SENATE COMMITTEE ON COMMERCE AND LABOR

MINUTES OF THE

SENATE Committee on Commerce and Labor

Seventy-First Session

April 3, 2001

The Senate Committee on Commerce and Laborwas called to order by Chairman Randolph J. Townsend, at 7:00 a.m., on Tuesday, April 3, 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

GUEST LEGISLATORS PRESENT:

Senator Terry John Care, Clark County Senatorial District No. 7

STAFF MEMBERS PRESENT:

Scott Young, Committee Policy Analyst

Kevin C. Powers, Senior Deputy, Legislative Counsel

Sharon T. Spencer, Committee Secretary

OTHERS PRESENT:

Douglas R. Ponn, Lobbyist, Nevada Power Company, and Sierra Pacific Power Company

Ernest Adler, Lobbyist, International Brotherhood of Electrical Workers, Local 1245

Robert G. Johnson, Lobbyist, International Brotherhood of Electrical Workers, Local 1245

Harvey Whittemore, Lobbyist, Nevada Resort Association

Jack Kim, Lobbyist, Health Plan of Nevada

Robert A. Ostrovsky, Lobbyist, Nevadans for Affordable Health Care

Linda L. Sheldon, Lobbyist, Great Basin Primary Care Association

Bobbette Bond, Lobbyist

Elizabeth Gilbertson, Lobbyist, Hotel Employees and Restaurant Employees Welfare Fund

Fred L. Hillerby, Lobbyist, Nevada State Board of Dental Examiners

Larry L. Champagne, D.M.D., Board of Dental Examiners of Nevada

John A. Hunt, Legal Counsel, Board of Dental Examiners of Nevada

Caroline Ford, Assistant Dean, University of Nevada Reno School of Medicine, Director, Office of Rural Health

Joel Glover, D.D.S., Nevada Dental Association

Maury Astley, Lobbyist, Executive Director, Nevada Dental Association

Stephanie Deevers, Concerned Citizen

Brenda Montoya, Concerned Citizen

Becky Harris, Concerned Citizen

Len Deevers, Concerned Citizen

Ronald L. Lynn, Lobbyist, Clark County

Bob Nunes, P.E., Director, Community Development, Douglas County

Robert C. Maddox, Lobbyist, Citizens for Justice

Phil M. Herrington, Chief Building Official, Building Department, Carson City

Greg Lynn, Owner, Greg Lynn Construction

Gordon DePaoli, Nevada Life and Health Insurance Guaranty Association

Alice Molasky-Arman, Commissioner, Division of Insurance, Department of Business and Industry

Lorraine T. Hunt, Lieutenant Governor

Gilbert P. Hyatt, Concerned Citizen

Robert E. Shriver, Executive Director, Division of Economic Development, Commission on Economic Development

Michael Kern, Attorney,

Clinton Pope, Lobbyist, Nevada Development Authority

Chuck Alvey, Chief Executive Officer/President, Economic Development Authority of Western Nevada

Michael D. Rounds, Attorney

Michael Thomas, Executive Director, Tech Alliance

John Wiles, Division Counsel, Division of Industrial Relations, Department of Business and Industry

William Stanley, Center to Protect Workers Rights, International Union of Elevator Contractors

Robert Barengo, Lobbyist, Nevada State Contractors’ Board

Rose E. McKinney-James, Lobbyist, Clark County School District

William Patterson Cashill, Lobbyist, Nevada Trial Lawyers Association

Chairman Townsend opened the hearing on Assembly Bill (A.B.) 369.

ASSEMBLY BILL 369: Revises and repeals various provisions governing the regulation of public utilities. (BDR 58-1156)

Douglas R. Ponn, Lobbyist, Nevada Power Company, and Sierra Pacific Power Company, provided the committee with language for a proposed amendment (Exhibit C) which would amend Nevada Revised Statutes NRS 704.110 by allowing deferred energy accounting. After deferred energy accounting was put into place, Mr. Ponn explained, the Public Utilities Commission of Nevada (PUCN) would be able to amortize the balance in deferred energy accounts over a period not to exceed 3 years. He said the intent of that portion of the proposed amendment is to keep prices level rather than subject consumers to volatile price fluctuations.

The proposed amendment, Mr. Ponn continued, also amended NRS 704.185 to include deferred accounting for electric utilities. The intent of amending this section of the NRS is to include in the process all items relating to deferred energy or the procurement of fuel and purchased power, he said. Mr. Ponn said he needed to alert the committee to the fact, in the past, capacity charges have been a contentious matter with the PUCN regarding whether those charges should be collected in the deferred energy process or in the general rate-making process.

Senator Rhoads requested Mr. Ponn explain what a future test period is and how long it runs. Mr. Ponn explained, under traditional Nevada rate-setting policy, for both general rates and deferred energy accounting, a limit was applied to all costs to be considered in the rate-setting process using historical references. A future test period made reference to a past period, or an historical period, in which no future or projected costs were included in the rate-setting process, he said. Establishing a future test period allows the PUCN to set rates based upon conditions anticipated. The process is also an account-balancing mechanism, Mr. Ponn added, which ensures a rate change can be reset if that change proved to be wrong due to a sudden and dramatic change in circumstances. Test periods usually lasted 1 year; however, the proposed amendment to A.B. 369 would allow the PUCN to amortize over a 3-year period.

Chairman Townsend asked Mr. Ponn for clarification regarding the provision in the proposed amendment pertaining to cost recovery for sale of generation plants, specifically, if he was comfortable with the process the PUCN currently used to allow recovery for costs legitimately incurred from state or federally approved power generation sales. Mr. Ponn responded in the affirmative and added he wanted to ensure the issue of nonrecurring costs, which may or may not fall within the test period for future general rate cases, have some form of legislative declaration stating those costs were entirely recoverable. The issue would probably first surface during the review of a general rate case, he said.

Senator O'Connell asked when the PUCN or the legislature required the sale of power generation plants, how cost recovery was normally handled and how that form of sale was categorized considering that form of sale differed from a contract sale. Mr. Ponn said those issues depended upon what exactly had been ordered either by the legislature or the PUCN. If it was ordered by law or by the PUCN to engage in some particular activity requiring an investment or an ongoing expense, cost recovery would occur. The normal process would be, if expenses incurred were recurring or ongoing costs or if the investment was a long-period investment, the issue would be dealt with the same as if it were a general rate case and expenses would appear as incurred costs or as test-year investments. However, nonrecurring expenditures made for specific purposes should not be included in general rate cases, Mr. Ponn explained. The language in the proposed amendment would make it clear, if expenditures were made during the sale of power generation plants, all expenditures incurred during that process should be recovered within a reasonable period of time. If it was not done, Mr. Ponn pointed out, shareholders would not be able to recover those expenses. Chairman Townsend stated, in the past, the committee was reticent to dictate what power generation plants should or should not be sold, because committee members did not believe it was the obligation of the legislature to mandate or force divestiture.

Ernest Adler, Lobbyist, International Brotherhood of Electrical Workers, Local 1245 (IBEW), presented the committee with a proposed amendment (Exhibit D) providing language for the deferred energy accounting process which would amend NRS 704.110 by requiring a public utility to submit, along with its application for requests to increase individual or joint rates or for requests to change service equipment, a statement showing the revenues, expenses, investments, and costs for the most recent 12-month period. He said the proposed amendment would also allow the PUCN to consider evidence supporting expenses for depreciation calculated on an annual basis and applicable to major components of the public utility’s plant placed into service during the recorded test period. Mr. Adler introduced Robert G. Johnson, Lobbyist, International Brotherhood of Electrical Workers, Local 1245 (IBEW), who reiterated what Mr. Adler had said, adding his organization strongly supported the reinstitution of deferred energy accounting in much the same manner as it existed prior to 1999. Mr. Johnson said the proposed amendment suggested other changes which would clarify the means for filing for rate relief. Mr. Johnson said section 3, subsection 2, paragraph (b) of the proposed amendment, required within 60 days of the effective date of the bill, a deferred energy filing must be completed by both Sierra Pacific Power Company and Nevada Power Company.

Chairman Townsend asked Mr. Johnson if the proposed amendment contained language deviating from pre-1999 deferred energy accounting. Mr. Johnson responded in the affirmative, adding the current volatility in energy markets might warrant huge balances which could possibly develop in certain circumstances and could significantly impact cash flows if utilities were rigidly held to the 6-month requirement for deferred energy filing; therefore, the intent of the change was to allow the PUCN the flexibility to allow those filings to occur every 3 months, if necessary.

Harvey Whittemore, Lobbyist, Nevada Resort Association, stated the chairman had requested he report back to the committee after conferring with the speaker and the majority leader of the Assembly regarding their intent in processing A.B. 369 and to determine if it was a comprehensive attempt to deal with rate caps and the deferred energy issues, to which, he said, their response was no, it was not. Mr. Whittemore added the assemblymen told him they intended to discuss the issues presented in A.B. 369 in another vehicle, A.B. 661. He said further negotiations between all concerned parties were scheduled to continue forthwith in order to develop language acceptable to both the Senate and the Assembly.

ASSEMBLY BILL 661: Revises and repeals various provisions concerning utilities and energy. (BDR 58-1128)

Scott Young, Committee Policy Analyst, noted he prepared and was presenting additional language for the first revision of the proposed amendment to A.B. 369 (Exhibit E).

Chairman Townsend said he preferred to see both proposed measures reviewed together if there was a consensus to do so. Chairman Townsend asked if there was any additional testimony and there was none. The chairman closed the hearing on Assembly Bill 369 and opened the hearing on Senate Bill (S.B.) 133.

SENATE BILL 133: Authorizes board of dental examiners to issue limited number of licenses without examination each year to dentists licensed in other jurisdictions. (BDR 54-241)

Senator Shaffer said, for a long time, he had been attempting to increase the number of dentists in Nevada and S.B. 133 was the vehicle to facilitate that objective. The proposed legislation would authorize the Board of Dental Examiners of Nevada to issue a limited number of licenses each year to dentists licensed in other jurisdictions. Senator Shaffer added there were additional suggestions for language changes within the measure later presented to him; therefore, he would also be presenting suggestions for a proposed amendment (Exhibit F). Senator Shaffer pointed out the proposed amendment provided for the Joint Commission on National Dental Examinations to present a certificate to the Board of Dental Examiners of Nevada declaring a dentist has passed the board’s examination and met all requirements with an average score of no less than 75 percent and passed an examination given by either a regional dental clinic administered by the Western Regional Examining Board, the Central Regional Dental Testing Service Incorporated, the Northeast Regional Board of Dental Examiners, Incorporated, or the Southern Regional Testing Agency, Incorporated. The proposed amendment also set fee rates for the licensing of dentists and for dentist examinations. Furthermore, Senator Shaffer continued, Fred Hillerby, representative of the Nevada State Board of Dental Examiners, would present another proposed amendment to the S.B. 133 later in the hearing.

Senator O'Connell asked, since the board would not have to administer an examination, how the cost of the application was determined. Senator Shaffer explained the board would retain authority over certain aspects of dental licensing due to regulations already in place.

Jack Kim, Lobbyist, Health Plan of Nevada, explained the proposed legislation addressed the urgent need for more dentists throughout the state, particularly in rural communities. He noted the companion amendment, also presented by Senator Shaffer, would provide access to regional boards to facilitate dentist licensure because currently dentists who want to become licensed to practice dentistry in Nevada must go out of state in order to take the required examinations, most often to California. Mr. Kim said the proposed legislation and amendment was good public policy because passage of the bill would increase the number of dentists in the state.

Senator Carlton said all boards should be self-sufficient but background checks would still be required; therefore, some form of application fee and renewal would be needed. Mr. Kim agreed. Senator Carlton suggested reviewing other boards to determine the appropriate amount and methodology for applying filing fees.

Robert A. Ostrovsky, Lobbyist, Nevadans for Affordable Health Care, noted studies, in which he assisted previously, determined regional board examinations would increase licensure of dentists and thereby increase the number of dentists in Nevada. The nearest local board currently administering dental examinations is located in California which, Mr. Ostrovsky pointed out, also improves the quality of dental care in Nevada. Regional boards have proved to be beneficial, he added, in administering the practical examination for dental licensure. He said 65 to 70 newly licensed dentists are needed in Nevada to accommodate current population and the rate of retirement among dentists. However, if the increase in population was also to be considered, the number of dentists needed would greatly increase. Mr. Ostrovsky noted in one area of the state, statistics show there is 1 dentist for over 17,000 people, and in another area of the state the ratio is 1 dentist for approximately 1700 people. Clearly, an uneven distribution of dentists exists throughout Nevada, which is ranked forty-eighth in the nation in terms of the percentage of dentists to overall population.

Senator O'Connell asked why more dentists were not moving to this state. Mr. Ostrovsky said Nevada had many barriers to entry into the dental profession. For one thing, he pointed out, Nevada has a very difficult test which was designed by the board to ensure quality dental care. Also, there is no dental school in the state and the state does not recognize dental licenses from other states, he said, adding if there was some form of reciprocity, professionals from other states would be encouraged to move to Nevada and open up practices. Most difficult for dentists, concluded Mr. Ostrovsky, was the fact dentists had to go to California to be tested, an expensive and time-consuming process that involved bringing all of one’s dental tools and patients.

Senator Carlton asked how regional tests compare to Nevada’s test. Mr. Kim responded regional board examinations and Nevada state practical examinations are different because other requirements are involved, such as denture examinations; therefore, no comparison is possible.

Linda L. Sheldon, Lobbyist, Great Basin Primary Care Association, explained she was an outreach coordinator representing various safety-net providers throughout the state. She said the proposed amendments were acceptable to the organizations she represented because citizen access to dental care would be greatly improved. Ms. Sheldon referred to statistics showing Washoe County had only one dentist at its federally qualified health center in Reno and that dentist’s waiting period was 8 months. She stated when the Bureau of Primary Health Care recently visited the facility, it was determined there was a great need to improve the issue of access to dental care as the dentist would not be able to survive the pace much longer. Lyon County, the fastest growing rural county in Nevada, has no dentist who receives low-income families or who accepts Nevada Medicaid or Nevada Check-up clients, Ms. Sheldon said, adding every county in the state, including (Indian) reservations, has a shortage of health care providers.

Bobbette Bond, Lobbyist, said she worked as a benefit specialist for the culinary union and was concerned about the shortage of dentists and other health care providers in both rural and urban counties throughout the state which had reached a crisis condition. Ms. Bond directed attention to population statistics showing Nevada currently has only 4.28 dentists for every 10,000 people, compared with Utah which has 9.19 dentists for every 10,000 people and California which has 7.70 dentists for every 10,000 people. Ms. Bond said she needed a statewide solution and regional examination boards worked well for other states. She concluded by encouraging committee support for S.B. 133.

Elizabeth Gilbertson, Lobbyist, Hotel Employees and Restaurant Employees Welfare Fund, pointed out, in her capacity as the culinary health fund benefits coordinator for over 10 years, she is convinced Nevada is in dire need of more dentists, specifically noting the situation had become intolerable. She said her organization represented 120,000 people in Clark County and 48,000 families. Ms. Gilbertson said the problem she has repeatedly encountered in her work has shown her the lack of dentists in the state has been a significant problem because, when interviewing dentists from around the country in her effort to encourage them to move to the state, she was invariably met with the same response: dentists did not want to move to Nevada due to the state’s restrictive dental licensure procedure, which made it impossible for them to practice here, she said.

Fred L. Hillerby, Lobbyist, Nevada State Board of Dental Examiners, presented the committee with the second proposed amendment referred to by Senator Shaffer (Exhibit G). He said S.B. 133, along with the proposed amendments, would greatly increase the number of dentists in Nevada by providing better licensure provisions, allowing for licensure reciprocity between states, and by providing dentists with additional incentives to practice in Nevada. Mr. Hillerby then introduced Larry Champagne, D.M.D., Board of Dental Examiners of Nevada, who has practiced dentistry in Sparks for the past 26 years, as well as serving on the Board of Dental Examiners of Nevada for the past 7 years and recently being elected president of the board. He said the best way to protect the dental health of the citizens of Nevada was through the examination procedure which in Nevada has very high standards for licensure of dentists, thus ensuring the practice of high-quality dental care throughout the state, including very few complaints against dentists.

Dr. Champagne said, currently anyone who wishes to practice dentistry in Nevada must be successful on the general examination, including dentists trained as specialists. As the president of the Board of Dental Examiners of Nevada, Dr. Champagne proposed specialists who obtain certification from their specific certification board be allowed to obtain specialty licensure by credentials without taking an examination. Specialists who are not licensed by their specific specialty board could either take the general examination or complete their special examination training by that board. He said this proposal would help alleviate concerns expressed by specialists who want to relocate to Nevada.

Dr. Champagne said the board is currently reviewing requirements for denture licensure to determine if changes to simplify the requirements should be made. He said members of the Board of Dental Examiners of Nevada were aware of changes in current educational and professional trends in their occupation and will continue to revise the examination requirements to continually and closely replicate important components of the individual practice settings of dental offices. In conclusion, Dr. Champagne said he supported S.B. 133 and the proposed amendments which would not only benefit the examination procedures for prospective licensees but also maintain the quality of dentistry the citizens of Nevada have experienced in the past and deserve in the future, while steadily increasing the number and locations of qualified dentists throughout the state. Dr. Champagne said some alterations could be made to the examination which may help promote the profession of dentistry in the state without sacrificing the quality of training and care. Dr. Champagne added there were some positive statistics to report, specifically an increase of dentists in the state of approximately 30 percent in the last 6 years due to the efforts of the Board of Dental Examiners of Nevada and its ability to change by staying current with advances in the dental profession.

Senator O'Connell said she had initially thought the shortage of dentists in Nevada was attributable to the fact many dental schools were closing all across the country. She asked for clarification on this point, specifically, if greater numbers of people were not entering the dental profession due to economic reasons. Dr. Champagne responded in the affirmative, adding dental school was very expensive and few incentives existed to support students in their endeavor.

Senator Shaffer said he supported Dr. Champagne’s testimony and added, the shortage of dentists throughout the state, in both urban and rural areas, had reached epidemic proportions. The problem was not limited to specialty dentistry but included general dentistry as well. Dr. Champagne agreed and said licensing standards would maintain the quality of licensees, yet increase the number of dentists throughout the state while providing incentives to dentists to open practices in rural areas of the state.

Senator Schneider asked if Dr. Champagne had said the number of dentists in Nevada had increased 30 percent over the past 6 years, to which Dr. Champagne responded in the affirmative. Senator Schneider pointed out recent statistics showed, in a 10-year period, the growth rate of North Las Vegas, Henderson, and Las Vegas were, respectively, the fourth, fifth, and tenth fastest growing cities in the nation with growth rates of 170 percent, 142 percent, and 85 percent, respectively. The Las Vegas metropolitan area was the thirty-second largest metropolitan area in the United States. A 30 percent rate of increase in dentists in triple-digit population growth percentages was essentially negative, with Nevada was falling behind very fast in terms of the dire shortage of dentists, he said. The rapid population growth in southern Nevada shows people want to move there; therefore, there must be a barrier preventing dentists from moving there as well. Dr. Champagne said it would not be beneficial to the citizens of this state “to open up the flood gates” by reducing all barriers to dentists; however, he added, it would be possible to alter examination procedures which might encourage more people to make application to the state’s board. If the number of dentists in Nevada could be increased by joining a regional board, the state’s board could be turned into nothing more than a policing agency rather than a licensing agency, he said.

Mr. Hillerby said the pool of dentists in Nevada was increasing despite the fact fewer dentists were graduating from dental schools throughout the country. It did not mean the rate of dentists becoming licensed was keeping up with the rate of population growth, he explained. In order to lend clarification to the discussion, Mr. Hillerby offered committee members copies of current statute (Exhibit H) as per the Nevada Administrative Code (NAC), as contained in NAC 631.190, dealing with dental specialties; NAC 631.200, dealing with delegation of duty to supervise dental hygienists and dental assistants, and NAC 631.210, dealing with duties delegable to dental hygienists. Mr. Hillerby said the proposed amendment (Exhibit I) would affect current regulations governing the dental profession by allowing dental specialists, such as pediatric dentists who are board certified, to be licensed to practice their dental specialties in this state. He said this could provide another incentive to encourage dentists to move to Nevada.

Chairman Townsend said the problem was not the board stopping dentists from moving to Nevada, it was the problem of declining numbers of qualified and available dentists and how to deal with the shrinking pool of dentists. Furthermore, if qualified dentists could be found who already held licenses for a broad spectrum of specialties and who had proven track records, how could they be encouraged to move to Nevada, particularly if dentistry was becoming a shrinking profession throughout the United States, he asked. The problem was, despite this possibility, there remained the obligation to provide quality dental care to all citizens of this quickly growing state, he said. Chairman Townsend agreed with Dr. Champagne, the cuts in federal and state money for dental schools and reimbursement of expenses had contributed to the current dilemma, which was compounded by the state’s overwhelming population growth. Considering the shortage of dentists, much like the shortage of nurses, is a universal problem throughout the country, he suggested looking to the other 49 states for possible solutions. Mr. Hillerby agreed with the chairman’s assessment of the situation and added it would be beneficial to provide more incentives to encourage dentists to move to Nevada. However, he added, providing economic incentives to dentists to move to Nevada was not the responsibility of the Board of Dental Examiners of Nevada.

Senator Shaffer asked Dr. Champagne what percentage of the students passed the examination. Dr. Champagne responded between 72 and 75 percent passed the Nevada board examination and from between 75 to 85 percent passed regional board examinations. He added regional boards are actually for-profit, private testing agencies not answerable to the citizens they test but to their stockholders. Regional board examination formats were considered compensatory, meaning a prospective licensee could fail one of several sections of the examination and do well enough on another to pass the entire board examination. In Nevada, however, Nevada board examinations are conjunctive, meaning prospective licensees would have to test to a minimally competent standard, or to a standard allowing newly licensed dentists to be considered “safe beginners.” Dr. Champagne said the Nevada system was superior because it required dentists to be competent in all areas of dentistry. Dentists should not hold licenses for procedures they were not qualified to perform. Also, he concluded, the examination content of regional boards did not necessarily meet the needs of our geographic area, particularly in prosthetics, the standards for which were currently be reconsidered by the Board of Dental Examiners of Nevada.

Senator Shaffer then asked Dr. Champagne if he would object to possibly restructuring the Board of Dental Examiners of Nevada so the majority of the people serving on the board were representatives from the private sector. Dr. Champagne said currently one member of the board was from the private section and more could be considered. It was important to consider the board’s first responsibility was to protect the citizens of Nevada, and because dentists understood the profession better than the average citizen, quality control could be jeopardized, he said. Senator Shaffer expressed his disagreement with Dr. Champagne’s opinion, adding this was the tenth time he presented this measure. The issue had worsened in that time rather than improved, the senator concluded.

Senator Carlton said when one of the largest insurance providers in the state was actively looking for dental services and was not able to find them, there must be something wrong. In her work as a shop steward, she pointed out, most of her efforts were directed toward facilitating insurance benefits for those she served, and the lack of available, qualified dentists was consistently the greatest problem she encountered. Senator Carlton said she agreed with Senator Shaffer, something was seriously wrong because insurance providers, who were willing to pay dentists at good rates, were unable to contract dentists.

The proposed amendment to S.B 133, Mr. Hillerby continued, provided for the removal of the requirement, set by the Nevada board, for 5 years of experience and a 3-year residency program in order for dentists to receive licensure in Nevada. Mr. Hillerby explained the provision in the proposed amendment, which was referred to as “restricted geographic licensure,” would allow dentists to become licensed in specific Nevada communities for which a request for a dentist was made by the board of county commissioners. A dentist would be allowed to receive a license to practice dentistry in Nevada as long as he or she held a dental license from another state, with no other requirement, he explained. The arrangement would provide more dentists to rural Nevada communities. After 5 years of practice in the community, a dentist would become eligible for an unlimited license, said Dr. Champagne, adding the specific time requirement could be negotiated.

John A. Hunt, Legal Counsel, Board of Dental Examiners of Nevada, explained in his career as a board prosecutor, the patient-to-dentist complaint ratio was very low for Nevada. However, Mr. Hunt said, the only thing worse than having too few dentists is having a bad dentist. Therefore, quality could not be sacrificed. The proposed amendment in support of board testing and certification, he said, provided an opportunity to increase the number of dentists in the state, place more dentists in rural areas, attract specialists to the state, and still maintain high licensure standards. Currently, the trend in regional testing agencies was to become independent entities. Once a state was under the auspices of a regional testing agency, the state had to give up autonomy because board examinations could no longer be crafted to suit the needs of its citizens. Mr. Hunt cited, as a case in point, Las Vegas’s population is still growing, including its elderly population; therefore, dentures are an important issue in this state. Because regional dental testing agencies do not test denture work, dentists licensed through those agencies might not be qualified to do denture work. The issues of not being able to customize state dental board examinations, along with the lack of accountability, suggest regional testing agencies are not the solution, Mr. Hunt pointed out.

Senator Rhoads asked how many Western Interstate Commission for Higher Education (WICHE) positions were available in Nevada, and if the number, whatever it was, could be increased. Ms. Sheldon responded there were five health care access program positions in Nevada. Those in health care access positions must agree to practice dentistry in an underserved area for 2 years. Another program, the professional student exchange program, also engaged five students, and was a dental student program only requiring students to return to Nevada to practice dentistry for 2 years, but not necessarily in an underserved area. Although Ms. Sheldon said she supported increasing the number of students involved in these two programs, she noted budgetary restrictions might not allow any increases to occur.

Caroline Ford, Assistant Dean, University of Nevada School of Medicine, and Director, Office of Rural Health, said she was in favor of S.B. 133. She noted the 5-year restriction explained by Mr. Hillerby applied to both geographic areas as well as federally qualified health centers and public clinics, and was more of a deterrent for dentists to move to Nevada than an incentive, particularly in rural areas. Ms. Ford stated her agency had surveyed dental practices across Nevada to determine variables such as waiting time for appointments, the availability of Medicaid and Medicare, and the level of uncompensated care offered. She said it was important to study individual practices, not only statistics, because the success of state and federal educational partnerships was dependent upon the private sector. It is extremely costly, she pointed out, to set up a dental office, and only a combined effort will improve current trends.

Joel Glover, D.D.S., Nevada Dental Association, said he had previously served on the Board of Dental Examiners of Nevada as well as other agencies monitoring dental examinations and quality control issues throughout the state. He said the board had always done a good job monitoring the dental profession and maintaining a high level of dental care in Nevada. Dr. Glover recommended the military’s solution to the shortage of dentists in rural areas, which is to offer educational incentives for schooling in exchange for practicing dentistry in the military. Similar incentives, including increasing the rates and amounts of reimbursable expenses, could be offered to dentists to encourage them to open offices in rural communities, he said.

Maury Astley, Lobbyist, Executive Director, Nevada Dental Association, provided the committee with a copy of his testimony (Exhibit I) entitled, “Improving Access to the Underserved” which included suggestions for improving the present dental health care system. He explained, dentists have come under fire for not doing enough to improve access for the underserved, which is not always deserved. He pointed out dentists do a great deal of pro bono work or work at reduced rates. Mr. Astley explained state run clinics would not necessarily be needed if existing educational, reimbursement, and testing options were better-funded for dentists as well as dental hygienists. Mr. Astley said his organization supported changes suggested by the State Board of Dental Examiners of Nevada giving incentives to dentists to serve rural areas.

Chairman Townsend said it was extremely important to consider the possibility Medicaid was a bureaucracy impeding the licensing of qualified dentists. Mr. Astley responded there were a variety of issues which needed to be addressed by Medicaid to improve the current system. Also, high overhead, low reimbursement rates, and processing problems were the main reasons dentists were not opening practices in rural areas. In conclusion, Mr. Astley stated in his written executive summary to the committee (Exhibit J), the Nevada Dental Association would support changes to the dental licensure procedure for dentists to solve specific problems, rather than relax standards. He also suggested maintaining a record of dentists’ performance histories. Chairman Townsend called for the Senate Committee on Commerce and Labor subcommittee on professions, occupations, and business to discuss S.B. 133. The subcommittee is chaired by Senator Carlton and members include Senator O'Connell and Senator Townsend.

Stephanie Deevers, Concerned Citizen, testified from Las Vegas cash customers were able to receive immediate treatment for their dental needs but Medicaid and Medicare patients were not. In addition, reimbursement of expenses and providing incentives for student aid would help alleviate the shortage of dentists in Nevada, particularly in rural communities, she said.

Brenda Montoya, Concerned Citizen, from Las Vegas, said it took her 2 weeks to get a dentist appointment, 4 weeks to get a pediatric dental appointment, and 3 months to get an appointment with a dental hygienist. She said it would be good idea to have a dental school in Nevada.

Becky Harris, Concerned Citizen, testified from Las Vegas, she agreed with the testimonies of Mr. Hillerby, Dr. Champagne, and Mr. Hunt. She said if the remedies suggested by these three authorities were implemented, most of the issues presented would be resolved.

Len Deevers, Concerned Citizen, testifying from Las Vegas, stated his concerns regarding dental coverage for members of the culinary union, specifically problems with providers, such as lengthy reimbursement processes.

Chairman Townsend asked if there was any additional testimony and there was none. He closed the hearing on S.B. 133 and opened the hearing on a work session discussion on construction defects.

Ronald L. Lynn, Lobbyist, Clark County, testifying on behalf of the Clark County Building Department, from Las Vegas, read from his written statement, “Working Session Geotechnical Considerations” (Exhibit K), in which he outlined proposed language legislation. Mr. Lynn explained it was necessary for each city or county to adopt an ordinance requiring the development of technical provisions and geotechnical reports for projects involving new footings or foundations or projects involving more than 5000 cubic yards of earthwork. Furthermore, the architect and whoever was responsible for the building design (the civil engineer or the structural engineer) should review the geotechnical report and verify their designs are compatible by providing a written statement plans are in compliance with the geotechnical recommendations, he said.

Bob Nunes, P.E., Director, Community Development, Douglas County, provided the committee with language for possible legislation to address the issue of construction defects and to establish the basic requirements (Exhibit L). Mr. Nunes pointed out the suggested language was a condensed version of the suggestions of Mr. Lynn (Exhibit K), with specific provisions to address the serious problem of excessive under-floor standing water which provides an environment suitable to the growth of black mold, a serious threat to human health.

Robert C. Maddox, Lobbyist, Citizens for Justice, presented the committee with a letter dated April 2, 2001 (Exhibit M), regarding the upgrading of standards for residential construction in Nevada. Mr. Maddox said the position of the Nevada Trial Lawyers Association is construction standards statewide need to be addressed. In particular, Mr. Maddox explained, the proposal brought forth by Mr. Lynn involving procedures, including checks and balances to help assure quality construction standards are adhered to by all primary design engineers and architects and disclosed to home buyers. Anticipated time constraints during session might make it impossible for legislators to develop detailed standards, Mr. Maddox said. Therefore, his organization requested the Nevada Legislature adopt home construction public policy positions. The proposed public policy would include a provision stating homes shall be designed and constructed so as to substantially mitigate the damaging impacts of adverse soil conditions and in such a manner as to prevent intrusion of surface and groundwater into living spaces and into above-ground surfaces beneath occupied areas.

Chairman Townsend asked Phil M. Herrington, Chief Building Official, Building Department, Carson City, if he would prefer a more definitive position, to which Mr. Herrington responded in the affirmative. However, Mr. Herington added, the more condensed version would allow specific issues to be developed by local authorities as per the unique geological and geographical conditions of their particular community. Mr. Herrington said he supported the position presented by Mr. Nunes, which was the more condensed language. Chairman Townsend said it was important to develop policies to ensure home buyers were protected against defective construction practices.

Senator O'Connell asked what additional financial burdens would be placed on home buyers if suggested policy positions were implemented. Mr. Lynn said the larger the development was, the less the cost would be to individual home buyers. Adherence to building standards should not place additional financial burdens on homebuyers, Mr. Lynn said.

Senator Amodei asked why homes were being built on wetlands, to which Mr. Herrington agreed it was a concern, adding local jurisdictions should be able to develop the criteria to address specific conditions.

Greg Lynn, Owner, Greg Lynn Construction, said he was a developer in Douglas County. Mr. Lynn said it was good to discuss theories, but in the real world, the cost-to-benefit ratio would make it implausible to set policies establishing blanket rules mandating homes be designed to resist the intrusion of standing groundwater. He said it was an unrealistic expectation because it was a difficult problem to solve, particularly, because there were many variables involved. Chairman Townsend asked if the proposed language presented by the rural representatives was reasonable, to which Mr. Lynn responded in the affirmative, adding if the process currently in place was followed, serious concerns could be avoided. A report presented to prospective home buyers disclosing all pertinent information would cost approximately $300 per home in an average development, an amount far less than the cost of even one failed foundation, he said. Chairman Townsend said amendments would be drafted and discussed in a work session.

Chairman Townsend asked if there was any additional testimony and there was none. He closed the hearing on construction defects and opened the hearing on S.B. 252.

SENATE BILL 252: Makes changes concerning Nevada Life and Health Insurance Guaranty Association Act. (BDR 57-683)

Gordon DePaoli, Nevada Life and Health Insurance Guaranty Association, presented the committee with copies of the association’s “Life and Health Insurance Guaranty Association Model Act of 1970” (Exhibit N) which described guaranty provisions designed to provide more timely coverage benefits to policyholders, reduced risks of litigation, and improved operating efficiencies. Mr. DePaoli pointed out currently seven states had adopted some or all of the amendments presented in the “model act.” Contained within the act were provisions to protect policyholders, to expedite coverage, to reduce the risk of litigation, and to improve operating efficiency, he pointed out.

Senator O'Connell asked if there was any possibility dental benefits could be increased, to which Mr. DePaoli responded, issues regarding insurance benefits were not related to the model act which concerned issues regarding insolvency of insurance companies. He stated the proposed amendments would facilitate the rehabilitation and liquidation of plans in national cases in order to improve the ability of the guaranty system to continue needed coverage, and recognize that guaranty associations are not responsible for covering policy obligations not materially affecting economic values and benefits, thereby facilitating the provision of coverage benefits to policyholders.

Senator O'Connell asked why there was a fiscal note to local governments. Scott Young, Committee Policy Analyst, explained a fiscal note was needed because S.B. 252 contained a criminal penalty provision. He explained false advertising was considered a gross misdemeanor. Mr. DePaoli added, a clause was contained within the proposed legislation prohibiting the use of certain types of materials in advertising and providing for possible criminal penalties. Senator O'Connell asked for specific clarification regarding the penalty section of the measure. Alice Molasky-Arman, Commissioner, Division of Insurance, Department of Business and Industry, came forward to provide additional testimony to clarify the issue. Ms. Molasky-Arman stated she saw no reason for the fiscal note other than for providing for criminal penalties for deceptive trade practices or false advertising. Mr. DePaoli pointed out the clause was in section 20 of the proposed legislation. Ms. Molasky-Arman said the Division of Insurance was in complete support of the proposed legislation and amendments because they would bring Nevada into uniformity with model legislation from other states throughout the country. Senator O'Connell requested the penalty clause be clarified in the final draft of the measure.

Chairman Townsend asked if there was any additional testimony and there was none. He closed the hearing on S.B. 252 and opened the hearing on S.B. 558.

SENATE BILL 558: Strengthens protection of patents and trade secrets. (BDR 52-1480)

Lorraine T. Hunt, Lieutenant Governor, introduced S.B. 558 which, she said, would greatly assist in attracting high-technology industry to Nevada. Lieutenant Governor Hunt said she has always believed if Nevada could become a safe-haven for the twenty-first century’s most talented scientists, inventors, and engineers, the high-technology industry would follow, bringing venture capital and high-technology companies to the state. The proposed legislation, designed to protect the intellectual property of talented entrepreneurs and companies who invent and discover new technologies, would be the beginning of realizing that goal, she said. Relative to patent and tort provisions, Lieutenant Governor Hunt explained, S.B. 558 is unique legislation. The trade secrets provision is stronger than current model legislation from other states, she explained. The proposed legislation would apply to Nevada businesses and residents who have home offices in Nevada, who are incorporated in Nevada, and whose employees are at least 50 percent Nevadans. The Lieutenant Governor introduced Gilbert P. Hyatt, a Concerned Citizen, and an inventor, who helped her prepare the bill.

Mr. Hyatt pointed out the proposed legislation offered significant incentives for high-technology industries and individuals to move to Nevada to conduct their businesses with no cost to the state. One of the most compelling aspects of the bill includes the provision that intellectual property rights have the same legal status as personal property rights, he said. Mr. Hyatt explained the Nevada Constitution mandates the legislature to protect the personal property of Nevada residents and companies. Also, the trade secrets provision protects companies and individuals against industrial espionage and would lower the threshold for defining trade secrets as well as permit classifying documents as “Confidential,” thereby making violations against breaching the confidentiality of trade secrets more serious legal issues. In addition, he added, S.B. 558 would define patent infringement violations and would provide that the state prescribe remedies for residents and companies whose patents have been infringed upon. The proposed measure would also provide incentives for venture capitalists, investors, and businesses to the extent Nevada would be considered “business friendly” and would protect legitimate businesses from the illegal activities of nefarious individuals, he noted. Mr. Hyatt said the proposed legislation had been carefully reviewed by the Legislative Counsel Bureau (LCB) and was confirmed to be consistent with model legislation from other states; however, S.B. 558 went further than any other current legislation throughout the United States.

Senator O'Connell asked for clarification regarding penalty provisions and the effective date of the bill. Mr. Hyatt explained the bill provided high-technology industries the right to sue for damages in court as their legal remedy if they were damaged by industrial spying or patent and trade secret violations. The effective date of the bill would be October 2001.

Chairman Townsend asked if the language contained in the proposed legislation was used anywhere in the nation or if it was unique, to which Robert E. Shriver, Executive Director, Division of Economic Development, Commission on Economic Development, responded S.B. 558 was a unique piece of legislation, particularly the tort remedy provided in section 3. Mr. Shriver said the proposed amendment (Exhibit O) would put the bill in compliance with federal law. He said the measure would give the state a unique opportunity to market Nevada as a haven for high-technology industry.

Senator O'Connell asked if the proposed measure required high-technology companies to locate their home offices to Nevada, to which Mr. Shriver responded in the affirmative.

Senator Schneider said he had heard from both the real estate and development industries that high-technology companies were not interested in moving to Nevada due to the state’s poor quality of education which has not produced an educated workforce to fill the highly technical positions that would become available. Lieutenant Governor Hunt responded higher education was critical to the success of the state in bringing high-technology industries to Nevada. A qualified workforce would be attracted to Nevada due to the safe-haven concept. She said the measure could speed up the goal to improve Nevada‘s educational system. Mr. Hyatt agreed with the Lieutenant Governor and added the bill was part of the broader picture, which includes working with Nevada’s primary and university school systems in order to advance education to the extent it becomes compatible with the education needed by high-technology industries.

Michael Kern, Attorney, testified from Las Vegas he supports the measure because it provides needed incentives to bring new, high-technology companies to Nevada. He said the mayor of Las Vegas, Oscar B. Goodman, also supported the proposed legislation.

Clinton Pope, Lobbyist, Nevada Development Authority, testifying from Las Vegas, expressed his support of the proposed legislation. He reiterated the statements presented by Mr. Hyatt.

Chuck Alvey, Chief Executive Officer/President, Economic Development Authority of Western Nevada, said the proposed legislation would be very beneficial to improving business opportunities in Nevada. He said it would also contribute to the diversification of economic opportunities in the state.

Michael D. Rounds, Attorney, said he supported the concept of S.B. 558, but from a legal standpoint, however, sections 4 and 5 provided contract and tort remedies for patent infringement which is a section of law governed by the United States Constitution and by federal patent laws. He said he was concerned, under the supremacy clause of the United States Constitution, federal law could invalidate the proposed legislation. The United States Supreme Court addressed this issue many times and has consistently ruled patent law is definitely within the ambit of federal law, he said. States have trod on federal patent law, Mr. Rounds explained, and have been preempted, with legislation similar to S B. 558 found to be invalid. He reiterated the concept of the proposed legislation was great; however, he was concerned if the legislation was enacted it would not withstand legal scrutiny. With respect to section 6 which deals with labeling documents “Confidential,” he noted, electronic media should also be covered under the provision.

Michael Thomas, Executive Director, Tech Alliance, said his organization applauded the efforts of Lieutenant Governor Hunt and agreed with the sentiments of the testimony presented in support of S.B. 558. Mr. Thomas said the proposed legislation was in step with current and more established technology regions such as northern California.

Mr. Hyatt, addressing the concerns of Mr. Rounds, said LCB and other legal entities have thoroughly explored the bill and found it to be legally sound and not in violation of federal patent law. He said legislatures pass measures such as this one because of the presumption of constitutionality, which has been considered by the LCB to be a very important factor when considering proposed legislation. Mr. Hyatt concluded by stating patent issues can be litigated at a state level if subordinated to tort claims. Mr. Rounds stated, as a Nevada attorney, he has experience litigating intellectual property issues and patent cases, and he said he disagreed with Mr. Hyatt concerning patent cases being subordinated to tort claims. Chairman Townsend suggested Mr. Rounds and Mr. Hyatt debate the issue further, during which time a proposed amendment could be drafted, as per the request of Lieutenant Governor Hunt.

Chairman Townsend asked if there was any additional testimony and there was none. The chairman closed the hearing on S.B. 558 and opened the hearing on S.B. 337.

SENATE BILL 337: Provides for regulation of boilers, elevators, pressure vessels, boiler inspectors and elevator mechanics. (BDR 40-1033)

Senator Terry John Care, Clark County Senatorial District No. 7, stated although people usually take their rides in elevators for granted, approximately 30 deaths and 17,000 injuries occur per year involving elevators, a number which includes elevator workers as well as elevator riders. Senator Care said the proposed legislation was an important bill because it addressed the issue of public safety. The bill was intended to ensure the people who work on elevators know precisely what they are doing by providing for a continuing certification for elevator workers. He said the bill was an effort to ensure elevators in Nevada are among the safest in the world. Senator Care provided the committee with a copy of a proposed amendment to the bill (Exhibit P) which would provide strict standards for the issuance and renewal of certifications for elevator operators and repairmen.

John Wiles, Division Counsel, Division of Industrial Relations, Department of Business and Industry, stated his agency supports the proposed legislation because it would significantly enhance an existing program. Elevator safety, he said, is a very serious concern to everyone, including elevator workers. Mr. Wiles said with this legislation, no fees would be levied. Instead, the responsibility for the services rendered would be shifted to those who receive those services. Currently, boiler and elevator workers are covered under the workers’ compensation fund, meaning all employers who pay into the workers’ compensation fund pay to operate the mechanical program. Senate Bill 337 obliges owners of boilers and elevators to pay a reasonable fee for the services provided, including inspections and certification, Mr. Wiles said. The measure would ensure the public and workers are not exposed to unsafe boilers and elevators.

Senator O'Connell asked for an estimate of what “reasonable fees” constituted. Mr. Wiles responded no specifics had been worked out yet, but information could be provided to the committee within a short period of time. He said most states use fee-based systems, much like S.B. 337.

William Stanley, Center to Protect Workers Rights, International Union of Elevator Contractors, stated his support for the proposed legislation. He noted a model legislation package was developed by the Elevator Industry Work Preservation Fund, governed under the Taft-Hartley Act, which developed competency standards affecting all elevator constructors. Mr. Stanley provided committee members with copies of “Deaths and Injuries Involving Elevators or Escalators—A Report of the Center to Protect Workers Rights” (Exhibit Q). Mr. Stanley concluded by stating it was necessary for Nevada to begin regulating its elevator industry.

Robert Barengo, Lobbyist, Nevada State Contractors’ Board, said he was concerned about the proposed measure because it sought to regulate construction issues and all construction issues were regulated by the State Contractors’ Board. He said he would work with all concerned parties to work out details and language for the proposed legislation.

Rose E. McKinney-James, Lobbyist, Clark County School District, said her organization supported the concept of the proposed legislation as a public safety measure, but considered section 12, which pertains to establishing a fee for the program, unacceptable due to the fact the impact of an undetermined fee could not be calculated. She requested Senator Care to provide her organization with a fee schedule because, she said, as an end user subject to paying the proposed fees, the measure contains fiscal implications for the school district. Ms. McKinney-James said there are also technical issues her agency has concerns about; however, she assured the chairman, she would be willing to discuss those concerns in a work session.

Chairman Townsend asked if there was any additional testimony on S.B. 337 and there was none. The chairman closed the hearing on S.B. 337 and opened the hearing on S.B. 511.

SENATE BILL 511: Limits enforceability of certain contracts in restraint of trade. (BDR 53-189)

William Patterson Cashill, Lobbyist, Nevada Trial Lawyers Association, explained his organization was opposed to the proposed legislation. Mr. Cashill said Nevada courts considered the enforcement of restrictive covenants in contracts to be reasonable in terms in duration and geographical limitations. However, stated Mr. Cashill, S.B. 511 would take this responsibility away from the courts. He said the measure, as drafted, would validate illegal restrictive covenants which restrain trade, are anti-consumer, violate professional ethics, and are designed to curtail, rather than foster, competition. In addition, the American Medical Association has declared similar legislation to be unethical because it finds restrictive covenants prohibiting a patient from being able to choose a doctor to be unacceptable. Senate Bill 511 is not sound public policy, concluded Mr. Cashill, because it attempts to legislate things best left for specific regional courts to decide. Mr. Cashill provided the committee with copies of his written statement (Exhibit R) and copies of an informational packet on restrictive covenants and business tort case histories (Exhibit S).

Chairman Townsend said in discussing the issue of creating a high-technology industry center in Nevada, it was brought up in places such as Silicon Valley, California, one day an industry is flying high and the next day everyone is out of work. He added, legislation prohibiting Nevada from developing and diversifying its economy would be more of a hindrance than help. Mr. Cashill said it would not be advantageous to allow trade secrets to be stolen, but if a law “would cement in stone a blanket approval of a type of contract that would result in restraining trade” it would not be good for the state.

Chairman Townsend asked if there was any additional testimony on S.B. 511 and there was none. The chairman closed the hearing on S.B. 511 and opened the hearing on S.B. 378.

SENATE BILL 378: Revises provisions relating to dentistry and dental hygiene. (BDR 54-1230)

Mr. Hillerby, representing the State Board of Dental Examiners of Nevada, presented the committee with a proposed amendment to S.B. 378 (Exhibit T) which he said clarifies language contained in section 1, subsection 2, paragraph (b), providing coverage for members of the public, and section 3, subsection 3, which provides for board participation in civil proceedings. Mr. Hunt explained the language changes contained in the proposed legislation and amendment are housekeeping measures pertaining to witness and board immunity. He said the intent of the legislation is to protect people who register complaints against members of the dental profession. Mr. Hunt explained S.B. 378, along with codifying existing law, would also allow licensees who admit to wrongdoing to avoid being taken to civil court. Offenders would instead be allowed to receive remedial training and a record would be kept of all offenders in order to monitor any future problems, he said.

Senator Carlton said when she was reviewing the proposed legislation, she had thought the bill was a good-faith measure concerned with the sharing of information with other state boards and protecting citizens. She said she did not realize the bill and amendment could protect a dentist who was having disciplinary problems. Mr. Hunt said the bill did not protect dentists who were having disciplinary problems because the burden of proof in civil cases is beyond a preponderance of evidence which is over 50 percent. However, in administrative hearings, in order to protect citizens, the burden of proof is lowered. As a result, any findings of the board would not be accepted in district court as evidence against a dentist accused of malpractice because the burden of proof had been lowered. Senator Carlton said she was concerned all information and stipulations would not be available to the public. Mr. Hunt said complete disclosure was assured.

Chairman Townsend asked if there was any additional testimony relating to S.B. 378. There was none. There being no further business before the committee, Chairman Townsend closed the hearing on S.B. 378 and adjourned the meeting at 11:35 a.m.

RESPECTFULLY SUBMITTED:

Sharon T. Spencer,

Committee Secretary

APPROVED BY:

Senator Randolph J. Townsend, Chairman

DATE: