The Committee on Commerce and Labor was called to order at 3:45 p.m., on Wednesday, April 14, 1999. Chairman Barbara Buckley presided in Room 4100 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Ms. Barbara Buckley, Chairman

Mr. Richard Perkins, Vice Chairman

Mr. Morse Arberry, Jr.

Mr. Bob Beers

Ms. Merle Berman

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. Joe Dini, Jr.

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Following roll call, Chairman Buckley noted Speaker Dini was excused, and also noted the meeting would begin as a subcommittee. She opened the hearing on S.B. 8.

Victoria Sakach, Vice President of the Nevada State Barber’s Board presented the bill. The proposed amendments were necessary to "clean up" and reword the bill because that had not been done in some time. She noted an amendment that addressed prisoners cutting their own hair and having a registered barber at the jail. Her organization felt that barbering was for cosmetic purposes.

Chairman Buckley asked Ms. Sakach to address the main sections of the bill with amendments, what the existing law was, and what the barber’s board wanted to accomplish with the changes.

Ms. Sakach noted one of the changes was to require barbers to identify themselves with a license or identification card of some sort. There was a problem with barbers who displayed licenses on the wall, but refused to show identification, so the board had no way of knowing if the license on the wall corresponded to the person performing the barbering.

Chairman Buckley clarified that was in section 3, and asked if the board had sent investigators to barber shops, and certain individuals had refused to produce proper I.D. Ms. Sakach confirmed that to be a problem.

Ms. Sakach mentioned many of the requested changes were simple rewordings to correct language. She pointed out the added language in section 14, lines 16 through 20, which indicated an applicant who failed the examination would be required to complete further study before he/she may retake the exam. There was a problem because those individuals were able to take the exam repeatedly, without any additional instruction, nor improvement, and it cost the board "a lot" of money. That section of the bill required an individual who failed the exam to take 250 hours of additional training before attempting the exam again.

Ms. Sakach noted there was a section in the bill that addressed the transfer of license; cases in which people would took their license to a different barber shop which had not been investigated by the board, and was perhaps substandard, or not appropriate for barbering.

Chairman Buckley noted sections 2, 21, 22 and 27, included fee increases, and suggested Ms. Sakach highlight the board’s proposed justification of the fee increases.

Ms. Sakach responded the fee increases were proposed because of the increase in workload. She noted the board’s secretary was attempting to modernize the board. The secretary put in very long hours, and the board felt he needed an increase in his salary because of the workload. The rest of the fee increases were to cover expenses. Examinations for instructors were costing the board more money than what the fee for the exam covered.

In the absence of Chairman Buckley and Vice Chairman Perkins, Acting Chair Assemblywoman Evans, asked Ms. Sakach when the board had last raised its fees. Ms. Sakach said she was new to the board, but believed it had been at least 10 years since the fees had been increased. Ms. Evans noted the proposed fee increases appeared to be a "large jump." Ms. Sakach agreed, but noted it had been a long time, and the workload had tripled since the last increase. There were many more barbers and barber shops, especially in Las Vegas, which was where the secretary was operating. The board was attempting to transfer all of their records to computers, and most of that information was in longhand up until two years prior. So they were updating the system, and modernizing it. Ms. Sakach noted she worked more hours than she was paid for because she was trying to catch up.

Assemblywoman Segerblom asked how long barbers were required to serve as apprentices. Ms. Sakach stated after 1500 hours of schooling, the apprentice served under a registered barber for 18 months.

Assemblyman Beers had accessed the barber board’s budget on the Internet, and noted the board’s annual expenditures were from approximately $35,000 to $36,000. Ms. Sakach agreed. He continued, the board had an $84,000 budgeted reserve from 1999 to 2000, $68,000 for the next and $51,000 for the next, so the board had well over a year of operating in reserve. Ms. Sakach believed that to be correct, although she noted the secretary handled most of the financial aspects.

Mr. Beers asked if there was anyone on staff who could tell the committee if that was a statutory requirement. Acting Chair Evans asked if there was a need to carry a reserve of that level. There were many budget counts that carried a reserve, and often there was a need to do that. However she had concerns that the board was asking for a rather substantial fee increase, when it had that amount of reserve. Ms. Sakach noted the reason for the large reserve was because they had not put anything into the board, as far as computers, and updating the board. The board did not have a fax machine or a computer the members were using their personal computers. They wanted to use that money to establish better communication with the barbers and everyone else involved. It was embarrassing when someone wanted to fax her information at the shop, because she did not own a fax machine. They board members worked out of their barbershops. They had no equipment, no up-to-date computers, and basically they wanted to update with the money.

Acting Chairman Ms. Evans noted that was a legitimate request and expenditure, however, those items alone, fax machines, copy machines, and computers, would not "put a dent" in the event level of reserve.

Chairman Buckley returned, and Ms. Evans explained the prior discussion.

Chairman Buckley asked Ms. Sakach to submit the board’s budgetary information; the estimated amount of money that would be raised by the fee increase, and how the board was going to use the money. The committee did not like to raise fees unless it was required for necessary regulation, and unless the committee was presented with a good justification, they would not pass the legislation.

Captain Jim Nadeau, Washoe County Sheriff’s Department, also representing the Nevada Sheriffs and Chiefs Association testified next. He noted there was a portion of the bill, on page 3, lines 1 and 2 that dealt with law enforcement detention facilities. Over the past several years, detention facilities had been exempted form the mandatory requirment of having a licensed barber on staff, by the NAC. He wanted the occurrence of that exemption codified into statute. Detention facilities provided an estimated 30, 000 to 40,000 haircuts per year. It would be extremely expensive if they had to have a licensed barber on staff to handle those haircuts. Las Vegas Metropolitan Police Department supported the exclusion.

Onie Cooper, Private Citizen, testified next. He did not think S.B. 8 was in accordance with fair play and justice, and he was against it. It appeared to him that Sheriff Kirkland was making efforts to cover himself by asking for a change which allowed incarcerated individuals to have their hair cut without regular health regulations that the board was required to follow, according to NRS 643.190, section 1. He provided copies of newspaper articles that would indicate some things they said about that (Exhibit C). If a person violated the law, he/she should face the consequences.

It was not fair to force men to cut their hair and not force women. A reason that was given was that men could hide weapons in their hair, but a woman could do the same. It seemed if an individual became a prisoner, he would be required to do what he was told to do, right or wrong, just or unjust. Mr. Cooper believed if the committee was considering the passage of S.B. 8, the members needed to get a "full view" of what was transpiring. If a man did not cut his hair, he was put in his cell for 22 hours per day, he did not get reading material, did not watch television, and he ate in his cell.

The legislation did not take into consideration that people in transition, who had not been sentenced at all, went through the same scenario that people who had been sentenced did. He thought it was an unjust situation and it needed to be disallowed.

Chairman Buckley thanked him for his testimony, and noted the committee would never have considered that point simply by looking at the bill.

James Earl Harris, Private Citizen, and former inmate of the Washoe County Detention Facility, testified next. He noted hair cutting in the facility had been used as a tool to further segregate the population. If man did not cut his hair, he was considered to be "non-participating" which meant he had restricted commissary use, and 23 hours of the day was spent in the cell. That distinction was made in a population of inmates, some of whom were in the process of going through the courts. A large percentage of the people in that detention center had not been convicted of anything. If the segregation was to be justified with the excuse of an inmate violated the law, and was convicted, the different court statues of individuals needed to be considered.

If an inmate agreed to the cutting of his hair, there was no sanitary arrangement. He did not think the sheriff’s department, or anyone else should be exempt from doing those things that related to health and safety. There was a reason why barbers were required to institute and follow certain practices of health and sanitation. Mr. Harris did not understand the purpose of exempting prisons, sheriff departments, and county jails from exercising basic good health practices. He asked if that could be justified based on the fact that a person was incarcerated, and did not deserve certain basic human rights. He asked if inmates deserved to be exposed to head lice or any other infectious diseases. He did not think that health and safety should be exempted from the domain of responsibility of those who governed Nevada’s institutions of incarceration.

If the law needed to be modified so it could protect health and safety without dealing with licensing, he thought it should be done. Whether an inmate was in the process of being convicted or not, he deserved related to health and safety measures. Mr. Harris thought barbering practices needed to be conducted in a way that protected the health and safety of all of the people involved. It was a matter of protecting human rights, regardless if a person was in jail or not.

Chairman Buckley noted the bill only dealt with the issue of whether there should be an exemption from licensing for a prisoner who cut hair in one of the facilities. S.B. 8 did not address whether it was constitutional for it to be required as a condition to get privledges, and it did not touch the sex discrimination issues either. She stated she understood how it related to their whole argument.

Assemblyman Humke clarified both witnesses alleged there were deficiencies in health practices in the cutting of hair in the Washoe County jail. He noted they had not given specifics, and asked if the intent of their testimony was to show the jail was not maintaining health practices, and therefore should come under the barber licensure law.

Mr. Cooper noted people came to him from the public told him the tools were not sanitized, and non-disposable towels were used several times with out being cleaned. That was not sanitary according to the current law concerning barbering, and he thought that was a health violation. Razors were another concern.

Health regulations were not being followed. He hopped the bill did not pass, because it was a discriminatory bill.

Mr. Humke asked if the Washoe County Jail charged inmates for the haircutting.

Mr. Harris answered there was no charge.

Chairman Buckley closed the hearing on S.B. 8.

Mr. Goldwater wanted clarification of page 13, section 34, paragraph 7, regarding the barber pole.

Chairman Buckley reopened the hearing on S.B. 8, and asked Ms. Sakach to address Mr. Goldwater’s question.

Mr. Goldwater wanted to know what the barber board was attempting to solve with the addition of paragraph 7 in section 34.

Ms. Sakach stated a barber pole was the symbol of a barber. Hairstylists, cosmetologists, and beauticians were not barbers, and if they were to display a barber pole, it would be false advertisement. The barber pole was, the barbers’ symbol. They wanted it to remain strictly for the barbers. If an individual saw a pole in front of a beauty shop, they would assume there was a barber in that shop.

Mr. Goldwater asked if the barber board had legal rights to the pole, more specifically, if they had copyrights to it.

Ms. Sakach said it had been that way for a long time, it was a symbol of barbers, and it had always been. It was one of the laws the barbers had, that if an individual had a barbershop, a barber pole was required to be displayed in front of the shop. The barber board was trying to stop anybody from imitating a barber, or trying to falsely advertise, or mislead the public. There was a big difference in beauticians and barbers. She had many clients who had gone into beauty shops thinking they were going to get a barbers service, and they did not.

Ms. Sakach said she had inspected the jail in Washoe, and would answer any questions about that. Chairman Buckley noted the proposed amendment applied only to prisoners who cut hair, and asked if it was required that prisoners cut hair in the Washoe County Jail. Ms. Sakach answered the prisoners did cut each other’s hair, but it was not mandatory. Chairman Buckley asked if the proposed amendment dealt with a prisoner who voluntarily cut another prisoner’s hair, or if it dealt with the policy of the jail, which forced inmates to have their hair cut. Ms. Sakach noted the jails had as much sanitation as possible with the safety precautions. They could not use spray disinfectants, but they had ultra violet ray lights, and they did not use towels, they used "drapes." She noted she had provided them with "a couple" of extra items to make their conditions a little better. She stated she saw no unsanitary conditions. She noted when a prisoner was in "lock up", the inmate performed all services on himself, she claimed it was no different than a man shaving his face in his own bathroom, or a woman cutting her own hair.

Chairman Buckley noted she was not required to have a license to cut her own hair. Ms. Sakach agreed, and said that was why the barber’s board did not think the inmates should be licensed. Chairman Buckley was not certain she had followed Ms. Sakach’s analogy. Ms. Sakach stated she was only talking about the sanitation conditions, and she did not find the conditions to be unsanitary.

Mr. Goldwater stated he understood her concern about the barber pole, but asked if it was necessary to make it illegal, and a crime to display it. Perhaps they could consider making it a license violation rather than a misdemeanor. Ms. Sakach did not think it would be a crime. Mr. Goldwater pointed out in section 34 the wording "It shall be unlawful: For anyone to place a barber pole…" and noted that would be indicative of an unlawful act, and a crime. Ms. Sakach stated she did not see where it would be a crime to display a barber pole. Chairman Buckley assured her it would indeed be a crime.

Mrs. Segerblom noted many men had their hair cut in beauty parlors. Ms. Sakach did not have a problem with that as long as the customers were not mislead into believing they were getting barber style haircut. She also noted cosmetologists were not trained in "clipper work", nor were they able to shave as a barber did. Her organization wanted to distinguish barbershops from beauty shops.

Mr. Beers asked if there had been problems with barber schools because there were changes on the requirements of schools on pages 10 and 11. Ms. Sakach stated there was no barber school in Nevada, however it had been proposed, and through research, the board determined what was needed to have a "good barber school." The way the current law was, a person could get a registered license, work 18 months as a barber, and then obtain an instructor’s license. The board felt 18 months was not long enough; an individual was unqualified at that time, because of a lack of experience. That was the reason the board asked that individuals perform barbering for at least 5 years before obtaining an instructor’s license.

Mr. Beers asked if the board felt that by requiring a barber school to have 2 instructors even if the active enrollment only warranted one, was going to help get a barber college started in Nevada. Ms. Sakach stated she felt it would. She continued, when dealing with young people who had never held a straight razor, and for sanitary reasons, the extra supervision provided by the second instructor was needed. She noted that was common practice in schools in California.

Mr. Beers clarified Nevadan barbers generally received their training in California, and Ms. Sakach agreed. Mr. Beers pointed out page 14, section 35, subsection 3, lines 20 through 22 which prohibited the board to make additional rules and regulations and prescribe other sanitary requirements in addition to what was set forth in law. He was curious of the board’s motivation for that. Ms. Sakach was not certain why that section was to be eliminated, unless it was repeated wording.

Chairman Buckley suggested the burden was on the board to justify to the committee the need for each section in S.B. 8. She noted the record would be left open so additional written remarks could be submitted on justifications of each section.

Chairman Buckley closed the hearing on S.B. 8, and opened the hearing on S.B. 24.

Dr. Dean Hinitz, Member of the Nevada State Psychology Board, presented S.B. 24. He stated most of the bill was to clarify matters of board business that needed updating. Section 1, was proposed to increase the scope of practice; to formally specify the diagnosis and treatment of alcoholism and substance abuse to be included in the Nevada Revised Statute.

The second provision was to allow the board to operate with a simple majority of the board, this would mean the 5 person board could operate as a quorum with 3 people.

The third point was to revise the board’s licensing requirement to be consistent with the changes in the national licensing exam which was changing. There was a recognized competency exam in Nevada, and the exam and scoring system was being changed, and the board wanted to change the language to be consistent with that scoring system.

The fourth provision in S.B. 24 was to allow the board to take disciplinary action if a psychologist practicing in Nevada had been disciplined in another state.

Mr. Hettrick wondered why the 70 percent passing grade was to be struck, and asked if a passing grade was being established at the national level. Mr. Hinitz stated the national scoring system was being changed from a percentile to a standard score. Mr. Hettrick clarified the basic standard did not change, but the nomenclature changed.

Brian Gresh, representing the Nevada State Psychological Association, noted the Association was in support of S.B. 24.

Ms. Giunchigliani asked if the board had changed its position regarding "grandfathering in" certain individuals, at least to the extent that they could take the test, and be licensed if they passed.

Mr. Hinitz said he did not have that information with him, but could certainly find out.

Chairman Buckley closed the hearing on S.B. 24, and asked the committee to entertain a motion.

Chairman Buckley opened the hearing on BS47.

Robert Barengo, representing the Nevada Insurance Guaranty Association (NIGA), presented the bill. He explained the attorney for the Association, David J. Guinan, was not able to testify, but a letter from him was distributed which went through each provision of the bill, and Mr. Barengo summarized it (Exhibit D). He noted the word "statutory" needed to be added to line 41, page 2 so the line would read "if the claim is for statutory benefits under a policy of industrial insurance." 1663

Chairman Buckley asked, for the benefit of the new committee members, for a short history lesson on the functions of the NIGA.

Alice Molasky-Arman Commissioner of the Insurance Division, testified next. She was not able to tell the committee when the Guaranty Association act was first enacted, however, it had been there long before she came to the Division of Insurance in 1976. It was part of the national models acts there was a Guaranty Association within every state in the U.S. The purpose of the Association was to cover claims of an insolvent insurer, so the insured and the claimants would not be forced to accept the damages of no insurance being available due to insolvency. The manner in which that was done was the claims were made against the Guaranty Association. All insurers who were licensed in Nevada were assessed a proportion of the claims that were paid from the Guaranty fund. The Association existed though a board, which was appointed by the Commissioner. It met twice per year to consider claims issues, and it had an office that was active daily for the purpose of dealing with and administering claims.

Chairman Buckley clarified, if an insurance company went insolvent, the NIGA was a mechanism to allow claims by those who were insured or damaged and who were previously covered by insurance to be made whole if they were not able to recover from the insolent insurer.

Ms. Molasky-Arman agreed, but stated there were limits to the amount that was recoverable, and the limits in Nevada had consistently been policy limits or $300,000, which ever was less. Those limits were also consistent with the language of the other associations in various states.

Chairman Buckley asked what the current claims cut-off procedure was, if the statute was silent, and asked if that was why 18 months was needed.

Ms. Molasky-Arman concurred that it was silent. She explained orders of liquidation were generally issued after there had been other proceedings within the domestic state of an insurer. Usually a state would first take an insurer under receivership; the Insurance Division received notice of all receiverships, and of when the insurer was ordered into liquidation. The Insurance Division then triggered the mechanism of the association by giving them notice. The notice was always on a timely basis. They received it immediately, generally there was predecessor notice that that insurance company was a troubled company.

Mr. Goldwater asked if there was currently a problem that could be solved with that legislation.

Mr. Barengo stated the reason for the bill was to make certain changes to bring it into conformity with other areas, such as the months, there was not currently a finality in that.

Mr. Goldwater clarified an 18 month time limit was being put on, and SIIS was being put into the insurance guaranty association. Mr. Barengo agreed. Mr. Goldwater said there seemed to be a conflict because what would happen if an insurer went down, and there was a claim on the Guaranty Association, and it was post 18 months, there was a lifetime reopening on the SIIS claim.

Mr. Barengo stated there would have to be an adjudication of insolvency on those types of insurance companies first. If there was a lifetime reopening, the guaranty association would only be able to gather that amount of money that they were able to from the insolent company. The problem was not with the bill, but with the insurance companies.

Chairman Buckley asked if there were provisions that any other states had utilized, or in the insurance Commissioner’s model that would provide more protection for injured workers. For example, an injured worker’s claim was adjudicated, but in the year 2000 the company went out of business. 18 months passed, but there was a subsequent injury, so in the year 2005, the injured worker wanted recovery, but the statute of limitations precluded them from seeking recovery from the guaranty association. She asked if there was anything in the national model that would provide protection in that scenario.

Ms. Molasky-Arman was not aware of any. In fact, some state laws did not include coverage for worker’s compensation claims. She believed also Chairman Buckley’s concerns might be addressed in lines 41 and 42 on page 2, and noted that indicated the limitations on claims. It read the entire amount of the claim, if the claim was for benefits under a policy of industrial insurance, was covered and was not subject to the $300,000 policy limit, because there were no limits on workers compensation. Chairman Buckley noted the issue was not the amount, but the time limit.

Mr. Barengo stated an orderly method for carrying out the order of liquidation was provided; that was a claim must be filed within 18 months after the order of liquidation. However, it was a policy decision whether worker’s compensation claims could be taken out of the bill. The Guaranty Association decided that worker’s compensation claims should be in the bill.

Chairman Buckley asked the Commissioner her thoughts on that matter.

Ms. Molasky-Arman stated the bill could be amended to clarify that the 18 months did not apply to workers compensation claims.

Mr. Goldwater pointed out that because of the lifetime reopening provisions for worker’s compensation claims, there may be a conflict by imposing an 18 moth time limit on filing claims against the Guaranty Association.

Ms. Molasky-Arman noted when the insurer was a Nevada domestic, which was likely, the laws of the domestic state generally applied. It was very clear Nevada’s laws would take priority in those circumstances.

Chairman Buckley noted it was a policy issue, and perhaps that larger issue, would be properly considered elsewhere.

Ms. Molasky-Arman brought the committee’s attention to lines 41 and 42, on page 2 where it stated that the limitations of the claim did not apply to benefits under a policy of industrial insurance. Industrial insurance was currently defined to include worker’s compensation and liability insurance. Worker’s compensation was mandatory coverage, it was "no fault." Employer’s liability had always existed separate and apart from worker’s compensation, an employer was not obliged to purchase employers liability coverage.

Chairman Buckley closed the hearing on S.B. 74 and noted she would leave the record open to allow further clarification on that final point.

Chairman Buckley addressed AB636, which had been passed out of the committee. It dealt with a recovery trust fund for people who were victims of contractors and faulty new home construction. She had great difficulty trying to get straight answers from the contractor’s board on the number of contractors, so as to properly assess the fee level. She had come up with an alternative suggestion to the fee schedule that was approved by the committee, which resulted in a lower fee. It would require individuals under a $1million license limit to pay $100, and individuals with a license limit over $1 million, to pay $250 and those in the unlimited license category to pay $500. That was to be contrasted by what the committee approved that went from $50 to $1000 per year. The fees could be lowered, and Assemblyman Lee, who was a plumber spoke for some of the small service contractors, and thought that lower fee would create greater buy-in. The homebuilders indicated their support for the bill. Chairman Buckley could propose an individual amendment, or if the committee felt comfortable, since the fees were being lowered, she could also offer it as commerce and Labor amendment.

Mr. Hettrick noted even though the number looked lower, if 80 percent of the contractors were under the $1 million they were going to be required to pay $100 rather than the $50 or $100, and all of the contractors over $1 million were going from $1000 to $500 per year, so they received a break, while the "little guy got hammered." He appreciated the direction Chairman Buckley was going with the bill.

Chairman Buckley said perhaps the first category, not more than a $50,000 license limit the fee could be $50 per year. Mr. Hettrick agreed, and said that was the direction he wanted to go. He noted it would be very helpful to the committee to know from the contractors board, how many contractors there were in the state with a bond under $50,000. Chairman Buckley emphasized how hard she had tried to get that information, and was unsuccessful, she had asked 8 different times. Mr. Hettrick suggested the $50 fee be applied to contractors who were bonded under $100,000 because he did not think there would be many at the $50,000 level.

Assemblyman Humke noted there had been another bill passed that increased contractor’s fees considerably, and AB636 put a "double hit" on the small contractor. It was very displeasing to him that the contractors’ board would not provide basic information.

Chairman Buckley felt that was a reason for some of the increased interest in the contractors board, and more senate bills on the same topic were expected..

Assemblywoman Berman asked if language could be added to the bill so there could a count done once the contractors started to apply.

Chairman Buckley noted the contractors were required to report to the contractor’s board under that bill, so that information would be available next session. Additionally, a cap was added. For example, if the fund reach a level where it had more money than it had claims, the board had to stop collection of the fee altogether.

Chairman Buckley noted if the committee’s frustration with the contractors’ board continued, the board could be subpoenaed. However, Chairman Buckley was concerned if the board was subpoenaed, the information would not be in a coherent enough form for the committee to review it.

Chairman Buckley adjourned the meeting at 5:15 p.m.

RESPECTFULLY SUBMITTED:

Meg Colard,

Committee Secretary

APPROVED BY:

Assemblywoman Barbara Buckley, Chairman

DATE: