The Committee on Transportation was called to order at 1:40 p.m., on Thursday, March 11, 1999. Chairwoman Vonne Chowning presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Mrs. Vonne Chowning, Chairwoman

Ms. Genie Ohrenschall, Vice Chairwoman

Mr. Douglas Bache

Mr. John Carpenter

Mrs. Barbara Cegavske

Mr. Jerry Claborn

Mr. Tom Collins

Mr. Don Gustavson

Mrs. Kathy McClain

Mr. Dennis Nolan

Mr. David Parks

Ms. Bonnie Parnell

Mr. Kelly Thomas

GUEST LEGISLATORS PRESENT:

Assemblyman Mark Manendo, District 18

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Bernard Kaufman, Representing, Airport Rent-a-Car of Las Vegas and Nevada Car Rental Association

Bob Ostrovsky, Representing, Hertz Rental Car Corporation

Steve Jarvis, City Manager, Hertz Rental Car Corporation

Dennis Baughman, Hearings and Special Projects Officer,

Nevada Department of Transportation

Dr. Robert Dickens, Director, Governmental Relations,

University of Nevada, Reno

Russ Benzler, Assistant Chief, Bureau of Enforcement

Department of Motor Vehicles and Public Safety

Mrs. Chowning opened the meeting with A.B. 247.

Bernard Kaufman, Representing, Airport Rent-a-Car of Las Vegas and Nevada Car Rental Association testified legislation was passed in 1989 which established a $10 cap on the collision damage waiver for rental cars in Nevada. A.B. 247 would change the cap from $10 to $15 and put in place a $5 cap for additional authorized drivers per 24 hour period. In 1989 when the $10 cap was initiated automobiles cost 40 to 50 percent less than they were today; however, because of the $10 cap the rental agencies had not been able to charge more for the collision damage waiver. The rental car agencies were asking for the increase because of the increase in repair costs. For example a car which cost $9,000 in 1989 would now cost $17,000 to $18,000. The sport utility vehicles which were currently offered as rental cars cost $40,000 to $50,000. An average repair bill for those vehicles, even for a dent in the bumper, was $1,800 to $2,000. The proposed increase was not a guarantee all rental agencies would charge $15. They could remain at the current $10 limit or charge $11 or $12. The industry simply wanted the flexibility to increase the collision damage waiver with a cap of $15 because of the increased costs of new cars and repairs.

Mrs. Chowning commented the request for the 50 percent increase in the collision damage waiver appeared to be due to the 50 to 100 percent rise in vehicle costs over the past 10 years.

Assemblyman Collins asked if the enabling language for a $15 cap would be per 24-hour period. Mr. Kaufman stated the comment was correct. He continued the collision damage waiver was an option, not a mandatory fee. If a customer were to come in with their own insurance, they could sign off the collision damage waiver and their insurance would cover any damage costs.

Assemblyman Gustavson wondered if the current $10 fee was for those customers who did not have collision insurance. Mr. Kaufman clarified the collision damage waiver was a basic protection if the customer wanted to purchase it. Some consumer insurance policies covered rental cars while others did not; other policies only provided liability. The collision damage waiver was something companies who rented cars were currently insisting their employees purchase, so there would be no hassle if there was an accident, then neither the company or the employee would be liable for the damages.

Mr. Gustavson inquired if the industry’s insurance had increased 50 percent to warrant a 50 percent increase to the consumer. Mr. Kaufman explained generally the fees collected on the collision damage waiver went into a pot and when an accident occurred the repair costs were taken out of the pot. That was not always an effective method since there was not always enough money in the pot. What the industry wanted to do with the increase was recoup some of those costs so they would not have to increase daily rates, which would be the only other alternative if A.B. 247 did not pass. He stated the industry’s insurance rates had increased over the past 10 years just as everyone else’s had, and when that was multiplied by 4,000 to 5,000 cars, the bottom line became obvious.

Assemblywoman Parnell asked if all rental car agencies were charging the current limit of $10 for the collision damage waiver. Mr. Kaufman thought most companies were at the limit; however, they were able to reduce the fee to remain competitive. For example one company could charge $9 or $9.50 for the collision damage waiver to try to take the customer away from another company.

Assemblyman Thomas wondered how much collision insurance would cost him a month on a midsize vehicle. Mr. Kaufman explained it would depend on his driving record.

Mr. Thomas clarified the question if he were to purchase only collision insurance would it be comparable to the $300 the rental agencies were receiving with the $10 fee and the $450 they could receive if A.B. 247 passed. He was not sure the request was justifiable. Mr. Kaufman reiterated the collision damage waiver was an optional fee. Only 23 to 25 percent of all customers chose to purchase the coverage, but the agencies still had to pay for repairs on any vehicle damaged. The repair costs had increased such a considerable amount that the $5 increase would allow the agencies to recoup some of the costs of the repairs but not all.

Mr. Thomas again asked how much was paid a month for collision insurance by the agencies. Mr. Kaufman stated the rates varied depending on the company. It depended on the number of cars and what their past experiences were. His company paid around 7 percent of the total value of the company.

Mr. Thomas explained he wanted to know how much the collision insurance was on one vehicle per month. Mr. Kaufman commented he did not have an exact figure, but would get the figure to the assemblyman. He did not want to give any figures which would be incorrect.

Mrs. Chowning requested Mr. Kaufman also provide the committee an average figure for the increase in repairs and new vehicles. She also wanted to know the effect on businesses in Nevada so the committee could base their decision on Nevada statistics.

Mr. Kaufman continued to the second portion of the bill, that of the $5 fee for additional authorized drivers, which was not allowed in the 1989 legislation. He explained the industry would be coming forth with amended language to exclude those in the same household from the fee. The reason the industry was requesting the fee was when someone came in to rent a car with 2 or 3 friends the agency was unable to charge for those other drivers. The second portion of A.B. 247 would allow for that charge. Nevada was one of the few states which did not allow a charge for additional authorized drivers. That had created problems since the industry was not allowed to collect for other drivers. The fee would be capped at $5 much like the fee for the collision damage waiver, meaning agencies would not have to charge the full allowable fee but could not charge more than the allowable amount.

Mr. Collins thought when a car was rented there was a section on the application stating the person signing for the car would be the only driver. Mr. Kaufman corrected Assemblyman Collins, explaining the application did not require the renter to be the only driver. An authorized driver would be if a renter came in with a friend and told the agency the friend would also be driving the car. As the law currently stood, the agency would only be able to make a copy of the friend’s driver’s license and place their name on the contract but not charge any fees for them. Since the industry was considered a leisure market, two or three couples would rent a car together, thus exposing the car to more than one individual driver.

Mr. Collins hypothesized from the proposed amendment language if a married couple came in to rent a car and were both under the same insurance policy they would not be charged the $5 fee as additional drivers. Mr. Kaufman confirmed the statement and added the amended language would cover two items. The first would be the same household, i.e. husband and wife or same insurance policy. The second item would be company employees, i.e. two workers from the same company would not be charged the fee.

Mr. Collins summarized the industry was looking for an enabling act of a $5 cap for additional drivers. Mr. Kaufman answered affirmatively.

Mrs. Chowning stated the language was awkward, but the industry was looking for enabling language for a $5 fee which would not be charged until a third driver was added. Mr. Kaufman corrected the Chair, explaining if two people, who were not family members or from the same company and rented a car, the fee would be charged with the first additional driver.

Mrs. Chowning commented with the amended language the legislation would read one person who rented the car plus one member of the same household or company would not be charged the fee so the $5 would generally begin with the addition of a third driver. Mr. Kaufman confirmed the statement. He added, if two couples were to rent a car, the first couple would not be charged but the second couple would.

Assemblyman Carpenter wondered if he and Assemblyman Collins were to rent a car with six other people, who would be charged the $5 fee. Mr. Kaufman explained if Assemblyman Collins were to rent the car, and was going to be the only driver, there would be no additional fee; however, if someone else in the group wanted to drive, then the fee would be imposed.

Mr. Carpenter inquired how the agencies would keep track of who was driving the car. Mr. Kaufman responded the process currently in place was, if the customer chose to would inform the agency there were going to be additional drivers, but once the car was driven off the lot there was no way of knowing.

Mrs. Chowning felt the problem was, as Mr. Kaufman previously stated, people came to Nevada and rented vans which held a lot of people. Then everyone would take turns driving the van and if there was an accident the agencies only had information on the person who originally rented the van. Mr. Kaufman remarked the agencies had no way of knowing what the driving records of those other people were. He noted there were new computer programs which allowed the agencies to enter a person’s driver’s license number and their driving history would come up, but they could only do that on additional drivers if they knew of the additional driver at the time of the rental.

Mr. Carpenter observed a common situation as if he and Assemblyman Collins were to come into an agency with eight other people and would rent a car, stating only he and Mr. Collins would be driving the car, but in reality everyone was going to take turns driving. He wondered what the penalty would be for himself and Mr. Collins. Mr. Kaufman remarked they would not go to jail; however, if anything happened to the car, they would be responsible for it.

Mr. Carpenter voiced if they were to pay the fee there would not be a problem. Mr. Kaufman commented if the collision damage waiver were purchased and all who were going to drive were placed on the authorized driver list then there would be no problem. He also said if an unauthorized driver were to get into an accident, then the person who originally rented the car would be liable.

Mrs. Chowning commented currently the only way to discover if there was an unauthorized driver was if there was an accident. Mr. Kaufman stated the comment was correct.

Assemblyman Nolan stated it appeared the additional $5 charge would apply to offsetting the cost of placing the additional operator on the policy, but most major companies allowed for additional drivers at no charge. He felt the language did not state the $5 fee had to go toward purchasing the collision damage waiver and it appeared the committee would be statutorily approving a $5 increase in the company’s bottom line.

Mr. Kaufman explained there were two separate items in A.B. 247. The first was the change on the $10 collision damage waiver cap to $15. The second item was a $5 cap for additional drivers. Currently, the law stated the industry could not charge for additional drivers. They were requesting the cap since additional drivers created a greater exposure than an individual driver. The fee would assist in the repair costs associated with any accidents. There was also the problem with the increase in mileage. An automobile’s value decreased with more miles placed on it. For example, a new 1999 car should statistically have 10,000 to 12,000 miles on it after 9 months; however, rental cars would have 25,000 to 30,000 miles in the same time frame. Thus, the $5 fee would go to recouping losses from accidents and mileage.

Mrs. Chowning indicated there were two issues placed in the proposed legislation in order to save time so there would not be two bills.

Assemblyman Claborn indicated a problem with some of the new language proposed. Specifically, he had a problem with the $5 fee to be charged for a full or partial 24-hour period. He wondered if he brought in a car a few hours late, would he still be charged the full fee. Mr. Kaufman explained that would be up to the individual agencies. Most companies did allow for a grace period of an hour or two, but if the car were kept longer than that the fee would be imposed.

Bob Ostrovsky, Representing Hertz Rental Car Corporation mentioned he wanted to respond to some of the questions raised. To Assemblyman Thomas’ question on the cost of insurance, he told the committee, with teenagers and a sports car, he personally paid thousands of dollars a year for insurance in Clark County. The collision damage waiver allowed the customer to purchase insurance on their own terms, such as during inclement weather. The industry felt the value of the insurance increased since people could purchase it if they wanted, either because their insurance did not cover rental cars or they wanted to be able to simply walk away after returning the car. The fee may look high on a daily basis, but the industry did take extraordinary risks. On the issue of the $5 fee for additional drivers, he wanted to remind the committee the industry was required to come before the legislature to ask for an increase which any other business in Nevada could implement without legislative oversight. The rental car industry was peculiar in that it was regulated by the legislature because it was believed to be in the public’s best interest. However, it was a very competitive industry so the consumer would not be overcharged, as evidenced by the vast number of airport counters in both Reno and Las Vegas.

Steve Jarvis, city manager, Hertz Rental Car Corporation explained one of the greatest reasons for the increase in new automobiles and their repair over the last 10 years was the airbag systems. The replacement of one airbag was over $400. He presented the committee with two incident reports (Exhibit C) to show how much the repair bills could run. The first report was from a Lincoln Town Car, which was rolled several times and cost almost $20,000 to repair. The second report showed damage caused due to the poor attitude of some of the people who rented cars, which was another reason for charging additional drivers the $5 fee. The additional driver on the second report totaled a brand new convertible near Lake Tahoe and gave as the explanation for the accident: "Mother Nature, awesome view".

Mr. Ostrovsky disclosed in 1998 on a nationwide basis Hertz Rental Car Corporation paid $29.2 million in vehicle damage due to additional drivers. In Nevada, they paid approximately $500,000. He reminded the committee both the collision damage waiver and the additional authorized driver were strictly voluntary. If the customer did not tell the agency there was going to be an additional driver, the agency would have no way of knowing. However, if someone came in, purchased the collision damage waiver, and wanted to add an additional driver, all parties would be covered if anything happened to the vehicle. What normally happened was "Joe" would not be able to rent a car and would have a friend rent it for him. "Joe" would either wreck the car or not return it on time and the agency would contact the person whose name was on the contract. The friend would not know what had happened, but would be responsible for the car.

Mrs. Chowning observed damages to vehicles in Nevada due to additional drivers cost Hertz Rental Car Corporation $500,000. She asked how many rental car agencies were in Nevada. Mr. Ostrovky noted there were 38 to 42 companies.

Mr. Gustavson asked how many customers purchased the collision damage waiver insurance because they felt pressured to do so from the employees. He commented he had asked a rental car employee whether he should purchase the insurance and the employee stated he should without fully explaining what it was. Mr. Ostrovsky explained he had heard of that occurring, but it was the policy of Hertz not to pressure people into purchasing the insurance. Mr. Jarvis reiterated the statement explaining Hertz would have the customer read a pamphlet on the coverage while the employee typed in information, then the customer could ask questions if they did not fully understand.

Mr. Nolan inquired if the industry would have a problem adding language stating the purpose of the $5 fee for additional drivers was to offset the cost of the collision damage waiver for the added driver, and the fee could be waived if the additional driver had insurance. Mr. Ostrovsky indicated he would be willing to work with the committee on the language for the proposed amendment.

Mr. Collins wondered why the additional fee could not just be added to the daily rates of the rental cars. He felt the industry could charge more for the cars since all companies ran out of cars during special events, such as when the National Association of Stock Car Auto Racing (NASCAR) race was in Las Vegas. Mr. Jarvis stated the industry was bound to run out of cars during special events and would not be able to increase their stock unless the company was able to show a profit. The industry tried to keep their daily rates low for those who did not need to purchase any of the additional insurance.

Mr. Collins noted the cities and counties also added fees above the daily rates plus airport costs and wondered if a $5 increase in the company’s daily rate would make such a difference. Mr. Ostrovsky remarked the agencies in Nevada were not only in competition with each other, but with other tourist destinations. If Hertz advertised a $29.95 weekend rate nationwide and a customer had to pay $34.95 when they came to Nevada, the customer would go somewhere else on their next vacation.

Mrs. Chowning requested Mr. Ostrovsky provide the committee with Hertz’s national rates as well as all industry rates in high tourist states, such as New York, Hawaii, and California so the committee would be able to judge the effect a rate increase would have in Nevada. She then closed the hearing on A.B. 247 and opened the hearing on A.B. 367.

Assemblyman Mark Manendo, District 18 testified A.B. 367 was brought forth at the request of constituents. The bill specifically addressed Elaina Avenue as the affected area; however, the following streets would also be impacted: Elaina Circle, Edith Street, Dwight Avenue, East Mesa Vista Avenue, Del Sueno Drive, El Nuevo Drive, and the southern portion of Orinda Avenue. He presented the committee with information he had collected while researching the bill (Exhibit D). The letter to Donald and Rita Greene from Daryl James, Chief, Environmental Services Division, Nevada Department of Transportation (NDOT), showed the noise levels when tested were above the impact criteria established by federal regulations, thus construction of a sound wall could be considered. The increase in noise levels was due to the unexpected population growth in the Henderson area. He had worked with the residents of the area in drafting the bill in order to attempt to speed up construction of a sound wall. He understood NDOT had approved $2 million annually for sound walls and was working with Clark County to match state funds. Also included in the packet was the fiscal note for the bill and information from Tom Stephens, Director, NDOT, on the department’s policy on retrofitting sound walls in existing areas.

Mrs. Chowning asked if the sound wall requested was an extension of the sound walls approved in 1997 on State Highway 95. Mr. Manendo explained the wall would be built on approximately 3 miles south and on the east side of the road. He felt the $1.5 million fiscal note attached to the bill was excessive since the affected area was roughly 6/10 of a mile.

Mrs. Chowning called attention to the information provided, which stated the noise levels exceeded 65 decibels during peak hours and NDOT’s policy set the requirement at 66 decibels. Mr. Manendo explained page 5 of Exhibit D showed decibel levels approaching 70 between the hours of 4 a.m. and 6 a.m. He indicated there were many senior citizens in the area and felt their quality of life had steadily been deteriorating and many had problems selling their homes because of the noise. He visited Mr. and Mrs. Greene to investigate the problem and stated the traffic noise could be heard in rooms furthest from the highway even with all doors closed.

Assemblywoman McClain observed A.B. 393 was similar to Assemblyman Manendo’s bill and the fiscal note was just as excessive. Mr. Manendo clarified the sound wall would be only on the east side of Highway 95 for only 6/10 of a mile.

Mr. Gustavson inquired which had been constructed first, the homes or the freeway. Mr. Manendo remarked many of the homes were 30 years old while the highway extension was approximately 10 years old.

Assemblyman Bache wondered if the proposed sound wall would be 12 feet or 14 feet high. Mr. Manendo stated he was not a sound wall expert and did not know what height would be appropriate for the area.

Mr. Bache informed the committee the sound walls built in his district were 6 feet high and did not reduce the noise sufficiently. They had been used as an experiment for cost savings, but only reduced the noise levels by a few decibels. He felt there was no sense building sound walls if the noise would not be significantly reduced and since most noise seemed to come from semi-trucks the walls should be high enough to block them. Mr. Manendo agreed.

Dennis Baughman, Hearings and Special Projects Officer, NDOT, explained the department estimated there were about 70 miles of highway in Nevada to be retrofitted with sound walls at $1.5 million a mile for a total of approximately $100 million. They felt all three levels of government, federal, state, and local, should share in the responsibility of alleviating the problem since all had a vested interest. The Federal Government set the policies and provided close to 95 percent of all highway funds in Nevada. The state coordinated the policies and provided matching funds. Local governments approved highway alignment and set conditions for land development.

Mr. Baughman continued since highways in Nevada were largely built with federal funds the only sound walls built were those allowed under strict guidelines. The guidelines did not provide funding for sound walls unless noise levels were predicted to be at least 67 decibels during peak hours based on the projected traffic in 20 years. NDOT was concerned about the problem in Las Vegas since such rapid growth had not been projected. The retrofit program initiated by the department was initiated to deal with the worst sections of highway in the greatest cost effective manner, that of receiving matching funds from the local governments. He mentioned the committee could amend the bill to provide 50 percent of the money needed to build the wall and request the county provide the rest. Another alternative to stop the problem from proliferating would be to enact legislation requesting local jurisdictions require developers to provide noise mitigation for new developments.

Mrs. Chowning remarked the theory would be relevant for developments approved after the highway; however, the current problem seemed to deal with developments which had long been established and the highways were new. Mr. Baughman commented the counties approved highway alignment long before a road was actually built. The residences along Elaina Avenue were built after the highway alignment was approved.

Mr. Carpenter wondered why the original study conducted did not show 20 year projected levels above the 67 decibels needed for federal funding on sound walls. Mr. Baughman remarked the models used were based upon current traffic volumes. The growth in Clark County had been so extreme and was not predicted by anyone.

Mr. Carpenter asked if sound walls were projected on the new highway construction in the Las Vegas Valley. Mr. Baughman indicated they were.

Assemblywoman Parnell wondered from where the funds for the sound walls were coming and if they were competing for the same money proposed for the Carson City Bypass. Mr. Baughman explained the sound wall funds associated with A.B. 367 would come from the state’s general fund, while the money for the Carson City Bypass came from the highway fund. Unless there was a change in the language of the bill to pull the money from the highway fund, there was no problem with competing funds.

Mike Painter, Environmental Services Division, NDOT informed the committee he acted as a noise engineer during a 1985 study of the affected area and was able to provide some background on the issue. An environmental impact study was finalized in 1977 on the proposed Highway 95 corridor. Between 1977 and 1985, much of the area was developed with residential housing. The 1985 study discovered ambient background noise levels around 52 decibels in the Elaina Avenue area. The model provided by the Federal Highway Administration required NDOT to use a specific statistical method to determine future traffic during the next 20 years, which included a peak speed of 55 miles per hour. The model predicted the worst case scenario for noise levels along Elaina Avenue to be around 65 decibels. The federal criteria at the time required 67 decibels before federal funding for sound walls, thus there was no noise mitigation proposed for the area. There had been various changes since the 1985 study, such as increases in the speed limit and traffic volume. Another study was completed at the request of residents in 1988, which determined a peak of 63.2 decibels. The federal standard was exceeded in 1997 when a study determined a peak level of 67.7 decibels. The measured levels not only included highway noise, but also aircraft fly-overs, lawn mowers, barking dogs, and other neighborhood noise.

Mr. Painter explained the length of the proposed wall was set at 5,200 feet to connect it to an existing wall, which started on a ramp off Tropicana Avenue on the east side of the highway. NDOT would suggest beginning the proposed wall at the existing wall and continuing until the distance between the subdivision and the highway was great enough to accomplish noise mitigation. The costs associated with building a sound wall were great because of the high standards set by the American Association of State and Highway Transportation Officials. Sound walls were required to have a design life of 50 years, withstand wind speeds over 100 miles per hour, be low maintenance, and have the ability to reduce sound. The walls had a high density and were made of very strong materials. Additionally, construction on an existing highway required traffic control, such as flag people and impact attenuaters.

Mrs. McClain wondered where in Las Vegas the beginning point of the 1977 environmental impact study was. Mr. Painter explained the study began at the Spaghetti Bowl and continued south through Henderson to the Wagon Wheel Interchange at the Boulder Highway.

Mr. Bache wondered if there was any money available for sound walls in the Transportation Equity Act for the 21^st Century (T21). If not, he felt a policy statement could be adopted to try to receive more money from the Federal Government. Mr. Baughman thought there was no money in T21 to retrofit sound walls, but would double check to be sure.

Mrs. Chowning expressed appreciation for NDOT’s cooperation. She felt NDOT worked well with everyone in Washington, D.C., to get as much money as possible for Nevada highways.

Mr. Bache reiterated the 6 foot experimental sound walls built in his district were not adequate and indicated he did not want NDOT to consider using the design in the future. Mr. Painter disclosed 12 feet was determined to be the minimum height necessary for sound walls to reduce noise levels at least 5 decibels.

Mrs. Chowning asked why the 12 foot wall was not constructed in the first place. Mr. Painter remarked the 6 foot walls were an experimental program. Mr. Baughman added the department wanted to determine if 6 foot walls would be adequate and how effective they would be.

Mrs. Chowning inquired if any more 6 foot walls would be built. Mr. Baughman mentioned the 6 foot walls would not be used for highway noise mitigation. The experimental wall was built with monetary assistance from the city of Las Vegas to determine its effectiveness.

Mrs. Chowning closed the hearing on A.B. 367 and opened the hearing on A.B. 329.

John Sande, Representative, Nevada Federated Automobile Dealers Association began by presenting a letter from Chris Ault, Director of Athletics, University of Nevada, Reno (Exhibit E), who was present at the meeting if there were any questions. The letter explained how the University Athletic Department’s courtesy car program operated and indicated support for A.B. 329 since the 22 cars used were donated to the program.

Mr. Sande indicated A.B. 329 was intended to clarify, through legislation, what had been the practice in Nevada until 1997. The current statute stated the loaner plates could be used by customers of a dealership. The advantage of a loaner plate was there were no registration or privilege taxes. The dealers were also able to change the plates from car to car, so a car could be loaned out for 3 months then returned to the dealer and sold. Dealerships loaned cars to a variety of different organizations for charitable purposes, such as the State of Nevada, university and community college system, school districts, and 501(c)3 groups like churches. If the dealerships had not donated the cars, it would have been necessary for the groups to purchase the cars themselves, which would be very costly for those groups. The bill would also clarify who would be able to operate the vehicles so there was no potential for abuse since there had been circumstances of abuse in the past. The fiscal effect on the state would be minimal and in fact less than if the taxpayers had to pay for purchasing the cars.

Mr. Sande continued reading from the letter presented by Chris Ault (Exhibit E), that the University of Nevada, Reno, Athletic Department received $123,000 in donated cars. The University of Nevada, Las Vegas also received a considerable amount in donated cars. The loaner cars were used as incentives to recruit coaches for the athletic departments and for certain people in the academic fields. For example, Chris Ault recently selected an assistant Stanford University basketball coach as head coach of the University of Nevada, Reno’s program. To compete with larger schools, who were able to offer greater salaries, part of the package offered included a car.

Mr. Sande mentioned after discussions on the bill with the Department of Motor Vehicles and Public Service (DMV & PS), there would be a proposed amendment. The amendment would affect page 2, line 5, where it stated dealerships would be allowed to loan cars to organizations exempt from taxation pursuant to provisions of section 501(c) of the Internal Revenue Code. The change would be to 501(c)(3) organizations, which was specifically directed at educational or charitable organizations and not as broad as 501(c) regulations. He felt the proposed legislation was worthwhile and should be passed. He concluded by adding when a dealer loaned a car, the car not only depreciated the longer it was loaned but was still considered part of the flooring line, a requirement for all dealers.

Mrs. Ohrenschall felt there was no real loss of income for the state on the bill. She thought in some instances the state was able to benefit from the dealership loan program. Mr. Sande indicated all who participated in the program received benefits, including the dealerships who received positive publicity.

Mr. Carpenter disagreed with Assemblywoman Ohrenschall feeling those on the list for one of the loaned cars received a high enough salary to be able to purchase their own car.

Mrs. Cegavske expressed many dealers abused the practice of loaner plates and allowed family and friends to use the plates. She wondered how the bill would change that practice. Mr. Sande explained there were also dealer plates, which the dealership received based on the number of licensed people in their shop.

Mrs. Cegavske interjected the dealers were able to use those plates for anyone they wanted and wanted to know if A.B. 329 would tighten up the regulations to prevent abuses. Mr. Sande announced the bill would define the people who would be able to use the plate and the dealer or their family members would not be included. Abuses had been a concern and they wanted to firm up the regulations.

Mrs. Cegavske asked if the dealerships would confirm the 501(c)(3) status before offering the loaner plate. Mr. Sande said they would.

Mrs. Cegavske inquired if there was a fiscal note due to the loss of registration. Mr. Sande relayed the fiscal note they received from DMV & PS stated the exact number would be difficult for them to ascertain, but knew the amount would be minimal. He reminded the committee the state allowed for the regulations in A.B. 329 prior to 1997 when there was an attempt to tighten the statutes.

Mrs. Cegavske wondered if the DMV & PS would know to whom the car was registered. Mr. Sande indicated the DMV & PS would be able to track any registration; however, in conversations with the department, the proposal had been to require the dealerships to keep all information on who had the plate and how they were authorized to use it.

Mrs. Cegavske asked if the Nevada Highway Patrol would have access to all information. Mr. Sande explained the dealerships would be required to provide the information as part of the regulatory process. He felt the simplest method would be to have the dealerships retain the information and provide it to authorities when requested.

Mrs. Cegavske called attention to legislation from the 1997 session on driver’s education in high schools and the dealerships had concerns about loaning cars to the school district. She wondered if the concerns had been alleviated. Mr. Sande felt the bill encouraged dealerships to comsider loaning more cars and did not know of any dealerships with concerns about loaning cars to school districts.

Mrs. Cegavske asked why the cities and counties were included in the legislation. Mr. Sande informed the committee there were some programs or activities run by the local government to which dealerships loaned cars. For example, there was a ski program run by Washoe County which required the use of vans.

Wayne Frediani, executive director, Reno-Sparks New Car Dealers Association, mentioned the dealerships had been involved in the ski program for a number of years and were interested in continuing the program.

Mrs. Chowning asked if the loaner plates were used for special events. Mr. Frediani remarked the current regulations allowed for a 10 day period to loan cars out for special events or promotional activities.

Dr. Robert Dickens, director, Governmental Relations, University of Nevada Reno expressed support for the legislation.

Mr. Bache wondered if the Board of Regents had taken a position on the bill. Mr. Dickens stated the board did not have an opportunity to review the bill during their last meeting and had not taken a position on it.

Mrs. Chowning requested Mr. Benzler from DMV & PS come forward to discuss the effects of the bill on the state and if there would be a significant fiscal impact. Russ Benzler, Assistant Chief, Bureau of Enforcement DMV & PS explained the fiscal impact was minimal. He did not have any precise numbers but a rough estimate was around $30,000 for every 100 vehicles.

Mrs. Chowning asked what the approximate number of vehicles were included in the bill. Mr. Sande thought the number of loaned vehicles would have been in the 100 vehicle range. Between the two universities and the charity organizations, the number was not unreasonable. He indicated most of the loaned cars were on a short term basis. For example, the Reno-Tahoe Open would be in northern Nevada over the summer and the Professional Golf Association was requesting 176 loaner cars. The cars would only be loaned for a week.

Mr. Collins inquired if a fee was paid for loaner plates. Mr. Sande thought there was a $12.50 fee for the plate.

Mrs. Chowning explained the committee would not take action on the bill until they received the amended language and closed the hearing on A.B. 329 then opened the work session on A.B. 76.

Elana Marton, committee policy analyst explained A.B. 76 was first heard by the committee on March 2, 1999. The bill contained two issues. The first would allow additional colors to be used on general issue license plates with the primary colors being blue and silver. The other colors would highlight state interests and allow for better visibility for the NHP. The second issue in the bill discussed an alternative to the pen and ink requirement to transfer ownership of motor vehicles. There was a proposed amendment by Mr. Ostrovsky.

Mr. Ostrovsky explained Assemblywoman Cegavske raised the issue of possible fraud if the pen and ink statute were removed. The proposed amendment limited the legislation to affect only signatures on certificates of origin, which were between the manufacturer and dealer. The amendment also indicated the DMV & PS may accept other forms, but it was not a requirement. That would allow the department to ensure the authenticity of the signatures by adopting other regulations. He reviewed the amended language with Peter English, Chief of Registration, DMV & PS who agreed with the language and felt the amendment strengthened the bill. The possibility of fraud was reduced since all titles would be required to be signed in pen and ink.

Mrs. Chowning noted DMV & PS was in agreement with the proposed amendment.

Mrs. Cegavske relayed she had reviewed the amendment and felt it adequately addressed her previous concerns about fraud.

ASSEMBLYMAN BACHE MOVED TO AMEND AND DO PASS A.B. 76 WITH THE PROPOSED AMENDMENTS FROM BOB OSTROVSKY.

ASSEMBLYMAN COLLINS SECONDED THE MOTION.

THE MOTION PASSED UNANIMOUSLY.

Mrs. Chowning closed the work session on A.B. 76 and opened the work session on A.B. 186.

Ms. Marton remarked the bill was first heard on March 9, 1999. The bill would require people who applied to operate or teach at a driving school to receive Federal Bureau of Investigation (FBI) fingerprint check. There were two issues raised regarding the bill. The first was how would good moral character be defined and who would make the determinations on those applying. DMV & PS currently had regulations in place which defined good moral character (page 5 Exhibit F). The regulations applied to those who applied for either an operator’s license or an instructor’s license. Regarding second issue, DMV & PS brought forward a possible amendment to the bill which would require the FBI check for the initial license and for every license renewal on a biennial basis.

Mrs. Chowning asked if the suggestion was to place the current regulation language in the bill. Ms. Marton commented someone from the criminal repository came forward when the bill was heard and was concerned that good moral character, as defined in the bill was too broad.

Mrs. Chowning wondered if DMV & PS felt the concerns raised were valid and whether their employees have been placed in a difficult position because of the sensitivity of the information. Mr. Benzler explained the department currently completed background checks on occupational licenses. The line staff in the Enforcement Division reviewed criminal histories and followed specific parameters to decide which persons would be licensed.

ASSEMBLYWOMAN PARNELL MOVED TO AMEND AND DO PASS A.B. 186 WITH THE PROPOSED AMENDMENT OF INCLUDING THE INITIAL LICENSE AND RENEWAL.

ASSEMBLYWOMAN CEGAVSKE SECONDED THE MOTION.

Mr. Bache stated he had a problem with the proposed amendment. He felt the background check only needed to be completed once and not every 2 years. It was not appropriate to charge $40 every 2 years since the initial fingerprinting was sufficient and could be checked against the repository when desired. Mr. Benzler articulated when someone applied for an occupational license there was only one set of fingerprints taken which remained on file in Nevada.

Mrs. Chowning confirmed those with an occupational license were fingerprinted once and did not need to be fingerprinted again with the renewal. Mr. Benzler agreed.

Mrs. Chowning asked why the bill required fingerprinting to be completed every 2 years. Mr. Benzler mentioned it might have had something to do specifically with driver’s license schools, but could not answer for sure.

Mr. Collins expressed the individual present at the first hearing of the bill seemed unaware of the occupational licensing currently done through the DMV & PS, which was a one-time process. If someone had an occupational violation, their license would be revoked without requiring a fingerprint check. He felt there was simply a mixup in information which had been clarified during the work session. He felt the initial check was the important process and there should not be a check every 2 years. Mr. Benzler remarked there was a $39 fee when someone had to be fingerprinted and he did not understand why another fingerprint card would have to be done upon renewal.

Ms. Parnell announced she would withdraw her motion.

Mrs. Chowning asked if the regulations currently in place defining good moral character should be put into the bill to clarify what actions would not be tolerated. Mr. Benzler observed it was always beneficial to strengthen by statute; however, by the wording remaining in regulation form, the committee allowed the DMV & PS to change the regulation without returning to the legislature.

Mrs. Chowning felt language should be added to the bill to mention good moral character was defined by DMV & PS regulations.

Mr. Parks mentioned the regulations were defined in the Nevada Administrative Code (NAC) so the amended language should reference the NAC and not DMV & PS regulations.

Mrs. Chowning commented the problem was the NAC did not specifically address the issue in the bill and if the regulations were used, the DMV & PS would have the ability to alter those without the necessity of a bill. She stated the committee would take action on the bill at a later date since the issue needed to be discussed further with the DMV & PS.

With no further business before the committee Mrs. Chowning adjourned at 3:37 p.m.

RESPECTFULLY SUBMITTED:

Jennifer Batchelder,

Committee Secretary

APPROVED BY:

Assemblywoman Vonne Chowning, Chairwoman

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