The subcommittee meeting of the Senate Committee on Commerce and Labor was called to order by Chairwoman Maggie Carlton, at 4:10 p.m., on Thursday, February 25, 1999, in Room 2144 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. There was no Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

SUBCOMMITTEE MEMBERS PRESENT:

Senator Maggie Carlton, Chairwoman

SUBCOMMITTEE MEMBERS ABSENT:

Senator Ann O’Connell

Senator Raymond C. Shaffer

STAFF MEMBERS PRESENT:

Laura Adler, Committee Secretary

OTHERS PRESENT:

Chairwoman Carlton opened the subcommittee hearing on Senate Bill (S.B.) 128.

Robert R. Barengo, Lobbyist, Attorney, State Contractors’ Board (SCB), introduced Fred Hillerby, Lobbyist, State Contractors’ Board, and John Sapp, Member, State Contractors’ Board. He stated he had another disclaimer. He said he also represents the Board of Medical Examiners and they are in the bill on page 2, section 3. On behalf of the Board of Medical Examiners, Mr. Barengo asked their name be removed from this bill and not placed in any other bill.

Mr. Barengo continued the SCB is in support of the bill, but has a suggested amendment to the bill. The SCB is asking to rewrite the provision by putting in language to the effect:

Mr. Barengo concluded the last suggested revision was a standard provision found throughout the Nevada Revised Statutes (NRS).

Fred L. Hillerby, Lobbyist, State Contractors’ Board, said although he was not here to represent SCB, he had a conversation with the chairman of the public utilities commission who expressed concern with the way the bill was written.

Chairwoman Carlton asked if there was anyone else who wanted out of this bill at this time.

Mr. Barengo responded he did not know of anyone else, but pointed out this was a new policy and a lot of people are concerned. He suggested the bill be limited to one board who would enforce the bill’s provisions. He said the contractors’ board was a sophisticated board with a large staff, and it knows how to operate under chapter 233B of NRS, the permissive procedures act. Mr. Borengo stated the contractors’ board understands the procedures. Other boards that are smaller in nature and more part-time may not be able to function through those requirements. Mr. Barengo suggested enforcement be limited to one board who could handle the provision.

John Sapp, Lobbyist, State Contractors’ Board, said, for example, there was an investigation of unlicensed advertising, which involved a telephone with eight separate lines and call forwarding back to the same number belonging to an unlicensed contractor. He said at one point the man was arrested in California and sentenced to prison. Mr. Sapp emphasized until recently that contractor was still conducting business through that phone number from prison. Ultimately, with the help of the telephone company in Las Vegas the number was disconnected.

Mr. Barengo explained the contractors’ board has been under some criticism for not actively and vigorously pursuing their mission and goals. This bill is a tool the board would like to have to protect the public by getting unlicensed contractors out of the business.

John Meder, Committee Policy Analyst, Research Division, Legal Counsel Bureau, inquired of Mr. Barengo clarification regarding deletion of section 2 altogether. Mr. Barengo replied that was correct, the Board of Medical Examiners does not want to be part of this bill.

Mr. Meder queried as to whether Mr. Barengo would be working on more specific language for the bill. Mr. Barengo acknowledged that he has roughed out some language, and he would work with the bill drafter for specific language.

Don Soderberg, Commissioner, Public Utilities Commission of Nevada (PUCN), expressed the PUCN’s concern with the due process element of the bill. In the initial draft there were a number of state and municipal agencies to be involved. All of them have different processes, raising concern that people’s telephones would be turned off in some instances where it would violate due process. He said from past experience, oftentimes it was debatable whether someone was properly licensed or not. Mr. Soderberg noted the Transportation Services Authority (TSA) was given the power to petition the court to turn off people’s phones in the previous legislative session, and it has not been used. Mr. Soderberg pointed out one reason was that debatable inference; and the other was so much due process was written into the bill, it became cumbersome, and not cost-effective to pursue violators. Mr. Soderberg urged some level of due process be included in the bill. He stated it seemed logical that the PUCN should be the central board, but the process to handle the regulation and what resources would be involved has yet to be worked out. Mr. Soderburg emphasized he was not asking for the PUCN to be the agency but simply pointing out there was a process as currently written.

Brian G. Herr, Lobbyist, Executive Director, External Affairs, Nevada Bell, conveyed Nevada Bell was not taking a position on the intent of the legislation. Nevada Bell’s only concern was that the legislation in its final form should include what Nevada Bell calls the "good faith reliance clause." This eliminates the liability for the telephone companies who would disconnect a number as ordered by one of these boards or the PUCN, should the bill end up in that form. Mr. Herr indicated he saw the language Mr. Barengo was proposing for the bill, and it appears to address Nevada Bell’s concern.

Margaret A. McMillan, Lobbyist, Director, Governmental Affairs, Sprint, said she had previously expressed concerns about the bill, and those concerns are still there because Sprint has not seen the modified language. Sprint also has the same due process concerns. Ms. McMillan stated from a personal perspective she has a concern about the reference to a ‘card’ in the bill. She has personal rental property and for the convenience of her tenants and in filling the rentals, her home phone number was on a card. She also used her home phone number when advertising vacancies in the newspaper. It seemed to her the way the bill was written, she could be singled out as not licensed and possibly have her telephone disconnected. Ms. McMillan continued the PUCN was a good way to handle enforcement; however, they indicated a staffing and funding problem to be addressed.

George William Treat Flint, Lobbyist, representing Wedding Chapels of Northern Nevada, remarked he would not go over items in his previous testimony, but he did have a suggested amendment. If sections 5, 6, and 7 are kept in the bill it is a "double-edged" sword in which any town board, county commission, or city council can look at advertisements in their yellow pages, and decide who are not advertising in their community. He said the suggested amendment he had already given the committee would help address that problem. Mr. Flint said Mr. Barengo indicated no great dedication to those final three sections in the bill. If this legislation was to be built around the contractors’ board, then the committee should be able to take that section out. Mr. Flint pointed out that in today’s Reno newspaper there were 20 ads for businesses located in Reno that cover the entire state, and any county commission or board could say those businesses are advertising in their community without a license. He emphasized as it exists it seems a dangerous concept, and suggested the committee consider removing those sections, or using an amendment to clarify those sections of the bill.

David Edwards, M.D., Lobbyist, Board of Homeopathic Medical Examiners, said Mr. Barengo may have resolved their concerns regarding due process, and dual-licensed physicians being caught in the middle.

David Horton, Lobbyist, Nevada Homeopathic Medical Association, conveyed the association’s immediate concern with the bill was chapter 630 of NRS. He said the association sees it as a cursory process where a regulatory board would make a determination putting in motion possible serious and damaging consequences for other people. Those people could be subjected to a board who has no jurisdiction over them as chapter 630 of NRS indicates, without effective legal review before the damage is done. Mr. Horton continued this points to a serious concern for a disclaimer of responsibility. But a disclaimer of responsibility does not fix the problem; it merely bars the remedy. He said it underscores the nature of many of the association’s concerns; namely starting to shave some of the constitutional requirements of due process, and how to make sure everybody was heard in a court of legitimate jurisdiction before the damage was done.

Mr. Meder inquired of Mr. Horton that Mr. Barengo was talking about section 2 which deals with chapter 628 of NRS, and Mr. Horton had expressed concern regarding chapter 630 of NRS.

Mr. Horton replied he is concerned about chapter 630 of NRS, but his remarks had to do with the due process problems of any regulatory agency getting into this fray. It seems a handy tool to help weed out unlicensed practitioners, but the bill also contains a lot of pitfalls.

Kent F. Lauer, Lobbyist, Executive Director, Nevada Press Association (NPA), iterated when he first viewed the bill he did not see a lot of danger for the newspaper members; however, NPA is concerned any time the regulation of advertising is mentioned. He stressed there was always the potential the newspaper would be forced to become a police agent for the state. How can it be determined someone is engaging in unlawful advertising. He surmised the regulating agency may want to look through a newpaper’s advertising contracts. Of course, the newspapers would object to that. The danger of having the newspaper police the ads they run, especially in the classified section, has come up in past sessions. Mr. Lauer emphasized the purpose is to target unlicensed contractors, make sure the regulating agency goes after the contractors and does not pull the newspapers into the equation.

Chairwoman Carlton stressed that was why the committee was talking about pulling the phone number, so no one could get through to them, because the prepaid ad would still be in the newspaper. She said the committee understands there are many people with the same concern.

Dino DiCianno, Deputy Executive Director, Department of Taxation, stated taxation was surprised to see section 8 in the bill. He said taxation’s concern was section 8 may make the Department of Taxation the policing agency for advertising. He said in NRS 360.490 taxation’s role and function now was to ensure that businesses have the necessary permits to operate a business. It makes no difference how or where they advertise or what they sell. Mr. Dicianno said if taxation has to administer a new program, it would be necessary to augment the department’s budget to perform this function. He stated taxation has no position one way or the other concerning the bill, only an administrative concern.

Chairwoman Carlton stated after the information and the revised bill with the amendments are out for review and a work session, then the committee will decide what to do with the bill.

Hearing no further testimony, Chairwoman Carlton adjourned the meeting at 6:16 p.m.

RESPECTFULLY SUBMITTED:

Laura Adler,

Committee Secretary

APPROVED BY:

Senator Maggie Carlton, Chairwoman

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