The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 9:40 a.m., on Monday, March 8, 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

Kathryn Lawrence, Committee Secretary

OTHERS PRESENT:

Frederick Schmidt, Chief Deputy Attorney General, Bureau of Consumer Protection, Office of the Attorney General, stated his office drafted this bill. He stated since there had been no antitrust laws in the state there needed to be a statute that was current. He explained this bill is for the General Fund money that the antitrust unit receives which can also keep the unit functioning. He explained in section 1, subsection 2, paragraph (a), there is a modification of statutes so that recoveries received between bienniums would be allowed to be used by the unit for the purpose of antitrust activities. He clarified that section 3, subsection 3 removes a cap that had been in legislation when it was first adopted that prevented a specific amount of money from being exceeded. He justified there would not be an impact in the General Fund and emphasized this would provide more money in the interim, which would make it possible to pursue more antitrust cases.

Kate Marshall, Senior Deputy Attorney General, Bureau of Consumer Protection, Office of the Attorney General, pointed out the way the statutes are currently written, it is probable that indirect purchasers could not have an antitrust remedy in court. She emphasized if there were two manufacturers that manufactured orange juice and sold the orange juice to a chain of distribution, then the consumer would buy the orange juice. She stressed if those manufacturers fixed the price on the orange juice to raise the price of the orange juice, the consumer as an indirect purchaser from the grocery store could not bring an antitrust action for paying too high a price for orange juice. She explained because it was purchased from the grocery store and not from the manufacturer, the consumer would not have a claim. She stated, for example, in April 1995, a private law firm brought a case against infant formula manufacturers who had price fixed an infant formula. The law firm was denied the ability to bring that suit in Nevada because the people who bought the infant formula were indirect purchasers; which is similar to customers who buy orange juice at the grocery store would be indirect purchasers. She declared a number of states have recently filed a case against generic drug manufacturers for increasing the price of generic drugs. She stressed that Nevada cannot parcipitate in that case because the drug manufacturers do not sell directly to the consumer.

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The Chairman closed the hearing on A.B. 108 and opened the hearing on A.B. 115.

James F. Nadeau, Lobbyist, Captain, Washoe County Sheriff’s Office, stressed the change in the law is to extend the permit from 1 year to 5 years on the renewal.

Debra Carr, Chief Records Clerk, Washoe County Sheriff’s Office, stated the sheriff’s office is in favor of this bill to achieve standardizing of the work permits, including fingerprinting the applicants each time they apply for a locksmith permit. She defined if a locksmith is arrested afterwards, his/her permit could be revoked at that time instead of the sheriff’s office having to wait for their 5-year renewal. She stated this bill would also allow the applicant to pay a one-time charge every 5 years.

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Chairman Townsend closed the hearing on A.B. 115 and opened the hearing on S.B. 42.

Amy Halley Hill, Lobbyist, Nevada Self-Insurers Association, submitted Attachment A-1 of Exhibit C. (Original is on file in the Research Library), titled "Work Session Document, Senate Committee on Commerce and Labor, 1999 Nevada Legislature," and then introduced Roger Bremner.

Roger Bremner, Administrator, Division of Industrial Relations, Department of Business and Industry, stated he was in favor of this bill. Senator O’Connell asked if he saw any problem with the smaller employers doing this. Mr. Bremner stated no.

Nancy Wong, Division Counsel, Division of Industrial Relations, Department of Business and Industry, stated this bill would prevent the private carrier subsequent injury fund from becoming established. She stated for the record that the purpose of the amendment is to bring an end to the subsequent injury fund and the end to submission of claims. She suggested the bill title could be rewritten to reflect this intent.

Lenard Ormsby, General Counsel, Employers Insurance Company of Nevada, referred to the Attachment A-1 of Exhibit C of the work session document and read the last sentence, "Section 1 (NRS 616B.540(4)) should also be amended to be consistent with the change to Section 2." He asked for the word "should" to be deleted and to add the word "must". He asserted it was necessary for the injury funds to expire at the same time.

Thomas G. Stamos, Lobbyist, Workers Compensation Consultants Incorporated, stated an employee could actually suffer mental anguish from the passage of this bill and asserted that future employment for an individual could be difficult. Senator O’Connell stated that nationally the trend is to do away with these funds. She asked if the committee could do a study to see how many people are being subsidized by these funds. Ms. Wong stated the self-insured employers have been submitting claims to the Division of Industrial Relations (DIR) for 2 years. She explained the claims are still being accepted by the insurer and the claimants are still receiving the same amount of benefits. She asserted the problem is who pays for the claims.

Chairman Townsend closed the hearing on S.B. 42 and opened the hearing on S.B. 95.

Barbara Gruenewald, Attorney, Nevada Trial Lawyers Association, referred to her Attachment C-1 of Exhibit C and stated she would like the same amendment to be applied in NRS 617.366, subsections 1 and 2.

Donna Sweger, Supervising Attorney, Nevada Attorney for Injured Workers, Department of Business and Industry, stated the Attachment C-1 of Exhibit C should remove "to the satisfaction of the insurer;" and the end of the sentence should read, "unless information submitted by a physician or chiropractor establishes that the subsequent injury."

Scott M. Craigie, Lobbyist, Liberty Mutual Insurance Group, read his Attachment C-3 of Exhibit C of the work session document.

Fred L. Hillerby, Lobbyist, Associated Pathologists Laboratories, stated this amendment was first offered in 1997. Chairman Townsend asked Mr. Hillerby if the U.S. Department of Health and Human Services has statutory authority to hold regulatory hearings to raise the standards. Mr. Hillerby stated they could do that, but they have not focused on toxicology. He stated he has been assured the injured worker will not lose benefits regarding drug testing.

Robert A. Ostrovsky, Lobbyist, American Toxicology Institute, stated in 1991 when Senate Bill (S.B. 192 of the Sixty-sixth Session) was introduced, a representative of the Associated Pathologist Laboratories testified there is more quality-control external proficiency testing in all of the areas to ensure quality test lab results required by the State of Nevada. He stated he did not believe that someone out of state should test these laboratories, but the Health Division should still test them. He referred to Attachment E-1 of Exhibit C and suggested the amendment be deleted.

Dan R. Berkable, Lobbyist, American Toxicology Institute, stated the Health Division is the only accrediting agency in Nevada to license laboratories to perform testing. He stated that having extraneous requirements in the law would make it difficult to license, and would exclude the American Toxicology Institute, which has already been licensed by the accrediting agency in Nevada. He urged if further standards need to be met by the laboratories, they need to be addressed to the Health Division.

W. Craig Brown, Toxicology Laboratory Manager, Associated Pathologists Laboratories, read his statement (Exhibit D) and stated he is opposed to the bill. Ms. Hill stated she is opposed to both amendments. Jack Kim, Lobbyist, Sierra Insurance Group, stated he is also opposed to these amendments.

Mr. Ormsby stated he was opposed to Attachment C-1 of Exhibit C. Ms. Swagert stated their opinion holds greater weight than the insurance company making the determination. She stated for the record that the Nevada Attorney for Injured Workers did not propose S.B. 192 of the Sixty-sixth Session. She explained the language change in S.B. 95 could create a problem for the hearing officer in the way the bill is worded.

Magda Karpuk, Director, National Council on Compensation Insurance (NCCI), stated she agreed with Mr. Ormsby. She pointed out group self-insured and individual self-insured are not required to report to NCCI.

Mr. Stamos stated he could foresee problems with this bill, if passed. He stated it will be harder for individuals to receive disability and there will be more litigation in the future.

Chairman Townsend closed the hearing on S.B. 95 and opened the hearing on S.B. 133.

Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association, stated he would like the proposed Attachment E-2 of Exhibit C to be withdrawn from consideration. He asked the committee to consider Attachment E-3 of Exhibit C. He stressed the amendment should read "published" rate instead of "subcontractor’s" rate.

Mr. Stamos stated that a contractor’s rate is lower than the published rate because of good experience. He remarked if the published rates are not lower than the wrap-up rate, the subcontractor may not be able to benefit from his own good experience. He stressed this could be penalizing the safe subcontractor. He emphasized he would like to recommend the wording to read "Coverage should be noncoercive, that is whenever the subcontractor’s rate is lower than the published subcontractor’s rate for the risk, the subcontractor retains own insurer and coverage." He emphasized it should be specific to that rate for that subcontractor.

The meeting was adjourned at 11:00 a.m.

RESPECTFULLY SUBMITTED:

Kathryn Lawrence,

Committee Secretary

APPROVED BY:

Senator Randolph J. Townsend, Chairman

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