MINUTES OF THE meeting
of the
ASSEMBLY Committee on Commerce and Labor
Seventy-First Session
February 26, 2001
The Committee on Commerce and Labor was called to order at 3:50 p.m., on Monday, February 26, 2001. Chairman Joe Dini, Jr. presided in Room 4100 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Joseph Dini, Jr., Chairman
Ms. Barbara Buckley, Vice Chairman
Mr. Morse Arberry Jr.
Mr. Bob Beers
Ms. Dawn Gibbons
Ms. Chris Giunchigliani
Mr. David Goldwater
Mr. Lynn Hettrick
Mr. David Humke
Ms. Sheila Leslie
Mr. Dennis Nolan
Mr. John Oceguera
Mr. David Parks
Mr. Richard D. Perkins
GUEST LEGISLATORS PRESENT:
Assemblywoman Debbie Smith
STAFF MEMBERS PRESENT:
Crystal McGee, Senior Research Analyst, Legislative Counsel
Bureau, Research Division
Vance Hughey, Committee Policy Analyst
N. Jolene Jones Miley, Committee Secretary
OTHERS PRESENT:
Alan Darney, Training Director, Northern Nevada Electrical Workers Apprenticeship Program
Greg Smith, Apprenticeship Administrator, Northern Nevada Operating Engineers, Apprenticeship Program
Terry Johnson, State of Nevada Labor Commissioner
Danny Thompson, Executive Secretary/Treasurer, Nevada State AFL-CIO
Coleen Henry, State Director for Nevada, Department of Labor Apprenticeship and Training
John Jeffery, Lobbyist, Representing Southern Nevada Building and Construction Trade Council
Cheryl Blomstrom, Lobbyist, Representing Associated General Contractors of America
Marilyn Skibinski, Regulatory Analyst, Attorney General’s Office
Patricia Jarman-Manning, Commissioner, Consumer Affairs Division
Samuel McMullen, Lobbyist, Representing Retail Association of Nevada
Susan Dunt, Risk Manager, Department of Administration, Risk Management Office
Brett Kandt, Senior Deputy Attorney General, Office of the Attorney General
Chairman Dini called the meeting to order at 3:50 p.m. and opened the hearing on Assembly Bill 149.
Assembly Bill 149: Revises provisions governing authority of state apprenticeship council to deny application for approval or suspend, terminate, cancel or place conditions upon approved program of apprenticeship. (BDR 53-1056)
Assemblywoman Debbie Smith testified in support of A.B. 149, and spoke from prepared text (Exhibit C). She explained that the bill dealt with the apprenticeship community. A.B. 149 allowed the Nevada State Apprenticeship Council to take appropriate action with respect to existing apprenticeship programs, or deny the application of a program for wage or safety violations. Apprenticeship programs were a vital segment of the workforce. She continued, stating there were 80 registered programs and 4,500 apprentices throughout the state. She had requested the bill in order to better structure, approve and supervise apprentice programs.
Assemblywoman Smith introduced Alan Darney, representing the Northern Nevada Electrical Workers Apprenticeship Program, and Greg Smith, Administrator of the Northern Nevada Operating Engineers Apprenticeship Program. Mr. Darney and Mr. Smith would assist her by answering detailed questions about the impact on the apprenticeship programs and their involvement in the apprenticeship council. Terry Johnson, Labor Commissioner for the state of Nevada, was also present. Assemblywoman Smith stated for the record that Greg Smith was her husband.
Alan Darney testified in support of A.B. 149. Apprentices in the construction industry were sometimes confronted with decisions regarding safety or wages. Because they were “low-man,” they felt pressured to take undue risks or question their paychecks. Apprenticeship administrators had always strived for the best programs possible and needed to continually monitor and update their safety programs. A.B. 149 would bring all programs to the same level of commitment for the safety of apprentices.
Greg Smith also spoke in support of A.B. 149, stating that Mr. Darney had spoken well on the bill. He offered to answer questions from the committee.
Mr. Nolan asked what portions of Nevada Revised Statute (NRS)608 or 618 did A.B. 149 reference that was of primary concern to them. Mr. Smith said the bill addressed wage and safety violations that were of concern to the apprenticeship community. Mr. Nolan asked that, in reading A.B. 149, it seemed if any violations to the provision of NRS 608 had occurred, would A.B. 149 provide the opportunity to discontinue the program.
Mr. Smith recited some history pertaining to the apprenticeship portions of the statute. He explained that the statute did not clearly address safety or wage violations; it was vague and prohibited the apprenticeship council from acting on violations. A.B. 149 clarified the statute and would enable the council to act.
Mr. Hettrick said he did not understand A.B. 149. The presumption could be made that if they did not have an apprentice at a job site and did not have an approved apprentice program, how could the council give notice and a hearing for good cause shown, to deny an application for approval of a program. He said if the Labor Commissioner ruled that a person wanted an apprentice program and that person had violated the state wage or safety law, the council would then deny the application before an apprentice program would be started. He requested clarification.
Mr. Smith explained that if an apprenticeship program had a history of wage or safety violations, those things would be taken into consideration before giving approval for a new apprentice program. At the present time, he said, the council could not evaluate those problems. Mr. Hettrick stated that he thought the bill was redundant.
Chairman Dini asked for more background on A.B. 149. Mr. Smith responded that there had been a few programs that had gone before the council and the council was not able to properly evaluate them. There was no justification in NRS 610 to allow a denial. A.B. 149 provided that an apprentice program could be denied based on safety or wage violations.
Terry Johnson, Labor Commissioner, testified in support of A.B. 149 with reservations. He had an understanding of what the intent was but had concerns with what may be some due process issues with how the language was drafted in A.B. 149. He cited that as Labor Commissioner he also served as the State Director of the Apprenticeship Council. He said he appointed members to the apprenticeship council. Any decision that was made by the council could be appealed to the Labor Commissioner whose decision was final, although the applicant would have appellant rights through the courts. He said his concerns dealt with the language in A.B. 149. With the Labor Commissioner’s findings, the council could take up the finding and place a program on probation, suspend or cancel it. Under current laws, under NRS 610, the aggrieved applicant must return to the Labor Commissioner to file an appeal before proceeding to the courts. That, he said, created a circle; that became problematic. It also placed a time-specified demand on the Labor Commissioner to comply with the directive of the council. Mr. Johnson said he would make his office available to the apprenticeship organizations to move what he believed was the intent of A.B. 149 forward.
Chairman Dini asked Mr. Johnson what he thought of the 15 days required on line 14, page 2. Mr. Johnson stated that was the council placing a mandate on the Labor Commissioner and he had some concerns with that.
Ms. Giunchigliani asked if Mr. Johnson’s authority as Labor Commissioner was defined in NRS 610. Mr. Johnson replied there was some language in NRS 610 that described the duties of the Labor Commissioner for appointing members to the apprenticeship council, and to serve as director to the apprenticeship program in Nevada. Ms. Giunchigliani asked what Nevada Administrative Code (NAC) might expand that definition. Mr. Johnson replied there was some language in the NAC that described the Labor Commissioner duties in appointing persons to the council. Also, there was some language at the end of NRS 610 describing how an aggrieved party before the State Apprenticeship Council exhausted their administrative duties prior to proceeding on to district court. He said that was in Nevada Revised Statutes (NRS) 610.
Mr. Nolan said he had perused NRS 608, and asked if a program went before the council for the first time, what would their status have been prior to application. How would the council make a determination that the applicant had violated the safety and wage criteria, if they had not yet been in an approved apprenticeship program?
Assemblywoman Smith responded that the applicant would likely be an existing company that wanted to apply for an apprenticeship program. There would be a history if there had been violations of the safety and wage procedures.
Mr. Hettrick stated he had read line 3 where it stated the State Apprenticeship Council could register and approve or reject an application. The statement required no finding by the Labor Commissioner to reject. He agreed with the Labor Commissioner’s testimony and saw reason to change the law.
Mr. Johnson responded by citing the requirements of a proposed apprenticeship program. The Apprenticeship Council was trying to clarify the issues that could be included for consideration when a proposed apprenticeship program went before the council. Violation of labor and industrial relations laws was not included among the provisions the council could consider when approving an apprenticeship program.
Mr. Hettrick stated that, as he read the law and based on his understanding, he did not see a need to change the law. As the current law read, the council had an absolute right to reject an apprenticeship program and an absolute right to place conditions on an apprenticeship program.
Mr. Smith responded that council members must list the actual reason for denial; safety and wage infractions were not listed in statute. He said that Mr. Johnson was correct, safety and wage infractions needed to be added to the statute.
Danny Thompson, Secretary/Treasurer for Nevada State AFL-CIO, stated he supported the concept of A.B. 149. Anything that would serve as a preventative measure would be good. He felt there could be an amendment to A.B. 149 to make it more effective.
Coleen Henry, State Director for Nevada Department of Labor, Apprenticeship and Training, Employer Labor Services, spoke from prepared text (Exhibit D) in opposition to A.B. 149. She said that the bill would amend the NRS that governs the apprenticeship system in Nevada. Nevada was approved by the U.S. Department of Labor to register apprenticeship programs for federal purposes. Federal approval of the Nevada Apprenticeship Council was dependent upon the state’s plan remaining in compliance with federal regulations found in the Federal Code of Regulations (CFR) Title 29 Part 29, Labor Standards for Apprenticeship Programs and 29 CFR Part 30 Equal Employment Opportunity in Apprenticeship. She said federal regulations required that current state apprenticeship councils that desired continued recognition by the U.S. Department of Labor could submit to the national administrator for approval and provide documentation that described policies and operating procedures that depart from or impose requirements in addition to those described in Title 29, part 29, and Title 29, part 30.
Ms. Henry continued, stating it was the opinion of the U.S. Department of Labor that proposed changes to Chapter 610 of the NRS should be cleared through the Department of Labor, Apprenticeship Training, and Employer Labor Services prior to implementation. She stated employers, associations and labor organizations that had never participated in a registered apprenticeship program had not received technical guidance from the State Apprenticeship Council or the U.S. Department of Labor to ensure their compliance with safety training. To deny or cancel a program because of previous or existing violation could jeopardize the registration of major labor organizations or associations of employers if just one of the member employers or signatory contractors violated any part of NRS 608 or NRS 618. She stated that existing law contained avenues for relief for the apprentice.
Ms. Henry noted the specific concerns of the U.S. Department of Labor were that A.B. 149 would expand the jurisdiction of the Apprenticeship Council beyond the scope of existing regulations. A.B. 149 did not adequately address the relationship between a program that represented multiple employers and the infractions that could lead to cancellation. She said the bill allowed any violation of NRS 608 or NRS 618 as cause for denial, cancellation, suspension or termination of a program. She urged the committee to not pass this bill.
Mr. Nolan asked Ms. Henry if there was research done prior to approving a program. She responded that the department was not an approving agency. States have authority for approval of program. Currently no agency required nor performed a background check prior to approval of a program.
Mr. Nolan asked if there were established criteria for approval or denial of a program. Ms. Henry replied an the applicant must meet minimum requirements of the Federal Code of Regulations and the state council had its own, NRS 610 and NAC 610, which exceeded the requirements of the federal level.
Chairman Dini closed the hearing on A.B. 149 and opened the hearing on A.B. 150.
Assembly Bill 150: Establishes deemed wage for certain trainees for purpose of industrial insurance. (BDR 53-1055)
Assemblywoman Debbie Smith spoke from prepared text (Exhibit E) and testified that A.B. 150 clarified language that was adopted in 1997. The language had proved to be a hardship for apprentice programs. NRS 616A.215 required an apprenticeship program to provide workers’ compensation coverage for those apprentices that were being trained. The previous legislation differentiated between wages for an apprentice and wages for a journeyman who were all considered to be trainees by the training programs. The result was a significant difference in the premiums paid for workers’ compensation coverage. A.B. 150 would classify all persons being trained by an apprenticeship program as trainees for purposes of determining wages.
Assemblywoman Smith re-introduced Greg Smith, Northern Nevada Apprenticeship Administrator’s Association, and Alan Darney, Training Director, Joint Apprenticeship and Training Committee. She also introduced Cheryl Blomstrom, Government Affairs Director, Associated General Contractors of America, Inc. She said those three persons would testify from the employer’s perspective.
Alan Darney testified in support of A.B. 150. Journeyperson-upgrade training takes place simultaneously with an apprentice under the same circumstances and controlled environments and guidelines. He said an instructor closely supervises journeypersons and apprentices and situations were always within a controlled environment. To clarify, he said that journeymen and apprentices were trained in the same manner. However, because of an oversight, coverage payments ranged from three to eight times more for journeypersons than for apprentices.
Mr. Hettrick asked if there was a difference between typical pay for apprentices or trainees. Assemblywoman Smith responded there was when in the same classification. He asked if the wage scale was the same. She replied the wage scale was not the same. Mr. Hettrick asked if A.B. 150 would raise the pay for a trainee to meet that of an apprentice. She replied, “No.”
Greg Smith interjected that the bill would define a trainee as a journeyperson who wished to upgrade his skills and would attend the exact class as an apprentice. However, that person would still be a journeyperson but would be classified during training as a trainee. Mr. Hettrick asked whether, under the rules, the trainee would have a different deemed wage of $150 per month. Mr. Smith replied in the affirmative, and that was part of the problem. While in the classroom, journeymen were receiving the same training as an apprentice. He said if a construction company employed the journeyman and apprentice while they were in training or upgrading the skills for journeymen, both would be covered under their employer’s workers’ compensation plan. The proposal was to deem the journeyperson-trainees and apprentices at the same wage when they were in training and not employed by a construction company.
Mr. Darney responded the law did not provide that compensation was required for journeypersons-in-training; it stated that coverage was provided for apprentices. The only option was to pay the inflated rate or the journeyperson had no coverage. The intent of A.B. 150 was to allow the apprenticeship program to provide the same coverage for the journeyperson as for the apprentice.
John (Jack) Jeffrey, Lobbyist representing Southern Nevada Building and Construction Trade Council, stated there was another provision in the law that stated that when a person was injured on the job and if the claim was accepted, that person would be paid compensation based on the rate of salary from all employers. The provision protected that employee from suffering a reduction in benefits.
Mr. Hettrick said if that was the case, the employee’s injury would fall back to his regular employer, not the apprenticeship program. He said he did not see the fairness. Mr. Jeffrey responded that if the apprentice was working for a contractor and was injured while training, the apprentice would be carried on the employer’s insurance. If the apprentice was not employed, he would be placed on the apprentice compensation schedule.
Cheryl Blomstrom testified in support of A.B. 150. She said it was in the best interest that the journeypersons in the industry were trained well. Providing relief to the apprenticeship programs by providing necessary training was in the best interest of the industry. If a journeyperson was provided training, he was covered under the employer’s workers’ compensation program.
MS. BUCKLEY MOVED TO DO PASS A.B. 150.
MS. GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION PASSED WITH MR. HETTRICK VOTING NO.
Chairman Dini opened the hearing on A.B. 151.
Assembly Bill 151: Revises provisions relating to solicitation by telephone. (BDR 52-486)
Marilyn Skibinski, Regulatory Analysis, Attorney General’s Office, Bureau of Consumer Protection, testified in support of A.B. 151. She explained that A.B. 151 would make a minor change to NRS 599B, relating to telemarketing. She said that it would shift to the Commissioner of Consumer Affair’s Division the responsibility to make decisions determining whether a telemarketer would be required to register with that division. The Attorney General would serve with that agency as legal advisor.
Patricia Jarman-Manning, Commissioner of the Consumer Affairs Division, also supported the bill. She said currently the division performed those duties and the bill was merely a housekeeping measure. The division would continue to seek the advice of the Attorney General when necessary.
MS. GIUNCHIGLIANI MOVED TO DO PASS A.B. 151.
MRS. GIBBONS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Chairman Dini opened the hearing on A.B. 152.
Assembly Bill 152: Authorizes court to award reasonable attorney’s fees and costs in certain actions relating to deceptive trade practices. (BDR 52-485)
Marilyn Skibinski, Attorney General’s (AG’s) Office, Bureau of Consumer Protection, testified in support of A.B. 152. She said that bill would amend NRS Chapter 198 to allow the AG’s office to accept attorney’s fees and costs throughout statutes dealing with deceptive trade practices. The AG’s office could only accept such fees currently through the statute pertaining to “pyramid” promotional sales cases. The deceptive trade practice statute was ambiguous and does not clearly state that that the AG’s office could receive attorney’s fees. An amendment to NRS 598A would be appropriate. Ms. Skibinski said that NRS 598A enumerated prohibited acts that the anti-trust unit was specifically authorized to investigate. Those included: price fixing, division of markets, allocation of customers and time arrangements.
Specific statutory language would be helpful to confirm Nevada’s authority to review mergers, as well as ensuring the anti-trust unit’s ability to obtain information pursuant to its confidential investigative demand authority under NRS 598A.100. Ms. Skibinski said an amendment was desirable that would add a new Section 5 that would specify attempts to monopolize, or combining or conspiring with any other person or persons to monopolize trade or commerce within the state. She suggested adding a new Section 6 that specified the acquisition directly or indirectly, the whole or any part of the stock or other equity interest, or the whole or any part of the assets of another person engaged in Nevada commerce, where the effect of such acquisition may be substantially to lesson competition or to attempt to create a monopoly of any line on Nevada commerce. Marilyn Skibinski submitted a copy of the proposed amendments (Exhibit F).
Mr. Hettrick asked if the proposed amendment would allow for a suit to be brought against Microsoft, for example. She replied yes, that the AG’s office felt there was authority under federal law that could allow them to participate in multi-state actions. Ms. Skibinski said the problem was related more to the confidential investigative demands because Nevada did not have clear authority in statute for that type of merger review.
Mr. Hettrick asked if the statute would have an impact on some of the major gaming machines manufacturers in the state of Nevada. Ms. Skibinski explained that her understanding of the anti-trust law was it dealt with monopolistic behavior or conspiracy and collaboration to create a monopoly.
Mr. Humke stated he understood the amendment. If the committee voted to approve the amendment he thought it would be fair to hold a rehearing on the bill.
Chairman Dini asked for a motion to take the bill to the floor for amendment and have it rereferred to committee.
MS. GIUNCHIGLIANI MOVED TO REFER A.B. 152 TO THE FLOOR OF THE ASSEMBLY FOR AMENDMENT AND REREFER BACK TO COMMITTEE.
MR. HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Chairman Dini opened the hearing on A.B. 157.
Assembly Bill 157: Prohibits reporting agencies from imposing charge to provide consumer reports and related information under certain circumstances. (BDR 52-612)
Assemblyman David Parks, District 41, spoke from prepared text (Exhibit G). He testified in support of A.B. 157.
Mr. Parks stated that the use of consumer reporting agencies had increased rapidly as consumer transactions became the rule rather than the exception. Consumer credit reports by reporting agencies could report on a consumer’s credit worthiness, credit standing, credit capacity, debts, character, general reputation, personal characteristics or mode of living as factors to establish a consumer’s eligibility for credit, insurance or employment. Consumer agencies should ensure that their information is fair and accurate. He described the need to ensure that consumer reporting agencies exercised their responsibilities with fairness, impartiality and respect for consumer rights. If the information provided by a consumer agency in a consumer credit report was not accurate, the consumer should be able to have the inaccurate information corrected in a swift and uncomplicated manner. He said A.B. 157 provided those recourses for the consumer. It required a free copy of a credit report be provided to the consumer once a year, and also required credit reporting agencies to provide a letter of disclosure to individuals when negative information was placed into the consumer file.
Speaker Perkins testified in support of A.B. 157. He said there was a great deal of money made in the area of consumer reporting. The consumer reporting companies were making revenue on the consumer’s information. The bill covered many areas that were important to consumers; one in particular was a letter of disclosure to the consumer.
Mr. Parks stated that the bill affected only the three major credit reporting agencies and were national and international in scope. The fee for one copy of the consumer credit report was $8.50. Some states, he said, had a cap on how much a consumer credit reporting agency could charge. Mr. Parks explained that getting inaccurate information removed from a consumer file was not an easy task. Companies could make inquiries about a consumer's credit worthiness without the consumer ever applying for credit. Mr. Parks said there were a number of companies that processed credit reports, but relied on the larger credit reporting companies for pursuing a consumer’s credit worthiness.
Mr. Beers asked if a broker was approached for a free report, would the broker have to supply a report. Mr. Parks responded those major companies generated a great amount of money by providing that information. They must pursue a source of information from various other reporting sources. That was obviously a cost to them for doing business.
Mr. Beers asked if the committee could somehow exempt smaller brokers from having to deliver a free credit report. Mr. Perkins said the reporting agency was considered one of the large national companies. The brokers were the “mom and pop” shops that were local and earned their living as a middle-person, acquiring information and providing it to the consumer. Brokers did not generate the report; they merely passed it along.
Mr. Beers asked if a reporting agency was defined elsewhere in NRS 598. Mr. Perkins replied that he did not think so.
Mr. Hettrick said it would be easier to define the entity as the one generating the report as the reporting agency. Chairman Dini stated that the reporting agency was defined in the statute.
Mr. Parks responded the reporting agency was defined in NRS 598C.100.
Chairman Dini closed the hearing on A.B. 157 and stated there was a Bill Draft Request (BDR) from the Retail Association of Nevada. (BDR 52-1462, later introduced as A.B. 375.) He said a correction needed to be made.
Samuel McMullen, Lobbyist representing the Retail Association of Nevada, spoke from prepared text (Exhibit H) and requested the consideration of the committee. The BDR would make it a crime to counterfeit the Universal Pricing Code (UPC) label and would make it unlawful to distribute a theft detection-shielding device that would block the theft detection abilities of a UPC. The BDR would also increase the penalty for shoplifting. Mr. McMullen said he would work with bill drafters to get the language in the BDR correct.
MR. HUMKE MOVED TO MAKE A BILL DRAFT REQUEST ON BEHALF OF THE RETAIL ASSOCIATION OF NEVADA.
MR. HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Chairman Dini opened the hearing on A.B. 160.
Assembly Bill 160: Clarifies that sole proprietor is not required to obtain industrial insurance or coverage for occupational diseases before performing work under certain contracts. (BDR 53-1097)
Barbara Buckley, Assemblywoman, District 8, testified in support on A.B. 160. She said that prior to the time the legislature privatized the workers’ compensation system, sole proprietors had received some sort of an exemption from State Industrial Insurance System (SIIS) stating they did not need workers’ compensation insurance. When SIIS ceased being a state agency, there was no entity to grant that exemption. A.B. 160 attempted to give sole proprietors with no employees who entered into a contract with the state an exemption from purchasing workers’ compensation insurance.
Mr. Beers stated that the bill had fine legislative intent. However, sole proprietor, he said, was a term from tax law and it distinguished a non-corporate business from a business that had multiple owners versus a one-owner business. He made the clarification that sole proprietorship did not preclude that business from having employees. Mr. Beers asked if there was something elsewhere in statute that described businesses eligible for exemption from workers’ compensation.
Ms. Buckley said she had requested the bill draft. Crystal McGee, Senior Research Analyst, LCB, Research Division testified on the language of A.B. 160. Pursuant to NRS 616A.310, a sole proprietor was defined as a self-employed owner of an unincorporated business and included working partners and members of working associations. She said a sole proprietor with employees would need to be covered by workers’ compensation insurance.
Mr. Humke asked Ms. McGee what effect it had for a person that was operating as a Limited Liability Corporation (LLC), which had no other members in the LLC and had no employees. He asked if the term “sole proprietor” covered that person. Ms. McGee said that she would need to forward that question on to the Legal Division.
Ms. Buckley stated that if insurance companies used the definition in the workers’ compensation arena, it would probably not cover LLC. The Legal Division should check on both issues to ensure that the intent was preserved.
Mr. Hettrick stated that he endorsed the intent of the bill. If there was any way at all to solve the issue of the sole proprietorship requirement to purchase workers’ compensation insurance, it should be addressed in law.
Susan Dunt, Risk Manager, Department of Administration Risk Management Division, spoke from prepared text (Exhibit I). She testified against A.B. 160. The division appreciated the intent of the proposed legislation, but there were issues that needed to be brought to the attention of the committee. One of the fiscal issues related to the legislation concerned the question of responsibility. She asked who would compensate the sole proprietor for injuries incurred in the course of performing the work of the contract. She stated that was only one of the reasons the state required contractors to carry workers’ compensation insurance.
Ms. Dunt said there were three possible options to the proposed legislation. One would be to make no changes, allow the current process and requirements to stay in effect, and allow state agencies to increase the amount of the contracts to help offset the cost of the workers’ compensation insurance of the contractor. As a second option, she said, the state could subsidize the cost of that insurance for the sole proprietor. As a third option, the current proposed language could be amended to allow the state the discretion to waive the requirement for sole proprietors to provide proof of industrial insurance on a case-by-case basis and accept the affidavit that the coverage had been waived.
That discretion would rest solely with the Attorney General’s Office. She said that amendment would likely require an amendment to NRS Chapter 41 as well.
Dawn Gibbons, Assemblywoman, District 25, asked if a sole proprietor elected to submit a certificate stating he did not need the insurance, or elected not to carry the insurance, why would the state be held liable. Ms. Dunt responded there were extreme examples such as fighting fires. If that contractor opted not to carry workers’ compensation insurance, and then was severely injured or killed, there could be an action against the state from the family.
Brett Kandt, Senior Deputy Attorney General, Attorney General’s Office, testified in response to Ms. Gibbon’s question. He said that the AG’s office wanted to remove barriers to the opportunity for persons to contract with the state. The state does that by offering various types of insurance depending on the type of contract and services. The statutes addressed a wide range of services for which the state contracts. He said, depending on the types of service, there could be significant risks to a contractor’s work and to the state’s exposure to those risks. He would like to see something in the law that would assert the state’s immunity if a sole proprietor declined coverage under workers’ compensation.
Ms. Buckley asked if in the past sole proprietorships’ coverage under workers’ compensation insurance was optional. SIIS had certified that they did not have to carry the insurance and they were in compliance with the law by not electing coverage under NRS 616B.659. She asked Mr. Kandt what had changed. Mr. Kandt said that the statement could be clarified to ensure the same information was being implemented. It was his understanding that in the past when a sole proprietor did not have workers’ compensation coverage and was injured, the state was responsible for the costs. The Division of Industrial Relations could place that cost upon the state. He said that was the information he based his testimony on.
Ms. Buckley stated the information she had obtained from the LCB Research Division was different. The purpose of workers’ compensation was for the employee/employer relationship. She asked how that relationship would have any bearing on an independent contractor.
Mr. Kandt responded that perhaps he did not have correct information. He stated that his client, the Division of Risk Management, told him that in the past if a contractor who had opted not to carry workers’ compensation had been injured on the job, the Division of Industrial Relations would force the state to pay for those injuries. The question of whether the state was the employer of an independent contractor needed to be clarified by the Division of Industrial Relations. The Attorney General’s Office was not opposed to the proposed legislation.
Speaker Perkins asked Mr. Kandt if the Risk Manager had suggested if A.B. 160 was moved forward the state would be given discretion by allowing some contractors to obtain workers’ compensation while others would not have the option. He asked Mr. Kandt if he saw any potential liability or potential litigation based on how the state chose to utilize that discretion. Mr. Kandt replied that it would be important to remember that for all state contracts the state had discretion to require certain types of insurance and certain levels of coverage. The only type of insurance the state did not have discretion on was workers’ compensation. By allowing the state additional discretion, and based upon the nature of a contract, the scope of work performed would dovetail nicely with the other types of coverage.
John Jeffery, Lobbyist representing Southern Nevada Central Labor Council, testified that he was not opposed to the proposed legislation because the injured worker was taken care of in any event. He suggested an amendment on page 1, line 14, after the word “proprietor” add the words “with no employees.” The same language would be inserted on page 2, line 21, after the word “proprietor.” Mr. Jeffrey said he was unaware of any health insurance that would pay for an on-the-job injury.
Chairman Dini closed the hearing on A.B. 160. He appointed a subcommittee consisting of Assemblyman Hettrick and Assemblywoman Buckley to research and report to the committee their findings.
Mr. Park asked that persons associated with credit reporting agencies be represented when A.B. 157 was considered in work session. Chairman Dini appointed Mr. Parks and Mr. Beers to a subcommittee to research A.B. 157 and report back to the committee prior to the work session on the bill.
There being no further business before the committee the meeting was adjourned at 5:48 p.m.
RESPECTFULLY SUBMITTED:
N. Jolene Jones Miley
Committee Secretary
APPROVED BY:
Assemblyman Joe Dini, Jr., Chairman
DATE: