The Senate Committee on Judiciary was called to order by Chairman Mark A. James, at 8:30 a.m., on Monday, February 8, 1999, in Room 2149 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 Mark A. James, Chairman

Senator Jon C. Porter, Vice Chairman

Senator Mike McGinness

Senator Maurice Washington

Senator Dina Titus

Senator Valerie Wiener

Senator Terry Care

GUEST LEGISLATORS PRESENT:

Senator Bernice Mathews, Washoe County Senatorial District No.1

Senator William J. Raggio, Washoe County Senatorial District No. 3

STAFF MEMBERS PRESENT:

Silvia Motta, Committee Secretary

OTHERS PRESENT:

James F. Nadeau, Lobbyist, Captain, Washoe County Sheriff’s Office

Robert L. Auer, Senior Deputy Attorney General, Private Investigator’s Licensing Board, Office of the Attorney General

Kent F. Lauer, Lobbyist, Executive Director, Nevada Press Association

Michael C. Rizer, President, Gold Coast Agency, Inc.

Russ Benzler, Chief Investigator, Bureau of Enforcement, Registration Division, Department of Motor Vehicles and Public Safety

Robert A. Ostrovsky, Lobbyist, Nevada Resort Association

Ben Graham, Lobbyist, Nevada District Attorneys’ Association

Stan R. Olsen, Lobbyist, Lieutenant, Las Vegas Metropolitan Police Department

Kevin Higgins, Chief Deputy Attorney General, Fraud Control Unit for Industrial Insurance, Office of the Attorney General

Mary F. Lau, Lobbyist, Retail Association of Nevada

John C. Morrow, Chief Administrative Deputy, Washoe County Public Defender

Chairman James opened the hearing on Senate Bill (S.B.) 34.

Senator Bernice Mathews, Washoe County Senatorial District No. 1, spoke about the concerns of some of her constituents regarding reasonable expectation of privacy. She stated the bill is straightforward, much like the one in Arizona, where a person cannot be filmed without prior consent.

Chairman James asked Senator Mathews if there was any reason for not extending the provisions of S.B. 34 to the government.

Senator Mathews explained that when she reviewed chapter 200 of Nevada Revised Statutes (NRS), she found employees within the government, with as the casinos, are exempt. The exemption applies to the casinos when hidden cameras are used for security or for the protection of a person or personal property.

Senator Mathews pointed out elderly people are intruded upon by hidden cameras and surveillance, and are hoping this bill will put a stop to the problem.

Senator Washington questioned if people were being videotaped and shown on local syndicated television shows like 20/20 or 60 Minutes. He assumed the syndicated programs had prior permission to air their film.

Senator Mathews responded TV shows might sometimes have prior permission, but not always. She suggested obtaining prior permission from the authorities or maybe even the courts. She acknowledged that there have been some recent court cases where cameras were not allowed.

Senator Care pointed out, based on his experience as a television news director, that the hidden camera tactic is used only as a last resort. He asked Senator Mathews if she knew the effect this would have on the electronic media. Senator Care emphasized obtaining prior permission from the government or the authorities for the press to perform their duties would be too complicated; the press regards itself as independent but subject to all laws in the state.

Chairman James pointed out there may be a distinction to be made within the law for expectation of privacy when doing business with the public. He remarked whether it is government or the press, no one should be using hidden cameras without justification. Senator Mathews mentioned the gaming commission and private investigators have justification to use surveillance.

Senator Care inquired if the bill would be addressing hidden microphones in conjunction with hidden video cameras. Senator Mathews clarified the bill includes any kind of surveillance equipment, whether it is microphones or video cameras.

Senator Wiener asked if there was a law or precedent to define reasonable expectation of privacy. In response, Chairman James indicated there is a body of law already established by the Fourth Amendment of the United States Constitution and used by the United States Supreme Court. Then he elaborated when the appropriate agencies issue warrants to search someone or their personal space in which reasonable expectation of privacy is expected, the courts make exceptions to the Fourth Amendment for the warrant. He gave an example, the Terry v. Ohio frisk, that when a routine traffic stop and search for a weapon is made, anything that is found in the course of the search can be kept as evidence against the car owner.

Senator Wiener acknowledged the constitutional protection; however, she expressed concern about the use of cameras in public places as well as a home- operated business, which technically is a public business.

Chairman James reiterated a reasonable expectation is an objective standard not one’s own subjective idea of privacy. Senator Mathews suggested posting a warning sign to let the public know there is a surveillance camera being used in the business.

Senator Mathews mentioned some of her constituents were filmed without their knowledge and shown on a television program for a news story. In addition, the film was altered to exclude the verbiage, except for comments that the news reporter wanted to use.

Senator Porter referred to line 15, section 1, subsection 2, subparagraph (2) of S.B. 34: "For purposes of security or protection of persons or property." He then inquired if posting a warning would be considered as an amendment for S.B. 34. Senator Mathews agreed the amendment should be added to the bill. She acknowledged that such an amendment would also be beneficial to the casino industry and private investigators.

Senator Porter asked Senator Mathews if the real problem to be addressed was the media. Senator Mathews replied the media would be a primary objective where privacy is expected.

James F. Nadeau, Lobbyist, Captain, Washoe County Sheriff’s Office, called attention to a business within Washoe County where an employee set up a video camera in the restroom with the intent to use the video on the Internet. Mr. Nadeau said the Washoe County Sheriff’s Office spent 80 hours of investigation in the matter, but were not able to prosecute because of a technicality. Senator Washington inquired if there had been any indication of blackmail or extortion. Mr. Nadeau replied he had no indication at this point.

Chairman James recalled the case of a businessman who placed a hidden camera for observation in the restroom of his establishment to make sure his employees were not taking time away from work. Chairman James insisted privacy in a restroom should always be expected.

Robert L. Auer, Senior Deputy Attorney General, Private Investigator’s Licensing Board, Office of the Attorney General, introduced an amendment (Exhibit C) for S.B. 34, in section 1, subsection 2 of the bill, "A corporation or an individual licensed as a private investigator or employed by a person so licensed, in the State of Nevada pursuant to chapter 648 of NRS." Mr. Auer requested that licensed private investigators be exempt from the criminal provisions of this law.

Mr. Auer continued private investigators have the need to use videotaping when conducting an investigation of a workman’s compensation insurance fraud. He suggested the licensing board should take disciplinary action against an investigator performing in an inappropriate manner.

Chairman James asked what is deemed as an appropriate standard. Mr. Auer replied, when a private investigator is able to establish there are no injuries in a State Industrial Insurance System (SIIS) claim. He said videotaping would be an appropriate use to prove there is intention of fraud. Chairman James suggested the investigator obtain evidence by filming, for example, the claimant rock climbing or playing basketball in lieu of activity at home.

Mr. Auer reiterated if the private investigator acts unprofessionally, he should be subject to disciplinary action or license removal by the Private Investigator’s Licensing Board. He pointed out if someone is hired for an investigation of improper conduct, videotaping could be considered a legitimate purpose.

Senator Care spoke about the restrictions television programs have in regards to hidden cameras compared to a private investigator, and stated there is nothing to prevent television programs from hiring an investigator to do the job.

Senator Washington expressed his fear for slander and character defamation from an opponent in an election. He questioned what would be ethical or not ethical, and whether or not a public person is held to a different standard under this bill. He concurred with Senator Wiener that a public official has to be held to higher standards.

Chairman James stated he recognized the need in Nevada for protection of privacy for elected officials and the general public. He emphasized society should be able to go anywhere without the fear of needless intrusion on privacy.

However, he recognized the need for hidden cameras in the casino and other industries for security purposes.

Chairman James said the bill needed amendment, but he commended Senator Mathews for introducing the bill.

Kent F. Lauer, Lobbyist, Executive Director, Nevada Press Association, voiced his concerns about the broad language in the bill and the various interpretations that it could generate. He questioned the difference of the meaning between "concealed" and "disguised." Mr. Lauer offered an example of a newspaper photographer using a long-range lens or a telephoto lens taking pictures at a football game, or shooting a car accident from his car on the road; technically he would be in violation of this measure. The bill does not distinguish between private and public places.

Chairman James clarified that there is a standard for right of privacy. Mr. Lauer added that news photographers have no more right than other people to intrude on private property, or to disobey requests of privacy. If a photographer does not leave private property when asked, he would be subject to arrest for trespassing.

Michael C. Rizer, President, Gold Coast Agency, Inc., indicated evidence in potential fraud cases is obtained mostly by videotaping. He stressed the importance of the correct phrasing for the measure. As a reminder, Mr. Rizer spoke about the rigorous policies and statutes the State of Nevada has in order to grant an investigating license. Senator McGinness inquired if the use of videotaping was mandatory by insurance companies and suggested the use of still photography.

Mr. Rizer responded still photos would not work out in the majority of cases; in addition to insurance fraud and investigations, surveillance is utilized for child endangerment cases and internal espionage. Chairman James stated child endangerment cases would fall within exemptions of the existing law which reads, "To the protection of people."

Russ Benzler, Chief Investigator, Bureau of Enforcement, Registration Division, Department of Motor Vehicles and Public Safety, explained the concern that some of the evidence gathered in an investigation could be excluded. He pointed out administrative and regulatory investigations must be included in the amendment for S.B. 34.

Robert A. Ostrovsky, Lobbyist, Nevada Resort Association, established that he made a commitment to collaborate with Senator Mathews on the amendment regarding privacy rights and preserving the right to use surveillance. He indicated the hidden cameras in the casinos, mainly located in elevators, hallways and parking lots are exclusively for the protection of customers, employees and the casino’s interest. There are certain areas where audio tape is used instead of video cameras, however the use of audio tape is not addressed in the bill.

Mr. Ostrovsky mentioned how vital it is for casinos to preserve security as well as other methods to identify individuals that may be on wanted lists or have been excluded from casinos. He outlined the justification for expectation of privacy on the part of a hotel guest.

Chairman James concurred and proceeded to read NRS 200.650, "Unauthorized, surreptitious intrusion of privacy by listening device prohibited. . . . a person shall not intrude upon the privacy of other persons by surreptitiously listening to, monitoring or recording, or attempting to listen to, monitor or record, by means of any mechanical, electronic or other listening device, any private conversation engaged in by the other persons, or disclose the existence, content, substance purport, effect or meaning of any conversation so listened to, monitored or recorded. . . ."

Mr. Ostrovsky urged that specific investigation be handled by law enforcement and professionals rather than an unauthorized person.

Chairman James reiterated the committee’s intent is not to interfere with the casino industry security measures. He referred the bill to a subcommittee of Senators James, Care, Wiener, and Mathews for further consideration.

Chairman James closed the hearing on S.B. 34 and opened the hearing on S.B. 69.

Senator William J. Raggio, Washoe County Senatorial District No. 3, indicated his concern for persons who have had their identity stolen. He said it has become one of the nation’s fastest growing crimes and a very important subject for the National Conference of State Legislatures (NCSL). He continued, if a thief takes possession of a person’s social security number, obtains a pre-approved application, requests credit reports with account numbers, then the thief can use that information to open new accounts and establish lines of credit. He added the social security number unlocks confidential information including medical records and all financial records. Victims are oblivious of what goes on until they actually have been robbed.

Senator Raggio testified ten states have enacted some form of personal identity theft law. The first law was passed in Arizona, which refers to the taking of the identity of another person, and relates to anyone obtaining personal information with intent to harm, including credit or anything of value to the victim. He stated this law provides for the cost to correct or restore the victim’s identity and credit history.

Senator Raggio introduced a packet (Exhibit D) which contained information from the National Conference of State Legislatures; i.e., NCSL. LEGISBRIEF, and an article from the ABA (American Bar Association) Journal, along with an article from the Council of State Governments. The ABA article talks about a man in Las Vegas who obtained services from a print shop using the name of Robert Hartle, and increased the bill to $185 by the time the transaction was completed. The thief had acquired enough information to purchase three pickup trucks, two motorcycles and a double-wide mobile home, which left the real Mr. Hartle with debts of over $110,000. Senator Raggio pointed out personal information is placed into computers and financial reports with an unlawful intent. He added, it is very difficult to prosecute someone in this matter with traditional laws.

Senator Raggio declared Congress passed the Identity Theft Protection Act of 1998 which amends the federal criminal code and provides for mandatory restitution. One of the articles in Exhibit D also points out that consumers must take steps to secure their financial records. He urged the committee to draw attention to this serious crime by making the offense a Category B felony. He emphasized the importance of being among the first states to address the situation. Senator Raggio said the United States Public Interest Research, an advocacy organization, estimates that there are some 40,000 acts of identity theft per year. Between Fiscal Year 1995 and 1997 the number of identification fraud cases rose from 8,806 to 9,455 in a period of 2 years, and the cost rose from $442 million to $745 million. Senator Raggio noted under the federal law and the state laws of Arizona, California and West Virginia, "identity theft" is a felony.

Senator Raggio remarked there is a great need for a state law as an additional tool for Nevada prosecutors to work out some of the cumbersome efforts that go with the federal laws.

Senator Washington inquired about the National Conference of State Legislatures (NCSL) report (Exhibit D) which indicates that Colorado has increased fines for credit report agencies that fail to correct false information within 30 days; New Jersey consumers can obtain a free copy of their credit report upon request; other states allow no more than 2 requests per year.

Senator Raggio said he had no objection to an amendment holding credit agencies responsible for the lack of reporting or correcting information.

Ben Graham, Lobbyist, Nevada District Attorneys’ Association, spoke in support of S.B. 69. He explained that many complications occur when trying to prosecute cases of identity fraud as well as trying to correct someone’s credit history. He offered an example of a case where an individual takes his brother’s identity, commits a series of crimes, and the good brother goes to prison. Mr. Graham indicated this bill may allow for appropriate prosecution.

Stan R. Olsen, Lobbyist, Lieutenant, Las Vegas Metro Police Department, concurred with Mr. Graham. He indicated his agency would be in total support of this bill based on the cases they see more and more each day. He talked about the complications and length of time it takes for victims to regain their identity.

Jim F. Nadeau, Lobbyist, Captain, Washoe County Sheriff’s Office, emphasized the complication and impact on the driver’s license and credit history of a person victimized by this type of crime.

Kevin Higgins, Chief Deputy Attorney General, Fraud Control Unit for Industrial Insurance, Office of the Attorney General, spoke in favor of S.B. 69, stressing identity theft needs to be addressed as soon as possible.

Mary F. Lau, Lobbyist, Retail Association of Nevada, declared she supported S.B. 69. She explained from a retailer’s point of view, the difficulties in trying to correct information and the unsuccessful collection on past-due accounts. She expressed the importance of this bill to start the process and give people the tools and the possibility to eliminate identity theft.

John C. Morrow, Lobbyist, Chief Administrative Deputy, Washoe County Public Defender, expressed that he did not agree entirely with prior testimony on S.B. 69. Referring to section 5, subsection 2, paragraph (a) of the bill, Mr. Morrow recommended that sales of identification material be classified as a Category C felony and stricter penalties. He asked the committee to review the existing laws for possible modification and to recognize the difference between the levels of this crime; for example, identification theft cases where no money is involved.

There being no further testimony on the bill, Vice Chairman Porter concluded the hearing, closed S.B. 69, and adjourned the meeting at 9:15 a.m.

RESPECTFULLY SUBMITTED:

Silvia Motta,

Committee Secretary

APPROVED BY:

Senator Mark A. James, Chairman

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