MINUTES OF THE meeting

of the

ASSEMBLY Committee on Judiciary

 

Seventy-First Session

April 27, 2001

 

 

The Committee on Judiciarywas called to order at 8:02 a.m. on Friday, April 27, 2001.  Chairman Bernie Anderson presided in Room 3138 of the Legislative Building, Carson City, Nevada, and by videoconference to Room 4401 of the Grant Sawyer Office Building in Las Vegas, 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.                     Bernie Anderson, Chairman

Mr.                     Mark Manendo, Vice Chairman

Mrs.                     Sharron Angle

Mr.                     Greg Brower

Ms.                     Barbara Buckley

Mr.                     John Carpenter

Mr.                     Jerry Claborn

Mr.                     Tom Collins

Mr.                     Don Gustavson

Mrs.                     Ellen Koivisto

Ms.                     Kathy McClain

Mr.                     Dennis Nolan

Mr.                     John Oceguera

Ms.                     Genie Ohrenschall

 

STAFF MEMBERS PRESENT:

 

Nicolas Anthony, Committee Policy Analyst

Risa B. Lang, Committee Counsel

Cindy Clampitt, Committee Secretary

 

OTHERS PRESENT:

 

Mr. Jim Wadhams, representing the Southern Nevada Homebuilders’ Association

Mr. Scott Rasmussen, on behalf of the Nevada Subcontractors’ Association

Mr. Robert Crowell, representing the Nevada Trial Lawyers’ Association

Mr. Jim Weston, Deputy Police Chief, City of Reno, and Chairman of the current Sentencing Advisory Commission

Judge David Gamble, District Judge, Douglas County, Ninth Judicial District

Mr. Richard Kirkland, Director, Department of Motor Vehicles and Public Safety (DMV&PS), and representing the Governor’s Office

Mr. Kevin Higgins, Chief Deputy Attorney General

Ms. Patricia Hines, representing Nevada Citizens United to Rehabilitate Errants (NV CURE) 

 

Chairman Anderson called the meeting to order at 8:02 a.m. and asked that the committee be updated on the progress of amendment language to A.B. 133 by the supporters of the bill.  He explained the bill was currently on the floor of the Assembly, but the committee needed to hear the explanation of the proposed amendments.  He noted the bill was sponsored by Speaker Emeritus Dini.

 

Assembly Bill 133:  Makes various changes concerning construction, constructional defects and common-interest communities.   (BDR 3-667)

 

Mr. Jim Wadhams, representing the Southern Nevada Homebuilders’ Association, explained extensive work had been done with various other parties.  He stated perfect legislation had not been achieved but in a spirit of democracy, compromises had been reached that the parties were willing to work with to achieve some of the goals expressed by the Chair and other members of the committee. He described the work that had been done on amendments to the bill. Mr. Wadhams explained that should those testifying get into extremely technical issues, he would defer to other experts.

 

Mr. Wadhams stated A.B. 133 (First Reprint) page 1, Section 2, subsection 2(a), addressed complex cases.  He explained there were two categories of cases described in statute, including simple cases, which addressed four or fewer houses, and those that were complex consisting of five or more houses.  Mr. Wadhams stated complex matters would incorporate homeowners’ associations and class actions.  Multiple project disputes were complex.  Single house disputes confused the simple matters.  He noted very little was being done to change the simple matters because that system had worked reasonably well.

Mr. Wadhams stated as of the current date, the activity began with the first official notice to the contractor, being that of the filing of a lawsuit.  The amendment attempted to structure a pre-litigation notice of defect.  Section 2 of the bill described that notice.  He stated Section 1 required that before an action could be commenced against a contractor, the claimant must give written notice of intent to file a lawsuit.

Mr. Wadhams explained the bill provided for a period of time that the contractor would have to be told what a problem was and to attempt to repair it.  The phrase “right to repair” covered that point.  There had been a great deal of discussion about whether an unfettered, absolute right of repair existed versus a reasonable right of repair.  That was the key point of the amendments.

Vice Chair Manendo stated one thing committee members heard from homeowners was that if they had a problem, the contractor had returned and did not do a good job, or that the contractor was unresponsive to the needed repair.  He asked what happened in those kinds of instances.  He asked if the homeowner had to go through the entire system again. 

Mr. Scott Rasmussen, on behalf of the Nevada Subcontractors’ Association, replied if the homeowner was not satisfied with the repair they could immediately move into a Chapter 40 process and sue the contractor for the failure to provide adequate relief.  He said the remedy was that “The contractor got one shot at the apple and if they cannot hit the apple, take them out.”

Mr. Robert Crowell, representing the Nevada Trial Lawyers’ Association, stated again that A.B. 133 (First Reprint) was the basis for recommendations to the committee and certain provisions would be added to that.

The first provision was a definition of the relationship between contractors and subcontractors.  He stated if a notice of defect was given to the contractor, the contractor would have a certain period of time to effect repairs.  Within that time frame would be another time frame for the subcontractor to make the repairs.  The 45- and 90-day time frames were the starting point.  Mr. Crowell suggested that the time frame for repairs could be extended by mutual agreement between the parties and that agreement would not be unreasonably withheld.

The second provision was to Nevada Revised Statutes (NRS) Chapter 133.  An amendment would be added to the homeowner statutes in Chapter 116 of NRS. The suggested amendment would state that the provisions of NRS 116.3115 (9e) should delete the phrase “To protect the health, safety, and welfare of members of the association.”  That would leave intact all other matters in NRS 116 with respect to construction defect litigation.

Additionally, there were some additions to A.B. 133 (First Reprint) that would state a homeowner was not required to give an opportunity to repair if there had been a threat of violence or if a previous attempt had been made in another exculpatory provision.  That would prevent a situation from arising where repairs were attempted to be made, and where they were not being made at all.

Mr. Wadhams stated about 12 people had been trying to work through proposed amendments to the bill until the wee hours of the morning.  He added it was important to note the phrase being deleted would not jeopardize the safety of residents.   The section referenced by Mr. Crowell spoke to votes by members of a homeowner’s association to commence litigation.  He explained a homeowner’s association must take a vote to proceed with litigation and the requirement was still present and untouched.  The exception to the vote taking provision was not based on safety because there was a separate section of law that dealt with threats of physical harm to human beings and was outside the voting process. Safety was not being relaxed in the process.  The proposal was a technical change to voting issues.

Mr. Wadhams stated the amendment process to A.B. 133 had been very difficult.  In judicial matters, individual words became very important and the proposed concept was solid.  The Legislative Counsel Bureau would present formal amendment language to the bill.

 

Assemblyman Collins stated it sounded like the amendments would include a responsibility trigger that would allow the contractor to get the subcontractor to make the repairs within the specified time frame.  He stated much testimony was heard during the 1999 Legislative Session that the bill, which passed during that time, would settle the problems with construction defects and yet the issue was still being debated during the 2001 Legislative Session.  He gave an example of a problem concerning the area around windows or the floor plate that could not be repaired without the concrete being repaired.  In other words, one subcontractor was willing to do what was needed, but another subcontractor, on whose work the first subcontractor’s actions depended, was not willing to make the needed repairs.  Mr. Collins asked which subcontractor would be sued in the litigation that followed.

 

Mr. Rasmussen replied the general contractor, as a first step, would receive the notice required by the bill.  Once that was received it was the obligation of the general contractor to identify every subcontractor they believed had any responsibility for that particular defect.  In Mr. Collin’s example that could include:

 

• The stucco subcontractor;
• The framing subcontractor;
• The glass supplier;
• The flashing subcontractor; and
• The painter.

 

If some of the subcontractors refused to do their part in the repair, the general contractor still had the right to hire his own person to go to the home and take care of the problem. The purpose of the language in the amendment was to ensure every subcontractor had an opportunity to be at the table and get the problem fixed.  If they did not, the general contractor could sue them.  

 

On the other side, penalties were provided if the general contractor did not give notification of a defect to all the subcontractors involved.  The homeowner could not collect against the subcontractor nor charge attorney’s fees, expert witness fees, and other costs.  After the Chapter 40 process was started, the subcontractor could make a deal directly with the claimant.  If such a deal was made all claims of the general contractor were negated.

 

Mr. Crowell stated the amendment proposals would resolve the construction defect issues concerning homeowner associations for the current legislative session.

 

Mr. Wadhams referred to Mr. Collins’ question and added, once a repair was made through a separate deal the claimant’s rights were cut off, as well as those of the general contractor. Chairman Anderson asked for clarification that if the repair was improper, none of the exclusionary language would apply.  Mr. Wadhams stated only if the repair was proper was the situation over.

 

The Chairman asked the parties proposing the amendment to move to bill drafting so that the reprint of the bill could be made available as soon as possible.  He recommended the primary sponsors of the amendment be the Chair, Assemblywoman Buckley, Assemblymen Carpenter, Brower, and Vice Chair Manendo.

 

The Chair opened the hearing on S.B. 286.  He explained the bill represented an important piece of legislation.   

 

Senate Bill 286:  Revises provisions relating to certain committees that review issues pertaining to criminal justice. (BDR 14-774)

 

 

Mr. Jim Weston, Deputy Police Chief, City of Reno, and Chairman of the current Sentencing Advisory Commission, provided an update on events surrounding the commission since Governor Guinn had taken office.  The new Governor had met with many of the different boards and commissions as part of his process of government reorganization.

 

Governor Guinn had identified the commission as one that might be able to be combined with another agency or board for better efficiency.  At the time the commission was operating on a very limited budget although there had been numerous meetings and members had made recommendations for legislation and provided considerable input to the criminal justice system.  The commission felt itself not to be as efficient as they should be.  The Governor had indicated he would support elimination of the Sentencing Advisory Commission in The Executive Budget.

 

Deputy Chief Weston stated the commission consisted of two assemblymen, two senators, a judge, a commissioner from Las Vegas, a citizen representative, a victim’s advocate representative, a defense attorney, and a number of people who represented different factors of the criminal justice system and citizen groups throughout the state.

 

In the last meeting of the commission it was agreed that some process should be left in place to continue providing input to either the Governor’s Office, the legislature, or someone in the governmental process.  Whether the input retained the form of a formal commission was irrelevant, but the process was important.

 

Senator James, who was a member of the commission, suggested that the legislature should create a policy advisory committee or some type of group dealing with criminal justice issues. 

 

Deputy Chief Weston stated the Sentencing Advisory Commission had not crafted the bill, but voted to support the concept of maintaining a sentencing advisory group placed somewhere in state government.  Senator James chose to sponsor S.B. 286, which would create a new group that included the functions of the commission.  The group proposed by the bill was larger than the commission because the new group would add consideration of juvenile justice policy issues, a high-tech crime task group, and was expanded to deal with all criminal justice issues in the state.

 

The legislation included the ability to subpoena individuals and offered greater authority and power than the current commission had. 

 

Deputy Chief Weston stated the commission had not discussed all elements of the bill, but they supported the concept of maintaining representation from commission members.  Speaking individually, he noted the legislation was good although he was not in favor of the subpoena powers.  The commission had not had similar authority and had experienced problems with encouraging testimony before it.  He noted Judge Gamble was present to support the bill and he had spoken with Washoe County District Attorney, Dick Gammick, who had offered his support of the bill with reservations concerning the large size of the group proposed and the subpoena powers.

 

Chairman Anderson stated he was also a member of the Sentencing Advisory Commission as well as other advisory bodies.  The subpoena powers were not dramatically different than those held within the legislature.  He added the exercise of that power in the legislature was required to be done through the Speaker of the House.

 

Judge David Gamble, District Judge, Douglas County, Ninth Judicial District, testified the Advisory Commission on Sentencing was created shortly after the Truth in Sentencing Law was passed several sessions previously and he had been a member of the commission since that time.

 

Judge Gamble stated the commission had served a very useful function and if it was not continued for between-session examination of the results of the Truth in Sentencing Law and the results of the rest of criminal law, it would be very difficult to propose effective and consistent legislation.  He stressed the function must be carried out in some fashion.

 

The commission suggested by the bill consisted of voting members made up solely of legislators.  Judge Gamble suggested the subpoena powers were included because the voting members consisted only of legislators.  The bill had a number of unintended consequences. 

 

Chairman Anderson stated the Assembly Committee on Judiciary had killed a bill that would have removed the commission during the 1999 Legislative Session partly because there was no proposal to replace it.

 

Mr. Brower stated he understood the points brought forward in testimony.  The Truth in Sentencing Law was passed in 1995, which resulted in the creation of the present commission.  He questioned a need for an interim committee given the fact there were two standing committees who met during each legislative session.  He did not see a particular mission for an interim commission to establish.

 

Judge Gamble stated the previous Advisory Commission on Sentencing had a narrow mission to study the statistical outcome of the Truth in Sentencing Law and to identify defects that might occur.  They were also to study the effects of the legislation and suggest changes to the legislature.  One outcome was that the commission had discovered a lengthy period of time was required for major changes in criminal law to take effect.  Because of that, good data on which to advise changes was just beginning to take effect.  Small changes had been recommended and subsequently changed. Over the next several years someone needed to examine the effect of the law on prison beds and on the system.  He commented the current commission members represented all the stakeholders in sentencing issues.

 

Chairman Anderson stated the final Truth in Sentencing Law passed in 1995, as a result of two pieces of legislation.  One was from the Governor’s Office and one was sponsored by Senators James and Washington.  One great fear of the money committees had been that the bill would cause prison beds to be filled to capacity.  Given the law of unintended consequences, it was hoped that the laws that were changed would not cause individuals to be sent to prison unnecessarily.  The commission had been created and alternative-sentencing formats had been made available to placate the fears of heavier demands on the prison system.

 

The Chair concurred with Judge Gamble in that statistical information needed to be continually gathered so the legislature could make realistic recommendations.  The intent was to keep the public safe from career criminals and yet have the ability to punish those who might be rehabilitated without incarceration.

 

Deputy Chief Weston stated members of the commission had traveled throughout the country to seek how sentencing issues were dealt with in other states.  They had found Nevada to be somewhat at the lower end of the scale in terms for alternative sentencing and methods of handling non-violent offenders.  He gave alternative-sentencing examples such as boot camps and home incarceration.  He noted many states had very effective programs to lower the number of prison beds needed and maintaining the “hard beds” for violent offenders.  The commission had initiated a grant program to experiment with after-care and residential treatment of prisoners before they left incarceration to lessen the impact they had on communities when released.  He noted 2 percent of the prison population was released into society each month.

 

Deputy Chief Weston opined the commission had not done a good job of statistical analysis of the effects of the Truth in Sentencing Law concerning inmate population.  Approximately half of the current prison population fell under the Truth in Sentencing Law and the other half had been sentenced prior to the law.  Earlier trend indicators pointed to the fact the law seemed to be working.  One issue considered was that 6 percent of the prison population consisted of driving under the influence (DUI) offenders.  The demand from communities throughout the country seemed to be to lock up all such offenders but that meant prison beds were needed for DUI offenders and in that particular situation, prison did not seem to help much with rehabilitation.

 

Chairman Anderson noted the Assembly Judiciary Committee had taken testimony concerning such issues as the drug court question, first and second DUI offenders, and treatment programs.  Some of the Rose Commission recommendations had not been adopted.

 

There were so many different groups in existence that there was no consolidated ongoing vision.  The intent of the bill would be to have a similar forum to that of the Assembly Committee on Ways and Means and the Senate Finance Committee through the Interim Finance Committee.  The forum would be a place for criminal justice issues to be reviewed, which was the reason for a broader-based group.  The Chair commented one problem with interim committees was that there never seemed to be one person to follow the status of legislation to ensure the same issues were not debated time after time.

 

Mr. Carpenter stated the Advisory Commission on Sentencing was needed and the reason reports had not been forthcoming was that during the last interim, the Governor wanted the commission disbanded.  In meetings he had attended, valuable commission time had been spent discussing how to address the issue of disbanding the commission.

 

Judge Gamble said Mr. Carpenter was exactly correct.  There had been very minimal resources available to the commission throughout its existence.  A necessity existed within criminal law in Nevada to ensure changes were retained in some institutional memory and that changes were made in a responsible manner.

 

Judge Gamble stated it was the position of himself, Deputy Chief Weston, and the Sentencing Advisory Commission that there needed to be a permanent review of current statistics and effects of legislation over time.  He noted there were some individuals present who had problems with various portions of the bill.

 

Mr. Richard Kirkland, Director, Department of Motor Vehicles and Public Safety (DMV&PS), and representing the Governor’s Office, stated he was not against the bill, only against certain issues within the bill.  He requested clarification on those aspects.  He agreed with much of the testimony from Deputy Chief Weston and Judge Gamble. Mr. Kirkland stated the Governor’s Office had certain areas of concern within the bill.  The words “investigate, subpoena, deposition, and court actions” spoke to adversarial process rather than statistical gathering.

 

He questioned that the word investigate led itself to other questions of “investigate who,” “investigate how,” and “for what purpose.”  He asked if the term meant Judge Gamble could be subpoenaed and asked to defend a judgment he had made. He commented if that was the intent of the legislation, he felt it needed further discussion before passage. 

 

Mr. Kirkland agreed that a better job should be done in evaluating statistical information to evaluate how the criminal justice system worked.  He commented in his previous and present employment he had not “investigated,” but he had gathered data, analyzed the data, and sought input from all aspects of the criminal justice system and attempted to make good management decisions.

 

There were inherent challenges of making the commission proposed in the bill all-encompassing, especially in the area of high-tech crime.

 

Mr. Kirkland asked if the commission created in S.B. 286 would be a statewide investigative group with ability to subpoena legislators and other professionals, deal in disciplinary actions, criminal investigations, and if so, would there be conflicts.

 

Chairman Anderson stated he was not speaking on behalf of Senator James, but opined the Senator was viewing the new commission as functioning like the legislature with oversight functions.  He noted there were statistical gathering entities in both the DMV&PS and the Attorney General’s Office that were growing larger and larger.  The Chair stated, however, that the bill had some real possibilities.

 

Mr. Kevin Higgins, Chief Deputy Attorney General, noted approximately five years previous it became apparent to law enforcement there were issues in the high-tech and Internet crime areas they were not prepared to deal with.  He recalled a famous case of a Gaming Control Board employee who was cheating at slot machines.  The Attorney General’s Office had investigated and it became clear no one knew how to investigate or prosecute the case.

 

An informal task force sprang up and as a result of that effort S.B. 485 of the Seventieth Session was passed that created the High-Tech Crime Advisory Board.  He stated there was no bomb squad in Nevada until Harvey’s Resort was bombed.  Nevada was behind the curve concerning telemarketing fraud.  California and Florida drove the perpetrators out with very tough laws and the majority moved to Las Vegas about 15 years previous.

 

Mr. Higgins stated it was hoped the advisory board would continue to stay ahead of high-tech crime.  The Federal Bureau of Investigation (FBI) and the Internet Fraud Complaint Center currently reported Nevada to be one of the top ten complaint states for Internet fraud and complaints.  There was a pharmacy in Las Vegas that advertised on the Internet a special Viagra without a prescription for $29.95, even though they were not really in Las Vegas.

 

Mr. Higgins stated although the High-Tech Crime Advisory Board was not originally in the bill, during the Senate Work Session on S.B. 286 the board was added.  The interim committee would have a fragmented focus and the issues of  the High-Tech Crime Advisory  Board were extremely technical.  The board was close to acquiring a $25 million federal grant. 

 

Mr. Higgins provided committee members with a packet of information highlighting the accomplishments of the High-Tech Crime Advisory Board (Exhibit C).  He explained one activity of the board had been to train law enforcement officers on what to do if they entered a crime scene and a computer was present that was turned on. A proposed amendment was included in Exhibit C that would delete the High-Tech Crime Advisory Board from the bill.

 

Chairman Anderson stated he served on that board as well.  He commented there was a dramatic difference between the functions of the High-Tech Crime Advisory Board and the Advisory Commission on Sentencing.  High-tech crime was a fairly new area and the business community needed to be aware of what could happen.  He commended Ms. Tara Shepperson for her efforts with the board. He stated if S.B. 286 passed, it would not do so with Sections 23 and 25, nor would the committee include NRS 205A.010 through NRS 205A.100.

 

Mr. Carpenter asked if the amendment to be deleted was only NRS 205A.100 or if it wished to delete anything dealing with NRS 205A.  Mr. Higgins requested all references to NRS Chapter 205A  be deleted, particularly any inclusion of the High-Tech Crime Advisory Commission.

 

Chairman Anderson indicated that would cover page 13, Section 23, lines 10 and 11, and the reference in Section 25 of S.B. 286.  He added there might be other references he had not identified.

 

Mr. Carpenter noted parts of Sections 23 and Section 25 referred to the sentencing commission and those portions should be left in the bill.  The Chair noted there was an ongoing dialogue with the Governor’s Office concerning various aspects of the bill.

 

The Chair added perhaps there would be a later time when the members of the board could present further information on what the board accomplished.  Mr. Higgins stated another bill would come before the committee that might open that opportunity.

 

Ms. Patricia Hines, representing Nevada Citizens United to Rehabilitate Errants (NV CURE) spoke from the audience stating there were portions of the bill she was opposed to.  The Chair stated the committee was due on the Assembly Floor and the Chair would accept any written documentation she wished to provide.

 

Chairman Anderson recessed the committee at 9:00 a.m. in anticipation of a further meeting behind the Bar of the Assembly.

 

Mr. Stan Olsen, representing the Nevada Association of Sheriffs and Chiefs, did not speak, but submitted Exhibit D consisting of letters in opposition to the bill from the sheriffs of Churchill and Lander Counties.

 

Chairman Anderson reconvened the meeting behind the Bar of the Assembly at 3:05 p.m.  Assemblywoman Buckley and Assemblymen Carpenter and Collins were not present.  The meeting was adjourned at 3:06 p.m.

 

 

  

RESPECTFULLY SUBMITTED:

 

 

Cindy Clampitt

Committee Secretary

 

 

APPROVED BY:

 

 

                       

Assemblyman Bernie Anderson, Chairman

 

 

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