MINUTES OF MEETING
ASSEMBLY COMMITTEE ON COMMERCE
Sixty-seventh Session
May 19, 1993
The Assembly Committee on Commerce was called to order by Chairman Gene T. Porter at 3:45 p.m., on Wednesday, May 19, 1993, in Room 332 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda, Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Mr. Gene T. Porter, Chairman
Mr. Morse Arberry, Jr., Vice Chairman
Ms. Kathy M. Augustine
Mr. Rick C. Bennett
Mr. John Bonaventura
Mr. Val Z. Garner
Ms. Chris Giunchigliani
Mr. Dean A. Heller
Mr. David E. Humke
Ms. Erin Kenny
Mr. Richard Perkins
Mr. Scott Scherer
Ms. Myrna T. Williams
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
Assemblyman William Allen Petrak, District 18; Assemblyman John C. Carpenter, District 33
STAFF MEMBERS PRESENT:
Mr. Paul Mouritsen, Senior Staff Analyst, Legislative Counsel Bureau
OTHERS PRESENT:
Ms. Alyson McCarthy, Channel 13; Mr. James Weller, Director, Department of Motor Vehicles and Public Safety; Mr. Raymond L. Sparks, Chief, Registration Division, Department of Motor Vehicles and Public Safety; Mr. Daryl Capurro, Nevada Franchised Auto Dealers Association; Ms. Gail Burks, Nevada Legal Services; Ms. Colette L. Rausch, Deputy Attorney General; Mr. John Kuminecz, Commissioner, Consumer Affairs Division; Mr. Ronald G. Shutt, Chief Compliance Officer, Consumer Affairs Division; Mr. Walt Monaghan; Mr. Ed Meeks; Mr. Warren Hardy, Hardy's Automotive; Mr. Frank Downs, Nevada Auto Body Association; Mr. Jack Greco, Chairman of the Board, Nevada Gasoline Retailers and Garage Owners Association; Mr. Steve Yarborough; Mr. Martin Bibb, National Federation of Independent Business; Mr. Phil Waldren, Paramount Auto Body; Mr. Steven Waldren; Mr. Richard Dahl; Mr. Warren Stephens; Ms. Lucille Lusk, Nevada Coalition of Concerned Citizens; Ms. Cathy Haskins, American Auto Air; Mr. Robert Gentile, President, Nevada Home Health Care Association, and Administrator, PRN Home Health Care; Ms. Ruth Jagodzinski, Director of Professional Services, Kimberly Quality Care; Ms. Stephanie Tyler, Nevada State Chiropractic Association and Nevada State Medical Society; Ms. Georgianna Barrett, Nevada State Board of Physical Therapy Examiners; Ms. Joan Clements, Administrator, Manufactured Housing Division; Mr. Charlie Joerg, Nevada Manufactured Housing Association; Mr. James Todd Russell, Nevada State Board of Accountancy (See also Exhibit B attached hereto)
AB 558 Regulates businesses for repair of motor vehicles.
Assemblyman William Allen Petrak, District 18, testified. Mr. Petrak asked for support of AB 558. He submitted a copy of AB 558 as originally written together with a proposed amended version of AB 558 (Exhibit C).
Chairman Porter asked if Mr. Petrak wished to use the proposed amended version of AB 558 as the basis for his testimony. Mr. Petrak replied he did.
Mr. Petrak declared thousands of car owners were being "ripped off." He read a letter from the Consumer Affairs Division of the Department of Commerce which was written in response to a consumer's complaint and which advised the consumer the division could take no action concerning the consumer's complaint. He said, "There isn't anything on the books that they can do to help the people."
Mr. Petrak told of a problem encountered by one of his constituents who had taken his automobile to a company to have oil put in the automobile and whose automobile engine subsequently "froze up" because no oil had been put in the automobile. He advised when his constituent returned to the company which had done the work, the manager said, "I'm sorry fella. He put oil in your car." He indicated his constituent had been pursuing the matter for three years and had retained an attorney. Mr. Petrak stated there were thousands of such cases in Nevada.
Ms. Alyson McCarthy, Channel 13, testified. She showed a video tape which she described as a tape of "...what we call tuneup terrors that we've run across at Channel 13."
Ms. McCarthy indicated Channel 13 had spent the previous two weeks investigating brake repairs. She stated (in the field of brake repairs) the ratio of honest to dishonest mechanics was three to one.
Ms. McCarthy advised "Contact 13" was a consumer information, referral and problem-solving service which received hundreds of telephone calls and letters, each week, from members of the community. She said the majority of the most common complaints received concerned problems regarding car repairs and advised car owners had little or no legal recourse (to resolve such complaints) other than small claims court. She stated a review of the 100 most recently received letters concerning car repairs revealed the most common complaints concerned: unnecessary repairs; repairs performed without the customer's prior, written authorization; charges made for parts and labor for work which was not done; failure to honor written warranties; cars being held for ransom; too much time being taken to effect repairs; incompetent mechanics; suspected sabotage of automobiles; charges which exceeded the written estimate of charges; companies closing business and then reopening under new names.
Chairman Porter said a consumer pursuing a small claims action concerned with repairs to his car would require an expert witness to testify work done on his automobile was not done properly; he asked how such a consumer would locate such an expert witness. Ms. McCarthy indicated she observed instances in small claims court when a "second mechanic" came forward to testify parts had not been put in a plaintiff's automobile or work had not been correctly. She suggested even if a plaintiff won his case in small claims court, collecting on the judgment could be difficult. Chairman Porter asked who was required to pay the cost of having a second mechanic testify in small claims court. Ms. McCarthy replied the consumer would pay the cost.
Ms. McCarthy stated most individuals who contacted Channel 13 (regarding automobile repair problems) were senior citizens or members of low income families who could not afford to lose "hundreds or thousands of dollars" because of improperly done or unnecessary automobile repairs. She advised of those people who wrote the 100 letters she had summarized, 70 had included in their letters receipts for money "they felt they had lost." She stated the total of those receipts exceeded $65,000.
A colloquy ensued between Mr. Bonaventura and Ms. McCarthy concerning collection on small claims judgments.
Ms. Giunchigliani asked how many of the authors of the 100 letters Ms. McCarthy had discussed were women. Ms. McCarthy responded, "I'd be guessing. I'd say the most are women, and of course, a lot of the senior citizens are ladies too."
Ms. Giunchigliani asked if in her investigations, Ms. McCarthy dealt with any automobile dealerships or only with individual garages. Ms. McCarthy responded, "...the only dealership we used was a dealership that provided our expert mechanics." She indicated Channel 13 received complaints concerning automobile dealerships as well as other businesses which provided automobile repairs.
Chairman Porter asked if Ms. McCarthy had testified the ratio of good mechanics to bad mechanics was "one in three." Ms. McCarthy answered, "Actually, three to one in favor of the good mechanics in our most recent survey out there with the brakes. As you saw, this one was pretty brutal. It was two out of ten we felt we got a fair deal. And I'm being told by mechanics, you know, in the profession, that transmission shops can be pretty rough." Chairman Porter asked, "Is your best guess, then, 25 percent?" Ms. McCarthy replied, "...about 30 percent."
Mr. James Weller, Director, Department of Motor Vehicles and Public Safety (DMV), testified. He said when the original version of AB 558 was introduced, members of the department expressed some concerns, and the department became involved with Mr. Petrak and other members of the legislature in attempting to "develop some follow-up legislation" (Exhibit C). Mr. Weller indicated his goal was to separate the department's law enforcement functions from its regulatory and licensing functions.
Mr. Raymond L. Sparks, Chief, Registration Division, Department of Motor Vehicles and Public Safety, testified.
Mr. Sparks said the intent of the revised version of AB 558 (Exhibit C) was to require businesses performing automotive repairs to be licensed to do so and to provide the department with authority to deny, suspend or revoke such licenses. He advised businesses currently licensed by the department, such as automobile sales dealerships and body shops, would not be required to obtain a separate license to perform automotive repairs.
Mr. Sparks advised the department's director contemplated establishing a program of consumer education ( with respect to automotive repairs). He suggested an argument could be made for the proposition that by educating both consumers and business people, many problems could be "alleviated" before they occurred.
Chairman Porter posed a hypothetical example of an individual having his automobile repaired by one of his neighbors for a fee. He asked if Mr. Sparks envisioned that neighbor being required to be licensed in order to collect a fee for doing such repairs. Mr. Sparks replied he believed under a literal interpretation of the language (of AB 558), the neighbor performing repairs would be required to be licensed. He indicated however, the situation described by Chairman Porter did not represent "the problematic cases" and he did not believe it necessary to draft AB 558 in such a way it would not apply to such a situation.
Mrs. Williams asked if the license fees would be used to provide an educational program. Mr. Sparks responded the license fees would be used to create a special fund with which to fund the program (contemplated under AB 558) and to create a consumer education program.
Mrs. Williams asked, "And would you briefly address the bond?" Mr. Sparks replied the requirement the department's current licensees be bonded provided protection to consumers against fraud or gross negligence on the part of the licensees. He said a like bonding requirement would apply to the new (automotive repair) businesses. He indicated current licensees' bonds would be expanded to include automotive repair work.
Mr. Heller disclosed a potential conflict arising from the fact his father owned a transmission shop in Carson City but said he wished to ask some questions. Mr. Heller asked what kinds of licenses were presently held by those entities it was contemplated would be exempted (from additional licensing for automotive repairs). Mr. Sparks responded those entities were licensed based on the type of activity in which they engaged and cited as examples automobile sales dealers, manufacturers, distributors, body shops and wreckers.
Mr. Heller asked if the department revoked a dealership's license because of wrongdoing in performing automotive repairs, would revoking the license prevent the dealership only from selling cars but not from making automotive repairs. Mr. Sparks replied Mr. Heller was correct; he said the license issued by the department (to an automobile sales dealership) extended only to sales activities. Mr. Heller asked if a gas station licensed as an emission inspection station performed poor repair work, could the department "pull a license that would affect the fact that they're doing repair work, or can you only pull the license for the emission inspection?" Mr. Sparks replied he believed under AB 558, if a service station licensed as an emission inspection station violated provisions of AB 558, "...the only license he would have would continue to be the emission station license...and that would be the license that would be revoked..."
Mr. Heller asked if revocation of licensure was the recourse the department sought. Mr. Sparks indicated in some cases, revocation of a license was a rather severe sanction. He said AB 558 would also permit imposition of administrative or civil penalties, which probably were more effective mechanisms with which to deal with the kinds of violations being considered. He said however, if a business had repetitive performance problems, license revocation would be an appropriate sanction.
Mr. Heller asked, "How would I, as a consumer, know, if he lost his emission control license and I go in there to have brake work done, that that gentleman is going to tell me that he lost his license as an emission control inspector, and yet I can still have my brake work done?" Mr. Sparks replied it would be incumbent upon the department to ensure such an individual ceased all business activities when his license was revoked. Mr. Heller asked if activities would cease with respect to all types of automotive repairs. Mr. Sparks answered affirmatively.
Ms. Giunchigliani asked why current licensees, licensed for activities other than automotive repair work, should be exempted (from being licensed to perform automotive repairs). Mr. Weller responded those licensees would not be exempt from the provisions of AB 558 but would be exempt from paying an additional $200 and obtaining a separate license for repair work. He indicated such licensees would be required to extend the scope of their bonds to include automotive repair work.
Ms. Giunchigliani asked if the purpose of the (licensing) fee was to make the program provided by AB 558 a self-funded program. Mr. Weller responded it was.
Ms. Giunchigliani asked, "And the hearings will be set up similar to the way you do...do you do license revocation hearings and that type of...?" Mr. Weller answered, "We have administrative hearings officers in all three major areas."
Ms. Giunchigliani asked if the intent of AB 558 was to license only the garages in which automotive repairs were performed and not to license the mechanics employed by those garages. Mr. Weller responded that was the intent.
Mr. Arberry asked if in the revised version of AB 558 (Exhibit C), the words "the Director" referred to Mr. Weller and meant Mr. Weller would be the one to deal with issues covered by AB 558. Mr. Weller replied those words referred to whoever was director of the department at a given time.
Mr. Arberry asked what factors were considered in arriving at the sum of $200 as the fee for licensure. Mr. Weller said Mr. Petrak advised him the fee was determined based on a review of California's regulations.
Mr. Arberry asked what number of complaints against a company would be allowed before the director would take the actions provided by AB 558. Mr. Weller responded that number would be established by departmental policy. Mr. Arberry commented AB 558 established a felony and asked at such time as the established number of complaints against a garage had been received, "...are we going to take their license, or are we going to say that they are a felon and we're going to put them in jail?" Mr. Weller suggested the department would commence action against a garage prior to the established maximum number of complaints being received, and would begin by taking the lowest level of action, such as a written warning. He suggested if a garage continued performing the activities complained of, the department's actions might become progressively more severe and could progress to an action for criminal sanction.
Mr. Arberry asked why under the revised version of AB 558 (Exhibit C), a garage was required to retain certain records for a period of one year. Mr. Sparks replied the requirement a garage maintain its records for a period of one year was an existing statutory requirement. He advised the amendment contained in Section 18 of the revised version of AB 558 would extend the existing requirement to include work orders.
Mr. Scherer asked if the bonds and the fees for applications or licenses, currently paid by licensees, provided sufficient funds both to pay the department's costs for regulating the activities of those licensees and to provide security for those activities. Mr. Sparks replied the bureau of enforcement in the department's registration division was funded primarily from three sources: the highway fund, the pollution control account and the salvage pool, body shop and auto wrecker account. He advised those three funding sources paid costs for 24 investigators and a number of support staff. Mr. Sparks said funds derived from the provisions of AB 558 would pay for additional staff. Mr. Scherer asked if the current licensing fee of $300 was adequate to "cover what's being currently regulated." Mr. Sparks answered the fee was not adequate, and it was projected by the end of the next biennium, the department would have to eliminate one position or increase the license fee.
Mr. Scherer asked if at present, the department neither licensed nor regulated automotive repair facilities other than those repair facilities of licensed emission control stations and of automobile body shops. Mr. Sparks replied the department had no authority to license or regulate other automotive repair facilities and did not do so. Mr. Scherer suggested under AB 558, the department would acquire additional responsibilities for and would expend additional time in regulating activities of those businesses it currently licensed. He asked why those businesses should not cover a portion of the costs which the department would incur for "those additional regulatory activities." Mr. Sparks replied he believed the $200 fee proposed by AB 558 would fund the department's additional activities. Mr. Scherer commented he understood existing licensees would be exempt from paying the $200 fee proposed by AB 558. Mr. Sparks advised it was estimated approximately 1,500 to 2,000 businesses would be subject to the licensing requirements of AB 558 and would pay the $200 licensing fee, thereby generating annual revenues of approximately $300,000 to $400,000.
Mr. Scherer said he was concerned about fairness. He asked why a business which paid a fee to be licensed to perform activities other than automotive repairs but which also performed automotive repairs and therefore, would require more of the department's regulatory time than a business licensed only to perform automotive repairs would require should not also be required to pay the fee (proposed by AB 558) which the business performing only automotive repairs would be required to pay. Mr. Weller responded, "I think that's up to you." He suggested Mr. Scherer's question might be expanded to ask whether both large and small businesses should pay the same licensing fee.
Ms. Augustine asked if under the bonding provisions of AB 558, a greater requirement would be imposed on automobile body shops than the requirement imposed on contractors. Mr. Sparks replied the requirement a body shop post bond in the maximum amount of $10,000 had been a statutory requirement since 1987. Ms. Augustine asked if there had always been a provision for (periodic) reduction of a bond. Mr. Sparks replied the department would reduce a bond unless there was a reason not to do so. He suggested at present, a $10,000 bond would not cover the cost of one expensive automobile but said $10,000 had been established as the amount of bond to be posted under AB 558 in order to provide consistency with the bonding requirement for automobile body shops.
Ms. Augustine asked if the licensing fee imposed by AB 558 was an annual fee. Mr. Sparks replied it was. Ms. Augustine asked if that licensing fee was in addition to the fee required to obtain a state business activity license. Mr. Sparks replied it was. Ms. Augustine asked the amount of the fee for a state business activity license. Mr. Sparks said he did not know the amount of that fee.
Mr. Arberry asked if Mr. Weller knew what the cost would be to implement AB 558. Mr. Weller responded $300,000. He added if the department had "the residual," it wished to establish a program of public education.
Mr. Arberry asked if the provisions of AB 558 would cause the department to need additional staff. Mr. Weller responded it would, and the $300,000 cost included the cost of such additional staff.
Discussions were held among committee members regarding funding for the program provided by AB 558.
Mr. Heller asked if the department would conduct any "sting operations" such as those depicted in the video shown by Ms. McCarthy. Mr. Weller replied the department would consider conducting similar activities.
Mr. Heller asked what results, expressed in numbers, could be expected if the department was given $300,000 (to regulate the automotive repair businesses). Mr. Weller said he could make no projection of the results which could be expected. He advised California experienced a significant reduction in complaints concerning automotive repairs after it implemented a program such as that proposed by AB 558. Mr. Heller contended if the legislature was to spend $300,000, it needed to know what results would be obtained.
Mr. Daryl Capurro, Nevada Franchised Auto Dealers Association, testified. He advised the association had participated in the work which resulted in the revised version of AB 558 (Exhibit C). He reiterated prior testimony that the bond required of those licensees exempted from payment of the fee required by AB 558 would be extended to cover automotive repair activities of those licensees. He suggested because of the variety of businesses which dealt with automotive repairs, the DMV would need time to ascertain which businesses were subject to AB 558 and therefore, should be licensed.
Mr. Scherer referred to Section 8, subsection 1, of the revised version of AB 558 (Exhibit C) and asked if there was a definition of "detailing services." Mr. Capurro replied there was not. Mr. Scherer asked, "So we're arguably going to be licensing car washes as well?" Mr. Capurro responded, "...that would probably cover that."
Ms. Gail Burks, Nevada Legal Services, testified. Ms. Burks provided written testimony (Exhibit D) and cited certain statistics contained in that testimony regarding automotive repair complaints filed with the Consumer Affairs Division in Las Vegas.
Ms. Burks advised under current law regarding liens, mechanics were permitted to retain automobiles if bills for repairs to those automobiles were not paid. She stated often such a vehicle was sold "to cover the cost of the lien" before its owner was able to seek relief from small claims court or from a justice of the peace. She explained AB 558 would prevent a mechanic from exercising such a lien prior to an administrative review being conducted.
Ms. Burks advised of 579 automobile repair shops which advertised in the yellow pages of the telephone directory in Las Vegas, only 463 repair shops had business licenses of which licenses, approximately 200 were current.
Ms. Colette L. Rausch, Deputy Attorney General, testified by reading from prepared text (Exhibit E).
Ms. Giunchigliani asked Ms. Burks if Nevada Legal Services had given the names of those businesses which did not have Nevada business licenses to anyone. Ms. Burks replied Nevada Legal Services had notified the city (of Las Vegas).
Mr. John Kuminecz, Commissioner, Consumer Affairs Division, testified. He said the division supported AB 558. He advised the division was pleased by the legislative intent "to include everyone who does auto repair in the state to be a part of this effort to enhance the image of the industry as a whole as well as to help the consumer."
Mr. Kuminecz suggested individuals who worked on classic cars as a hobby were concerned about AB 558 and said the division understood "hobbyists" and restorers of classic cars, who pursued those activities for pleasure, would be exempt from the provisions of AB 558.
Mr. Ronald G. Shutt, Chief Compliance Officer, Consumer Affairs Division, testified. He said the division had done a very poor job of helping consumers resolve their complaints about automotive repairs. He stated the figures provided by Nevada Legal Services were correct but did not reflect the 30,000 telephone calls concerning complaints about automotive repairs which the division had received since 1989. He advised the division was unable to dispose of those complaints and had to refer them to "someone else." He said the department perceived AB 558 as a means to provide consumers a remedy for their complaints and supported AB 558 completely.
Mr. Bennett asked how Mr. Shutt felt about the Consumer Affairs Division being provided the means to deal with complaints concerning automotive repairs "as opposed to creating this program within the Department of Motor Vehicles." Mr. Shutt replied the Department of Motor Vehicles was better equipped than the Division of Consumer Affairs to perform the function of dealing with complaints regarding automotive repairs. He advised the division had five investigators, including himself, while the Department of Motor Vehicles had investigators in nearly every large community.
Mrs. Williams asked if Mr. Shutt had any statistics concerning results of the enactment of legislation such as AB 558 in California. Mr. Shutt responded he had no such statistics, but he knew the program was an effective one.
Mr. Perkins asked, "What are we going to do with you and your folks if we create this program within DMV?" Mr. Shutt replied the division had many matters other than automotive repair complaints to which to attend.
Mr. Perkins said he was concerned about creating a duplication of services in two different divisions of government. Mr. Shutt responded initially, he was concerned AB 558 would transfer enforcement functions to the Department of Motor Vehicles while the division continued to receive all complaints concerning automotive repairs. He indicated that concern was adequately addressed by the program of consumer education proposed by the Department of Motor Vehicles.
Assemblyman Petrak submitted a letter from the Chief Executive Officer of the Better Business Bureau of Southern Nevada (Exhibit F).
Mr. Walt Monaghan testified by reading from prepared text contained in a packet of information he provided to the committee (Exhibit G).
Mr. Ed Meeks testified. He stated he was in favor of regulating the automotive repair industry. He contended there should be prerequisites for obtaining a license to do automotive repairs, and those seeking to be licensed should have to prove, among other things, they were capable of performing the work, had the necessary facilities and equipment to perform the work, met EPA and OCEA requirements and carried workman's compensation and garageman's liability insurance. He said he believed licensing of those doing automotive repairs was necessary but did not believe AB 558, even if amended in accordance with Mr. Monaghan's proposed amendments (contained in Exhibit G), provided the proper means to do so.
Mr. Meeks advised he had assisted in creating a motor vehicle repair ordinance for the city of Dallas. He said that ordinance had been in effect since June 1, 1974, and had been revised only once. Chairman Porter asked if the document entitled "Dallas Motor Vehicle Repair Ordinance", contained in Exhibit G, was the ordinance to which Mr. Meeks referred. Mr. Meeks replied it was.
Mr. Humke asked Mr. Monaghan to review "some of the highlights of" his proposed amendments. Mr. Monaghan replied his proposed amendments would: define "garage" as a business establishment; create an appeals board to be comprised of three private citizens, one attorney and three technicians; include (installation and repair of) telephones and alarm systems used in automobiles in the list of those services an individual must be licensed to perform; provide that an individual disciplined in another state might be denied licensure; require garage owners to maintain liability insurance; provide enforcement of the licensing requirement; provide administrative fines be distributed to the school districts of the counties in which those fines were collected and be used to improve automotive technology classes; amend the requirement odometer readings be entered on work orders; provide when a warranty exists, a written copy of such warranty be given to the consumer; and exempt automobile clubs, such as AAA, from the provisions of NRS 696. Mr. Monaghan referred to his proposed amendment that a copy of any warranty be given to a consumer and said there should be a further provision that if no warranty was given, that fact be clearly stated on the work order.
Mr. Warren Hardy, Hardy's Automotive, testified. He indicated members of the automotive repair industry recognized a problem existed within the industry and wished to solve it. He advised members of the industry wished to provide input with regard to the proposed legislation and said he would make himself available for that purpose.
Mr. Frank Downs, Nevada Auto Body Association, testified. He told of difficulties experienced by those in the auto body shop industry as a result of a bill passed by the legislature in 1987, AB 883. He indicated members of the industry paid an annual fee of $300 which was to be used by the Department of Motor Vehicles to enforce regulations governing the auto body shop industry. He said however, the Department of Motor Vehicles had not provided such enforcement. He advised each week, insurance companies wrote checks to 17 unlicensed body shops in Clark County.
Chairman Porter asked if Mr. Downs would provide a list of those 17 unlicensed body shops. Mr. Downs replied he would.
Mr. Downs contended unless there was "a better regulatory body" than the Department of Motor Vehicles through which to regulate the automotive repair industry, "...it's just a waste of the money."
Mr. Downs advised the industry estimated AB 558 would affect 3,000 businesses, rather than 1,500 or 2,000 as stated in prior testimony, and in order to enforce the provisions of AB 558, the DMV would need to add 28 employees to its staff at a total cost of $840,000. He contended that cost would create an immediate deficit of $240,000.
Mr. Humke asked if Mr. Downs had seen any positive results from the licensure bill for the auto body industry (AB 883). Mr. Downs said he had not.
Mr. Jack Greco, Chairman of the Board, Nevada Gasoline Retailers and Garage Owners Association, testified. He advised he owned a licensed emission inspection facility and was a licensed emission inspector, a member of the committee developing a pilot technician's training program and a member of the Clark County Health District Air Pollution Control Hearing Board and had done work with the DMV.
Mr. Greco said the average age of an automobile mechanic in Nevada was approximately 40 years. He contended this was because Nevada offered such mechanics only "...covert operations with fines, educational requirements that don't address their needs, a long list of procedural mistakes which will cost them their license and now a proposal from the state to respond to consumer complaints only with no provisions for judicial review and double jeopardy from the courts as an option to the consumer only." He stated "additionally" a new federal rule would cut automotive technicians' pay by 30 percent to 50 percent.
He stated the association was concerned there would be a mass exodus of qualified automotive technicians from the industry. He said while the association favored the concept of a technician's support agency, it was concerned about "...the establishment of yet another punitive auto repair organization which will exacerbate the qualified technician shortage in Nevada." He suggested this (the establishment of such an organization) could lead to motorists being caused to pay outrageously high hourly rates for service to their automobiles and to both local motorists and tourists having to wait longer periods of time to obtain emergency services for their automobiles.
Mr. Greco reviewed a two-page document reflecting the impact of governmental regulations on service stations and garages (Exhibit H). He advised federal regulations were presently being written to address some of the problems under discussion and suggested any regulations established by the legislature might be nullified by those federal regulations.
Mr. Greco advised an as yet unpublished rule of the Environmental Protection Agency would create licensure requirements for automobile technicians which requirements might include 80 hours of training and continuing education. He stated the rule would require "the agency to provide a hotline service to assist repair technicians with specific repair problems." He indicated he believed automobile repair problems resulted more from automobile technicians' errors than from their dishonesty.
Mr. Greco called attention to a letter from the California Bureau of Automotive Repair (Exhibit I). He said the bureau was working with the automotive repair industry in proactive enforcement.
Mr. Greco referred to a three-page document entitled "Even the Best Technicians Need Ongoing Hands-On Training!" (Exhibit J) He advised two of the three technicians described in Exhibit J worked for dealerships. Mr. Greco reviewed each of the three automotive repair scenarios set forth in Exhibit J. He contended each of the technicians described in those scenarios was a good technician and to "...put them out of business is not the answer."
Mr. Steve Yarborough testified by reading from prepared text (Exhibit K).
Mr. Martin Bibb, National Federation of Independent Business (NFIB), testified. He stated NFIB's opposition to AB 558 consisted of opposition to imposition of additional fees and additional regulation. He said AB 558 contained some very broad language and cited Section 8, pointing out that section described several categories of (automotive) services and contained a catch-all category.
Mr. Bibb expressed concern about whether the new licensees proposed by AB 558 were being created to provide additional funding with which to support the DMV's existing enforcement activities. He said he did not believe that would be equitable.
Mr. Bibb said equitable application of fees and enforcement of regulations was of serious concern to small business owners. He suggested the fact unlicensed businesses were not subject to the many fees and regulations imposed on licensed businesses was stressful to licensees. He contended unlicensed businesses made life more difficult for the individual who was honest and who paid his fees and assessments.
Mr. Phil Waldren, Paramount Auto Body, testified. Mr. Waldren cited statistics obtained from the Better Business Bureaus of Las Vegas and Reno regarding the number of complaints concerning automotive repairs those bureaus received during a specific four month period. He said he estimated 360,000 automobiles were repaired during that four month period and it appeared to him less than one percent of those repairs were "a problem." Mr. Waldren suggested AB 558 represented a great deal of legislation for the size of the problem with which it dealt.
Mr. Steven Waldren testified. He advised his body shop was licensed pursuant to previous legislation which had the same intent as AB 558, to wit "to clean up our industry." He contended the prior legislation had not accomplished its purpose but had driven legitimate businesses "underground" or out of business. He suggested government should not involve itself in further regulation of private industry but rather existing laws should be strengthened and enforced. He indicated private enterprise was attempting to regulate itself through the Better Business Bureau.
Mr. Waldren suggested more responsibility should be placed upon consumers to ascertain the honesty of those with whom they did business. He also suggested the process by which consumers could resolve their complaints should be streamlined. He stated consumer education was a valid concern but the small businessman could not afford to pay for such education.
Mr. Waldren said he opposed AB 558 and could not envision how it would benefit either consumers or businessmen. He said if AB 558 was passed by the legislature, his shop would have to pay $300 to be licensed while other automotive repair businesses would have to pay only $200 to be licensed and suggested there should be equity with respect to fees.
Mr. Waldren suggested individuals involved in the automotive industry should have an opportunity to be involved in creating legislation to control that industry.
Mr. Richard Dahl testified. Mr. Dahl referred to a provision in Section 19 of AB 558 which required a garageman to comply with the provisions of NRS 487.035. He then referred to language in NRS 487.035 which required a person charging money to repair an automobile to present a statement of charges to the individual requesting the repairs and to obtain that individual's signature on the statement. He contended computerization had changed the way paperwork was generated. He said currently an individual requesting repair to his automobile signed a repair order, and as repair work was performed, actual charges were entered into a computer which would then generate a statement of charges which statement would bear no signature. He suggested a dishonest customer could refuse to pay a repair bill because his signature was not on the statement of charges, and he contended a garage owner's ability to retain the customer's vehicle until the garage owner received payment was his only means to ensure payment. He suggested eliminating the requirement that a statement of charges must be signed by the person requesting repairs.
Mr. Dahl advised existing law, created in 1975, provided the amount charged for repairs to an automobile could not exceed the amount of the estimate given for those repairs by more than 20 percent or $40, whichever was less. He indicated the effect of that law on garagemen had been affected by inflation and suggested the law be changed to provide charges for repairs could not exceed the amount of the estimate given for those repairs by more than 15 percent or $40, whichever was greater.
Mr. Warren Stephens testified from prepared text (Exhibit L).
Ms. Lucille Lusk, Nevada Coalition of Concerned Citizens, testified. She advised NCCC was concerned additional costs imposed on automotive repair businesses would be passed on to consumers in the form of additional fees and asked the legislature to consider not only the consumer's need to have automotive fraud eliminated but also the impact (of AB 558) on the consumer's budget.
Ms. Cathy Haskins, American Auto Air, testified. Ms. Haskins said of each $100 earned by her shop from labor charges, $45 was used to pay employee wages. She enumerated certain government imposed costs her shop must pay and stated of the $55 remaining from the $100 earned by her shop from labor charges, 20.3 percent was paid to government. She contended AB 558 would impose additional costs on automotive repair businesses which those businesses would have to pass on to consumers, who were already unhappy about the costs of automotive repairs.
Chairman Porter closed the hearing on AB 558.
AB 546 Establishes procedure to allow person who provides express warranty to post performance bond to guarantee terms of warranty.
Mr. Scherer advised various individuals had contacted him and expressed concerns about AB 546. He said he would like additional time to work with such individuals to alleviate their concerns regarding the bill.
Chairman Porter asked those individuals present at the meeting who were concerned about AB 546 to work with Mr. Scherer to arrive at compromises and advised AB 546 would be placed back on the committee's agenda at Mr. Scherer's discretion.
Chairman Porter closed the hearing on AB 546.
AB 570 Makes various changes relating to physical therapy.
Mr. Robert Gentile, President, Nevada Home Health Care Association, and Administrator, PRN Home Health Care, testified. He advised Nevada Home Care Association supported the use of physical therapy assistants in home care settings. He contended AB 570 would reduce the cost of home physical therapy and make it more available.
Mr. Gentile provided a packet of information (Exhibit M). He referred to the first two pages of Exhibit M, consisting of advertisements for physical therapists, and called attention to the salaries offered by PRN in the advertisements on the first page and the lesser salaries offered by others in the advertisements on the second page. He indicated despite the high salaries offered by PRN, PRN had difficulty attracting physical therapists.
Mr. Gentile advised the third page of Exhibit M was a portion of a Medicare cost report and pointed out of the six disciplines listed therein, physical therapy was the only one whose costs exceeded the limits imposed by Medicare.
Chairman Porter asked Mr. Gentile to briefly state the purpose of AB 570. Mr. Gentile replied, "It provides cost containment, and it provides access, two of the major problems that we're confronted with." Chairman Porter asked if AB 570 allowed physical therapy assistants to conduct some in-home activities on condition they were in communication with a physical therapist. Mr. Gentile replied that was correct.
Ms. Ruth Jagodzinski, Director of Professional Services, Kimberly Quality Care, testified. She advised there had been a shortage of physical therapists since the mid-1980s. She said occupational therapists had used properly supervised licensed assistants for many years, in Nevada, and there had been no problems. She stated over one half of the states in the United States had regulations providing for physical therapy assistants.
Ms. Stephanie Tyler, Nevada State Chiropractic Association and Nevada State Medical Society, testified. She advised two proposed amendments were discussed with the proponents of AB 570. She said the first proposed amendment was to delete from the sentence contained on lines 13 and 14 of page 2 the words "and identify problems of the patient" and to insert in place thereof the words "for the purposes of developing a plan of care." She said the second proposed amendment was to change the language in lines 21 and 22 on page 3 to read "Has allowed a physical therapy assistant to modify any portion of a plan of care."
Chairman Porter asked if Mr. Gentile had a position regarding the amendments proposed by Ms. Tyler. Mr. Gentile replied he did not believe the proposed amendments made any material changes to AB 570.
Ms. Augustine asked Ms. Tyler if the purpose of AB 570 was only to allow physical therapy assistants to provide in-home care and not to expand their scope of practice. Ms. Tyler replied there was "...an expansion of the authority to a different type of assistant...," however AB 570 did not expand the scope of practice of a physical therapist or the authority a physical therapist passed on to his assistant.
Ms. Augustine asked if only a physical therapist's assistant would go into a home but not the physical therapist himself. Ms. Tyler responded she believed the physical therapist would go into the home initially, but the primary care provider would be the physical therapy assistant.
Ms. Georgianna Barrett, Nevada State Board of Physical Therapy Examiners, testified. She advised the board was unable to support AB 570. She said the board was concerned about patient safety "in remote situations" and about physical therapy assistants having the necessary level of skill to handle complex emergency situations to which, in normal settings, a physical therapist would be immediately available to respond.
Ms. Barrett said the home health patient population consisted of individuals discharged prematurely from hospitals and nursing homes. She suggested caring for such patients required much training and advised physical therapy assistants had two years of schooling.
Ms. Barrett stated the board considered AB 570 "as a rules and regulation change" and was opposed to it for numerous reasons. She stated one reason the board opposed AB 570 was there were insufficient funds and manpower to enforce the regulations (it would create) and another reason was AB 570 would expose the board to charges of discriminatory practices "against physical therapist assistants in one setting over another."
Ms. Barrett advised the Federation of State Boards of Physical Therapy opposed AB 570. She contended states which had adopted regulations similar to those proposed by AB 570 regretted having done so and cited Texas and Oklahoma as specific examples of such states.
Ms. Barrett stated AB 570 would affect how physical therapy assistants practiced in specialty areas of health care and would raise questions regarding how physical therapists would supervise physical therapy assistants.
Discussions were held between Chairman Porter, Mr. Bennett and Ms. Barrett regarding a possible conflict of interest involving Mr. Bennett.
Mr. Humke asked if Ms. Barrett was a member of the board. Ms. Barrett replied she was a member.
Chairman Porter closed the hearing on AB 570.
AB 582 Authorizes manufactured housing division of department of commerce to issue limited license for serviceman.
Assemblyman John C. Carpenter, District 33 testified. He explained AB 582 would simplify the procedure for a licensed contractor to obtain a license to perform specific work on manufactured or mobile homes.
Ms. Joan Clements, Administrator, Manufactured Housing Division, testified. She advised contractors licensed by the State Contractors Board were licensed to work only on real property. She indicated in order to be licensed by the division to perform work on personal property, contractors must pass an examination and must be qualified to perform skirting, awning, roofing, electrical, plumbing and heating work. She said some contractors did not wish to perform work in all six of those categories, and AB 582 would permit the Administrator of the Manufactured Housing Division to issue separate licenses for each of those categories of work.
Chairman Porter said he understood the Manufactured Housing Division had jurisdiction over individuals who performed repairs on manufactured homes and the State Contractors Board did not have jurisdiction over those individuals. Ms. Clements stated Chairman Porter's understanding was correct. Chairman Porter asked if AB 582 changed that jurisdiction. Ms. Clements replied it did not. She advised AB 582 merely allowed those individuals already licensed by the State Contractors Board to obtain a license from the Manufactured Housing Division to perform work in one of the categories she had listed rather than having to obtain a license to perform work in all of those categories.
Chairman Porter asked Mr. Charlie Joerg, Nevada Manufactured Housing Association, present at the meeting, if he was in favor of AB 582. Mr. Joerg replied he was.
Chairman Porter closed the hearing on AB 582.
ASSEMBLYMAN SCHERER MOVED DO PASS AB 582.
ASSEMBLYMAN HUMKE SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Assemblymen Arberry, Bonaventura, Giunchigliani, Kenny and Williams were absent at the time of the vote.
AB 588 Makes various changes relating to certified public accountants.
Mr. James Todd Russell, Nevada State Board of Accountancy, testified. He explained AB 588 would change the present reciprocity requirements for certified public accountants and would permit a certified public accountant who had practiced (outside of Nevada) for five of the previous ten years and who met the requirements set forth in AB 588 to be licensed in Nevada.
Chairman Porter asked, "So currently you grant reciprocity to a CPA who's got ten years in another state, and you're going to cut that in half to five." Mr. Russell responded affirmatively.
Chairman Porter asked if such an applicant for licensure would be required to take an examination. Mr. Russell replied the examination would be waived.
Chairman Porter asked what other states were doing (with respect to reciprocity). Mr. Russell responded most states presently had reciprocity for CPAs. Chairman Porter asked, "What is their time frame?" Mr. Russell answered, "Most states the reciprocity...in fact if you've taken the examination currently in the state of Nevada, under the requirements of the state of Nevada, you can come in under reciprocity now. This is merely to allow that window of opportunity to those people who, unfortunately, didn't know what the requirements in the state of Nevada were when they took that exam in, let's say, Colorado, and then they want to come into the state of Nevada now. It merely allows them, if they've been practicing for five of the last ten years, to do that."
Chairman Porter asked if AB 588 was sponsored by the board. Mr. Russell replied the board was in favor of AB 588, and the "society" also was in favor of it.
Chairman Porter closed the hearing on AB 588.
ASSEMBLYMAN GARNER MOVED DO PASS AB 588.
ASSEMBLYMAN HUMKE SECONDED THE MOTION.
THE MOTION WAS CARRIED UNANIMOUSLY BY ALL THOSE PRESENT; Assemblymen Arberry, Bonaventura, Giunchigliani, Kenny and Williams were absent at the time of the vote.
AB 558 Regulates businesses for repair of motor vehicles.
Chairman Porter assigned AB 558 to a subcommittee comprised of Mr. Humke and Mr. Perkins.
There being no further business to come before the committee, Chairman Porter adjourned the meeting.
RESPECTFULLY SUBMITTED,
_______________________
SARA J. KAUFMAN
Committee Secretary
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Assembly Committee on Commerce
May 19, 1993
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