MINUTES OF THE
SENATE Committee on Commerce and Labor
Seventy-First Session
March 2, 2001
The Senate Committee on Commerce and Laborwas called to order by Chairman Randolph J. Townsend, at 8:05 a.m., on Friday, March 2, 2001, in Room 2135 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Randolph J. Townsend, Chairman
Senator Ann O’Connell, Vice Chairman
Senator Dean A. Rhoads
Senator Mark Amodei
Senator Raymond C. Shaffer
Senator Michael A. (Mike) Schneider
Senator Maggie Carlton
STAFF MEMBERS PRESENT:
Scott Young, Committee Policy Analyst
Sharon T. Spencer, Committee Secretary
OTHERS PRESENT:
David Noble, Assistant General Counsel, Public Utilities Commission of Nevada
Donna Wickham, Assistant Commission Secretary, Public Utilities Commission of Nevada
Joseph L. Johnson, Lobbyist, Toiyabe Chapter, Sierra Club
C. Joseph Guild III, Lobbyist, Union Pacific Railroad
Kent F. Lauer, Lobbyist, Executive Director, Nevada Press Association
Larry D. Lessly, J.D., Executive Director, Board of Medical Examiners
Margi A. Grein, Lobbyist, Executive Officer, Nevada State Contractors’ Board, Executive Director, State Contractors’ Board
Dorothy Riley, President, Nevada Nurses Association
Keith Marcher, Senior Deputy Attorney General, Boards and Commissions Section, Office of the Attorney General
The Chairman opened the hearing on Senate Bill (S.B.) 210.
SENATE BILL 210: Makes various changes concerning regulation of utilities. (BDR 58-540)
David Noble, Assistant General Counsel, Public Utilities Commission of Nevada (PUCN), began his testimony by explaining the proposed legislation line by line, beginning with how the measure affected existing law pertaining to Nevada Revised Statutes (NRS) 704.095. Section 1 provided the PUCN with more flexibility and more options in establishing regulations for setting rates for water and sewage services. Section 2, continued Mr. Noble, affected NRS 704.190 and required an investigation be conducted to determine the cause of any accident resulting in death that involved a public utility operating in the state of Nevada. Section 3 would regulate the application process for changing railroad crossings. The provision would establish the procedure for filing various changes for railroads.
Donna Wickham, Assistant Commission Secretary, Public Utilities Commission of Nevada (PUCN), continued the line-by-line discussion of the proposed legislation. She explained section 4 was a provision for levying and collecting annual assessment fees from each railroad subject to the jurisdiction of the commission. The railroads affected would include those that transported cargo into, out of, and through the state of Nevada and which supported the activities of the PUCN.
Mr. Noble resumed the line-by-line discussion of the proposed legislation by explaining sections 5 and 6 eliminated the July 1, 1992, date for filing a water conservation plan from NRS 704.6624 and updated the statute. Sections 7 through 13 dealt with various aspects of mobile home parks, particularly forbidding alternative vendors of gas, water, and electricity to charge for those services at higher rates than the current rates established by the PUCN, he said.
Senator Raggio asked how altering the July 1, 1992, date would affect existing law. Mr. Noble replied eliminating the old date made the process of requiring utilities to prepare and submit water conservation plans an ongoing process rather than limit them to the old date.
Joseph L. Johnson, Lobbyist, Toiyabe Chapter, Sierra Club, presented the committee with a proposed amendment (Exhibit C). He said citizens had the right to know all factors affecting public policies so they could make informed decisions. He said he was opposed to the secrecy privilege granted in NRS 704.190 and the absolute control of disclosure which S.B. 210 gave to the utility as per section 2, subsection 7. He stated that he believed the privilege and secrecy granted in existing statute was inappropriate for reporting fatal accidents as required by law. Mr. Johnson proposed an amendment that would delete the provision allowing for secrecy in existing statute. The proposed amendment suggested deleting the word “notwithstanding” which occurred in section 2, lines 27 to 37 and lines 38-46 on page 2 of the proposed legislation. Mr. Johnson’s amendment also suggested adding the language “any accident report made as required by this chapter or any report of the commission made pursuant to its investigation of a fatal accident is open to public inspection.” Mr. Johnson concluded that if the existing provision allowing for secrecy and privilege was not eliminated the proposed amendment would not be necessary.
Chairman Townsend called Mr. Noble back to the witness table to respond to further questioning from the committee in regards to the issue brought forth by Mr. Johnson. Mr. Noble explained the purpose for the language in existing statute was to provide no opportunity for disclosure in order to prevent lawsuits from being filed as a result of accidents. Another reason was because investigators would have a great deal of trouble getting information from the utility during an investigation of an accident if the utility was concerned the information would be available to the public and the media. Therefore, concluded Mr. Noble, investigation reports were strictly confidential unless the commission ordered them released to the public.
Chairman Townsend asked if reports concerning accidents came from the PUCN investigative staff, to which Mr. Noble responded in the affirmative. Mr. Johnson again reiterated it was wrong for governmental agencies to interfere with the right of citizens to receive just compensation if they were victims of an accident. Also, it was wrong to limit disclosure and to allow governmental agencies to maintain their secrecy and confidentiality privileges.
Chairman Townsend asked if the reports prepared by the PUCN investigative staff concerning hazardous situations were filed anywhere else such as with the United States Environmental Protection Agency (EPA). Mr. Noble responded in the negative and added that was because existing statute did not allow the agency to file reports outside the agency unless a petition was served on the PUCN requesting additional filings of the report. Once a petition was received by the agency, a review of the request occurred. The report would be released only if a request was deemed appropriate by the agency. Mr. Noble also responded to Mr. Johnson’s concern regarding secrecy privileges of the PUCN which prohibited interested parties from acquiring those reports. He said that was not the case as subpoenas, lawsuits, and other normal legal processes ensured reports would be available to those who requested them through the proper procedure. Mr. Noble added the proposed legislation did not suggest additional requirements that would further limit the availability of investigative reports to concerned citizens.
Senator Rhoads asked Mr. Noble if the proposed amendment was acceptable to him. Mr. Noble said the language he was proposing did not transfer the decision-making process to the utilities regarding the dissemination of reports. That authority would need to stay with the PUCN.
Chairman Townsend asked Mr. Noble if an accident were to occur and the PUCN investigated the accident and later filed a report with the commission, could anyone or any entity who decided to sue as a result of the accident subpoena the report and if the commission would be required to provide it. Mr. Noble responded in the negative, adding a person or entity could subpoena individuals who were in some form or another directly related to the accident as long as they were not the PUCN personnel. Senator Townsend asked why it was important to have an investigative report of an accident if the report was not readily available to the public. Mr. Noble said the report would demonstrate if there was something that could have been done to avert the accident. Also, the report could be used to alert utilities of what changes needed to be made to avoid problems in the future. The proposed legislation would confirm investigative reports were privileged documents that could not be used in a lawsuit.
C. Joseph Guild III, Lobbyist, Union Pacific Railroad, stated his opposition of section 3 of S.B. 210. He said his organization had not been consulted prior to the writing of the proposed legislation. He considered the language regulating applications for railroad crossing improvement projects to be vague. In addition, section 3, page 2, beginning on line 47 was redundant as the same language also appeared on page 3, lines 16 through 32 in reference to NRS 704.300. Overall, added Mr. Guild, he considered section 3 to be unnecessary and possibly harmful to contractual negotiations with cities and counties regarding railroad crossing improvement projects.
Chairman Townsend asked Mr. Guild to respond to the language in the proposed legislation, section 3, page 3, line 4, that provided for a lengthier delay time for those cities and counties in which the tracks reside in order to ensure the safety of the traveling public. However, lines 30 through 32 of the proposed legislation stated, “the commission shall act on an application filed pursuant to this subsection within 6 months after the date on which it receives the application.” Senator Townsend asked if it were truly the goal of the commission to help the traveling public and protect their safety by adding an active warning device to a railroad track how could delaying a ruling on such a device for up to 6 months further that goal. Mr. Guild agreed, adding currently no time limitations were provided in statute. He suggested the commission act to determine a more expeditious manner for ruling on important safety improvements. Mr. Guild stated the purpose of the proposed legislation was not clear as the commission already possessed the authority to structure and implement policy, to initiate investigations, to file reports, to make recommendations, and to exert authority to enforce its recommendations. In conclusion, stated Mr. Guild, S.B. 210 could become an impediment to cooperation between railroads and local governmental entities.
Chairman Townsend called Mr. Noble back to the witness table and asked him why the suggested language in the proposed legislation was necessary based on the language contained in existing statute. Mr. Noble said despite current statute specifying similar provisions as those suggested in S.B. 210, the proposed legislation provided additional clarity. Mr. Noble asked if it was unimportant to provide additional specificity. Senator Townsend said Mr. Noble’s responses were adequate but not compelling. Mr. Noble said he would meet with the PUCN railroad safety staff and have them prepare a more compelling argument for the proposed legislation. Senator Townsend suggested the PUCN staff confer with Mr. Guild before returning to the Legislature because it was necessary for the various entities that regulate an industry to have an open line of communication as well as a mutual understanding. The public deserved informed and timely rulings on safety policies that affected them. He suggested the PUCN staff meet with Mr. Guild and other members of the industry to talk about legitimate issues that might be clarified by statute. In addressing Mr. Noble, the Senator added it was important to understand the confidentiality issues Mr. Johnson presented and he suggested they work together to establish common ground that would best serve the public without promoting litigation.
Chairman Townsend asked if there was any additional testimony and there was none. He closed the hearing on S.B. 210 and opened the hearing to a discussion on occupational and professional licensing board disciplinary procedures.
Chairman Townsend announced the hearing on disciplinary procedures of occupational and professional licensing boards would be a discussion rather than a review of specific legislation. An issue of great concern had developed in northern Nevada which resulted in the sealing of records regarding disciplinary actions taken by a licensing board against a licensee. The matter had come to the attention of certain people that varying degrees of protection existed for different licensing boards. The Senator said he had contacted numerous licensing boards throughout the state seeking information about disciplinary procedures, of which 21 responded. Chairman Townsend said at one point he submitted a bill draft request (BDR) clarifying the position licensing boards existed to protect both the public welfare and the interests of licensees who had claims filed against them. It was particularly important to protect the records of professional licensees who had been wrongly accused of various acts and who had been vindicated. He pointed out the proposed legislation maintained the position professional records of licensees should not be subjected to public disclosure if claims against them had been adjudicated and found to be untrue.
Chairman Townsend said issues pertaining to licensing boards in northern Nevada were taken very seriously. One such issue involved a licensee who faced disciplinary review. After negotiations were held, specific actions were taken by the board, discipline was imposed, and all records were sealed. The Chairman said if no grounds existed to discipline a licensee, no records should be released. However, he said he had mistakenly thought public policy required records be made public if disciplinary actions had been rightfully applied toward licensees. Apparently, the Chairman added, that provision was not clear in statute. In addition, it became apparent varying degrees of public protection existed throughout the various occupational and professional licensing boards.
The measure drafted by the Nevada Legislative Counsel Bureau (LCB) for Senator Townsend affirmed public policy and required its uniform application to all boards throughout Nevada, Chairman Townsend urged. Because the proposed legislation was very lengthy and addressed all statutes in the Nevada Revised Statutes (NRS) pertinent to licensing boards, the Chairman said he considered it to be in the best interest of the committee that a discussion on the matter be held prior to the introduction of legislation. After discussion, if the committee considered it appropriate, a measure could be formally introduced. The goal of the proposed legislation was to balance the interests of all parties involved in a complaint action if an event occurred that warranted disciplinary action by a licensing board against a licensee. In cases such as those, the public would be protected by making that information available to all concerned parties.
In addition, Chairman Townsend emphasized, there were other issues relevant to disciplinary actions that needed to be addressed because each licensing board possessed a unique set of circumstances. Among those diverse issues included public versus private reprimands, diversionary programs versus discipline, settlements and consent decrees versus reprimands, confidentiality versus public record, adjudication versus litigation, and other sensitive issues. For the reasons cited, concluded Chairman Townsend, he had invited representatives of the Nevada Press Association, the state Board of Medical Examiners, and the State Contractors’ Board to participate in the discussion.
Kent F. Lauer, Lobbyist, Executive Officer, Nevada Press Association, was the first to testify on the issue of disciplinary procedures of occupational and professional licensing boards. He explained his organization represented 40 newspapers throughout the state. Mr. Lauer said the issue was not solely a news media issue, but rather a vital issue that directly affected the public. The Legislature created various professional and occupational licensing boards in order to protect the public interest. He said it was impossible to protect the public when professional and occupational licensing boards secretly impose discipline. Public interest was not served when concerned citizens registered a complaint only to be told later their complaint resulted in disciplinary action; however, the disciplinary action was kept secret. Mr. Lauer said certain professional and occupational licensing boards have issued private reprimands that remain cloaked in confidential settlements and secret consent decrees.
Regardless of any justification they might have, continued Mr. Lauer, professional and occupational licensing boards have defended their secrecy policy while disregarding the public interest. He said the need for disclosure far outweighed the need for secrecy. If professional and occupational licensing boards insisted on keeping their disciplinary actions secret from the citizens they were supposed to protect, Mr. Lauer suggested, the public needed to question whether the boards should continue to exist. He concluded by emphasizing it was time to bring common sense and consistency to laws and regulations to prohibit professional and occupational licensing boards from imposing secret discipline, confidential settlements, private reprimands, and secret letters of admonishment which did not serve the public interest. He said the NPA supported clarifying the laws to specify that once a board decided to proceed with disciplinary actions all records should be to open for public inspection. Boards would also be forbidden from imposing any form of secret discipline.
Senator Shaffer requested information regarding the composition of professional and occupational licensing boards. If boards were intent on protecting the public, the Senator continued, they would be comprised mainly of private-sector individuals. However, most boards contained only a small number of people from the private sector and a predominant number of professionals. Mr. Lauer said the composition of professional and occupational licensing boards was not an issue to him but eliminating secrecy in disciplinary procedures was.
Chairman Townsend said the details of the issue were very complex and it was important to get all facts pertinent to the matter before the committee. He called for further testimony from witnesses. Larry D. Lessly, J.D., Executive Director, Board of Medical Examiners, was the next witness to come forward to offer testimony. Mr. Lessly said the chairman’s initial comment was accurate when he stated the purpose of licensure law was to protect the public. Licensure bodies were not intended solely to protect professions but also to protect the public and to ensure the competency of those who practiced medicine in the state of Nevada. In response to Senator Shaffer’s comment regarding membership on professional and occupational licensing boards, Mr. Lessly pointed out that of the nine members of the Board of Medical Examiners, six were physicians and three members, including the president of the board, were from the public sector with no connection whatsoever to the health care profession.
Mr. Lessly explained the 1985 Nevada Legislative Session completed a major revision of the medical practice act (MPA) which established a good system for disciplining physicians. According to the act, prior to a physician being disciplined by the Board of Medical Examiners, that physician would be scrutinized by an investigative committee composed of three members of the board, one of whom had to be a member of the public sector. The committee confidentially reviewed a complaint against a physician, investigated the allegations, received advice from a physician member of the board, and considered if any of the physician’s acts were in violation of the MPA. As soon as the committee reached its final determination that a violation of MPA had occurred, he stated, the Board of Medical Examiners would file a public complaint against the offending physician. The remaining six members of the board were represented by the attorney general's office and, having no prior knowledge of the case, were responsible for adjudicating the complaint. The board’s general counsel was responsible for prosecuting the case. Mr. Lessly said the entire matter was made public by reporting it to the press, the Federation of State Medical Boards of the United States, and the National Practitioner Data Bank. Mr. Lessly concluded he had no knowledge of any licensing board in Nevada having the authority to conduct private investigations or to impose sanctions against a physician in secret. According to the open meeting law, unless there was a statute stating a specific issue could be managed in confidence, a licensing board was obligated to conduct investigations and disciplinary procedures in public.
Senator Shaffer said it was good to have three people from the public sector on the board but questioned the balance of the board considering the remaining six were from the professional sector. Mr. Lessly said according to a publication of a consumer watchdog group, in 1995 the Board of Medical Examiners was nationally ranked tenth in the nation for adequately adjudicating disciplinary cases, and ninth in 1996. Also noteworthy, Mr. Lessly said, Nevada had the highest licensure standards for physicians in the entire United States.
Chairman Townsend asked Mr. Lessly what the difference was between an actionable reprimand, which resulted in public disciplinary action, and a consent agreement involving a substance-abuse diversion program, and if such an issue would be within the public process of his organization. Mr. Lessly responded in the negative, adding if a physician or physician’s assistant were found to have a drug or alcohol problem, a diverse program was available to the offender through a contract with the Board of Medical Examiners. If offenders declined to cooperate with the terms of the Board of Medical Examiners and refused intervention through its corresponding treatment program the investigative committee would prosecute them. If offenders did cooperate the issue would not become public because they would be in treatment and would not be considered impaired. Senator Townsend asked what would happen to second- time offenders, particularly those who cooperated on the first offense but later relapsed. Mr. Lessly explained the disciplinary action would depend on the nature of the relapse. Diversion programs for physicians were designed to be extremely strenuous, strictly structured and intensely monitored programs which lasted approximately 5 years and were very costly to the offender. Circumstances were reviewed on an individual basis with the most serious repeat offender ultimately losing their license to practice medicine, Mr. Lessly stated.
Margi A. Grein, Lobbyist, Nevada State Contractors’ Board, Executive Director, State Contractors’ Board, was the next to speak on the issue of disciplinary procedures of occupational and professional licensing boards. She said the issue was of great importance because consumers needed to be informed of all matters pertaining to public safety. Ms. Grein explained all complaints, and the disposition of those complaints, were made public. She concluded by saying she welcomed all changes to the law that would support such a position. The Chairman commended Ms. Grein for continuing to supply the committee with information on all disciplinary proceedings that transpired within her organization.
Dorothy Riley, President, Nevada Nurses Association (NNA), expressed her appreciation to Chairman Townsend for bringing such a vitally important issue before the committee. She said her organization supported the standardization of disciplinary procedures as meted out by professional licensing boards in the interest of public safety as well as to protect professional licensees. Having identical procedures for discipline regardless of the professional specialty involved would give the process greater credibility by reducing claims regarding secretive, arbitrary, and capricious conduct. Ms. Riley said the NNA realized disciplinary boards were taxpayer-supported agencies and therefore all activities should be available for public scrutiny. Standardization of disciplinary measures prevented boards from selecting practices which isolated them from their peer boards and ensured the civil rights of both the practitioner and the complainant received equal protection under the law, she stressed.
Ms. Riley said due to the concerns of her organization, NNA launched a study of disciplinary procedures of registered nurses over a 3-year period. The final disposition of their complaints and resulting disciplinary procedures were difficult to obtain; however, the information was eventually received. The NNA was in the process of analyzing the data, she explained. Preliminary findings revealed every nurse against whom a formal complaint had been lodged was found guilty. She said that level of prosecutorial success was questionable in terms of the fairness issue. The State Board of Nursing used a standard of proof known as substantial evidence which allowed a nurse to be found guilty of professional misconduct even when the preponderance of evidence indicated the nurse was innocent. Ms. Riley recommended the discipline function of the board be made separate from the regulatory function of the board and placed under a consumer affairs board as has been done in the state of California. Ms. Riley’s other recommendations for new legislation included conducting disciplinary hearings before independent officers which would be followed by state Department of Personnel sanctions, the abolishment of the State Board of Nursing court fees, and raising the standard of proof required to establish guilt from substantial evidence to a preponderance of evidence. Ms. Riley concluded by offering the committee her continued support and testimony in order to help formulate legislation that would standardize board disciplinary procedures. She provided the committee with copies of her proposed amendment (Exhibit D).
Chairman Townsend thanked Ms. Riley for her testimony and explained it was oftentimes better to discuss issues before discussing proposed legislation in order to get to the heart of the matter. He called for additional testimony on the issue.
Keith Marcher, Senior Deputy Attorney General, Boards and Commissions Section, Office of the Attorney General, said it was his responsibility to supervise the commission deputies in both Reno and Carson City. The State Board of Nursing was his primary client. In addition, he stated he was the Chairman of the Private Investigator’s Licensing Board. Mr. Marcher offered his assistance to the committee regarding issues relating to the attorney general's office. Chairman Townsend asked Mr. Marcher to obtain authority from the attorney general's office which would allow him to work with the committee to build suitable legislation that would eliminate the issue of private reprimands. Mr. Marcher agreed to do so. The Chairman expressed concern regarding the issue of due process afforded to licensees who went to court seeking to have reprimands overturned. That process exposed all actions taken and all investigative notes pertinent to a complaint. It was important to discuss legal issues as well, concluded the Chairman, when formulating appropriate language for new legislation.
Chairman Townsend closed the hearing on the issue of disciplinary procedures of occupational and professional licensing boards and opened the hearing to the introduction of a bill draft request (BDR).
BILL DRAFT REQUEST 54-593: Revises provisions governing rights and duties of contractors and subcontractors under contracts or subcontracts. (Later introduced as Senate Bill 274.)
Chairman Townsend called for a motion for an introduction of the BDR.
SENATOR SHAFFER MOVED TO INTRODUCE BDR 54-593.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
*****
Chairman Townsend asked if there was any additional testimony and there was none. There being no further business before the committee, the Chairman adjourned the meeting at 9:39 a.m.
RESPECTFULLY SUBMITTED:
Sharon T. Spencer,
Committee Secretary
APPROVED BY:
Senator Randolph J. Townsend, Chairman
DATE: