MINUTES OF THE meeting
of the
ASSEMBLY Committee on Judiciary
Seventy-First Session
May 9, 2001
The Committee on Judiciarywas called to order at 8:09 a.m. on Wednesday, May 9, 2001. Chairman Bernie Anderson presided in Room 3138 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to Room 4401 of the Grant Sawyer Office Building, 555 East Washington Avenue, 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
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
COMMITTEE MEMBERS ABSENT:
Ms. Barbara Buckley (Excused)
STAFF MEMBERS PRESENT:
Nicolas Anthony, Committee Policy Analyst
Risa B. Lang, Committee Counsel
Sandra Albrecht-Johnson, Committee Secretary
OTHERS PRESENT:
Gemma Greene-Waldron, Nevada District Attorney’s Association, Deputy District Attorney, Washoe County
Captain Jim Nadeau, Washoe County Sheriffs Office, Nevada Sheriffs and Chiefs Association
John P. Fowler, Chair, Executive Committee, Business Law Section, State Bar of Nevada, and Lawyer, Marshall Hill Cassas and de Lipkau
Renee L. Lacey, Chief Deputy Secretary of State
James L. Wadhams, Nevada State Board of Architecture, Interior Design and Residential Design
Greg Erny, Chairman, State Board of Architecture, Interior Design and Residential Design, Licensed Architect
Frank W. Daykin, National Conference of Commissioners on Uniform State Laws (NCCUSL), former Legislative Counsel, Legislative Counsel Bureau
Alan B. Rabkin, General Counsel and Executive Director, Commission on Judicial Discipline, former General Counsel for Sierra West Bank and former in-state counsel for Bank of the West
Ted Wehking, Nevada Bankers Association
John Sande, Nevada Bankers Association
Chairman Anderson declared that a quorum was present. He encouraged testimony before the committee and requested persons who wished to speak to sign-in at the door.
Senate Bill 242: Prohibits growing, cultivating or propagating of marijuana. (BDR 40-469)
Chairman Anderson opened the hearing on S.B. 242 and called forth Ms. Gemma Greene-Waldron, Nevada District Attorneys’ Association, Washoe County Deputy District Attorney, to introduce the bill. Ms. Waldron explained that the purpose of the bill was to close loopholes in the law with regard to the growth, cultivation, and propagation of marijuana, and to make it illegal. She described that it had previously been illegal until the drug laws were revamped in a past session. Somehow during the process of the last legislative session, it inadvertently became legal to grow marijuana in Nevada. She clarified that the bill should not interfere with A.B. 453, a bill that would legalize the medicinal use of marijuana, since S.B. 242 would start by covering persons growing one pound or more.
Ms. Waldron referred the committee to Section 1 of the bill, which would make it a felony to grow one pound or more of marijuana. She explained that the category of felony for the growth of marijuana would range from a Category E up to a Category A felony, depending upon the amount of marijuana grown. Sections 2 through 4 aligned the statutes throughout the Nevada Revised Statutes (NRS) with S.B. 242. She summarized that the purpose of the bill was to close the loopholes in the law and make it illegal to grow marijuana. Chairman Anderson clarified that S.B. 242 would not interfere with A.B. 453. He inquired if the bill would expand the laws, in any way, to impact persons who had not previously been in violation of the law, but would be under S.B. 242. He wanted reassurance that the bill would not have unintended consequences.
Ms. Waldron clarified that the bill was to bring the law back to where it was
before it was inadvertently removed from statute.
Chairman Anderson observed that the final penalty contained in the bill was a Category E felony. Ms. Waldron reiterated that it ranged from a Category E felony up to a Category A felony, depending upon the amount of marijuana grown. She pointed out that if a person was growing 10,000 pounds, he would be an obvious trafficker and not merely using it for medicinal purposes.
Assemblyman Gustavson inquired what the street value would be for 2,000 pounds of marijuana. Mr. Gustavson added that the fine of up to $50,000 and approximately 10 years in prison might be too low for growing such a large amount of marijuana. Ms. Waldron explained that she had previously dealt with drug cases and occasionally still did when they involved domestic violence, and she stated that the value of 2,000 pounds of marijuana was a very sizable amount of money. She referred the question to Captain Jim Nadeau, Washoe County Sheriffs Office and Nevada Sheriffs’ and Chiefs’ Association. Captain Nadeau responded that he would retrieve the answer shortly.
Assemblyman Brower inquired what the crime would be for growing and propagating less than one pound of marijuana. Ms. Waldron stated that her office would charge it as possession of a controlled substance. Mr. Brower clarified that the charge of possession would be used rather than the charge of growing the marijuana. Ms. Waldron agreed.
Chairman Anderson referred to the monetary fine scale, which was dependent upon the category of felony. He observed that Category B felonies usually carried fines that ranged from $5,000 to not more than $10,000. He inquired if the scale listed in the bill was consistent with that of a Category B felony. Ms. Lang responded that a Category B felony could carry a penalty of imprisonment for up to 20 years. She stated that the fines varied from $5,000 and higher, and occasionally were not specified at all; however, Ms. Waldron added that the fines for drug offenses were generally high. She cited that fines for trafficking were approximately $100,000.
Captain Nadeau informed the committee that the street value of marijuana ranged from approximately $150 to $400 per ounce, depending upon the quality. He explained that he had retrieved the information from a lieutenant in Washoe County Sheriff’s Narcotics Division. He voiced their support of S.B. 242.
Mr. Brower stated that if the growth of less than one pound of marijuana could be prosecuted as a possession offense, then so could the growth of more than a pound. He requested clarification as to whether a loophole existed. Ms. Waldron responded that an argument could be made that possession of under a pound of marijuana could be for personal use. She explained that if somebody had over a pound of marijuana, it would be more likely that he was trafficking it, and he would not be able to effectively make the argument that it was for personal use. She pointed out that it would take several plants to get up to a pound of marijuana, and A.B. 453 allowed persons using the marijuana for medicinal purposes to have up to seven plants, which would probably still not amount to a full pound.
Mr. Brower clarified the loophole that existed did not allow for the prosecution of growing and propagating marijuana. It just allowed prosecution for possession, which was a different crime with different penalties than growing and propagating. Ms. Waldron agreed. She stated that the penalty for possession of a controlled substance was only a Category E, with mandatory probation, and the offender would probably appear in drug court. She asserted that if a person was growing several plants, it was a much more serious crime that would require more of a penalty than merely appearing in drug court and going to counseling.
Vice Chair Manendo inquired how many marijuana cigarettes could be made from an ounce of marijuana. Captain Nadeau disclosed that he was not a narcotics expert. Based upon his experience of working on the streets, he described that an ounce of marijuana was approximately a baggie that was a quarter to one-third full; however, he could not accurately estimate how many marijuana cigarettes would be made from it.
Chairman Anderson pointed out that line 9, page 2 of the bill, stated, “marijuana means all parts of any plant of the genus Cannabis, whether or not growing.” He mentioned that he was under the impression that the bill was to prosecute persons who were actually growing the materials, not somebody who was in possession of some marijuana cigarettes. Ms. Waldron responded that the Chair’s assumption was correct. She referred the committee to page 1, Section 1, line 5 of the bill, and she pointed out that it covered persons growing, cultivating, and propagating marijuana. She explained that the intent of line 9, on page 2 of the bill was to cover persons who had marijuana seeds that had not yet sprouted, as well as to cover the various stages of growth of the plant. Chairman Anderson clarified that the bill would not unintentionally capture a person who was in possession of ashes from the plant, for instance. Ms. Waldron clarified that under the laws governing possession of a controlled substance, such a person could be arrested for the possession of just the residue of the marijuana cigarette, but they would not be prosecuted under S.B. 242.
Mr. Gustavson calculated that a pound of marijuana would range from $2,400 to $6,400, and 2,000 pounds of marijuana would range from $4.8 million to $12.8 million dollars.
Chairman Anderson called for persons to testify in support of, against, or neutral to the bill. There being none, he closed the hearing on S.B. 242.
Senate Bill 51: Makes various changes pertaining to business associations. (BDR 7-255)
Chairman Anderson opened the hearing on S.B. 51. Mr. John P. Fowler, Chair, Executive Committee, Business Law Section, State Bar of Nevada, and Lawyer, with Marshall Hill Cassas and de Lipkau, introduced the bill. He referred the committee to a letter dated May 8, 2001, from the Office of the Secretary of State (Exhibit C). Chairman Anderson acknowledged that he had received the letter the previous evening and had already reviewed it. Mr. Fowler explained that the bill originated as a result of the interim committee that was formed by Senate Concurrent Resolution 19 of the 70th Session, designed to encourage businesses to incorporate in Nevada.
Mr. Fowler explained that the bill made changes to corporate law in order to simplify business transactions. He noted that one of the common transactions that would be allowed by the bill was a “conversion.” He explained that a conversion allowed a business entity to become another kind of business entity by filing a document with the Secretary of State. Without conversions, businesses had to form subsidiaries and then merge them in order to change the kind of business entity they were. He indicated that the conversion would both simplify and reduce expenses of the process. He informed the committee that he had received several calls from lawyers of American and Canadian companies, inquiring if Nevada was going to allow domestications. Since the North American Free Trade Agreement (NAFTA) was signed, domestications became more common and popular in North America. He stated that S.B. 51 would permit domestications to occur in Nevada.
Mr. Carpenter requested Mr. Fowler to explain the inclusion in the bill of provisions for Limited Liability Corporations (LLC) and bankruptcy. He inquired if it prevented LLCs from declaring bankruptcy. Mr. Fowler responded that the provisions were established in case law from the bankruptcy courts. He explained that under certain circumstances, certain entities, including some LLCs, could not declare bankruptcy. He described that the bill would allow LLCs to have a non-economic member, who would be an owner, similar to stockowners of corporations, but would not have an economic ownership interest in the LLC. The non-economic member would have limited voting rights to vote on certain types of basic company transactions, which would normally include the decision of whether or not to declare bankruptcy. He described the usefulness of LLCs for cyclical businesses, such as airlines, to form subsidiary LLCs to obtain better interest rates on loans. Loan officers would generally conclude that the LLC would not file bankruptcy due to the presence of a non‑economic member. Mr. Fowler summarized that the bill would not legislate which companies could and could not file bankruptcy, and he added that bankruptcy courts and bankruptcy codes would make the determinations. He explained that the bill took into account the case law to specify in the statutes that certain LLCs would not be eligible to declare bankruptcy.
Chairman Anderson inquired if the $75 for the filing of certificates of incorporation was an additional fee or an expanded fee. Ms. Renee L. Lacey, Chief Deputy Secretary of State, responded that the fee was added for the certificates of termination that would be allowed by S.B. 51, of which there was no fee for previously. She explained that the fee was consistent with the fee for filing a certificate of correction, which was set at $75 in NRS Chapter 78. She noted that the fee of $75 was incorporated throughout the bill to keep the fees consistent.
Chairman Anderson inquired if the references in the beginning of the bill to other sections that included Sections 11, 15, 28, 29, 37, and 38, were amending the fees or adding new ones. Ms. Lacey explained that those sections were adding fees when a new certificate was created and amended fees for certificates that were already included in the statutes. Chairman Anderson inquired how much additional revenue the changes would raise for the office. Ms. Lacey answered that no projections had been made since they could not estimate how often the various procedures and certificates would be filed. Mr. Fowler did not believe the certificate of termination would raise a significant amount of revenue, since it was simply a matter of convenience for businesses to be able to terminate transactions.
Chairman Anderson inquired if businesses would have to pay the fees each time an amendment would be made to change their corporate status. Mr. Fowler answered in the affirmative and added that it was already in the law and S.B. 51 was not creating that procedure. Chairman Anderson inquired if the bill would charge the same fees to charitable organizations that were incorporated. He did not want the bill to unintentionally adversely affect charitable organizations that were designed to have to renew their articles of incorporation on a regular basis. Mr. Fowler explained that several of the charitable organizations that incorporated in the 1940’s and 1950’s had limitations that resulted in expiration of their articles of incorporation after 50 years, at which point they would need to renew them. He stated that at the time the organization would renew their articles, they could include an amendment to their articles and remove the time limitation. He added that the filing fees were lower to amend the articles of incorporation for charitable organizations than it was for profit organizations. He asserted that the charitable organizations would not be affected by the changes in S.B. 51.
Mr. Gustavson recognized that the added fees were necessary because they were for new certificates and that they were consistent with other fees for similar certificates. He acknowledged that the bill increased the fee for a certificate of amendment from $15 to $20. He pointed out that Sections 29, 75, 129, et cetera, charged $125 for certificates of termination, yet in Section 37, the charge was only $75. He inquired why the fees were inconsistent. Ms. Lacey responded that the inconsistency was an error and that she had a proposed amendment to submit for the bill to correct the errors (Exhibit D). She explained that $75 was intended to be the fee for those certificates.
Mr. Gustavson declared the changes would need to be made to page 22, Section 29, line 17, page 37, Section 75, line 17, page 62, Section 129, line 16. Ms. Lacey explained that Section 129, line 16, was the fee involved with mergers that was already established in the law and should remain $125. She apologized for not yet submitting the proposed amendment to the committee. She explained that the error was discovered that morning, and the proposed amendment was drafted shortly thereafter (Exhibit D).
Mr. Fowler explained that some of the changes in the bill were simple corrections to typing errors in the statutes, and the main changes of the bill were to corporate law, as outlined in Exhibit C. Chairman Anderson inquired if passage of the bill would bring Nevada further up-to-date in the law to attract business than did the laws of Delaware. Mr. Fowler explained the issue was debatable. He said that some believed Delaware’s take-over protection was better than Nevada’s, and some believed the opposite. He explained that each provision would be formidable to a business making the decision to incorporate in Nevada or somewhere else.
Chairman Anderson inquired if there would be any detrimental effects of the bill on Nevadans. Mr. Fowler responded that he did not foresee any downsides of the bill for Nevadans. He stated that any time changes were made to help corporations, it helped Nevadans by making it easier for them to conduct business transactions and to increase business activity. He noted that any time there was an increase in business activity, the potential for fraud increased as well; however, he opined that the proportions between increased business activity and increased fraud would not change. The Chair inquired if the committee formed by S.C.R. 19 of the Seventieth Session had any members that were legislators. Mr. Fowler responded that Assemblyman Brower was a member of the committee, as were other legislators who were not present.
Chairman Anderson requested the proposed amendments (Exhibit D) be distributed to the committee. Ms. Lacey explained that the document was not yet submitted because she was still making changes to it. Chairman Anderson requested her to submit a final draft of her proposed amendment (Exhibit D) and advised her that the committee would wait to take action on the bill until then. He called for testimony in support of, against, and neutral to the bill. There being none, he closed the hearing on S.B. 51.
Senate Bill 301: Makes various changes concerning certain professions. (BDR 7-634)
Chairman Anderson opened the hearing on S.B. 301. Mr. James L. Wadhams, Nevada State Board of Architecture, introduced the bill. He stated that Section 1 of the bill amended NRS Chapter 89, the professional corporations statute. He brought the committee’s attention to subsection “d,” lines 9 and 10, which required the licensing boards to provide certificates that verified whether the individuals that were forming the professional corporation were appropriately licensed. The Attorney General and Secretary of State requested it so that their offices did not have to verify the licenses themselves, thereby placing the burden upon the licensing boards.
Mr. Wadhams explained that Section 2 of the bill also amended NRS Chapter 89, by recognizing the changes made to multiple discipline corporations that were made over four years ago. He stated that it would not allow lawyers and accountants to merge together; however, the bill only allowed design professionals to be in multiple discipline corporations. Section 3 was drafting language until page 4, subsection 4, which recognized the requirement that the individuals had to be properly licensed by the appropriate licensing board. Sections 4, 5, and 6 were drafting language that included “except as otherwise provided.” Section 7, subsection 2 of the bill, line 11, was a counterpart to Section 1. It specified that a professional association would furnish a statement to the Secretary of State to verify the appropriate information. Section 8 of the bill was bill-drafting language.
Mr. Wadhams explained that Section 9 was the definition of “responsible control” as it would be incorporated into NRS Chapter 623. It would change the level of supervision required by a licensed architect over design professionals from “direct supervision” to “responsible control.” It would allow some flexibility while maintaining accountability by the licensed architect. Section 10 insured that there would be equal reciprocity of rights for registered interior designers as was allowed for architects and residential designers. Section 11 was bill-drafting language.
Section 12, subsection 1, lines 9 through 16, clarified the scope of practice of residential designers and registered interior designers. He explained that residential designers only drew plans for residential homes and projects, whereas architects could draw plans for all types of projects, including industrial and residential. He explained that registered interior designers typically designed office space layouts to conform to fire safety and egress requirements for human traffic throughout the building. He noted that there were registered interior designers on the Nevada Board of Architects.
Section 13, page 8, lines 8 through 11, allowed the board to issue annual certificates as opposed to biennial certificates. He clarified that it would not increase the licensing fees. Rather the annual certificates would be issued at half of the price of the biennial certificates. The section also allowed them to set a fee schedule that would permit them to prorate the fees so that if somebody wanted to be licensed in the last half of the year, they would not have to pay the full fee.
Mr. Wadhams stated that Section 15 allowed the board to develop regulations to track electronic transactions with regard to architectural and design plans. He explained that the law only allowed for the physical delivery of stamped and signed plans, not electronic transmissions. Section 16, page 9, lines 40 through 45, explained that a registrant would appear and take an oath before he received his certificate. Section 17 established the level of education required for a registered interior designer to be that level determined by the authorized accrediting body, which in Nevada would be the Foundation for Interior Design Education Research. Lines 28 and 30 pertained to the oath to be taken under Section 16. Section 18 was bill-drafting language to conform to the balance of the act.
Section 19 specifically provided for the annual renewal, as referred to in Section 13. Section 20, page 11, line 49, replaced the language of “direct supervision” with “responsible control.” Section 21 addressed the concern that a residential designer might have to hold both a license for the residential designer and a license for registered interior designer to be able to design the interiors of residences. He clarified that it was not the intention of the previous legislation for both licenses to be required for the residential designer; only the residential designer license was to be required for the design of an entire residential dwelling. Section 22 replaced the term “direct supervision” with “responsible control” and allowed registered interior designers to have the same opportunities to practice in Nevada as architects and residential designers.
Section 24 was an amendment requested by the professional engineers to NRS Chapter 625, to allow them the same opportunities to participate with the legislation. Section 25 eliminated the expiration date for persons who maintained their grandfather rights to complete the requirements to obtain their licenses. Mr. Wadhams informed the committee that the State Board of Architecture, Interior Design and Residential Design, had thoroughly researched the provisions set forth in the bill and received public input.
Chairman Anderson inquired how the bill was shortened and why it was referred to the Assembly Committee on Judiciary instead of the Assembly Committee on Commerce and Labor. Mr. Wadhams explained that the bill was originally consolidated with a bill from the Attorney General’s Office, but he had suggested that it be split since the issues were so technical in nature. As a result, the bills were split into A.B. 539 and S.B. 301. He explained that A.B. 539 basically consisted of Sections 8 through 27 of S.B. 301. Speaker Emeritus Joe Dini, Jr. requested the bills be combined and heard by Senator Mark A. James’ committee rather than the Assembly Committee on Commerce and Labor, due to time constraints. The Senate Committee on Judiciary heard the bill, at which point Senator Mark A. James requested that Senator Randolph A. Townsend hear the bill in the Senate Committee on Commerce and Labor. Mr. Wadhams explained that the First Reprint of S.B. 301 contained the amendments requested by the Secretary of State and the professional engineers. The Second Reprint of S.B. 301 was the addition of A.B. 539 into the bill, which put it back into the originally requested form. Chairman Anderson inquired if the bill would have to be forwarded to the Assembly Committee on Commerce and Labor upon passage. Mr. Wadhams responded that would not be necessary.
Assemblyman Carpenter inquired if page 6, lines 15 and 16, which required the listing of the residence and phone numbers of all members and employees of the association, would include janitors as well. Mr. Wadhams clarified that it was the intention to certify the principal professionals of the organizations that were the licensees. He stated that an amendment should be made to clarify the intent to address only the professional employees. Mr. Carpenter inquired if page 9, lines 3 and 4, would eliminate any of the programs from the institutions of higher learning in Nevada. Mr. Wadhams answered that it did not eliminate the programs. He clarified that those programs were the beginning points for the programs on architecture, and only the accredited schools would be able to graduate the persons qualified to be licensed architects in order to keep the accreditation process in place. Mr. Carpenter did not want to exclude the community colleges and universities that offered the programs from being able to do so.
Mr. Greg Erny, Chairman, State Board of Architecture, Interior Design and Residential Design, licensed architect, responded that the reason the language was stricken from the bill was to allow the School of Architecture at the University of Nevada, Las Vegas (UNLV) to be supported by the board. He explained that the school was not originally accredited when it was formed. It had since been accredited as a school of architecture, and the board wanted to eliminate other architecture programs that were not accredited, as it did with schools from other states that were not accredited.
Mr. Carpenter expressed his concern that the universities might not accept the transfer of the courses taken as part of the community colleges’ programs since those community colleges were not accredited. He stated that, although those courses might not be accredited, he felt that they were still worthwhile and should be accepted. He opined the elimination of the language might inadvertently cancel community college programs that should not be canceled. Mr. Wadhams stated that the section required further review, because the intent was to address the requirements for an architect, to specifically require them to go through an accredited school of architecture. He clarified that courses from community colleges would not be disqualified from counting toward an architectural degree by the bill; however, the bill recognized that the only school that could award an architectural degree would be one that was properly accredited, and none of the community colleges was accredited.
Chairman Anderson inquired what programs were in existence for architects to become licensed architects in the state of Nevada prior to the establishment of the accredited school of architecture at the UNLV. Mr. Erny stated that there was a two-year program for architects at the University of Nevada, Reno (UNR), but most students went to out-of-state schools to obtain their architecture degrees to become licensed in Nevada. He explained that an exception was made in the previous legislation for the UNLV to issue degrees in architecture that would be accepted by the board, because it was understood that the school was still going through the accreditation process. He clarified that the language was deleted because the exception was no longer necessary for the UNLV. He asserted that the removal of the language would not disqualify any of the programs in the community colleges that led into the university-level program for credit toward the student’s degrees in architecture.
Mr. Carpenter expressed his concerns that universities might not accept credits for the courses taken in the community colleges if the language were to be removed. He requested assurance that the universities would not refuse the credits from the community colleges. Mr. Wadhams recognized the historical lack of cooperation between the universities and the community colleges. He explained that there was no accreditation process for the community colleges for the discipline of architecture. The issue about acceptance of courses from community colleges was up to the universities, and it could not be governed by the board.
Chairman Anderson inquired if the bill would be harmed by not removing that language. Mr. Wadhams answered that keeping that language would not harm the bill. Chairman Anderson requested assurance that students who completed the programs at the community colleges would not be precluded from acceptance into the accredited schools. Mr. Wadhams clarified that it was not the State Board of Architecture, Interior Design and Residential Design, that decided what courses would be accepted from the community colleges by the universities. He explained that the educational institutions would make such decisions, not the board.
Assemblyman Brower inquired why it was necessary for interior designers to be registered with the state. Mr. Wadhams described the differences in the scopes of practice of various interior designers. He noted that there was a limited number of interior designers who planned the floor layouts of offices by incorporating the fire safety and egress requirements along with the flow of human traffic throughout the offices into the plans. Their responsibility would be to ensure there were plenty of fire exit routes available in the event one of them would be blocked by fire, to ensure that there were proper firewalls to stop a fire from spreading through to other offices, and to ensure there were properly marked exits. He pointed out that other interior designers would not need the same technical expertise, and therefore, would not need to be registered with the state. He stated that the profession of registered interior designer, as defined in previous legislation, was a limited one, in comparison to the typical interior designer that would not be registered.
Chairman Anderson recognized the conflicts of the bill with licensed professions versus unlicensed professions. Assemblyman Oceguera referred to Section 25 of the bill, and inquired if, by removing the deadline for the grandfather clause of December 31, 2004, the state would effectively be stating that the person would simply have to apply for the grandfather rights and would automatically receive them. Mr. Wadhams responded that it was critical for registered interior designers to be educated in egress, ingress, and fire safety requirements. He clarified that the option to file a letter of intent was no longer available, and the removal of the deadline was for those who had already filed the letter of intent that they were pursuing a career in interior design. He explained that the transition requirements were no longer necessary, and, if a person who had filed the letter of intent did not complete their requirements by the deadline date, he would still be able to do if the deadline was removed in S.B. 301.
Mr. Oceguera asked what the incentive would be for those persons to complete their requirements if the deadline was removed. Mr. Wadhams responded that the persons with the grandfather rights were in the process of becoming registered interior designers, but were not yet allowed to be registered interior designers until they completed their requirements.
Mr. Carpenter requested assurance that typical interior designers were not going to be regulated by S.B. 301. Mr. Wadhams assured him that they would not. Mr. Carpenter then inquired what the difference was between a residential designer and a registered interior designer, as listed in Section 2, on page 2 of the bill. Mr. Wadhams explained that residential designers were separately licensed individuals who designed residential houses. He noted that Section 12 on page 7 of the bill clarified their scope of practice. He explained that residential designers worked on plans for single- and multiple-family dwellings, as well as the use of space inside and outside the dwelling. The registered interior designer was defined in NRS 623.0225. He also stated the main difference between registered interior designers and interior designers was that interior designers did not design fire safety features.
Mr. Carpenter commented that he did not want to require interior designers and color coordinators to be regulated. Mr. Wadhams clarified that the bill would not change the licensing status of anybody in the state practicing for the last six years and would not add any new licenses.
Chairman Anderson requested clarification of page 6, lines 15 and 16, which required the listing of names and residential addresses of all members and employees of the association. He recognized that the State Board of Architecture, Interior Design and Residential Design might not want to reach all of the members and employees, but they might still be interested in employees that worked immediately under the professional members, such as drafters. Mr. Erny responded that they were only interested in knowing the names and addresses of the persons responsible for supervision. Chairman Anderson inquired if the phrase “professional” members and employees of the association would be narrow enough to accomplish the goals of the board. Ms. Lang responded that it should be sufficient. She stated that she would review it further to make sure that it would have the desired effect.
Chairman Anderson indicated that the language on page 9, with regard to programs of architecture in Nevada, would remain in the bill since it would not affect the power of the board. He called for any persons to testify either in support of, against, or neutral to S.B. 301. There being none, he closed the hearing on S.B. 301.
Chairman Anderson requested Mr. Wadhams to speak with Mr. Carpenter and Mr. Brower to address their concerns before the bill would be processed. He clarified for Mr. Anthony, Committee Policy Analyst, and Ms. Lang, Committee Counsel, that the language on page 9 with regard to programs of architecture in the state of Nevada, should not be removed from the bill and that Section 7, page 6, lines 15 and 16 needed clarification.
Senate Bill 474: Revises provisions of Uniform Commercial Code governing secured transactions. (BDR 8-453)
Chairman Anderson opened the hearing on S.B. 474 and called upon Mr. Frank W. Daykin, National Conference of Commissioners on Uniform State Laws (NCCUSL) and former Legislative Counsel, Legislative Counsel Bureau, to introduce the bill. Mr. Daykin stated that the purpose of S.B. 474 was to refine the previous bill from the 1999 Session, which was to become effective July 1, 2001, which extensively amended Article 9 of the Uniform Commercial Code (UCC). He explained that S.B. 474 would become effective one minute after midnight on July 1, 2001. That was to ensure that the amendments to Article 9 became effective at the same time as S.B. 474. He noted that the minor amendments to the act contained in the bill were based on the evaluations by a subcommittee from the NCCUSL that followed the revisions of Article 9 over the last two years.
Chairman Anderson invited Mr. John Sande and Mr. Ted Wehking, both representing the Nevada Bankers Association, to testify; however, Mr. Sande replied it would not be necessary.
Mr. Daykin explained that the longest changes were in Section 1 of S.B. 474, which dealt with financing statements that were already filed under the existing law and would remain in effect under the revised law. He stated that it specifically provided for additions to those statements that were already filed before the law was revised, to allow for a smooth transition when incorporating the changes to Article 9. He highlighted some of the significant amendments made by the bill. He referred the committee to page 13, Section 6 of the bill and noted that, instead of exempting transfers that secured both local and federal governmental securities, another statute would apply. He stated that Nevada had no statute of the kind. He recommended that government or state bonds would be better regulated by language that was previous to Article 9 of the Uniform Commercial Code.
Mr. Alan B. Rabkin, General Counsel and Executive Director, Commission on Judicial Discipline, former general counsel for Sierra West Bank and former in-state counsel for Bank of the West, testified in support of the bill. He described his active involvement in the banking industry in Nevada for more than a decade that included his active participation in banking legislation since 1989. He explained that the bill dealt with sections of the UCC that secured personal property. He described that the primary parties concerned about the bill were lenders and debtors. It was a sweeping change to the statutes with regard to securities, but most of the changes were made in the last legislative session. The changes that would be made by S.B. 474 were primarily for cleanup of the changes made last session. He stated that none of the changes made by S.B. 474 altered the meaning or spirit of the changes made in 1999.
Chairman Anderson inquired if provisions regarding contracts of adhesion and third party waivers of rights were included in S.B. 474. Mr. Rabkin explained that the NCCUSL was very careful to balance the rights of waivers and the ability to sign away your rights, especially in consumer transactions with financial institutions that tended to present such documents to borrowers. He pointed out that there were certain provisions that could be waived and others that could never be waived. He stated that the right to a hearing before a judge with regard to a dispute was one of the rights that could not be waived, and some of the administrative rights were the type of rights that could be waived. Mr. Daykin added that none of the particular amendments included in S.B. 474 pertained to the compromise between consumers and the financing agencies. Chairman Anderson clarified that he did not believe the bill addressed those issues, but he wanted it noted that he had raised the question. Mr. Daykin commented that the NCCUSL had extensively discussed the issues about such waivers of rights and contracts of adhesion and had carefully balanced them with rights that could be waived.
Mr. Ted Wehking, Nevada Bankers Association, testified in strong support of S.B. 474. Chairman Anderson clarified that the bill was primarily a cleanup measure to legislation passed in the last legislative session. Mr. Daykin agreed and asserted that, upon passage of the bill, Nevada’s laws with regard to Article 9 of the UCC would be uniform with the other states. Mr. Rabkin also added the bill recognized that electronic transactions would take place with regard to the securities. He stated that, in cooperation with the Secretary of State, loans could be granted over the Internet, and, simultaneously, the transactions could be secured without waiting for hard copy paperwork to arrive. Chairman Anderson clarified that the law permitting such actions had not yet been passed, and the committee was still to receive a report from its subcommittee with regard to that legislation.
Chairman Anderson called for persons to testify either in support of, against, or neutral to S.B. 474. There being none, he closed the hearing on S.B. 474. He reminded the committee that there would be a joint meeting later that evening. He indicated that he did not want to process S.B. 474 until the committee heard the reports on S.B. 33 and S.B. 49, which were acts relative to e-commerce. He explained that there was a small connection between the three bills, and he did not want any unintended consequences to result. He called for any further business to be brought forth. There being no further discussion, the meeting was recessed at 10:15 a.m. The committee reconvened in a joint hearing with the Assembly Committee on Education.
Sandra Albrecht-Johnson
Committee Secretary
APPROVED BY:
Assemblyman Bernie Anderson, Chairman
DATE: