The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 7:00 a.m., on Friday, April 2, 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

Beverly Willis, Committee Secretary

OTHERS PRESENT:

Frederick Schmidt, Consumer’s Advocate, Chief Deputy Attorney General, Bureau of Consumer Protection, Office of the Attorney General, presented an amendment to S.B. 487 (Exhibit C). Mr. Schmidt claimed from section 11 on, the remainder of the bill had been stricken, noting S.B. 487 had been limited to the lifeline portion. Mr. Schmidt continued his explanation of Exhibit C. Senator Townsend and Mr. Schmidt spoke on rates for this lifeline service.

Margaret A. McMillan, Lobbyist, Director Governmental Affairs, Sprint, remarked about various changes requested in order to provide liability protection that has not existed in the past for wireless companies. James T. Endres, Lobbyist, Assistant Vice President, Law and Government Affairs, AT&T, concurred with remarks offered by Ms. McMillan. Brian G. Herr, Lobbyist, Executive Director, Nevada Bell, noted his support of language offered by Ms. McMillan and Mr. Schmidt.

Marcia C. Cobian, Lobbyist, Executive Director, Nevada Telecommunications Association, noted her organization did agree, in concept, with sections 1 through 10 of S.B. 487. She declared, however, there were portions that caused concerns. In particular, Ms. Cobian was concerned over what she termed "a negative campaign."

Judy M. Sheldrew, Chairman, Public Utilities Commission of Nevada (PUCN), offered various remarks concerning Exhibit C. Ms. Sheldrew requested Sharon Thomas, Director of Regulatory Operations, Public Utilities Commission of Nevada (PUCN), to elaborate. Ms. Thomas asserted language in portions of Exhibit C could pose problems for some rural carriers, in particular a wireless carrier. Mr. Schmidt declared he thought these problems had been addressed; however, he had no objections to further clarification.

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Dan Reaser, Lobbyist, Nevada Bell; and Gardner Gillespie, Lobbyist, Cox Communications, presented information on S.B. 207 and S.B. 440. Mr. Gillespie stated there had been proposals and counter-proposals on language for these pieces of legislation. Mr. Reaser stated it was his belief these discussions and workshops had been fruitful, however, a few more days would be needed to present the language that would bring these issues to a conclusion. Mr. Gillespie concurred with remarks made by Mr. Reaser. Senator Townsend noted all parties would need to reach a settlement, or the committee would determine what action to take.

The hearing was closed on S.B. 207 and S.B. 440 and opened the hearing on S.B. 375.

Pat Coward, Lobbyist, Michelen of North America, presented an amendment to S.B. 375 (Exhibit D). Mr. Coward stated all concerned had reviewed this amendment; concurred, and there were no problems. At the request of Senator Townsend, Mr. Coward, referring to Exhibit D, explained and clarified this amendment. Senator Townsend concluded the language in this amendment had been modified as to what a judge could do in a civil or criminal action about protecting trade secrets.

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Senator Townsend referred to a proposed amendment to S.B. 12 (Exhibit E), and information pertaining to Blue Cross and Blue Shield of Nevada (Exhibit F). Jon L. Sasser, Lobbyist, Statewide Coordinator, Washoe Legal Services, presented information on Blue Cross and Blue Shield (Exhibit G) along with "Senator O’Connell’s Question" (Exhibit H). Mr. Sasser, referring to Exhibit G and Exhibit H, proceeded with reasoning and explanation of these exhibits.

Referring to Exhibit F, Mr. Sasser and Senator Shaffer perused problems that could be caused; i.e., the possibility that citizens might suffer the loss of insurance. Mr. Sasser declared he did not think this was a very great possibility and only the management of Blue Cross and Blue Shield could answer this type of question.

Mr. Sasser answered questions posed by Senator Rhoads concerning whether or not Blue Cross and Blue Shield of Nevada had been in financial difficulty upon their move from Nevada. Mr. Sasser stated that Blue Cross and Blue Shield of Nevada had lost considerable amounts of money recently. Mr. Sasser continued touching on various aspects of possible assets and whether or not Blue Cross and Blue Shield of Nevada is designated as a charity.

Paula Berkley, Lobbyist, Truckee Meadows Human Services Association, offered comments on whether or not Blue Cross and Blue Shield of Nevada was solvent.

James L. Wadhams, Lobbyist, Blue Cross and Blue Shield of Nevada, asserted he was representing Blue Cross and Blue Shield of Colorado, and stated:

Mr. Wadhams continued, "I find this whole notion extremely fascinating, because what we are talking about here, is passing a law in Nevada to make the opportunity to go prospecting for gold in other states." Mr. Wadhams continued, "This is a law that is designed to affect foreign property, not Nevada property." Referring to Exhibit F, he claimed, "We have been unable to find a single state in America that has adopted a conversion statute that applies to foreign corporations." Mr. Wadhams maintained, "If we want to adopt a conversion statute for a Nevada business, that is the business of this Legislature. Adopting laws to change the business of foreign corporations, foreign citizens, residents of other states, is not our business." He gave further background and noted the Blue Cross and Blue Shield of Nevada had never been a charity; had never held charitable assets, and received no special consideration from the State of Nevada. Mr. Wadhams emphasized the fact that Blue Cross and Blue Shield was a commercial enterprise; not a charity and has never been a charity. Mr. Wadhams declared, ". . . this is extremely special legislation, this amendment, today [Exhibit E] clearly identifies this is not a matter of public policy, it is focused on a grab of business belonging to a foreign corporation." He maintained it was inappropriate for the Nevada Legislature to try to pass laws affecting Colorado. Senator Amodei and Mr. Wadhams discussed fine points of law dealing with this proposed legislation. Mr. Sasser reviewed further legalities pertaining to S.B. 12. As there seemed to be questions regarding the difference between "nonprofit" and "charity," Mr. Wadhams stressed, ". . . to confuse nonprofit with charity is contrary to Nevada law."

Senator Townsend stated he had a problem with the concept presented, as it was aimed at only one company. He stated, ". . . It is very tough for me to ask this committee, to rule on something that is so narrowly constructed." Senator Townsend continued, "I think the conversion that affects every company that does business, in the State of Nevada, is important."

Senator Townsend closed the hearing on S.B. 12. In order to accommodate several concerned citizens with questions regarding S.B. 438, an opportunity was provided to hear their concerns.

John Ohm, Concerned Citizen, and Darryl Reed, Concerned Citizen, presented information on S.B. 438 (Exhibit I).

Mr. Ohm stated he had questions pertaining to the definition of a qualified facility, specifically referring to the types of fuel to be used in a qualified facility. Mr. Ohm indicated the device he intended to introduce to the electric market does not have any of the fuel sources presented in S.B. 438. He presented a technical explanation for Ms. Sheldrew, who entered the conversation. Ms. Sheldrew explained there was information available, pertaining to federal codes/ regulations to facilitate the qualification process in order for an "independent" to be purchased by a utility for the provision of electric service. She noted this was a federal regulation designed to encourage the development of independent power producers, primarily using renewable energy. Mr. Ohm and Ms. Sheldrew continued a conversation, with Ms. Sheldrew presenting parameters for Mr. Ohm on the apparatus he would like to present.

Mr. Ohm and Senator Townsend deliberated the scope pertaining to other sections of S.B. 438 as they would apply to any enterprise with which Mr. Ohm and Mr. Reed might become involved.

Ms. Sheldrew interjected, "I will not go into it now, because I know we will get another opportunity, I have some concerns and questions about what the intent and indeed the impact of section 21 is, as it relates to new entrants."

Mr. Reed noted his support of Mr. Ohm’s endeavor. He pointed out special concerns over problems that might occur with the advent of the year 2000. Senator Townsend indicated those types of concerns would be better put before the Public Utilities Commission of Nevada, or the utility itself. Ms. Sheldrew noted she was uncertain as to what their technology was and exactly what sort of service it would provide. She did say her determination was Mr. Ohm and Mr. Reed wanted to enter the marketplace as soon as possible and they had concerns about any unnecessary delay. Ms. Sheldrew explained the proper procedure for becoming licensed; noting this is one of the first steps these gentlemen would need to take. Ms. Sheldrew claimed the year 2000 was not a major concern, however, time was needed to accommodate other factors of deregulation. She suggested Mr. Ohm and Mr. Reed meet with her at a later date for a more detailed explanation.

After presenting a short description of the unit he would like to offer, Mr. Ohm declared it was his hope his component would be especially useful for the residential customer.

As there was no further business, the meeting was adjourned at 10:40 a.m.

RESPECTFULLY SUBMITTED:

Beverly Willis,

Committee Secretary

APPROVED BY:

Senator Randolph J. Townsend, Chairman

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