The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 7:10 a.m., on Tuesday, April 27, 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

GUEST LEGISLATORS PRESENT:

Assemblyman Mark A. Manendo, Clark County Assembly District No. 18

Assemblywoman Genie Ohrenschall, Clark County Assembly District No. 12

Assemblywoman Barbara E. Buckley, Clark County Assembly District No. 8

STAFF MEMBERS PRESENT:

Scott Young, Committee Policy Analyst

Crystal Suess, Committee Secretary

OTHERS PRESENT:

Chairman Townsend canvassed the audience to determine how many people were present to testify on each bill listed on the agenda. He opened the hearing

on Assembly Bill (A.B.) 39.

Assemblyman Mark A. Manendo, Clark County Assembly District No. 18, testified that A.B. 39 is a bill worked out with mobile home park owners. It came about on behalf of residents in Assembly District No. 18 and others who wanted the First Amendment right to post political signs on their lots. He explained that in section 1, line 5, the signs are restricted to a size no larger than 24 x 36" within the boundary of the lot of the tenant. Assemblyman Manendo stated the bill limits the signage to be put in place no sooner than 7 days before elections. He added the bill not only allows political signs for candidates, but also allows signs relative to ballot questions as well.

Senator O’Connell said she had attempted to introduce a bill to satisfy many complaints she had received regarding the proliferation of signs, which would have specified specific timing for putting up and taking down signs. She stated that she was told that constitutionally it could not be done.

Assemblyman Manendo iterated that the issue had not been raised in the Assembly. He said that in Clark County there is already a certain time frame in which signs must be taken down. He told the committee he did not object to tweaking the bill as they found necessary, and that he only wanted to assure that people have every right to display signs and support candidates and ballot questions.

Senator O’Connell repeated that interestingly enough she was told it was not possible to put any restrictions on putting up political signs.

Senator Townsend mentioned that when he had first read this bill, the first question that came to mind was the constitutionality issue. He queried whether someone had been prohibited from erecting political signs.

Assemblyman Manendo said there were several reports of individuals that were allowed to put up signs, but their neighbors were not allowed to do the same. He maintained the bill merely wants to put into statute that park managers can no longer prohibit some residents from displaying political signs while allowing others to do so.

Assemblywoman Genie Ohrenschall, Clark County District No. 12, testified that the situation mentioned by Assemblyman Manendo has existed in several parks in her district also and that she wanted to lend her support to passage of the bill.

Marolyn C. Mann, Lobbyist, Executive Director, Manufactured Home Community Owners (MHCO), testified MHCO’s concerns had been addressed in the amendment to the bill. She stated the MHCO was concerned with the size, location and time element. Ms. Mann noted that she was unsure about the constitutionality issue.

Senator Townsend questioned whether any tenants have complained that they were unable to exercise their First Amendment political rights in a mobile home park. Ms. Mann responded that she was unable to find any association members that would not allow signs in their parks.

George William Treat Flint, Lobbyist, F.T.H. Corporation, stated the corporation owns a 100-plus unit mobile home park in Lockwood and reported that the corporation president refused to let anyone put up signs. He said that it was very frustrating for those who wanted to support their candidates by displaying political signs. Mr. Flint declared the corporation was in favor of this bill to prevent park managers or owners from refusing permission to display political signs.

Chairman Townsend closed the hearing on A.B. 39 and opened the hearing on A.B. 107.

Renee Diamond, Administrator, Division of Manufactured Housing, Department of Business and Industry, testified A.B. 107 would protect consumers. She stated the division has had consumer complaints; and this bill is meant for the 5 percent of the manufactured housing dealers that cause consumers trouble with their contracts and other matters, and which give the division 100 percent of its work. Ms. Diamond related the bill was modeled on the Real Estate Division’s real estate agreements so that, in general, a contract could not be presented to a consumer without all the blanks filled. She stressed that, at present, there is no requirement that contracts be filled in. Ms. Diamond said, as itemized in her written testimony (Exhibit C), a dealer must set forth the terms and prices for sale in advance and, unless specifically waived by the buyer in writing, there is an implied warranty of all essential systems. She explained that essential systems include heating, air conditioning, electric, and plumbing and drainage systems of a manufactured home. Ms. Diamond expounded this bill would contain language for the first time mandating dealers to warranty these essential systems on a used home. She stated that as it is now, when a used home is sold, the division sometimes has to "duke it out" with the individual dealer or broker to fix essential systems. Ms. Diamond emphasized the division receives approximately 400 complaints per year regarding this problem.

Ms. Diamond said section 4 sets out the terms that dealers should follow upon receipt of money for the sale, or terms. Section 5 sets forth requirements that an agreement be in writing and must include the expiration date of the agreement. She stressed the bill would not require the client to do any particular act after the expiration date. Currently, some dealers maintain that once the exclusive agreement expires, the client must write a letter to terminate the agreement, but the division considers a date certain to be just that. Ms. Diamond said section 6 requires the dealer to set out the price concerning the sale, advise the client to obtain counsel if the agreement is beyond their expertise or knowledge; and to determine, in advance, that good title can be given to the consumer upon completion of the sale. Ms. Diamond related there have been completed sales wherein the title has been so involved that the consumer who paid money and was making payments on the home might not get the title for years. She stated this bill would require the dealer to contact her division to execute a title search to make sure the person represented as the seller truly is the rightful owner.

Ms. Diamond said section 7 contains the mandated warranty on essential systems on used manufactured homes. She emphasized the division’s position is that a person purchasing a used home has a right to expect all the essential systems to be in good working order. Section 8 calls for the form of sales contracts to be prescribed by division regulation. Ms. Diamond related that she had met with the dealer’s association and they agreed to assist the division through the regulation process in adopting a contract protecting both the dealer and the consumer. She emphasized that with this provision, when a consumer filed a complaint about a contract, the division investigator would have a standard contract to review. As it is now, there are probably 20 different contracts throughout the state, which complicate investigations on behalf of the consumer. Section 9 requires that all spaces in a contract be filled in and signed. Section 11 adds language to the definition of "dealer." She explained this section also exempts a person who rents or leases his own manufactured home or commercial coach. The bill does not cover renters. Ms. Diamond stated section 13 involves a licensing issue--it adds air conditioning servicemen to the list of persons qualified to receive a limited license.

Ms. Diamond said the repealed section would remove the current requirement that the division be notified upon the commencement of an action in court, against a licensee. She opined this was redundant, as the division would receive a copy of any judgement rendered by the court.

Ms. Diamond reiterated that the division intended to put the small percentage of dealers who cause the trouble on notice, as well as giving the manufactured home purchaser protections similar to those of consumers buying stick-built homes.

Senator Townsend referred Doug Walther, Senior Deputy Attorney General, Commerce Section, Office of the Attorney General, to page 3, section 7, and commented that when the term "as is" is quoted and redefined another world is entered. He wondered whether defining the term in section 7 would leak over into the world of the automobile industry. Mr. Walther responded the term is defined in section 7 for purposes of the section only. He iterated that changing the normal definition of the term, "as is," was not intended; the section only calls for the term to be more specifically referenced to an essential system. He explained that instead of saying "as-is" condition for the entire home, the part of the mobile home which is in an "as-is" condition must be identified. Mr. Walther stated that even though this section creates an implied warranty, it still allows those warranties to be waived. He expounded that it just requires more specificity in how the warranty is waived. Mr. Walther claimed that it alleviates misunderstandings on what is being waived and what is being warranted.

Senator Townsend queried whether this is merely a shifting of the burden of proof from the consumer to the seller. Mr. Walther replied that Senator Townsend’s statement is true relative to being specific about what is being warranted and what is being waived.

Senator Townsend asked whether Mr. Walther knew of anywhere in any of the commercial codes where an industry has one of these waived written examples on implied warranties. Mr. Walther responded that he was not specifically aware of any. He expounded that other types of merchandise are not as complicated as manufactured homes. He added that most merchandise does not have all these different systems, which operate separately and are equally critical to the use and enjoyment of the product. Mr. Walther commented that automobiles are warranted in their various components as well, but he is unaware of any similar type of language. He noted that there are probably areas in the law where implied warranties can not be waived. He recalled under the Uniform Commercial Code (UCC) implied warranties can not be waived for the use for the specific purposes for which it is being sold.

Senator Townsend asked what would happen if someone did not comply with the requirements. Mr. Walther replied that it would constitute a violation that could either warrant disciplinary action or simply an order by the Manufactured Housing Division that the situation be remedied.

Ms. Diamond stated the division is always anxious not to create fines. She said

the division simply wants the consumer to have what they assume they are purchasing. Ms. Diamond contended that if someone were to buy a used manufactured home in the winter, it is rare that they have the wherewithal and thoughtfulness to turn on their air-conditioning. The division might get a call 6 months later in late spring, when the weather turns hot, from the consumer complaining the air-conditioning does not work. Ms. Diamond maintained that certain essential systems should be warranted to be in working condition. She noted that the majority of dealers do a walk-through in which they turn on the systems. This bill is intended for the 5 percent who do not. Ms. Diamond related that in her discussions with the manufacturers association, which represents the dealers, there was no discomfort with this bill.

Senator O’Connell asked how long the implied warranty is supposed to last. Ms. Diamond responded that the implied warranty should be 1 year for new homes. She added that if the consumer complains to the division within that year and the dealer is unwilling to fix the problem, the time-period warranty would carry over because the dealer had not responded. Ms. Diamond noted roofing products and some other items might have a longer warranty period.

Senator O’Connell said she assumed when the words "as is" appear in the bill and the warranty is mentioned within that context, the division is referring to a used manufactured home. Ms. Diamond agreed.

Senator O’Connell asked how long the warranty is implied in a used manufactured home. Ms. Diamond replied 1 year, but that time frame has not been negotiated with the dealers’ association. The division would not have a problem in regulation if the time frame for the warranty were changed to 3 months, or 6 months. She insisted the consumer must be given time to make sure the systems work longer than a month.

Senator O’Connell remarked that her only concern was that when anything is purchased as used there was never any guarantee of what might occur tomorrow, or next month. Ms. Diamond interjected that the division would be willing to go on record to ensure that the division would work with the dealers’ association to find a mutual date, whether it were 3 months, 6 months or 1 year. She expressed confidence that the dealers’ association would have plenty of input from the membership on what would work best for all concerned. Ms. Diamond expressed a willingness to work with the association and when all the other regulations are adopted, the time frame for the warranty period could be put in the regulations, also. She pointed out there would be an advantage in having time frames in regulation, so it would not be necessary to return next year due to the time frames not being adequate or being too long. Ms. Diamond asserted if the time frames are added to the regulations, the division can deal with any changes without having to return to the Legislature.

Senator O’Connell commented that the division would probably need something in the regulation stating that the seller is willing to take care of any problems concerning essential systems within a certain period of time. Ms. Diamond responded that she agreed.

Senator Townsend related that, unfortunately, this committee had just spent 90 to 100 days on warranty issues brought to the committee through a bill introduced by Senator Michael (Mike) A. Schneider, Clark County Senatorial District No. 8, and a number of others regarding single-family residences. He iterated that the committee was familiar with warranties and the difference between warranties on the personal property issue involved in this bill. Senator Townsend pointed out the committee’s concern has always been that problems after the fact are problematic. He surmised when those problems are not fixed, there are more problems, lawsuits, and complaints. Senator Townsend queried whether it was possible to ensure all the essential systems were operating up front. He noted that buyers of stick-built homes sometime hire an independent inspector to locate any problems. He mentioned when his home was sold, his family thought the home was perfect. Then the buyer hired an independent inspector who found a million things wrong. Senator Townsend related that he and his family hired an inspector to do the same thing to the house they were considering buying. He noted that although many dollars were spent to satisfy the buyer of his home, the seller from whom he bought a home had to spend many dollars to satisfy him, as the buyer, on the essential systems and other areas of the home, too.

Senator Townsend asked whether an independent inspector checking for problem areas accomplishes the kind of preventive measure necessary to forestall similar problems in manufactured homes. He stated that he was aware of a number of members on the committee who represent areas with a great many manufactured home parks in them. Ms. Diamond replied that after reviewing all the complaints, especially on used manufactured homes, the consumer must be given something on which to fall back. She said these manufactured homes are not generally inspected by an outside inspector, so reliance must be placed on the two people who are involved in a deal on a home that might be considered an inexpensive home, but may represent a person’s life savings. Ms. Diamond remarked that the only two people usually involved in the transaction are the seller, usually a dealer, (a private individual selling a home is not covered under this bill) and a buyer. She stressed that the buyer must be given some right to expect essential systems work at the time of purchase. Ms. Diamond remarked that if the committee would feel more comfortable with a 60-day or 90-day limit on the warranty, she would be amenable to amending the bill thusly.

Senator Townsend questioned whether the Manufactured Housing Division or the attorney general’s office had ever prosecuted a dealer under chapter 598 of the Nevada Revised Statutes (NRS), the deceptive trade practice statute, for selling a product that could not be used for its intended purpose. Ms. Diamond replied that in her 4-plus years as administrator, she had no knowledge of any such prosecution. She indicated that she used her own personal style of persuasion to solve many complaints and to convince the dealer to fix problems.

Senator Townsend told Ms. Diamond the committee appreciated her approach to getting complaints solved. He indicated that an encouragement behavior modification plan is better than another way of solving a problem. Senator Townsend called attention to the fact that chapter 598 of NRS may be a tool for the Manufactured Housing Division that Mr. Walther may want to review, rather than being specific as a general catchall that could be supportive to the current approach to things. Senator Townsend said that chapter 598 of NRS is one of the most unused statutes in the state. He stressed that the statute prohibits selling anything in such a condition that it cannot be used for its intended purpose. Senator Townsend pointed out that violators of this statute should be prosecuted, whether the violators are car dealers, mobile home dealers, or another type of salesperson. He advocated strengthening the statute for the benefit of agencies that are mandated to protect the public.

Ms. Diamond said that the division has always tried to handle complaints in the most direct method because it is faster. Many hearings require months of preparation, the attorney general’s time, and staff time. She explained that big cases take so much time, other consumers’ legitimate complaints that could probably be resolved are not handled because staff time is taken up with hearing preparations.

Charles W. Joerg, Lobbyist, Nevada Manufactured Housing Association, testified the association’s board of directors voted unanimously to support this bill. He stressed that there is nothing in the bill that most dealers are not already doing and most of the provisions in the bill are already in existence in other states. Mr. Joerg pointed out that on line 25, page 3, the wording says that systems are in working order upon the execution of the sale. He stated his understanding of those words is that they refer to the day the home is sold and does not imply any extended warranty. Mr. Joerg remarked that it would be difficult to mandate an implied warranty for a used product. It was the understanding of the association membership, according to the way the bill read, there was no implied long-term warranty.

Senator O’Connell queried whether there was any use for the next three lines on page 3. Mr. Joerg replied that it was his understanding that some people have sold homes in an "as-is" condition, and the day the sale was completed the essential systems in the home were not working. He surmised those three lines would cover those situations.

Senator O’Connell questioned whether a constituted waiver of the implied warranty, unless the words specifically refer to particular components of essential system, would not carry it a little further. She clarified the question by adding that in the mind of the consumer the wording might lead them to believe the warranty extended beyond the execution of the sale. Mr. Joerg replied that he could not judge what a consumer might think, but suggested that if a consumer bought a used product, it would be unreasonable to expect the same system performances or conditions a new product would have. He suggested there might be an out in the bill for the consumer and the seller to agree that a system does not work. Mr. Joerg explained that when a dealer knows that a system does not work and the consumer wants to buy the product anyway, the dealer could state the status of the system in the contract.

Senator O’Connell remarked that if Mr. Joerg’s interpretation of the lines was correct, the lines were in need of clarification.

Ms. Diamond explained what the division intended the lines to cover in terms of a warranty, at the time of sale, was that these specific essential systems work. She said when a used home is purchased, cosmetic things are not expected to be in perfect shape. Most people moving into a home change the carpet, the drapes, window coverings and sometimes the windows themselves. Ms. Diamond stated the division intended the bill to say that at the time a home is sold, if the listing of the home states the home has air-conditioning, the air-conditioning must work. She emphasized that those specific systems are listed for that particular reason. Ms. Diamond said it would be up to the consumer to ensure the stove burners were in working order.

Senator O’Connell asked whether Ms. Diamond was saying that at the time of the sale, these specific systems, as far as the seller knows, are in working condition, period. If the consumer called the Manufactured Housing Division 2 to 3 months after the sale complaining about one of the systems not working, the division would say that if the systems had been tested at the time of sale, the division no longer had jurisdiction over the situation. Ms. Diamond responded that it would be a key issue. The division needs something that orders, at the time of sale, that the consumer and buyer test all the essential systems and then sign a statement acknowledging the systems are in working order. She said that if the consumer comes to the division 6 months later with a complaint about an essential system in the home, the staff would look at the signed document and would have to tell the consumer that because the system was working at the time of the sale, according to the statute the division no longer has jurisdiction. Ms. Diamond remarked that many times staff must tell this same thing to consumers buying new homes with a specific warranty period that has expired.

Mr. Joerg suggested that there is an opportunity to clarify the wording in the portion of the bill that deals with developing a standard contract. He said that would probably be the place to make the consumer aware of exactly what protections they would have.

Senator Townsend said he was completely confused by the testimony. He declared the committee was not interested in creating more work for lawyers. Senator Townsend emphasized that it had been stated for the record that an implied warranty is 1 year. Now the testimony is that on lines 24 and 25 there is an implied warranty by the dealer that all essential systems are in working order upon the execution of the sale. Senator Townsend demanded to know which statement was correct. Ms. Diamond responded that manufacturers give 1-year warranties for new homes; in a used home, to which those lines apply in regard to essential systems, it would be at the time of the sale. She stated a new home has a specific warranty from the manufacturer; a used home depends on the good will of the two parties.

Senator Townsend related the concern of the committee centers upon consumers who purchase previously owned coaches knowing exactly what they are getting. He said he thought that was the goal of the bill and the committee wants to make sure that is true.

Senator O’Donnell remarked that perhaps the uniform contract stipulated in the bill could specify all the terms and conditions necessary to protect the consumer.

Chairman Townsend closed the hearing on A.B. 107 and opened the hearing on

Assemblywoman Ohrenschall testified that A.B. 195 is a bill that revises the eligibility requirements for receiving assistance from the rent subsidy fund for the Fund for Low-Income Owners of Mobile Homes. She stated the measure requires that the administrator of the Manufactured Housing Division exclude from the calculation of monthly income the value of food stamps that the applicant receives; or if the person is receiving Medicare, the cost of the coverage for Medicare Part B, whichever is greater. Assemblywoman Ohrenschall continued explaining that the bill also allows the administration to waive requirements for eligibility for receiving assistance if the circumstances of the applicant have changed as a result of illness, disability, or extreme financial hardship, which creates a significant reduction in income. She explained that to be eligible for this waiver, the applicant must provide the administrator with medical and financial documents to support the request.

Assemblywoman Ohrenschall stated the measure also requires Clark County and the cities within its boundaries to enact ordinances authorizing law enforcement agencies to patrol common areas in mobile home parks.

Assemblywoman Ohrenschall reiterated that the measure is basically to expand the coverage of the rent-subsidy program; it increases the total value of allowable assets owned from $10,000 to $12,000. She explained that frequently there are widows in parks who have been left a certificate of deposit for a few thousand dollars. If the certificate must be liquidated to remain in the subsidy program, the money would be spent very quickly or the widow might be forced to liquidate the certificate at a loss. Assemblywoman Ohrenschall stated the rent-subsidy program is a fine program and possibly the only one in the country. She declared that more people should be able to take advantage of the program.

Senator O’Connell asked why there was a population cap in the bill. Assemblywoman Ohrenschall replied that most of the problems seem to arise in mobile home parks in southern Nevada. She said that in northern Nevada there are a lot more mom and pop parks where if someone has a problem the owner, who is often the manager, knows about the problem and deals with it directly. She emphasized the greatest need for this measure is in southern Nevada.

Senator O’Connell queried whether the Las Vegas Metropolitan Police Department (Metro) had been involved in the formulation of the bill. Assemblywoman Ohrenschall stated Metro became involved this morning. She related that Metro had a problem with the definition of "county law enforcement agency and city law enforcement." Assemblywoman Ohrenschall suggested if the committee would consider it, she would like to add a section 4, which would state that for purposes of this statute, county law enforcement agency is not intended to mean Clark County Park Rangers and city law enforcement agency is not intended to mean the City of Las Vegas Marshals.

Senator O’Connell asked whether most of the mobile home parks did not have their own security. Assemblywoman Ohrenschall replied that many of the senior mobile home parks do not have their own security. She said that even those with their own security do not have regular patrolling of the park streets due to the cost.

Senator O’Connell said she was asking the question because of a recent conversation concerning how short of officers Metro is right now.

Lieutenant Stan R. Olsen, Lobbyist, Las Vegas Metropolitan Police Department, testified Metro is extremely short of officers and this affects their abilities to patrol all the areas because of the demand for service. He stated Metro is patrolling mobile home parks on a daily basis, whenever possible, and officers always respond to demands for service in those areas. Lieutenant Olsen stressed that because of the current demand for service calls, they are prioritized and some callers must wait several hours before officers can respond. He related Metro supports the amendment proffered by Assemblywoman Ohrenschall because there have been some issues in Clark County involving the City of Las Vegas Marshals and some jurisdictional issues that could result in some complex situations.

Senator O’Connell asked when Metro receives a call how the calls are prioritized. Lieutenant Olsen explained that Metro prioritizes according to urgency; i.e., priority zero is the hottest call. He expounded that obviously loss of life or threats to loss of life are of the highest priority; loss of property is next and then disturbances. Lieutenant Olsen stated that it is not uncommon within the Metro jurisdiction for a shift to come on duty and for one station out of the five in operation to have 15 to 25 calls waiting for assignment.

Senator O’Connell referred to page 3, beginning at line 27, which speaks to the county commission, whose population is 400,000 or more, enacting an ordinance authorizing the members of the county law enforcement agency. Senator O’Connell queried whether that is not what Metro already does. Lieutenant Olsen replied in the affirmative. He commented he was unsure why an ordinance must be enacted for something already being done. Lieutenant Olsen mentioned the only time there might be an issue is when there are gated community mobile home parks. He said in the past there have been some situations in gated stick-home communities as well as the gated mobile home park communities. Lieutenant Olsen explained the gated community security people could not understand why Metro feels a need to enter the community to patrol; so Metro tends to not enter the community unless there is an urgent situation.

Senator O’Connell opined that if there was a problem in the park that Metro would certainly be allowed access to the park. Lieutenant Olsen concurred that if there were a problem or a demand for service, Metro could enter the park.

Senator O’Connell asked Assemblywoman Ohrenschall why she had inserted this language in the bill. Assemblywoman Ohrenschall responded that it was inserted partly to take care of the gated communities, but also because in parks in her district the manager and residents are of the impression that because the park is private property that Metro does not routinely drive through the park. She said the bill was intended to extend the Metro patrol so residents know Metro cars will be driving through their streets.

Senator O’Connell clarified that in order for Metro to be able to enter gated areas, Metro would have to obtain all the information necessary from every gated area in the county.

Lieutenant Olsen remarked that gated communities are a challenge for Metro. He elucidated that there are different codes at each community. For security purposes, Metro does not encourage gated communities to have one blanket code. He said Metro is attempting to work with the developers in utilizing new technology that opens the gates automatically at the approach of a patrol car. Lieutenant Olsen explained that Metro does not have the necessary device to activate the gates, but the fire department does. The devices are fairly large and fit nicely on fire trucks, but take up a lot of room on patrol cars. Lieutenant Olsen expounded that if a guard is not at the gate Metro has no way to enter the park.

Mr. Flint, representing himself as a resident of a mobile home in a park, told the committee that in 1991, NRS 188B.215 was created as a compromise between the park residents and park owners. He said a rent justification bill also passed in the Assembly, but failed in the Senate by a vote or two. Mr. Flint expounded that the park owners had come forth with the concept of rent subsidy, which he felt has worked well in many cases. Mr. Flint estimated that there are 350 to 400 park residents currently drawing on a rent subsidy and Assemblywoman Ohrenschall is attempting to expand the program to those who are on the borderline for qualifying. He pointed out that although the rent abuses in the parks are relegated to a very few number of parks, rent rates are continuing to escalate. Mr. Flint stated the program has been of great help to those under the poverty level and he encouraged passage of the bill.

Senator O’Connell questioned whether there was anyone on the waiting list who is not currently being helped. Ms. Diamond responded that there is no waiting list. She stated that the division qualifies applicants within 2 weeks of the receipt of applications. Applicants are qualified the same way they are qualified for welfare assistance. She expounded that applicants must bring in all supporting documentation; bank account statements, and social security statements. Ms. Diamond noted that the program officer checked the file of applications for the past year to determine how many applications had been denied, and then scrutinized the list of denials to estimate how many of those would be approved if this bill were to pass. She concluded only three of all the applications denied would have qualified under this bill. Ms. Diamond declared that this is a unique program that has been studied by other states. She said park owners pay in to the fund on a $12-per-space basis once a year, in July.

Assemblyman Manendo testified his constituents are grateful for the original legislation that produced this fund. He said the intent of this bill is to catch those who are on the bubble and add them to the subsidy program.

Assemblyman Manendo commented that on the gated community issue, there are several gated mobile home parks in his Assembly district. He related that at one of the parks there was a manager who was wonderful and who patrolled the streets on his own and worked with Metro when problems arose. Assemblyman Manendo commented that this is not the case in all of the gated community parks. He iterated that people know they are paying taxes for police services but they never see the police patrol their streets.

Senator Townsend said that he was a little confused by the testimony that the reason the bill is limited to counties with a population of more than 400,000 is so that the program funds would not go bankrupt. Assemblywoman Ohrenschall interjected that statement may be incorrect because going over the language she recalled it was basically looking at the Metro problem. She stated there are many parks in southern Nevada where kids climb over the walls with guns and scare park residents. She iterated that she does not believe that the subsidy portion of the bill is limited to a county with a population over 400,000. She explained that it was an incorrect statement on her part.

Ms. Diamond interjected that the chairman might want to note that when it comes to the issue of enforcement, page 3, line 25 of the bill affects chapter 244 of NRS; the trust fund is in chapter 118B of NRS. She clarified that the latter portion of the bill dealing with the police has no impact on the fund.

Mr. Flint testified that the bill should not limit the requirement for police patrols to counties with populations over 400,000. He said the park in which he resides has 500 units and no one ever sees a Reno Police Department squad car drive through the park. Mr. Flint claimed that residents were told the police do not patrol the park’s streets because the park is private property and the police have no access. He said the population limit should be lowered enough to include Washoe County in the bill.

Senator Townsend stated that the culture in Reno is similar to that of southern Nevada and he would hesitate to exclude northern Nevada park residents from access to street patrolling.

Lieutenant Olsen stated he could clarify several points. He asserted that the laws are pretty clear in both north and south and even central Nevada. Lieutenant Olsen expounded that police officers may patrol private property; e.g., shopping malls and strip malls. He stated Metro patrols those areas all the time even though the malls are all private property. Lieutenant Olsen clarified that the mobile home park is much like a residential area, and since the type of problems are different and the demand levels are different, Metro will obviously not patrol in parks as often as they would in a mall where there are more people and more chances of crime. He elucidated that this scenario would be the same both north and south.

Senator Townsend remarked that the language confused him. He questioned whether there is a need to change the language in that section that states an ordinance must drafted to authorize police to patrol and provide for public safety within the common areas of mobile home parks. Lieutenant Olsen responded that from the perspective of law enforcement the last two paragraphs of the bill are actually not necessary. He informed the committee that if the bill comes out with that wording and with Assemblywoman Ohrenschall’s amendment, it would not increase the amount of patrolling in a mobile home park because of the vast demand for service placed upon southern Nevada law enforcement now.

Assemblywoman Ohrenschall said that she disagreed with Lieutenant Olsen. She stated that there is no regular patrol in mobile home parks. Assemblywoman Ohrenschall opined that the consensus in southern Nevada is that the police are under the impression that because parks are private property they really should not enter at all. She expounded that residents of senior parks, in particular, are caught in the situation where, for cost savings, several parks that have traded hands recently have eliminated the regularly touring private security company patrol car. She stated the parks have instituted use of a hotline beeper number that does not make the seniors feel safe. Assemblywoman Ohrenschall pointed out that the seniors feel that the mere fact that people will see a police vehicle patrolling the park’s streets would discourage would-be troublemakers.

Assemblywoman Ohrenschall added that, in answer to Senator Townsend’s question, it would be up to the committee to decide whether to have the counties adopt an ordinance or put it in statute. She stated that it was a matter of how much home rule the committee wishes to give the counties.

Senator Townsend insisted that was not the issue. He told Assemblywoman Ohrenschall that she had made a valiant effort to address a problem, but law enforcement has testified that no matter what is enacted, unless more officers are added to the force, it could not be accomplished.

Lieutenant Olsen agreed that because of the demand such enactment would create it would be very difficult to have the manpower to make sure the streets in the mobile home parks were patrolled regularly. He suggested that mobile home organizations could work with the police departments and through Neighborhood Watch begin their own programs, notifying police when they were needed.

Assemblyman Manendo stated that he was confused as to where Metro’s jurisdiction is as far as where it patrols and where it does not patrol. He surmised that the neighborhood of those living in subdivisions had their streets patrolled regularly, while the residents of mobile home parks do not. Assemblyman Manendo stressed that he is aware there is a need for more police officers and that he has always supported increasing the number of police in the department. He said he finds himself confused because what he is hearing is that because it is a mobile home park, the department does not have the personnel so they do not patrol. Assemblyman Manendo declared that he was a little uneasy about that situation. He stated that mobile home parks should be treated equally to stick-built subdivisions whether they are gated or not gated.

Senator O’Connell stated that she lives in a gated area and has for over 20 years and she has never seen a police car in her area.

Assemblywoman Ohrenschall clarified that the incidents that have occurred have mostly involved teenagers climbing over fences and trying to totally demolish extra vehicles. She stated that when these same teenagers set fire to a recreational vehicle, since the vehicles are mostly aluminum, they are setting up a big hazard to life if the fire should spread. Assemblywoman Ohrenschall related that the mobile home residents were of the opinion that if everyone knew Metro patrolled their streets regularly they would not seem such easy targets.

Senator Townsend acknowledged that both Assemblyman Manendo and Assemblywoman Ohrenschall make an excellent argument for need, but this bill does not address the need. Senator Townsend clarified what the bill says is that an ordinance will be enacted authorizing law enforcement to patrol and provide for public safety. Senator Townsend maintained that those were two separate statements. He stated that authorizing law enforcement to patrol is one thing, but providing for public safety within the common areas is altogether different. Senator Townsend explained that Lieutenant Olsen’s testimony is that Metro cannot provide for the public safety within common areas without more officers. Senator Townsend suggested that to address the problem, the Legislature would have to work with law enforcement on the issues of dispersion of their current resources, which has nothing to do with this bill. Senator Townsend elucidated that this bill demands provision of safe common areas, but there is no fiscal note. He maintained that if the Legislature demands such action, there would have to be a fiscal note on the bill.

Senator Townsend noted that in order to solve the problem there are two things that must be addressed. He said the question is whether law enforcement can easily have access to gated parks, or gated communities of any type, and, working with law enforcement, what indicators does the police department use to start to increase patrols.

Lieutenant Olsen asked to clarify that he did not mean to imply that Metro intended to give a different level of service to those who live in mobile home parks as opposed to anywhere else. He emphasized that Metro believes in giving everyone the same level of service, but it must be on prioritized demand. Lieutenant Olsen related that there are mobile home parks in southern Nevada that have a high demand for service. He identified one park in particular for which Metro had 300 calls for service. Lieutenant Olsen stated, in that particular case, Metro made a project of the mobile home park and assigned a utility squad to work with the management of the park to bring the park back into control. He said when the management refused to cooperate, Metro went after the landowners and demanded cooperation, which was then accomplished. Lieutenant Olsen commented that this same procedure has been used successfully with troublesome apartment complexes. He stressed if the demand for services exists, Metro is there. Lieutenant Olsen emphasized that Metro does the best it can to randomly patrol all streets, even though they are short of staff because of the surge in population. He stated that Metro averages 1.7 officers per 1,000 and the national average is 2.6 per 1,000. Lieutenant Olsen expressed that Metro hopes to reach a goal of 2.0 per 1,000. He also stated that problems in mobile home parks are currently being addressed, whenever Metro is made aware of them. Lieutenant Olsen averred that Metro is patrolling the parks when it can. He suggested that the best way to alleviate problems is for park management to come to regular first-Tuesday of the month meetings to bring up troubling issues and talk with the area command captain to get his commitment to try to solve any specific problems.

Assemblywoman Ohrenschall stated that she did not know law enforcement had any problem with this bill until a few minutes before the committee meeting began. She said that the intention of these two sections is basically only to clarify that the local law enforcement agency does have jurisdiction. Assemblywoman Ohrenschall commented that there seems to be a great deal of confusion in southern Nevada as to whether they have jurisdiction or whether they do not. She said there have been people who have called in with a complaint who were told that unless a violent crime was in progress at that moment, Metro did not have jurisdiction to enter the park to merely follow the trail of an occurrence from the day before.

Senator Townsend defined that the issues could be dealt with one at a time. First, the problem of access to the gated communities needs to be addressed. He suggested that even though the gated communities are private property, there should be something in the law that says that law enforcement would have access to them as they would any non-gated private property. Senator Townsend said that such a stipulation, particularly in the urban centers, should be possible to accomplish. He suggested the park owners would realize that police access is in everyone’s best interest. He said after that problem was successfully handled the amount and of focus of patrolling could be addressed. Senator Townsend clarified the committee does not want to kid anyone by passing a bill that states certain things will happen when they know they may not.

Lieutenant Olsen stated that clarification would be very helpful as to the ability of officers to enter private property. He stressed that park management, on occasion, has told Metro officers, that the police were not needed and they were on private property.

Ms. Mann commented, reflecting from the point of view of the park owner, there is a difference between a mobile home park and a rental park. She said that she hoped the 300 calls came from a rental park and not a mobile home park. Ms. Mann remarked some of the problem might be a mindset regarding police not coming into the parks. She stated MHCO members have recently instituted a very high profile in their continuing education within the association for encouraging participation in the first-Tuesday meetings at Metro.

Ms. Mann wanted to share a fact sheet she had put together for the MHCO membership regarding the lot rent-subsidy program (Exhibit D). She said the MHCO had some concerns and she would give the committee a quick history of the program. Ms. Mann pointed out that this program is unique in the nation and is the only mandatory program of its kind. She explained that the Manufactured Housing Division on the behalf of the park owners’ association administers it. Ms. Mann expounded that park owners are assessed $12-per-space per year and there are approximately 450 communities in Nevada with approximately 30,000 homesites, which results in approximately $350,000 per year. She related that start-up costs of $190,000 in the initial year were the only expenditure out of the fund for the first year, which allowed for the current reserve. Ms. Mann pointed out that Nevada uses the highest figures available nationally for the designated federal poverty level. She emphasized, to date, park owners have contributed over $2.5 million and 819 people have been helped; 309 have been denied and there are 3 applications pending. Ms. Mann reported there has been a turnover in eligible recipients of approximately 451 people because they move, their income goes over the limit, or they die. She referred to Exhibit D for other statistics she had gathered.

Ms. Mann stated that the MHCO is not opposed to the bill but she cautioned that further increasing the benefits would deplete the reserves.

Senator O’Connell said previous testimony had indicated that only three additional applications would be approved under the formula in this bill. She asked whether this was true. Ms. Diamond replied that it was almost true. She said staff examined applications received during this past year and if this bill had been in effect this past year, of the people denied, only three would have been affected and accepted. Ms. Diamond surmised that this bill would not create a major impact, but Ms. Mann is correct in saying that each time the program formula is tweaked it is not possible to estimate how many additional applications would be received and approved.

Chairman Townsend closed the hearing on A.B. 195 and opened the hearing on A.B. 477.

Assemblywoman Barbara E. Buckley, Clark County Assembly District No. 8, testified that last session when legislators were hearing a particularly contentious mobile home bill, the chairman of the committee suggested that it would be very nice if both sides could meet during the interim to resolve some of the problems. Assemblywoman Buckley said the Assembly Committee on Commerce and Labor sent a letter of intent to Renee Diamond, Administrator, Division of Manufactured Housing, Department of Business and Industry, asking her to facilitate meetings between the park owners and tenants over the interim. She reported that Ms. Diamond called together representatives of the park owners’ association, the park tenants’ organizations, and the Clark County Housing Authority to meet to resolve differences. Occasionally several legislators were able to attend these meetings. Assemblywoman Buckley related that the meetings ranged from informational to actual issues of concern. She reported the park owners put forth four items they wanted, to protect landlords, in chapter 118B of NRS. The tenants, likewise, picked four items that they wanted to see resolved in the same chapter.

Assemblywoman Buckley said that some items, such as rent justification, could not be resolved, but other issues were discussed and agreed upon. The group spent 2 days determining whose responsibility it is to trim the trees. She related that at times the meetings seemed very unproductive, but at other times they were very productive.

Assemblywoman Buckley then gave the committee a thumbnail sketch of the bill. She stressed the bill was a compromise between the park owners and the park tenants, and was done in good faith. She thanked all the participants in the meetings for their efforts.

Senator O’Connell questioned whether a landlord may evict a person who has been leasing property from someone else, a person who has purchased a unit without getting park approval, or both. Assemblywoman Buckley responded that usually when this situation arises the people have purchased the home and have put a hefty down payment on the home or have paid outright. She explained the problem is that under the law a park may require approval before accepting a new tenant. She said for the parks that post signs requiring approval for new tenants, this bill provides that the landlord may first offer the purchasers a rental agreement or they may determine the purchasers are bad risks and initiate proceedings. Assemblywoman Buckley clarified that under current law the park owners have the right to do that anyway, but the procedure action is not set up. She said this bill just clarifies that the action would be a 10-day notice.

Senator O’Connell queried whether there is a requirement that before a manufactured home is sold that this need for approval is told to any prospective buyers. Ms. Diamond replied that when one of these cases goes to court, and if indeed there is a history of bad payment and a judge orders these people to leave the park, the judges understand that this is a home that is owned and the majority of judges give them 6 to 9 months to sell the home. She mentioned that all tenants of the parks get a copy of chapter 118B of NRS every 2 years, after the Legislature meets and after the Legislative Counsel Bureau has updated the statute. Ms. Diamond added that in every rental agreement she has ever seen, or the rules and regulations of the park, and sometimes both, tells of the need for prior approval. She mentioned that even if the new tenancy is accomplished through an inheritance, there must be an approval for new tenancy of the heirs.

Senator O’Connell voiced concern that the buyers of manufactured homes would not be aware of this requirement and lose their home because of it. Ms. Diamond iterated that the majority of the dealers notify the prospective buyers of the need to make application. She remarked that occasionally the prospective buyers are not told, and then the Manufactured Housing Division acts as a mediator between the park and the prospective tenant.

Ms. Mann reiterated that the main reason the park owners want this in the bill is what are referred to as "midnight move-ins." She clarified that these are surprise people that all of a sudden, on Monday morning, their new home appears on one of the vacant lots. She said this usually occurs because the buyers know they will not be approved.

Chairman Townsend closed the hearing on A.B. 477. He referred the committee members to A.B. 470 in their bill books. He announced that the committee would review the bill, but probably not take any action pending things that might occur during the rest of the week. Senator Townsend said that he just wanted the committee to become comfortable with the issues contained in the bill because they are complicated. He suggested that committee members consult with other committee members, industry members and other trusted advisors regarding the bill so that they would be well prepared to make the final decisions. Senator Townsend expounded that Assemblyman David E. Goldwater, Clark County Assembly District No. 10, introduced the bill, and it is a fairly simple bill. He said that Assemblyman Goldwater and Assemblywoman Buckley had taken the language in A.B. 156 of the Sixty-ninth Session, which passed, and applied it to managed care and consumers of managed care organizational services for the purpose of clarifying workers’ compensation.

Senator Townsend explained that the purpose of this bill was to clarify the rights of those injured with regard to managed care organizations. Senator Townsend recalled that the committee went into discussion and, after discussing the committee’s ideas with Assemblyman Goldwater, Ms. Amy Hill, Lobbyist, was authorized by Assemblyman Goldwater to draft an amendment dealing with the hearing officer. Senator Townsend read the proposed amendment (Exhibit E) and commented the wording of the amendment makes it sound like the hearing officer has demonstrated a special competence and interest in industrial health to treat injured employees. He opined the goal of the amendment is to allow the hearing officer to refer an employee to a physician or a chiropractor, chosen by the hearing officer defined to in fact include physicians and chiropractors who have demonstrated a special competence. He said the wording would also appear in chapters 616 and 617of NRS.

Senator Townsend stated that the other issue in A.B. 470 has to do with the administrative pricing. He said there was no one present from the system, but as long as James L. Wadhams, Lobbyist, Blue Cross and Blue Shield of Nevada and a representative of the insurance division were present he would go ahead. Senator Townsend wanted to offer the following opportunities for the committee to review. He said there is another amendment that deals with how administered pricing is determined. He referred to Exhibit F that looks at a private company competing in an open market. Senator Townsend explained that because of the testimony from the insurance division from National Council on Compensation Insurance, Inc. (NCCI) and all the private carriers, that the first year is crucial. Those prices have been set actuarially based on certain known factors that could not be changed during the first year. He said Exhibit F would simply say that for the first year, July 1, 1999 through June 30, 2000, there would be no variance from the established rates. After that date, the market opens up to everyone.

Senator Townsend referred to Exhibit G, which deals with what would happen if the complete privatization that has been offered by this administration does not take place. Workers’ compensation would then have to remain as a state-authorized trust. The implications of such a scenario would have to be computed for purposes of the trust’s survival between now and the next session. He said that in that case the committee would be looking at there being no variance in the first year, a 10 percent variance the second year, and a 20 percent variance the third year with the committee back in action on February 1, 2001. Senator Townsend asserted the committee would have the opportunity to raise the rates again in 2001 and help Employers Insurance Company of Nevada (EICON), if it stays EICON, under a non-privatization position. He explained he was offering both of the amendments so that everyone could look at them, and when A.B. 470 is reviewed next week the committee will know the disposition of the proposal to privatize the system. Senator Townsend emphasized that the privatization decision must be made by Friday on the Senate Floor. He said his effort was to get people to understand that current law, if nothing happens with the Governor’s proposal, is A, B, C, and D on both of the proposed amendments. He clarified that what is being proposed is that due to the changes in the competitive world is not necessary for those second, third and fourth years, with Exhibit F, and that maybe additional time must pass on behalf of the system on Exhibit G. He expounded that there are two different proposals that the committee needs to review that are independent from the current law. Senator Townsend stated that when the bill is reviewed again next week, after the disposition of the Governor’s proposal, the committee would have the amendments available. He added that the proposed amendments would be available for the representatives of EICON, the insurance division, and private carriers to review and make comments.

Senator Townsend asked committee members and interested parties to take copies of the two proposed amendments and kick them around to get a sense of what each amendment would do. He said the sooner workers’ compensation gets to a competitive market, the better off consumers are. He stipulated that one of the things with which the committee will be dealing is a number of the other bills that have come over from the other house. Senator Townsend reiterated that in the first year the Legislature could not affect anything. He referred to Exhibit F and Exhibit G to the line on each which stated no variance for July 1, 1999 through June 30, 2000. Senator Townsend stated that first year is absolutely crucial; but after the first year, changes could be made.

Senator O’Connell asked Scott M. Craigie, Lobbyist, Liberty Mutual Insurance Group and the Alliance of American Insurers, speaking of those rates, whether he and Alice Molasky-Arman, Commissioner, Division of Insurance, Department of Business and Industry, had a successful hearing on Senate Bill (S.B.) 417, yesterday.

Mr. Craigie answered that the meeting had gone fairly well. He reported that there was some concern voiced about the setting up of a large bureaucracy to handle appeals. Mr. Craigie said most participants were receptive to the need, since 860 class codes would be reduced to 420 codes and there would be no uniform pattern for how the codes are spread. He remarked that the codes are literally being reclassified and reanalyzed. Mr. Craigie commented that the biggest problem with the bill is that it is on the Governor’s list of bills that could be vetoed. He stated he had talked to the Governor’s team before the hearing and pointed out that the situation existed. Mr. Craigie reported the matter was worked out to meet the Governor’s standard so that the Governor could sign the bill because it already has statutory authorization. He mentioned that it is still imperative that a number of the groups of large employers write the Governor indicating that they want and need to go forward on this. Mr. Craigie claimed that they were well down the road to getting some of those letters lined up.

Chairman Townsend adjourned the meeting at 10:15 a.m.

RESPECTFULLY SUBMITTED:

Sandy Arraiz,

Committee Secretary

APPROVED BY:

Senator Randolph J. Townsend, Chairman

DATE: