MINUTES OF THE
SENATE Committee on Commerce and Labor
Seventy-second Session
March 10, 2003
The Senate Committee on Commerce and Labor was called to order by Chairman Randolph J. Townsend, at 9:00 a.m., on Monday, March 10, 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 Joseph Neal
Senator Michael Schneider
Senator Maggie Carlton
GUEST LEGISLATORS PRESENT:
Senator Bob Coffin, Clark County Senatorial District No. 10
STAFF MEMBERS PRESENT:
Scott Young, Committee Policy Analyst
Kevin Powers, Committee Counsel
Laura Adler, Committee Secretary
OTHERS PRESENT:
Sean Abbott, Ph.D., Analytical Director, akaMOLDLAB
Jim Werbeckes, Lobbyist, Farmers Insurance Group
Lisa A. Foster, Lobbyist, AAA Nevada Insurance Agency
Marshall L. Schultz, President, Residents Information Center, Incorporated
Richard Daly, Lobbyist, Laborers International Union of North America Local 169
Chairman Townsend opened the hearing on Senate Bill (S.B.) 173. He said the bill addresses licensing boards and is the jurisdiction of government affairs because it deals with accounting practices.
SENATE BILL 173: Exempts certain licensing boards from State Budget Act and certain provisions governing financial administration. (BDR 31-506)
SENATOR O’CONNELL MOVED TO RE-REFER TO SENATE COMMITTEE ON GOVERNMENT AFFAIRS S.B. 173.
SENATOR HARDY SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS NEAL AND SCHNEIDER WERE ABSENT FOR THE VOTE.)
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Chairman Townsend said Senator Coffin would like S.B. 130 set aside at this time.
SENATE BILL 130: Provides for use of form for employers to apply for health insurance under certain circumstances. (BDR 57-232)
SENATOR O’CONNELL MOVED TO INDEFINITELY POSTPONE S.B. 130.
SENATOR HARDY SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS NEAL AND SCHNEIDER WERE ABSENT FOR THE VOTE.)
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Senator Bob Coffin, Clark County Senatorial District No. 10, stated his home had mold and was the genesis of S.B 131 and S.B. 132.
SENATE BILL 131: Requires certain insurers to disclose coverage for control of mold in property insurance policies and to offer coverage for control of mold. (BDR 57-221)
SENATE BILL 132: Requires licensure of persons engaged in certain activities relating to control of mold. (BDR 53-235)
Senator Coffin said the intent is to alert everyone to the fact there is no coverage for one of the most disastrous things that can happen to your home, which is toxic mold. He said he did not know of an insurance company in Nevada covering mold. Senator Coffin emphasized S.B. 131 was not a mandate to insurance companies to cover mold; it was a gateway to provide coverage. He stated Senate Bill 132 comes from his personal experience in remedying the mold situation in his house.
Senator Coffin said about a year ago he suspected mold because of his family’s health problems. Because he had read about mold, he inquired of his health providers about mold who said it could have an effect, but then again it might not. The study of the effects of mold on people’s health is still in its infancy, so there are no conclusive answers at this time. Further, it was difficult to determine which people are susceptible and who are not to toxic mold. An expert in this field said, “There is no such thing as a person sick from mold, it is a sick-building syndrome.”
Senator Coffin said his home was tested by a reputable lab at University of Nevada, Las Vegas under the management of Dr. Linda D. Stetzenbach, Program Director, Administrative Faculty, Harry Reid Center. He said Dr. Stetzenbach has strong opinions on the importance of standards in this industry, and would make herself available for meetings.
Senator Coffin said his home tested positive for toxic mold. He received six different bids, none of which had any semblance of uniformity in service, before he settled on the seventh company. Senator Coffin said he could not get a company to give him an apples-to-apples comparison, nor did he feel comfortable all the people were qualified to successfully remove the mold. Senator Coffin said he could not find a licensure process through which an agency could be relied upon to determine who had the qualifications in the industry.
Senator Coffin said he hired a company to analyze the bids, in part, because they had experience with older unusual homes. He said his home was 52 years old. It was built of cinder block and plaster. He stated the company did a good job, but he found he had to monitor them because the solution was expensive, time-consuming, and the temptation to take shortcuts was enormous. None of the people had the same training, experience, or background. Some of the people had 2 or 3 days of training, others a week, a few a little more. He clarified there are qualified people in the field such as laboratory people, microbiologists, and industrial hygienists who have the qualifications, but they are not contractors.
Senator Coffin said the State had spent millions in cleaning sick buildings, therefore the State had an interest in maintaining standards from a budgetary point of view.
Senator Coffin asked the Clark County Assessor for a list of homes over 10 years of age, their value, and the amount of tax collected from the properties. Homes in Clark County have an assessed valuation of over $10 billion with taxes of $240 million annually, and that is a depreciated amount. He chose the 10-year period because it is the cutoff for going back to a contractor regarding housing defects.
From personal experience, he said, his house was worth $240,000. It cost $50,000 to fix the mold problem, and nearly $50,000 to make sure his house was less prone to getting mold in the future. He stated no house could be mold free. Anytime a building has water, plaster, drywall, and/or wood in the same place, there will eventually be mold. Senator Coffin said he would never recover the original value of his home nor the money it took to make it healthy.
Senator Coffin pointed out the number of homes in Clark County and the number of them with mold, the impact on assessed valuations, and property taxes could be an enormous cost to local governments. These costs do not cover loss to the homeowner in furniture, carpeting, accessories, clothing, and other personal possessions contaminated with mold. The results could be a devastating and costly process possibly resulting in bankruptcy for the homeowner.
Senator Coffin said he moved his family out of their home in May 2002, and returned in December 2002. The family had to thoroughly clean or replace every single item before bringing it back into the home. Instead of wall-to-wall carpeting, they opted for wood and tile floors, and still do not have drapes or curtains on the windows. The house was completely re-plumbed, a completely new roof, and has upgraded both air-conditioning units.
Senator Coffin stated other people are repeating this experience. Qualified, well‑trained, licensed, and bonded contractors must be out there to do the best job possible for the property owners. The intent of these bills is to encourage insurance companies back into this area.
Senator O’Connell said she understood three out of millions of molds were highly toxic. Senator Coffin replied there are many more than three molds because each person has a different sensitivity. There is general agreement that half a dozen or so would be harmful to some people, but not to everybody. Some molds may only cause sniffles.
Senator Hardy said the construction industry is concerned about people getting into preventive maintenance because of the liability. Senator Coffin agreed there should be a standard regarding liability. The homeowner should also accept some responsibility for maintaining the home. In many cases neglect is a big contributor to the buildup of mold.
Senator Hardy said mold has been around forever. People have recently become more educated about mold and are concerned. It could be the next panic. It would be good to find a way to encourage people to get into the prevention portion.
Senator Coffin said it is hard to get some people to take preventive action such as regularly re-caulking of their bathrooms. He said he thinks there are fewer lawsuits right now because there is no insurance coverage, so litigation would be less worthwhile.
Senator Carlton said she was concerned Senator Coffin had to go through so many people before finding someone qualified to do the job. Because most people would not know to be as diligent, she asked if he would expand on the process he went through.
Senator Coffin responded the first three or four people came highly recommended, but each had a widely different method to clean up the mold, and widely different prices. He paid $1500 to have his home tested for mold before seeking a cleanup service. The biggest consideration is not to disturb the infected area any more than necessary so the mold is not spread through the rest of the house. He strongly urged protocols for cleanup. He observed this would not be the asbestos of the twenty-first century because the insurance companies got out early. Additionally, not many State agencies want to be involved in the licensure, and probably only under duress. He said the State Contractors’ Board appears the most obvious to oversee licensure. Senator Neal noting page 1, lines 3 to 7 of the bill, asked who would get the disclosure statement.
Senator Coffin said currently every policyholder in the State has received a disclosure statement saying they have no coverage for mold. He surmised the disclosure statement should be in every insurance policy and renewal. He emphasized water damage is covered if caught right away, but usually not covered if the homeowner waits a couple of weeks.
Senator Neal asked who would be responsible. Senator Coffin answered that his original intent with certain sections of the bill has changed, but he is still looking for a way to aid prevention and cleanup. He said S.B. 131 might be the vehicle for insurance companies to find encouragement back in the business of coverage for mold. On the other hand, S.B. 132 may be the bill on which to spend the most time.
Senator Neal said this is an area of concern regarding the health and wellness of Nevada’s citizens. He said he researched the subject of mold on the Internet. He found an article that stated, “Toxic mold is man’s worst enemy. It can cause severe illness, birth defects, miscarriage, headaches, memory loss, destruction of brain tissue, cancer, allergic reaction, loss of hair, skin disease, open sores, fungus infection, sinusitis, lung disease, aspergillus, other respiratory illnesses, mold induced infections, and sometimes death.”
Senator Coffin stated all of these things are true to some degree, yet the previous vehicle for addressing these problems has disappeared.
Senator Neal said people are conscious of water damage, but not of the mold that could develop from leaks. When his home had a leak, the insurance company came right away, pulled up the carpet and set up fans for 4 days to dry out the area. He never thought about the possibility of mold.
Senator Coffin noted in Senator Neal’s case everything may have been taken care of, or maybe not; it was hard to determine.
Senator Carlton said she wanted to know if the condition of mold in the house had to be disclosed to the real estate agent.
Senator O’Connell clarified that any leaks in the roof or plumbing would have to be disclosed and might involve a potential for mold. Some people might not disclose and it could be a problem for the buyer.
Senator Hardy stated this is the reason we have to have standards. He said he was in his home for 2 years when the dishwasher leaked. When it was pulled out there was a small area with mold. He said he would have treated the area with bleach and forgotten about it. The repair people went to great lengths to block off the area with plastic before working. He added the repair was made by the homebuilder. He did not know the cost of the work. He agreed everyone needs a better understanding of molds.
Senator Coffin said people could overreact, but most underreact. He recommended overreacting when your family’s health is a consideration. He pointed out that part of the problem is indoor plumbing and environmentally tighter-built homes. He said homes in southern and high-humidity regions do not have this problem because they are built off the ground thus allowing for an exchange of air. He noted there are homes with mold on the outside but is not the problem. It is the mold on the inside that is a health risk.
Senator Shaffer stated the emphasis should be put on the competency of the people who do the initial inspection because that is where it all starts. He said he had his home in Carson City inspected when he purchased it and mold was found in one small area of a crawl space. When he looked at it, he saw that the previous owner had vented a clothes drier into the crawl space because it was full of lint.
Senator Coffin pointed out to Senator Shaffer that after he went into that crawl space, he walked through the rest of his house carrying some of the lint containing mold spores, thus spreading the potential into other areas of the house. He emphasized this is a good example of why no one should inspect and clean mold unless they are properly trained, dressed, equipped, and bonded.
Sean Abbott, Ph.D., Analytical Director, akaMOLDLAB, said he is involved in the industry and has 15 years of extensive experience in mold. His background is fungal biologies, especially relating to fungi in the human environment. Although he is not a physician, he has training in medical mycology. He said he supports a bill requiring a thorough approach to the industry. He agreed with the requirement that people should be properly trained. He stated the health of people in the workplace and at home is important. Equally important is the health of people working in this industry by ensuring adequate protection. He said the mold environment is a double-edged sword. On one hand is public awareness of airborne molds; on the other hand is not having a panic, as these airborne molds are generally not immediately life threatening. A way needs to be found to make the process rational, cautious, and protective for people. This problem is solvable, if done in a careful, controlled manner.
Senator Shaffer asked if there were any devices on the market by which homeowners may take readings.
Dr. Abbott replied the science is still evolving. There are various types of monitoring devices but no consensus as to which are the most accurate. Part of the problem is there is no agreed upon method in determining and correcting the problem. He said the most common method for detection are air quality monitoring devices that draw air into a cassette or into a petri dish that the laboratory would analyze for mold spores.
Senator Neal said he wanted to know if there was dampness in a house caused by some type of moisture and left untreated if it would cause a toxic mold.
Dr. Abbott said toxins are an aspect of health risks imposed by fungi. He said most molds come in from the air and lay dormant until some type of moisture is introduced. Keeping an area dry is the best prevention. Statchybotrys is a common environmental mold. It is less common as an airborne mold, and is commonly found outside in soils, plant debris, flowerbeds and so on. Molds will start to grow and develop as soon as water and a food source such as drywall paper become available. Generally, the mold will not take hold until after 48 hours. The preferred treatment is to thoroughly dry the area as soon as possible to keep the molds from getting established. He added there are a great deal of variables in types of molds and conditions supporting their growth and toxicity.
Senator Neal said he wanted to know the difference between fungi and mold. Dr. Abbott responded that fungi belong to the kingdom fungi. Mold is a looser term generally defined as micro fungi. All molds are a type of fungi, but not all fungi are molds. Fungi can include mushroom molds, yeasts, and others.
Jim Werbeckes, Lobbyist, Farmers Insurance Group, said Farmers Insurance Group has never covered mold. In the past 2 years Farmers issued endorsements clarifying the noncoverage of mold because of court cases they lost due to the language in their policy not being clear enough. He said Farmers agrees with S.B. 132 regarding licensure, and continued education of people in the industry. Further, the proper place for licensure is under the contractors board with a self-sustaining fee.
Senator Hardy asked if a rider for coverage could be purchased. Mr. Werbeckes answered, “No.” He added Farmers has paid for mold remediation. He explained mold is usually associated with a long-term event where water has been present for a long period of time. Farmers covers sudden, accidental events such as a leak while the homeowner is on vacation. It has never covered mold occurring as a result of unmaintained grout thus allowing moisture to seep over a long period of time causing the wall cavity behind the tile to build up with mold.
Senator Neal inquired if Farmers wrote health policies as relates to homes. Mr. Werbeckes replied a homeowner policy would cover a neighbor coming onto your property and injuring themselves, but does not cover homeowner health benefits. He said Farmers would cover a sudden and accidental event, Farmers would not cover a situation where the homeowner delayed reporting the situation until they saw the mold growing on the walls. The homeowner has a duty to report a claim in a timely and prompt manner.
Senator Neal said he wanted to know how long would it take for mold or fungi to develop once it had contacted a food source. Mr. Werbeckes said if the spores are there and had the proper temperature and food source then mold could grow.
Senator Neal asked how Farmers could determine if the mold spores were already in a home. Mr. Werbeckes said mold spores are present in most homes just waiting for the right conditions of moisture and temperature to start growing. He noted Senator Neal had a water accident in his home. Once the insurance company is notified, they try to get into the home as soon as possible to pull up carpeting, put in air movers, and dehumidifiers to remove as much moisture as possible to prevent molds from growing. A fungicide is also sprayed to kill any mold spores that may be present. The key is to respond quickly to prevent anything further from occurring.
Senator O’Connell said it is important to look at the effect on assessed value of homes and on county revenue. She remembered there was a major court case over plastic pipe. It resulted in having the plastic pipe removed from the homes in question. It would help to know how many of those homes were affected. She also recommended looking into mansard flat roofs, especially in Las Vegas, for water problems resulting from flat roofs. The water district should also look into placement of sprinkler systems around homes because of spray against the structures would eventually cause deterioration and buildup in the wood and concrete. She said there would be a need for information in these areas.
Lisa A. Foster, Lobbyist, AAA Nevada Insurance Agency, stated concerns with S.B. 131. She said they do support S.B. 132 with a suggestion to divide licensure into two categories. One license for people doing testing, and another one for those doing remediation. This will also reduce the expense of education and continuing education.
Senator Neal said he wanted to know where else besides in a home could mold be found. Dr. Abbott said water in virtually any environment can lead to mold growth indoors or outside. For example, if water gets on a car’s floor mats, contaminated with soil and other organic particles left for a period of time, they will eventually get moldy and fungal growth will occur. The same will apply to a crawl space with soil exposed to high humidity, wet cardboard boxes in a basement, sewage loss, plumbing leaks, and wet building materials of all kinds. Also, intermittent moisture versus chronic moisture, accidental losses, condensation and moisture from humidity, changes in temperature, if persistent over time, even an intermittent source could encourage mold growth.
Marshall L. Schultz, President, Residents Information Center, Incorporated (RIC), said RIC sponsors Nevada Renters Hotline to which many State and local governments refer callers. He said they are the only organization in the State collecting and collating data on rental problems throughout Nevada. Mr. Schultz said RIC supports S.B. 131 and S.B. 132. Reading from testimony (Exhibit C), he said recognition of mold problems has been growing steadily in recent years, and nobody has quite figured out what to do about it. Mr. Schultz recalled shortly after the Grant Sawyer State Office Building in Las Vegas opened, it was closed for a while because mold was making the workers ill. It was an expensive operation for the State and the workers.
As for insurance, Mr. Schultz said he would suggest a rider with an additional premium. He surmised an insurer would want to know if a building is clean prior to coverage. He said RIC supports licensure based on training and experience. He stated landlords around the State constantly encounter problems after the fact. He said the landlords could use assistance through insurance to protect them from huge costs associated with laboratory tests, repairs, and remediation.
Richard Daly, Lobbyist, Laborers International Union of North America Local 169, said it would help to have a protocol for workers handling toxic mold. He said currently there is a crew of 20 people working to clean up a building in Washoe County. He said these people are willing to help develop the protocol for a curriculum to make sure workers have the education and procedures in place for their own safety and safety of others so that toxic molds are not spread elsewhere or carried into their own homes. He noted they use procedures developed on a national level that is a 24-hour class. He said he sees a parallel with asbestos, and suggested it be looked at in conjunction with S.B. 132.
There being no further business, the meeting was adjourned at 10:33 a.m.
RESPECTFULLY SUBMITTED:
Laura Adler,
Committee Secretary
APPROVED BY:
Senator Randolph J. Townsend, Chairman
DATE: