed five licenses, it would cost him $500 apiece. It would eliminate those small county contractors. Although he understood the intent of the bill, the great cost of it concerned him. He hoped they put two or three in at once to reduce the rate for the second and the third application and not go through he whole process on each license. He inquired whether they made a separate background check for each license on an individual's application. He advised them to keep the costs down to avoid eliminating the small contractors in rural Nevada. Ms. Grein remarked applicants applied for a license with certain subclassifications under one application. The fees usually did not affect the smaller contractors because it was the bigger contractors who applied for multiple licenses in the different specialties. Chairwoman Buckley asked if they considered a staggered fee scale based on the smaller contractors doing lower amounts of work. Ms. Grein replied they had not considered such a scale.

Mr. Humke felt the larger contractors represented by the Association of General Contractors would not object to the fee cap raises. His concern was the small business people. The fees represented a barrier to entry into the industry. He disclosed the raise in fee cap could force him to reserve the right to change his vote on the floor.

Chairwoman Buckley reviewed the committee’s choices. They could hold it, they could reduce the fee caps, or they could keep the fee caps at the same level and add a provision requiring if the board considered raising fees, it would hold a hearing for the smaller contractor doing a smaller amount of work or mandate there be a consideration for the smaller contractor to pay a lower fee. Mr. Dini suggested reducing the fee caps from $700 to $550 and from $500 to $450 in 1 and 2 under section 10 in the mockup, which gave them $150 more in both categories. He felt it should hold them for 2 years. Chairwoman Buckley asked Ms. Grein if it was a sufficient amount. Ms. Grein responded she hoped it would. There were other pieces of legislation in the committee, which would help them recover their costs from settlement agreements. If it passed, she hoped it would offset some of the expenses.

ASSEMBLYMAN DINI MOVED TO AMEND A.B. 633 BY REDUCING THE FEE CAPS FROM $700 TO $550 AND FROM $500 TO $450 AND DO PASS.

ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

Chairwoman Buckley told the committee she would like to hold A.B. 634 until the next work session to allow Southern Nevada Home Builders to review it in mockup form and provide comments.

Chairwoman Buckley also would like to hold A.B. 635, which left them with A.B. 636.

Chairwoman Buckley explained A.B. 636 was the recovery fund she suggested, which the committee discussed in their last work session. Attachment l in the work session document was a mockup of the bill.

Chairwoman Buckley asked them to turn to page 9 in the work session document. She prepared a staggered fee schedule for a recovery fund for individuals who bought a faulty new home or who had suffered damages and the contractor refused to pay. She worked with the contractors’ board and Jim Wadhams on behalf of the Home Builders Association on the assessments. She followed a suggestion made by Mr. Hettrick to consider a sliding fee scale. Each residential contractor would pay an assessment to the contractors’ board on an annual basis. She developed categories from 0 to 50,000 for amounts of $50 and up. Additionally, she added a cap on the recovery fund. When it reached 150 percent of the previous year’s fund, the board would suspend collection for the fund. If they only paid out $50,000 for people who had roofs that caved in or faulty homes in that year then the board would cease collection. Therefore, it would not build up and collect fees unnecessarily. The rest of the amendments were the same as last time.

Chairwoman Buckley informed the committee she could hold the bill until their next work session or the committee could move it today. It was the last bill the committee had to move today. Chairwoman Buckley thanked James Wadhams for working with her.

ASSEMBLYWOMAN SEGERBLOM MOVED TO AMEND A.B. 636 AS DRAFTED IN THE WORK SESSION DOCUMENT AND DO PASS.

ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

Chairwoman Buckley commended the committee on their hard work processing the large amount of bills, which shortened the workload for the next meeting. She hoped the architects and the interior designers could concur on an agreement, which would also shorten the next meeting. Lastly, Amy Hill brought a concern to Chairwoman Buckley as the Chairwoman. The position of Ms. Hill was misrepresented and Chairwoman Buckley wanted to give her an opportunity on the record.

Amy Halley Hill, McMullen Strategic Group, explained that earlier in the work session when the committee discussed the amendment on A.B. 326, Ray Badger of the Nevada Trial Lawyers Association answered a question from Chairwoman Buckley. Ms. Hill revealed when Chairwoman Buckley asked him who worked with him on the amendment, he stated the DIR and Sam McMullen’s office. Ms. Hill explained she was the only one in Mr. McMullen’s office he could have worked with on the amendments. He said they worked together and she believed he indicated McMullan’s Strategic Group supported the amendment. She stated they did not work on the amendment. In addition, they did not see the amendment until it appeared in the work session document. She thought the committee needed to know of the misrepresentation. She found it unfortunate, since they wanted to find some resolutions in worker’s compensation, which both the employers’ attorneys and labor could agree. She also found it unfortunate that Mr. Badger felt the need to falsify their position on that piece of legislation. She thanked the committee for the opportunity to set the record straight.

Chairwoman Buckley promised she would address this matter on behalf of the committee directly and seriously with Mr. Badger

Having no further business before the committee Mrs. Buckley adjourned the meeting at 7:15 p.m.

RESPECTFULLY SUBMITTED:

Lori Fitzgerald,

Transcribing Secretary

APPROVED BY:

Assemblywoman Barbara Buckley, Chairman

DATE: