MINUTES OF THE

      ASSEMBLY COMMITTEE ON TRANSPORTATION

 

      Sixty-seventh Session

      May 3, 1993

 

 

 

The Assembly Committee on Transportation was called to order by Chairman Larry L. Spitler, at 1:45 p.m., on Monday, May 3, 1993, in Room 331 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Meeting Agenda.  Exhibit B is the Attendance Roster.

 

 

COMMITTEE MEMBERS PRESENT:

 

      Mr. Larry L. Spitler, Chairman

      Mr. Bernie Anderson

      Mrs. Vonne Chowning

      Mr. Tom Collins, Jr

      Mr. Louis A. Toomin

      Mr. William D. Gregory

      Mr. Lynn Hettrick

      Mr. James W. McGaughey

 

COMMITTEE MEMBERS ABSENT:

 

      Mr. Val Garner, Vice Chairman (Excused)

 

GUEST LEGISLATORS PRESENT:

 

      None

 

STAFF MEMBERS PRESENT:

 

      Kerry Carroll-Davis, Senior Research Analyst Legislative

          Counsel Bureau

 

OTHERS PRESENT:

 

      Ashley Hall, Auto Recyclers/Dismantlers of Nevada

      Allan M. Bloomberg, Auto Recyclers/Dismantlers of Nevada

      Clark Whitney, Quality Towing

      Bob Smith, City Auto Towing, Inc.

      Tim Chandler, Ace Towing/Nevada State Towing Association

      Danny Thompson, B & E Auto Auctions, I & S Auto Auctions

      Larry Hewitt, National Tow and Service

      Dick Mills, Pick n' Pull Auto Wrecking

      Bob Crowell, Farmer's Insurance Industry

      Jerry Walton, Walton Salvage

      Doug Dickerson, City of Las Vegas

      Pat Ormsby, Far Out Auto

 

 

Chairman Spitler stated a requested bill draft request for the "Pearl Harbor Survivors" license plate had been received and a motion was now needed to introduce the bill.

 

      MR. McGAUGHEY MOVED FOR A COMMITTEE INTRODUCTION OF THE BILL         DRAFT REQUEST RELATING TO THE PEARL HARBOR SURVIVORS LICENSE         PLATE.

 

      MR. HETTRICK SECONDED THE MOTION.

 

      MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT.

      (MR. ANDERSON, MR. GREGORY, AND MR. TOOMIN WERE ABSENT AT THE          TIME OF VOTE.)

 

ASSEMBLY BILL NO. 510:  Makes various changes related to automobile                          wreckers and operators of tow cars.

 

Ashley Hall, representing Auto Recyclers/Dismantlers of Nevada, stated both organizations jointly represented approximately 100 recycling/dismantlings businesses throughout Nevada.  He stated A.B. 510 represented the culmination of approximately nine meetings held between the association and Department of Motor Vehicles (DMV) over the past 16-18 months to address concerns.  On behalf of the association, he expressed gratitude to DMV Director, James Weller, for his cooperation.  

 

Mr. Hall presented a brief review of issues accomplished by A.B. 510. Mr. Hall introduced Allan Bloomberg and Clark Whitney to the committee. 

 

Mr. Allan M. Bloomberg, Auto Recyclers/Dismantlers of Nevada, stated a diverse group of towing companies and auto wreckers begAn to meet thirteen months ago to draft the proposed bill. Of those meetings three goals derived from the discussions: 1) To seek relief from the $10 dismantling certificate charged for every car that entered dismantling yards.  Mr. Bloomberg stated for many small dismantling companies, the $10 was equivalent to a 25 percent tax and was very unprofitable.  2) To address problem areas in  paperwork and 3) To develop procedures for selling wrecked vehicles.

 

Addressing the first issue, Mr. Bloomberg explained relief from the excessive $10 dismantling fee might be accomplished by streamlining and going to an acquisition type of process. Mr. Bloomberg explained a two-day hold would also be placed on vehicles received to make sure they were not stolen before dismantling began.  As soon as a vehicle was received, DMV would be faxed necessary information identifying the car. If DMV did not respond, the vehicle would be dismantled.  Mr. Bloomberg clarifed civil liability would still be placed with the dismantling company to make restitution had a vehicle been dismantled that should not have been.  Mr. Bloomberg further explained if a car was shredded, resold as shredded, etc., that information would be forwarded to DMV for up-to-date record keeping with very minimal costs.  Approximately 25,000 vehicles per year were scrapped in Nevada.  He stressed the bill provided a paper trail with permanent records kept in files at individual wrecking companies. 

 

Mr. Bloomberg repeated concerns with the $10 dismantling fee.  He felt the fee discouraged recycling.  Mr. Bloomberg stated in order to offset the revenue lost due to the fee elimination, issuance of the dismantling certificate would be dropped so it would not cost DMV the time and effort spent on printing. He then presented an example of a dismantling certificate which was identical to a regular title, except for small print reading "Dismantling Certificate."  Mr. Bloomberg explained DMV's costly process in issuing the dismantling certificates.  Mr. Bloomberg discussed the process for lien sales.  He stated under the current system, if a vehicle was brought in that was abandoned, attempts would be made to contact the last registered legal owner by paying a fee to DMV Records Division. The Records Division would inform if there was a match in Nevada. Mr. Bloomberg explained if a match was not made a point of quandary was met because current law stated contact must be made or an attempt to reach the last legal owner.  He questioned with each state charging a $10 fee and fifty states were searched, the total cost expended on trying to reach the owner would be $500 on a car probably worth $50.  Mr. Bloomberg did state DMV had bent the rules in only requiring six states be searched; however, this was still $60 expended on a $50 car.  Mr. Bloomberg stated the bill attempted to correct the measure by requiring the same processes be applied to lien sale vehicles as well as cars with titles.  Mr. Bloomberg stated current law did not check to see if vehicles were stolen until the very last step.  He recognized a vehicle would change hands numerous times and finally, after someone had put money into the car to condition it for registration purposes, only at that point was the vehicle checked to see if had been stolen. Mr. Bloomberg explained the bill prescribed the first step an impounder took would be to notify DMV, DMV would check to see if the vehicle was stolen, and if a last legal registered owner existed, DMV would furnish that information.  A $5 fee would be attached for DMV to release that information.  In addition, DMV would utilize the national computer system for stolen vehicles or registered owners in other states.  Mr. Bloomberg pointed out in avoiding DMV from facing contractual problems for releasing such information to a third owner, the bill proposed DMV only release the name of the state the information was found in. Dismantling companies would contact that state personally to avoid researching all fifty states. 

 

Mr. Bloomberg also addressed the problem with lack of storage spaces for impounded vehicles.  He felt the bill had many provisions that accommodated expedition of storing periods.

 

Mr. Bloomberg stated the most controversial portion of the bill dealt with control of wrecked vehicles.  Mr. Bloomberg stated insurance companies totaled vehicles not because they were structurally unsound, but instead for economic reasons.  Normally, these vehicles were auctioned out.  Mr. Bloomberg mentioned concern was placed on auctions because car companies could purchase a vehicle, rebuild the vehicle, and then sell it as a used car without the purchaser being notified the car was indeed a rebuilt vehicle.  Mr. Bloomberg felt this problem existed because salvage pools were open for anybody to purchase and rebuild.  Mr. Bloomberg felt this was wrong and urged the state to make a decision on who bought and built wrecked vehicles.  He stated the bill defined who qualified for a salvage pool, who was allowed to sell, and who was allowed to purchase salvage pool vehicles.  Mr. Bloomberg felt those privileges mentioned should be restricted to licensed rebuilders and auto wreckers.  Color coding different certificates was also proposed by the bill, for example, a rebuilt vehicle would have a red title, a reconstructed vehicle would have an orange title.  He felt visible titles would prevent deceit. Mr. Bloomberg realized this would entail costs to the state.  He estimated approximately 10,000 or less vehicles were rebuilt in the state.  Mr. Bloomberg stated because the colored certificates lowered vehicle value, insurance companies did not like to insure rebuilt vehicles and banks did not like to issue loans on rebuilt vehicles.  He felt the bill was geared toward consumer orientation.  Mr. Bloomberg informed the committee a similar bill was proposed at the federal level.  He urged passage of the bill. 

 

Mr. McGaughey asked the definition of "front inner structure."  Mr. Bloomberg explained in old framed type vehicles, inner structure took the place of the frame.  Uni-body front wheel drive cars were built today with no frames.  Mr. Bloomberg stated "front inner structure" was defined in manuals, but not in law. 

 

Mr. McGaughey asked the distinction between "rebuilt" and "reconstructed" vehicles.  Mr. Bloomberg stated a reconstructed vehicle was made from many different parts but upon completion, was a completely different car, for example, a reconstructed '86 Buick could end up as an 89' Yugo.  A rebuilt vehicle resulted in the same car being rebuilt as the same car.

 

Mr. McGaughey, in reading Section 9 of the bill, stated the language did not require dismantlers to try to find the origin of the car or legal status and appeared to be voluntary.  He asked if the word "may" should be changed to "must" for the operator to be duty bound to determine the situation of the vehicle.   Mr. Bloomberg stated Section 9 referred to seeking the last registered owner of the vehicle.  They wanted to leave options because sometimes tow companies and impounders used private services to find information.  Mr. Bloomberg explained often private companies offered better records at a cheaper rate than the DMV.  Mr. McGaughey stressed there was room for mischief in the business and emphasized anyone in the salvage business and tow companies should be duty bound to determine the legal status of all vehicles they dealt with.

 

Mr. McGaughey referring to Section 21, questioned the statute that stated "A motor vehicle that is more than 10 years old or has been driven more than 100,000 miles must be appraised at $200 or less.." Mr. Bloomberg stated the section referred to a person who applied for a junk certificate.  He explained junk certificate stipulations and processes. 

 

Clark Whitney, Manager, Quality Towing, Associate Member of Nevada Towing Association, addressing a previous question from Mr. McGaughey informed the committee a requirement already existed in Nevada Administrative Code for tow car operators to inquire within one hour if a vehicle in their possession was stolen.  Mr. Whitney also addressed the importance of the language proposed which would allow public access to a record of impounded vehicles during working hours.  This would enable anyone to locate the necessary information on his vehicle and  would be cost effective.

 

Answering a question from Mr. Toomin, Mr. Bloomberg explained a fiscal note was attached to the bill because of expenses caused and savings  reduced by the bill.  He stated the bill proposed the elimination of the $10 dismantling fee.  This was a loss of $100,000 to the department.  He stated the records division is compensated to locate the current registered legal owner within Nevada.  The bill proposed compensation be transferred from the Records Division to the Registration Division as this would enable both impounded and regularly titled vehicles that were dismantled to go to the same location. A $5 fee would be assessed.  Mr. Bloomberg stated savings from the proposed bill would be derived from the elimination of three positions currently necessary for paperwork involved in issuing dismantling certificates and extra paperwork shuffle.  He calculated the savings to be approximately $100,000.  Requiring colored certificates also entailed minor expenditures.   Mr. Bloomberg felt the bill also offered an opportunity to make money.  He explained out-of-state auto wreckers who did business in Nevada were currently licensed by DMV as stipulated in A.B. 883 (of the 65th Session).  Enforcement of the law would increase revenue for the state.

 

Referring to an earlier question from Mr. McGaughey concerning Section 21, #2, Mr. Whitney presented photographs of an automobile which did not qualify for a junker certificate because the car was currently registered (Exhibit C).  He explained DMV inspected vehicles applying for junker certificates.  Mr. Whitney also stated his confusion with the lack of assistance from DMV in drafting a section of the bill dealing with release of information on registered owners in other states because DMV currently released names when requested.

 

Robert Smith, General Manager, City Auto Towing, Reno, testified in opposition to Section 11 of A.B. 510.  He felt the section needed further review.  He stated in light of the current situation, DMV established a situation where dismantlers construed current regulations to allow "Class C" tows. Mr. Smith explained regulations conformed with when abandoned cars were removed from private property.  Mr. Smith stated private dismantlers who removed cars from private property did not conform to regulations towing companies complied with.  Mr. Smith explained a large portion of business dealt with "Class C" towing. He envisioned opportunity for private automobile owners to be restricted from their rights because private dismantlers did not report the vehicle and offered no recourse for the automobile owners to locate their vehicles. 

 

Tim Chandler, Owner, Ace Towing/Acting President, Nevada State Towing Association, from prepared testimony (Exhibit D) testified in opposition to the bill. 

 

Chairman Spitler, because of the lack of time, permitted those guests who would be unable to attend a future meeting time to testify. 

 

Danny Thompson, on behalf of Mr. Jeffrey, represented Bobby Ellis of B&E Auto Auctions and Terry and Cindy Spooner of I&S Auto Auctions, Henderson, Nevada.  He stated his clients opposition began with Section 25.  Mr. Thompson repeated a bill was passed in 1987 without input from salvage pool operators, and passage of this bill would categorize B&E Auto Auctions as a salvage pool.  Mr. Thompson indicated salvage pool regulations for local wreckers required out-of-state buyers to comply with the law.  Out-of-state buyers who paid higher prices for salvage would be eliminated from the bid process.  Mr. Thompson stated passage of the bill would force insurance companies in Nevada to ship vehicles out of state or increase rates in Nevada to compensate for lower recovery rates.  He explained surrounding states currently allowed rebuilders, dealers, and auto wreckers to bid pools if required licenses were presented.  Offering reasoning for the law, Mr. Thompson said it reduced salvage prices.  He stressed the proposed bill would damage auto dealers and would have a negative impact on Nevada consumers if recovery insurance rates were raised to recover money lost.

 

Larry Hewitt, General Manager, National Tow & Service, Reno, explained he was opposed to Section 11. Mr. Hewitt stated junk certificates were administratively being accomplished; however, as written in the bill, addressing junk certificates was unconstitutional as it violated process of law. Mr. Hewitt explained current process.  He noted it was necessary to make sure vehicles were  eliminated as vehicles in order to obtain a junk certificate.  He explained a court case had decided that vehicles were personal property and people could not be deprived of personal property without due process.  Mr. Hewitt stated the junk certificate as proposed would deny a person due process.  Another problem explained by Mr. Hewitt was the lack of a specific definition of "damaged or wrecked vehicles."   

 

Dick Mills, Pick n' Pull Auto Wrecking, expressed desire to present written comments at a later meeting.

 

Bob Crowell, Farmer's Insurance Co., expressed desire to testify at a future hearing but voiced opposition to Section 27 which excluded new and used car dealers from bidding on salvaged vehicles and Section 26 excluded selling of the vehicles.  He stated the impact from those sections would depress the market for sale of the vehicles which depressed value received for vehicles from an insurance standpoint. 

Jerry Walton, Walton's Salvage, voiced concern with bidding processes  as dealerships did not bid, but individual auto dealers did.  Mr. Walton relayed an experience in which a person received an automobile from an auction which had a completely ruined frame; however, the person fixed the car and sold it but told the buyers all the vehicle needed was a front end alignment.  Mr. Walton stated this was the problem faced with allowing anybody to bid on vehicles.   

 

Doug Dickerson, City of Las Vegas, voiced concern with the bill regarding citizen's complaints about abandoned vehicles.  He stated the Las Vegas City Council wished to respond by amending Section 20.  Presenting an amendment (Exhibit E), Mr. Dickerson stated by adding "or parking enforcement officer" would arrange for abandoned vehicles to be towed from public property.  He stated city parking enforcement officers were on duty at all times and could issue notices for removal of a vehicle in seventy-two hours but lacked authority to have the cited vehicle towed.  Although Las Vegas Metropolitan Police were notified, busy schedules hindered timely responses.  Mr. Dickerson stated by allowing parking enforcement officers to arrange for towing provided responsive government to respond to complaints. 

 

Pat Ormsby, Owner, Far Out Auto, explained his business was a used car dealership and rebuilder.  Providing history, Mr. Ormsby stated a wrecker's association passed legislation A.B. 883 (of the 64th Session) (Exhibit F) which eliminated dealers and rebuilders from purchasing cars.  Mr. Ormsby stated a bill (S.B. 421) amending A.B. 883 was introduced in the 65th Session (Exhibit G).  Mr. Ormsby stated earlier testimony given today referred to S.B. 421 (of the 65th Session) as "clean-up"; however, Mr. Ormbsy stated those same people were very much against the bill, and he read an excerpt from Senate Transportation Committee Minutes for April 16, 1989 (Exhibit H) indicating so.  Mr. Ormsby stated there was no time to throw out the legislation (A.B. 883 of the 64th Session) in 1987, it had cost a lot of money and there was not a lot of rebuilders in the state anyway; however, he stated that bill two years ago was special interest legislation introduced to monopolize vehicles only being bought from salvages. He stated through S.B. 421 (of the 65th Session) they were able to include auto dealers.  He explained earlier practices used to purchase automobiles from salvages prior to S.B. 421 (of the 65th Session).  Mr. Ormsby stated the proposed bill A.B. 510 was almost identical to the bill introduced six years ago. 

 

 

Darryl Capurro, Nevada Franchised Auto Dealers Association, submitted copies of letters opposing the bill (Exhibits I, J, K, L, M, N,& O). 

Chairman acknowledged there were a number of people wishing to testify that did not get the chance due to the lateness of the meeting. Chairman stated A.B. 510 would be identified on the agenda under "WORK SESSION" so everyone would have a chance to know when the bill would be heard again. 

 

With no further business, meeting adjourned at 3:20 p.m.

 

 

            RESPECTFULLY SUBMITTED:

 

 

                                   

            Carolyn J. Harry

            Committee Secretary

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Assembly Committee on Transportation

May 3, 1993

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