MINUTES OF THE
SENATE Committee on Commerce and Labor
Seventy-second Session
February 14, 2003
The Senate Committee on Commerce and Laborwas called to order by Chairman Randolph J. Townsend, at 8:00 a.m., on Friday, February 14, 2003, in Room 2135 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Randolph J. Townsend, Chairman
Senator Warren B. Hardy II, Vice Chairman
Senator Ann O'Connell
Senator Raymond C. Shaffer
Senator Michael Schneider
Senator Maggie Carlton
COMMITTEE MEMBERS ABSENT:
Senator Joseph Neal (Excused)
STAFF MEMBERS PRESENT:
Scott Young, Committee Policy Analyst
Courtney Wise, Committee Policy Analyst
Kevin Powers, Committee Counsel
Johanna Downey, Committee Secretary
OTHERS PRESENT:
Robert I. Correales, Associate Professor of Law, William S. Boyd School of Law, University of Nevada, Las Vegas
Jon L. Sasser, Lobbyist, Washoe Legal Services
Mary Lau, Lobbyist, Retail Association of Nevada
Robert A. Ostrovsky, Lobbyist, Employers Insurance Company of Nevada
Lynda Parven, Administrator, Nevada Equal Rights Commission
John Wiles, Division Counsel, Division of Industrial Relations, Department of Business and Industry
Fred L. Hillerby, Lobbyist, Nevada Association of Health Plans
Lawrence P. Matheis, Lobbyist, Nevada State Medical Association
Vice Chairman Hardy:
I open the meeting and introduce Senate Bill (S.B.) 22.
SENATE BILL 22: Broadens applicability of laws relating to unlawful employment practices. (BDR 53-132)
Professor Correales, Associate Professor of Law, William S. Boyd School of Law, University of Nevada, Las Vegas:
This testimony is in support of S.B. 22. I will read my written testimony (Exhibit C).
Jon L. Sasser, Lobbyist, Washoe Legal Services:
Professor Correales taught at the William S. Boyd School of Law in Las Vegas as the employment law professor. The concern about small business regarding the potential expense of retrofitting has been addressed. The Americans with Disabilities Act (ADA) requires each business to make itself accessible to the public. There is the requirement if a person with a disability applies for employment, reasonable accommodation must be provided.
Mary Lau, Lobbyist, Retail Association of Nevada:
The retail association has many concerns about S.B. 22. I have several statutes and I will just leave that to be pursued another time.
Chairman Townsend:
Perfect.
Robert A. Ostrovsky, Lobbyist, Employers Insurance Company of Nevada:
For 8 years I operated a small retail business at the Fashion Show Mall in Las Vegas. Today the business would have fallen under the provisions of this proposed bill. Asking business owners to retrofit their property is not a decision that the owner might make, it is a judgment the court might make for the owner. There is written material about how to comply. I do not think one can expect all small businesses to comply. It is not right to discriminate. Take that into consideration when moving the number of employees from 15 down to 5. I have concerns about someone asking for an elevator to be installed on the second story of a rented space and the owner says he cannot afford it. The affordability now becomes a question of law. It will have to be determined through the Nevada Equal Rights Commission and probably the district court whether or not an elevator is required. I do not know if 15 is the right number. There are a lot of small struggling businesses. It is common knowledge that most small businesses do not succeed. The few that do prosper and thrive should be encouraged because it creates jobs for a lot of people who otherwise have nowhere to go.
Chairman Townsend:
Since the sponsor of this bill, Senator Neal, is not here today, our intent would be to hold this bill out of respect. We had a bill in front of us 2 years ago that dealt with discrimination. It was written differently, pulled out of a different section, and it listed that you shall not discriminate against an individual based on sex, age, race, or ethnicity, now it is sexual orientation. I think disability is in there. What section is that in?
Kevin Powers, Committee Counsel:
Mr. Chairman, the correct cite is Nevada Revised Statutes (NRS) 613.330 and it provides that it is an unlawful employment practice for an employer to fail or refuse to hire, to discharge any person, or otherwise discriminate against any person with respect to his compensation terms, conditions, or privileges of employment because of his race, color, religion, sex, sexual orientation, age, disability, or natural origin.
Chairman Townsend:
In subsection 2 of S.B. 22, it says an employer is a person who has 15 or more employees. Does that translate to NRS 613.330? Is NRS 613.330 only for businesses of 15 or more?
Mr. Powers:
“The definition we are amending in this bill, NRS 613.310, applies to 613. 330, but it also applies to several other statutes in this grouping of statutes.”
Chairman Townsend:
The reason I ask the question is because the term disability now encompasses this debate. The potential for additional expense in order to accommodate someone is in question. The other statutes constitute behavior, which is no expense. Does it separate employees who work for a company of 14 people versus a company of 16 people?
Mr. Powers:
The present statute does not separate them. Disability and age and race and sexual discrimination are based on the number of employees. Fifteen or more employees, all of those employees are subject to the same restrictions on discrimination whether it be disability or the other categories.
Chairman Townsend:
If one is unfortunate enough to work for an employer who has 14 employees, one has no standing to bring an action if one feels one has been discriminated against based on age or race?
Mr. Powers:
“That is correct, Mr. Chairman.”
Chairman Townsend:
When the 26 states made changes regarding disability and the cost of lowering the number were changes made across the board, or was disability left for the ADA?
Mr. Powers:
“I cannot answer that question without further research, Mr. Chairman.”
Chairman Townsend:
We are not going to act on this bill because of Senator Neal’s absence. Did any of these states, Wyoming, Connecticut, Delaware, California, differentiate between disability and other forms of discrimination?
Lynda Parven, Administrator, Nevada Equal Rights Commission:
Of the states that I spoke to, Oregon, Idaho, and California did not differentiate between the types of disabilities.
Chairman Townsend:
Did you ask these states how they accommodated the small business concern that was articulated by Mr. Ostrovsky regarding what would happen if you had to put an elevator in when you had three employees?
Ms. Parven:
I just want to clarify that this does not change the public accommodation rules. It only changes the accommodations you have to make for employees.
Chairman Townsend:
What if a business had to accommodate an employee?
Ms. Parven:
It has to be a reasonable accommodation. It cannot cause an undue hardship to the employer. I know testimony is not being taken today, but I did want to notify the committee there would be a fiscal impact to this bill to the Nevada Equal Rights Commission. We were not asked for a fiscal impact, but just knowing that those cases would be State only, the federal government would not subsidize us in any way for those additional cases. It would create an increase in our caseload, approximately 300 to 400 cases a year, based on the number of employees, as detailed in my written testimony (Exhibit D).
Chairman Townsend:
Could you get that to us in writing?
Ms. Parven:
I can get you a fiscal note, Mr. Chairman.
Senator O’Connell:
Tell me how it was determined there would be an additional caseload of 300 to 400.
Ms. Parven:
We took the proportion of employees who filed charges that are covered now. That ratio is 0.21 percent. We multiplied it by the number of employees we believe are in the five to 15 employer group. If the same proportion of employees filed in this group do file in the over 15 group, that is where we got the 300 to 400 number.
Senator O’Connell:
Does that mean extra bodies for you?
Ms. Parven:
Our caseload is already at 1880 cases. It would rise to 2200 to 2300 cases.
Senator O’Connell:
Would that be in your fiscal note?
Ms. Parven:
That is correct.
Senator Hardy:
You testified there are no states you are aware of that separate the issue of racial discrimination from disabilities.
Ms. Parven:
I am not aware of any.
Senator Hardy:
The professor testified the federal statutes do not preempt the states from providing remedies that are equal to or greater than what is there. Can the racial issue be separated from additional sanctions, leaving the other issues alone?
Ms. Parven:
Age is already separated out. The age qualification is for 20 or more employees, which is federally regulated.
Mr. Powers:
Mr. Chairman, if you would like, I can address Senator Hardy’s question. Senator Hardy’s question has two components. First, the federal component about the federal statute and, as mentioned in the testimony, the federal statute allows the states to lower the employer threshold, the number of employees, but it does not require the state to do it across the board at any point, or for any type of characteristic, whether it be sex, or disability, or age. In addition, there will be a constitutional question, but in terms of preventing discrimination in cases of disability and distinguishing disabilities from other types of discrimination, it is under the equal protection challenges, a rational basis test. So if the Legislature can identify a rational basis for making distinction, such as, the cost to employers, then the Legislature could distinguish disability from other types of discrimination, lower the number of employees for the other types of discrimination, and not be disability.
Senator O’Connell:
I realize the number was at 25 and it was brought down to 15. The reason was because of the cost to small employers.
Mr. Powers:
“Are we referring to the State’s statutes or the federal statutes?”
Senator O’Connell:
I am referring to the federal statutes.
Mr. Powers:
“I believe in determining the number of employees that the employer had to have in order to be subject to the statutes that the federal government did to make that determination based on the cost of small businesses.”
Chairman Townsend:
There seems to be a need to understand the fiscal note in two ways. First, if we were to pass the bill in its current form as an across‑the‑board reduction, there would be a need to carve out disability because of the previously stated issue regarding the federal government’s understanding of small business. Second, have an approximation number ready, so all this information, when given to Senator Neal upon his return, can help him decide in what direction he would like to go. Since we do not deal with your agency we were not thinking about its impact on what you would have to face. Do you have 1800 cases now?
Ms. Parven:
We have almost 1900 cases now.
Chairman Townsend:
Under this current bill the impact would add another 300 to 400 cases. Is that a correct approximation?
Ms. Parven:
Yes, the bill would add 300 to 400 cases a year.
Chairman Townsend:
I close the work session on S.B. 22 and open the work session on S.B. 8.
SENATE BILL 8: Clarifies scope of and increases penalty for certain punishable conduct by employer leading to death of employee. (BDR 53-298)
Chairman Townsend:
This bill is the result of the interim subcommittee on industrial explosions. There was considerable discussion regarding the language that reads, “or creates a condition that causes.” Mr. Wiles, trying to resolve some of the case problems relative to prosecution caused enough concern to rethink getting an increase in penalties.
John Wiles, Division Counsel, Division of Industrial Relations, Department of Business and Industry:
Yes, Senator, this is the appropriate approach. The language itself is problematic in terms of understanding. Applying the existing language is not that bad. We were trying to address subcommittee concerns in reference to the tragedy that occurred at Depressurized Technologies. We recommend the language that causes concerns be stricken.
Chairman Townsend:
I would recommend a motion to amend the language, or strike or amend the bill, to strike the language on line 5 and simply leave it where the increase in fines on the first offense is not more than $50,000, and the second offense, not more than $100,000.
SENATOR O’CONNELL MOVED TO AMEND AND DO PASS S.B. 8 BY DELETING THE LANGUAGE CHANGE ON LINE 5.
SENATOR HARDY SECONDED THE MOTION.
Chairman Townsend:
We learned about two incidents that brought about entirely different results. The industrial explosion case in southern Nevada was entirely different than the industrial explosion case in northern Nevada. They are both equally tragic and should not have occurred. The northern Nevada case was left in the hands of the district attorney and a plea bargain was struck.
Ms. Lau:
It was my understanding that Douglas County’s district attorney did strike a deal on the northern Nevada case.
Chairman Townsend:
Mr. Wiles, tell us the legal implications of letting a local entity, such as the district attorney, plea bargain a serious issue. District attorneys do prosecute these types of cases when it is within their jurisdiction. Since your organization has global authority, what discussion ensued between you and the district attorney?
Mr. Wiles:
Our initial contact with the district attorney’s office was informationally based. We provided them with all the information they needed to investigate and pursue this matter. We discussed the statutory scheme had been changed to allow the division itself to prosecute these matters acting like a district attorney. We had not pursued one of these cases criminally before; so we deferred to the district attorney’s office in the event they elected to pursue this matter. They ultimately filed charges. As one witness indicated, it was resolved through a plea bargain. Prosecutors maintain a great deal of discretion based upon the information of the case as it develops over time. My own point of view is perhaps some direction by the State is not necessarily inappropriate in terms of a matter of policy. At the same time, there needs to be some discretion left with the prosecutor who is most knowledgeable in terms of the evidentiary standards, to apply that information, and come to a just result in terms of the cost and burden to the state or local entity prosecuting this matter. I was hopeful that you might hear some testimony from the district attorney’s office or some prosecutors in this matter. I think this is an important public policy discussion and is necessary.
Chairman Townsend:
Committee, we have a very important issue in front of us from Senator Carlton. We have 11 bills stemming from the interim committee. It would be my recommendation to move on this bill. Mr. Wiles, would you recommend someone who actually saw what occurred in the development of the northern Nevada case? I never want to lose sight of the loss that occurred within surviving families of those employees who lost their lives in an industrial accident.
Senator Carlton:
If I remember correctly, this case was classified as a misdemeanor. A death was involved and that bothered me the most. Mr. Powers, was this a misdemeanor?
Mr. Powers:
That is correct, Senator Carlton, although the statute is not as clear on the face as it could be to designate it as a misdemeanor, there is a default provision in chapter 193 of NRS that deals with criminal statutes that would lead to the conclusion that a violation of a first offense of this statute is a misdemeanor.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
Chairman Townsend:
I now introduce S.B. 23.
SENATE BILL 23: Provides for independent review of certain final adverse determinations made by health maintenance organizations and managed care organizations. (BDR 57-209)
Fred L. Hillerby, Lobbyist, Nevada Association of Health Plans:
Assemblywoman Buckley also introduced her bill concerning external review. Marie Soldo and I met with Assemblywoman Buckley yesterday and we have narrowed down the differences in the bill passed 2 years ago. We remain committed to seeing the bill passed regarding external review.
chairman Townsend:
Senator Neal will be notified that this bill will be held until there is total resolution on it. I close the hearing on S.B. 23 and open S.B. 24.
SENATE BILL 24: Provides for access for certain persons to health care records of deceased. (BDR 54-178)
Chairman Townsend:
There was concern with S.B. 24 regarding health records. Some of these provisions may be covered under different statutes regarding durable powers of attorney, and possibly removing section 1 requiring physicians to inform each patient. Mr. Powers, did you review this as it pertains to Health Insurance Portability and Accountability Act of 1977 (HIPAA), and if it is compliant? Line 10 may be covered under another statute. If section 1, subsection 1 is removed, would subsection 2 need to be removed?
Mr. Powers:
“I believe all of section 1 stands together, Mr. Chairman.”
Chairman Townsend:
Was section 1 entirely removed?
Mr. Powers:
“Correct.”
Chairman Townsend:
That would leave new language remaining under section 2, subsection 1, paragraph (b), “The personal representative of the estate of a deceased patient:” and paragraph (c), “The parent or guardian of a deceased patient who died before reaching the age of majority.” Definitions on page 4, subsection 8, of “guardian,” “parent,” and “personal representative” would remain in the bill, is that correct?
Lawrence P. Matheis, Lobbyist, Nevada State Medical Association:
What needs to be addressed is who has the power of attorney, who is the legal next of kin, or who has authority to be able to get medical health records of a deceased patient. With the information that would be left in section 2, as long as it is compliant with the HIPAA regulations in terms of the language used to define a family, that is the intent of the law.
Senator Hardy:
I want to make sure by doing this we establish the same standard for those who are able to acquire medical records would also be able to acquire records related to death. Is that what we are doing by this change?
Mr. Powers:
If the records relating to death constitute medical records, this is all about medical records that relate to a person who is deceased, whether the medical records were created before the person died or after the person died.
Senator O’Connell:
In the testimony heard before, we were told there were different standards from hospital to hospital. Does this language change take care of that?
Mr. Matheis:
The problem is how the guardian of a medical record, whether it is a physician, a physician’s office, other health care provider, or hospital interprets who has the legal status to request a medical record. Under the HIPAA rules federal regulations are much more prohibitive of who may assert the right to have access to someone else’s medical record. A family member, or whoever has the legal right to a person’s estate, has the legal right to obtain whatever information is needed.
Senator O’Connell:
Would it be helpful for us to put the intent of the committee into the minutes and state it on the floor as well?
Chairman Townsend:
This is Senator Neal’s bill. We will hold it for him. Senator O’Connell has a good point. Anyone involved at both the federal and State level could work with Mr. Powers regarding a statement of intent. We need to be very clear in whatever references or length it needs to be. One of the reasons we have gone to more sophisticated and verbatim minutes is because they are used constantly for litigation and debate. We want to make sure we have as much on the record as possible. We will take this up in our next work session when Senator Neal has returned.
I close the hearing on S.B. 24 and open S.B. 9.
SENATE BILL 9: Revises provisions governing exclusivity of certain rights and remedies under industrial insurance. (BDR 53-632)
Chairman Townsend:
If an employer does not have coverage under the exclusive remedy law, the employer is not protected in any way, shape, or form, is that correct, Mr. Powers?
Mr. Powers:
“That is correct, Mr. Chairman.”
Chairman Townsend:
An employee who may be injured, or may lose their life while they are not covered, has certain rights that are not afforded them when they are protected. It is my understanding there is an “either/or” issue regarding employees’ rights under those who are not covered. An employee can claim against the Uninsured Employers’ Fund for purposes of receiving normal benefits like an injured worker under a covered employer would receive, or go litigation. Is this a subrogation issue regarding litigation? What are the rights and opportunities of an injured employee?
Mr. Powers:
Thank you, Mr. Chairman. When an employee is injured who is working for an uninsured employer, that employee can recover from the uninsured employer’s claim account if the employee executes a written right of subrogation to the Division of Industrial Relations (DIR). The employee then is able to receive the workers’ compensation benefits. The employee, however, is not prevented from bringing a civil action. The employee may still bring the civil action against the uninsured employer. If the employee recovers damages, those damages are given to the Division of the Industrial Relations to the extent that the Division of Industrial Relations has paid workers’ compensation benefits to the employee. If the damages exceed the amount the employee has recovered through workers’ compensation, the employee gets to keep the excesses of those damages.
Chairman Townsend:
The fund is held harmless if enough money is recovered. The employee keeps the additional recovery money. Is that correct?
Mr. Powers:
“That is correct, Mr. Chairman.”
Chairman Townsend:
How long does a claim against the uninsured employer funds take? Is an employee disadvantaged as opposed to a normal claim?
Mr. Powers:
“If I may, I would like to defer to Mr. Wiles on that.”
Mr. Wiles:
Mr. Powers is correct. The injured worker who is working for an uninsured employer maintains the right to bring an action against that employer and collect benefits from the uninsured employers claim account. In order to collect those benefits the injured worker must complete certain forms and submit them to the Division of Industrial Relations. One of those forms is an election of benefits. It essentially does acknowledge our subrogation rights in the event of third-party litigation. The process is slightly different than for a regular industrial insurance claim. Under normal circumstances, an injured worker submits the report of injury, paperwork is generated, and there is an acceptance by the insurer within 30 days. In cases of an uninsured claim, the division first makes a determination whether there was an employer-employee relationship. Once a relationship is established, a determination is made and appeal rights are issued. Generally that takes about 30 days. This potential claim is forwarded to its third-party administrator for determining the compensability issues, which are the insurance-related issues of the claim. This means whether there was an accident occurring in the course of injury, what the scope of that claim might be, what were the affected body parts. This takes another 30 days to process. In an uninsured claim, there is an additional 30-day evaluation period that applies. This makes it slightly different than a claim covered by industrial insurance.
Senator O’Connell:
How would the employee of an uninsured employer be aware they could do this?
Mr. Wiles:
Pamphlets and information are available through the office of the Nevada Attorney for Insured Workers. It is also available on our Website. The information may not flow directly to the employees. They may hear it from people they speak to, or from an attorney they may contact. Practitioners in the workers’ compensation arena know of the existence of the uninsured employers claim account.
Senator O’Connell:
Is the information concise and in an easily read language?
Mr. Wiles:
Yes. Forms are simple and straightforward. We also have people in our office who speak other languages. There are Spanish-language pamphlets, and people to assist employees in understanding what those forms and options are in terms of the process.
Chairman Townsend:
Mr. Wiles, do you know if the fines issued to uninsured employers go into the DIR pool and then subsequently remitted to the General Fund if there is excess at the end of the fiscal year?
Mr. Wiles:
There is a fine and premium penalty that is assessed against an uninsured employer. The fine is a deterrent. The premium penalty is an enrichment. Both go back into the assessment process and are used to offset the assessment on industrial insurance insurers. The money does not go into the General Fund.
Chairman Townsend:
Are there any recommendations that you might have with regard to what motivators can be utilized to get employers to insure, and, at the same time, make sure those who are injured or lose their life while working for an uninsured employer are not penalized?
Mr. Wiles:
The existing framework works fairly well. There is a bill draft request that makes a slight adjustment to NRS 616C.220 in terms of the claims and evaluation process. It proposes to change the employer-employee relationship appeals directly to the appeals office, providing for a 30-day appeal time, lengthening the time for appeals of the claim-related decision from 60 to 70 days for injured workers. This is consistent with the process an injured worker who is insured would go through. The other aspect is the information sharing. Getting information out early to employers, as it relates to being uninsured, can better address safety-related issues before another tragic accident takes place. Information should cross jurisdictional lines so the division and all other enforcement agencies are able to share it
Chairman Townsend:
We want to make sure employees are not injured or die in vain. The major policy helps to create a safe workplace. We will hold this bill to coordinate with other associated bills on this subject.
I close the hearing on S.B. 23 and open the hearing on Bill Draft Request (BDR) 54-508.
BILL DRAFT REQUEST 54-508: Revises requirements for certain licenses to practice medicine if applicant intends to practice medicine at certain mental health centers under certain circumstances. (Later introduced as Senate Bill 133.)
SENATOR CARLTON MOVED TO INTRODUCE BDR 54-508.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NEAL WAS ABSENT FOR THE VOTE.)
*****
Chairman Townsend:
I adjourn the meeting at 9:24 a.m.
RESPECTFULLY SUBMITTED:
____________________________
Johanna Downey,
Committee Secretary
APPROVED BY:
Senator Randolph J. Townsend, Chairman
DATE: