MINUTES OF THE
SENATE Committee on Judiciary
Seventy-second Session
April 29, 2003
Chairman Mark E. Amodei called the Senate Committee on Judiciary to order at 8:12 a.m., on Tuesday, April 29, 2003, in Room 2149 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 Mark E. Amodei, Chairman
Senator Maurice E. Washington, Vice Chairman
Senator Terry Care
Senator Mike McGinness
Senator Dennis Nolan
Senator Dina Titus
Senator Valerie Wiener
GUEST LEGISLATORS PRESENT:
Assemblyman David F. Brown, Assembly District No. 22
Assemblyman David E. Goldwater, Assembly District No. 10
STAFF MEMBERS PRESENT:
Nicolas Anthony, Committee Policy Analyst
Bradley Wilkinson, Committee Counsel
Ann Bednarski, Committee Secretary
OTHERS PRESENT:
Alan B. Rabkin, Attorney, Nevada Bankers’ Association
Scott W. Anderson, Deputy Secretary of State, Commercial Recordings, Office of the Secretary of State
Frank W. Daykin, Commissioner, National Conference of Commissioners on Uniform State Laws
Alfredo Alonso, Lobbyist, National Association of Settlement Purchasers
Matthew Sharp, Lobbyist, Nevada Trial Lawyers Association
Ray Bacon, Lobbyist, Nevada Manufacturers Association
John P. Sande, III, Lobbyist, Pfizer International
Renee L. Parker, Chief Deputy Secretary of State, Office of the Secretary of State
Dean Heller, Secretary of State
Chairman Amodei opened the meeting with Assembly Bill (A.B.) 92.
ASSEMBLY BILL 92 (1st Reprint): Makes various changes to requirements governing filing and form of certain documents. (BDR 8-271)
Alan B. Rabkin, Attorney, Nevada Bankers’ Association, said A.B. 92 had four parts to it designed to remedy some problems with forms and meet the requirements of the Office of the Secretary of State. Mr. Rabkin said the first part dealt with staying current with national forms used for filing universal commercial code filings. He explained in 1999, the forms were included in the statute and the decision was made to remove these forms from the statute to make it possible to keep the revision of forms current. Mr. Rabkin said, by regulation, the secretary of state held public hearings before new forms were adopted and these hearings protect the public should the forms change.
Section 2 of A.B. 92 was designed to control “spite filings,” which Mr. Rabkin described as filings against public officials because the person filing does not like that official. The section attempted to remedy the problem with these filings by referring to an existing section requiring proof of an underlying debt before a filing could be completed against a public official, Mr. Rabkin said.
Section 3 of A.B. 92 solved a problem that occurred in a previous Legislative Session when a new chapter 108 of Nevada Revised Statutes (NRS), was adopted to create a producer lien, a lien between a manufacturer or a producer of a crop and a middleman. The statute, Mr. Rabkin explained, did not contain forms needed to implement chapter 108 of NRS. In section 3 of A.B. 92, the problem is remedied by adopting the use of the same forms as those used in chapter 104 of NRS.
Mr. Rabkin said section 4 of A.B. 92 added an overlooked national form as one of the types of forms county recorders could accept. He said this national form was one typically used by those filing from out of the State of Nevada. This form was omitted during the previous Legislative Session and remedied by A.B. 92.
Senator Wiener asked if this bill represented corrective action, what had been the procedure regarding county recorders who had accepted filings on national forms. Mr. Rabkin said the problem was discovered early, therefore, the national forms were accepted and this bill simply made their acceptance codified. He explained the statute passed in the last Legislative Session did not go into effect until July 1, which has caused no concern to date. If A.B. 92 is accepted, Mr. Rabkin said, “The national form will be informally accepted until the most likely October 1 start date of the new statute.”
Scott Anderson, Deputy Secretary of State, for Commercial Recordings, Office of the Secretary of State, submitted an amendment to A.B. 92, Exhibit C, and explained the amendment placed the standard fees in chapters 105 and 108 of NRS that were overlooked last Legislative Session. He said fees were changed, but were not added to statute. Mr. Anderson described the numbers of these filings as minor in terms of volume. He said, “Of 108 filings, a handful; 105 filings, a little larger volume.” He said the fees proposed were the fees from Revised Article 9 and the Model Rules as promulgated by the International Association of Corporation Administrators, Exhibit C.
Chairman Amodei asked Mr. Anderson if the amendment required a two-thirds vote to be enacted. Mr. Anderson said he did not know.
Frank W. Daykin, Commissioner, National Conference of Commissioners on Uniform State Laws, said Senator Care asked for an explanation of section 1, subsection 2, paragraph (h) of A.B. 92. He said Mr. Rabkin had touched on the subject and explained the purpose was to avoid having unauthorized claims of a debt filed against public officers when no debt existed. Mr. Daykin said a condition of filing such a claim was the debtor had to authorize the filing. He said, “There must be a general debt.”
Mr. Daykin said the secretary of state did not believe he had the authority to reject a filing if that requirement was not met. This section of A.B. 92 gave the secretary of state the authority; it invoked NRS 104.9509, the provision requiring a general debt, Mr. Daykin said. He added, line 34 of paragraph (h) reads, “the filing of such information” and needed to be changed to “the filing of theinformation” to clarify the intent.
Chairman Amodei closed the hearing on A.B. 92 and opened discussion on A.B. 536.
ASSEMBLY BILL 536 (1st Reprint): Makes various changes to filing requirements for business entities. (BDR 7-454)
Mr. Anderson submitted a proposed amendment to A.B. 536, Exhibit D. He said A.B. 536 with the proposed amendment would allow the secretary of state to further standardize the filing processes and facilitate a smooth transition into e‑commerce in the office.
Mr. Anderson said the proposed amendment changed what was presented to the Assembly and was explained on the last page of Exhibit D. He said the amendment complied with chapter 116 of NRS.
Senator Care asked Mr. Anderson to explain section 6 of A.B. 536 wherein the word “street” was replaced with “mailing address” on information about resident agents. Mr. Anderson replied the name and address of the resident agent were required as listed on the annual list of officers. He said the way the lists were generated, the address on it was where the lists were sent. He said the experience at the secretary of state’s office was frequently communications are labeled with the address found on the certificates of acceptance and often these addresses do not accept mail. Therefore, Mr. Anderson explained, a “mailing address” insert would alleviate the problem of hundreds of lists being returned to the Office of the Secretary of State marked “undeliverable.” The change was for clarification, he said. Senator Care remarked about a previous discussion recalling resident agents were using post office boxes and were required to provide physical addresses. Mr. Anderson said that aspect had not changed, but clarified a street address was required with the certificate of acceptance.
Senator Care asked about the proposed $50 fee to the person who wanted his or her name removed from the list of officers on a filing. He asked for verification that if a person resigned, a $50 fee was required to be removed from the list. Mr. Anderson answered affirmatively, stating if a person wanted his or her name off the list, there was a $50 fee involved.
Senator Care then asked if, after A.B. 536 was enacted, when a long form was submitted and the secretary of state’s office accepted it, was it deemed as “filed.” He explained his inquiry was whether the rejection of a form had to take place at the time the form was submitted to the secretary of state’s office.
Mr. Anderson said, “As long as a form contains all the requirements necessary to file in the office, we will accept it.” He added the appropriate fee needed to be submitted as well. If a person filed a form with incorrect information, the form could either be amended or a certificate of correction could be filed. The forms and information therein were then made public record.
Senator Wiener asked what procedure was followed if a fictitious name was no longer available. She asked for an example of how and where this situation could happen. Mr. Anderson responded when a corporation or an entity entered a revocation, the name became available for use by any other entity. If an entity had gone into default and it desired to reinstate, if the name had been taken by another entity, the corporation would need to choose another name.
Senator Wiener asked Mr. Anderson how much of a cost savings the State would realize with the proposed changes to the some 205,000 filings each year. Mr. Anderson said the amount was uncertain, the filing form had an informal certificate attached to it and if sent in with the filing, the secretary of state’s office would stamp it and return it as a receipt of filing. He added the majority of these informal certificates were not used, perhaps only 10 to 15 percent, but with 205,000 filings, there would be a savings even with the low percentage of informal certificates returned.
Senator Wiener asked about filing provisions for foreign entities. She said in previous meetings on limited liability partnerships and limited partnerships the filings were discussed and asked if they were included in foreign limited liability partnerships and foreign limited partnerships. Mr. Anderson said, “We would want that.“ He said those provisions would be considered in another bill heard at some future date.
Chairman Amodei closed the hearing on A.B. 536 and opened the hearing on A.B. 166. He invited Assemblyman David Brown to come forward.
ASSEMBLY BILL 166 (1st Reprint): Makes various changes concerning transfer of right to receive payment pursuant to structured settlements. (BDR 3‑231)
Assemblyman David F. Brown, Assembly District No. 22, said a constituent named Patricia Law brought this issue to his attention. He said this bill focused on companies that purchased payment streams or income streams over time from those who owned these streams. Mr. Brown referred to an article from U.S. News & World Report, Exhibit E, citing examples of people who received settlements from accidents and were awarded an income stream over time. Assemblyman Brown said there were companies who paid pennies on the dollar to buy these settlement amounts. He explained some of these settlements were paid over 20 years.
Assemblyman Brown said A.B. 166 created a procedure by which someone wishing to purchase the aforementioned income stream must apply to the court. The hopeful purchasers of the settlements had to prove to the court the transfer was in the best interests of the payee, that the payee had been advised to discuss the transfer with independent counsel, and that the transfer of the settlement did not violate any applicable laws. The transfer also had to be filed where the payee resided or in the court where the original award decision was rendered. In addition, Assemblyman Brown said, there were a number of disclosures the purchaser had to make to the payee including the total value of the income stream and the costs involved in the transfer.
Assemblyman Brown then referred to the testimony of Randy Dyer, Exhibit F, who had testified on A.B. 166 before the Assembly. He said Mr. Dyer, who was the executive vice president of the National Structured Settlements Trade Association, in Washington, D.C., was unable to attend today’s meeting. Whereas the text of the bill did not mandate structured settlements, rather, Assemblyman Brown explained, if a structured settlement existed and one wished to dispose of all or part of it, the regulations were there to facilitate such a transaction. Within Mr. Dyer’s testimony, Exhibit G, was a listing of the 35 states which have enacted structured-settlement protection acts. Assemblyman Brown said this settlement-protection legislation worked in conjunction with federal law. One of the issues of concern regarding the companies who purchased these structured settlements, Assemblyman Brown said, was the tax-free status they enjoyed.
He explained the transfer of the funds was made when the structured settlement was sold and a simple change of address form was filled out and the seller filled out a power of attorney to the factoring/purchasing company. He added there was no tax, as was the condition of most injury settlements. He said there were companies that were unscrupulous about these transactions. One of the objectives of this legislation was to make these purchased settlements taxable.
Senator Wiener asked how factoring companies found people with settlements and what the range of lump sum payments was in Nevada. Assemblyman Brown said the J. G. Wentworth Company Structured Settlement Funding Corporation, a settlement-purchasing company, had completed over 15,000 structured-settlement transactions with a total value of $370 million. He referenced accounts of settlement recipients in Exhibit E, the U.S. News & World Report Magazine article. Regarding how the buyers found those with settlement monies, Assemblyman Brown said he did not know exactly how they were found, but suspected some companies combed through legal documents. But, he added, sometimes purchasing companies advertised on television, and therefore they do not find the sellers, the sellers find them.
Senator McGinness referenced Mr. Dyer’s testimony, Exhibit F, and the portion explaining model legislation. He asked Assemblyman Brown if this was the basis of A.B. 166. The Assemblyman answered affirmatively, and said the model was given to drafting and instructed to incorporate all the elements.
Senator McGinness said the Assembly had changed the bill and asked what changed from the original drafting of A.B. 166. Assemblyman Brown said some disclosure information was added and safety measures were added for the benefit of the seller. In addition, Assemblyman Brown said the purchaser was responsible for filing the documents with the court
Senator Wiener asked if there were any regulatory tools in place for these transactions at this time. Assemblyman Brown said, “It has been essentially an unregulated industry.” He added the federal government recognized these purchases as a serious problem and encouraged these kinds of legislation on the state levels. He said the federal regulation assessed a 40 percent excise tax on these purchases if the purchasers were not following the proper process. If they followed regulations, the income from the structured-settlement purchases was taxed as regular income.
Senator Wiener asked Assemblyman Brown to verify his testimony was most of these companies were not paying any tax on these acquired structured settlements. He responded he did not know, but could not imagine the Wentworth company, for example, was not paying any tax on these purchases. He then added it was the predatory nature of this business that validated the need for legislation such as A.B. 166. He said the objective was to protect the sellers of the settlements. The government’s concern was if a disabled person was awarded a lifetime structured settlement designed to support that person, and the person sold it and lost the lump sum payment from the sale, he or she would then become a burden to the state.
Alfredo Alonso, Lobbyist, National Association of Settlement Purchasers, said the settlement purchasing industry dealt with people who have injury settlements or lottery winnings, and had legitimate reasons for needing to sell their settlements for a lump sum of cash. Mr. Alonso said the problem was without regulation this industry attracted ”a lot of bad players that do come on the scene and they ultimately end up paying these individuals pennies on the dollar, which is just wrong.” He said A.B. 166 provided adequate disclosure and included some important protective features.
Mr. Alonso said he had some amendments to A.B. 166, Exhibit H, for clarification purposes. He said the disclosures included advising the payee of any adverse tax consequences.
Senator Care asked who would be the “interested party” mentioned who would vouch for the payee and either support or oppose the decisions to sell a settlement. Mr. Alonso said initially, this party was the insurance company; subsequently it was decided that was too intrusive. Therefore, as a compromise, the “interested party” language was adopted. He explained the judge made the final determination, but statements from others were considered in the making of that decision. Senator Care asked about a payee who was advised the sale was a “bad deal” but chose to sell anyway. Mr. Alonso repeated, ultimately, the court made the decision, after all factors were considered, or the totality of circumstances, as it was worded in A.B. 166.
Senator Care questioned if a transfer or an assignment of funds took place in violation of this proposed statute, would the transaction be void. He explained he meant a sale without court approval and asked if there was a mechanism to cure it. Mr. Alonso said he did not believe there was, but added the A.B. 166 was fashioned after the model act with many compromises. He said he did not believe an unapproved assignment of funds was covered in the model act, either.
Assemblyman Brown said in discussions with Mr. Dyer there were times when the insurance company, who set up the annuity, was paying the income stream to the transferee unbeknownst to them. He said when the seller realized the sale was not a good idea, he was able to convince a court the insurance company had committed an oversight and the lost income had to be paid back to the original party. Assemblyman Brown said the object of A.B. 166 was to bring some sunshine onto the sale of a settlement transaction.
Senator Care asked if language stating a transfer in violation of the statute would be void. He said he did not want to cloud this legislation, but could foresee this being a problem down the road. Assemblyman Brown said the model legislation had been overwhelmingly successful in the states that adopted it without that provision. Assemblyman Brown said he wanted to move forward with A.B. 166.
Matthew Sharp, Lobbyist, Nevada Trial Lawyers Associations, voiced support for A.B. 166 and commended Assemblyman Brown for his work on it. Mr. Sharp described the bill as ”important public policy for this committee.”
He explained the importance of it by describing the negotiations that occur when a structured settlement was offered. He said with catastrophic injuries, either financially or physically, and a settlement was reached, the attorney’s job was to protect the client, he said, even after the case was settled. Mr. Sharp continued, a structured settlement had many advantages including tax advantages, but more so, the structured settlement was designed to assist the injured for the remainder of their lives, or several years after the settlement. The structured settlements were arranged with complete disclosure, Mr. Sharp reported. But, over a course of years, people least able to protect themselves had been ripped off by these settlement-purchasing companies. He said the bill was one that protects the public with two important provisions, the court order, and the notification of sale to the attorney who represented the consumer. Both of those elements working together, provided a considerable amount of protection, Mr. Sharp stated. He added Senator Care’s concern about voiding a settlement sale transaction without a court order was something to be considered for inclusion in the bill.
Senator Care asked when a client entered into structured settlement agreement, was he advised to consult with the attorney should he consider selling the settlement. He asked if there was any “notice” language regarding future sale of the settlement in the structured-settlement agreements. Mr. Sharp said in his office, a structured-settlement broker they worked with met with the client and set up the payment plan. He said he did not believe any additional disclosure about the event of selling it in the future. He added he had discussed A.B. 166 with the structured-settlement broker and reported the broker was comfortable with the provisions of the model act.
He said settlement agreements could be structured to have both the principal and the interest tax-free. Mr. Sharp said a lot of time was spent to ensure there was an absence of “constructive receipt” to the client. Senator Care asked if “pain and suffering” settlements were affected by A.B. 166. Mr. Sharp responded affirmatively; he stated these mandated settlements were affected by this bill.
Senator Alice Constandina (Dina) Titus, Clark County Senatorial District No. 7, said she had presented S.B. 251 a few weeks before and since that time several editorials on the subject of secrecy agreements with regard to public hazards had appeared in newspapers across the state, Exhibit I.
SENATE BILL 251: Enacts certain provisions governing confidentiality of certain information. (BDR 3-572)
Senator Titus said the complaints about S.B. 251, which did not pass, were considered, and the provisions rewritten to remedy them. The proposed amendments were now offered as amendments to A.B. 166, Exhibit J. Senator Titus referred to Assemblyman Brown’s testimony regarding directing sunshine onto settlements to protect the public and stated that was done by A.B. 166.
Senator Nolan asked if “serious public hazard” was defined somewhere else in the statute. Senator Titus said she did not know if “serious” was defined and said that determination would come from a judge.
Senator Care said he had no problem with the amendments proposed to A.B. 166, but referred to section 9, and said it could put the court in a position of making a determination without benefit of a verdict. He suggested consulting with judges regarding those determinations. He added if affidavits were provided by experts, judges could make determinations using them as a basis for a decision.
Chairman Amodei questioned the proposed section 6, subsection 2, and the line “or prolonged physical pain.” Senator Titus said that language was part of the existing statute.
Senator Titus said she met all the complaints with these amendments. She said she believed:
I think that people just don’t want this and they tried to come up with ways to attack the bill rather than to say, “We just don’t want it.” Remember who the people are who don’t want it: pharmaceutical companies, the rollover Jeeps, the exploding Pintos. Keep that in perspective.
Ray Bacon, Lobbyist, Nevada Manufacturers Association, handed out a proposed amendment to A.B. 166, Exhibit K, which required licensed professionals who were withholding information relevant to public hazards to report such hazards to consumer protection agencies at the state and federal levels. He said this reporting was not only a moral obligation, but a legal one as well. Mr. Bacon said if consumer agencies in multiple states and at the federal level were involved and informed of public hazards, the number of deaths would be reduced. He said with such a reporting obligation, problem resolution would be far timelier. He said if there were design problems with a product or with the products used in production, consumer agencies’ involvement would get issue resolution much faster. Mr. Bacon referenced Ford Motor Company and stated, “Four years and 190 lives, potentially, would have been avoided had disclosure been required.”
Mr. Bacon said a provision would need to be added to protect attorney-client privilege. He said discovery of a potential public hazard could be investigated without revealing this privileged information. Mr. Bacon said his suggestion related directly to Senator Titus’ bill with required information being made available to the public as soon possible. He added, “Not only to the public, but to the guys who can fix it. Good companies do not want bad products.” He said the reporting requirement would both broaden and enhance the bill.
John Sande, III, Lobbyist, Pfizer International, said he wanted to emphasize he had never heard of any court being criticized for protecting discovery. He said the legal profession had changed a lot, citing the tremendous amount of advertising law firms used. He said there was far more coverage of what happened in courts on television and in the newspapers.
Mr. Sande cited the federal study on Rules of Practice and Procedures of the Judicial Conference of the United States, which found no need to make it more difficult to issue discovery protective orders. He said A.B. 166 would increase the burden of judges. He said the argument of what constituted a serious public hazard would be debated a lot without resolution.
Mr. Sande said he had discussed this issue with the defense attorneys and felt their attitude was nonchalant. He said defense attorneys were not testifying and said this legislation just provided more work for defense attorneys. He concluded, “The court system is not broken in the State of Nevada and we don’t need this legislation, although I certainly agree that on its face, it looks like it is something that we need.”
Senator Titus asked if Pfizer would support Mr. Bacon’s proposal. Mr. Sande said he did not know what was Mr. Bacon’s proposal.
Mr. Sharp said he was “behind the 8 ball right now,” but reiterated support of the sunshine legislation. He said it was important to clarify sunshine legislation was about orders on discovery and not the ultimate settlement reached between litigants.
Vice Chairman Washington closed the hearing on A.B. 166 and said it would be considered in a work session. He opened the hearing on A.B. 163, and referred to it as “Mr. Goldwater’s Bill.”
ASSEMBLY BILL 163 (2nd Reprint): Makes various changes to provisions concerning financial practices. (BDR 7-383)
Assemblyman David E. Goldwater, Assembly District No. 10, said he was proud to bring forward A.B. 163 and described it as a collaborative effort between Secretary of State Dean Heller, State Gaming Control Board Chairman Dennis Neilander, and Assemblyman Goldwater himself. He said it was a response to the “biggest ill in financial markets and that is corporate fraud, abuse, accounting fraud and abuse, and severe issues regarding corporate governments.”
Assemblyman Goldwater cited USA TODAY reported all of the 1990s and early 2000s were marred by corporate scandals the likes of which were unprecedented in this country. Assemblyman Goldwater described the situation as very troubling to realize the results of greed and the need was there to respond. Assemblyman Goldwater said in the last Legislative Session, the alter ego doctrine holding individuals accountable was lowered on behalf of corporations. He said, “We need more protections for investors, for shareholders, for pensioners, and for the general public.”
Assemblyman Goldwater referred to an article from The Wall Street Journal regarding the federal government’s response called “The New Legal Landscape” which outlined the Sarbanes-Oxley Act (Exhibit L. Original is on file at the Research Library.). He said federal regulatory bodies handled most corporate issues and the procedures were described in Exhibit L. The additional pages of the exhibit outlined the ways people lied, cheated, and stole.
Assemblyman Goldwater said section 1 of A.B. 163 provided if an investigation was underway and documents were destroyed, either electronic or paper, or to evade the issue, a violation had occurred. Section 2 was the penalty provision, which, he said, increased such an occurrence to a class B felony crime, mandated prison terms, and determined fines. He said Assemblyman John C. Carpenter, Assembly District No. 33, recommended increasing the fines, and this suggestion was added to raise the fine to the statutory maximum. In section 3, an increase in the statute of limitations was added for civil violations, and section 4 was for criminal violations. Assemblyman Goldwater continued section 5 would enhance the gaming statute, as section 5 made it illegal to use the same auditing company for external and internal audits. He added this was deemed necessary because, in a number of corporate fraud cases, the financial statements were compiled with a conflict of interests. Assemblyman Goldwater said research found a pervasive practice by large corporations of paying millions of dollars to auditing companies, giving them incentive to cheat. Two separate companies must do the auditing, he explained.
Assemblyman Goldwater publicly thanked Secretary of State Dean Heller, who was “instrumental and always active on behalf of investors and shareholders and retirees and their protection.”
Senator Care thanked Assemblyman Goldwater for bringing a white-collar crime bill forward. He noted the words, “In any investigation,” that begins A.B. 163, and asked what would happen if some of the conduct occurred before any investigation was launched.
Assemblyman Goldwater said, “The most important part of this (A.B. 163) is the criminal aspect of it. The day one of these guys actually goes to jail and he’s in jail for a long time, that will be the day … that it slows this stuff down.” He said he did not think any conduct prior to an investigation was excused.
Renee L. Parker, Chief Deputy Secretary of State, Office of the Secretary of State, said the word “proceeding” applied to Senator Care’s concern. She said the secretary of state’s office could be working on a proceeding with the Securities and Exchange Commission and further investigation could be anticipated. She said the language was designed to monitor conduct before an official investigation was begun.
Chairman Amodei referred to the independent audit language in section 5, lines 31 to 35, and asked about gaming entities that were not publicly traded. He said he wanted to know if family-owned operations were required to have two auditing companies. He said in the publicly traded context there was no objection to the language, but in closely held entities, the expense seemed unnecessary since the securities were not traded publicly.
Assemblyman Goldwater said Senator Amodei had asked a good question. He said if the consensus was that smaller, nonpublicly traded companies did not need both internal and external audits, both would not be required. If both audits were required, two independent companies would conduct them. He added if this was an issue to smaller companies, it was probably very necessary to hire two companies to audit the books.
Dean Heller, Secretary of State, acknowledged Assemblyman Goldwater and Ms. Parker, and said Charles Moore, securities administrator for the State of Nevada, was present. Secretary of State Heller said today The Wall Street Journal had articles specifically addressing the misdeeds of the 1990s. He said these articles illustrated the role of security administrators and were supportive of the intention of A.B. 163. Secretary of State Heller offered quotes from these articles he felt were pertinent to today’s hearing including one from a 62‑year‑old Minnesota real estate saleswoman: “I have no faith in Wall Street. There is no one there to protect you. It’s a nightmare.” He said her sentiment could easily be resounded by many senior Nevadans.
Secretary of State Heller described A.B. 163 as “a great move in the right direction.” He said the bill mirrored the federal Sarbanes-Oxley Act and added, investigations were becoming increasingly more complicated and this legislation would be very helpful. This, he said, would protect the investors in Nevada. The increase to a class B felony crime made the penalty a serious consideration for offenders. He said the extension in the statute of limitations was also beneficial to the effort to clean up fraudulent actions.
Assemblyman Goldwater asked to make it part of the record, A.B. 163 did extend to electronic mail. He said this was important and becoming increasingly more important as spreadsheets and E-mail and other electronic communications were destroyed during investigations. He said he had made the same for‑the‑record announcement to the Assembly, in committee and on the floor.
Chairman Amodei closed the hearing on A.B. 163. He said the committee would further discuss the issues in a work session. Chairman Amodei adjourned the meeting at 9:43 a.m.
RESPECTFULLY SUBMITTED:
Ann Bednarski,
Committee Secretary
APPROVED BY:
Senator Mark E. Amodei, Chairman
DATE: