MINUTES OF THE meeting

of the

ASSEMBLY Committee on Commerce and Labor

 

Seventy-First Session

April 4, 2001

 

 

 

The Committee on Commerce and Labor was called to order at 4:01 p.m. on Wednesday, April 4, 2001.  Chairman Joseph 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

Mrs.                     Dawn Gibbons

Ms.                     Chris Giunchigliani

Mr.                     David Goldwater

Mr.                     Lynn Hettrick

Mr.                     David Humke

Ms.                     Sheila Leslie

Mr.                     Dennis Nolan

 

COMMITTEE MEMBERS EXCUSED:

 

Mr.                     John Oceguera

Mr.                     David Parks

Mr.                     Richard D. Perkins

 

GUEST LEGISLATORS PRESENT:

 

Assemblyman Greg Brower

 

STAFF MEMBERS PRESENT:

 

Vance Hughey, Committee Policy Analyst

Darlene Nevin, Committee Secretary

 

OTHERS PRESENT

 

Kimberly Maxson-Rushton, Legislative Liaison, Office of the Attorney General

Marilyn Skibinski, Regulatory Analyst, Bureau of Consumer Protection

Patricia Jarman-Manning, Commissioner, Consumer Affairs Division, Department of Business and Industry

Jim Endres, Legislative Advocate, AT&T

Steve Tackes, Legislative Advocate, MCI WorldCom

Alfredo Alonso, Legislative Advocate, Lionel Sawyer and Collins, and Citibank

Margaret McMullen, Director, Government Affairs, Sprint

Mary Lau, Executive Director, Retail Association of Nevada

Kevin Ross, Telemarketer, Rolling Thunder Communications

Kent Lauer, Legislative Advocate, Nevada Press Association

Rhonda Hylton, Business Owner, Nevada’s First Institute of Barbering

Vicky Sakach, Vice President, Nevada State Barber Board

Dr. Peter Lok, Doctor of Acupuncture, Nevada Oriental Medical Association

Dr. Sae Lee, Doctor of Oriental Medicine, Vice President, Nevada State Board of Oriental Medicine

Dr. Michael Ranft, Board of Directors, American Association of Oriental Medicine

Brian Fennen, Acupuncturist, California State Oriental Medical Association and Council of Acupuncture and Oriental Medicine Association

Dr. Debra Duncan, National Certification Commission for Acupuncture and Oriental Medicine

Barbara Mitchell, Executive Director, Acupuncture and Oriental Medicine Alliance

Merle Roth, Private Citizen

Steve Drescher, Private Citizen

Don R. Baesel, Private Citizen

Herman Roth, Private Citizen

Harry Swainston, Private Citizen

Shauna Haipola, Private Citizen

Sharon Roth, Licensed Acupuncturist

Maureen Lamerdin, Private Citizen

Bruce Eichelberger, Private Citizen

Dr. Michael Labrum, Private Citizen

Marilyn Hite, President, Harris Foundation

Gail Burks, Executive Director, Nevada Fair Housing Center, Inc.

Mark Krueger, Deputy Attorney General

Susan Furlong Reil, Private Citizen

Scott Craigie, Legislative Advocate, Farmers Insurance Group

John Sande, Legislative Advocate, Nevada Bankers Association

Ken Scruggs, Legislative Advocate, Household Financial Group

Robert Barengo, Nevada Consumer Finance Association

Sam McMullen, Legislative Advocate, Assurant Group

Jim Wadhams, Legislative Advocate, Nevada Mortgage Bankers Association

 

PARTICIPATING VIA VIDEOCONFERENCE FROM LAS VEGAS:

 

Jo Ann Gibbs, Senior Deputy Attorney General, Bureau of Consumer Protection

Nathaniel LaShore, President, Nevada State Barbers Health and Sanitation Board

Ann Gallegos, Secretary-Treasurer, Nevada State Barbers Association

Ding Yuan, PhD, Private Citizen

 

 

Chairman Dini called the meeting to order at 4:01 p.m.  A quorum was present.  Chairman Dini opened the hearing on related bills A.B. 337 and A.B. 439.

 

Assembly Bill 337:  Revises provisions relating to deceptive trade practices. (BDR 52-484)

 

Assembly Bill 439:  Revises provisions relating to solicitation by telephone. (BDR 52-1263)

 

Assemblyman Brower, District No. 37, presented A.B. 439.  He informed the committee Kimberly Maxson-Rushton was also present on behalf of the Attorney General’s Office and their proposed legislation, A.B. 337, which was similar to A.B. 439.

 

Assemblyman Brower related A.B. 439 was designed to create a state “do not call” list to combat the problem of unsolicited phone calls.  He added that other states had adopted similar legislation as well.  Consumers would add themselves to the list either by phone or perhaps through a website.  Telemarketers would have to obtain the list from the state.  Mr. Brower explained that some states charged the consumers to be added to the list and all states charged the telemarketers for the list.  Mr. Brower did not expect the consumers to be charged, but the telemarketers would be charged a “nominal” fee.

 

The telemarketer would be responsible for not calling any numbers on the list.  The list would consist of telephone numbers, not names, and it would have to be decided whether or not the list would include businesses.  Some states allowed only individuals.  Mr. Brower stated A.B. 439 would only address calls made for the purpose of selling goods or services and would not apply to charitable organizations seeking contributions.

 

Mr. Brower informed the committee A.B. 439 excluded callers who had existing business relationships with the consumers.  He advised the committee A.B. 439 provided for the adoption of regulations.

 

Mr. Brower directed the committee to his revised version of A.B. 439 (Exhibit C).  Section 1 placed this law in Chapter 598 rather than 599B of the Nevada Revised Statutes (NRS).  Chapter 599B was created to combat telemarketing fraud, whereas A.B. 439 addressed consumer privacy.  Also, A.B. 439 was aimed at all callers.  Placing this legislation in Chapter 599B would “virtually exempt all callers that we want to subject to this bill,” which Mr. Brower clarified was the purpose of A.B. 439.

 

Section 2 required the Commissioner of the Division of Consumer Affairs to establish and maintain the “do not call” list.  A.B. 439 required at least a semi-annual revision, but that was subject to further consideration from industry through the regulatory process.

 

Section 3 addressed publication of the list by the publisher of the local telephone directory.  Section 4 stated a seller “shall not intentionally” make a call to a number on the list maintained by the state.  Section 4, subsection 2, clarified a caller could call someone whose number was on the list if the caller had an established business relationship with that person.  This replaced the previous Section 4, subsection 2.

 

Section 4, subsection 3, stated the Commissioner “may adopt regulations to carry out the provisions of sections 2, 3 and 4.”  Mr. Brower recommended changing the wording to “shall adopt.”  He stated Section 4, subsection 3(b), “Rules of practice . . . in this chapter” should be deleted and pointed out Section 6, the penalty section, was deleted in the revision.  He informed the committee they would consider the penalty provisions already stated in NRS 598.0999.  He pointed out the rest of line 39, “except sections 2, 3 and 4 of this act” should also be deleted.

 

Section 7 changed the effective date from October 1, 2001 to January 1, 2002.  Mr. Brower said he expected an “intensive rule-making process” by the Commissioner of Consumer Affairs as they adopted regulations.

 

Mr. Brower did not intend for the consumer to bear any costs; however, the committee would decide.  He noted Idaho charged fees and avoided the use of taxpayer dollars.  The cost to telemarketers had not been decided.  Some states, he interjected, incurred no financial burden with similar legislation.

 

Mr. Brower suggested consumers could “sign-up” by placing a phone call or utilizing a website.  He informed the committee these procedures had worked in other states.  The frequency of updating the list, or renewal, could be determined through the regulatory process.  He also submitted the format of the list would concern businesses and would depend on the systems they utilized.

 

Mr. Brower informed the committee they would hear of a federal law that already addressed the issue of phone solicitation.  Under that law, he expounded, the consumer would tell a solicitor to not call him/her again and the telemarketer would add the consumer’s name to a list and maintain that list.  A.B. 439, however, required only one call by the consumer; it would be simpler.

 

Mr. Brower advised the committee they would also hear from the Direct Marketing Association who maintained a “do not call” list to which consumers could add their names.  However, only members of the Direct Marketing Association subscribed to that list, and their compliance was voluntary.

 

Mr. Brower also cautioned the committee they might hear testimony that placing consumer names on a “do not call” list could prevent the consumer from receiving “valuable” information from telemarketers.

 

Mr. Brower reminded the committee A.B. 439 gave consumers the choice of being called.  He advised the committee to pose any questions regarding regulations and maintenance of the list to a forthcoming panel which would include Marilyn Skibinski, Regulatory Analyst, for the Bureau of Consumer Protection; Patricia Jarman-Manning, Commissioner of the Consumer Affairs Division for the Department of Business and Industry, who will be maintaining the list; and Jo Ann Gibbs, Senior Deputy Attorney General.

 

Kimberly Maxson-Rushton, Chief Deputy Attorney General, presented A.B. 337 as a “companion” bill to A.B. 439.  Ms. Maxson-Rushton described A.B. 337 as essentially an amendment to NRS 598 for the purpose of expanding the definition of “deceptive trade practice.”  She referred the committee to the revisions she proposed (Exhibit D).  Section 1, subsection 1, prohibited telephone solicitors from using “threatening, intimidating, profane or obscene language.”  Section 1, subsection 2, prohibited telephone solicitation that “repeatedly or continuously conducts the solicitation or presentation in a manner that is considered by a reasonable person to be annoying, abusive or harassing.”  Section 1, subsection 3, was deleted because it duplicated what was included in A.B. 439.  Section 1, subsection 4, prohibited a solicitor from calling a person at his residence between 9:00 p.m. and 8:00 a.m.  A.B. 337 originally prohibited calls between 9:00 p.m. and 9:00 a.m.  Section 1, subsection 4, prohibited solicitors from blocking or intentionally circumventing services used to identify callers, such as “Caller I.D.”

 

Ms. Maxson-Rushton emphasized the need for A.B. 439 and A.B. 337 and conveyed the numerous complaints received from consumers by the Attorney General’s Office and the Consumer Affairs Division.

 

Marilyn Skibinski, Regulatory Analyst, Bureau of Consumer Protection, voiced her support of A.B. 337 and A.B. 439 as well as that of Timothy Hay, the Consumer Advocate.  She noted A.B. 337 provided additional protection for the consumers.  She related the numerous complaints received and the violation of privacy experienced by consumers, as well as feelings of being threatened or endangered.  Ms. Skibinski added there were businesses that were justified in being on a “do not call” list.  She presented to the committee the problems encountered by the Medical Answering Service in Carson City.  All 400 lines could be affected in sequence when a telemarketer called.  This caused 45‑minute delays.  Such delays could be crucial if the hospital was trying to contact a doctor during a medical emergency.  Most hospital calls occurred after hours, the same time the answering service would be operating.  In closing, Ms. Skibinski provided that other states had devised manageable systems and urged support of A.B. 337 and A.B. 439.

 

Patricia Jarman-Manning, Commissioner of the Consumer Affairs Division for the Department of Business and Industry, reinforced that private citizens had the right to limit who called their homes and added that unlisted phone numbers did not adequately address the problem.  She maintained Consumer Affairs was not “anti-business.”  She reaffirmed their support of the proposed legislation as an opportunity to return control to the consumers within their own homes.

 

Assemblywoman Giunchigliani recognized A.B. 439 was sensible and asked Ms. Manning if political phone calls had been addressed.  Ms. Manning responded the legislation would apply during political campaigns.

 

Assemblyman Beers asked if a political message was considered a sale of goods or services and thereby prohibited by A.B. 439.  He also offered, regarding A.B. 337, that the data be transmitted to telemarketers electronically as the most efficient method.  He wanted assurance this method would be used.

 

Assemblyman Brower replied the language of A.B. 439 would not prohibit political messages nor was that intended.  He explained that political messages comprised a very small percentage of unsolicited calls.  Mr. Brower also responded that availability of the “do not call” lists to telemarketers was crucial and stressed the proposed legislation was addressing “intentional” violations.  Unless there was a pattern of intentional violations, the caller would not be in violation of the legislation.

 

Assemblyman Beers apologized and clarified he was speaking to A.B. 337.  He asked if a political call was, as stated in A.B. 337, “a solicitation by telephone or sales presentation.”  Ms. Skibinski answered it was not.

 

Assemblyman Hettrick asked if the data provided to the telemarketers would include information other than the phone numbers.  Mr. Brower responded the Consumer Affairs Division would decide the exact data and asserted mailing addresses should not be included; he also did not see any purpose for the names to be included.

 

Assemblyman Hettrick asked if the list would be sold to the telemarketers.  Mr. Brower said the telemarketer would be obliged to obtain the list once they knew the legislation was in effect, and there would be a fee associated with obtaining the list.

 

Assemblyman Hettrick felt the legislation should be amended to prevent telemarketers from reselling the lists.  Ms. Manning informed the committee those already registered under NRS 599B could receive the list without charge because they already paid a “sizeable” registration fee.  “Mr. Hettrick restated his concern that those already registered should also not resell their lists and reasoned the sales of the lists would pay for the costs of enacting the legislation.  Assemblyman Brower assured Mr. Hettrick his concerns would be addressed.  Assemblyman Beers suggested the telemarketers might demonstrate their intent to comply through the receipt of their purchase of the lists.

 

Ms. Skibinski informed the committee they had already received requests from telemarketers outside of Nevada to purchase Nevada’s lists.  She conveyed telemarketers viewed these lists as beneficial and relayed to the committee the Direct Marketing Association was among those who requested lists.

 

Assemblyman Brower asserted he was not “anti-business” and viewed this legislation as a small burden to business in comparison to the benefits it provided the consumers.  He submitted industry should work with the state to increase the efficiency and benefits of the legislation and considered it a “no lose” proposition that benefited both business and consumers.

 

Jo Ann Gibbs, Senior Deputy Attorney General, Bureau of Consumer Protection, informed the committee that she and two deputies were in Las Vegas to respond by videoconference to any questions that might arise.

 

Jim Endres, representing AT&T, informed the committee AT&T had no objection to A.B. 337 as revised and perceived it as beneficial to Nevada.  He also acknowledged the good intent of A.B. 439, but proposed a change on behalf of AT&T.  Under Section 4, subsection 2, of the revised A.B. 439, Mr. Endres proposed an exemption for businesses that had prior business relationships with the consumers.

 

Mr. Endres reasoned that AT&T and other communication companies regulated by Chapter 704 of NRS were in a situation within the marketplace in which they were transitioning from a monopoly to a competitive marketplace.  It appeared to him that only in their marketplace, such as energy and communications, did a monopoly already have an existing relationship with the consumers.  He claimed that those businesses that transitioned from a monopoly to the competitive marketplace needed the same or similar opportunities as those available to existing monopolies so they could market and sell their services.

 

Mr. Endres claimed they needed to be in this “competitively neutral” position with respect to their competitors, which in this situation, was the “incumbent” providers of phone services.  Without his proposed exemption, Mr. Endres claimed that AT&T and other competitors would not be able to notify their customers of new services they offered.  Mr. Endres offered himself as an example of a prospective purchaser of energy who, under the proposed legislation, would not receive calls from various energy services because they did not have with him a pre-existing business relationship.  Mr. Endres therefore proposed his amendment (Exhibit E) that excluded:

 

a public utility or community antenna television company which is regulated pursuant to chapter 704 or 711 of NRS, or by an affiliate of such a utility or community antenna television company, if the solicitation is within the scope of its certificate or franchise.

 

Assemblyman Hettrick asked if every “public utility” was regulated under Chapters 704 and 711 of NRS.  Mr. Endres replied that 711 governed the cable television industry and that 704 governed utilities.  Mr. Hettrick asked if any other industry was regulated under those two sections and Mr. Endres replied there were none.

 

Steve Tackes, Legislative Advocate, MCI WorldCom and attorney practicing in telecommunications law, related they were, as Mr. Endres described, transitioning in practice from that of a monopoly to the competitive marketplace and suggested consumers would want to be informed of available communication services.  He claimed there should an exemption, for example, should the Legislature or the utilities commission want to inform the public of services beneficial to them.

 

Mr. Tackes related that when practicing in front of the commission, they frequently practiced under the Telecommunications Act of 1996, which fostered the transition to competition.  The Telecommunications Act provided that state law could not prohibit the ability of an entity to provide a telecommunications service.

 

Because the monopoly phone companies currently had a business relationship with every one of their customers, they would be able to call their customers.  Those with only prior business relationships could not.  Without the amendment proposed by Mr. Endres there would be an imbalance; the competitive neutrality would not exist.  Instead of chancing noncompliance with the law, Mr. Tackes strongly recommended the acceptance of Mr. Endres’ proposed amendment.

 

In addition, Mr. Tackes referred to the letter from MCI WorldCom (Exhibit F), which described other “do not call” programs.  He noted the letter was originally written in opposition to A.B. 337, but given the proposed changes from the Attorney General’s Office, they were no longer opposed.  Mr. Tackes informed the committee that also present with him was Robert Munoz, author of the MCI WorldCom letter, should there be any questions for him.

 

Alfredo Alonso, Legislative Advocate, Lionel Sawyer and Collins, representing Citibank Credit, voiced his approval that the “established business relationship” was excluded in A.B. 439, Section 4, but requested prior business relationships also be excluded.  In support of his argument, he informed the committee a banking product might not fit the needs of a consumer at a given time.  Later, with different products to offer, that same institution might be able to provide the consumers a product that would suit their needs.  In addition, Mr. Alonso stated they would support a designated time span regarding prior business relationships.

 

Chairman Dini asked Mr. Alonso if he was suggesting an additional amendment to A.B. 439.  Mr. Alonso replied that was correct and restated his proposed amendment would be the inclusion of “former business relationship” in Section 4, subsection 2.

 

Margaret McMullen, Director, Government Affairs, representing Sprint, agreed with the amendments offered by Mr. Endres and Mr. Tackes.  She anticipated regulations would need to address problems that could arise from consumers moving and changing their phone numbers because previous phone numbers would be assigned to other customers after three months.

 

Mary Lau, Executive Director, Retail Association of Nevada, stated they were not in opposition to a “do not call” list.  Their concern was the deletion of Section 4, subsection 2, of A.B. 439, which listed exceptions for which legal proceedings would not be undertaken.  Ms. Lau suggested retailers wanted this provision to remain in A.B. 439 and noted standard provisions “across the board” was facilitating for national retailers.  Ms. Lau said she favored the original and the new Section 4, subsection 2, which was deleted, and the replacement subsection 2.  She observed “shall not institute a legal proceeding” might not be necessary language since NRS 598B addressed deceptive trade and not criminal activity.

 

Ms. Lau was concerned that Section 2 of the revision of A.B. 439 provided for semiannual revisions of the list.  However, according to Section 4, the entity calling the consumers would be responsible for knowing whose names were in the registry for 30 days or more.  Ms. Lau offered to work with Assemblyman Brower, the Commissioner of Consumer Affairs, and the committee.

 

Kevin Ross, a telemarketer and owner of Rolling Thunder Communications, felt a “do not call” list was “absolutely appropriate” in Nevada.  He observed that someone who actively sought to be placed on a “do not call” list would not be a direct mail or telephone consumer.  Mr. Ross claimed these individuals were also nonvoters.  He perceived that legislation would save his company from placing “wasted” calls.  He offered to work with the committee and suggested the law was already ten years behind technology.

 

Kent Lauer, Legislative Advocate, Nevada Press Association, voiced their support of the amendment proposed by Mr. Alonso that excluded prior business relationships.  He offered the example of a newspaper subscriber being approached to renew their subscription.

 

Assemblyman Hettrick asked Mr. Lauer if he had any problem with a time frame being applied to the proposed amendment.  Mr. Lauer replied he did not, but could not suggest a time frame at the moment.

 

Chairman Dini appointed a subcommittee consisting of himself, Assemblyman Humke and Assemblyman Hettrick to consider A.B. 337 and A.B. 439.  Chairman Dini closed the hearing on A.B. 337 and A.B. 439 and opened the hearing on A.B. 192.

 

Assembly Bill 192:  Revises provisions relating to barber schools. (BDR 54-735)

 

Rhonda Hylton, business owner, Nevada’s First Institute of Barbering, testified in favor of A.B. 192.  She enlightened the committee on the benefits she expected of the Institute.  The education and training would “encourage students to pursue the higher standards needed to demonstrate essential skills and knowledge to produce quality work.”  The Institute would provide alternative employment and a positive impact on teen dropouts, pregnant teens, low-income families and welfare-to-work individuals.  Students would not have to depend on sponsorships, grants, or state monies; they could develop self-worth and they could use the skills nationwide.

 

Ms. Hylton proposed customers should pay for services rendered.  She also referred to a letter she sent Assemblyman Arberry (Exhibit G) which requested Section 1, line 16, be changed to read “Two instructors available to provide instruction at all times.”

 

Chairman Dini asked why A.B. 192 originated.  Ms. Hylton replied that in 1970 the law forbad charges for services rendered.  She noted the cosmetology board charged for services and those charges paid for instructors and mannequins.  Ms. Hylton added that the students were required to take 1500 hours; 1200 of those were practicum hours.  She reasoned the fees were necessary for the Institute to function properly.  Ms. Hylton also stated the charges would be reduced for customers such as low income and senior citizens.

 

Assemblyman Beers asked Ms. Hylton how many barber schools were in the state of Nevada.  Ms. Hylton replied there were none.  Mr. Beers asked Ms. Hylton to clarify whether or not cosmetology schools could charge for services rendered by students.  Ms. Hylton replied that they could.

 

Assemblywomen Giunchigliani asked Ms. Hylton to clarify the number of hours required by the students and where they would be performed.  Ms. Hylton replied 1500 hours were required and would be performed at the Institute.  The first 200 hours, or six weeks of the program, were instructional, and the remainder was practicum, or clinical work.  Ms. Hylton also informed Ms. Giunchigliani that prospective students applied to the Barber’s Board.

 

Vicky Sakach, Vice President, Nevada State Barber Board, informed the committee she supported A.B. 192 with the change proposed in section 1, line 16, that changed “One instructor” to “Two instructors.”  She also had no objections to charging for the students’ services.

 

Nathaniel LaShore, President, Nevada State Barbers Health and Sanitation Board voiced his opposition to A.B. 192 because of the language.  He was not sure if A.B. 192 clearly stipulated one instructor for every ten students.  He offered there should be one instructor for 1 to 10 students, a second instructor for eleven to twenty students and a third instructor for twenty-one to thirty students.  Chairman Dini assured Mr. LaShore A.B. 192 already provided the desired number of instructors.  Mr. LaShore expressed his hopes there would be students from the Institute who would advance toward being instructors themselves.

 

Ann Gallegos, Secretary-Treasurer, Nevada State Barbers Association, conveyed the association had opposed A.B. 192 based on the provision for one instructor.  They supported A.B. 192 with the change from one instructor to two.

 

Chairman Dini closed the hearing on A.B. 192 and opened the hearing on A.B. 302 and A.B. 339.

 

Assembly Bill 302:  Makes various changes to licensure requirements for professionals in Oriental medicine. (BDR 54-1083)

 

Assembly Bill 339:  Revises provisions relating to practice of Oriental medicine. (BDR 54-295)

 

Assemblywoman Chris Giunchigliani, District No. 9, presented A.B. 302.  She informed the committee that acceptability for Oriental medicine had grown in the United States and among western medicine groups.  Acupuncture and Oriental medicine had become recognized in the Nevada Statutes following the introduction of the original bill by Senator Walker in March of 1973.  The Nevada State Board of Oriental medicine contacted Ms. Giunchigliani to request this legislation.  She thought they approached her because Oriental medicine was evolving and the statutes had not been changed since 1991.

 

A.B. 302 was submitted based on the recommendations of the board.  Ms. Giunchigliani recognized that strong standards were originally established by the Legislature and continued.  Her review showed that those standards worked.  Ms. Giunchigliani emphasized the need to recognize that Oriental medicine had become more accepted and should be more available as a profession.

 

Ms. Giunchigliani informed the committee her amendments to A.B. 302 were “practical” and based on what they believed would allow for more qualified applicants into the profession.  Although there was an art to the practice of Oriental medicine, Ms. Giunchigliani maintained it was also a science.  She related that other professional boards created their own exams, established criteria for licensing, had apprenticeship programs and required educational prerequisites.  The board fought for this recognition as a medical profession in 1973.  Few states actually recognized Doctors of Oriental Medicine as doctors.  In 1991, herbal medicine was included in Oriental medicine.  Also at that time, Oriental medicine was included in health insurance benefits as well as workers’ compensation benefits.  This exemplified the state’s recognition of Oriental medicine.  Ms. Giunchigliani reported careers in Oriental medicine had increased and suggested the increase could be the impetus for both A.B. 302 and A.B. 339.

 

Ms. Giunchigliani contended issues regarding per capita would not apply to Oriental medicine because it was mainly used by the Asian population.  Also, the need for Oriental medicine was increasing as more Doctors of Medicine were referring patients to Oriental medicine.

 

A significant issue Ms. Giunchigliani raised was that of accreditation.  She claimed that because of the board’s high standards, it did not accept every school accredited by the national commission.  Accreditation did not assure high standards, it simply meant a school attained a certain level of standards.  Ms. Giunchigliani felt boards still had the responsibility to review and add standards if they felt it was necessary.  She informed the committee the U.S. Department of Education did not accredit the National Certification Commission for Acupuncture and Oriental Medicine (NCCAOM) as some might assume; that was not their purpose.  She stated the U.S. Department of Education published a list of nationally recognized accrediting agencies (Exhibit H).

 

Ms. Giunchigliani related she had shared with the board numerous e-mails and letters received from the public and referred to an e-mail received from Mr. and Mrs. McSweeney and their daughter (Exhibit I).  Most concerns referred to the six-year apprenticeship program and the board having to use a national test.  Both issues were addressed by Ms. Giunchigliani’s proposed amendments.  Ms. Giunchigliani thanked the board for their patience and commended them for their openness and willingness to help move Oriental medicine into a “profession of the twenty-first century.”  Ms. Giunchigliani promised the board that should the proposed legislation be adopted, it would be given time to work.

 

Ms. Giunchigliani addressed her proposed amendments (Exhibit J).  She removed all references to Assistants of Acupuncture and Doctors of Acupuncture.  The profession would be referred to as Doctor of Oriental Medicine.

 

Section 2, page 3, allowed the board to establish a list of accredited schools that could be generated from the NCCAOM.  She changed the language for the filing of complaints and deleted the reference to investigations.  However, the board could investigate the accuracy of applications.

 

Section 3 allowed licensed applicants to take a national examination established by NCCAOM or one provided by an independent third party contracted by the board.  Ms. Giunchigliani stressed the importance of the board’s adoption of a test that assured knowledge, health and safety laws pertinent to the state of Nevada.

 

Beyond an undergraduate degree, A.B. 302 allowed for successful completion of four years of study or its equivalent, as some accredited programs were three years and equivalent to four years.  This allowed for flexibility of the board.

 

All references to an apprenticeship program were deleted because clinical experience was included in most programs in current colleges.  Apprenticeship programs were hard to find, as most Oriental medicine offices were too small to pay an apprentice salary in addition to their own.  The board was assured that all colleges of accreditation required both observation in the classroom and actual hands-on practice.

 

Chairman Dini asked Ms. Giunchigliani if the board considered the acupuncture assistant no longer necessary.  Ms. Giunchigliani responded they did.

 

Peter Lok, Doctor of Acupuncture, representing the Nevada Oriental Medical Association, gave a brief history of the State Board of Oriental Medicine.  Referring to the beginnings of Oriental medicine in Nevada, he communicated the board’s commitment to high standards.  The standards set by the Legislature in 1973 included a minimum of three or four years of acupuncture and Oriental medicine studies and ten years of clinical experience.  In 1981, the requirement of ten years clinical experience was reduced to six years.  The current requirements in Nevada are three years of acupuncture studies, four years of Oriental medicine, and six years of clinical experience.

 

Dr. Lok pointed out the number of doctors of Oriental medicine had not grown proportionately with Nevada’s population.  Of the 29 acupuncturists licensed in Nevada, only 16 had chosen to practice here.  Twelve decided it was more economically rewarding to practice elsewhere.  Dr. Lok related that licensed acupuncturists in Nevada see an average of only three to ten patients.  This was surely a concern to Nevada and its licensees.  Dr. Lok determined that after 27 years of acupuncture being legalized in Nevada, patients were still “concerned about being stuck with a needle.”

 

Dr. Lok conveyed the Association’s opinion that Nevada needed more acupuncturists and doctors of Oriental medicine.  He stated the Legislature would have to decide whether or not an “abbreviated” course in acupuncture and Oriental medicine would suffice in place of a “traditional and comprehensive education” with regard to the public’s safety.

 

Dr. Lok claimed safety and effectiveness were the main concerns, but maintained there should be more emphasis on effectiveness of the treatment.  He asserted safety took time to train, but effectiveness required extensive training.  Dr. Lok informed the committee he was in favor of A.B. 302 because it was a balance between quality and quantity; one was not sacrificed for the other.  He stated four years of college and four years of additional oriental medical school training, with no additional clinical training after graduation, should be the requirement.

 

Dr. Lok entreated the committee to retain their high standards and not let politics interfere.  He informed the committee they would hear testimony from those outside of Nevada telling Nevadans how to regulate the industry that Nevada itself legalized.  He reiterated his support of A.B. 302 with the amendments proposed by Ms. Giunchigliani.  He added the industry wanted and welcomed change; however, he added, Nevadans knew what was best for Nevada.

 

Chairman Dini asked Dr. Lok if there were any standards in foreign countries for education and training.  Dr. Lok replied by relating events of 60 years ago when the Nationalist Chinese were driven from the mainland.  Due to the lack of doctors in the rural areas, doctors of inferior quality were “mass produced.”  After two years of failure, the doctors had to be re-educated.

 

Dr. Sae Lee, Doctor of Oriental Medicine, and Vice President of the Nevada State Board of Oriental Medicine, responded to Chairman Dini’s question of Dr. Lok.  Dr. Lee replied there were standards in foreign countries for education and training.  He informed the committee that in Korea, two years of pre-medicine was required and four years of medical school, to be a medical doctor.  To be a Doctor of Oriental Medicine, three years of pre-medicine, four years of Oriental medical school, and a one-year training session were required.  He could not speak for China or Taiwan.

 

Dr. Lee told the committee he was proud to be a doctor of Oriental medicine in Nevada.  In Nevada he was considered a doctor and given the respect of a doctor.  He submitted acupuncture was not simplistic as some critics claimed.  Dr. Lee indicated when he saw a patient, he, like other medical doctors, obtained an overall health picture including medical history, medicines taken and blood pressure.  He added that he had to learn pharmacology in Nevada so he could take medications into account when assessing the patient’s health.  Dr. Lee emphasized the current system in Nevada was good, but he believed it was time for change.  He especially requested that the quality of practitioners in Nevada be maintained.

 

Dr. Lee wondered why there were so few non-Asian applicants until the year 2000 and conveyed he was happy to see the number increase.  He attested he was open to non-Asian applicants and stressed the importance of not being discriminatory.  In closing, Dr. Lee reaffirmed his support for A.B. 302, stating it was fair and “a good service to Nevada.”

 

Chairman Dini asked if there were any questions.  Ms. Giunchigliani displayed needles to the committee to support her position that anyone “inserting needles” into another’s body should be well trained in anatomy and physiology.

 

Dr. Michael Ranft, member of the Board of Directors of the American Association of Oriental Medicine, and the State Board of Oriental Medicine in Arkansas, verbalized The National Association of Oriental Medicine’s support of A.B. 302.  He acknowledged A.B. 302, with the proposed amendments, would help open Nevada to other practitioners while maintaining the high standards expected of them.

 

Chairman Dini asked if the profession was large in Arkansas.  Dr. Ranft replied it was not.  There were 14 licensed practitioners to 2.3 million people.  Chairman Dini commented it was proportionately similar to the size of the profession in Nevada.

 

Brian Fennen, a licensed acupuncturist from California, former President of the California State Oriental Medical Association and the Council of Acupuncture and Oriental Medicine Association (CAOMA), was concerned that standardization and reciprocity at “high levels of competency” would encourage monopolies.  He stated he would like to make further amendments.  He described the accreditation and certification standards as monopolies as well.  He noted California did not require accreditation or certification; they had their own exams, which he stated were above the national standard.  Dr. Fennen also revealed the ratio of acupuncturists to citizens was 1 to 7,500 in California and about 1 to 30,000 in Nevada.  He stated he would like to see the NCCAOM exam require both acupuncture and Oriental medicine evaluations.  He noted the NCCAOM and ACAOM standards required 1725 hours of schooling for the acupuncture exam, and 2,025 hours for the Oriental medicine exam.  He noted California was raising its requirement from 2350 hours to 3200 hours.  In closing, Dr. Fennen cautioned against “lowering the bar too far” in Nevada and reaffirmed his “general” support of A.B. 302.

 

Assemblywoman Giunchigliani commented the equivalency was key and that was her reason for changing some of the language to “may utilize.”  Just because the accreditation was here presently did not mean that particular profession or group would remain to practice in Nevada.

 

Assemblyman Beers asked Dr. Fennen if he worked with Mr. Maloney.  Dr. Fennen replied he was also now on the board of the American Association of Oriental Medicine and that Mr. Maloney was the executive director.  However, Mr. Fennen clarified he was here representing the Council of Acupuncture and Oriental Medicine Associations.

 

Mr. Beers informed Dr. Fennen that Mr. Maloney had expressed his support earlier in the week for A.B. 339 rather than A.B. 302.  Dr. Fennen affirmed for Mr. Beers that he did not represent the American Association of Oriental Medicine.  Dr. Ranft interrupted that he was representing the American Association of Oriental Medicine and they supported A.B. 302 as it was amended, but not as it was the previous week.

 

Assemblyman Hettrick asked Dr. Fennen if his hours of training included a four-year undergraduate degree, or if they were hours in training for acupuncture.  Dr. Fennen replied he had a bachelor’s degree.  He expounded that accreditation required two years of college before attending an acupuncture school and that most schools in California were accredited and would therefore meet that standard.

 

Assemblyman Hettrick asked how long the typical acupuncture school lasted.  Dr. Fennen replied schools were typically four years with a two-year prerequisite for entry.  Mr. Hettrick asked if they accepted any of the national tests for licensing.  Dr. Fennen replied they accepted only the California test for licensing.  He further clarified for Assemblyman Beers that the organization he represented was primarily California practitioners.

 

Assemblyman Hettrick asked how often they performed licensing testing after completion of the course and if they had statutes that provided for background checks.  Dr. Fennen replied exams were given twice per year and that a statute for background checks did exist.  Dr. Fennen affirmed for Mr. Hettrick that background checks could be obtained in six months and the doctors would be tested every six months.

 

Ding Yuan, PhD, private citizen, voiced his concern for the citizens of Nevada.  He emphasized the need for both education and experience.  He recognized two trends:  1) The United States was gradually recognizing acupuncture and Oriental medicine and 2) states were improving their requirements for acupuncture.  He stressed the importance of high standards in the fields of acupuncture and Oriental medicine.

 

Dr. Debra Duncan, National Certification Commission for Acupuncture and Oriental Medicine (NCCAOM) prefaced her testimony by announcing she was “not coming in as an outsider to tell the people in Nevada how to do their business.”  Rather, she intended to present facts with clarity.  Dr. Duncan informed the committee NCCAOM was a certifying agency accredited by the National Commission for Certifying Agencies and had been in existence since 1982.  Out of 1700 certifying agencies evaluated, NCCAOM was one of the 30 that met the “golden standard” in the United States to certify individuals.  Dr. Duncan revealed NCCAOM provided certification exams in acupuncture, Chinese herbology and Asian bodywork therapy, and their certification and examinations were used by licensure boards in 38 of the 41 jurisdictions of the United States.  She cautioned the committee against choosing an alternative to national standards.  She revealed California had been “plagued” with problems and the Office of Examination Services replaced its examination.

 

Dr. Duncan informed the committee the national acupuncture exam was a six-hour exam that included a point location exam, a comprehensive written exam and also testing on clean needle technique.  NCCAOM also enforced competency requirements to maintain certification.  Dr. Duncan clarified the only reason NCCAOM existed was to “protect the public from unsafe practice” by requiring education from the Accreditation Commission for Acupuncture and Oriental Medicine (ACAOM) or an equivalent international education.  They also protected the public by administering national board examinations to ensure safe and effective treatment from qualified practitioners.  Since its beginnings in 1982 NCCAOM never had to discipline a nationally certified individual for unsafe practice or for causing injury to a patient.  Dr. Duncan affirmed NCCAOM and the Accreditation Commission for Acupuncture and Oriental Medicine opposed A.B. 302 and strongly supported A.B. 339 with a minor amendment.  That amendment would require an individual to graduate from an ACAOM agency or an equivalent international educational agency to practice Chinese herbology.  Dr. Duncan concluded A.B. 339 “cleaned up some of the problematic semantic language” in A.B. 302 and would provide choices for more practitioners.

 

Assemblywoman Giunchigliani and Dr. Duncan clarified comments made earlier in the hearing regarding accreditation of NCCAOM.  NCCAOM was accredited by ACAOM.

 

Assemblyman Beers asked why it would be inappropriate to be accredited by the Department of Education.  Ms. Duncan replied it would not be appropriate because the Department of Education was a certifying agency, not an accrediting agency.  They themselves were accredited by the National Commission of Certifying Agencies.  ACAOM, the accreditation commission that evaluated schools and judged the quality of education, was overseen by the U.S. Department of Education.

 

Barbara Mitchell, Executive Director of the Acupuncture and Oriental Medicine Alliance, clarified that the NCCAOM certified individuals and the accreditation commission certified colleges.  That was why ACAOM was approved by the U.S. Department of Education.

 

Ms. Mitchell, a licensed acupuncturist and attorney, proceeded with her testimony.  She recognized the debt owed those who came from overseas and helped establish Oriental medicine in the United States.  She was also pleased with the amendments; they would improve access in a state that “had a reputation for being closed.”  Ms. Mitchell noted she had received numerous complaints from consumers who could not gain access to practitioners, students who wanted to return to Nevada to practice, and practitioners from other states who could not locate the proper board to apply.

 

There were issues with A.B. 302 as amended she wanted to address.  Section 2, subsection 4, read “establish a list of accredited schools which may be generated from the National Certification Commission for Acupuncture and Oriental Medicine.”  She reiterated NCCAOM did not accredit colleges; it certified individuals.  ACAOM accredited colleges.  She informed the committee ACAOM would strongly support their inclusion of “candidacy.”  She explained one step of the review process approved by the U.S. Department of Education was “provisional” accreditation, also referred to as “candidacy.”

 

Section 3, subsection 2, read “Applicants for licenses to practice as a doctor of Oriental medicine must take a National examination established by the National Certification Commission for Acupuncture and Oriental Medicine or the board may contract with an independent party to create the exam.”  Ms. Mitchell strongly encouraged the committee to adopt the NCCAOM.  She related unsuccessful attempts by various states that tried to create their own exams.  Several lawsuits resulted.  She related the Legislature removed the California examination from the acupuncture board and gave it to the Department of Examinations Services.  Later the Legislature pulled the practical exam because of the complaints.  Ms. Mitchell explained this field of medicine had difficulty doing a “fair, valid and legally defensible examination well.  In the mid 1980s those involved in the profession came together at a national level to resolve these problems.  She attested NCCAOM did an “excellent job” and had received only one appeal on the national exam in 15 years.

 

Section 4, subsection 1, lines 3-1 to 3-9, required an undergraduate degree from an accredited college or university in the United States for those who were graduates of U.S. schools.  Ms. Mitchell observed the national accreditation standard was a two-year undergraduate degree.  She informed the committee there were six acupuncture and Oriental medical colleges that required a four-year undergraduate degree in order to enroll, and only three states that required an undergraduate degree in order to be licensed to practice acupuncture or Oriental medicine.  She claimed this provision would reduce access for the consumers to acupuncture and Oriental medicine and declared there was no significant evidence this provision would provide better practitioners.

 

Section 4, subsection 2, lines 3 through 26, required that foreign applicants earned doctorate degrees in Oriental medicine from an “accredited” college or university in a country other than the U.S.  Ms. Mitchell informed the committee China, Korea and Japan did not “accredit” colleges.  Rather, their colleges were “government recognized.”  Secondly, in China, a four to five year “bachelors in traditional Chinese medicine” qualified an individual as a doctor of Chinese medicine.  Ms. Mitchell pointed out it was not a “doctorate” degree.

 

Ms. Mitchell commented increased hours of study did not provide better-qualified practitioners.  She addressed that as a problem she had recognized in the United States.  She also pointed out many practitioners left school feeling they “did not do or know enough.”  She emphasized there were people qualified to set educational standards.  The ACAOM, NCCAOM and the Acupuncture and Oriental Medicine Alliance asked states to utilize the national standards so individuals would have reciprocity and consumers would have access to qualified individuals.

 

Ms. Giunchigliani asked with whom did the different groups “interface.”  Ms. Mitchell replied the four agencies were entirely independent.  The Council of Colleges was the membership association of the colleges in the United States.  They developed the doctorate program and proposed a curriculum to the accreditation commission.

 

The Accreditation Commission for Acupuncture and Oriental Medicine (ACAOM) was the body that accredited the schools.  The National Certification Commission for Acupuncture and Oriental Medicine (NCCAOM) provided national examinations and certification programs.  The two national professional membership organizations were the Acupuncture and Oriental Medicine Alliance (AOMA) that Ms. Mitchell represented, and the American Association of Oriental Medicine (AAOM) that Michael Ranft represented.

 

Ms. Giunchigliani asked how they were financed.  Ms. Mitchell responded her organization was totally financed by professional membership dues and conferences.  Dr. Duncan responded NCCAOM received their money through examinations given.  She added NCCAOM purposely remained “at arms length” from the profession because their role was, as a licensure board, to protect public welfare.

 

Ms. Giunchigliani asked about the exams.  Ms. Duncan answered the acupuncture exam cost $900 and had two components:  point location and comprehensive written.  This included the cost for certification.  There was a $200 extra fee if they chose to test in either Chinese or Korean.  The certification was good for four years.

 

Ms. Mitchell continued the Council of Colleges was a membership organization funded through membership dues and offered the National Clean Needle Technique course.  The Accreditation Commission for Acupuncture and Oriental Medicine (ACAOM) was funded exclusively through accreditation fees.  Ms. Mitchell confirmed for Ms. Giunchigliani that the ACAOM did the accreditation and got funding through the schools that requested accreditation.  She also confirmed that the ACAOM did on-site evaluations both for the candidacy and a more extensive on-site evaluation for the accreditation.  Ms. Mitchell offered she could provide Ms. Giunchigliani with those costs at another time.

 

Ms. Giunchigliani provided, for the record only, Exhibits K through N.

 

Chairman Dini closed the hearing on A.B. 302, and opened the hearing on A.B. 339.

 

Assemblyman Beers, Assembly District No. 4, presented A.B. 339 (Exhibit O—Original is on file in the Research Library—and Exhibit P).  Mr. Beers informed the committee that Nevadans’ access to acupuncture was among the worst in the country.  He stated this was a result of the low number of licenses issued in Nevada.  Mr. Beers drew the committee’s attention to the fact that many Nevadans had to study Oriental medicine out of state and upon their return to Nevada, could not obtain a license to practice in Nevada.  Mr. Beers pointed out Nevada’s per capita ratio of Oriental medicine doctors to the populace was among the lowest in the nation.  He also informed the committee that ratio had declined steadily since 1994.  [Statistics were only available since that date.]

 

Mr. Beers emphasized thousands of acupuncturists were licensed annually in the United States yet very few were licensed in Nevada.  He described the provisions of current law as “hurdles.”  The Nevada Board had to accredit Oriental medicine schools, and prepare its own test.  Few applicants passed this test.  Then the applicant was required to have six years of experience.  The six years experience was an especially difficult obstacle.

 

Mr. Beers commented that although Nevada was one of the first states to legalize Oriental medicine, it did not necessarily have the most effective methods for regulating it.

 

Mr. Beers explained to the committee how A.B. 339 would remedy the situation.  A.B. 339 provided for national accreditation of schools and a national standardized test.  Mr. Beers offered it would not be necessary for Nevada to spend their efforts producing what the national level, with better resources available, had already developed.  A.B. 339 would also eliminate the requirement of six years of experience.  A.B. 339 would include acupuncturists as Oriental medicine practitioners.  The ACAOM and the NCCAOM would be the accrediting and certifying organizations.

 

Section 1 added herbology to the practice of Oriental medicine and Section 2 added acupuncturist.  Section 3 changed the duties of the State Board of Oriental Medicine.  Section 4 “curbed” the investigation practices of the board.  Section 5 changed the requirements for licensure.  Section 6 was a drafting modernization submitted by the Legal Division.  Section 7 “streamlined” temporary licensing for lecturers.  Sections 8 and 9 were modernizations submitted by the Legislative Council Bureau.  Section 10 clarified “Doctor.”  Section 11 exempted “widespread” drug addiction treatment.  Sections 12 through 15 also added acupuncturists.  Section 16 “grandfathered” existing Oriental medicine doctors into the new law.  Section 17 repealed laws made obsolete by the previous changes.  Section 18 provided the effective date of October 1, 2001.

 

The requirements for licensure, Section 5, were English proficiency and graduation from an accredited Oriental medicine school or from a foreign school approved by the U.S. Department of Education.  Mr. Beers pointed out A.B. 302’s requirement of four years of college before attending Oriental medical school was unusual; only three states required four years.

 

Mr. Beers pointed out the minutes of a January 2001 meeting of the Board of Oriental Medicine divulged there were only three schools they approved; two were in the United States and one was in Asia.

 

Mr. Beers continued to specify the requirements provided by Section 5.  Applicants were to be certified by NCCAOM.  Such certification required passing a national exam, completion of the Clean Needle Technique course, agreement to be bound by NCCAOM’s Code of Ethics, and the applicant being at least 18 years old.  Mr. Beers added that most of the states utilized the national exam; only three did not.

 

Mr. Beers reminded the committee that because it was so difficult to obtain licensure in Nevada, many Nevadans were unable to practice in their home state.  There would be testimony presented from some of these individuals and their family members.

 

Assemblywoman Leslie informed the committee her interest in A.B. 339 was not roused by outside organizations approaching her.  Rather, her constituents had approached her.  Ms. Leslie also commended Ms. Giunchigliani on A.B. 302.  However, she was in favor of the national test as proposed by A.B. 339 and gave Mr. Beers credit for the legislation.  She wanted her constituents to know the national tests deserved serious consideration.

 

Mr. Beers acknowledged the board as they were moving toward adopting some of the recommendations raised by A.B. 339.

 

Ms. Mitchell observed A.B. 302 and A.B. 339 both seemed to be moving toward recognizing graduates of United States colleges.  She noted A.B. 339 recognized “senior practitioners,” those who graduated in the United States before accreditation standards were widely available.  She conveyed their value in knowledge and experience and stressed the importance of including them.  She added the accreditation commission itself recognized the need for provisions for senior practitioners.

 

Ms. Mitchell also pointed out A.B. 339 recognized acupuncture separately from Oriental medicine.  Acupuncturists were “masters-level” practitioners.  There were no doctorate programs for them in the United States and there were extremely few doctorate programs overseas.  Another reason the separation was beneficial was the practice of herbology did not require acupuncture competencies.  Herbology was included in Oriental medicine.  However, acupuncturists who demonstrated competency in herbs could practice herbology and designate themselves that way.

 

Ms. Mitchell pointed out that many of her profession were addressed as “doctor” out of respect, but that was misleading to the public.  She asserted that until there was an accredited doctorate program, it did not make sense to offer the title “Doctor of Oriental Medicine” or “Doctor of Acupuncture.”  She informed the committee that the accreditation commission was establishing guidelines for an accredited doctorate degree and was awaiting approval from the U.S. Department of Education.  A.B. 339 would not take away the title “doctor” from those already licensed in Nevada, but would require an accredited or equivalent degree for future licensees.  She concluded A.B. 339 was a well-designed bill that improved access and informed consumers, thus enabling them to make choices.  Ms. Mitchell provided, for the record only, Exhibit Q, Exhibit R and Exhibit S.

 

Two letters were submitted to the committee by Vance Hughey, Committee Policy Analyst, on behalf of ACAOM and NCCAOM, urging the committee’s support of A.B. 339 (Exhibit T and Exhibit V).

 

Dr. Duncan agreed A.B. 302 had addressed many of their concerns and that A.B. 339 had improved the language.  Therefore she offered NCCAOM’s support of A.B. 339 with the written amendment offered previously (Exhibit T and Exhibit U).

 

Merle Roth, private citizen, informed the committee her daughter, Sharon Roth, a licensed acupuncturist in California, was trying to return to Nevada to practice as an acupuncturist.  Ms. Roth expressed her support of A.B. 339 and her appreciation, in light of the changes made to A.B. 302, that there was an attempt to improve the situation for those wishing to practice acupuncture or Oriental medicine in Nevada.  Ms. Roth noted Sharon had passed the national test, the California test and the Nevada State test, with all scores in the 90th percentiles and pleaded with the committee to make changes that would facilitate her being able to practice in Nevada.

 

Steve Drescher, private citizen, spoke on behalf of his girlfriend who had received an associate’s degree, attended an acupuncture school for four years, passed her NCCAOM exam and, after moving to Nevada, was considering leaving because of the difficulties faced in obtaining a Nevada license.  Mr. Drescher felt that with her experience, she should be able to practice in Nevada.

 

Don R. Baesel, private citizen, informed the committee he and his wife moved to Nevada to be closer to their son, Neil, who was a student at the Pacific College of Oriental Medicine in San Diego.  He related that his son had a bachelor’s degree and upon completion of the four year program in Oriental medicine, his son would have completed about 3,000 hours total of classroom and clinical work.  Upon completion of the four years Neil would take the California test and be licensed in California if he passed the exam.  Neil would like to work in Nevada; however, the six years of clinical experience required in Nevada would impede him from working to pay off his college loans.  He offered the previous experience requirement could be dropped as it “did not protect the public”; rather it “insured an artificial shortage” in Nevada and gave existing practitioners a “virtual monopoly.”  In closing, Mr. Baesel urged the committee to adopt A.B. 339 to attract quality practitioners to Nevada.

 

Herman Roth, private citizen, related his daughter’s dilemma to the committee.  His daughter Sharon Roth, as her mother Merle Roth testified earlier in the hearing, was an acupuncturist licensed in California who would like to practice in Nevada.  Mr. Roth noted the number of licensed doctors of Oriental medicine has decreased in Nevada.  His daughter wrote to 17 of the 20 practitioners in Nevada seeking to gain from them her six years experience required by Nevada for licensure.  The two responses she received informed her their practice was too small to hire her.  Mr. Roth also informed the committee that because his daughter was bilingual, her practicing Oriental medicine in Las Vegas would be beneficial to the Hispanics that constitute 20 percent of the Las Vegas population.  Finally, he concluded, the required six years of experience did not stipulate any specific standards to be met.

 

Harry Swainston, private citizen, spoke on behalf of his niece Shauna Haipola who graduated from high school in Nevada as a National Merit Scholar.  She graduated from Mount Holyoke College in Massachusetts as the Outstanding Biochemistry Student of the Year and later obtained a Master’s of Science in Acupuncture from Bastyr University in Washington.  Ms. Haipola then studied traditional Chinese medicine in China.  He explained to the committee Nevada’s current licensure requirements prevented his niece from practicing in Nevada.  He added her practicing in Nevada would benefit Nevadans and asked the committee’s “favorable treatment” of A.B. 339.

 

Shauna Haipola, private citizen and acupuncturist licensed in the state of Washington, expressed her support of A.B. 339 and thanked the committee for its work with A.B. 302.  Ms. Haipola expressed her desire to live in Nevada and informed the committee the only way she was able to receive an application for licensure in Nevada was through the Attorney General’s Office “because of problems with the board.”  However, she commended the board for the steps they have taken to correct problems.

 

Ms. Haipola declared she did not earn nor desire a doctorate degree and the title of doctorate should be reserved for those who earned it.  She understood and respected patients who referred to her as “doctor.”  Ms. Haipola provided for the committee’s perusal her document (Exhibit W.  Original is on file in the Research Library.), which presented:  1) Acupuncture and Oriental Medicine Facts, 2) Consensus Statements, 3) Other States’ Legislation and Licensure Standards and 4) Legislative History.

 

Sharon Roth, a licensed acupuncturist in San Diego, informed the committee she was recently licensed in Nevada as an acupuncture assistant because she passed the exam.  However, she could not practice in Nevada because she did not meet the requirements of six years clinical “practice.”

 

Ms. Roth informed the committee of her six years experience.  Three of those six years was the clinical practice included in her curriculum.  During that time she treated patients with “all of the techniques” of Oriental medicine including “needling,” prescribing herbs, and diagnosis.  Ms. Roth was in her fourth year of private practice in San Diego.  These years of experience did not meet Nevada’s requirement of six years clinical practice.  She also reminded the committee of her father’s earlier testimony that she applied to work as an acupuncture assistant in Nevada, but none of the current practitioners offered her a position.

 

Ms. Roth referred to Ms. Giunchigliani’s comments earlier wherein she stated Oriental medicine practitioners should have extensive knowledge of anatomy and physiology.  Ms. Roth informed the committee that the accredited schools provided extensive courses in anatomy, neuroanatomy, muscles, organs, physiology, pathophysiology, clinical sciences and pharmacology.  In closing she offered her support of A.B. 339 and described it as the clearer of the two proposed legislations.

 

Maureen Lamerdin, private citizen, informed the committee she had a Master’s of Science in Oriental Medicine and a diploma of acupuncture.  She passed the national exam and could practice in 37 other states.  She would like to practice in Nevada.  Despite her four years of clinical internship, to be licensed in Nevada would require six more years of internship.  With only two doctors of Oriental medicine in Reno, she doubted she would be able to gain the six years experience there and might have to move again.

 

Ms. Lamerdin revealed to the committee her experiences with the board of Oriental medicine in Nevada had displayed “a lack of organization” on their part.  She provided the committee with the details of her experiences with the Nevada State Board of Oriental Medicine (Exhibit X).  Her document addressed:  1) Letters and Minutes, 2) News Articles, 3) California Acupuncture Board, 4) NCCAOM Outlines, 5) Acupuncture Laws by State and 6) DOMs in Nevada.  In closing, Ms. Lamerdin urged the committee’s approval of A.B. 339, as it would improve access for Nevadans to Oriental medicine.

 

Bruce Eichelberger, private citizen and practitioner of Oriental medicine and healing arts for 30 years, informed the committee he was licensed in California, Oregon and Idaho and had passed the national acupuncture and herbal medicine exams.  Because of his wife’s health issues, they moved from Oregon to Reno so she could be near her parents and grandmother.  He would like to practice in Nevada, rather than travel to California to practice, and urged the committee to pass A.B. 339.

 

Dr. Michael Labrum, longtime resident of Nevada, expressed his support of A.B. 339 and acknowledged the “positive” changes proposed by A.B. 302.  He hoped the committee could come to a resolution for the benefit of Nevadans.

 

Marilyn Hite, President of the Harris Foundation in Las Vegas, stated the foundation funded preventative health care and viewed acupuncture and traditional Chinese medicine as preventative.  She expressed the foundation’s desire to fund such programs and offered her personal support of A.B. 339.

 

Brian Fennen, Council of Acupuncture and Oriental Medicine Associations, testified against A.B. 339 and suggested A.B. 302 and A.B. 339 should be merged.  Mr. Fennen declared testimony already given in the hearing misrepresented California and told the committee they could call the executive director of the board for accurate information.  Referring to A.B. 339 “certified in Chinese herbology” Mr. Fennen informed the committee they not only studied herbs, but also prescribed them.  Therefore the practice was herbal medicine, not Chinese herbology.  He also pointed out “Doctor of Oriental medicine” generally included acupuncture, Chinese herbal medicine and such others as Oriental massage.  Mr. Fennen wondered if both the acupuncture and herbology exams should be required.  He acknowledged the title of “doctor” was commonly accepted and offered his opinion that schools were trying to “lock them [practitioners] out,” and necessitate their going back to school just to get the title.  Referring to the NCCAOM exams utilized by over 30 states, Mr. Fennen informed the committee several states included their own exams as well.  He implied the NCCAOM exam was used to qualify practitioners as therapists, not necessarily as practitioners.

 

Mr. Beers provided, for the record only, his letter to the committee (Exhibit Y), and a letter received from Celia Hildebrand (Exhibit Z).

 

Chairman Dini closed the hearing on A.B. 339, and opened the hearing on A.B. 447.

 

Assembly Bill 447:  Prohibits unfair lending practices for home loans. (BDR 52-440)

 

Assemblywoman Buckley, District No. 8, presented A.B. 447 which addressed predatory lending.  Ms. Buckley provided the committee with Citibank’s definition of predatory lending (Exhibit AA).  Ms. Buckley informed the committee Gail Burks, the Executive Director of the Nevada Fair Housing Center, was viewing the hearing by videoconference from Las Vegas and was available for any questions from the committee.

 

Ms. Buckley described predatory lending as “unscrupulous lending practices that stripped the equity from people’s homes.”  “Steering” was the practice of directing borrowers into more costly loans.  “Unnecessary insurance” was a practice by which lenders added unnecessary coverage such as credit, life, credit disability or involuntary unemployment coverage to the loan.  “Prepayment penalties” penalized the borrower for paying the loan off early.  “Flipping” was the practice of repeated refinancing of the loan.  This added costs to the borrower and profits to the lender.  A.B. 447 addressed some of these predatory lending practices.

 

Ms. Buckley related the story of a 92-year-old woman who refinanced her home hoping to consolidate and pay off her debts.  The interest rate on her new loan was higher than her previous loan.  The fees and points were so high she could not afford the loan, and if she defaulted she would lose the equity she had in her home.

 

Section 11, paragraph 1, stipulated it was an unfair lending practice for a lender to require a borrower to provide property insurance on improvements in an amount that exceeded the reasonable replacement value of the improvements in order to obtain the loan.

 

Paragraph 2 provided it was an unfair lending practice to connect credit, life or other insurance to the financing unless the premiums were calculated and paid on a monthly basis.

 

Paragraph 3 addressed “flipping.”  Ms. Buckley acknowledged the language “reasonable and tangible net benefit” was subjective and needed to be reworked.  Some suggested Ms. Buckley look at the ability to repay and if the same lender in quick succession was doing the loans.  Paragraph 4 prohibited prepayment penalties under certain conditions.

 

A.B. 447 also contained enforcement provisions including high penalties.  Ms. Buckley cautioned “predatory lending” was not to be confused with “subprime lending.”  Subprime lending did not involve abusive practices, rather it was lending available for individuals who could not qualify for traditional loans.

 

Ms. Buckley informed the committee Jim Wadhams would assist her with addressing the concerns of those who opposed A.B. 447.  She also stated the Attorney General’s Office would assist with possible amendments.

 

Gail Burks, Executive Director, Nevada Fair Housing Center, Inc., pointed out predatory lending should not be confused with subprime lending and that A.B. 447 was not intended to put a limit on legitimate lending practices.  Ms. Burks referred to a chart, page 3 of Exhibit BB, which categorized borrowers by “grades A through D,” “A” being “prime.”  The grades were based on the borrower’s record of late payments and bankruptcy filings.  Ms. Burks confirmed the need for subprime lending as well as the need to keep and gain “good lenders.”

 

Ms. Burks described predatory lenders, referring to page 2 of Exhibit BB.  Her “Indicators of a Predatory Lender” were divided into four categories:  1) Marketing, 2) Sales, 3) The Loan Itself, and 4) After Closing.

 

Ms. Burks related the successful response to a program they initiated entitled “Don’t Borrow Trouble.”  She discovered most of the loans were made knowing the borrower would not be able to pay back the loan.  Other cases studied focused on “flipping.”  Many of the cases revealed their loans had been “flipped” [repeatedly refinanced] over 20 times.

 

Ms. Burks related a study disclosed about 35 percent of those put in subprime loans could have gotten “A” credit paper.  Over 70 percent of those subjected to high interest, or predatory loans, could have gotten “B” paper.  She referred to page 4 of Exhibit AA, which identified weaknesses regarding loans and collections.

 

Ms. Burks reiterated A.B. 447 spoke to conduct of the lenders and was not intended to limit services to the consumer.

 

Assemblyman Goldwater informed Ms. Burks there was another bill pending that would create a board to regulate licenses, mortgage companies and mortgage agents.  He understood the lending institutions addressed by Ms. Burks had been exempt from licensure under those chapters and wondered if they, too, should be regulated under those chapters.  He asked Ms. Burks how she felt about agent licensure and added that many were already licensed under 645B.

 

Ms. Burks replied 645B had a license provision, but that often the information was not given to clients as to whether or not the broker could actually fund the loan.  She related the experience of a young single mother buying a home from probate.  She did not know she was dealing with a broker and her loan was never actually opened in escrow.  Ms. Burks stated that 645B was not helpful in this situation.

 

Mr. Goldwater asked Ms. Burks whether she had tried to rectify the situation through the Financial Institutions Division.  Ms. Burks replied she did.  It was discovered that former employees of that broker had been instructed to falsify documents, but she was unable to obtain an interim audit of the company.

 

Assemblywoman Buckley expounded that in addition to the need for a regulatory body there existed the need of making the practices illegal so the victims could have the necessary recourse.

 

Mr. Goldwater observed the numbers of “scams and schemes” were increasing and wondered if the “vulnerable” populations were becoming more educated.  Ms. Buckley did not think so and expressed her hopes that the program Ms. Burks was heading, “Don’t Borrow Trouble,” would help educate the public.

 

Ms. Burks submitted that even with education, the emotion involved with the purchase of a home was a factor.  Oftentimes the borrower felt pressured into closing a transaction quickly, and did not have full understanding of the documents he/she signed.

 

Addressing the need to retain good lenders, Ms. Burks stated that Citibank and other banks were trying to educate the public because they were adversely affected when they bought predatory loans.  She suggested the committee visit with these lenders and she offered to assist them in doing so.

 

Assemblyman Goldwater hoped that, as difficult and emotional as the mortgage process was for people, A.B. 447 would not drive away good lenders.  He asked for assurance from Ms. Burks that A.B. 447 would not hinder the public’s ability to get a loan.  Ms. Burks responded it would not.  She added predatory lending was a $100 billion dollar industry purchased by the secondary market and Wall Street as well.  She provided it “would not go away” and neither would the subprime market.

 

Kimberly Maxson-Rushton, Chief Deputy Attorney General, introduced Mark Krueger, Deputy Attorney General, responsible to the Financial Institutions Division and Susan Furlong Reil, private citizen.

 

Ms. Maxson-Rushton offered the Attorney General’s support of A.B. 447 and reminded the committee the Attorney General always supported legislation that protected consumers.  She described predatory lending as fraud, deception, manipulation of the borrower, and taking “unfair advantage” of the borrower’s lack of understanding of loan terms.  Predatory loan practices were abusive and could make the borrower more vulnerable to abusive practices.

 

Ms. Maxson-Rushton shared that research undertaken by HUD discovered predatory lending was largely occurring in the subprime market and seemed to be concentrated in low income and minority communities.  She also revealed that consumer advocates maintained the consequences of predatory lending were “high foreclosure rates, abandoned property, and community breakdown.”

 

In closing, Ms. Maxson-Rushton divulged that the growing incidences of predatory lending brought to her attention had revealed to her it was a growing problem throughout Nevada.  She reemphasized her support of legislation that would protect consumers from such industries.

 

Mark Krueger, shared Ms. Maxson-Rushton’s support of A.B. 447 and pointed out that Section 11, subsection 3, was vague and assured Ms. Buckley of their willingness to assist with amending the language.  He specified they did not want to limit the services of the subprime market and verbalized that financial institutions could not enforce laws that did not exist.  In closing, Mr. Krueger reinforced the need for subprime lending.  He also acknowledged the existence of brokers not engaged in abusive practices as well as the growing number of those who were.

 

Susan Furlong Reil, employee of the Legislative Council Bureau (LCB), informed the committee she was present to testify as a private citizen with the permission of Lorne Malkiewich, Director of LCB, and Bob Erickson, Research Director of LCB.  Ms. Furlong Reil explained the purpose of her testimony was to present some of the circumstances of her mother’s refinancing of her home, and was not intended to support or oppose A.B. 447.

 

Because of outstanding medical bills resulting from cancer treatments, Ms. Furlong Reil’s mother responded to a mortgage solicitor who contacted her by phone to refinance her home.  She already had a $56,000 equity line of credit on her home at 10.75 percent with life insurance on the loan.  She conveyed the importance of her having life insurance on the loan because of her history of cancer.  She was offered refinancing at 10.74 percent and was assured that, even with her health history, she would qualify for the life insurance on the loan.  Expecting to save money, Ms. Furlong Reil’s mother signed the loan papers.  The next day Ms. Furlong Reil’s mother was informed she did not qualify for the life insurance and two days after that she was again diagnosed with cancer.

 

After surgery, Ms. Furlong Reil’s mother consulted an attorney and spoke with the Division of Insurance.  However, she was advised by both that it was “her word against theirs” and was left with no recourse.

 

Upon hiring an attorney to look at her loan file it was discovered Ms. Furlong Reil’s mother had a mortgage loan of $130,853.  She had paid an origination fee of five percent, ($6,542), a credit insurance premium of $6,353, and a loan discount fee of five percent to lock in the interest rate at 10.75 percent.  In all, total settlement charges for the loan were about 15 percent of the loan, or $21,000.  The life insurance premium was refunded.  Payments on the house were $1,220 per month, not including taxes or insurance, for 20 years with a balloon payment at the end of 20 years of $90,780.

 

Assemblyman Goldwater asked the name of the company that sold the refinancing.  Ms. Furlong Reil replied it was CONSECO Finance.

 

Ms. Maxson-Rushton closed, restating the Attorney General’s support of any legislation that protected the citizens of Nevada.

 

Scott Craigie, Legislative Advocate, Farmers Insurance Group, referred to a letter (Exhibit CC) he submitted on behalf of Jim Werbeckes, Government Affairs Representative, Farmers Insurance Group.  Farmers Insurance Group specifically supported Section 11, subsection 1, of A.B. 447.  This section prohibited a lender from “requiring the insurer to insure to the full value of the loan.”  As an example of the problem addressed, Farmers Insurance presented that lenders often required the borrower, who borrowed for both the land and the real property, to insure not only the real property, but also the land on which the property was situated.  Farmers Insurance recognized that although both the land and the real property were insured, should there be a loss, the borrower would only be able to collect on the real property.  Farmers Insurance has adopted the policy of not insuring any property on which the lender required coverage “in excess of the real property.”

 

Mr. Craigie also informed the committee the Senate had passed similar legislation, S.B. 6.

 

John Sande, Legislative Advocate, Nevada Bankers Association, expressed their support of Section 11.  He agreed with Ms. Buckley that Section 11, subsection 3, needed to be reworded.  Mr. Sande felt the penalties provided by sections 12 and 13 were too severe and would discourage some of the “good lenders.” 

 

Mr. Sande also disagreed with the provisions of Section 11, subsection 4, which provided it was “an unfair lending practice for a lender to impose a prepayment fee or penalty in connection with a home loan” under certain conditions.  He maintained that prepayment fees enabled the loan institution to “lock the borrowers in” should the interest rates drop.  To protect themselves, the lender might loan at a higher interest rate or assign more points to guarantee they would get a certain return should the interest rates drop.

 

Chairman Dini asked Mr. Sande if he was willing to work on A.B. 447.  Mr. Sande replied he was.

 

Alfredo Alonso, Legislative Advocate representing Citibank, conveyed the importance of the issue being addressed.  He shared some of the concerns Mr. Sande presented and expressed his willingness to work on A.B. 447 with Assemblywoman Buckley.

 

Ken Scruggs, Legislative Advocate, Household Financial Group, representing Household Finance and Beneficial Finance, clarified they were subprime lenders, not predatory lenders.  Mr. Scruggs acknowledged the existence of “predatory lenders” and communicated their desire to work on A.B. 447.  He distinguished between those who qualified for prime loans and those who qualified for subprime loans and substantiated the need for both.

 

Subprime borrowers had poorer credit, higher loan to value ratios, and less predictable income.  These borrowers borrowed often, moved often and paid-off often.  Mr. Scruggs maintained these factors justified prepayment penalties.  He explained that customers were given the option of prepayment penalties or higher interest rates.  This protected the lending institution against the additional expenses they would incur.  The lender could compensate for those expenses either by imposing the prepayment fee on the borrower or by charging higher interest rates to all borrowers.  He summarized that prepayment penalties were not necessarily harmful, but they could be abused.

 

Mr. Scruggs maintained credit insurance, addressed by Section 11, subsection 2, was valuable to, and even requested by many of their customers.  They offered single-premium credit insurance, which they recommended to protect the borrower should he fall behind on his payments.  He informed the committee they did not have a monthly premium product and would need time and assistance to transform to monthly premium payments as required by Section 11, subsection 2, of A.B. 447.  Mr. Scruggs reiterated their suggestion that the customer be given the option to choose the insurance.

 

In closing, Mr. Scruggs declared he shared the same concerns as those who testified before him; he conveyed his concerns and commitment to address unfair lending practices, and he stated he would like to continue working with Assemblywoman Buckley on A.B. 447.

 

Assemblyman Hettrick indicated a lending company might be indirectly financing insurance should a borrower go elsewhere to buy insurance on a loan they had obtained.  This could violate Section 11, subsection 2.  Mr. Hettrick suggested A.B. 447 should address this.

 

Assemblyman Goldwater disclosed he was employed by First Union Securities.  He was seriously concerned that a big lender like CONSECO could perform as they did in the incident related by Ms. Furlong Reil.  He asked what recourses there were to deal with such lending practices.  Mr. Scruggs responded the only solutions he knew of were consumer education and better enforcement of the laws.

 

Mr. Goldwater suggested companies confer with underwriters.  Mr. Scruggs agreed and conveyed it was their policy to disapprove a loan if it appeared the customer would have difficulty making the payments.  Mr. Scruggs also explained that only 30 percent of customers chose to watch an informative six-minute video in advance of purchasing a loan.  He noted they spent a sizable amount on consumer education of which the public did not avail themselves.

 

Robert Barengo, Nevada Consumer Finance Association, informed the committee they supported S.B. 6, having added an amendment to help it pass in the Senate.

 

Mr. Barengo was especially concerned with the looseness of the language in Section 11, subsections 2 and 3.  He expounded that the lender had to make the assessment; the “subjective intent” was placed on the lender.  He emphasized they needed to “tighten up” the language of A.B. 447.  To support this position he also pointed out the ambiguity of “primarily” in Section 11, subsection 4, lines 36 and 37, which read “primarily for personal, family or household purposes.”  Mr. Barengo cited other reasons for “tightening” the language of A.B. 447.

 

In closing, Mr. Barengo reiterated the language of A.B. 447 needed to be clarified and offered to work with Assemblywoman Buckley toward that end.

 

Assemblywoman Buckley agreed the language was not clear and asked Mr. Barengo how he would address, in A.B. 447, the “predatory lending” practice exemplified by Ms. Furlong Reil’s testimony.  Mr. Barengo responded that A.B. 447 was placing the responsibility on the lender to determine if the transaction was in the best interest of the borrower.  He suggested disclosures might be provided for the borrower, but the lender could not be expected to know “the subjective mind of the borrower.”

 

Sam McMullen, Legislative Advocate, Assurant Group, a credit insurance provider, communicated their concern regarding Section 11, subsection 2.  He stated that portion of the bill eliminated a product that could be beneficial to the consumer and was often requested by the consumer.

 

Mr. McMullen informed the committee that the lenders, not the insurance providers, solicited credit insurance and it was usually offered through a master policy.  Also, if a customer qualified for a loan, he/she usually qualified for the insurance as well.

 

Assemblyman Goldwater asked Mr. McMullen if he was talking about credit insurance or mortgage life insurance.  Mr. McMullen responded he was speaking about mortgage life insurance.  Mr. Goldwater claimed that although mortgage life insurance was solicited through the lender, one of the “greatest mistakes” consumers made was to accept only that solicitation.  He submitted that different vendors could quote mortgage life insurance for an individual using the same variable; yet result in vastly different premiums.

 

Mr. McMullen responded he was specifically addressing the language of Section 11, subsection 2, which prohibited a lender from offering insurance in connection with a home loan.  Mr. McMullen’s main concern was that A.B. 447 forbade a lender from financing insurances in connection with loans unless premiums were calculated and paid on a monthly basis.  He maintained A.B. 447 needed to provide flexibility, as many consumers actually preferred the insurance attached and paid at the onset.  Mr. McMullen concluded his remarks and offered to work on A.B. 447 with Assemblywoman Buckley.

 

Assemblyman Hettrick pointed out disclosure would be necessary for the receipt of partial payments.  The borrower would need to know if their partial payments were credited to the principal, the interest, or the insurance.

 

Mr. McMullen submitted, for the record only, a printout of “Nevada Insurance Related Regulations, Nevada Administrative Code, Chapter 675 – Installment Loans,” (Exhibit DD).

 

Jim Wadhams, Legislative Advocate, Nevada Mortgage Bankers Association, stated his opposition to A.B. 447 as written but offered to work on the proposed legislation.  He reiterated the language needed to be changed and agreed that lending practices needed to be regulated for the protection of the consumers.

 

As there was no further testimony, Chairman Dini adjourned the hearing at 8:39 p.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

 

Darlene Nevin

Committee Secretary

 

 

APPROVED BY:

 

 

 

                       

Assemblyman Joe Dini, Jr., Chairman

 

 

DATE: