MINUTES OF THE meeting
of the
ASSEMBLY Committee on Commerce and Labor
Seventy-First Session
April 13, 2001
The Committee on Commerce and Labor was called to order at 1:30 p.m., on Friday, April 13, 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. Bob Beers
Mrs. 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
COMMITTEE MEMBERS ABSENT:
Mr. Morse Arberry Jr.
GUEST LEGISLATORS PRESENT:
Assemblyman Greg Brower
STAFF MEMBERS PRESENT:
Vance Hughey, Committee Policy Analyst
Crystal McGee, Committee Policy Analyst
Rebekah Langhoff, Committee Secretary
OTHERS PRESENT:
Patricia Jarman-Manning, Commissioner, State of Nevada, Department of Business and Industry, Consumer Affairs Division, Las Vegas, Nevada
Mary Lau, Executive Director, Retail Association of Nevada, Carson City, Nevada
George Flint, Legislative Representative for Alan Lichtenstein, Reno, Nevada
Keith MacDonald, Executive Secretary, Nevada State Board of Pharmacy, Reno, Nevada
Ron Bingaman, Director of Pharmacy Administration and Compliance, Safeway, Inc., Pleasanton, California
Kirk Wentworth, Pharmacist/Owner, The Medicine Shoppe, Carson City, Nevada
James W. Penrose, Attorney, Legislative Representative, Thrifty-Payless, Inc., d.b.a. Rite-Aide, Carson City, Nevada
Laurie Squartsoff, Pharmacist II, Division of Health Care Financing and Policy, State of Nevada, Carson City, Nevada
John Sande, Attorney, Legislative Representative, Merck Medco Managed Care, Reno, Nevada
Alice Molasky-Arman, Commissioner of Insurance, Insurance Division, State of Nevada, Carson City, Nevada
Ray Seidlinger, Pharmacy Supervisor, Albertsons-Savon, Las Vegas, Nevada
Khamh Pham, Retail Pharmacist, Albertsons, Las Vegas, Nevada
Helen Foley, Legislative Representative, PacifiCare, Nevada Association of Health Plans, Las Vegas, Nevada
Cliff Hardesty, Regional Director of Pharmacy, PacifiCare, Phoenix, Arizona
Robert Barengo, Legislative Representative, Health Insurance Association of America, Reno, Nevada
Janice C. Pine, Legislative Representative, Saint Mary’s Health Network, Reno, Nevada
Kevin Higgins, Chief Deputy Attorney General, State of Nevada, Reno, Nevada
Donald E. Jayne, Legislative Representative, Nevada Self-Insured Association #200, Gardnerville, Nevada
Samuel P. McMullen, Legislative Representative, Retail Association of Nevada, Service Contract Industry Council, Carson City, Nevada
Robert Ostrovsky, Legislative Representative, Cox Communications, Las Vegas, Nevada
Fred Hillerby, Legislative Representative, Professional Insurance Agents of California and Nevada, Nevada State Contractors Board, Reno, Nevada
George Lyford, Director of Special Investigations, Nevada State Contractors Board, Las Vegas, Nevada
Ron Krump, Representative, Krump Construction, Sparks, Nevada
Lori Urmston, Secretary, Nevada Certified Court Reporters Board, Reno, Nevada
Karen Yates, Immediate Past President, Nevada Court Reporters Association, Reno, Nevada
Roll was called and a quorum was determined to be present. Chairman Dini opened the hearing on A.B. 627.
Assembly Bill 627: Revises provisions relating to trade practices. (BDR 52-554)
Patricia Jarman-Manning, Commissioner, State of Nevada, Department of Business and Industry, Consumer Affairs Division, told the committee A.B. 627 was a housekeeping bill put together after a review of the Nevada Revised Statutes (NRS) for outdated items or items requiring revision due to the growth in the state of Nevada. Ms. Jarman-Manning noted A.B. 627 sought to place NRS 598.992 under NRS 597 because NRS 597 dealt with adult cabarets, erotic dance establishments and adult nightclubs. Ms. Jarman-Manning felt the Consumer Affairs Division was ill equipped to enforce the statute, which she felt was well suited to NRS 597, so that local District Attorneys could better enforce the provisions of the chapter. Ms. Jarman-Manning indicated she was aware of a request by the Governor’s Office to reduce the population threshold from 400,000 to 300,000 so that the legislation would be applicable to Washoe County.
In that regard, a letter by Mike Sullivan was provided to the committee without testimony and was submitted for the record (Exhibit C).
In response to a question posed by Mr. Beers, Ms. Jarman-Manning confirmed the population threshold would be lowered to allow Washoe County, in addition to Clark County, to address the problems occurring in the county and noted she was not aware of problems occurring in the rural areas.
Ms. Jarman-Manning continued by addressing Section 2, subsections 1 through 10, which related to the sale or leasing of merchandise and the misrepresentation of merchandise. By way of example, Ms. Jarman-Manning told the committee of a business that sold mattresses claiming the mattresses were new, when in fact the mattresses were used, infested with bugs and resulted in a woman and her child being severely bitten. Ms. Jarman-Manning noted such practices were deceptive trade practices and she stated the bill would inclusively define these practices as such.
As to Section 2, subsection 11, Ms. Jarman-Manning noted the Consumer Affairs Division was concerned by the practice of advertising goods or services for sale or lease at a wholesale price to the public. She believed that the term “wholesale to the public” created an unfair marketplace, noting current law allowed goods and services to be sold wholesale only to a vendor, contractor, or business owner for purposes of resale, and, accordingly, Ms. Jarman-Manning stated it was not legal to advertise as “wholesale to the public.”
Mr. Beers confirmed with Ms. Jarman-Manning that it was illegal to advertise as “wholesale to the public,” which was why the bill sought to make it illegal to use that term. Ms. Jarman-Manning stated the bill attempted to make it prohibitive to advertise as “wholesale to the public” because such advertising created an unfair marketplace, when, in fact, wholesalers could sell wholesale only to business owners, contractors or vendors, and not the public.
Mr. Beers asked for confirmation that, outside of the fair trade provisions, there was a prohibition against a wholesaler selling to a member of the public. Ms. Jarman-Manning reiterated that the bill sought to prohibit advertising as “wholesale to the public” because current law provided only for wholesale to business owners, contractors or vendors.
Mr. Beers asked whether Costco would have to change its name if this legislation was passed. Ms. Jarman-Manning indicated Costco would have to change its name.
Mr. Dini noted it was possible for the public to purchase meat, for example, from a wholesaler, but the public had to pay the sales tax. He noted the meat company could advertise and sell meat at wholesale prices, but the public had to pay the sales tax.
Mr. Beers stated he would not be able to support the “wholesale” provision of the bill because he felt it was an infringement on First Amendment speech rights.
Mr. Hettrick suggested the language of the bill could be modified to reflect that a wholesaler could not advertise the sale or lease of goods or services at wholesale prices to the public unless the wholesaler did not collect sales tax. He noted, however, such an amendment would force Costco to change its name because Costco collected sales tax.
Mr. Beers stated he was asked whether or not he would be paying sales tax every time he went to Costco. He noted the sales tax law provided that when a company was selling to someone who was buying a product for resale, sales tax should not be charged.
Chairman Dini indicated he understood the impetus and intent of the provision.
Ms. Jarman-Manning continued by stating Section 2, subsection 12, addressed the issue of advertising goods or services as being available free of charge with intent to require payment of undisclosed costs as a condition of receiving the goods or services. Ms. Jarman-Manning noted many times consumers were lured into accepting a free offer and later were required to pay a cost for a processing fee. She noted the bill would clearly provide that no charge could be associated with goods or services advertised as free, unless the charge was absolutely disclosed upfront.
Addressing Section 4 of the bill, Ms. Jarman-Manning stated the Consumer Affairs Division currently collected a one-time fee of $25 when a business started up, and noted many times the division was not made aware of the existence of a business until the business closed. Ms. Jarman-Manning noted Section 4 provided for an annual registration to allow the division to better monitor businesses.
As to Section 5, Ms. Jarman-Manning noted the division was requesting reimbursement for investigative and audit costs when there was a security in place for a particular business. As to Section 6, a modification was proposed to require a business to register with the division prior to opening for business. Ms. Jarman-Manning noted Section 6, subsection 2(f), pertained specifically to three businesses in the health club area that had numerous members. She noted the provision increased the security instrument to $250,000 for any business whose membership was over 25,000 in order to adequately protect the consumer.
Ms. Buckley inquired whether a fee would be charged with the renewal of the annual registration proposed in Section 4 of the bill. Ms. Jarman-Manning indicated a fee of $25 would be required each year, for a total income to the division of $50,000 a year.
Ms. Buckley asked Ms. Jarman-Manning whether there had been any delay in the implementation of laws regarding credit-counseling organizations. Ms. Jarman-Manning indicated she was not familiar with that issue.
Chairman Dini called for witnesses who wished to testify either in support of or opposition to A.B. 627.
Mary Lau, Executive Director, Retail Association of Nevada, testified in opposition to A.B. 627 and indicated she was completely confused by the bill. As to Section 2, subsection 11, regarding the wholesale provisions, Ms. Lau noted she had been under the impression that businesses such as Smart & Final, Sam’s Club or Costco would not be subject to the provisions of the bill because those businesses charged a membership fee and sold to members, not the general public. She felt the issues identified by the Consumer Affairs Division might be more appropriately addressed through the regulatory process as opposed to the legislative process. Ms. Lau also noted some concern over the increase in fees proposed in Section 6, subsection 2(f).
George Flint, Legislative Representative for Alan Lichtenstein, indicated Mr. Lichtenstein was an attorney in Las Vegas who represented several of the sexually-oriented businesses in Southern Nevada. Mr. Flint indicated concern over language in Section 1, and suggested that the word “knowingly” be added between the words “entity” and “pays” on page 1, Section 1, at line 7, and the word “diverting” be added between the words “for” and “taking” at line 11 to allow for the possibility of an “honest mistake on the part of a taxi driver.”
Mr. Flint indicated he was personally bothered by language in Section 2, subsection 1, which stated “knowingly passes off goods or services for sale or lease as those of another person,” noting the provision could apply to consignment situations. Additionally, Mr. Flint stated he had a problem with the prohibition of advertising of goods or services for sale or lease at wholesale prices with intent to sell or lease the goods or services to the general public. He noted many companies cleared out old inventory by selling at wholesale prices and he felt the provision was a constraint of trade.
Mr. Hettrick asked why Mr. Flint suggested the word “knowingly” be added between the words “entity” and “pays” on page 1, Section 1, at line 7. Mr. Hettrick did not feel the provision was associated with the taxi driver but was associated with the licensee. Mr. Flint indicated his interpretation was that the provision applied when the business entity knowingly paid for purposely diverting and could involve both parties.
Chairman Dini closed the hearing on A.B. 627 and opened the hearing on A.B. 624.
Assembly Bill 624: Provides for issuance of uniform identification cards and devices to process insurance claims for prescription drugs and devices. (BDR 57-549)
Keith MacDonald, Executive Secretary, Nevada State Board of Pharmacy, State of Nevada, introduced A.B. 624 and provided his written statement for the record (Exhibit D). Mr. MacDonald advised the most frequent pharmacy industry complaint, with the exception of shortfall of personnel, involved the adjudication of claims for prescription benefits for health care providers and noted the problem could be greatly reduced by use of a standardized drug benefit card. Mr. MacDonald provided the committee with a copy of the bill showing amendments and deletions from the original draft (Exhibit E).
Mr. MacDonald noted Section 1 set forth the requirements of the standardized drug benefit card and subsection 2 therein addressed the time requirements for issuance of a revised identification card. Mr. MacDonald noted the industry was concerned over the cost of providing revised cards, and he directed the committee to the provision in the bill that allowed for new cards to be issued upon standard annual reissuance of cards, and also allowed for update stickers to be used to update old cards for a period of one year. Mr. MacDonald indicated subsection 1 set forth the requirements for the identification card, and noted many existing cards did not contain information necessary to process a claim. Subsection 6 avoided the requirement of the issuance of dual cards, and subsection 7 excluded the Medicaid program from the statute.
Mr. MacDonald indicated Section 2 was the remaining portions of the existing statute, with minor modifications.
Ron Bingaman, Director of Pharmacy Administration and Compliance, Safeway, Inc., indicated he was also representing the Retail Association of Nevada, and himself, as a resident of Nevada. Mr. Bingaman indicated there was a critical need for A.B. 624 and stated over the next three to five years the pharmacy industry was projected to increase in pharmacist manpower by 6 percent, while the number of prescriptions that needed to be filled was projected to increase by 40 percent. He indicated it was necessary to take measures now to ensure there would be enough pharmacists’ time available in the future to adequately fill, check and dispense prescriptions, while offering patient consultation and answering questions about various drugs or the health conditions to which the drugs related. Mr. Bingaman believed the essence of the bill was to provide enough information on a prescription drug card to allow a consumer to have a prescription processed at any pharmacy.
Mr. Bingaman offered an explanation of the new language in Section 1 by stating that some health care plans subcontracted the responsibility for producing identification cards, and he noted the language was administrative in nature and was intended to close loopholes. Additionally, he noted Section 1 set forth the minimal information required on the card. As to Section 1, subsection 2(c), Mr. Bingaman noted an update sticker containing the required information could be applied to current cards at very little expense until the next regularly scheduled cycle for printing updated cards. Mr. Bingaman noted this provision was particularly important due to the amount of consolidation occurring in the industry. As to subsection 6 of Section 1, Mr. Bingaman indicated multiple cards, one for insurance coverage and one for benefit services, did not need to be issued and noted that a single card was acceptable as long as it contained all of the required information.
Mr. Bingaman stated Section 3 extended the date for adoption of the legislation to January 1, 2003. He noted concern by the industry that a shorter deadline required a special printing of identification cards. Mr. Bingaman provided the committee with a copy of a letter from Express Scripts, which detailed how Express Scripts planned to voluntarily comply with the identification card standard format at minimal cost (Exhibit F). Mr. Bingaman concluded by advising the committee the trend in other states was to adopt similar standards, and he urged the committee to pass A.B. 624.
Chairman Dini asked why the National Council of Prescription Drug Program (NCPDP) was chosen as a model and inquired if there were other programs that could have been chosen as the model. Mr. Bingaman indicated the NCPDP was a nonprofit group, which was formed to establish uniform standards that could be used throughout the United States.
Kirk Wentworth, Pharmacist-Owner, The Medicine Shoppe, spoke in support of A.B. 624 and provided the committee with an example of identification cards (Exhibit G). Mr. Wentworth advised that when a customer came into his pharmacy with an identification card that did not contain enough information to process the prescription, the customer would elect not to pay for the medication and went without it. He noted page 2 of Exhibit G was one of a 17-page report itemizing cards that were rejected because the information was not uniform. He stated it was often difficult to figure out which numbers on the card should be used for processing. Mr. Wentworth commented that the process diverted the pharmacist’s time and attention and patients often became impatient. He noted if the industry had a standardized card it would greatly expedite the process and reduce the burden on the pharmacist.
James W. Penrose, Attorney, Legislative Representative, Thrifty-Payless, Inc., d.b.a. Rite-Aide, stated Ride-Aide supported A.B. 624 and felt any process that reduced the workload of the pharmacy staff would reduce costs to consumers and improve patient care.
Laurie Squartsoff, Pharmacist II, Division of Health Care Financing and Policy, State of Nevada, indicated the division supported A.B. 624 with the proposed amendments.
Mary Lau, Executive Director, Retail Association of Nevada, indicated the association strongly supported the bill and the proposed amendments, and felt the amendments would be acceptable to the insurance industry.
John Sande, Attorney, Legislative Representative, Merck Medco Managed Care, suggested an amendment to A.B. 624 to delete the sentence on page 2, line 16 which stated “the term includes an employee welfare benefit plan or other health benefit plan permitted under the Employment Retirement Income Security Act of 1974.” Mr. Sande indicated plans covered by the 1974 act were exempt from state regulation and therefore the bill should not apply to ERISA plans.
Alice Molasky-Arman, Commissioner of Insurance, Insurance Division, State of Nevada, testified in favor of A.B. 624 and noted she favored uniformity in claims processing and identification cards. Ms. Molasky-Arman indicated she was concerned over the definition of a health care plan under Section 1, subsection 5(b), and indicated uncertainty as to whether the definition included health maintenance organizations and prepaid limited health service organizations through the use of the word “insurer.” Ms. Molasky-Arman felt the provision should be clarified to ensure that it was applicable to health maintenance organizations pursuant to Chapter 695C of the Nevada Revised Statutes (NRS) and prepaid limited health service organizations pursuant to Chapter 695F of NRS. Additionally, Ms. Molasky-Arman believed the new language in Section 2, subsection 2(f), was superfluous and was not necessary because Section 2, subsection 1(d), applied disciplinary action of the section to a violation of any provision of the code.
Ray Seidlinger, Pharmacy Supervisor, Albertsons-Savon, indicated support for A.B. 624 with the suggested amendments.
Khamh Pham, Retail Pharmacist, Albertsons, indicated her support for the bill and told the committee she encountered problems on a daily basis that forced her to stop what she was doing in order to call an insurance company to get the necessary information to process a claim.
Helen Foley, Legislative Representative, PacifiCare, Nevada Association of Health Plans, testified in opposition to A.B. 624. Ms. Foley indicated the identification card provided by HMOs contained quite a bit of information and while she appreciated that the bill did not require more than one identification card, she indicated HMOs would not be able to get all of the required information onto just one card. Ms. Foley noted the proponents of the bill felt the biggest issue to be dealt with was the adjudication of claims, and she noted the processing of claims could be expedited by accessing the PacifiCare website and providing the claimant’s identification number. She indicated all necessary information would be immediately displayed for the pharmacist’s use. Ms. Foley felt it was very important for an HMO card to reflect the copay and other information about the health plan, including the primary care physician, and noted the guidelines promulgated by the NCPDP regarding identification cards were simply guidelines and not a mandate.
Ms. Foley provided the committee with the NCPDP implementation guide, which included publication information, together with a copy of the Sierra Choice identification card, and noted the guidelines were revised often (Exhibit H). She expressed concern that it would be necessary to issue new identification cards each time the guidelines were updated. She indicated PacifiCare had never received a complaint about their identification cards from its members or participating pharmacies.
Cliff Hardesty, Regional Director of Pharmacy, PacifiCare, provided the committee with a handout containing samples of current PacifiCare identification cards and pharmacy information for identification cards (Exhibit I). Mr. Hardesty stated it would be very difficult for PacifiCare to put the required NCPDP information on its existing card and, accordingly, PacifiCare would be forced to issue a second card, at a projected cost of $80,000 to $100,000 per year. He commented that update stickers would be a very complicated process to administer, and he felt update stickers would cause confusion at pharmacies. Mr. Hardesty advised the committee he had been told that NCPDP did not endorse legislation that mandated information on healthcare cards, and he noted that in states where NCPDP guide criteria had been adopted, criteria was adopted for prescription-only cards which were usually generated by prescription benefit administrators. Mr. Hardesty stated California and Arizona both considered similar legislation, noting California removed the requirement of compliance with NCPDP guidelines from its legislation, and Arizona withdrew the legislation and committed to resolving issues outside of legislation.
Ms. Buckley spoke of her personal experience at the pharmacy and indicated the pharmacist had so much trouble processing her card from Southern Nevada that she finally paid for the prescription out of pocket. Ms. Buckley did not feel her experience was an isolated incident and wondered why there was opposition to establishing uniformity. Mr. Hardesty indicated that allowing pharmacists time to counsel customers was a priority for PacifiCare, and stated his belief that the PacifiCare identification cards already provided information necessary to process claims. He stated it was his experience that all a pharmacist needed to process a claim was the member number. Ms. Buckley asked whether the member number was all that was necessary for every insurance company to process a claim. Mr. Hardesty noted he could not speak for other insurance companies but he felt, in general, the member number was all that was needed to process a claim.
Ms. Buckley commented that she did not see the harm in standardization. Mr. Hardesty indicated he would prefer national standardization.
Ms. Foley noted it was important that an identification card, such as the Sierra Choice identification card, identified what the fees were based on what type of provider was seen. She noted the card also contained information on the cost of brand versus generic prescriptions and she stated this was important information to have on the identification card for easy reference. Ms. Foley stated her belief that the problems experienced by pharmacies were not caused by the major HMOs, and she suggested excluding HMOs from the legislation in the same way Medicaid was excluded from the legislation.
Robert Barengo, Legislative Representative, Health Insurance Association of America, provided a handout regarding mandatory prescription drug card alternative legislation, which set forth six standards the association would like to see maintained for identification cards (Exhibit J). Mr. Barengo noted the provision that provided the identification card must conform to the requirements of the NCPDP was an unconstitutional delegation of authority, indicating his understanding that it was an unconstitutional delegation of authority to delegate to another body, such as the NCPDP, the ability to promulgate regulations. He believed it was possible to adopt existing regulations, but he did not believe it was possible to give another body the continuing ability to promulgate regulations.
Ms. Giunchigliani asked if Mr. Barengo’s concern was that the NCPDP was a regional group rather than a national group. Mr. Barengo indicated he was concerned only by the unconstitutional delegation of authority.
Janice Pine, Legislative Representative, Saint Mary’s Health Network, indicated she concurred with testimony given by Helen Foley and Cliff Hardesty. As to the proposed amendment, Ms. Pine indicated she was unclear as to the definition of the terms “benefit administrator,” “help desk administrator,” “transacting routing information,” “prescription international identification number,” “prescription processing control number” and “prescription group numbers” as used in Section 1.
Chairman Dini closed the hearing on A.B. 624 and suggested the pharmacy board put together an amendment by the committee passage deadline of the following Monday.
Chairman Dini opened the hearing on A.B. 572.
Assembly Bill 572: Establishes single fraud control unit for insurance within office of attorney general. (BDR 18-487)
Kevin Higgins, Chief Deputy Attorney General, Office of the Attorney General, State of Nevada, presented A.B. 572, and indicated the bill was a management change in the Office of the Attorney General, which would authorize the workers’ compensation fraud unit and the insurance fraud unit to be operated jointly. Mr. Higgins indicated there would still be two separate fraud units from a fiscal perspective because the funding streams were separate and must be accounted for separately. He stated the merger was recommended by the Governor and noted that as the insurance industry had changed due to the implementation of three-way system of workers’ compensation insurance, insurance companies were writing both kinds of insurance and a separate workers’ compensation fraud unit was unnecessary. Mr. Higgins provided the committee with an outline of the fraud unit consolidation proposed by A.B. 572, which identified amendments to the existing statute (Exhibit K). Mr. Higgins reiterated the bill was purely a management change.
Mr. Hettrick noted the workers’ compensation fraud unit wanted assurance, beyond a paper trail, that workers’ compensation fraud unit funding would not be spent on something else when the two units were combined. Mr. Higgins asserted that “in just about every case” workers’ compensation cases and insurance fraud cases would be separate in the sense they arise out of separate criminal activities. He noted it was easy to clearly identify workers’ compensation cases from insurance fraud cases and he felt keeping extremely accurate timesheets and relying upon the supervision of the unit were the keys to showing time and money was being spent in an equitable and fair fashion.
Chairman Dini noted Mr. Hettrick participated in the Governor’s Fundamental Review and asked how the merger was brought up during the review. Mr. Hettrick responded that all agencies were asked to make suggestions that would save time, money and effort, and the Attorney General’s Office brought the idea of a merger forward. Mr. Hettrick reiterated the concern of the workers’ compensation unit and felt the unit should be satisfied that workers’ compensation money would not be spent on other things.
Ms. Giunchigliani asked what savings would be realized by merging the two fraud units together. Mr. Higgins noted supervision could be merged and workers’ compensation cases and insurance fraud cases in remote areas could be investigated at the same time by the same person, rather than sending two different people to a remote area. In that regard, Mr. Higgins noted timesheets would be separated by case number down to the quarter hour so the cost could be properly allocated.
Ms. Giunchigliani wondered whether a workers’ compensation fraud unit was still necessary in light of the privatization of the industry. Mr. Higgins noted insurance fraud still occurred, even with privatization, and reporting requirements for insurance companies did not catch employers who did not insure themselves with workers’ compensation insurance. He stated the focus of the division had moved towards catching uninsured employers.
Donald E. Jayne, Legislative Representative, Nevada Self-Insured Association #200 (NSIA), indicated he had been assured by the Attorney General’s Office that the budget accounts of the two separate fraud units would not be combined at this point in time. He noted the budget accounts were the key area of concern, as noted by Mr. Hettrick.
Chairman Dini closed the hearing on A.B. 572 and turned the committee’s attention to the scheduled work session. The committee was provided with a work session document and Chairman Dini announced the first bill to be taken up in the work session was A.B. 132 (Exhibit L).
Assembly Bill 132: Authorizes possession, use, manufacture, purchase, installation, transportation or sale of chlorofluorocarbons. (BDR 40-743)
Chairman Dini asked the committee whether they had any appetite to process A.B. 132.
ASSEMBLYWOMAN BUCKLEY MOVED TO INDEFINITELY POSTPONE A.B. 132.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION FAILED. MR. PERKINS, MR. HUMKE, MR. GOLDWATER, AND MR. NOLAN WERE NOT PRESENT FOR THE VOTE.
Chairman Dini opened discussion on A.B. 289.
Assembly Bill 289: Expands definition of “police officer” for various purposes relating to industrial injuries, occupational diseases and programs for public employees. (BDR 53-393)
Crystal McGee, Committee Policy Analyst, discussed the suggested amendments to A.B. 289, and noted the amendment proposed by Brian Slobe, State Fire Marshal, would essentially delete the bill and insert a new section amending Nevada Revised Statute (NRS) 617.135, which was the definition of police officer, to include the state fire marshal, his assistant and his deputies, under the Occupational Diseases Act (Exhibit L, page 2). Ms. McGee noted there were also amendments proposed by Phil Gervasi, the President of the Police Officers’ Association, and Ronald Dreher of the Peace Officers Research Association of Nevada (Exhibit L, pages 2, 9-16).
Chairman Dini indicated his preference to process the bill with the first amendment by the State Fire Marshal.
Ms. Giunchigliani agreed the bill, and the definition, should be kept narrow. She wondered whether the word “only” should be included with the amendment proposed by the State Fire Marshal. Chairman Dini did not feel the word “only” should be added.
Speaker Perkins concurred with Ms. Giunchigliani and indicated his belief that the courts recognized the Legislature created and removed various categories of peace officers each legislative session, and rather than affect the statute each time, the courts looked at each case and provided the benefit when the categories were significantly similar in responsibility.
ASSEMBLYWOMAN LESLIE MOVED AMEND AND DO PASS A.B. 289 WITH THE AMENDMENT PROPOSED BY THE STATE FIRE MARSHAL.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT. MR. HUMKE, MR. GOLDWATER, AND MR. NOLAN WERE NOT PRESENT FOR THE VOTE.
Chairman Dini opened discussion on A.B. 439.
Assembly Bill 439: Revises provisions relating to solicitation by telephone. (BDR 52-1263)
Samuel P. McMullen, Legislative Representative, indicated he represented a consortium of interests, and he provided a two-page document containing amendments agreed to at the subcommittee hearing on A.B. 439 (Exhibit M). He also provided a document that set forth an exception to the bill, proposed by the telecommunications industry (Exhibit N). Mr. McMullen indicated the draft prepared and provided at the hearing on A.B. 439 could generally be relied upon (Exhibit O).
Mr. McMullen explained in detail the amendments proposed in Exhibit M. He stated there was a proposal by the proponents of the bill to include the number of consumers in the registry rather the names of consumers, and additional language was proposed to place an annual maximum of $500 on the cost of obtaining the registry. A provision was added requiring the registry to be purged at least annually, and clarification was included to make clear that the Commissioner could update the registry at any time, but dates of publication would be two specified dates each calendar year. Mr. McMullen indicated the language in Section 4, subsection 1, was restated to ensure no telephone solicitation would be made 30 days after the new registry was published. As to Section 4, subsection 2, an agreement was reached to include a provision providing that cross-marketing could be conducted on existing business relationships; however, if there was no existing business relationship cross-marketing could be conducted where a product or service was sold within the last year. Finally, Mr. McMullen indicated the provisions contained as item 7 on Exhibit M were included in an attempt to give dignity to the language and incentive to businesses to obtain a copy of the registry, provide training and keep evidence of their efforts.
Mr. McMullen indicated Exhibit M had the approval of Patricia Jarman-Manning, the Commissioner of the Consumer Affairs Division, Kimberly Maxson Rushton of the Office of the Attorney General, the Retail Association, Nevada Press Association and a number of the telecommunications companies.
Assemblyman Greg Brower, representing Assembly District 37, noted Mr. McMullen adequately explained the proposed amendments, which were agreed to by those sponsoring the bill. He stated item 6 on Exhibit M was important to the extent it might dilute the bill, taking into consideration business realities and federal law, which still allowed a consumer to call or to respond to a call from a particular telemarketer and ask not to be contacted. Mr. Brower indicated his support for the proposed amendments. Additionally, Mr. Brower noted the amendment set forth on Exhibit N relating to utility companies was an important addition and noted the amendment was aimed at addressing the reality of the increasingly competitive environment that the state had an interest in perpetuating and enhancing, without undermining the intent of the bill.
As to the provision regarding the annual purging of the registry, Mr. Hettrick asked what was intended by the use of the word “purged.” Mr. McMullen indicated his belief that the registry would be deleted and the process would start again. He noted deleting the registry and starting again was not the most workable situation but indicated that process was a result of how often numbers where changed, and indicated without some mechanism the registry would grow so large it would become unworkable. Mr. Hettrick noted the consumer would have to call in more frequently in order to remain on the registry. Mr. McMullen believed the registry would only be purged once a year until a program was established and a practical understanding of the issue was obtained. Chairman Dini noted purging of the registry could be set by regulation and further noted the consensus of all parties that the program was experimental and the program would have to be put into practice before it was possible to determine what problems would need to be worked out.
Mr. Brower noted that legislators were not fond of passing enabling legislation and then waiting for the regulations to be worked out, but he noted this was an area that required an extensive rule-making process with all interested parties participating to resolve all of the issues.
Mr. Hettrick noted the idea behind the bill was to allow the consumer to avoid receiving unsolicited phone calls, and he indicated he did not want to see the registry purged so often that the consumer was continually having to call to update the registry. As to Exhibit N, Mr. Hettrick asked for an explanation of the use of the words “community antenna television company” and he wondered whether or not the use of those words disadvantaged a satellite television company in any way.
Robert Ostrovsky, Legislative Representative, Cox Communications, indicated the words “community antenna television company” were a specific definition that applied to cable companies and would not include satellite providers.
Mr. McMullen provided additional clarification by noting the logic behind the definition was that there was a Consumer Protection Division at the Public Utility Commission. Mr. Hettrick reiterated his concern that one party not be disadvantaged by the legislation.
Ms. Giunchigliani asked who proposed the amendment identified as Exhibit N. Mr. McMullen indicated Sprint, Nevada Bell, AT&T and Cox Cable proposed the amendment. He stated subsection (a) on Exhibit N would be same the language identified as item 6 on Exhibit M.
Chairman Dini asked Mr. Hughey to explain the original amendments proposed at the time of the hearing of A.B. 439.
Vance Hughey, Committee Policy Analyst, advised the committee of an earlier amendment which proposed to change the Chapter designation to put the provisions under the Deceptive Trade Practices Act and a proposal to change the word “quarterly” to “semi-annually.” However, he believed the issue was addressed by a subsequent amendment. Mr. Hughey indicated there was also a proposal to delete Sections 5 and 6 of the bill, since those sections did not deal with Chapter 598, and a proposal to include a provision that would give the Commissioner a requirement to adopt regulations to carry out certain provisions of the act.
Mr. McMullen indicated his assumption that all of the earlier amendments that did not conflict with the new amendments were included in the amendments proposed on Exhibit O.
Due to time constraints, Chairman Dini felt it would be appropriate to put the bill together and amend it on the floor.
ASSEMBLYWOMAN BUCKLEY MOVED AMEND AND DO PASS A.B. 439.
ASSEMBLYMAN PARKS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT. MR. PERKINS, MR. HUMKE, MR. GOLDWATER, AND MR. NOLAN WERE NOT PRESENT FOR THE VOTE.
Chairman Dini noted the amendments were complicated and would take time to draft. He noted the committee could meet again to discuss the amendments after they were drafted, if necessary.
As to the annual purging of the registry, Ms. Buckley stated the language that provided the registry could be purged more frequently, and not less frequently, concerned her. Chairman Dini indicated his belief that the matter should be addressed through regulations. Mr. McMullen noted the language regarding the purging of the registry was suggested by the Commissioner.
Chairman Dini directed the committee’s attention to A.B. 447.
Assembly Bill 447: Prohibits unfair lending practices for home loans. (BDR 52‑440)
Ms. Buckley reminded the committee A.B. 447 addressed predatory lending and noted she had the opportunity to work with numerous people, as a representative group of lenders, to prepare conceptual amendments to the bill (Exhibit P). She noted one issue the bill addressed was financing insurance with a home loan and she recommended an amendment that would still allow the financing of insurance but would require a notice which indicated the buyer elected to purchase the insurance, identified the cost of the insurance was prepaid and financed at the interest, and informed the buyer of the right to cancel the insurance, together with a cost comparison. Ms. Buckley indicated the bill also addressed the issue of refinancing without regard to a consumer’s ability to pay and an amendment was proposed to make it an unfair lending practice for a lender to knowingly or intentionally make a home loan to a borrower based on the consumer’s equity in the home without regard to the consumer’s ability to repay the loan. Finally, Ms. Buckley indicated the bill addressed the issue of prepayment penalties and suggested that instead of mandating a prohibition, an amendment was proposed to make it an unfair lending practice to refinance a prepayment penalty or fee. Additionally, the Nevada Fair Housing Center suggested an addition to make clear that any unfair lending practice or predatory lending practice constituted a defense when the predatory lender sought to steal equity.
Mr. Hettrick sought clarification as to whether the penalties in Section 13 of the bill would be replaced by the language regarding unfair lending practices constituting a defense. Ms. Buckley indicated the language regarding a defense was in addition to the penalties in Section 13, which would remain in the bill.
ASSEMBLYMAN PARKS MOVED AMEND AND DO PASS A.B. 447.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT. MR. GOLDWATER AND MR. NOLAN WERE NOT PRESENT FOR THE VOTE.
Chairman Dini opened discussion on A.B. 552.
Assembly Bill 552: Revises provisions relating to manufactured buildings. (BDR 40-561)
Vance Hughey, Committee Policy Analyst, provided the committee with background information on A.B. 552 and noted the bill revised the definition of factory built housing and modular building contained in Chapter 461 of NRS to exclude manufactured homes and commercial coaches (Exhibit L, page 4). The only proposed amendment was identified as Exhibit L, page 17. Mr. Hughey noted the committee received a phone call from the proponents of the proposed amendment who asked that the amendment be submitted for review, and indicated they were amenable to processing of the bill as written if the committee found the amendment unacceptable.
ASSEMBLYMAN BEERS MOVED AMEND AND DO PASS A.B. 552.
ASSEMBLYMAN HUMKE SECONDED THE MOTION.
Ms. Buckley inquired about the impact of the amendment in terms of the particular Chapter in which the bill was contained. Mr. Hughey indicated Chapter 489 of the NRS addressed mobile homes and similar vehicles and manufactured homes.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT. MR. GOLDWATER AND MR. NOLAN WERE NOT PRESENT FOR THE VOTE.
Chairman Dini turned the committee’s attention to A.B. 618.
Assembly Bill 618: Makes various changes relating to regulation of insurance. (BDR 57-564)
Alice Molasky-Arman, Commissioner of Insurance, Insurance Division, State of Nevada, provided a memorandum detailing amendments to A.B. 618 (Exhibit Q). She noted the amendment to NRS 687A.033 proposed by the Nevada Insurance Guaranty Association, the amendment to Section 63 proposed by Nevada Trial Lawyers Association, the amendment to Section 71 proposed by Robert Barengo and the amendment to Section 191 proposed by the Division of Insurance had all been discussed and agreed upon by the parties. Ms. Molasky-Arman advised the amendment for the creation of the Insurers Demutualization Act and the Mutual Insurance Company Holding Act proposed by Employers Insurance Company of Nevada (EICON) did not meet with opposition from the insurance industry or the Division of Insurance. She noted the document (Exhibit Q) did not contain proposed modifications to the EICON amendment and stated the parties had agreed to delete specific language in the EICON amendment. The parties agreed that the amendment to Section 58 proposed by Bob Feldman and the amendment proposed by Annie Rees should be withdrawn. Finally, Ms. Molasky-Arman noted the parties had not reached an agreement on the amendment to Section 85 proposed by Bob Feldman.
Fred Hillerby, Legislative Representative, Professional Insurance Agents of California and Nevada, indicated he supported the position of Ms. Molasky-Arman.
A memorandum from the National Association of Independent Insurers in support of A.B. 618 was provided for the record without testimony (Exhibit R).
Mr. Hughey pointed out the proposed amendment from EICON contained several technical changes that would be pointed out to the bill drafters for correction when the amendments were submitted.
ASSEMBLYWOMAN BUCKLEY MOVED AMEND AND DO PASS A.B. 618 WITH ALL OF THE AMENDMENTS LISTED EXCEPT FOR THE AMENDMENT TO SECTION 85 PROPOSED BY MR. FELDMAN
Chairman Dini questioned whether an amendment from the Retail Association should be included.
Samuel P. McMullen, Legislative Representative, Retail Association of Nevada, Service Contract Industry Council, provided a proposed amendment to A.B. 618 that would increase application and renewal fees from $500 to $1,000 in order to make the program self-supporting (Exhibit S).
Chairman Dini confirmed that the amendment was acceptable to the Insurance Commissioner, Mr. Ostrovsky and the Nevada Trial Lawyers Association.
ASSEMBLYWOMAN BUCKLEY MOVED TO AMEND HER ORIGINAL MOTION TO INCLUDE THE AMENDMENT CONTAINED IN EXHIBIT S AND REREFER THE BILL TO WAYS AND MEANS.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT. MR. HUMKE, MR. PARKS, MR. GOLDWATER AND MR. NOLAN WERE NOT PRESENT FOR THE VOTE.
Chairman Dini opened discussion on A.B. 619.
Assembly Bill 619: Revises certain provisions relating to mobile home parks. (BDR 10-1090)
Ms. Buckley reminded the committee A.B. 619 was the consensus bill between the mobile home park owners and the mobile home park residents, and presented a document which detailed the amendments for the committee’s review (Exhibit T). She noted the amendments deleted Sections 2, 3 and 4, and attempted to clarify the intent of those sections with modifications to other sections. Ms. Buckley noted page 2 of Exhibit T was proposed by Ernie Nielson to allow a co-op exemption. Page 3 of Exhibit T was language modified by the health division in order to meet their statutory requirement regarding well water and was agreeable to both residents and park owners. Ms. Buckley noted the amendments simply attempted to tighten the language of the original bill.
ASSEMBLYWOMAN LESLIE MOVED AMEND AND DO PASS A.B. 619.
ASSEMBLYMAN PERKINS SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT. MS. GIUNCHIGLIANI, MR. PARKS, MR. GOLDWATER AND MR. NOLAN WERE NOT PRESENT FOR THE VOTE.
Chairman Dini opened the hearing on A.B. 620.
Assembly Bill 620: Makes various changes relating to contractors. (BDR 54‑407)
Fred Hillerby, Legislative Representative, Nevada State Contractors Board, indicated the Contractor’s Board had been involved in many discussions concerning construction defects and the need to educate the public. He indicated there was a shortage in skilled construction workers and, accordingly, felt it was important to provide educational opportunities to train construction workers.
George Lyford, Director of Special Investigations, Nevada State Contractors Board, told the committee A.B. 620 was introduced on behalf of the State Contractors Board to establish a construction education fund by earmarking money from fines imposed and collected by the board to be used to provide education programs in the construction industry as a means to create more knowledgeable, competent and qualified contractors, which Mr. Lyford felt would enhance consumer protection and improve the quality of construction in Nevada. Mr. Lyford noted the bulk of the bill dealt with the construction education fund; however, he pointed out there were three other sections in the bill that were housekeeping in nature. Mr. Lyford advised that both the Office of the Attorney General and the Legislative Counsel Bureau were of the opinion that the Nevada State Contractors Board could not impose fines in disciplinary actions while at the same time distributing the monies collected by such fines, and accordingly, an outside entity must handle the funds.
Ron Krump, Representative, Krump Construction, indicated he was involved in the development of several classes which would qualify under the proposed program. He noted the classes were developed because a survey of high school students revealed that a career in construction ranked 247 out of 250 possible careers. Mr. Krump stated 25 to 30 percent of construction-related jobs required an advance degree and the industry was not attracting good people. Mr. Krump indicated programs had been implemented but stated funding for classes and materials was necessary beyond what the local schools could afford.
Ms. Buckley felt the industry’s approach made sense, but she indicated concern regarding the broad way the bill was worded. She wanted to know how much money was involved and who was intended to receive the education provided. Mr. Lyford responded the amount of money collected in fines from disciplinary actions was approximately $43,000 last year and that number was anticipated to increase for the current year. Mr. Hillerby indicated Section 6 of the bill provided a voluntary opportunity for contribution to the educational fund and stated the focus of the program was to educate people into the trades. He noted there was also an opportunity to provide continuing education to improve the skills of people already in the industry. Mr. Hillerby stated Section 2, subsection 7, allowed the commission to adopt regulations regarding grants, applications and qualifications necessary to receive the education, and indicated he was receptive to ideas by the committee to more clearly focus the program.
Chairman Dini confirmed the Governor appointed the commission and the monies collected would be a separate account in the state treasury. Accordingly, he noted the bill would need to be referred to the Committee on Ways and Means because it created a new fund.
Chairman Dini asked if there were any proposed amendments to the bill. Mr. Hillerby stated there were no amendments to the bill, unless the committee wished to refine the focus of the program.
Ms. Buckley stated she would not offer any sort of amendment as to the focus of the program, but noted a purpose for the funds would need to be clearly established when the bill came before the Committee on Ways and Means.
Chairman Dini inquired whether the monies collected through fines, proposed to fund the program, would be taken out of the State Contractors Board’s revenue. Mr. Lyford indicated the fines currently went directly into the state General Fund.
Chairman Dini noted his recommendation that the committee pass the bill on to the Committee on Ways and Means.
ASSEMBLYMAN HETTRICK MOVED DO PASS AND REREFER TO THE COMMITTEE ON WAYS AND MEANS.
ASSEMBLYMAN HUMKE SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT. MS. GIUNCHIGLIANI, MR. PARKS, MR. GOLDWATER, MR. BEERS AND MR. NOLAN WERE NOT PRESENT FOR THE VOTE.
Chairman Dini indicated Mr. Beers requested the hearing on A.B. 623 be continued until the following Monday, and opened the hearing on A.B. 622.
Assembly Bill 622: Makes various changes to provisions governing practice of court reporting. (BDR 54-533)
Lori Urmston, Secretary, Nevada Certified Court Reporters Board, provided a brief overview of A.B. 622. She indicated the bill requested regulation of court reporting firms, noting business practices had changed and violations were occurring as a result of a firm’s action and not as a result of the individual court reporter’s action. Ms. Urmston noted the bill also requested that the board be able to provide education to meet continuing education requirements and the bill requested a fee increase to meet increasing operating costs.
Ms. Buckley, temporarily chairing the meeting, asked if there was any support for the provisions of the bill from court reporters in the state.
Karen Yates, Immediate Past President, Nevada Court Reporters Association, indicated the association had been following A.B. 622 and supported the bill.
Ms. Buckley asked if Governor Guinn’s office had been consulted about the fee increase and also inquired whether analysis had been conducted as to how much money would be generated by the fee increase and how that money would be used. Ms. Urmston indicated Governor Guinn’s office had not been contacted about the fee increase. She estimated the proposed increase would generate approximately $14,700 per year and indicated the funds would be spent on necessary items such as audits, legal opinions and office equipment.
Ms. Buckley advised she received a phone call prior to session from a court reporting firm that was concerned the board was attempting to regulate court reporting firms and prohibit certain practices. Ms. Buckley asked whether the board had been advised of any concerns and, if so, whether those concerns had been worked out. Ms. Urmston indicated a meeting was held in Las Vegas and concerns were discussed and addressed.
Ms. Buckley closed the hearing on A.B. 622.
There being no further business to come before the committee, Chairman Dini adjourned the meeting at 4:26 p.m.
RESPECTFULLY SUBMITTED:
Rebekah Langhoff
Committee Secretary
APPROVED BY:
Assemblyman Joe Dini, Jr., Chairman
DATE: