MINUTES OF THE
SENATE Committee on Judiciary
Seventy-First Session
March 28, 2001
The Senate Committee on Judiciarywas called to order by Chairman Mark A. James, at 8:30 a.m., on Wednesday, March 28, 2001, in Room 2149 of the Legislative Building, Carson City, Nevada. The meeting was video conferenced to the Grant Sawyer Office Building, Room 4401, Las Vegas, 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 Mark A. James, Chairman
Senator Jon C. Porter, Vice Chairman
Senator Mike McGinness
Senator Maurice Washington
Senator Dina Titus
Senator Valerie Wiener
Senator Terry Care
GUEST LEGISLATORS PRESENT:
Senator Michael A. (Mike) Schneider, Clark County Senatorial District No. 8
STAFF MEMBERS PRESENT:
Bradley A. Wilkinson, Committee Counsel
Allison Combs, Committee Policy Analyst
Heather Dion, Committee Secretary
OTHERS PRESENT:
Scott M. Craigie, Lobbyist, American Resort Development Association
Karen D. Dennison, Lobbyist, American Resort Development Association
Joan C. Wright, Lobbyist, Resorts West
Joan Buchanan, Administrator, Real Estate Division, Department of Business and Industry
Foster Mullen, Cochairman and President, QM Corporation
John Holmes, Concerned Citizen
Steve Cloobeck, President, Diamond Resorts International
Ben Graham, Lobbyist, Clark County District Attorney
David Schwartz, Deputy District Attorney, District Attorney, Clark County
James J. Jackson, Lobbyist, Nevada Attorneys for Criminal Justice
Howard S. Brooks, Deputy Public Defender, Public Defender, Clark County
JoNell Thomas, Attorney, President, Nevada Attorneys for Criminal Justice
Michael Pescetta, Assistant Federal Public Defender, U.S. Department of Justice
Aaron C. Bryant, Assistant Professor, William S. Boyd School of Law, University of Nevada, Las Vegas
David Schieck, Attorney
Dick Gammick, District Attorney, Washoe County
Helen A. Foley, Lobbyist, Clark County Health District
Samuel P. McMullen, Lobbyist, Philip Morris Management Corporation
Chairman James:
We will open the hearing on Senate Bill (S.B.) 261.
SENATE BILL 261: Makes various changes to provisions governing time shares. (BDR 10-819)
Senator Michael (Mike) A. Schneider, Clark County Senatorial District No. 8:
I bring to you today S.B. 261, concerning time-shares. Let me give you the history of what is going on in Las Vegas in the time-share market. Las Vegas is the hot market in the world for time-shares, the premiere market. Everyone knows about time-shares in Hawaii and Florida. Las Vegas is now the number one growing market, and all the builders and time-share developers are looking at Las Vegas. Many of the developers have already purchased land in Las Vegas, or buildings to convert. One time-share, opening this spring, is Fairfield, with their grand desert resort with 650 rooms. It is behind the MGM Grand Hotel/Casino, and is an elaborate resort. They will have approximately 32,000 owners.
Laws will need to be put into place to protect the consumer. The American Resort Development Association (ARDA), the professional association for time-share developers and operators, contacted me to bring forward this bill. Mr. Chairman, everyone involved in the time-share community and the real estate industry have signed off on the bill. They think it is good consumer protection.
What we are doing is moving everything out of the homeowners association in Chapter 116 of Nevada Revised Statutes (NRS) to Chapter 119 of NRS, so we do not mingle all the different laws. And, there are some sections that step up the protections of the consumer. With that, Mr. Chairman, I would like to introduce Karen Dennison, of a law firm in Reno. She will go over the bill step by step, with Mr. Craigie.
For full disclosure, I would like to disclose that I do have interest in a time-share project myself. I do understand it, but I want to leave this to the professionals that know the details.
Scott M. Craigie, Lobbyist, American Resort Development Association:
For the record my name is Scott Craigie, and with me is Karen Dennison. We are both registered in the building on behalf of ARDA. Ms. Dennison spent the interim period putting together a coalition bill in an effort to update our laws, and bring them in line with what is required given the growth in the area.
Ms. Dennison is going to take the primary responsibly to walk you through this bill. So I will turn it over to her.
Karen D. Dennison, Lobbyist, American Resort Development Association:
I am a lawyer, as Mr. Craigie said, and I represent ARDA. You have two handouts in front of you (Exhibit C and Exhibit D). One is a memorandum to you with a brief overview of the statute, and the other is a letter from an organization that is part of ARDA, which is the resort owner’s coalition. This is actually the time-share owners’ themselves, who have a group within ARDA that support the bill.
To bring you up to date with the history, time-share legislation in Nevada started in 1983. It remained in Chapter 119A of NRS until Chapter 116 of NRS was enacted in 1991. After 1991, there were two chapters that regulated time-shares, Chapters 116 and 119A of NRS. There is a bifurcated regulatory scheme here, and it is not always clear which statute controls. What we are attempting to do is to put all of the legislation into one statute, that being Chapter 119A of NRS. We have borrowed some of the sections of Chapter 116 of NRS so we can have a cohesive workable statute.
As mentioned, this was a collaborative effort, and many industry representatives, as well as the Real Estate Division, had input. We believe we have come up with a balanced bill, which both meets the needs of the industry, and, also, affords new consumer protections.
I would like to go over the major areas of S.B. 261. The first one is a requirement of reserve study, which is a requirement passed last year by the Legislature for homeowner associations. Time-share projects were exempted, and, now, we are bringing the time-share projects into the requirement, by requiring them to do a budget study to determine if their reserves are sufficient to meet the upkeep necessary for their improvements and amenities. Management company regulation is also new.
Mr. Craigie:
The memo was prepared specifically to point out the major policy issues and changes that are being made in the bill (Exhibit C). Many pieces of the bill are direct transfers from the one chapter into the new chapter. There are references to each section, and rather than going section by section through the whole bill, the summary is meant as an efficient way to go through those policy issues. We are not going to go back and do the other piece, to the extent you are cross-referencing and checking. I know every member of this committee pays a good deal of attention to these details. I wanted to let you know the roll-out plan in advance.
Ms. Dennison:
Management company regulation is an entirely new area of regulation in Chapter 119A of NRS. Prior to this bill, the only mention of management companies was references to what has to be in management agreements. We have found management companies have assumed a major role, even more major than the developer, in time-share operations. Basically, the role comes into play when the developer stops sales, or when the developer turns over control of the board to the association. You primarily have absentee owners on these boards, and they rely heavily on management companies. Management companies have become very creative, and have invented cottage industries, in addition to managing the association. They have developed exchange programs among the resorts they manage, for which they charge a fee. They also charge a fee when they are involved in lien foreclosures. The thought of this bill is to (1) have a management company register, so the Real Estate Division will know who is in charge; (2) disclose the activities the management company is engaged in, beyond the traditional management contract; and (3) when their contract comes up for renewal or they enter into a new contract, they must disclose all the compensation they are receiving as a result of being affiliated with the time-share project.
Regarding the third item, association board control turnover, both statutes currently require that, at 80 percent sellout, the board majority be turned over to the owners themselves, and developer representatives would then be in the minority. However, it is unclear at this point what other provisions of Chapter 116 of NRS apply to time-shares. What we have done is take, wholesale, the requirements of Chapter 116 of NRS, with respect to when turnover must occur. We have also added the benchmarks at 25 percent and 50 percent sellout, where you must have at least one owner representative at 25 percent and at least 2 owner representatives at 50 percent. This is another consumer protection item that would be added by S.B 261.
Senator Care:
Ms. Dennison, my experience with time-shares was limited to a 2-hour pitch in Puerto Vallarta, Mexico, in 1988, and I did not buy. Going back to Chapter 116 of NRS, with homeowners associations there comes a point when you come to class A shareholders and class B shareholders. It depends on the 50 percent, I may be wrong, when the developer sells. I think then class A shareholders would go away and the class B shareholders would take over.
Maybe the law on that has changed. These figures are different, the 80 percent, the 25 percent, and the 50 percent. Is this modeled in any way after the statutes I am talking about, or would you even know?
Ms. Dennison:
Senator Care, what I think you are referring to is prior to the development of Chapter 116 of NRS. You usually had a 3 to 1 developer vote, so at 75 percent there would be an automatic turnover because the developers’ votes could not outweigh the votes of the owners. Chapter 116 makes it mandatory and does not allow weighted voting, except for certain communities formed before 1991.
What we have here is, almost word for word, putting into the time-share bill what is in Chapter 116 of NRS. If you look in NRS Chapter 116, it refers to 80 percent where the association governs time-shares. It refers to 75 percent where the association governs just whole condos.
Senator Care:
As I said, I had not looked at this in a while, but I know I have seen the old language in the earlier developments.
The benchmarks are new to the time-share statute. But they are in Chapter 116 of NRS; the benchmarks are at 25 percent and 50 percent sellout.
Owner referral programs are another new piece of legislation in S.B 261. Basically, the proposed provision was taken in part from Illinois. There are limits on the activity of owners and what they can do when they refer other owners to the developer. They cannot engage in the types of activity that real estate brokers would engage in, and are also limited to 20 referrals per year.
Time-share representatives came forth, both at the request of the industry and the Real Estate Division. These are people who may persuade you to attend a program, and who promote tours to time-share projects. Right now there is a registration requirement. Often the “shelf life” of the time-share representative is less than a week. The division is constantly processing them. Time-share representatives fall directly under the project broker, who is a licensed real estate broker, and is responsible for their activities. Basically, you already have regulation of time-share representatives.
Mr. Craigie:
Just to give you some background here, the suggestion the division should be pulled out of this responsibility resulted from the Governor’s fundamental review of committee work. As you know, the Governor is very interested in putting local government in charge of areas they have closer reach to, and it probably belongs there.
When the Real Estate Division representative, Joan Buchanan, testifies, she might run through the numbers. There are thousands of people registered at the state level whose registrations are sitting in filing cabinets, and many of those are inactive. Local government should be the entity responsive to complaints or questions, because they have better reach and knowledge. The fundamental review recommendation is what is being brought forward in this section.
Ms. Dennison:
You will see on the last page of the handout (Exhibit C), the division has requested this bill not become affective immediately, but that local governments be given time, under their solicitation statutes to actually regulate time-share representatives. When Ms. Buchanan testifies, she may speak to what the division feels would be an appropriate date for the registration provision to go away. Also, keep in mind all the limitations on the activities of time-share representatives are still in this act. They still cannot do what real estate brokers can do, and the project broker is responsible for controlling that.
Senator Wiener:
Let me get this right. Because this was under fundamental review, it is not under the scope of state activity, but is more appropriate at the local level. And, they would still be held to certain standards under statute. Are we looking to enable the local jurisdictions, or require jurisdictions to do the registration? Where is the accountability and tracking if someone needs information? I am feeling a gap here. You may have requirements, but you do not have enforceability.
Mr. Craigie:
There would remain a complaints division at the Real Estate Division. As you know, the administrator works in Las Vegas, but they have offices in both ends of the state. The responsibility would be assigned for enforcement at the local level. If anyone had any confusion of where to find information, they could still come to the state. Frankly, people right now, Senator, are more likely to go to their local governments on these issues. One of the problems we have is people get lost when they cannot find something, but they know where their local government is. Very seldom, unless they are an industry representative, do they know to come to the state for the information. To help this situation, we are trying to make the system more user-friendly, and this was also the recommendation of the fundamental review committee.
Senator Wiener:
Though it is easier to go to the local governments, are the mechanics in place? Is it just easier for the people because it is local, and are we enabling the local jurisdictions to do this? Are we telling them this is their job, because the public is better served at the local level? Are we looking to mandate all local jurisdictions to pick up the responsibility, or are we saying it is theirs because we do not want the responsibility anymore?
Mr. Craigie:
This is probably a question you should ask Ms. Buchanan. But it is my understanding it has been considered where exactly in municipal government this would go, and it would piggyback on existing work. The logistics of this should come from the division. The handoff is a legitimate question, and is why the issue of timing is important.
Ms. Dennison:
Just to clarify again what a time-share representative is and does. You probably have seen booths in casinos where people are handing out brochures; these are the representatives distributing promotional material.
Advertising is the next major topic, and was requested by the Real Estate Division. Currently, every piece of advertising, whether it is a card, mailer, or something on video, must be reviewed by the Real Estate Division and given a Nevada Administrative Verification (NAV) number. This consumes a lot of time, and states such as California have seen the wisdom in not requiring the number. California uses an honor system, which is what we would go to under this bill. All of the advertising regulations would remain in place, and it is just a question of not having a number on your ad. This has also been requested by the industry, because often many resorts are national. For example, if they have one ad and have to have a NAV number for the national ad, which is also being used in Nevada, this is a deterrent.
Chairman James:
Is this a misprint, where it says repealing 240? Do you mean repealing 370 (referring to Exhibit C)?
Ms. Dennison:
Yes, I apologize. That is 240, a time-share representative. As far as advertising is concerned, you would be repealing 370. Thank you, Senator. There would also be a repeal of 4773. The last item has to do with mixed-use projects, and is basically the first seven sections of the bill. I just want to make clear, there are some projects where you will have condominiums that are time-shared, and condominiums that are wholly owned by individuals, under the same master association. In those cases, those people who wholly own condominiums would still be protected under Chapter 116 of NRS. The master association would still have to follow all of the rules and guidelines under Chapter 116 of NRS. The time-share association would most likely be a sub-association, which would cover functions such as reservations and maid service.
Chairman James:
Let us go back to the provisions adopted regarding turnover, meetings, and control, in sections 23, 24, and 25. Section 23 says, “After conveyance of 25 percent of the time-shares to owners other than the developer, at least one member and not less than 25 percent of the members of the board must be elected by owners other than developer.” So, once non-developer time-share owners own 25 percent, they get 25 percent of the board. But then it says, “after conveyance of 50 percent of the time-shares . . . not less than 33 1/3 percent of the members of the board must be elected by members other than the developer.” Why the incongruity there?
Ms. Dennison:
That is directly out of Chapter 116 of NRS.
Chairman James:
So you just left it as it was?
Ms. Dennison:
Right, there has not been any change there.
Chairman James:
My other question is the same thing with respect to the removal of members. The owners, by a two-thirds vote of all present, can remove people, but cannot remove people who were appointed by the developer. That is in Chapter 116 of NRS also. That seems odd.
Ms. Dennison:
If you would like the sites I can give them to you. It is NRS 116.31036 and the other site is NRS 116.31032.
Mr. Craigie:
I know, with the development of residential properties, not necessarily time‑share properties, in the past, there has been a lot of interest and concern on the part of developers. The developers are concerned that they retain adequate control of the associations, until they get their properties fully developed and sold. For example, in many cases they have common areas, parks or recreational areas assigned to the homeowners association and are the responsibility of the homeowners association. In the early years when these laws were developed, developers were very interested in making sure that their properties looked their best when selling them. So, certain protections were given by the Legislature to the developer so they could maintain control when they were doing the build out.
Chairman James:
I know how it works, and I am familiar with it. Despite Senator Schneider’s comment, this is the committee that deals with all this business. It is only an aberration that has a definite, soon-to-terminate lifespan that is causing those bills to go to the commerce committee.
The next thing is section 25, which talks about a quorum present throughout any meeting of the association if persons are entitled to cast 10 percent of the votes that may be cast, and are present in person or proxy at the beginning of the meeting. Tell me how this works, since you have time-share owners? When you are talking about these percentages, each unit is one vote, correct?
Ms. Dennison:
Each time-share interval generally is one vote. Although you could have weighted voting based on size and type of unit, if you had a two bedroom it might have more weight than a studio, for example.
Chairman James:
Does this provide for that? Can the time-share instrument provide that?
Ms. Dennison:
Yes it may, and that is a permissive provision of the declaration, or time-share instrument, which can provide for separate classes of voting. It is different from a condominium, when utilities and everything are included in the expenses.
Chairman James:
A vote is a time-share interval. If a developer owns a unit then he owns all of the time-share intervals of the unit, depending on how the intervals are divided. With time-share owners I cannot imagine that they ever attend meetings. Do they attend meetings in person or by proxy?
Ms. Dennison:
I have represented associations where they do attend, but primarily it is through proxies.
Chairman James:
How do those proxies work? Is it the same in Chapter 116 of NRS?
Ms. Dennison:
No, it is not the same as Chapter 116 of NRS in terms of who can receive a proxy. This is one of the issues the industry had with Chapter 116 of NRS, where only relatives or people living on the project can receive a proxy from an owner. Of course, this does not work in a time-share setting. What has been adopted from Chapter 116 of NRS is the language, the 10 percent requirement is in the nonprofit statute, which governs time-shares and other associations (NRS 82.291).
Chairman James:
Who gets the proxies?
Ms. Dennison:
Generally, members of the board put themselves in the proxy, or a blank for whomever they want to appoint. If they know someone else who is actually going to the meeting, then they can appoint that person as a proxy.
Chairman James:
I am trying to ensure that whatever is in Chapter 116 of NRS works in Senate Bill 261, because it is different. Chapter 116 of NRS is where you live, and sometimes it could be in a vacation community, but it is still a second home. A house is a unit, and a unit is a vote. Whereas, this bill is a whole different deal, it has a lot bigger numbers. If you have a thousand units, it is a thousand times 52. It is like dealing with shareholders in a company in terms of voting and quorum. You are saying that you have not modified Chapter 116 of NRS, or have you?
Ms. Dennison:
What is taken from Chapter 116 of NRS is the meat of section 25. What is different is the 10 percent requirement, which comes from the nonprofit statute that makes it consistent with the nonprofit statute as the minimum. The declaration can provide a higher percentage, but, as you say, with so many absentee owners, the association needs to be able to conduct business. If 100 percent show up, that is fine, or if 100 percent give proxies, but you only need 10 percent to conduct business.
Chairman James:
Well, the practical effect of it is the developers will always be able to do everything until they are done. What is the action?
Ms. Dennison:
Majority is the action, and I would beg to differ with you. I have represented associations during troubled times when there are problems, and there have been a lot of people who attend the meetings. You get a lot of proxies, and board members who are owner representatives can solicit proxies. I would not say that always the developer has the upper hand. However, generally speaking that could be the case when you do not have a controversial issue.
Chairman James:
Ten percent of the votes is a quorum, and fifty-one percent of that is enough to conduct business on behalf of the association. I do not know about the cases you are talking about, but I do know that means the developer will control all of the business.
Ms. Dennison:
I am trying to say you may have more than 10 percent, which is the minimum threshold. You may have 60 or 70 percent of all of the owners attend, either in person or by proxy.
Chairman James:
Sixty or seventy percent of all the owners will attend the meeting in person or by proxy, I cannot imagine what you are telling me. I have dealt with these issues before and it seems like that would not happen.
My point is I want to know what protections there are for people who own the time-shares with respect to critical issues concerning the property. The operative effect of these two provisions is, even at a time when private individuals own 50 percent of the project, anyone who controls 10 percent can have a quorum to conduct business, and then 50 percent of the 10 percent can conduct all the business of the company. If these people are from all over, it will be difficult for them to get to the meetings, and it will be the developer who conducts most of the business, if he or she owns 50 percent of the remaining shares, and is guaranteed to have at least 50 percent of the board.
Ms. Dennison:
I think there are two different issues here. One is the election of the board, which we have been through, and is developer controlled until 80 percent sellout. The other issue is voting, where notices of meetings are sent out, agendas are sent out, and people have to choose to participate. If they choose not to participate, then the developer will control the vote on many issues. As the developer sells out, however, it is completely owner-controlled.
Mr. Craigie:
All of the developments, time-share or other types, in the earlier stages, the developer is dominant. We are caught in the situation of the time-shares creating an entity that can reasonably self-govern, and having enough of a requirement so a large enough group of the owners can make a decision on controversial issues. If we set that percentage too high, then you would end up with a board that, in calm times, would not be able to govern at all. You are only looking at one piece of this; there are other parts of the bill that address the concern you have.
For example, up to now there is no requirement for managers to make declarations to the board when there might be conflicts of interest by the management team. We have tried to build in some protections that have not been there, recognizing the very issue that the chairman has brought up, and most people in these time-share groups are absentees who do not participate. But, the combination of the notice requirements and the self-motivation of getting involved when there is trouble should help.
We have to have a system that can operate when people are not motivated to participate, and it has to be a reasonable number. Once the developer gets to the 80 percent sellout level, the 10 percent becomes more realistic for the operation.
Senator Care:
I note in Chapter 116 of NRS the figure is 20 percent. You obviously have reasons for going from 20 percent to 10 percent. I have to go back to the fundamental question of why are we considering this legislation? There may be road developers, and there may be off-Strip properties, I have no idea. I have driven down The Strip, and I know about The Jockey Club and about Polo Towers, but, other than that, I am not sure what is out there. I do not know if you have developments that do not belong to ARDA. But, obviously, there is a reason that you are requesting this legislation. And, what would be helpful to me, is answering how these associations work, or how you want them to work, other than what is in the statute and, also, some kind of “real world” description of what goes on here, and what led you to request the legislation. You do not have to discuss it today, but it would be helpful if I understood.
Mr. Craigie:
We can respond to that. Maybe what we will do is bring together people who are active owners in some of the groups. Also, we can pull together people who are not just involved with “On-The-Strip” type operations, even though those are very important.
Ms. Dennison:
I do believe we have a gentleman who will be testifying, who is an owner and on the board of Ridge Sierra, which is a project at South Lake Tahoe.
Chairman James:
Another area is section 52, and I would like to know what is being done in this section?
Ms. Dennison:
This section is an existing statute which has been modified, that being NRS 119A.380. What we have done is added two new areas, other than the clean up, which you see in the very beginning of this section. Paragraphs (f) and (g) of subsection 2, section 52, both come from Chapter 116 of NRS, as shown on your chart. Paragraph (f) basically deals with reallocation of expenses, if units are withdrawn or added. The second item, the maximum number of time-shares that may be created under the time-share plan, comes again from Chapter 116 of NRS and sets the threshold for the 80 percent turnover. Section 52, subsection 3, provides what can be or may be in a time-share instrument.
Chairman James:
So, there was never before a maximum number of time-share units that could be created under a time-share plan?
Ms. Dennison:
There was never before that requirement.
Chairman James:
So, this would be something that would be required to be provided in the time-share instrument? If it were to be modified, then that would also have to be contained in the statute?
Ms. Dennison:
Yes, to both questions.
Chairman James:
What would be the method and the procedure for modifying it?
Ms. Dennison:
That would be included in the amendment section. I think a very important thing to recognize is the difference between a subdivision project and a time-share project. Every single document in a time-share project is reviewed and approved by the Real Estate Division. The Real Estate Division is charged with looking out for the public interest. If there were an amendment provision unfair to the owners, it would be caught and modified prior to sale of the time‑shares.
Chairman James:
What is the amendment provision?
Ms. Dennison:
It is whatever is put into the declaration.
Chairman James:
Could you amend the 10 percent quorum?
Ms. Dennison:
Generally, I would say the amendment provisions range from a majority to 75 percent in the documents that I have seen.
Chairman James:
Of the total time-share owners?
Ms. Dennison:
Of the total owners.
Chairman James:
But, that is just in the documents. It is not required in the law. So, that is something the Real Estate Division would have to recognize. If you require 10 percent, they would have to say, “No, that is not fair.”
Ms. Dennison:
Yes, and I do not think the developer would want that either, because when the tables are turned, 10 percent could change his project; usually it is a majority.
Senator Wiener:
Just for my understanding, basic definitions of terms here, I notice some places where “project” is stricken and “plan” is put in, and then some places “project” remains. Would you help me understand the scheme of things as I do not understand the consistency or inconsistency of the changes?
Ms. Dennison:
Bill drafting made some of the changes. However, we have a new definition of time-share “plan” in section 17 of the bill. I believe in the existing statute we have a definition of “project.” A project can include more than just a time-share component. A project can have a time-share component and a whole condominium component, even a mixed-use community, which has a master association. I believe that when we are referring to the whole project as the physical real estate, the term “project” is used. Time-share plan refers to the actual time-share regime, whether it is a deeded ownership or a right to use.
Senator Wiener:
Under section 17, when you talk about “shares and the obligations and interests appurtenant thereto,” is it appurtenant to that particular time-share project?
Ms. Dennison:
The plan sets out the rights of the owners to use a certain unit type or amenity. It also sets out obligations to pay assessments to the association. It defines the type of ownership that the time-share owner is going to receive, whether they will have the undivided interest type of ownership, which Senator James referred to, or own an interest in the condominium, or maybe a right-to-use allowance for a period of time.
Senator Wiener:
Again, I am coming back to the time-share “plan” and time-share “project,” project being the bigger universe. Would “appurtenant to” relate to the smaller of the two, or would it be appurtenant to the time-share project privileges, rights, and interests?
Ms. Dennison:
Perhaps the term “appurtenant thereto” could be changed. But, what I think we are talking about is all the rights and all the obligations that are in the time‑share plan.
Chairman James:
Can we go back to section 52, line 12, page 20, where it says, “A time-share instrument may provide for:” and there is new language about allowing certain things in a time-share instrument, and I do not know if it existed somewhere else in the statute. It provides for cumulative voting for the election of members, and the establishments for separate voting classes. Did this practice already exist prior to the language?
Ms. Dennison:
Yes, I believe so. In certain projects, owners have more votes because they pay more dues.
Chairman James:
Then there is a separate voting class for the developer during the development period.
Ms. Dennison:
Once again, I think this is pretty traditional. Senator Care pointed out most time-share instruments do provide for weighted voting for the developer. The Real Estate Division reviews the voting, and if it is unreasonable and does not protect the public interest, then the Real Estate Division can require an amendment before the project is permitted.
Chairman James:
Is that the same kind of separate voting classes that is done in Chapter 116 of NRS?
Ms. Dennison:
No, it is only done for pre-1992 communities, those that existed before 1992, before the Uniform Common Interest Ownership Act.
Chairman James:
It is in time-shares now, but there is no law about it. Why would we need to have a separate class for the developer?
Ms. Dennison:
Again, I think that goes back to Mr. Craigie’s comment, and maybe he can elaborate on it. The developers invest a lot of money in a project, and they want to make sure the project gets off the ground. Also, certain issues are important to the developer, for example, the amendments to the declaration of time-shares. There are certain vested interests the developer wants to protect, which would be the primary reason for the weighted voting. But, it does go away upon turnover of control.
Mr. Craigie:
If I might just point out, that is permissive and it is not required. Some areas will have huge and expensive common areas, and this just makes it possible for them, depending on what the project is, to tailor the mechanism to meet the need I described before. It gives them enough control so they get themselves all the way through to the point where they sell out 80 percent.
Chairman James:
Section 52, line 22, page 20, of S.B. 261 says, “The rule against perpetuities and NRS 111.103 to 111.1039, inclusive, do not apply to defeat any provisions of a time-share instrument.” Why is that language necessary?
Ms. Dennison:
That is simply in Chapter 116 of NRS, and is a carryover. It is a comfort to lawyers not to have to deal with the rule against perpetuities, which is a very confusing concept.
Chairman James:
So, it has not been in this part before?
Ms. Dennison:
No, it has not.
Chairman James:
Then, in section 57, it says, “A person who, on behalf of an owner other than a developer, wishes to list, advertise or promote for resale, or solicit prospective purchasers of 12 or more time shares that were previously sold must: (a) Be licensed as a real estate broker.” That does not mean someone who is selling on behalf of a developer does not have a right to do so.
Ms. Dennison:
That is correct. One selling, on behalf of a developer in Chapter 119A of NRS, has to register as a project broker. That is why the language was included. Developers are regulated under another section of the act.
Senator Wiener:
What is the non-disturbance agreement?
Ms. Dennison:
Non-disturbance agreement is basically a requirement of the Real Estate Division for registering a time-share project. It is commonly given by a lender, but could be given by someone else. Basically, you have a deed of trust on the project, and the non-disturbance agreement states, if the lender forecloses or takes the project back, the deed of foreclosure will allow the time-share owners to remain on the project under their project documents.
Chairman James:
In section 53, subsection 5, of S.B. 261, regarding closing of escrow, is this closing of escrow with buyer, or is this closing some other escrow? At the beginning of NRS 119A.430, to what escrow are they referring?
Ms. Dennison:
This is the language from the old statute and I think it means that no escrow may be closed.
Chairman James:
What escrow are we talking about, escrow with the buyer?
Ms. Dennison:
Escrow with the buyer.
Chairman James:
Section 53, subsection 5, says escrow may not be closed unless the developer has provided evidence to the administrator that, “The developer has obtained and recorded one or more binding non-disturbance agreements acceptable to the administrator, executed by the developer, [and] all holders of a lien recorded against the project.” Then you took out the language: “which provides that subsequent owners or foreclosing holders of a lien take title to the project subject to the rights of prior purchasers provided in the contracts.” What is the reason for that language, just to make it broader?
Ms. Dennison:
The reason for the added language was clearly to make it broader to include anyone who has a superior interest, such as a lessor, if it is a leasehold project. And, the agreement must be acceptable to the Real Estate Division, which must allow the purchasers to remain on the project regardless of a foreclosure or a termination of a lease.
Chairman James:
Is this to address some problem that occurred, what is the reason?
Ms. Dennison:
This was discussed with the Real Estate Division to broaden it out. Some of the language could be added back in, which provides that subsequent owners or foreclosing holders take title, subject to the rights of prior purchasers provided in the contracts. The language could be added back in, this is why the non‑disturbance agreements are reviewed and recorded.
I would like to add one more thing, a correction to section 64. There is an addition to the language, in the statute, which clarifies that any money or revenues collected by the developer buyer on behalf of the association must go into the association’s account. As you are probably aware, developers do collect revenues on time-share interests the developers own, because they rent them out. And, “buyer,” on behalf of the association, is to clarify the revenues collected for the association must go into the associations account.
Joan C. Wright, Lobbyist, Resorts West:
I am here representing Resorts West. I have represented various developers, homeowner associations, and management companies since 1981. I am currently involved with the David Walley’s Resort Hot Springs and Spa. I am a member of ARDA, and assisted in the redrafting of the bill. There has been a lot of confusion with the cross-referencing between Chapters 116 and 119 of NRS. The issues that come up in the homeowner associations, where there are residents and condominiums, are not the same. The kind of protections you want in Chapter 116 of NRS does not work in Chapter 119A of NRS. I think it is a good thing to get them separated. This bill (S.B. 261) may not be perfect and we may be back to make minor corrections next time. However, it is a very good start.
The corrections I thought should be made to section 64 did not get into the bill. I think there are important clarifications and since you are going to make a correction to section 64, subsection 2, you might as well make both corrections at once.
If you look at section 64, there is no requirement for an association. There are situations where there are owners and no association. Clarification is needed in this area of the bill. In subsection 1 of section 64, it should say, when there is no association, it is the owners, not the developer, who adopt a budget. Subsection 2 of section 64 should provide that the association or, if there is no association, the owners provide the opinion from the consultant as to the sufficiency of the budget. In the next clause, where it says “developers,” it should actually say “owners.” You do not want the developer adopting the budget. There is no provision here for adopting a budget when there is no association, and you do want a budget adopted.
One other point, I believe the registration of mangers is appropriate. I am happy with the fact they will make disclosures. But I do not think the bill reads, or the intent of the sections on disclosure is, to have the managers disclose the actual amounts of money they were making in the area. The idea was they disclose to the board, and file with the division, the areas in which they make revenue. It would be the disclosure of the sources of revenue, not the amount they made. These business issues should not become public record, because then the material would be fair game to competitors. I believe the intent is only to disclose the source of the money.
Chairman James:
Where are you?
Ms. Wright:
We are looking at the management section (section 63) of the handout (Exhibit C). Those disclosures are not intended to say we earned $500 from this and $600 from that. The intent was to disclose money was earned from renting, from advertising, or from doing an exchange program. That would then trigger the question, if it were important to the board, of how much was made. But, we do not want that in the public record, which is not fair to the management companies. It will, with the disclosure, trigger the questions whether it is important to the board to ask how much money is being made. The idea being the board then has the ability to negotiate on the renewal.
We asked for these disclosures because we were aware, from the industry connection, there are a number of management companies making money on things that are revenue sources to the associations. The associations were not aware the management companies were making money in that area.
Chairman James:
You are making the case you should not have to disclose the fees?
Ms. Wright:
I am pointing to the case to not disclose the dollar amount in the public record, and the source of the fees.
Chairman James:
Is this an amendment the group you are representing has agreed to by Ms. Dennison?
Ms. Wright:
I believe the party involved in the drafting would agree we were not asking for the number but the source of the income. What the language says is that they will disclose.
Chairman James:
The agreement the project developer or the owner has to enter into with a management company is the written agreement. What Ms. Dennison has added is a provision stating there has to be a detailed, itemized schedule of fees, or other compensation, or other property, the managers received for services rendered from things that could be sources of revenue.
Ms. Dennison:
It is in section 63, subsection 3.
Ms. Wright:
It is a detailed, itemized schedule of all fees. It would be a list of the fees obtained. So, I get rental fees and advertising fees, but I am not going to tell the board how much I make in fees. I do not have to tell them, but I will not get a renewal of my contract if I do not.
Chairman James:
I think you need to tell them. I think it is inherent in what they are saying, and there needs to be a compulsion for you to tell them.
Ms. Wright:
It was not inherent in our discussion when we drafted the bill.
Ms. Dennison:
My recollection of this is it is a controversial area with management companies. And, I believe that ARDA would support the bill without having actual fees disclosed, because we feel it is very important to have disclosure. We do not want to see the whole section of the bill gutted just for this issue. There was opposition by management companies in having to disclose these things, and they have their own reasons. The other side of the issue is how can an absentee board decide which management company it should hire? One management company takes 10 percent, another takes 25 percent; if they have the information they might go with the management company that only takes 10 percent. These people are lay people who are not getting paid for what they do. We are trying to make it easy for them to decide which management company they want to hire. As Ms. Wright has said, they will probably ask the next question, “You said you made money from exchanges or renting. How much are you making?” However, the management company is not required to put it in writing.
Ms. Wright:
Those people who are going to use the figures are the other management companies. The objection to putting the figures in the public record is it makes it anti-competitive. The competitor is the one looking at the figures, not the homeowner association. It is not fair to ask the management companies to put their financial statement in the public record. It is not the competitors’ business. I would not mind disclosing there is a 25 percent rental fee being made, but the question I object to is, “How much is that with respect to the project?” I do not think anyone needs to know what the income is; and they do not need to know it is $25,000 a year. They should know they receive 25 percent on rentals, so they can say this is a source of income.
Chairman James:
Is there a requirement this agreement, which they must enter into, be filed with the Real Estate Division?
Ms. Wright:
This disclosure statement is to be filed with the Real Estate Division; that is the objection. Even if it were a confidential memo given to the board, I would feel better about the numbers.
Chairman James:
Where does it say that?
Joan Buchanan, Administrator, Real Estate Division, Department of Business and Industry:
On page 13, line 16, “The administrator shall adopt regulations describing the form and contents of the disclosure statements . . .”
Chairman James:
“. . . required by this section.”
Ms. Wright:
Section 30 (subsection 1) refers to the disclosure list and says, “. . . that contains a description of any arrangement made by the manager or an affiliate of the manager relating to:” paragraphs (a), (b), (c), and (d). That gets published with the division. If you are saying the section 63 disclosure is something that does not get filed, that is not my understanding. I understood those worked together.
Ms. Buchanan:
The disclosure statement would be part of the record.
Ms. Dennison:
Maybe I can clarify. Section 30 is concerned purely with disclosure. Section 63 discusses what goes into the management agreement, only a renewed management agreement or new agreement after October 1, 2001. Management agreements, as they are amended under existing law, are required to be filed with the Real Estate Division, as are any other time-share documents. If you are amending your documents as a developer, you have to file them with the Real Estate Division. There is a period of time in which the Real Estate Division must approve them, or they will be deemed approved. That is how the information would get into the public record, through the management agreement, not through the disclosure statement.
Ms. Wright:
I was trying to clarify what goes into the disclosure statement. Do you intend for the fees to go into the disclosure statement? A good management agreement would have scheduled fees. Is there anything the division does to keep information of that sort private?
Ms. Buchanan:
Traditionally, any information on file for a time-share is public record. When the real estate brokerage files a financial statement, it is confidential information; therefore specific incomes on an individual project may be deemed private information. The management agreement for community managers requires some specific information, so that all the homeowners know specifically for what they are charged.
Chairman James:
These are two different things. The disclosure statement is not the same as the management agreement; they are two different things. Ms. Dennison is not suggesting any changes in this disclosure statement. It is in the management agreement where you should not be required to include dollar amounts from the fees. This agreement might work if you leave it as it is, but add a separate provision stating, if requested by the owners’ association or the board, fee amounts are disclosed to them. Then, it is not public record. But, the provision clarifies when requested, the board or owners’ association are entitled to receive the information regarding fee amounts. It is not at the client’s discretion. This provision does not have to be changed at all. We can clarify it to say the disclosure statement does not have to include the actual fees. However, it does have to include a detailed, itemized schedule of fees and compensation for different services. Since it is prospective, you will not know what the amounts are, anyway. You will just know you get certain percentages for rental referrals and other things. It is all in the agreement. We can add a provision stating, if requested by the board, you are required to provide them with the fee amounts. The provision could include language to ensure fees do not fall into the hands of competitors.
Ms. Wright:
On what basis would it be the association’s business whether the management company entered into an agreement with a member of the association? For example, what if management were to rent the member’s condominium located down the street? If money is derived from the association, it should be disclosed; however, if money is derived from the manager’s affiliation with the time-share project, it becomes an itemization of the terms. With language such as, “any member of the association,” if the association hired a member, for example, to buy groceries for a week and received a commission, would terms be satisfied? Consider how to keep track if a real estate broker has a listing for the member. Ridge Tahoe deals with 10,000 people; a broker could have a listing with them and deal with several thousand people at a time. Should this be in the management agreement?
Chairman James:
I do not know the answer. The language addresses income derived from the manager’s affiliation with the time-share plan. No matter what the relationship, it would be the business of the board of directors to know the compensation derived from the relationship. The manager hired by the board is placed in a position of confidence and trust allowing the manager to derive the income. It is up to the board’s discretion whether or not they want to allow management to continue to have the income, and they have to know about it.
Ms. Dennison:
The reason “member” was included was the resale issue. If a management company is representing members in the resale of the time-share, they are not handling them for the association. This would be an item disclosed and made part of the management contract regarding the schedule of fees charged.
Chairman James:
If you both can agree, come up with some appropriate language.
Ms. Buchanan:
Regarding section 63, the issue of reviewing the fees, schedules, and compensation and making it available to the people, whose authority must be made available? Is it available upon review? Who is going to enforce it?
Chairman James:
I do not know, but the ARDA hired Ms. Dennison to make sure the language will work. I think it can be put into the agreement to say “by law it is enforceable.”
Ms. Buchanan:
There are many things S.B. 561 accomplishes and updates since the 1983 version. Some controversy created in our office by chapter 116 of NRS we would prefer to eliminate. It does eliminate the regulation, although we do not really regulate, we register time-share representatives. Time-share representatives are the people who solicit on The Strip to get people to attend a presentation, and are paid $20. Since 1992, I can recall two cases where we had a problem with representatives. One problem was with overzealous time-share representatives who would switch prior sign ups for one project out of another person’s hand, and get them to go to a different project. We have no other authority to do anything to these people. They have to be honest and trustworthy. We believe soliciting through the local venues would be more appropriate.
Since 1983 we have had 20,833 time‑share representatives; currently there are 1200 active representatives and the number is increasing with the projects. We have 85 projects in the state of Nevada, 720 time-share agents, and 1232 time-share representatives.
Regarding advertising, we agree it is repetitive to approve every piece of advertising a project uses. The project broker remains bound by NRS Chapter 645 for any misrepresentation. The practice of reviewing every piece of material, charging a fee of $25, and issuing a number is redundant and represents double-regulation.
For the record, S.B. 261 has no fiscal effect on state government; but we have submitted a fiscal note. It does take off some income, as well as not having the time-share representatives, which amounts to about $86,000 a year of income. We would have some income for registering the management companies, which would offset the advertising; there would be no offset on the time-share sales representatives. There would also be elimination of a lot of paperwork and time spent. I think one person does it in 5 hours a day in the Las Vegas office.
Senator McGinness:
I was looking at the fiscal note. It looks like you are losing $81,000 in revenue. Then it shows on expenditure savings only $6200 overtime reduction for licensing staff, and also man-hour savings for existing project section staff. You indicated one person in Las Vegas spends 5 hours a day on this; there should be more savings.
Ms. Buchanan:
What we did in this particular area is absorb the increase over the current year for staff load. Eliminating this paperwork means staff could keep up with the current workload. We could pencil that out for the 5 hours a day, but to eliminate a position would be difficult.
It is very important to have some kind of registration for management companies. They are starting to mature, and we need to be proactive. This represents a beginning, but the reserve study will be beneficial to look at the foreclosure process from the management company to the resale, and it will allow us to do that. NRS 119A.660 gives more authority to act if something is wrong. This registration will help move the process along to where it needs to be, and will affect ongoing projects.
Foster Mullen, Cochairman and President, QM Corporation:
We are a developer of time-shares in the Reno and Lake Tahoe areas. I am also cochairman for ARDA of Nevada. We represent Hilton, Marriott, Fairfield, and Century 21.
My reason for testifying today is members of the association have seen the bill and agree it is something to be moved forward. In past years we have been governed under NRS Chapter 116, which is evolving and changing at a rapid pace. In previous sessions, there were some changes in regard to homeowners living on their property, being able to serve on a board for 270 days. This is impractical for time-share owners to do, since it would limit other members from staying at the resort.
Today we are asking for a hard look at the differences and to separate the “apples from the oranges” and appropriately place them. There are also some questions regarding who would govern the time-share representatives. Those people are still employees of the project broker. The project broker is responsible for any solicitation or advertisement. The developer of a project also has employees or staff who are still responsible to him and to the Real Estate Division for what they say and do.
Chairman James:
Could you have an independent contractor do it, and then you could have a “firewall” there?
Mr. Mullen:
No, those people would still have to be your responsibility, because it is your advertisement and solicitation. As a broker and a developer, you are accepting responsibility for your project and all advertising of the project, whether or not you are doing it through an independent contractor. Just as all brokers deal through independent real estate agents, you are responsible for what the real estate agent does and says. The other thing is we have to get a business license for any areas in which we operate. So, we are required by the cities to have business licenses. We also have to follow their regulations. There are some mechanisms in place as far as what those people can and cannot do.
In regard to your questions on class A and class B voting rights, most declarations state the reason for the different classes. The developer usually has class B voting rights, which do not allow him to diminish the rights of the homeowner. The developer has control of the project from the beginning, but every person who buys a time-share in a project has rights, which cannot be diminished by what the developer decides or how he votes in the future.
John Holmes, Concerned Citizen:
I am here representing myself, and the board of directors for the property owners association of the Ridge Sierra in Stateline at Kingsbury Grade. I have been on the board for 13 years, and an owner for 17 years on this project. I fully support S.B. 261, as it is badly needed. Needless to say, in the last session, I found difficulty with one of the bills requiring members to live at the resorts for 6 months to be on the board. Some of the provisions were for a live-in condo instead of a time-share condo. However, the way they were worded would have effectively shut down all of the homeowner associations and time-shares. Confusion existed after the bill was clarified. Shortly after the session was over I received a letter saying I owed the Real Estate Division a sum of money for the portion of the legislation that very specifically exempted time-shares. When I called the division, they had no way of distinguishing a time-share organization from a live-in organization. I cannot tell you how excited I am to see this go through getting us separated into two sections.
This confusion has gone on for some time; therefore, I pushed very hard to get the funding for a rewrite through ARDA. We hope this will separate us into two types and in the future it will be much easier to modify either one, independent of the other. There is always a saying in this Legislature, “This is a small bill,” and everybody grits his teeth. This one is not a small bill; it is not controversial; and it is rather dull reading; but it is very important to us, and I hope you will give it very careful consideration.
There were questions about the proxies. My experience is at any given board meeting 30 percent of ownership is represented by either their presence or by proxy. Previously testimony stated when things are going smoothly, the board outnumbers those sitting in the audience. The lack of attendance is an indication of how smoothly things are running. However, when there is a problem, they are there.
Another concern regards developer control. I understand your concern but my opinion is it is not a big concern, except in the initial development state when the developer needs control. As a resort develops, it rolls rather quickly as it sells out. Our resort, for example, is sold out; the board consists of all owners except for one who is a member of the management team.
Chairman James:
Where is Ridge Sierra? When was it developed?
Mr. Holmes:
It is at Stateline, right at Kingsbury Grade. It was developed in 1983.
Chairman James:
My concerns are with new developments, and the proper phasing of developer control versus owner control. I am still not comfortable with the provisions of S.B. 261; I need to study them more and talk to the attorney. I understand your position; when the development is sold out and the owners are in control, the dichotomy is gone and the development must self-govern.
Mr. Holmes:
I was in the minority position as one of the first board members. I understand your concern. Fortunately, in our case, we did not have someone who was trying to take advantage of us, and we had a good working relationship.
Chairman James:
We have reputable people who want to self-regulate and do a good job. But the bills have to be written so if it is a booming area, and the unscrupulous come in, there are protections. The provisions might be fine, but I want the requirements to work for time-shares the same way they work for a normal live-in project.
Steve Cloobeck, President, Diamond Resorts International:
We are the developers of The Jockey Club and Polo Towers which have over 39,000 homeowners. Diamond Resorts has been in business for over 24 years and is the oldest operating time-share company in the state of Nevada. We are very proud of the bill (S.B. 261) before you today; it has been many years in the making. We have been involved in every aspect of the changes in the law as it comes to you today. In past sessions the resale law was passed, and now this legislation incorporates some of those laws in regard to management companies.
I am very concerned about the testimony attempting to avoid protecting consumers in regard to management companies and the fees that they charge. I urge the senators to really understand we want the consumer protected and one way to accomplish this is to understand it is very important management companies fully disclose their fees. Please make sure the consumers are protected.
With regard to members on the board, we have governing boards for over 27,000 homeowners at Polo Towers; the Jockey Club has over 14,000 homeowners. We have successfully brought time-share owners onto the board and we have tried to educate them, because we know one day we will not control the board.
We did run into a problem, and perhaps S.B. 261 will take care of it. A management company comes in and works with a board and makes decisions that do not meet the standard required by law in the state of Nevada, and we, as the developer, are no longer involved. For example, currently there is an assessment proposed by the management company at The Jockey Club. The management company did not suggest the board take a vote. The passage of S.B. 261 in particular will allow the Real Estate Division to effectively govern management companies. The Real Estate Division needs support in this area to enforce the rules and regulations of the state.
Chairman James:
We will close the hearing on S.B. 261, and open the hearing on Senate Bill 375.
SENATE BILL 375: Clarifies statutes concerning murder. (BDR 15-465)
Ben Graham, Lobbyist, Clark County District Attorney:
I am going to beg the chair’s indulgence to make a brief introduction, and then turn it over to the expert in this area. I have with me, David Schwartz, chief deputy district attorney in the Clark County district attorney’s office. For the past 15 years he has primarily done first-degree capital murder cases. That seems to be the issue of the day, and this is a bill being brought by the district attorney’s association and the Clark County district attorney’s office. It addresses what we see as confusion, and further, confusing the instructions for first-degree capital murder. We are asking the committee to take a look at it.
David Schwartz, Deputy District Attorney, District Attorney, Clark County:
Mr. Chairman and members of the committee, I would like to speak on behalf of Senate Bill 375. Going back to 1926, there was a decision dealing with first-degree murder. When we talk about the deliberate killing as opposed to the felony murder, first-degree murder has always been defined as the willful, premeditated, and deliberate killing of another individual. We never really separately defined “premeditated” and “deliberate” prior to the Byford [Byford v. State, 116 Nev. 215, 994 P.2d 700 (2000)] decision rendered last year.
In the Byford decision, the majority of the Nevada Supreme Court, with Justice Maupin dissenting, said that, in the future, the district courts must give an instruction on deliberation, which reads as follows:
Deliberation is the process of determining upon a course of action to kill as a result of thought, including weighing the reasons for and against the action and considering the consequences of the action.
A deliberate determination may be arrived at in a short period of time. But in all cases the determination must not be formed in passion, or if formed in passion, it must be carried out after there has been time for the passion to subside and deliberation to occur. A mere unconsidered and rash impulse is not deliberate, even though it includes the intent to kill.
Prior to the Byford decision, we instructed juries on premeditation as a “designed determination to kill, distinctly formed in the mind, by the time, or at the time, of the killing.”
Chairman James:
Is deliberation in the law separate from premeditation, or is deliberation what has to happen before you can premeditate?
Mr. Schwartz:
As of the Byford decision, our supreme court has defined deliberation and premeditation separately, as two different elements. I think prior to the decision they had been one element. Justice Maupin gave the dictionary definition. Basically he said there was no meaningful difference between premeditation and deliberation. He defines premeditation, through the dictionary, as “to think, to consider, or deliberate beforehand.” What I am concerned with is the definition our supreme court has given us on deliberation; it is confusing.
Lawyers are going to disagree on what it actually means; and we are not expecting jurors, many of whom are seeing the criminal justice system for the first time, to understand what is meant by this definition. When we look at the cases, the cases I have been involved in, killers do not weigh the consequences of what they do. They do not put on one side the reasons for killing somebody, and on the other side the reasons they should not kill the person. They kill because they want to kill. I think some jurors might think, by reading the definition, it requires some planning. As a result of this definition, I believe we are going to see fewer first-degree murder verdicts, which is probably the reasoning behind the defense bar’s trying to get the Supreme Court to define deliberation. In 1995, the penalties for first-degree murder were doubled; they went from a 10-year minimum to 20 years, without a weapon, and doubled if a weapon was used. Because of the serious consequences for committing first‑degree murder, my feeling is the defense bar has been trying to get this line drawn between first- and second-degree murder.
Chairman James:
Where did the court’s formulation in Byford come from?
Mr. Schwartz:
I was looking for a decision they were relying on, and I thought perhaps in California. But in reading their decision, I do not know where they got the formulation. I am sure other jurisdictions might define deliberation, and that may be where they obtained it.
In our cases, prior to Byford, from 1926 through 2000, in Briano [Briano v. State, 94 Nev. 422, 581 P.2d 5 (1978)], we had, “The state must prove that a design to kill was distinctly and rationally formed in the mind of the perpetrator at or before the time the fatal blow was struck.” As long as that instruction on premeditation is given, it is not necessary to separately define deliberation. That is what they said in Briano. However, in the year 2000, we needed to change 70 years of law to add this definition, which is confusing.
Chairman James:
Have they overruled the prior decisions?
Mr. Schwartz:
I do not know if they used the word “overrule,” but they basically said the decisions were inappropriate, and deliberation should have been separately defined from premeditation. The correction is going to be made through Byford.
Chairman James:
The reason I asked is that I remember taking criminal law in law school, and they talked about murder and the concept of premeditation. As soon as the lay person hears the word “premeditation,” he or she starts thinking about someone who sits down with a piece of paper and says, “I am going to leave at 7 a.m. and travel here.” What they try to teach you is that is not premeditation. And, they give you a case in which one guy has another guy down on the ground, and picks up a rock and hits him over the head. From that case, you learn the premeditation was picking up the rock and the decision was to hit the person with it. That is all that is needed for premeditation, and it can be instantaneous.
I thought that premeditation was a settled area of the law; it can be instantaneous. What they are saying in this bill is it is reflection and judgment of any duration, any time before or at the time of the killing; so, you do not come up with the concept that deliberation has to be something that happens before you act. You could walk into this room or into a restaurant with no intention to kill anyone, and then kill someone through premeditation.
Mr. Schwartz:
Our current definition, because Byford did not address it, is premeditation can be as instantaneous as successive thoughts of the mind. As long as you make a conscious decision to kill somebody, right at the very moment, it is enough for premeditation. We put in this proposed bill, “reflection.” In Byford, they wanted to take out “deliberation.” We hope “reflection” will satisfy that. It seems to me the definition the supreme court has placed on us is confusing, and is certainly going to impact us in terms of verdicts for first-degree versus second-degree murder.
Senator Titus:
It seems by taking out the word “deliberate,” you are trying to get around the Supreme Court decision. You trusted the Supreme Court since 1926 when it was going your way, but once it decided not to go your way, you want to change the law. Is that what you are up to?
Mr. Schwartz:
I think, what my concern is if they want to leave deliberation in, the way it is written now, it is very confusing. It was never defined for 70 years. They always said premeditation and deliberation are one concept. Now they have decided to break it into two concepts.
Senator Titus:
And, you want to do away with one of the concepts, thereby overturning the Supreme Court decision with this amendment. Is that right?
Mr. Schwartz:
Changing the decision as it defines first-degree murder, yes.
Senator Care:
If we enact a bill the way it is drafted here, what is the effect? I know in civil litigation we submit standard jury instructions. We cite the source of the jury instructions. The way the court has written this, however, it says, “Accordingly, we set forth the following instructions for use by the district courts.” Do you mean right now it is mandatory, and the language has to be included in the jury instructions? So in effect, what we would be doing if we adopt this bill proposed today would be to say that is no longer a jury instruction.
Mr. Schwartz:
Or, we would be going back to where we were in defining first-degree murder as in this proposed bill.
Senator Care:
It may be confusing, but if we strike the word deliberate, then where does that leave the court’s discussion in defining what deliberation even is? How does it become a part of jury instructions, or what a jury would consider?
Mr. Schwartz:
Our supreme court in the past has ruled that premeditation and deliberation are one concept. You defined premeditation as, “determination to kill distinctly formed in the mind before or at the time of the killing,” and the word deliberation is not used. Or you can say premeditation and deliberation are one concept. I think the way it is defined here the weighting process is not the real world. Jurors are going to read this and think a list of what has been done is needed. Did the person think about what they were doing? Did they plan this?
Chairman James:
That is why I asked if any other state has the formulation contained in Byford, pages 15 and 16, of the decision. Do any other states have that formulation as part and parcel of the requisites of a first-degree murder?
Mr. Schwartz:
I do not know.
Chairman James:
I think the committee would like to know.
Mr. Schwartz:
I would like to give you a few examples of cases I have been involved in where this instruction might have changed the result. Several years ago, David and Gilbert Agular, were in an apartment complex in Las Vegas firing assault rifles in the air. An individual, Mark Aminson, was on his ground floor apartment patio; he had a cell phone in his hand. As he was calling 911 to report the shootings, he was killed. When Mr. Aminson’s wife saw what happened, she reported Gilbert Agular was standing outside her residence with an assault rifle. The jury convicted Mr. Agular, but I wonder having this instruction, did Mr. Agular weigh the consequences of his actions? Did he think if he shot someone what would happen to him? The instruction would confuse a jury.
Chairman James:
I think clearly under this decision, the case would not be first-degree murder. Because the decision reads, “a mere unconsidered and rash impulse is not deliberate, even though it includes the intent to kill.”
What I remember from law school, that would be premeditated murder. Even though it was instantaneous, you had to decide not to shoot the gun in the air, but to instead shoot the man. Otherwise, you go back to the cases like torture, lying in wait, and poison, which are the other ones in that section. You would have to show the jury some plan or scheme that was carried out.
Senator Care wants to know about the change in the definition of murder in the second-degree, which is the other part of the bill.
Mr. Schwartz:
As it stands now, second-degree murder is found in various parts of the statute. We have decided to make it clear and to easily find, and we would just put it in the same statute altogether. Therefore, there is second-degree murder, second‑degree felony murder with a reckless action with disregard for life, or, if not first-degree murder, it would be murder, then second-degree murder. We wanted to have it all together, but nothing has changed in terms of definitions.
Senator Care:
I would like to see your responding brief, and the appellant’s brief as well. I am going to have to sit down and read what the parties wrote. I have looked at Justice Maupin’s dissent, and I understand the argument.
Senator Wiener:
Please explain, “is committed in the prosecution of a felonious intent,” on page 2, line 7, of S.B. 375.
Mr. Schwartz:
There are certain killings for which you do not have to prove premeditation. If a killing occurs during a burglary or sexual assault, they call them “enumerated felonies.” If those killings occur, it is automatically first-degree murder. Those felonies not enumerated in the statute fall into the second-degree felony murder concept.
James J. Jackson, Lobbyist, Nevada Attorneys’ for Criminal Justice:
We have with us today Howard Brooks, Attorney, Nevada Attorneys’ for Criminal Justice who is also a Clark County public defender. Mr. Brooks will briefly discuss some of Nevada’s history concerning the definition of the first-degree murder. We also have, in Las Vegas, Professor Chris Bryant, who is with the William S. Boyd School of Law, University of Nevada, Las Vegas. Professor Bryant is with us to discuss some of the common law history, and the state of the law concerning the laws defining murder; also, JoNell Thomas, Lobbyist, President, Nevada Attorneys for Criminal Justice, and Michael Pescetta, who I consider Nevada’s expert on criminal defense issues in relation to any issues involving murder cases or appellate issues surrounding them.
Mr. Chairman, we all rise in opposition to this bill. As Senator Titus so ably pointed out, this statute has been well reasoned and in place for many years. It was the unanimous opinion of the Nevada Supreme Court, of each and every justice sitting on the court, which affirmed Justice Shearing’s opinion with respect to the changes in the deliberation aspect of our murder statute, with only a minor discussion by Justice Maupin as to how he might phrase the jury instruction. It is testimony to the fact that our supreme court did affirm the conviction of Mr. Byford, but felt the lines had been so blurred between first- and second-degree murder it did require, in our evolving state of law, the state to be put to the burden of proving each element of our first-degree murder statute. The Supreme Court simply said deliberation is an element and must be shown. It then becomes a question of facts the prosecution will present for discussion and explain how the deliberation occurred. It is important to note that in the Byford case, ample evidence of deliberation was presented, and the Supreme Court upheld the conviction.
Howard S. Brooks, Deputy Public Defender, Public Defender, Clark County:
I have worked on about 50 murder cases in the last 6 years, and have done 11 murder trials in the last 5 years. If we look at the history of homicide and first-degree murder in this state, and go back to 1865, the first homicide statute established the same test which exists today; it was willful, deliberate, and premeditated. They established three elements for first-degree murder. Since 1865 every single statute has repeated that test. For the last 135 years the Nevada Supreme Court has consistently used these elements as the basis for interpreting first-degree murder law. The question is why do we want to take 135 years of jurisprudence and toss it aside? Senator Titus and Senator Care were absolutely correct. What has happened is we have the Byford case, and the district attorneys do not like the decision. I would submit to you that Byford clarifies much more than it confuses. I would also say jury instructions tend to be confusing, in any event.
Byford settles an issue that has been going on for 20 years. For the last 20 years, the Nevada Supreme Court has consistently taken homicide law and shifted it more and more in favor of the state. The primary way they have done this is by taking premeditation and defining it as something that can arise in as little as instantaneous, successive thoughts of the mind. In countering, the defense community has said, “If we are going to define premeditation, let us define deliberation as well.” That is what the argument has been about for 20 years.
I disagree with Mr. Schwartz’s characterization that the Nevada Supreme Court has been firmly committed to saying premeditation and deliberation are simply one thing. They are not. There is substantial case law defining both. However, in recent years, the Nevada Supreme Court has seemed to say it is okay not to define the deliberation, and to just define the premeditation. I find, in conversations with the justices, they understand this is a problem which has blurred the distinction between first-degree murder and second-degree murder.
Mr. Brooks:
What Byford does is simply say, “We are going to define premeditation and define deliberation.” If you look at the instructions in the Byford case, they have in there the instructions favorable to the state on premeditation. But, they have simply added a definition defining deliberation. I would just tell you, I find it amazing that anyone could believe there is going to be a dramatic shift in what happens in the courtroom based on the Byford decision. Since Byford has come out, the conviction rate has not changed substantially. I have done five murder trials since Byford, and in four of the five the jury came back with first-degree murder. I will tell you in this state if you go to trial, the chances are overwhelming you will be convicted of first-degree murder. Byford allows the discussion to concentrate not only on the quantity of time, but also focuses on the quality of the fault.
It is frustrating to us, because in our cases most killings occur as a result of anger, rage, or intoxication. I submit that when you look at the quality of the fault, which is what we want to punish, it is important to try to consider whether deliberation occurred. Byford simply restores a playing field that is much more fair. For the origin of the Byford instructions, the best person to address that is David Schieck in Las Vegas.
Chairman James:
The word “deliberate” is also used in the definition of malice, which is applicable to all murder, correct?
Mr. Brooks:
Are you talking about the language in the bill proposed by the state?
Chairman James:
No, I am talking about the language in the statute, “Express malice is deliberate intention unlawfully to take a life.” Does that require deliberation?
Mr. Brooks:
I think it requires the intention be deliberate.
Chairman James:
Then, you would never have a murder unless there was some weighing of the consequences, because you would not get to the first-degree or second-degree question. You would not have malice; you would be in the manslaughter statute.
Mr. Brooks:
We have had the “deliberate” language out there for juries for years, and the convictions come back over and over again as first-degree murder.
Chairman James:
But now we have defined “deliberate.” There are two kinds of words; there is “deliberate” (the adjective) and “deliberate” (the verb). Which one are they defining?
Mr. Brooks:
In the statute, in terms of willful, premeditated, and deliberate, it is used as an adjective.
Chairman James:
It is the quality of the act, rather than to deliberate.
Mr. Brooks:
Correct.
Chairman James:
Is the Byford case saying the person needs to deliberate about the crime?
Mr. Brooks:
I think they are saying there has to be some element of deliberation in there, but this is something we argue in every case. When you are at the same time telling the jury premeditation can arise in as little as successive thoughts of the mind, you have an invitation for them to assume deliberation did occur. This simply is putting the brakes on that a little bit and suggesting you try to look at both sides. We want to punish people when they have actually thought about something, and I am not sure they have to be thinking for a long time. However, there has to be some thought.
Chairman James:
Well, what about the guys that were firing guns in the air outside of an apartment complex, and the man who goes outside to see what is going on and gets shot?
Mr. Brooks:
I have had that case twice now, and both times the verdict came back first‑degree murder.
Chairman James:
And you used the Byford instruction, which says you have to have a weighing of the consequences?
Mr. Brooks:
We had to use the word “deliberate.” I cannot recall whether I had the specific delineation of deliberation, but we certainly had the “deliberate” there. I argued to the jury, in both cases, that deliberation requires some fault. I lost both cases, as we are losing now, since Byford.
JoNell Thomas, Attorney, President, Nevada Attorneys’ for Criminal Justice:
Mr. Pescetta is prepared to address your question regarding the definition of malice. Byford makes sense. We have first-degree murder and we have second-degree murder, and there should be a clear distinction between the two concepts. The punishments vary drastically between those two offenses. The way it was before Byford, and the way it would be under this bill, is there would be no meaningful distinction between first- and second-degree murder.
The distinction is essential for a number of reasons, and it is for those reasons I repeatedly raised the premeditation and deliberation issues before the Nevada Supreme Court in the capital and murder appeals I routinely handle. There is a due process right, an equal protection right, and the right to be free from cruel and unusual punishment, all of which are implicated by definitions when there is no clear distinction between first- and second-degree murder.
Basically, what this comes down to is the question, don’t we want to punish people more harshly when they have the opportunity for reflection and decide to go ahead on a course of action of killing someone, as opposed to a person who acts out of rash impulse? I think we need to keep in mind that second-degree murder in this state is not a walk. People are not let out on the streets when they are convicted of second-degree murder. In 1995, you doubled the punishment so it is 10 years to life. In this state, I submit, it is virtually impossible to commit a murder without receiving a deadly weapon enhancement. What this does is prohibit the imposition of the death penalty in cases of second-degree murder. Right now, Nevada has the highest per capita rate for the death penalty in the country. In last year’s Columbia study (“ABroken System: Error Rates in Capital Cases, 1973-1995,” a study headed by James S. Lieberman of the Columbia School of Law) the graphs showed the incredible rate at which we impose the death penalty above other states. If we take away the distinction between first- and second-degree murder, we only open the door for more people to be eligible for the death penalty. It is for that reason I believe there is a strong fiscal impact as well to this bill.
The bill indicates there is a fiscal impact for the state, but does not indicate there is an impact for the local communities or counties. I believe that is wrong. I believe the district attorney’s office, the public defenders, and the court system, through the court-appointed attorneys, will incur significant increases in cost if second-degree murders are allowed to become capital cases.
Chairman James:
Is this going to be an impediment to a first-degree murder conviction, if you have this instruction? Because, when you have someone who beats and kills his wife, the deliberation being imputed by the law also says you have to have weighing, but in no cases can the determination to kill be formed in passion. You need to have this reflection process. So, that is going to give the defense the argument it was a passionate act and second-degree murder. It is murder, but it is not first-degree murder. I am worried about those cases, and I am worried about the case where people have weapons available to them and make the determination to use them that is not part of any plan or weighing process.
Ms. Thomas, you talk about the need for a specific requirement there must have been some reflection before you go to the next level of punishment. But, we are still requiring premeditation. I think all Mr. Schwartz is talking about is the premeditation concept. The fact you can instantaneously premeditate is included in that concept. If we overlay something more on it, you are going to get more reticence by a jury to say there was first-degree murder.
Ms. Thomas:
Mr. Chairman, for decades criminal defense attorneys have been arguing in domestic violence situations, “in the heat-of-passion,” urging voluntary manslaughter convictions based on the heat-of-passion language in the statute. For years juries have been telling us, “No. There was a time for reflection and a time for thought,” particularly in situations where there are aggregated disputes over a period of time, where there have been heated battles and police have been called out and perhaps people have gone through domestic violence training as a punishment. The prosecutors would argue, and rightly so, there has been a time for reflection throughout those moments. I do not view the Byford decision as adding anything new to the murder statute; I think it simply clarifies.
What I do not understand is the premeditation and forming thoughts as successive thoughts. I have never exactly understood what that meant. I have watched trials where they have argued there were six shots and there was a pause of 3 seconds between shots two and three; therefore, there was time to think. I think it is only muddling the concept of malice with the concept of premeditation and deliberation. It is as if the preface “pre” has been taken out of the term. I do think we, as a society, should be more offended by people who have considered thought and the ability to think through a process. The instructions in Byford say that does not have to take any time at all. The idea this is only going to happen when someone takes out a piece of paper is ludicrous. In the last year, there have been many first-degree murder convictions, and I have yet to hear when anyone plotted it out on a piece of paper. Aside from that, there have been a good number of first-degree murder convictions. I think this makes sense, and provides a rational distinction between first- and second-degree murder. Also, I think it provides a rational distinction between malice and deliberation.
Senator Care:
I was wrong, Justice Maupin’s opinion was concurring, not dissenting. At any rate, he cites the jury instruction in the case and talks about premeditation, “It need not be for a day, hour, or minute.” You could almost say the same thing about deliberation. I am curious to know, in the cases you have tried since Byford, when you have lost, and where all melded together as the events seem to be so fast-paced people have difficultly making the distinction between the two, have you had an opportunity to interview the jurors?
Ms. Thomas:
Senator Care, I would defer that question to Mr. Brooks. I am an appellate attorney, and I rarely try cases. I read transcripts and discuss cases with other criminal defense attorneys, but I believe Mr. Brooks could answer the questions.
Mr. Brooks:
Yes, I have had the chance. What has always happened in these cases is the state uses the “successive thought of the mind” instruction to pound in the idea that, if there is any kind of delay, it is when the premeditation and deliberation occur. In my last case involving this issue, my client shot the guy five times, and the state argued that the time involved allowed the premeditation and deliberation to occur. The jury had no problem with that idea. They are generally going to go with the state on that question, which is one reason I find it so odd they are so concerned with the deliberation issue, because it is not changing results in murder cases.
Michael Pescetta, Assistant Federal Public Defender, U.S. Department of Justice:
I am an attorney, and practice exclusively in capital cases. I am also an assistant federal public defender, but I am not appearing as a representative of the federal public defender. I would like to make a few brief points.
In answer to the chairman’s question about the malice definition, the distinction between murder and manslaughter is malice. Malice is the intent to unlawfully kill. The fact it is called “malice of forethought” is a vestige of early English practice. It does not mean thinking about it beforehand. The word deliberate in the malice statute simply means intentional, not unintentional. The difference between deliberate, and an act that is deliberate, is in the sense that “I did not mean to do something else,” as opposed to deliberation which means “I considered and thought about it.”
Premeditation and deliberation are the distinction between first-degree and second-degree murder, except in felony murder situations. The constitutional arguments we have been litigating for the past 10 years leading up to the Byford decision is there are federal constitutional difficulties and state constitutional difficulties with saying there is no distinction between first- and second-degree murders. In a case tried by Mr. Schwartz, one of the prosecutors stood in front of the jury and said, “If I point a gun at you and as I pull the trigger I form the intent to kill you, that is premeditation and deliberation.” Our argument has always been: What is the difference between pure intent to kill, and premeditation and deliberation, for first-degree murder. It is our position that, constitutionally, although the Byford decision was not cast in constitutional terms, it was the recognition of the Supreme Court that there has to be a rational distinction. There has to be a determination by the jury of the difference.
The questioning has been directed to the fact this is a jury question, a question of fact. What the instruction allows of the state and the defense to argue is, under the circumstances of this particular case, the individual did or did not deliberate. Ultimately, the jury is going to have to make that distinction in every case. It is our position the Byford decision clarified what the factors are the jury has to consider, which is, did the person reflect? In the example given by Chairman James, if someone is just shooting a gun and sees someone move, and reflexively shoots the person, is that premeditation and deliberation as opposed to that person saying, “I see someone; maybe it would be a good idea to shoot the person instead of into the air.” That would, under this instruction, remain a jury question.
The brief we submitted to the Supreme Court in the Coleman case, which contains the constitutional arguments, is going to be submitted to the committee by Ms. Thomas. Another point in the Byford instruction raised by Chairman James is, although it is not identical to other states’ instructions, it has elements taken from the standard California Jury Instructions, which have been in use for 30 years on premeditation and deliberation. The rule of law encompassing premeditation and deliberation requires something more than instantaneous thoughts of the mind, [and] is the law in every American jurisdiction. The former instruction used before Byford only had the “instantaneous-thoughts-of-the-mind” language, and was not used in any American jurisdiction. In every jurisdiction where it has been litigated, it has been rejected.
Chairman james:
What has been rejected?
Mr. Pescetta:
The instantaneous-thoughts-of-the-mind language was rejected where the question of jury instructions confused the distinction between first- and second-degree murder by reading out the “pre” in premeditation. There are two cases, State v. Brown from Tennessee, and State v. Midgret from Arkansas, cited in the Coleman brief. They are the most recent cases in which courts from other states have found a jury instruction has to explain to the jury there is a distinction between first- and second-degree murder. How the jury works with the distinction in a particular case is up to them.
Chairman James:
Do you disagree with this definition of premeditated where it means the intent to kill is formed in the mind of the perpetrator after a period of reflection and judgment of any duration at any time before or at the time of killing?
Mr. Pescetta:
Yes, once you have preformed the intent and once you have thought and deliberated about it for any period of time, and you act on it instantly, it can follow as “instantaneously successive thoughts of the mind.” You have thought about it before and then you have shot. That is the distinction which is sometimes confused, because you do have to take some period before you act, but the period can be very short. However, you do have to think and deliberate to turn it over in your mind at least once. It would be the decision to kill, as opposed to drawing back and not shooting. Once you have formed that intent, the period of deliberation, then you can act on it immediately and it remains premeditated.
Chairman james:
But, is the word “deliberate,” as used in 200.020 of NRS and 200.030 of NRS, the same word, meaning intentional?
Mr. Pescetta:
I do not believe so.
Chairman James:
Has any other state that has words, “willful, deliberate, and premeditated” killings gone off on this definition of “deliberate?”
Mr. Pescetta:
No, Mr. Chairman, as far as I am aware, any attempt to take the deliberation concept for first-degree murder was imported back into the malice definition.
Chairman James:
No, I am not talking about that. Has any other state focused on the word “deliberate,” the verb?
Mr. Pescetta:
Yes, for purposes of the first-degree murder. Those are the cases cited in the brief in which they say, “Yes, it has to be before you commit the act.”
Chairman James:
Premeditation or deliberation?
Mr. Pescetta:
The premeditation is the before element, the deliberation is the concept of thinking about it to some extent.
Chairman James:
I would like to have the law from all the other states on this issue. Show me the cases where they have separately defined this concept of deliberate, as being necessary for premeditation. I think the word “deliberate,” as used in both of these statutes, is the same; it means intentional. Premeditate is when you have to have the thought ahead of time. Premeditation is good enough to encompass all the thought you need without importing the concept of deliberation as being a weighing process.
Mr. Pescetta:
I would agree it is not crucial to which of the words you attach the concept. What is crucial is it is there. The problem with premeditation, as it has previously been defined without consideration of the deliberation concept, is that it is the successive thoughts of the mind. There is no “pre” in premeditation as it has been previously used.
I would like to make one point on the second-degree murder section, section 2. In his testimony, Mr. Schwartz was referring to the second-degree felony murder rule, which is for non-enumerated felonies. The second-degree felony murder rule has been murder in the commission of felonies which are inherently dangerous to human life, and is the standard definition. Section 2, subsection 2, paragraph (a) of S.B. 375, says it is not first-degree murder if it: “(a) Occurs in the commission of an unlawful act, which, in its consequences, naturally tends to destroy the life of a human being,” and (b), “Is committed in the prosecution of a felonious intent.” This section adds all felonies to the second-degree felony murder rule, not just those inherently dangerous to human life.
Chairman James:
I am not interested in expanding the felony murder rule. What interests me is the definition of premeditation.
Aaron C. Bryant, Assistant Professor, William S. Boyd School of Law, University of Nevada, Las Vegas:
I want to say that I am here expressing my own views, not those of the law school. I would like to make a few historical points, and then answer some of the questions raised.
First, Mr. Brooks sold short the full story of the history, which is deeper than he has suggested. The first jurisdiction ever to differentiate between first- and second-degree murder was Pennsylvania, which in 1794 adopted the precise language currently in the Nevada Revised Statutes defining first-degree murder as willful, deliberate, and premeditated. So, it actually goes back much further than 1865. The language came to dominate the definition of first-degree murder in a vast majority of jurisdictions in the United States. Nevada followed suit in that regard. I may have to take issue, Mr. Chairman, with your recollection from law school. I teach criminal law, and we talk about the distinction between first- and second-degree murder, and the meaning of premeditation. You are right; some jurisdictions have defined premeditation in a way to effectively equate premeditation with the intent to kill; but it is not settled law. There are a significant number of jurisdictions which have expressly rejected that approach, and have held it is an improper interpretation of the language.
I have been learning from a couple of reference materials and am happy to share them with the committee. Volume 36 of the American Criminal Law Review, page 145, includes a full-length article on premeditation and deliberation; it talks about the evolution of the law. Also, the article makes clear a number of jurisdictions have indicated something over and above intent to kill is required to satisfy the premeditated and deliberate murder standard.
I want to emphasize those jurisdictions that have read premeditated and deliberate requiring something over and above an intent to kill, are reading the statute pursuant to a well-settled rule of statutory interpretation stating you are to assign an independent meaning to every word in the statute. If we were to adopt the view “deliberate” and “premeditation” are the same thing, there would have been no reason to have written the statute the way it was written. It could have simply said “willful and premeditated.” There is a rule of statutory interpretation stating, “If at all possible, assign independent meaning to every word in the statute.” Pursuant to that canon of interpretation, the Nevada Supreme Court held in Byford, “deliberate” could not have been read out of the statute as the court’s instruction had done, and required some meaning be given to deliberation.
I want to talk about the impact of Byford. In Byford’s definition of deliberation, I am not sure what the court was looking at when they were deciding. But I can cite other places where the same language has been written into the law. New Mexico adopted, in the Garcia case, a definition of deliberation that is almost word for word the definition adopted in Byford. The New Mexico case preceded Byford by several years. California has adopted, in the Anderson case, very similar language to the meaning of the term deliberation. Also, an Ohio Supreme Court decision has adopted similar language.
Chairman James:
You said there is a rule of statutory construction which requires giving meaning to each word in the statute. The word “deliberate” is used in NRS 200.020, defining “express malice” as, “the deliberate intention to unlawfully take away a life,” and “malice” being the difference between murder and manslaughter. Does the word deliberate, as used in that statute, have a different meaning than deliberate, as used in NRS 200.030?
Mr. Bryant:
I do not think you have to reach that conclusion. I think the thing to remember about NRS 200.020, subsection 1, to which you are referring, is it is a definition of “express” malice. The universe of murder is not limited to express malice. “Implied” malice will support a murder conviction as well. The word “deliberate” does not appear in the definition of implied malice in NRS 200.020, subsection 2. It is possible that NRS 200.020, subsection 1, is, in fact, coextensive with first-degree murder. It does not eliminate the category of second-degree murder, because you still have implied malice. I do not see that as a sticking point.
Chairman James:
If you found express malice then you could skip over the part of the first-degree murder statute dealing with deliberation, because you would have already found that kind of deliberate act.
Mr. Bryant:
Not necessarily. You would not want to ignore what the Legislature has provided by way of elaboration. But as I understood your concern, if we read “deliberate” in NRS 200.020, subsection 1, the same way the supreme court, in Byford, read “deliberate” in NRS 200.030, subsection 1, paragraph (a), you would have a problem of having murder only if you had deliberation. My answer is to say no. It is true you can have first‑degree murder only if you have deliberation, but, because we have an additional category of implied malice, you can have second-degree murder without deliberation or premeditation, even if you read “deliberate” in NRS 200.020 to mean the same thing as Byford reads it in NRS 200.030.
Chairman James:
That satisfies only part of my concern. My real concern is I am completely unconvinced the word deliberate in NRS 200.020 has any different meaning than it does in NRS 200.030. If the meaning is that it be an intentional act, then the thoughts of the mind need to occur before the killing is encompassed in the definition of “premeditated,” whatever that definition is. A jury instruction to separately define “deliberate” as some kind of deliberate weighing process not encompassing unconsidered or rash acts, could throw a real “monkey wrench” into first-degree murder convictions.
I have looked at the facts in Byford, as we have been sitting here. I think the girl upset this group of guys, and they had thrown out the idea of killing her, which some of them said they had taken in jest. Maybe later on, when she was killed, it was enough to say there was deliberation and premeditation before the act actually occurred. If the court is saying the discussion that took place on the second trip back from the store is what satisfied the court that there was premeditation, it is a very worrisome result. What if they had not had the discussion, so the proof was not there, but they had still killed her under the same circumstances? It should be first-degree murder.
Mr. Bryant:
Let me address that question. I think it is important, in reading the court’s discussion of the evidence for deliberation in Byford, to understand the court is not setting a floor; it is not saying you always have to have evidence of this character to satisfy the deliberation finding. Rather, the court is saying there is overwhelming evidence of deliberation in Byford. It is important to realize, although the court found the instruction defining first-degree murder was improper in Byford, the court, nonetheless, did not reverse the murder conviction, because it found the improper instruction was, basically, harmless error and the evidence on deliberation was overwhelming. It is in that context the court made its points about the prior discussion of the men. The court in Byford is clear that that level of evidence is not required to support a jury finding of deliberation. Also, it is clear, in almost all the cases, the evidence is going to be solely circumstantial. The court is up-front to recognize murderers do not announce the state of their minds. It is ultimately a jury question, and I think it would be wrong to understand Byford’s discussion of the facts as establishing a minimum of what would be required in future cases.
Chairman James:
I did not understand it that way, and it makes it even worse, because it does not provide guidance from the facts.
We have to close the hearing. You have adequate time to submit additional information, and the committee would greatly benefit from it.
David M. Schieck, Attorney:
In addition to what has already been said, I wanted to say the Nevada Supreme Court, to my knowledge, has been looking at this issue for some 10 to 12 years. This is not a situation where they picked this instruction out of a hat. They considered all the other states and all the other decisions, and decided this is the way we should define first-degree murder. I believe they selected the Byford case intentionally, because they could say this is harmless error, and this is clearly premeditation and deliberation. The deliberation aspect comes from the fact there were 19 separate shots into the body of the victim, and it was from a 6-shot gun, which means they had to reload at least 3 times. It is on that issue where they could say the improper jury instruction was harmless error and find there was deliberation. It was not necessarily anything that happened before the men got to the desert where the shooting took place. I will be happy to work with the professor and submit additional briefing to the committee.
Chairman James:
We need to close the hearing. We know what we want to get at is the definition of deliberation in any other state.
Richard Gammick, District Attorney, Washoe County:
We are trying to tell juries what they are supposed to do, and we thought we had a simplified set of instructions and a system to explain it to them. Then the Supreme Court came up with Byford and complicated it again.
Senator Titus:
Was the decision unanimous?
Chairman James:
There is a concurring opinion by one of the justices on the issue with which we have been struggling.
Senator Titus:
I do not think it is inconsequential when the Supreme Court, as varied as its members are, decides unanimously.
Chairman James:
We will close the hearing on S.B. 375 and open the work session. I said I would bring S.B. 34 back so you could see what we were doing on it. This is the temporary guardian bill. Mr. Wilkinson, will you explain the amendment?
SENATE BILL 34: Revises provisions relating to appointment of temporary guardians. (BDR 13-1070)
Bradley A. Wilkinson, Principal Deputy Legislative Counsel, Legal Division, Legislative Counsel Bureau:
In drafting this, we split the existing statute regarding appointment of temporary guardians into three separate statutes to make it easier to read, based upon the reasons under which the temporary guardianship was sought.
Section 2, page 1, deals with the type of guardianship at issue in the original bill. The amendment requires, if a temporary guardianship is sought for a ward who is an adult, and it is sought on the basis that the ward is unable to respond to a substantial and immediate risk of physical harm or to a need for immediate medical attention, the request be accompanied by a certificate signed by a physician or psychologist who is licensed to practice in the state, stating the proposed ward is unable to respond to the substantial and immediate risk of harm. If the certificate is not immediately obtainable, the petitioner would need to submit an affidavit explaining the reasons the certificate is not obtainable. Assuming the court found it was appropriate to appoint a temporary guardian, there would be another hearing within 10 days to determine whether to extend the temporary guardianship. At that time, there would need to be either a filing of the certificate or a determination by the court that circumstances prevented the petitioner or temporary guardian from obtaining the certificate. It separates adult wards from juvenile wards, and separates guardianships sought because of a substantial or immediate risk of financial loss.
Chairman James:
Are there any questions on the amendment? We do not need to take any action.
There is a work session document in front of you on Senate Bill 258. Since the first set of amendments comes from the Democratic Caucus, Senator Titus, would you explain?
SENATE BILL 258: Authorizes state agencies and local governments to adopt more stringent restrictions governing tobacco and products made from tobacco than restrictions imposed pursuant to state law under certain circumstances. (BDR 15-1299)
Senator Titus:
We talked about this and looked at the tobacco settlement, and we decided the state does need to do more to strengthen its anti-smoking statute. We have come up with recommendations to do that (Exhibit E). The first one is to require Millennium Scholarship recipients to sign a pledge not to smoke, as a condition of receiving funds. We do not want to get into policing Millennium Scholarship recipients, but we think this is a good way to make a statement that smoking is not good for young people and to remind them their education is being paid for by tobacco funds, and they should appreciate that.
The second is to require taxicabs to post a sign. There is no restriction on smoking in cabs, but there is a restriction on smoking in buses. We are not suggesting you restrict smoking in taxicabs, but there should be a sign posted in each cab stating whether smoking is allowed or not.
The third recommendation comes directly from the settlement and prohibits the advertising of tobacco products in school publications, on school grounds, and at school-sponsored activities.
The next recommendation relates to the desire of local governments to have more control over certain facilities, and we think perhaps spas and health clubs are something local governments might want to consider.
The fifth suggestion is to allow local school districts to expand the definition of public buildings to include school grounds.
Then, another suggestion we support is to change the definition of a childcare facility in the smoking statute. Right now it says a childcare facility is a facility that takes care of more than thirteen children. If you look at NRS 432A.024, our definition of a childcare facility is one that takes care of more than five children. We think this should be made consistent so it would be five children in relation to smoking.
Chairman James:
Is it because a childcare facility is one where smoking is prohibited?
Senator Titus:
Childcare facility is already in the statute, but it is the special definition of childcare that is inconsistent with what exists in NRS.
Chairman James:
So, it is already in the statute as being prohibited?
Senator Titus:
It is in the bill, in section 3, subsection 8, paragraph (a), where it says 13 or more children. But, if you look at NRS 432A.024, childcare facility is defined as having five or more children. We think it should be made consistent.
Helen A. Foley, Lobbyist, Clark County Health District:
We appreciate the amendments brought forward by the Democrats on the committee (Exhibit E). We would encourage you to include health care facilities, also, and allow local governments, or you as a state, to make the policy that there should not be smoking in health care facilities. Currently in the statute, (section 3 of the bill), the only locations within medical facilities where smoking is not allowed are public waiting rooms, lobbies, or hallways. That means in examination rooms smoking is allowable, and we believe it should not be.
The other thing we thought was very strange about this bill is section 3, page 2, line 43, which says, “The person in control of an area in paragraphs (c), (d), (e), (f) or (g),” which would be medical facilities, hotels or motels, the public area of grocery stores, child care facilities, and all of those other things; then on the top of page 3, paragraph (b) of subsection 2 says, “May designate separate rooms . . .for smoking.” We do not believe childcare facilities should have separate rooms for smoking. A lot of times people end up smoking outside and children walk past the area.
We think local governments should have the authority, or you, as the state, have a policy that there will be no smoking within those areas. But as you notice, it is permissive; it says they may designate smoking areas. However, at the bottom of page 3, line 39, it says “public building” means the university and community college system, State of Nevada, prisons, any county or city school district, or political subdivisions. Then go to line 9 on page 3, which says, “The person in control of a public building:” (line 12) “shall,” which means “must,” “designate a separate area which may be used for smoking.” What that means is public buildings in the state of Nevada must have smoking sections. It should be up to the local school districts to conduct hearings and workshops to hear from teachers and parents, and decide whether they want a totally smoke-free environment. If they do, as Senator Titus mentioned, they should consider the school grounds, also, and possibly the athletic fields.
Chairman James:
What you are asking us to do on page 2, line 29, of S.B. 258, is take out the words “public waiting room, lobby, or hallway of any,” right?
Ms. Foley:
Yes.
Chairman James:
Then, you are asking us to change the word “shall” to “may” on page 3, line 10?
Ms. Foley:
It is line 12. I would like “may” used for the public schools. We should also add language giving local authority to school districts.
Chairman James:
We have that in Senator Titus’ amendment. We are talking about your amendment. For health care facilities in which smoking is already prohibited in certain areas, we can make it clear that smoking is prohibited in any part of a health care facility; and, you may have smoking in a public building if you so designate it.
Ms. Foley:
As I understand, the University of Nevada, Reno, has no smoking, so I guess it violates the law.
Chairman James:
Well, let’s just clean up, because I think it is clear here you can prohibit smoking in a public building.
Ms. Foley:
There is one other area I think is insulting, on line 14, page 3. After it says they “shall” designate the smoking areas, then it says they do not have to designate a smoking area for students.
Chairman James:
When we passed this, we talked about the fact we did not want the students walking across the street and getting hit by a car because they were trying to get off the school grounds to smoke.
Senator McGinness:
Mr. Chairman, I know the situation in Fallon. The high school is located next to a residential area and all the students who smoked were across the street, littering the neighborhood lawns with cigarette butts. So, the school district rented an area from a private person and asked the students to go there. If we put this back in, the kids will be going back across the street again.
Senator Titus:
If you change the “shall” to “may” on line 12 of page 3, will that take care of the problem?
Ms. Foley:
It is a sad commentary we have to find locations for the children to smoke.
Senator McGinness:
It truly is, and I do not think students should smoke. The Assembly should have passed this three sessions ago, but this is the reality.
Ms. Foley:
There was an article in this morning’s Reno Gazette-Journal saying smoking has become the top cause of cancer deaths among women, while the number of teenage girls who smoke has risen 30 percent. They talk about an R.J. Reynolds Tobacco campaign featuring a skinny, sexy woman who says, “Until I find a real man I will take a real smoke.”
Senator Washington:
I am not advocating smoking one way or another. It seems to me we are putting the cart before the horse. We just had the Oscars and they had the film reviews, and a lot of the actors smoke. You see nice, buff, handsome leading men, and they smoke, and leading women smoke. It seems to me if we are really advocating against smoking, should we just outlaw tobacco products altogether: nobody smokes. We are sending two different messages.
Samuel P. McMullen, Lobbyist, Philip Morris Management Corporation:
I am uncomfortable because I have not had a chance to think what parts of this I am supposed to speak on and what parts I am not supposed to speak on. I know I have restrictions on what I can lobby for and against.
Chairman James:
Do you mean under the tobacco settlements?
Mr. McMullen:
I think it would be a matter of courtesy to let us have some chance, with all the people who are involved in the issue, to have an opportunity to get back to our clients and make sure they have had a chance to discuss this.
Chairman James:
I understood that you knew there was a work session. I put the word out and told everybody to talk to both sides of the issue. We brought it up Friday in a work session, and both sides had opportunity to speak then.
Mr. McMullen:
There were no proposed amendments given to me until this morning. They were probably given to other people. I am prepared to speak to them, anyway.
Chairman James:
I want to accommodate you, but we must move this bill. What is specifically causing you concern, the “shall” to “may” things?
Mr. McMullen:
I think the top three issues in Exhibit E and the clarification of childcare facility should not be an issue. I have not had direction from my client, yet, but I do not think those are an issue. We would clearly have trouble with, and are allowed to lobby against, anything that changes the standard from a state standard to a local standard. So, the introductory sentence on the second set of issues causes us great concern.
Senator Porter:
Are you referring to the second part of the introductory?
Mr. McMullen:
I am addressing the proposed amendments (Exhibit E). There is another set of proposed amendments you have not seen. The issues of school districts and smoking policy, smoking in health care facilities, including hospitals and other places where organized labor is present as part of the workforce, and smoking in state buildings have been fought by the actual employees and their representatives, not by us. With all due respect, they have fought for a preemptive standard, a single standard across the state, whether it is all public buildings or leased facilities. So, as a matter of information and education, you ought to understand those issues probably are not being addressed by people who are directly interested in them; they are not here. There have been huge battles by school district teachers who were sure they were going to be shifted out into the rain with some of the other things that have happened. Consequently, those issues were just as strongly negotiated, and we may not have even been involved in those.
Senator Titus:
That is true. I recall the teachers, as well as state employees, being very concerned about having smoking areas. I know there were those employee groups who wanted to be sure those who smoked could retain their jobs.
Mr. McMullen:
I added a third category, which is healthcare facilities. If you notice, under S.B. 258, section 3, subsection 1, paragraph (c), on page 2, line 30, a medical facility is a term of art in the statute, and that could include hospitals. The only reason I raise that issue is because there has been a lot activity in terms of Service Employees International Union (SEIU) and its representation of nurses and other hospital personnel. The SEIU may not have had the opportunity to understand those issues were back in play.
Chairman James:
It will be the person in control of the building who determines whether a smoking area will be within it.
Mr. McMullen:
That is, again, something they have fought for; they want one standard. Could you please explain the last bullet under your proposed amendments (Exhibit E)? If you adapt the definition of public building as it relates to school facilities, and include the areas in section 3, subsection 8, paragraph (c), you do not need to change what has been the long-standing balance in the other sections.
Senator Titus:
I think that is reasonable. I think it seems like an appropriate way to handle it.
Mr. McMullen:
The only things it does not address are the spas and health clubs. Functionally, when you talk about health facilities, if we are going into the public waiting room, lobby, or hallway, our understanding of the draft is that those are not just public facilities; they can be private facilities as well. That is based on a recognition, in those facilities, there may be a need to accommodate a workforce that wants to smoke. The balance is the function of private property rights.
Ms. Foley:
It is oxymoronic to have smoking in a health club. If you remove public waiting rooms, lobbies, and hallways, you are still giving medical facilities the opportunity, under line 43 on page 2 of S.B. 258, to designate a smoking area. They can still designate smoking areas, but smoking is not allowed in all of the other areas.
Chairman James:
What I have now, and you are not objecting to, Mr. McMullen, is the first three bullets on the work session document (Exhibit E), and the last bullet on childcare facility. For the second to last bullet, school districts, we are going to change the language in line 46 on page 3, regarding the definition of public building, to include school grounds. Then, on the health clubs, where are we?
Mr. McMullen:
I think that is an issue that goes to the ownership and the operation of those health clubs. If you are putting that issue into play, out of courtesy, you should make sure they should know that. That is a market or business dynamic they need to accommodate, and they probably have found a way to do so.
Senator Titus:
In order to move this bill along I would suggest we withdraw that and deal with it in the Assembly.
Mr. McMullen:
If we do strike a deal, I would like to know it is the deal we are going to have for this bill all the way through, and this committee would work with us if it came back in a modified format from the Assembly.
Chairman James:
That is up to each member to tell you how he or she is going to vote. I appreciate the position. Senator Titus is withdrawing bullet 4. We addressed the issue of health care facilities by taking out “public waiting room, lobby or hallway,” on page 2, line 29.
Mr. McMullen:
I do not think we are in favor of that. I would add, you have left one out, on the top bullets. Make sure that the childcare five is in there.
Chairman James:
It was added, at the bottom; we just have to write it in. We would take out “public waiting room, lobby or hallway,” which would then mean the whole medical facility. The word “may,” at the top of page 3, stays there. The only thing left is whether the “shall” on page 3, line 12, changes to a “may.” It should be “may,” shouldn’t it?
Ms. Foley:
I believe so.
Mr. McMullen:
We would not agree to that.
Chairman James:
Isn’t it inconsistent with what is before that? It says you have the discretion to designate a smoking area.
Mr. McMullen:
In public buildings, the rule has always been, for state employees and the public, there would be a smoking area allowed, and it was mandatory. That is why it is “shall.”
Chairman James:
Why does it say, “The person in control of an area listed under paragraphs (c), (d), (e), (f) or (g) [of section 3, subsection 1] . . . may designate separate rooms or portions of areas which may be used for smoking?”
Mr. McMullen:
Understand, Mr. Chairman, the definition of public building is in paragraph (e).
Chairman James:
We will have to take that up with the committee. The proposal here is to change “shall” to “may.”
Mr. McMullen:
If there is a concern on the committee about regulating this, recognize that the law allows the health care authorities, once you set the standards in NRS 202.2491, to enforce those. Consequently, we want one standard policy.
Ms. Foley:
It still gives them the opportunity to designate smoking areas in health care facilities, but it is optional.
Chairman James:
They “may” designate them.
Mr. McMullen:
Could you clarify whether it says they would, or would not, be allowed to create a smoking area inside the office of any of the practitioners, if they want?
Chairman James:
They would be allowed to.
Mr. McMullen:
You have exercised prohibition against the whole building and all of its subparts.
Chairman James:
Yes, but it says a person in control of an area in paragraph (c) may designate a separate room for a smoking area. Nothing is changing there.
Mr. McMullen:
I still think we are going to oppose that, because I do not have a history on the language and what the reasons for it were.
Senator Porter:
If we take action on this today, I would like to see the draft come back to us. I am not sure I understand what is being said regarding the public facilities. I am not sure about what is happening under section 3.
Chairman James:
I keep thinking I have amendments that are settled, then I get different things and more opposition. I want to send a bill to the Assembly with amendments that have been agreed to and supported by both sides of the issue. What do you suggest, Senator Titus?
Senator Titus:
I suggest we take a vote on the proposed amendments. I think there is consensus on Millennium Scholarships, taxicabs, and advertising, and on changing the number in childcare facilities to five; we are eliminating local government control for health clubs; we can amend out public waiting rooms, lobbies and hallways; I would redefine “public buildings” to include school grounds; but, I would not change “shall” to “may,” because I think public employees do want the guarantee of smoking area. I would be willing to make that motion. The changes move us a long way forward and tighten up the state law. It allows flexibility; both sides have compromised.
SENATOR TITUS MOVED TO AMEND AND DO PASS S.B. 258.
SENATOR WIENER SECONDED THE MOTION.
Chairman James:
I have written down what Senator Titus just said, and it is what the bill drafter is going to get. This amends section 3, subsection 8, paragraph (c), subparagraph (3).
Mr. McMullen:
You may have to add a separate category; let the bill drafter decide. They talked about buildings in the other categories; in this one, you have areas outside of buildings. So, there might be a subparagraph (4) added to speak specifically to school problems.
Chairman James:
The only thing you have difficulty with now is the waiting room, lobby, or hallway?
Mr. McMullen:
Yes.
Ms. Foley:
I would like to state for the record when I spoke to Harvey Whittemore he agreed to these amendments. And I know that he also spoke to you, Senator James.
Chairman James:
Just generally about health care facilities and schools.
Ms. Foley:
I did not want it indicated that Mr. McMullen represented the entire tobacco industry, because I do not think that is the case. Also, I have some language from the Colorado statute on school property which may be helpful to the bill drafter.
Senator Washington:
Just for clarification, on number one from Senator Titus, regarding the condition for receiving the Millennium Scholarship, if they are caught smoking do they lose the scholarship?
Senator Titus:
I do not think we want to get into the business of policing. It is more the symbolic measure; it might make them stop and think before they smoke.
Senator Washington:
Just for my own clarification, I am going to vote for the amendment, but I reserve the right after I read the amendments.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman James:
There is no further business and we are adjourning the meeting at 12:55 p.m.
RESPECTFULLY SUBMITTED:
Heather Dion,
Committee Secretary
APPROVED BY:
Senator Mark A. James, Chairman
DATE: