The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 1:30 p.m., on Friday, March 12, 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 Lesbo, Committee Policy Analyst

Beverly Willis, Committee Secretary

OTHERS PRESENT:

Lenard T. Ormsby, General Counsel, Employers Insurance Company of Nevada Robert Crowell, Lobbyist, Farmers Insurance Group

Peter D. Krueger, Lobbyist, Nevada Petroleum Marketers and Convenience Store

Association

Today’s meeting was opened with the hearing on Senate Bill (S.B.) 290.

Lenard T. Ormsby, General Counsel, Employers Insurance Company of Nevada (EICON), noted similar legislation had been proposed and was pending. He stated he supported S.B. 290, as well as this similar proposed legislation. He asked the committee to hold S. B. 290 until Governor Guinn had presented his plan dealing with Employers Insurance Company of Nevada.

Chairman Townsend closed the hearing on S.B. 290 and opened the hearing on S.B. 313.

Robert Crowell, Lobbyist, Farmers Insurance Group, explained S.B. 313 would require the insurance company to offer medical coverage on auto insurance; however, each client would need to sign in the affirmative in order to be covered. Mr. Crowell presented a medical expense form (Exhibit C) to offer an example of medical provisions that might be provided. He noted the insurance commissioner has approved this form.

Barbara Gruenewald, Attorney, Nevada Trial Lawyers Association, requested the word "accepts" in line 19 on page 2, be changed to "denied."

The hearing was closed on S.B. 313 and opened on S.B. 295.

Susan Allen, Registered Nurse, Resolve of Nevada, noted her support of S.B. 295. Ms. Allen read her remarks into the record (Exhibit D). She pointed out infertility is a medically recognized disease and treatment is very expensive. Ms. Allen maintained insurance coverage would add just a few dollars per year to an insurance premium. She presented proposed amendments to S.B. 295 (Exhibit E).

Carol Newberger, Ph.D., Resolve of Nevada, offered remarks expressing her disappointment (Exhibit F). Ms. Newberger then presented remarks from Russell A. Foulk, M.D. (Exhibit G), and read these remarks into the record. Dr. Foulk’s letter reiterated the claim that infertility is, in fact, a medical disease and very expensive to treat.

Rosa M. White, Resolve of Nevada, expressed her frustration with an infertility problem, by presenting a scenario for the committee (Exhibit H).

Melissa J. Swanson, M.A., Executive Director Pen-Parents, Inc., and Resolve of Nevada, offered remarks concerning the high cost of treatments for infertility. Ms. Swanson presented a briefing paper on "Infertility and Insurance Coverage" (Exhibit I).

Cynthia K. Turnipseed, Resolve of Nevada, presented remarks (Exhibit J) claiming she felt the lack of insurance coverage was discriminatory. Ms. Turnipseed quoted a ruling from the United States Supreme Court to reinforce her remarks. At this time, Jeff Turnipseed, Resolve of Nevada, gave his viewpoint on insurance coverage (Exhibit K). Mr. Turnipseed maintained infertility treatment would not be a great burden to insurance companies.

Roberta A. Gang, Lobbyist, Nevada Women’s Lobby, expressed support of this legislation and urged the passage of S.B. 295.

Helen A. Foley, Lobbyist, Humana Healthcare Inc.; Alltel, and World Gaming Network, stated her opposition to S.B. 295. Ms. Foley noted her opposition stemmed from the fact this legislation expressed a mandate. She claimed the cost of an insurance rider covering infertility would be very expensive. Ms. Foley gave various examples of treatment that would raise health care expenses.

Senator Rhoads noted 13 states did require infertility insurance and inquired for information on a comparison of Nevada’s insurance with these states. Ms. Foley stated she would be happy to supply this information.

Janice C. Pine, Director, Governmental Relations, Saint Mary’s Health Network, and Nevada Association of Health Plans, declared there were a variety of insurance costs presented, maintaining these costs were borne by business people. She presented an article, "Who Pays for New Rights?" (Exhibit L). Ms. Pine proceeded to read pertinent portions into the record. She noted her organization, St. Mary’s Health Network, was a religious organization and would be prohibited from covering these procedures, in any form. Senator Schneider pointed out amendments (Exhibit E) had addressed this situation. Referring to Exhibit L, Ms. Pine maintained small business would be hard hit. Ms. Pine reiterated her opposition to S.B. 295.

Robert A. Ostrovsky, Lobbyist, Nevadans for Affordable Healthcare, and Nevada Resort Association, indicated this legislation would only impact 30 percent of policies written in Nevada. He pointed out some mandates could cause significant and substantial loss of (insurance) coverage by a great many employees in Nevada.

Senator Townsend closed the hearing in S.B. 295 and opened the hearing on S.B. 334.

Senator Michael (Mike) Schneider, Clark County Senatorial District No. 8, gave his reasons for this legislation and explained, . . . "they call mystery shoppers those people who go in and analyze the conduct of employees." Senator Schneider noted one of his constituents, who have a mystery shopping business, had offered a list of a national mystery shopping organizations without any private investigators included. According to Senator Schneider, a "spotter" is a person who would look for employee theft, claiming the mystery shopper does not fall in this category. He indicated those in the retail industry might offer support for this legislation, as they do not often need a private investigator; however, they do need market research.

Amy Halley Hill, Lobbyist, Retail Association of Nevada, indicated her support of S.B. 334. Ms. Hill reiterated comments by Senator Schneider and noted language on line 11 and 12 of page 2 of S.B. 334. She maintained mystery shoppers would not investigate any suspected criminal behavior of employees. Ms. Hill claimed the purpose of this legislation is marketing research and customer service. She stated it was not necessary for the mystery shopper to be licensed by the private investigator’s board.

Mr. Ostrovsky, speaking for the Nevada Resort Association, stated he would support this legislation. Mr. Ostrovsky stated his organization uses spotters, explaining the procedure. He claimed he had concerns if a mystery shopper found a criminal act as to how this could be handled.

Peter D. Krueger, Lobbyist, Nevada Petroleum Marketers and Convenience Store Association, maintained this legislation addressed, on a day-to-day basis, efforts his organization wished to accomplish; to maintain a clean, safe, courteous workplace for customers, as well as employees. Mr. Krueger commended Senator Schneider for his work on this legislation and noted his support for this legislation.

Carol Widmer-Hanna, Executive Director, Private Investigator’ Licensing Board, maintained those covered by this legislation should be properly licensed. Ms. Widmer-Hanna claimed there were 36 states that licensed mystery shoppers/private investigators. She noted, in checking, each has placed mystery shopping under the definition of private investigation. Ms. Widmer-Hanna noted employees of other retail establishments would not fall under the jurisdiction of the state. Senator O’Connell, Senator Schneider, and Ms. Widmer-Hanna discussed various aspects of what would constitute a mystery shopper. At this time an example of an advertisement for a company dealing with mystery shoppers was presented (Exhibit M). Senator Schneider suggested a new type of mystery shopper, perhaps designated as courtesy shopper, could be created. He concluded some organizations would be comfortable with mystery-shopper duties that would include evaluating customer service, but not to the extent they would investigate criminal or suspected criminal behavior. Ms. Widmer-Hanna maintained these duties seemed to encroach on duties of the private investigator.

Karen Stickel, President, Double Vision, presented a brochure (Exhibit N) outlining the scope of her organization and outlined work performed by her company; i.e., check on integrity of the employees, and employee presentation. She noted a criminal act did not need to be performed in order for repercussions to occur. Ms. Stickel stated her employees were not necessarily private investigators, however, were registered with the private investigator’s board. Ms. Stickel stated, "If this bill [S.B. 334] passes, Nevada will lose the ability to hold these companies accountable for the actions of their shoppers." She maintained, if this legislation passes, anyone from another state could come into the market with no experience, no accountability and no financial risk.

Further deliberation was offered on what comprised a mystery shopper, as opposed to a private investigator, between Senator Townsend and Ms. Stickle. Gina Crown, Owner, Crown, Stanley and Silverman stated she is a licensed investigator in Nevada. Ms. Crown maintained language in S.B. 334 would allow for potential abuse in an unregulated way. She claimed that industrywide and nationwide; mystery shopping was an investigative function. Ms. Crown maintained mystery shopping was regulated in most states. She asserted mystery shopping was a part of the investigative realm and to deregulate it could cause long-term problems.

Senator Townsend made inquiries whether or not an investigator/mystery shopper would come face to face with the accused. Ms. Widmer-Hanna stated each investigator/mystery shopper would be accountable. Ms. Crown claimed a private investigator, once licensed, may have as many unlicensed employees as they want. They must have a work card, a police check and must be registered with the private investigator’s board, and they are subject to liability policies. Ms. Crown stated, "None of this would exist in an unchecked, unregulated mystery-shopping situation."

Dorothy Williams-Jamal, President, Williams-Jamal Ltd., stated her private investigation firm dealt mostly in mystery shopping. She explained the process involved in her investigations.

Michael C. Rizer, President, Gold Coast Investigations/Nevada Investigators Association, noted some companies come to Nevada from out of state to work; however, when any type of disciplinary action is needed, these investigators/mystery shoppers are no longer available. Mr. Rizer declared no matter how they are identified; i.e., mystery shopper, private investigator, etc., they must be competent. He claimed those from another state often have no experience and no regulatory commission to oversee their actions.

Senator Townsend closed the hearing on S.B. 334 and noted S.B. 334 would be presented to a subcommittee. The hearing was opened on S.B. 12.

As an accommodation, Senator Townsend called Richard J. Panelli, Chief, Bureau of Licensure and Certification, Health Division, Department of Human Resources, to speak on S.B. 95.

SENATE BILL 95: Makes various changes to provisions relating to provision of benefits for industrial insurance. (BDR 53-386)

Mr. Panelli presented his written testimony (Exhibit O), pointing out several organizations who certify laboratories who perform drug testing. Mr. Panelli explained in what area each organization excelled.

Senator Townsend opened the hearing by referring to a proposed amendment to S.B. 12 (Exhibit P).

Jon L. Sasser, Lobbyist, Washoe Legal Services claimed the adoption of this legislation might raise constitutional issues. Senator Townsend requested information whether there were other jurisdictions that have a statute for reference purposes. Mr. Sasser indicating this is a unique situation, remarked, ". . . we have had a merger across state lines and a petition to convert in another state." He claimed he could not point out any exact situation. Mr. Sasser and Senator Townsend discussed methods to monitor this situation. Mr. Sasser referred to "Rebuttal to BCBS’S Testimony in Opposition to S.B. 12" (Exhibit Q) and information concerning a case involving the United States Court of Appeals, Ninth Circuit (Exhibit R). Mr. Sasser requested passage of this legislation, as amended.

James L. Wadhams, Lobbyist, Blue Cross and Blue Shield of Nevada, was next to testify on S.B. 12. He presented "Comments on S.B. 12" (Exhibit S). Senator O’Connell inquired of Mr. Wadhams whether or not his organization had been in business in Nevada as a business for profit, or nonprofit. Mr. Wadhams declared, "When Blue Cross of Nevada operated as an independent corporation, it was a nonprofit, taxable, non-charitable corporation." Senator O’Connell then asked how/when Blue Cross of Nevada became a charitable organization. Mr. Wadhams responded by giving background on how this came about. He pointed out the Nevada Legislature cannot pass legislation that will affect another state. Answering an inquiry by Senator O’Connell pertaining to allocation of any assets that would belong to policyholders in Nevada, Mr. Wadhams stated, "Under the merger law of this state [Nevada], those assets went to Colorado. . . . The technical ownership, of the assets when the merger occurred, went to the merged company, which is a Colorado company." It was concluded by Senator O’Connell and Mr. Wadhams a major part of any assets transferred would include intangible items; i.e., goodwill, and value of ongoing business. Mr. Wadhams stated, ". . . It is a Colorado issue, under Colorado law. . . ." He made further comments on his opposition to this legislation, noting Nevada could not affect Colorado law.

Alice A. Molasky-Arman, Commissioner, Division of Insurance, Department of Business and Industry, noted intangibles were not permitted to be considered as assets in an insurance company. She claimed insurance accounting required a more conservative approach under statutory accounting principles. Senator O’Connell confirmed the statement given by Ms. Molasky-Arman regarding intangible assets, with Ms. Molasky-Arman reiterating intangible assets were not considered. Senator Schneider and Ms. Molasky-Arman discussed other nonprofit insurance companies licensed in Nevada.

Thomas G. Stamos, Lobbyist, President, Nevada Workers’ Compensation Consultants, Inc., claimed, ". . .Blue Cross/Blue Shield has been strengthened, so I see this as an asset to Nevada and its policyholders and residents." He reiterated claiming the legislation would be a plus for Nevada policyholders.

The hearing was closed on S.B. 12 and the hearing was opened on S.B. 42.

John Wiles, Division Counsel, Division of Industrial Relations, Department of Business and Industry, presented a proposed amendment to S.B. 42 (Exhibit T). Mr. Wiles explained this proposed amendment would provide for a date certain for claims to be submitted to the funds, in particular the subsequent injury fund for self-insured employers. He explained although this proposed amendment would cover the self-insured employers, the general consensus would be what applies to one fund should apply to all funds.

* * * * *

Senator Townsend opened the hearing on S.B. 55.

Samuel P. McMullen, Lobbyist, Nevada Self Insurers-Association, explained proposed amendments he had for S.B. 55 (Exhibit U and Exhibit V). Mr. McMullen claimed one item his proposed amendment would accomplish would be to reinstate the Governor’s ability to appoint appeals officers. He continued his clarification pointing out differences between his proposed amendments and a proposed amendment presented by committee staff (Exhibit W). Answering an inquiry from Senator Townsend, Mr. McMullen noted Exhibit V would add to and amend Exhibit W. Exhibit U would need to be integrated into any amendment completed by the bill drafter.

Ms. Gruenewald noted her opposition to the proposed amendment Exhibit U. She also had concerns with Exhibit V. Ms. Gruenewald noted some of her concern dealt with the method of the appointment of the appeals officer. Ms. Gruenewald reiterated her opposition to the proposed amendments as well as to S.B. 55. Robert Balkenbush, Attorney, Public Agency Compensation Trust, pointed out his concerns with section 5 of Exhibit W, as it would pertain to the appointment of an appeals officer.

Mr. McMullen and Senator O’Connell discussed the length of time necessary to settle claims for injured workers, asserting a major outcome would be the speedy settlement of claims. Nancyann Leeder, Nevada Attorney for Injured Workers, Department of Business and Industry, noted in northern Nevada decisions were being completed in 3 or 4 months. In southern Nevada decisions, via a decision letter, are rendered within 30 days of the hearing.

* * * * *

Senator Townsend opened the hearing on S.B. 128.

Senator Townsend informed the committee members of the proposed amendment (Exhibit X) for S.B. 128. Senator Carlton, noted as a result of her subcommittee hearing on S.B. 128, Exhibit X was the result and she would recommend the passage of S.B. 128.

At this time, Robert R. Barengo, Lobbyist, State Contractor’s Board, stated:

Ms. Foley, speaking for Alltel, stated her organization wanted to be sure this legislation, as it pertains to telephone service, would include commercial mobile radio service. She claimed she would be happy to work with Mr. Barengo and Commissioner Soderberg.

* * * * *

Dino Di Cianno, Deputy Executive Director, Department of Taxation, noted his concern pertained to section 8 of S.B. 128. He voiced his concern over the scope of his department with regard to this legislation. In particular, Mr. Di Cianno asked if his department would be involved in the process of disconnecting. Mr. Barrengo indicated any amendment offered would dispense with this problem.

Walter R. Tarantino, Lobbyist, Nevada Corrections Association, noted this legislation had been initiated at an interim committee. Mr. Tarantino stated:

Mr. Tarantino noted it was his understanding that amendments were being offered by Raymond McAllister (Raymond C. McAllister, Lobbyist, Professional Firefighters of Nevada) and Ron Dreher, (Ronald R. (Ron) Dreher, Lobbyist, President, Peace Officer’s Research Association of Nevada). Mr. Tarantino stated, "We consider those friendly amendments and the Nevada Corrections Association, as drafters and having requested the bill [S.B. 132], do support the amendments of Mr. McAllister and Mr. Dreher."

Senator O’Connell and Mr. Tarantino discussed what budgetary arrangements might have been made. Senator O’Connell suggested Mr. Tarantino talk with the finance committee to see what would be necessary.

Mr. McAllister presented a proposed amendment (Exhibit Y). He noted language suggested by Mr. Tarantino dealing with correction officers had been kept. Language covering firefighters and police officers had been added. Mr. McAllister referred to the portion of Exhibit Y pertaining to "intent." He noted this portion should read, "The intent of this amendment is to provide employees that are currently employed, or are no longer serving employment with these public safety agencies." Mr. McAllister gave information on the cost of various tests that might be needed. He continued, claiming the purpose of this proposed amendment was to assure that any firefighter or police officer that is exposed to, and contracts a contagious disease, will be covered for treatment of these diseases. Mr. McAllister noted, "We would like to emphatically oppose any provisions in the bill [S.B. 132] dealing with heart and lung coverage. He claimed, "I would like to see S.B. 132 continue on and be a contagious disease bill and have all provisions in regard to firefighters heart and lung coverage be deleted from the bill."

Mr. Ormsby commented on remarks by Mr. Tarantino referring to a letter denying preventive treatment. Mr. Ormsby stated:

Mr. Ormsby maintained:

Mr. Ormsby noted, for Senator Townsend, EICON had claims from very few firefighter or law enforcement officers as opposed to the self-insured company. Mr. Ormsby acknowledged a problem did exist and did need to be addressed. He maintained the Legislature had declared medical personnel was entitled to preventative treatment; no one else.

Mr. Balkenbush referred to another proposed amendment (Exhibit Z), pointing out differences with Exhibit Y. Mr. Balkenbush asserted he would want an assurance that there is an exposure to which a diagnosis could be attached. He reiterated his desire a diagnosis should be tied to exposure in a work situation. Senator O’Connell pointed out to Mr. Balkenbush information was available on what is necessary in order to file a claim. She maintained this is very detailed information and should cover his concerns.

Ronna Hubbard, Captain, Nevada Firefighters Association, concurred with testimony given by Mr. McAllister. She emphasized concerns that volunteers would be included in this legislation.

Mr. Dreher noted his support for the legislation and amendments presented by Mr. McAllister. Mr. Dreher then offered answers to questions posed by Senator Amodei, at an earlier meeting, in a letter (Exhibit AA). He asserted information had been provided in Exhibit AA, showing at this time, no police officers were receiving disability for heart and lung complications. Mr. Dreher stated, "We are opposed to any changes in the heart and lung, other than what has been put forth in the amendment." Senator Amodei thanked Mr. Dreher for his prompt response to his earlier questions.

Randy L. Oaks, Lobbyist, Nevada Peace Officers Research Association, stated at the request of Mr. Dreher, to accommodate Senator Amodei, he had checked in the Las Vegas area for information pertaining to any officers who might be affected with the heart and lung problem. According to Mr. Oaks there were two or three retired officers with heart claims pending.

Eloise Koenig, Self-Insurance Coordinator, Workers’ Compensation Section, Division of Insurance, Department of Business and Industry noted all self-insured employers are required to have an excess insurance policy. Any time a claim goes over a specific amount, this excess policy would be in effect. Senator O’Connell and Ms. Koenig perused amounts and costs of these policies.

* * * * *

After the vote, Scott Young, Committee Policy Analyst, Research Division, Legislative Counsel Bureau, requested clarification from Senator Townsend, by asking,". . . The motion was to separate it out. Do you want us to leave that portion in the bill and take everything else out, or take the portion you passed out of the bill [S.B. 132] and put it someplace else?" Senator O’Connell replied, "No, to leave the portion that we just have discussed today, the contagious disease. Separate out the heart and lung. Mr. Young asked, "And by separate out, do you mean to remove it and delete it, or to put it someplace else?" Senator O’Connell replied, "Remove it and delete it from this bill." Mr. Young replied in the affirmative and expressed his thanks.

RESPECTFULLY SUBMITTED:

Beverly Willis,

Committee Secretary

APPROVED BY:

Senator Randolph J. Townsend, Chairman

DATE: