MINUTES

COMMITTEE: COMMERCE

DATE: Monday, March 19, 1973

MEMBERS PRESENT: Chairman Prince, Dr. Robinson, Messrs Bicker­staff, Capurro, Wittenberg, Demers, Dini, Hafen, and Torvinen;

MEMBERS ABSENT: None

GUESTS: Name

Charles Levinson Tom Leen Thomas Lorentzen Kay Ricks Joyce Jones Minnie Inzer George Vargas Eileen Brookman Elliott Sattler Mike Melner Daryl Capurro Pete Holden George Archer Pete Kelly John Garvin Tom Waterman Charles McKenney Ken O'Connell Sonner Greenspan Henry Michel Larry Struve Vickie Kolousek Charlotte Lorello Rebecca Ratliff. Fred Lugar Rex Lundberg Joe Lawler Keith Ashworth Suzie Hood Ray Lloyd Lester H. Berkson

Representing

Consumers' League II II

U of N, School of Home Econ. II It ti It fl

II II II II

American Insurance Assn. Assemblyman

II

Attorney General's Office Director Commerce Dept. Nev. Fran. Auto Dealers Washoe County D.A.'s Office Amer. Asso Retired People Retail Merchants Assn. Montgomery Ward Penney's Sears i Las Vegas Chamber of Commera Park Lane Center 1

II II " Washoe County District Atty U of N Home Economics II

II

II

II

Penney's

" II

II

II

Commerce Dept., Las Vegas 11 11 Carson City

Assembly Speaker FTC

" Attorney

Chairman Prince called' the meeting to order at 4:00 p.m. Mr. Capurro asked the ColllJTlittee to allow him to make certain changes in the amendments to AB 227, particularly in the As­signed Claims portion of the bill, to bring them into confor­mity with Nevada law. Mr. Demers moved, Mr. Wittenberg seconded

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COMMERCE MINUTES - page two - Wed., Mar 19, 1973

the motion. It was unanimously passed.

Due to over-crowded conditions in Room 222, the Committee adjourned to Room 214.

Mr. Wittenberg, as one of the sponsors of AB 300, stated that this bill includes fair trade practices and AB 301 estab­lishes a Consumers' Affairs Division of the Commerce Depart­ment; that a majority of the·introducers would prefer taking the strong enforcement language out of AB 300 and include it in AB 301 for a better enforcement provision. He asked wit­nesses to consider this in their testimony.

Dr. Levinson of the Consumer's League stated that he supports AB 300, but feels that there are many things the bill does not cover in respect to food services. He presented two pieces of meat which were the same cut of meat, in his opinion, but indicated a price difference of 14%. This is the type of practice the consumer needs some protection from. The consumer has no recourse and there are presently no laws to cover this type of violation.

Mr. Demers stated that Senator Lamb is presently consi­dering introduction of laws to cover meat labeling similar to those of New York.

Torn Leen, attorney for the Consumers League, stated that there is a great need for consumer laws to cover deceptive practices and he gave historical reasons for this; that con­sumers today are forced to buy products that they really don't understand; that there is no equality in bargaining between consumers and retailers; that there are many occasions when consumers are defrauded in ways that are not illegal and are very difficult to prove; that Nevada is one of the very few states that have no consumer protection laws.

Chairman Prince stated that it would cost $146,846.00 to set up the Consumer's Affairs Division.

Mike Melner of the Commerce Department stated that in 1971 the Governor, by Executive Order, established the Con­sumer's Affairs Division of the Commerce Department, but it was not funded in any way; that they have handled 3,000 com­plaints but have not been able to prosecute any of them; that they have worked fairly well with limited funds and limited legislation; that honest businessmen can only benefit from this kind of legislation and the dishonest businessmen will be forced out of business; that AB 301 is very broad and com­prehensive; that there are only six states which do not have this act. Regarding AB 300, he felt that it would be more

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COMMERCE MINUTES - page three - Mon., March 19, 1973

effective if it were amended and included in AB 301; that the Commerce Department would support any amendments which would add definitions of unfair trade practices and give more authority to the District Attorney's Office. He sug­gested removing Section 25 from AB 301.

Mr. Demers asked Mr. Melner if he felt this bill has the teeth necessary in it to properly enforce the act. Mr. Melner stated that with amendments and the language from.M_ 300 added to it, it would.

Mr. Larry Struve of the Washoe County District Attorney's Office stated that many states are now simply adopting the FTC Consumers' Protection Act; that Section 5 of AB 300 and Section 9 of AB 301 are from this Act. He feels that concur­rent jurisdiction between the State and local District Attor­ney offices is the best way to enforce the provisions of this act. He stated that AB 301 is very week; that it only allows for injunctive enforcement which would leave the Commerce De­partment with very~little strength to enforce the bill; that the amendments prepared by the Washoe County District Attor­ney's Office will provide for civil penalties for any wilful acts. (See Exhibit "A" for amendments.)

Mr. Struve felt that the FTC laws incorporated into the bill gives the bill more flexibility, particularly in view of the fact that the Legislature only meets biannually.

Mr. Wittenberg pointed out that if the FTC amends their law while the Nevada Legislature is not in session, their changes would still apply in Nevada. Mr. Struve felt that without the crimina·l •penalties in the law, they would not be in a good enforcement position and he urged the Committee to consider these provisions.

Mr. Torvinen stated that he felt the discovery provisions in Section 19 were very broad and could be very depressing to business. Mr. Melner stated that many agencies of the Commerce Department have these powers; that the reputable merchant will cooperate with their office and show them their records. Mr. Struve stated that most of their complaints were received from businessmen, not consumers, because of price-cutting practices causing the businessmen to lose customers. Mr. Bickerstaff asked what was meant or intended by a "reasonable time" in which to correct an unfair practice, Mr. Struve stated that it was what the consumer was "given to believe".

Mr. Holden, an investigator for the ·Washoe County District Attorney's Office, stated that because most of the states sur­rounding Nevada have strong consumer laws, crooks are driven to Nevada where there aren't any. "We have had problems with each

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COMMERCE MINUTES - page four - Mon., March 19, 1973

and every provision of Section 9," he stated, and that "the legitimate businessman has nothing to fear from this". He gave examples of used cars being sold for new and that under the present situation, all he can do is advise the consumer to sue civilly

230

Mr. Rex Lundberg of the Las Vegas Office of the Consumer's Affairs Division of the Commerce Department, stated and felt that AB 301 would be good for both consumers and businessmen. He stated that of the 3,000 complaints they had received, 753 were against firms and/or individuals; that 78% had been re­solved in favor of the consumer; 15% were a "draw", and 7% were in favor of the businessman; that there are more problems in some industries than others; that this bill would cover just -aboJlt-every industry the consumer will come in contact with.

Discussion was held regarding Dr. Robinson's query re­garding protection for the businessman who might be found inno­cent of any unfair practice, yet could be put out of business in the meaptime. Mr. Lundberg and Mr. Melner both stated that the Commerce Department would have no powers to create a hard­ship of any businessman nor impound any property without an order from a District Court.

Mr. Garvin, an attorney representing Montgomery Ward and the Nevada Retailers Association stated that he felt AB 230 took care of many of the problems covered by AB 300; that he was in favor of AB 300 as an adjunct to AB 230. He had several suggested changes to be made in AB 301 and the proposed amend­ments. Chairman Prince asked Mr. Garvin to meet with Mr. Wit-tenberg t.o draft his suggested changes. /. /}

/('~1&,,,,el D,;, ? v' C- '1 C, e?L:/;r .s e.s ~ .3o/ "'s a--,e-,,,,;~. ' ' , I

Mr. Wittenberg asked for Committee approval to introduction of fiva•:heusekeepinq, bill~related to the Savings and Loan· divi­sion of the Commerce Department. Mr. Wittenberg moved that they be presented to the Committee; Mr. Capurro seconded the·motion. All the Committee members approved· the·motion·with the excep­tion of Mr. Torvinen · who voted· "nay". Mr. Demers· moved, and A Mr. Wittenberg seconded a motion to introduce an insurance bilI. The vote was unanimous.

The meeting was adjourned at 6:00 p.m.

Respectfully submitted,

PHYLLIS BERKSON, Attache,

~ IL 13. 72'? ( lJ)rZ. 5il·li/S )) A.8, 7 2 'j {Bl)!?. ~ -11.fl.), A,B, 730 (B'/JJZ %·13c-;), 11.B, 731 (BDlf!. 51.-,110) lh B. 7 32 (BD1<... c;/,,~/1./t/)

A A,6, 138 {BDt ~1-t32'J)

ASSEMBLY

AGENDA FOR COMMITTEE ON COMMERCE

• Date Mon., March 19 Time 4:00 p.m.Room -------222

Bills or Resolutions Counsel to be considered Subiect requested*

•

THIS AGENDA SUPERCEDES AND CANCELS PREVIOUS AGENDA DATED MARCH 2 AB 300 Prohibits unfair methods of competition

and unfair or deceptive acts or practices in conduct of any trade or commerce;

AB 301

..

Creates consumer affairs division of the Department of Commerce and regulates de­ceptive trade practices •

*Please do not ask for counsel unless necessary.

•""· r Adopted Lost Date: Initial:

• • Adopted Lost Date: Initial:

• •

Concurre~d'---"i~n~----LI4-~'--"'-"A"'-'l.u._--"-"'--'-L---'-.....___ -~oncurred in • Initial:

Amendment

Not concurred in • Date: Initial:

466

Amendments to Assembly Ex.A,.

I Sena:t-z31

Bill/ Jo_int_ Resolut~on No. __ _ (BDR ·-" ~ - -

l!Op.Osed. by . . , . . -- . -

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insoee::ion., st·..:d•, o.r

takir-.g of testimonv under ;:~a th or z:cJn:.owleclcrr:.ent relati.n'.J to --------·------------·--------------

Amend sec. 14r page 3, by deleting line 49 and i~s?~tins:

Amend ~he bill as a whole by adding a new sac~ion desis~a~e~ sec. 14.3

-:ollry,,,5_nq sec. 11 to read as follows~

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} . ~~~i~g a false re~r~sentation or ~~usinq ccnfusia~ or li~elihoo~ of

confusion or mis~nderstanding as to a~~ ~ffiliatio~, c0n~~ction, association

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