The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 7:00 a.m., on Friday, April 9, 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 Suess, Committee Secretary

OTHERS PRESENT:

Chairman Townsend opened the hearing on Senate Bill (S.B.) 463.

Robert Bayer, Director, Department of Prisons, testified that S.B. 463 would correct the current inequity in industrial insurance coverage for non-uniformed peace officers employed with the Department of Prisons.

Lenard Ormsby, General Counsel, Employers Insurance Company of Nevada, expressed concern with any bill affecting benefits that would be effective July, 1, 1999 because the National Council on Comprehensive Insurance (NCCI) has already filed rates, which would only take current benefit packages into consideration. Mr. Ormsby asked if the effective date could be changed to January 1, 2000, which would give NCCI an opportunity to refile the rates under the new benefit schedule.

Robert J. Gagnier, Lobbyist, State of Nevada Employees Association, testified in support of this bill as well as the changes in subsection 7 of the bill.

Chairman Townsend closed the hearing on S.B. 463 and opened the hearing on S.B. 495.

Mr. Ormsby stated that S.B. 495 was a collaborative effort between the Department of Industrial Relations (DIR), the Division of Insurance (DOI), and the Employers Insurance Company of Nevada (EICON) to prepare for the opening of the competitive market. Mr. Ormsby explained that issues concerning EICON have been satisfied in S.B. 37 and S.B. 495 would only deal with DIR and DOI issues.

Alice A. Molasky-Arman, Commissioner, Division of Insurance, Department of Business and Industry, stated there are three provisions in S.B. 495 that she would like to preserve, section 13, section 14, and section 16 to aid in regulating the workers’ compensation insurance industry after July 1, 1999.

Donna Sweager, Supervising Attorney, Nevada Attorney for Injured Workers, Department of Business and Industry, noted that section 28 of S.B. 495 discusses fees for subpoenas, and she proposed an amendment for section 28 (Exhibit C). Ms. Sweager explained that this change includes the rules for civil procedure regarding subpoena and service, which exempts a State of Nevada agency from issuing fees and mileage at the time of subpoena. Ms. Molasky-Arman and John F. Wiles, Division Counsel, Division of Industrial Relations, Department of Business and Industry, stated, they have no objections to this change.

Mr. Wiles submitted a proposed amendment to S.B. 495 (Exhibit D), which would make a few technical corrections to the bill. Mr. Wiles added that section 1 of the bill would give DIR responsibility over employee leasing companies along with the other changes throughout the bill to make this change consistent.

James L. Wadhams, Lobbyist, Southern Nevada Homebuilders Association; American Insurance Association, US Bank Plaza; and Nevada Independent Insurance Agents, asked the committee to consider an amendment to sections 18 and 34 (Exhibit E). Mr. Wadhams explained this amendment addresses the provision of a maximum deemed wage, which Mr. Wadhams claimed Nevada is the last state to have this provision, and this amendment would eliminate this.

Chairman Townsend asked if the comment that Nevada is the last state to have this provision is true. Clifford N. King, Supervisor, Property and Casualty Section, Division of Insurance, Department of Business and Industry, stated that is correct. Mr. Ormsby stated this is a public policy issue, and having the effective date at January 1, 1999 makes it consistent with rate changes.

Harvey Whittemore, Lobbyist, Nevada Resort Association, and Robert A. Ostrovsky, Lobbyist, Nevadans for Affordable Health Care, asked the committee to postpone action on the bill until they could review Mr. Wadhams’ proposed amendment.

Chairman Townsend agreed and closed the hearing on S.B. 495 and explained he has concern with the language in S.B. 463, which would give peace officer status to non-uniformed employees that are designated by the Director of Prisons. Scott Young, Committee Policy Analyst, Research Division, Legislative Counsel Bureau, explained that there is a definition of a peace officer in statute which delineates categories for certain eligibilities afforded to peace officers, but would have to research if a director can be afforded an Executive or Legislative Branch responsibility. Senator Carlton outlined that she believes Mr. Bayer was addressing the correctional caseworkers working inside the prisons. Senator O’Connell pointed out that she dealt with a bill with similar language regarding the director appointing peace officers.

Chairman Townsend opened the hearing on S.B. 94, and referred to a memorandum composed by Crystal Lesbo, Committee Policy Analyst, Research Division, Legislative Counsel Bureau, regarding subrogation formulas (Breen formula) (Exhibit F).

Don Jayne, Lobbyist, CDS of Nevada Inc., stated this is a very complicated issue and does not know if the differences on both sides of the issue will ever come to a compromise. Chairman Townsend asked if the Breen formula would help bring both sides of this issue together. Bill Bradley, Lobbyist, Nevada Trial Lawyers Association, stated that would be correct, but the difficulty has been to achieve a consistent but flexible approach.

Danny L. Thompson, Lobbyist, American Federation of Labor/Congress of Industrial Organizations, commented that he does not think the Breen formula is perfect, and this proposal (Exhibit F) removes the flexibility of the system to negotiate. Mr. Thompson stated he thinks this proposal is more unfair to the injured worker than the Breen formula.

Senator O’Connell stated for the record:

Mr. Thompson stated he agreed and understands that.

Senator Shaffer queried why a provision could not be made to say that under no circumstance would the injured worker come out with less money than the insurer or the attorney. Mr. Bradley commented they have tried to evaluate that, but because of the extreme costs with product-liability cases it is difficult to achieve this goal and does not think this could be mandated. Mr. Jayne pointed out that it was not their position for S.B. 94 to reduce the flexibility, and it was their intent for negotiations for arranged settlement to be the preferred method. Mr. Jayne explained that the Breen formula and the formula in S.B. 94 would have been the default if no agreement was made up front.

Senator Shaffer reiterated that there are not many attorneys as compassionate as Mr. Bradley, and these uncompassionate attorneys are his concern. Mr. Bradley replied that he would be bringing this issue to the attorneys to whom Senator Shaffer is referring.

Mr. Whittemore commented on Mr. Wadhams’ proposed amendment to S.B. 495 and stated it will not cause a major fiscal problem for his clients.

Mr. Gagnier commented on the question to S.B. 463 relating to the power of the director of prisons to name non-uniformed peace officers. Mr. Gagnier noted that this is a peculiar issue and Nevada Revised Statutes (NRS) 289.220, which outlines all of the different designations attached to a peace officer, states, "The director of the department of prisons, and any officer or employee of the department so designated by the director, have the powers of a peace officer . . . ." Mr. Gagnier added that the director of prisons is the only officer that has this power.

Chairman Townsend opened the hearing on S.B. 438 and referred to the proposed amendment (Exhibit G).

Frederick Schmidt, Chief Deputy Attorney General, Bureau of Consumer Protection, Office of the Attorney General, clarified, for the record, with regard to deferred energy accounting, "Any repeal of the current deferred-energy provisions of the statute does not and should not affect the statutory basis under which their purchase gas accounting has been developed or would continue." Mr. Schmidt added this would only impact the repeal of deferred-energy accounting for Sierra Pacific Power Company and Nevada Power Company. Mr. Schmidt remarked that the rate cap is good for the retail customers, as well as provisions that allow Sierra Pacific Power Company (SPPC) and Nevada Power Company to create alternative affiliates to supply power to different types of customers. Mr. Schmidt concluded by saying he is supportive of the 3-year rate cap, which would encompass all components of the current rates, in the proposed amendment, but would like to see a cap exceeding the 3 years.

Senator Amodei queried if a rate cap is necessary because there will be no auction in the next 2 years. Mr. Schmidt responded, "I think a rate cape is necessitated because it is the right thing to do for the ratepayers." Senator Amodei asked if there is any connection to the rate cap because there cannot be a voluntary auction in the next 2 years. Mr. Schmidt replied that not having an involuntary auction in the next 2 years benefits many of the people he represents, and he supports the notion that the customers that do not want to change from their current supplier or choose a new supplier remain with their current supplier. Senator Amodei pointed out that to his knowledge nothing was requested to prohibit people from being voluntarily auctioned off in the next 2 years, and stated, "And so to the extent that anything the consumer advocate said may be interpreted by anybody as indicating that because there cannot be an involuntary auction in the next years we need a rate cap. I personally would take issue with that for purposes of the record." Mr. Schmidt claimed he was only trying to emphasize customers could choose service from another supplier without an auction.

Mr. Whittemore commented that he agrees with the proposed amendments to S.B. 438 that would help the efforts for deregulation as well as providing protection for small ratepayers and allowing utilities to earn a fair return.

Douglas R. Ponn, Lobbyist, Sierra Pacific Power Company, stated that they support all of the amendments included in Exhibit G. Senator O’Connell asked Mr. Ponn what his understanding is in regards to the stranded-costs issue. Mr. Ponn replied that they will follow the process outlined by the Public Utilities Commission of Nevada (PUCN) and the recovery of stranded costs are not affected by the amendments. Senator O’Connell asked Mr. Ponn if his understanding is that Senate Bill 366 of the Sixty-ninth Session is going to be the obligation that he is under.

Mr. Ponn responded that this will be the process they will be under to determine the amount of stranded costs, and may be subject to provisions that will affect how they recover these stranded costs as outlined in Exhibit G.

Steven Rigazio, Lobbyist, Nevada Power Company, concurred with Mr. Ponn’s comments, and added that the elimination of deferred-fuel mechanism does preclude Nevada Power Company from filing a case to set the proper fuel rate and collect the unrecovered balance. Mr. Rigazio stated the rate would be set prior to the cap being implemented on March 1, 2000. Mr. Schmidt clarified that it was his understanding that any rate-cap provision would not restrict the deferred-energy filing expected in July 1999, and if the above aforementioned case is not completed before October 1, 1999, which is the effective date of a repealer of deferred energy. Mr. Schmidt added this would not prevent Nevada Power Company from resolving the case.

Samuel P. McMullen, Lobbyist, Enron Corporation, and Nevada State Board of Nursing, asked for clarification if a customer could look for an alternative service before March 1, 2000 so a contract could be made with an affiliate to the existing utility or with an alternative seller. Mr. McMullen added that these negotiations should only be conducted with a licensed affiliate of an existing utility or an alternative seller. Mr. McMullen asserted that he feels the existing utilities have a monopoly and some fairness protections need to be addressed.

Mr. Ponn commented that his perception of a level playing field is that all parties will have an opportunity to negotiate and enter into agreements.

Terry K. Graves, Lobbyist, Nevada Independent Energy Coalition; Pioneer Chlor Alkali; and Saguro Power Company, commented that he still has concerns with not having regulatory language in the bill that will support the concepts and principles being presented. Mr. Graves added he still would like contract sanctity because there have been attempts in the last year to attack their contracts and reiterated he would like language added to address this.

Ivan R. Ashleman II, Southern Nevada Air Conditioning and Refrigeration Service Association, stated that he cannot comment on the amendment that addresses the logo that is used by the company he represents. Chairman Townsend stated the issue is clear because the committee voted to allow the utility to retain their name and logo as they see fit, and queried what Mr. Ashleman wants. Mr. Ashleman replied he had submitted an amendment, which the committee gave its approval, and at this time he has not seen the amendment language in bill form. Chairman Townsend asked Mr. Ashleman if his amendment says:

Mr. Ashleman replied yes.

Mr. Rigazio stated he has not seen this language, and if this is the proposed language he would have to oppose this language and stay with the current language concerning this issue. Mr. Ashleman commented that he spoke with several representatives from the utilities offering to negotiate the language and they told him there would be no negotiations.

Ernest K. Nielsen, Lobbyist, Washoe County Senior Law Project, stated he suggested that language be added to section 16 of the bill that would aid in customers comparing different suppliers. Mr. Nielsen also suggested creating a preamble with respect to energy efficiency, which he has drafted.

Charles K. Hauser, Lobbyist, Southern Nevada Water Authority, agreed with the current draft of the bill but would like the addition of a section that would amend NRS 704.987 subsection 1, paragraph (b), to allow all governmental entities to purchase power from the Colorado River Commission. Senator O’Connell asked if the Colorado River Commission could offer the Southern Nevada Water Authority (SNWA) a better rate then they are currently receiving. Mr. Hauser replied that the Colorado River Commission claims they could save them approximately 20 percent. Senator O’Connell asked if these savings would be returned to their customers via water rates, and Mr. Hauser claimed they would try cutting rates to the customers.

Norman Ty Hilbrecht, Lobbyist, Las Vegas Cogeneration LP, went on record to indicate he approves of the language in the latest draft of section 20 of the bill. Mr. Graves commented that he does not agree with this language.

Chairman Townsend closed the hearing on S.B. 438 and opened the hearing on S.B. 210 and referred to Amendment No. 223 to the bill (Exhibit H. Original is on file in the Research Library.) from Dorothy B. North, Lobbyist, Nevada Association of Alcohol and Drug Counselors.

Ms. North stated Amendment No. 223 makes substantial changes to the bill and explained the changes and additions the amendment makes.

Helen A. Foley, Lobbyist, Marriage and Family Therapists, supported the change that would require a marriage and family therapist hold himself as a licensed alcohol and drug abuse counselor then must meet the appropriate requirements as well as taking the test.

Marilynn K. Morrical, Lobbyist, stated the section where marriage and family therapists and social workers are exempted she has added registered nurses that meet the requirements of their licensing board for counseling.

Senator Carlton asked for clarification on the section that will grandfather in the people with experience. Ms. North stated these provisions are now located in sections 79 and 80 of Exhibit H and these sections outline the parameters for the grandfather provision. Chairman Townsend stated he does not feel this is a grandfather provision because the current drug and alcohol counselors need to attain a certificate before January 1, 2000 to continue practicing without meeting the new provisions outlined in the bill. Mr. McMullen stated he believes this amendment states if a current alcohol and drug abuse counselor can or has been certified by the bureau defined in the amendment before January 1, 2000 then they must be issued a license for this purpose.

Senator Carlton asked if these people currently need to be certified or licensed, and Ms. North replied they are currently certified. Ms. North added that there are currently over 800 in the state.

Senator O’Connell asked why a new board is needed and why they will not be brought in under an existing board like the family therapists. Ms. North replied this is a very different discipline which needs its own board because they are raising the requirement from a certification to licensure. Ms. Foley stated there are many marriage and family therapists that deal with alcohol and drug abuse counseling on a part-time basis.

Senator O’Connel asked Ms. Foley why the alcohol and drug abuse counselors could not be licensed under her board. Ms. Foley said the alcohol and drug abuse counselors would have a different license than a marriage and family counselor that is specific to their field.

Chairman Townsend clarified that currently there is a certification that requires a bachelor’s degree and a license that requires a master’s degree for an alcohol and drug abuse counselor, and the certification that now exists does not meet the standards that S.B. 210 outlines for certification. Ms. North answered that is correct. Chairman Townsend asked what would happen if the same board that licenses the marriage and family counselors has to add alcohol and drug abuse counselors to their duties. Ms. North replied the problem would be that the marriage and family therapist board does not have certified alcohol and drug abuse counselors on their board. Senator O’Connell commented they could add a certified alcohol and drug abuse counselor to the board, and asked if all of the funding requested in the bill is for a self-sustaining board.

Marilynn K. Morrical, Lobbyist, stated she prepared the budget and based the funding needs on budgets from other boards, and it would be self-sustaining. Ms. Morrical added that there should be a separate board because of the concerns with the scope-of-practice issues.

Senator O’Connell asked in what circumstance personal information would be shared as outlined in section 39 of the bill. Ms. Morrical replied this information would be shared if a licensed alcohol and drug abuse counselor had a complaint brought against them by a client and was also licensed through another board in a different field. Senator O’Connell queried if the client’s privacy rights would be honored. Ms. Morrical replied that the client bringing the complaint would be informed of the shared information with the other board.

Chairman Townsend commented that section 39 does not prohibit the board from supplying any records or information to another licensing board. Ms. Morrical replied the language in section 39 was drafted from language in other statutes. Chairman Townsend asserted that he does not have a problem with sharing information, just that the information needs to be subpoenaed.

Ms. Foley suggested that if a counselor were investigated the information would not be shared with the other licensing boards until after the investigation has been completed. Paula Berkely, Lobbyist, Chiropractic Physicians Board of Nevada, testified that all of the information in an investigation, including the complainant’s name, is confidential until the actual complaint has been released for a public hearing.

Ms. Foley suggested that language be changed in section 39, subsection 2 to say:

Ms. Foley explained this language would prohibit any information from being released unless disciplinary action was taken. Senator O’Connell expressed concern with the language section 39, subsection 2 and Ms. Foley agreed to have that subsection removed from the bill. Chairman Townsend commented that there does not need to be language in the bill regarding the sharing of information between boards because of the public-record issue.

Chairman Townsend queried how the amount of the license and application fees was reached, and why there is a discrepancy between the amount in the bill and the amount in the budget. Ms. Morrical explained she did not want to take the maximum to allow for increased costs over time. Chairman Townsend asked why there is a charge for an application fee, renewal fee and a license fee, and queried if other licensing boards are concurrent with this practice. Ms. Berkley commented that the application fee is usually higher because of the time involved in reviewing the applications. Chairman Townsend asserted that they need to fix the fees, and asked if they have enough start-up money to fund this new board. Ms. Morrical explained that the budget and fees for the new board were based on the budgets of other comparable boards.

Chairman Townsend queried if the current advisory board and staff structure would become the new licensing board and staff, and Ms. Morrical concurred that they will. Chairman Townsend clarified that this bill needs to be compliant and consistent with the other licensing boards in the state for it to be processed. Chairman Townsend asked Ms. Berkley if the chiropractic board requires the person being investigated to pay for the investigation costs. Ms. Berkley explained that it is the expense of the board, but if the person is found guilty and is fined then the money is put into the General Fund then the board makes an application for that money.

Senator O’Connell pointed out if this is the case then the bill would be vetoed. Ms. Berkley pointed out that the fine would be dependent on the violation and not on the cost of the investigation. Chairman Townsend recited from NRS 634.190, which explains the fine procedures regarding the chiropractic board.

Chairman Townsend opened the hearing on S.B. 220, and referred to the proposed amendment, Amendment No. 187, to the bill (Exhibit I).

Chairman Townsend commented on the extreme opposition to the bill and no motion was heard from the committee. Chairman Townsend closed the hearing on S.B. 220 and opened the hearing on S.B. 384.

Senator Shaffer referred to the proposed amendment to S.B. 384 (Exhibit J), which would essentially gut the bill and replace it with two small sections allowing for extended legal action. Senator O’Connell brought up the concept of the loser paying for the costs of the lawsuit.

Robert Crowell, Lobbyist, Nevada Power Company, stated that he has no problem with the loser of the lawsuit paying the costs, but does have concerns with section 1 of Exhibit J. Mr. Crowell stated that section 1 of Exhibit J creates an unlimited time for the statute of limitations to bring a lawsuit, as well as a time definition for people bringing a lawsuit from past power line placements. Mr. Crowell noted that the current statute allows for 15 years for adverse possession. Chairman Townsend asked if that is from the time of discovery or from the time the possession took place, and Mr. Crowell pointed out it is from the time it was taken.

Senator Amodei asked Senator Shaffer if this bill is in the context where there is a recorded easement, and Senator Shaffer answered yes.

Senator O’Connell closed the hearing on S.B. 384 for legal research and opened the hearing S.B. 103.

Senator Carlton referred to the proposed amendment to S.B. 103 (Exhibit K) and explained the amendment came out of the compromises agreed upon from the subcommittee.

Chairman Townsend reopened the hearing on S.B. 438.

Senator Carlton expressed that her concern with the proposals to S.B. 438 is the auctions. Chairman Townsend replied the issue of an auction is no longer viable from today through July 1, 2001, but explained customers could change power companies on their own before this date. Chairman Townsend added that the passage of this bill is contingent upon the merger completion between Sierra Pacific Power Company and Nevada Power Company.

Senator Amodei questioned language in the bill that could possibly raise concerns with how previous contracts were going to be evaluated for an evaluation factor for the utilities. Chairman Townsend commented that this is language that is currently in regulation with the PUCN, in regards to contracts. Senator Amodei asked if this language could be interpreted to go back and rewrite existing contracts.

Senator Schneider expressed concern with the 3-year rate cap in the bill and how it will affect Nevada Power Company’s ability to keep up with the growth in Las Vegas. Chairman Townsend replied that the rate would be decided upon by the PUCN and the utility to cover their costs during the 3-year rate cap time period.

Senator Amodei commented that he had not previously heard of this bill being contingent on merger completion and of the thought process behind it. Chairman Townsend stated that the PUCN has made arguments that in order to go forward with a competitive market Sierra Pacific Power Company and Nevada Power Company must merge and divest themselves of generation.

Chairman Townsend reopened the hearing on S.B. 384 and referred to new language agreed upon by Mr. Crowell and Senator Shaffer (Exhibit L).

Chairman Townsend opened the hearing on S.B. 32.

Senator Schneider thanked all of the people involved in working hard on this issue.

Mr. Wadhams referred to draft 10 to S.B. 32 (Exhibit M) and outlined repair, consumer protection, and other homeowner issue provisions in the bill. Scott M. Craigie, Lobbyist, Del Web Corporation, stated that the people involved in this issue are dedicated to the philosophy in this bill and other bills related to this issue and will work together in both houses and in all committees.

Senator O’Connell remarked that she received considerable response to this bill as not being consumer friendly. Mr. Bradley commented that he believes this bill and other legislation benefits the consumer because it has brought all of the concerned parties together to a consensus.

James J. Jackson, Lobbyist, Plumbers and Mechanical Contractors Network, expressed his support for this bill.

Chairman Townsend expressed concern with the current contractors’ board and its viability and makeup.

Greg Walch, Lobbyist, Summit Engineering, offered an amendment to S.B. 103 that would not allow a charge made against a land surveyor or engineer under NRS chapter 40 at the State Board of Professional Engineers and Land Surveyors to have no impact on litigation, as well as any decision made by the board to be used as evidence. Chairman Townsend asked Mr. Walch if he knows of any bill in the Assembly that is associated with this issue. Mr. Walch stated that current proposed amendments to S.B. 103 would impact this issue. Chairman Townsend commented that since this bill has already been voted on and this amendment was not included in the motion Mr. Walch may amend another bill to address this issue as long as the parties involved are in agreement.

With no further business before the committee, the meeting was adjourned at 1:30 p.m.

RESPECTFULLY SUBMITTED:

Scott Corbett

Committee Secretary

APPROVED BY:

Senator Randolph J. Townsend, Chairman

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