The Senate Committee on Judiciary was called to order by Chairman Mark A. James, at 9:20 a.m., on Monday, March 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 Mike McGinness

Senator Maurice Washington

Senator Dina Titus

Senator Valerie Wiener

Senator Terry Care

COMMITTEE MEMBERS ABSENT:

Senator Jon C. Porter, Vice Chairman (Excused)

STAFF MEMBERS PRESENT:

Jo Greenslate, Committee Secretary

OTHERS PRESENT:

Brian K. Krolicki, State Treasurer, testified that S.B. 125 essentially transfers the duties of the Division of Unclaimed Property (DUP) which is currently part of the Department of Business and Industry (DBI) into the state treasurer’s office. Mr. Krolicki stated the DUP’s business is to repatriate abandoned assets, lost assets, deposits, bank accounts, and so forth, with their rightful owners. He gave a brief background on the DUP, saying it is relatively new. In 1979, Nevada adopted statutes authorizing creation of the unclaimed property function. Rather than creating a separate division, Mr. Krolicki advised this activity was assigned to the old Department of Commerce since much of the money found is from financial institutions and insurance companies. He remarked there were already divisions for both of those, so existing field auditors handled unclaimed property as well. After a couple of years, in 1983, the Legislature established the Division of Unclaimed Property, according to Mr. Krolicki, and it has remained a part of DBI since that time.

To put the size of the DUP into perspective, Mr. Krolicki noted, DBI has approximately 700 employees in 27 divisions, and DUP has 8 employees with an authorized budget of approximately $500,000. He noted since many of the functions of the DUP are similar to those of the state treasurer’s office, transfer to that office is a logical move. Mr. Krolicki advised that 27 states perform the unclaimed property function in the state treasurer’s office. Seven of those have occurred in the last decade; one was transferred out of the state treasurer’s office in South Dakota. Another reason given by Mr. Krolicki for the transfer is for professional coordinating. He said there is a National Association of Unclaimed Property Administrators called "NAUPA," to which Nevada belongs. Additionally, within the state treasurer’s organization, National Association of State Treasurers (NAST), there is a network dedicated exclusively to unclaimed property and the newest technologies. Mr. Krolicki noted most of his colleagues are already participating in these activities.

In Mr. Krolicki’s opinion, a union with the state treasurer’s office will assist DUP employees in maximizing the efficiency of their tasks, such as cash management. He mentioned the state treasurer’s office employs certified public accountants, people who deal with banks on a regular basis, people with the ability to negotiate fees with brokerages who sell unclaimed property, and so forth. Another area addressed by Mr. Krolicki regarding reasons for transferring the DUP is past and present problems in the DUP. An audit performed by the Legislative Counsel Bureau (LCB) in 1994 was somewhat negative both in DUP’s ability to perform its constitutional and statutory requirements as well as constituent servicing. Mr. Krolicki remarked the situation was partially remedied in the 1996 time period by a strong administrator who had the support of staff that accepted recommendations of the LCB and made strides in improving the DUP. He noted, however, there are still a couple of concerns. Nevada has not adopted the Uniform Unclaimed Property Act of 1996, and in Mr. Krolicki’s opinion, it should be adopted immediately. Currently, there is no administrator for unclaimed property, and the position has been vacant for approximately 6 months. He reported there have been significant personnel problems in the last 2 years, and it has been a troubled agency over the years.

Further, Mr. Krolicki shared legislative history on S.B. 125. He advised that his predecessor, Robert L. Seale, tried to move DUP from DBI to the state treasurer’s office twice during the last two legislative sessions. Those two attempts were unsuccessful. This session Mr. Krolicki advised the new director of DBI fully supports the move, and Governor Guinn supports the move as well. If the committee moves to pass this bill, Mr. Krolicki proposed two small changes. In section 18 of the bill, regarding Nevada Revised Statutes (NRS) 226.100, he recommends striking the word "administrator" after "deputy," and replacing it with "treasurer." In section 25, Mr. Krolicki would like the effective date to be changed from July 1, 1999 to "effective upon passage and approval," due to the urgency of this bill.

Senator Wiener inquired what impact the Uniform Unclaimed Property Act of 1996 has if Nevada adopts the act and if Nevada does not adopt the act. Mr. Krolicki answered the act would put Nevada’s statutes in order with those around the country. He advised there are companies nationwide that look for unclaimed property. It is important for those companies to know how they would be treated legally if they were to help Nevada find unclaimed property to return to its rightful owner.

Senator Care asked if this "friendly merger" would result in anyone losing a job. Mr. Krolicki replied he does not anticipate eliminating any of the eight positions, and they will remain in Las Vegas where they are currently housed. In response to Chairman James’ question, Mr. Krolicki stated there would be no changes to DUP other than it will be under the state treasurer’s budget.

Senator Wiener queried about the dollar value of the current unclaimed property. Mr. Krolicki stated he did not have an exact figure, but that it is in the millions of dollars. Two years ago, approximately $2.5 million was returned. He explained money that is not returned and stays in the fund for 1 year, goes into the General Fund.

Dan Tom, Director, Department of Business and Industry, testified his department is in complete concurrence with S.B. 125, including the changes offered by Mr. Krolicki.

Seeing no further testimony on the bill, Chairman James closed the hearing on S.B. 125 and opened the hearing on S.B. 150.

Senator Maurice Washington, Washoe Senatorial District No. 2, testified the genesis of S.B. 150 is from a number of fathers who approached him during the interim study on the family court. These fathers have children from previous marriages they are supporting, have remarried, and now have current families to support. The burden of the amount of child support is causing financial neglect of one of the families or a frustrated noncustodial father electing to go to prison rather than trying to keep up with overwhelming financial obligations. Senator Washington asserted the intent of the bill is not to obfuscate child support payments, but to help fathers adhere to their responsibilities of making child support payments for all of their children. Senator Washington read statistics from the book, Where Have All the Good Fathers Gone? By Douglas O’Brien, as follows:

Senator Washington explained S.B. 150 does two things. It authorizes but does not mandate that the court deviate from the current formula in statute in determining the circumstances and the child support payments. It also considers a parent’s child support obligations for children from previous marriages. The court may make a determination of whether an award of support in accordance with the appropriate formula would advisedly affect the ability of the obligator to pay those other obligations. Senator Washington informed the committee there are 35 states that currently take into consideration the deduction of one spouse versus the other spouse and one family versus the other family. There are five states that authorize deductions from income, and there are three states, Colorado, Iowa, and Texas, that have specific formulas or consideration for preexisting orders for child support payments to these families.

Senator Care inquired about a situation in which a father who has divorced twice and has children from both marriages, quits a high-paying job as a computer technician and goes to work at a fast food restaurant to avoid making child support payments. Chairman James noted NRS 125B.080, section 8, deals with willful underemployment. Senator Washington pointed out the father could leave his current job and go to work at a fast food restaurant; however, he would still be obligated to make child support payments under the existing formula based on his current wages.

Chairman James commented there is currently a formula that may be adjusted by the court. He expressed concern that moving the language in section 1, subsection 9, paragraph (e) to page 2, lines 20 through 33 would be exalting that factor above all the other factors listed on page 3, lines 24 through 40. Senator Wiener inquired whether paragraph (e), "The responsibility of the parents for the support of others" could also include care of a parent. Chairman James suggested adding, "including without limitation," and noted in most cases it is going to be a child.

Senator McGinness stated he has also received numerous letters regarding inequities in child support rulings. In his opinion, since the formula was set into law, it has been used as a template over every custody proceeding without considering the individual circumstances of each case. He commented he is not certain that S.B. 150 will solve the problem, but that it needs to be addressed.

Senator Titus added a couple of points. She said she cannot imagine anybody taking a lesser job with lower pay just to decrease the amount of their child support payments. Additionally, Senator Titus remarked the current formula has worked for a long time. There are 12 exceptions to the formula which allow the judge to consider including another family. She asserted if the formula no longer appears to be fair, it should be readdressed. However, if a person gets married, has children, divorces, gets married again, has children and divorces, the children from the second family are no less deserving than the children from the first family. In Senator Titus’s opinion, recalculating child support for the second family because the obligator has a previous family is a move in the wrong direction.

In response, Senator Washington remarked that unfortunately, children are often the pawns in the terrible situation of divorce and child support determinations. He stated to calculate a formula for child support of a preexisting family and leave the current children out of the equation is unfair. What S.B. 150 tries to do, according to Senator Washington, is to bring both families together to ensure the obligator is taking care of both of his responsibilities. He continued the intent of the bill is to give the courts the discretion and authority to take other families into consideration when calculating child support.

John C. Morrow, Lobbyist, Chief Deputy, Washoe County Public Defender, testified the Washoe County public defender’s office becomes involved in the child support situation at the point where sanctions are being imposed against the non-supporting parent. He mentioned he works with minimum wage earning, service-industry type individuals who often have two previous families as well as a current one. He said these people have placed themselves into a corner where they have absolutely no resources to devote to their present families. That causes discord with the current family, and yet another broken family occurs. It is a vicious cycle. In Mr. Morrow’s experience, the people making the judgments who have the opportunity to modify child support based upon the existing formula factors are very reluctant to do the work that is required when they are considering support of other people. Those at the bottom of the formula, the $100-a-month obligees, have a particularly difficult time if they have three, four, or five children. He mentioned they get into arrears, are unable to make their payments and end up in jail where they are unable to make payments of any amount. He pointed out that Senator Washington has attempted to elevate that factor to one that is given more weight and consideration. In Mr. Morrow’s opinion, reemphasizing the fact that the support of others is an important consideration is a step in the right direction.

Chairman James remarked that in his opinion, the support of others should not be exalted above the other factors. He said if the committee were to do that, it would have to look at each factor and decide how to rate it. He explained that is why it is important to elect good family court judges who can weigh the facts in each case and adjust the formula accordingly. The Chairman stated if one factor is taken out and made the most important, the judges will be constrained to do that in each case. Another concern of Chairman James is child support awards from other states. He explained another state may have a different formula, and if a Nevada court bases its award on a support award from another state, the Nevada court would have to defer to the determination of the prior court from the other jurisdiction, possibly to the detriment of the Nevada child.

Michael Seal, Concerned Citizen, testified in his opinion, the child support laws need to be rewritten for the noncustodial parent. He is a divorced father living in Carson City, and his ex-wife and son live in Las Vegas. He reported that he has been to court in both Lyon County and Carson City, and the judges in neither district would consider the cost of transporting his son back and forth from Las Vegas to Carson City. Mr. Seal advised the judges would not consider adjusting the formula; they have told him it is 18 percent, and that is it. He also remarked he only sees his son 17 percent of the time, approximately 63 days a year, which is not enough time for his son to spend with his father. Further, in Mr. Seal’s opinion, both parents’ incomes should be considered when determining the amount of child support. He mentioned that he makes $25,000 a year, and his ex-wife earns $75,000 a year, but he is required to pay 18 percent of his income in child support. He concluded by stating the law needs to be reworded to allow deviations in the formula.

Senator Wiener pointed out that Mr. Seal’s testimony demonstrated why it is difficult to single out one item as a priority in the list of factors affecting child support. She noted Mr. Seal mentioned proposed section 1, subsection 5, paragraph (c), subparagraph (9), the cost of transportation of the child to and from visitation; subparagraph (10), the amount of time the child spends with each parent; and subparagraph (12), the relative income of both parents; all of concern in his situation. Senator Washington reiterated that it is not the intention of S.B. 150 to prioritize any one of the factors listed as being more important than any other. He surmised he was attempting to leave some deliberation with the court, but not to put everybody in the same "cookie cutter."

Valerie J. Cooney, Lobbyist, Nevada Trial Lawyers Association, testified against S.B. 150. She pointed out this bill gives the court the ability to deviate from the statutory formula. She asserted the court currently has that ability, and it takes into consideration the list of factors currently set forth in NRS 125B.080. She maintained the bill as written does give a preference for some priority to the fact of existing or previous family members simply by its location in the proposed bill. It removes the consideration of section 1, subsection 9, paragraph (e), "The responsibility of the parents for the support of others," to a position of prominence in the bill. Ms. Cooney remarked that it is unfortunate if the courts are not giving that the weight that it should, but the judges are the people who have the background and knowledge on the facts and know what priority to give that consideration.

Ms. Cooney mentioned the provision under section 1, subsection 5, paragraph (b), subparagraph (2) of the bill that provides for payment to a former spouse; and stated in her opinion, that provision is inappropriate under any circumstances when a determination of child support is to be made. Additionally, Ms. Cooney stated the statutory percentages are unrealistically low in the sense there are limitations on the percentages. She advised the minimum amount of child support that an individual can be required to pay is $100 per child; the maximum, regardless of the obligator’s income, is $500 per child. Ms. Cooney pointed out that Nevada does not have the complex formula for child support that many other states have. For example, she mentioned California’s intake data is approximately ten pages in length. She said it takes a computer program to do the calculation and determination, and it results in much higher child support payments. Ms. Cooney suggested if the committee is inclined to review these considerations, it should also review the matter of statutory limitations on child support. In doing so, she recommended going back and restudying the whole matter of child support and following the example of some of the other states that take into consideration many more factors. In conclusion, Ms. Cooney remarked, in her opinion, the bill is well intentioned, and there may indeed be a difficulty for certain individuals who have more than one family. However, the bill as written is a bad idea, and it should not be passed.

Jan Gilbert, Lobbyist, Progressive Leadership Alliance of Nevada, and Nevada Empowered Women’s Project, testified she has seen this issue from a different perspective, that of low-income single mothers who are not getting child support and who are fighting to get it. Ms. Gilbert said she saw this bill as someone not keeping his or her responsibility. In her opinion, every child is the parents’ responsibility, and one child’s support payment should not be a little behind because it is not the newest family member. Ms. Gilbert urged the committee not to pass S.B. 150.

There being no further testimony on the bill, Chairman James closed the hearing on S.B. 150, and opened the hearing on Assembly Bill (A.B.) 120.

Ben Graham, Lobbyist, Nevada District Attorneys’ Association, stated A.B. 120 provides for an additional means to serve documents between attorneys. He said it is important to note that section 1, subsection 4, which allows serving legal documents by means of facsimile machine, is meant to be a supplemental means, not to replace or eliminate any type of service process. Also, he mentioned on the first page of the bill, "a person" is also to include a governmental entity, because in NRS 0.039 governmental entities are excluded. It is meant to go both directions, from the state to private counsel and from private counsel to the state. Mr. Graham advised regarding specific types of documents which may need to be served personally, section 1, subsection 1 of the bill states, "Except when personal service of a person is ordered by the court . . . ." He commented the effective date of this bill, if passed, will be later in 1999, and if questions arise regarding personal service, there will be adequate time to address the courts and make sure those items are covered. In conclusion, Mr. Graham stated this is an effort to bring Nevada into the electronic age and provide for uniform application throughout the state.

Chairman James inquired whether A.B. 120 mirrors the Eighth Judicial District Court rule. Mr. Graham answered it does; however, it applies only to criminal law. He advised the civil bar in the Eighth Judicial District is currently addressing the issue for civil law as well.

Karen C. Winckler, Attorney, Nevada Attorneys for Criminal Justice, referred to section 1, subsection 1, " . . . a person who is represented by an attorney may be lawfully served . . . ." She remarked it does not say that person can serve a governmental agency; therefore, she was concerned about the definition of "a person," which is just a governmental agency. Ms. Winckler mentioned her discussion with Mr. Graham, in which he expressed his concern that NRS 0.039 excludes governmental agency from the definition of person. She clarified that Mr. Graham did not intend to exclude NRS 0.039 from the bill. Ms. Winckler pondered whether a reference to NRS 0.039 should be included in the bill so that individuals would also be able to serve and be served. Secondly, regarding appellate matters, Ms. Winckler mentioned, the supreme court has established a fast-track appeal process that requires everyone within 30 days of the trial or the issue that has been raised file papers with the supreme court from both sides. She advised that when the Notice of Appeal is filed, it is different than a motion, and it changes the jurisdiction. It takes it from the district court to the supreme court, and the supreme court rules are very specific in criminal matters about things being "fast tracked." Both sides must comply within 30 days. Ms. Winckler explained there was concern that a Notice of Appeal delivered via facsimile might not reach the person sufficiently soon to enable the person being served to reply within the 30-day time limit. She remarked the decision was made, if A.B. 120 passes, to send a joint letter to the supreme court to put them on notice that the service via facsimile option is now available. If the supreme court does not want to participate in this option, Ms. Winckler advised it can create a court rule stating this does not apply to it.

Chairman James asked if this would be more appropriate for a court rule. Ms. Winckler replied apparently there is an effort by the district attorney’s office to have a uniform rule in place for the entire state rather than having each court design its own. Mr. Graham remarked this is an effort to bring uniformity throughout the judicial process, but allow for individual exceptions, if appropriate. Chairman James pointed out the Legislature does not write the Rules of Civil Procedure. In his opinion, the Rules of Civil Procedure for civil cases and the Rules of Criminal Procedure for criminal cases should be established by the Nevada Supreme Court uniformly throughout the state. Mr. Graham stated he initially included civil cases in the bill, and it was removed.

Senator Care stated his concern is the situation in which three or four sole practitioners share a secretary. He mentioned the sender might receive a confirmation that the facsimile arrived, but it may not reach the correct attorney.

Chairman James corrected a misstatement; the Legislature does adopt criminal rules, and the court adopts civil rules.

Senator McGinness questioned the meaning of the word "maintained" in section 1, subsection 1, paragraph (b) in the sentence, "The facsimile machine is operational and is maintained by the attorney . . . ." Mr. Graham remarked that means the attorney has the facsimile machine in his or her office.

Hearing no further testimony on A.B. 120, Chairman James closed the hearing.

The Chairman opened a work session and called for a motion on S.B. 125.

*****

There being no further business to come before the committee, Chairman James adjourned the meeting at 10:48 a.m.

RESPECTFULLY SUBMITTED:

Jo Greenslate,

Committee Secretary

APPROVED BY:

Senator Mark A. James, Chairman

DATE: