The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 7:30 a.m., on Thursday, February 18, 1999, in Room 2135 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Senator Randolph J. Townsend, Chairman

Senator Ann O’Connell, Vice Chairman

Senator Mark Amodei

Senator Dean A. Rhoads

Senator Raymond C. Shaffer

Senator Michael A. (Mike) Schneider

Senator Maggie Carlton

STAFF MEMBERS PRESENT:

Scott Young, Committee Policy Analyst

Crystal M. Lesbo, Committee Policy Analyst

Ardyss Johns, Committee Secretary

OTHERS PRESENT:

Rosa Molina, Director, Latinos for Political Education

Chairman Townsend opened the meeting stating the committee today would address the tragedy that occurred in northern Nevada in regard to the explosion at the Sierra Chemical Company plant. He said because of the shortened legislative session, this hearing was being held so the committee could have a better understanding of the issue when the drafted bills came before the Senate. He outlined the Assembly Bills (A.B.s) to be addressed.

Drennan A. Clark, Major General, The Adjutant General of Nevada, Office of the Military, identified himself as the chairman of the Commission on Workplace Safety and Community Protection, created by then Governor Miller as a result of an explosion that occurred on January 7, 1998 at the Sierra Chemical Company plant. He stated the commission had made 29 recommendations, (Exhibit C) as a result of 6 hearings and other investigations it had undertaken. He said 15 of those recommendations were adopted by executive order and the remaining 14 were the subject of legislation, with four bills introduced so far. He declared Assembly Bill (A.B.) 98, which had already been heard before the Assembly Committee on Government Affairs, dealt with the Division of Emergency Management (DEM) overseeing the local governmental agencies to insure they have coordinated plans to deal with emergencies.

Chairman Townsend stated it is one thing to have a plan, but another to practice that plan, and asked General Clark if the agencies would be capable of implementing any given plan they might have, in a real situation.

General Clark replied the law already requires there be exercises to insure plans are operative, and so the only change recommended was that there be a central agency to act as a clearinghouse to ensure that all local agencies did, in fact, have plans.

General Clark continued, stating there would be a bill to address the fact there currently is no definition of explosives in the Nevada Revised Statutes, which were therefore not subject to inspection or regulation. Another concern of the commission, he added, was paying employees who work in explosive manufacture by piecework because of the potential of the employee working too fast and perhaps not taking the care needed in a dangerous occupation. He explained this was the reasoning behind requiring hourly rates for individuals doing this kind of work.

Another recommendation, General Clark added, is that training for employees who work in explosives manufacture or with hazardous materials, as well as all safety instructions, be in languages they could understand. He said if employees were primarily Hispanic, Korean, Vietnamese or any other non-English speaking nationality, training should be available in that language. The commission also focused on ensuring regular periodic inspection of explosive manufacturing organizations, and those organizations dealing with hazardous materials. He suggested city, county and state inspection agencies coordinate their schedules so that all inspection could be done at one time.

General Clark stated one of the problems with respect to the Sierra Chemical Company explosion occurred because the first responders did not have a good map of the facility and, therefore, were unable to identify what was supposed to be in any given building. He said some buildings were listed as storage for machinery and actually had chemicals stored in them. New legislation, he declared, would require good maps and even photographs of these kinds of facilities be furnished to emergency responders on an annual basis, so that buildings containing hazardous materials can be easily identified. The commission, he clarified, proposed legislation requiring manufacturers of explosives and hazardous materials be subject to the Chemical Accident Prevention Program (CAPP), already enacted and adopted in Nevada for some organizations dealing with chlorine and other dangerous chemicals.

General Clark outlined requirements for building a facility that would house explosive or hazardous materials. He said a permit to build would have to go through not only the building department, but fire, law enforcement, emergency and any other agencies that would become involved if anything went wrong. He added the zoning people would have to take into account what other facilities, homes, highways, etc. were in reasonable proximity to the proposed facility.

General Clark suggested the State Fire Marshal Division not be responsible for counties with a population of more than 50,000 but noted it was understood that the State Fire Marshal office did not have enough people or the expertise on board to carry out even that lesser responsibility. He also suggested a portion of the funds from tax on fire insurance premiums be utilized to hire experts and additional people needed to carry out those responsibilities.

In conclusion, General Clark suggested to the committee that a state organization, possibly the State Emergency Response Commission (SERC) would identify all of the investigations required by the various state and local agencies and when they were required, and then chart those inspections to ensure they occurred. He noted since SERC did not currently have that capability, it would have to be built in if they were to undertake that responsibility. He stressed these regulations did not apply to the mining industry since it is already regulated to a very strong degree, by both state and federal statute.

Ray E. Bacon, Lobbyist, Nevada Manufacturers Association, pointed out there were a lot of inconsistencies between state and federal regulations in this area and stated a lot of the intended legislation, and what has already been done by executive order, is to rectify these inconsistencies. He said that when this body, in the 1991 Legislative Session, created CAPP, explosives were left out of that law, which was probably a mistake.

Senator Shaffer remarked with the number of building codes, safety codes, fire codes and zoning codes in place in the past 20 years, it is very simple to approve or disapprove construction. He added, 30 years ago you could take a couple of laborers and do what you wanted to do, but not today.

General Clark replied that while he agreed with Senator Shaffer, it was amazing what a huge crack in the system the Sierra Chemical Company facility fell through in Washoe County. He declared even though annual inspections were supposed to be done by the Truckee Meadows Fire Protection District, none had been done in 4 years, and there were none scheduled to be done. He stated as an example, a boiler had been added to the facility without a building permit and without even notifying the state boiler people. He added, at one time a county official voiced concern that it was not done correctly and would close them down; but the next thing anyone knew, the boiler was operating and nothing was done.

Senator O’Connell asked if there is a certification process for someone opening a business dealing with explosives or hazardous materials and questioned whether any type of testing is done before a license is given.

Mr. Bacon replied he knew of no specific licensing or certification requirement.

Chairman Townsend asked General Clark as chairman of the commission, what, if any, explanation did the regulatory agencies, that apparently were not out there in an appropriate time frame, give in regard to why they had not concentrated on areas of potential tragedies such as this.

General Clark replied there was no adequate explanation, but in general, it was a lack of expertise and a lack of requirement on the part of some of the regulatory agencies to enact or adopt appropriate regulations requiring it.

Chairman Townsend asked General Clark if he was satisfied the issues were dealt with in the four bills presented thus far, were comprehensive enough. General Clark said he believed they were.

Senator Schneider asked if there is a law in place that prohibits building close to manufacturers of explosives and hazardous materials.

Mr. Bacon said national fire prevention codes, adopted by every county as well as the State of Nevada, dictate standoff distances and separation distances, but added, those were not abided by in the case of Sierra Chemical Company. He told the committee the reason the facility had not been inspected in 4 years was because the fire inspector’s office had lost the card for Sierra Chemical Company and therefore, even though they knew it existed, they had completely lost track of it for those 4 years. As a rule he concluded, the job of making sure those zoning restrictions were abided by had not been adequately done.

Senator Schneider asked if the state then should have more strict guidelines for the cities and counties, and Mr. Bacon replied the recommendations coming out of the Clark commission should resolve the problem. He explained that by issue of the state lands people being involved and by issue of adding explosives to the CAPP program so those facilities are inspected by Nevada Division of Environmental Protection (NDEP), inspections will be carried out by qualified personnel.

Ann Nelson, former Legal Counsel, Governor’s Office, stated:

Chairman Townsend asked that someone from the workers’ compensation system, who was active in this issue, give their perspective as to how it was handled and what took place.

Lenard T. Ormsby, General Counsel, Employers Insurance Company of Nevada, outlined the sequence of actions taken by his agency who learned of the explosion shortly after it occurred. He said an investigator was dispatched to the scene to make an assessment, and because he was bilingual, was able to assist the Washoe County Sheriff by translating statements from people on the scene. The investigator’s video camera was utilized by the Washoe County Sheriff also, and in fact, was used on the helicopter to take the first videotape of the scene.

Mr. Ormsby stated a nurse and two claims adjusters, one bilingual, were dispatched to Washoe Medical Center within an hour and a half of the explosion, arriving before the first injured workers were transported. He said those three individuals were there throughout that day and the next day assisting injured employees in completing claim forms and explaining the process and how it worked. He explained filing a workers’ compensation claim is not an easy process and therefore, meetings were held with the employees and their family members that week, utilizing bilingual claims adjusters.

Mr. Ormsby outlined the claims received stating there were three death claims, three employees hospitalized and, as of March 4, 1998, two were receiving temporary total disability (TTD). He continued, two injured workers were treated and released whom also received TTD, and two were treated but because a doctor did not take them off work for 5 or more days, did not qualify for TTD. He pointed out that a couple of people, who received medical treatment, did not file a claim and even though an attempt had been made to find those individuals, no benefits could be awarded.

Commenting further, Mr. Ormsby noted there had been requests for medical treatment and/or testing of family members of the employees but, because that is not authorized under the Nevada Revised Statutes, those requests had to be denied. Also denied were requests to transport the remains of the deceased outside the continental United States, he added, again, because it was precluded by law.

In review of the system’s response to the explosion, Mr. Ormsby summarized, given the magnitude of the tragedy and the language problems dealt with, the action taken was appropriate and professional.

Chairman Townsend inquired if, based on this experience, there were any procedures or policies Mr. Ormsby would further examine or pursue, to be better prepared should a tragedy of this magnitude occur again.

Mr. Ormsby responded he could think of no statutory change that would adequately or effectively affect how his office responded to this tragedy or how it would anticipate responding should another occur. He mentioned one of the things that came up during the Clark commission was the possibility of coming up against a language problem that could not be overcome, giving as an example a client whose entire workforce was Tongan. He said he knew of no one on his staff who speaks Tongan and inquired as to a source for the various languages and dialects of those living in our communities today.

Senator O’Connell suggested, as a possible source, the chamber of commerce. She said the one in southern Nevada keeps a list of volunteers who speak different languages and utilizes those volunteers for events such as tours and conventions. Senator Townsend added the language department at the university as another possible source.

Chairman Townsend asked for Mr. Ormsby’s insight into loss control.

Mr. Ormsby maintained while his agency has loss-control supervisors and experts, there are none trained or qualified in loss control for explosives. He said that even though his loss-control staff had, on a number of occasions, worked with management at Sierra Chemical Company, it had been as with any other work site, for workers’ compensation, preventing injuries, but not dealing specifically with explosives.

Chairman Townsend suggested because of the uniqueness and tremendous danger involved in this type of business, special attention might be called for, such as from the fire marshal, workers’ compensation or possibly, a federal agency.

Mr. Ormsby concurred stating it was in everybody’s best interest to prevent accidents. He said that to focus on those types of industries and what could be done to help prevent tragedies, would certainly warrant everybody’s time and concern.

Chairman Townsend inquired of Mr. Ormsby if there was litigation pending in regard to the explosion, and he replied that to his knowledge, none to which his agency was a party. Senator Townsend said he would not want to put anyone in a position of saying something they really should not talk about because of current litigation.

Bob Fulkerson, Director, Progressive Leadership Alliance of Nevada, expressed his appreciation to General Clark, Tim Crowley and the members of the Clark commission for the long hours they spent dealing with this issue. He said there were two points made during the Clark commission that he had not seen addressed in any bill draft request to date. The first was the requirement of a railroad to file an annual report of all the tons of hazardous materials and toxic chemicals being transported across Nevada. He said the other was the recommendation by the commission to look at Arizona statutes pertaining to additional penalties for willful or repeated violations causing employees permanent disability or death, with the penalty fine payments going to the worker or his family.

Chairman Townsend declared the committee had worked on a similar provision over the last two legislative sessions and a bill had been passed and signed. He asked Scott Young, Committee Policy Analyst, Research Division, Legislative Counsel Bureau, to retrieve a copy of that bill so a comparison could be made with the Arizona statute. Addressing the issue of a railroad’s requirement to file annual reports, he asked if there had been any testimony regarding what the federal government required a railroad to do for a state through which it traveled.

Mr. Fulkerson replied there had not and Senator Townsend stressed a need to look at what federal jurisdiction there is and why it was not addressed.

Tom Stoneburner, Director, Alliance for Workers’ Rights, reiterated Ms. Nelson’s and Mr. Fulkerson’s statements regarding the excellent job done by General Clark, the Clark commission and the Governor’s Office; and added their help was invaluable from a community standpoint.

Mr. Stoneburner said the community was shocked at the lack of regulation in an industry one would naturally expect to be extremely well regulated. He stated the Clark commission had put together a package of bills starting from zoning and planning, and going through a process in training, inspections and the coordination between agencies, as well as follow-up inspections and investigations between those agencies. What the commission found, he claimed, was that if any one of those areas is lacking, the result is a tragedy, and all other work the committee had done was nullified and went up in the blast. He stressed to the committee the importance of this complete package coming out of this session, and added it would go a long way toward making what is a very dangerous industry, a much safer part of our community.

Chairman Townsend responded stating the committee wanted to make sure they fully understood the entire issue so they could deal with the package. He referred to Exhibit C regarding the recommendations concerning the State Fire Marshal and asked why that office, as stated in the first item on page 9, has been unable to completely fulfill that recommendation.

Marvin Carr, State Fire Marshal, State Fire Marshal Division, said the bottom line was his office simply does not have the necessary staff. He pointed out with only one hazardous material inspector for the entire State of Nevada, it is impossible for the State Fire Marshal’s office to fulfill the responsibility outlined in the recommendation to which Senator Townsend referred.

Mr. Carr shared with the committee the results of a survey done in Winnemucca by one of his deputies, which showed that 61 percent of the 33 businesses inspected there would have required hazardous material permits. Based on that survey, he said, inspectors could be added to inspect all Nevada businesses and industries handling or storing hazardous materials, and could be paid through the permitting system, without impacting the General Fund. He surmised there were in excess of 50,000 hazardous material businesses in Nevada, all a potential threat to the general public, and stated his office, with only one inspector, was not even scratching the surface.

Senator Rhoads mentioned there were several chemical plants in his district, including one in Carlin and one in Battle Mountain. He said he had been through a couple of them and knew they had very strong regulations and wanted to know who currently inspected those facilities.

Mr. Carr replied that in the rural counties, if the local volunteer fire department did not inspect them, and in most cases, they did not, the facilities would not be inspected at all.

Mr. Fulkerson responding to Senator Rhoads’ question, stated when a history of the inspections done at the Battle Mountain facility was reviewed, the record was not good. Not only had they not been inspected at all in the last couple of years, they had been fined prior years by the Occupational Safety and Health Review Board.

Chairman Townsend voiced his pleasure regarding that portion of the report dealing with the mental health of those individuals impacted by the tragedies, as more and more people are becoming aware of the importance of an immediate response.

Rosa Molina, Director, Latinos for Political Education, stated for the record, "We are grateful to General Clark and the Clark commission and also to this committee for taking the time and the interest in this issue." She said on behalf of the Latino community, she concurred with Tom Stoneburner when he stated the whole package should be passed into law. She noted everyone working at Sierra Chemical Company were Latinos and stressed the difficulty they encountered due to the language barrier. Even though the company said the workers had received proper training, she added, even for those who do speak some English, it is hard to understand instruction in other than one’s own native language.

Chairman Townsend welcomed the survivors of the Sierra Chemical Company tragedy and offered condolences on behalf of the committee.

Chairman Townsend offered two bill draft requests (BDRs) for introduction.

SENATOR O’CONNELL MOVED TO INTRODUCE BDR 54-1033 AND BDR 54-164.

SENATOR SCHNEIDER SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

* * * * *

There being no further business, the meeting adjourned at 9:30 a.m.

RESPECTFULLY SUBMITTED:

Ardyss Johns,

Committee Secretary

APPROVED BY:

Senator Randolph J. Townsend, Chairman

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