The Subcommittee for Senate Bill 491 of the Senate Committee on Finance was called to order by Chairman William R. O’Donnell at 5:10 p.m., on Tuesday, May 18, 1999, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

SUBCOMMITTEE MEMBERS PRESENT:

Senator William R. O’Donnell, Chairman

Senator Bob Coffin

Senator Bernice Mathews

STAFF MEMBERS PRESENT:

Ginny Wiswell, Program Analyst

Jean Laird, Committee Secretary

OTHERS PRESENT:

Regarding Senate Bill (S.B.) 491, Chairman O’Donnell stated there is a difference between tour buses, sightseeing buses, and buses for hire.

Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association (NMTA), testified the federal preemption specifically mentions charter buses. He said the problem is that if charter buses are deregulated, as required by federal preemption, scenic sightseeing and special service buses would also be deregulated due to the fact that charter buses would be used for sightseeing and special services. Mr. Capurro stated this had been a problem for years. He explained that out-of-state buses would come into the state and be chartered to a broker, and most would go to Laughlin, Hoover Dam, or the Grand Canyon. He remarked that in going to Hoover Dam or Laughlin, the bus would simply cross the border and the trip would become a continuation of an interstate movement and thus would not be regulated. Mr. Capurro mentioned the key was control "on the charter end." He maintained if his industry is preempted from regulating charter buses, the props would be "kicked out from under" regulation of any kind of bussing.

Chairman O’Donnell pointed out that buses accommodating 16 or fewer passengers could still be regulated. Mr. Capurro noted a vehicle that holds fewer than 16 passengers is not a bus; by definition in the law it is a limousine. He indicated there were two definitions on the federal level. One definition is that a bus is anything over 10,000 pounds GVW (gross vehicle weight). Another definition, according to Mr. Capurro, is the same definition that the Transportation Services Authority (TSA) uses in Nevada, which is a vehicle with a 16-passenger capacity including the driver.

Michael R. Reed, Lobbyist, Baker and Drake, Inc., stated he had seen the proposed amendment referred to by Chairman O’Donnell (Exhibit C) and for the most part agreed to the proposed changes. He remarked it was his organization’s opinion that it would be easier to eliminate the TSA, but the organization would be willing to agree to some other things. One section mentioned by Mr. Reed as causing his organization a problem was the phaseout of leasing. He was also opposed to the language in section 95, subsection 3 of the bill stating, "A person who leases a taxicab to an independent contractor is jointly and severally liable with the independent contractor for any violation of the provisions of this chapter relating to the regulation of taxicabs . . . ." Chairman O’Donnell indicated that was already existing law. He inquired whether Mr. Reed had any new proposed amendments. Mr. Reed reiterated his organization would like to eliminate the TSA. Chairman O’Donnell remarked the household goods movers had made a case, and the committee was of the opinion that the household goods movers need to be regulated for a period of 2 years. He said that would be a function of the TSA. Mr. Reed suggested turning that responsibility over to the Department of Business and Industry. Chairman O’Donnell commented that is not the way the committee closes budgets. He asked Ginny Wiswell for an explanation of whether the budgets have closed for the TSA and the Taxicab Authority (TA). Ginny Wiswell, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, explained the TA budget has not closed at this time, nor has the primary budget for the TSA.

Mr. Capurro requested Chairman O’Donnell give him an idea of what the amendments proposed by lobbyists Harvey Whittemore and Robert Broadbent (Exhibit C) entail. Chairman O’Donnell replied they deal primarily with the TSA and TA as far as the taxicabs. Mr. Reed mentioned it was his understanding the amendments deal mainly with the limousine situation and the operation of the Clark County TA. Mr. Capurro indicated if that were the case, he would have no concerns relative to the proposed amendments. He remarked the NMTA could support S.B. 491 as currently written. Mr. Capurro agreed with Mr. Reed’s suggestion to eliminate the TSA altogether and save the Highway Fund $1.6 million each year of the biennium. He said if that is not possible, the NMTA could support the bill the way it stands. Mr. Capurro commented that if, as Chairman O’Donnell indicated, the committee would like to study regulation with respect to household goods movers over the next 2 years, there are a couple of issues the committee should address. The first would be that the household goods standard be a "fit, willing, and able" one only, as discussed during the last meeting. If that is the case it was Mr. Capurro’s opinion the household goods movers would also not be interested in continuing. If, however, it was a "public convenience necessity" (PCN) standard as well as a "fit, willing, and able" standard, as it currently is, that would be a different issue. Second, Mr. Capurro stated, the questions raised revolved around the cost. In the original bill the fee was $500 per vehicle, and the issues that were set forth indicated the affected business represented a fairly small portion of the overall transport business.

Chairman O’Donnell remarked that for the household goods movers the fee would remain the same as it is currently because this group would not be deregulated; they would continue to be regulated for 2 additional years. Mr. Capurro pointed out that under this bill the tow car operator fee would be raised by more than double. Chairman O’Donnell concurred and explained the tow car operators would be regulated as far as the nonconsent tows. Mr. Capurro stated that is the way it is now. He asked why the tow car fee would be more than doubled if the fees that are charged to others regulated under the same chapter were going to remain the same. Chairman O’Donnell suggested the committee could close the budget "Governor Rec," which contains $1.9 million for the TSA, and then no fees whatsoever would be needed on tow cars. "The aspect of that," according to Chairman O’Donnell, is that the TA in Reno has to be properly funded. He said if the role of the TSA in regard to limousines and taxicabs in Reno and in Las Vegas is going to be diminished, then some of that money could be reallocated to a TA in Reno and reallocated to the TA in Las Vegas.

Mr. Reed inquired whether Chairman O’Donnell was saying to move the household goods to either one of the TAs and do away with the TSA. Chairman O’Donnell replied no. He clarified he was saying not to do anything with the household goods; leave them under the TSA for the next 2 years and let them study the aspect of deregulation in the interim. Chairman O’Donnell further clarified the TSA would regulate household goods, nonconsent tows, and appeals on the TAs. Mr. Reed remarked that is a good solution, in his opinion.

Garland Knopp, Action Moving & Storage, inquired whether, during the 2 years of the proposed study, everything would be status quo with no changes to entry and so forth. Chairman O’Donnell asked Mr. Knopp whether he was in support of the study. Mr. Knopp answered yes and inquired who would be doing the study. Chairman O’Donnell replied "the money committee" could establish a bill to authorize an interim committee to perform the study. Mr. Knopp mentioned that the proposed amendments his company had submitted (Exhibit D) are probably no longer necessary. Chairman O’Donnell stated they would not be needed because the law regarding household goods movers is not going to change. Mr. Knopp asserted the one amendment his industry would especially like to have is the tow impound of vehicles used in an illegal move. Chairman O’Donnell advised that since the committee was not going to do anything with household goods movers for 2 years, they would leave everything status quo rather than get involved in amendments. Mr. Knopp maintained it would give the committee a more realistic picture if law was enacted that would facilitate getting the illegal movers off the street. He further stated there is "a lot of grief" for the consumer right now that could be prevented in 2 years if the committee would consider that particular amendment. Mr. Knopp said he would concede the rest of his proposed amendments if the committee would consider that one.

Barry E. Jones, Owner, Carson Valley Movers, requested the committee’s support through the next 2 years for the TSA and the household furniture movers.

Gary E. Milliken, Lobbyist, Star Transportation, Yellow Cab, Checker Cab, stated the purpose of his industry’s amendment is that it has already applied for a limousine license and the amendment would allow enough time for the license to be processed before the bill would go into effect.

Alfredo Alonso, Lobbyist, Bell Transportation, agreed to the proposed amendments to S.B. 491.

Mr. Capurro remarked one of the issues that arose concerned airport transfers. He noted the Airport Authority already regulates airport curb space and access to the airport. Mr. Capurro maintained that by removing buses from regulation under the TSA, the Airport Authority would be provided the opportunity to regulate rallying points or marshalling points with respect to buses. In was his opinion that would be a clean resolution of the issue.

Chairman O’Donnell noted "it boils down to" taking the budget items dealing with the TSA and the Highway Fund, and the item that deals with the TA and the new TA in Reno, and determining how the funding should be allocated. He said if the household goods movers are taken out of the budget along with the fees that were generated by the household goods movers, and the tow car operators are taken out of the budget along with the fees that were generated by the tow car companies, over and above the $36 annual fee, the budget could be crafted around those two entities to ensure the TA and TSA have enough money to function. Chairman O’Donnell asked Donald Drake whether the taxicab operators in Reno were willing to come to the table.

Donald L. Drake, Manager, Baker & Drake, Inc., testified the Reno taxicab operators were willing to come to the table. The way the TA in the northern part of the state would operate would be a little different than the way it would operate in southern Nevada. Mr. Drake advised that the northern Nevada TA would not have a full-time governing board, making those costs considerably less. He said the agreement was that the state would help with the funding for the first 2 years. After that the northern Nevada TA would be on its own. Chairman O’Donnell inquired what fee was determined appropriate for the TA in northern Nevada to charge taxicabs. Mr. Drake confirmed it was $100 per taxicab and a per-trip charge of up to 20 cents. He mentioned that it tripled the per-taxicab cost and for the first time added the per-trip cost. Chairman O’Donnell remarked that by taking the balance of fees and trip charges and using Highway Fund dollars, the TA will get an idea of what its rates should be. He suggested to Ms. Wiswell that money from the Highway Fund be put into an escrow account held by the Interim Finance Committee (IFC) and the TA from northern Nevada be allowed to come in and request funds from the IFC if more money is needed.

Chairman O’Donnell asked John Mendoza whether, now that the limousines are not going to be under his jurisdiction, the TA in Nevada would be able to handle regulation of the limousines with the same amount of funding it has currently.

John F. Mendoza, Las Vegas, Chairman, Transportation Services Authority, Department of Business and Industry, replied his answer was "kind of a guesstimate." He advised that the TSA chose not to make any projections until it was learned what the decision of the committee would be. Mr. Mendoza remarked that in the last 2 years, in accordance with the direction of the IFC, the TSA has been concentrating in the area of limousines first and then in the other areas. Chairman O’Donnell noted the TSA currently has a budget of $1.9 million, part of which will not be needed once the TSA regulates only household goods movers and nonconsent tows. He said he wanted to take some money out of the $1.9 million budget and put it into the TAs in northern and southern Nevada, because they will have the responsibility for regulating the limousines. Mr. Mendoza maintained one of the big areas of concern is that of household goods movers. He stated that area requires a tremendous amount of enforcement personnel to support.

Mr. Reed stated the Clark County TA would essentially be adding the regulation of limousines. He suggested allocating $300,000 to $500,000 for the Clark County TA; $750,000 plus for the northern Nevada TA; and the balance allocated to the TSA. Mr. Reed mentioned the committee could escrow a portion of the Highway Fund. Chairman O’Donnell remarked he was more comfortable putting the highway funding into an escrow account out of the Highway Fund.

Mr. Mendoza estimated that at least five investigators would be necessary to cover the entire state. Responding to a question from Chairman O’Donnell, Mr. Mendoza said the TSA currently has eight investigators. The reason five investigators would be needed for just the household goods is that the TSA would not have an office in northern Nevada and investigators would have to come out of Las Vegas. Mr. Mendoza indicated administrative support would also be necessary. He commented the TSA would need eight or nine employees as well as half an attorney general position. Chairman O’Donnell stated he would request staff to prepare an assessment of what is appropriate.

Mr. Knopp suggested that if the committee adopted his amendment to impound illegal household goods moving trucks, the fines would bring in revenue and reduce the amount of money and staff that are needed. He added that if the illegal movers’ trucks were impounded the truck owners would be unable to ignore the fines as they do currently. Mr. Knopp also advised adopting his amendment No. 5 regarding people advertising moving in the Yellow Pages being required to write in either their certificate number or the words "The State of Nevada issues certificates for legal, full-service, in-town moving. This company does not have one of these certificates." He claimed that would reduce the amount of work and therefore the amount of staff needed.

Chairman O’Donnell pointed out that if the Legislature deregulates the movers in 2 years, all that would be for naught. Mr. Knopp expressed his opinion it will be necessary to continue to regulate the industry after 2 years. Chairman O’Donnell remarked the committee’s purview on this bill is predominantly financial. Mr. Knopp reiterated that the fines collected would help the overall budget. Chairman O’Donnell asked that Mr. Knopp not view it in that manner since only two state agencies have been allowed to collect fines and use them back in their own budget. One is the TSA, and that is being changed with S.B. 491, and the other is the Tahoe Regional Planning Association (TRPA). Chairman O’Donnell pointed out the fines that are collected are deposited to the General Fund, which funds all of the agencies. He stated the Legislature could make the bill effective October 1, 1999, and Mr. Knopp could come back to the IFC with a proposed budget during the interim. Chairman O’Donnell requested staff draft the new budget.

Al Pealers, Owner, Pealer’s Moving & Storage, asked where the fine money from the household movers goes besides for radios. Chairman O’Donnell answered, "Salaries, operations, and enforcement." Mr. Pealers remarked the Public Utilities Commission (PUC) in California has been very successful in sting operations and he recommended Nevada’s TSA also perform the sting operations. He said the TSA would need the cooperation of the courts in obtaining orders for substantial fines. Mr. Pealers maintained that as soon as members of the "illegal society" find out that violators are being assessed substantial fines, things would change in the overall problem of illegal movers.

Chairman O’Donnell summarized that the subcommittee had agreed to keep the regulation of household movers in the TSA budget for the next 2 years to allow the committee to study the aspects of deregulation. Additionally the subcommittee agreed to incorporate the amendments from lobbyists Harvey Whittemore and Robert Broadbent (Exhibit C) but to keep the majority of the aspects of the bill intact. However, in dealing with the TSA’s budget, Chairman O’Donnell said the subcommittee had agreed to decide on a dollar amount that can be taken from the Highway Fund and placed in an escrow account to be transferred to the TA, since the amount needed by the TA is unknown at this time. Chairman O’Donnell noted the provisionary parts of the bill commence in July 1999; however, the financial portion of the bill does not occur until October 1999. He explained that would give the affected parties a chance to determine how much they would need so that they can come before the IFC to request funds from the escrow account. Chairman O’Donnell asked "the affected parties" whether they agreed. Mr. Pealers replied all of the household movers in attendance strongly agreed to having the study for the next 2 years to determine whether or not the household movers should be deregulated.

Senator Coffin stated he did not agree with having all household goods movers regulated from "ground zero value."

Michael R. Reed, Lobbyist, Baker and Drake, Inc., remarked that Donald L. Drake, Manager, Baker and Drake, Inc. and he both agreed to S.B. 491 with the proposed amendments.

Alfredo Alonso, Lobbyist, Bell Transportation, stated he also concurred with comments made earlier with respect to the existing bill with the proposed amendments.

Gary Milliken, Lobbyist, Star Transportation, Yellow Cab, and Checker Cab, added his support for S.B. 491 with the proposed amendments.

Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association, remarked his association had not discussed the "Broadbent" amendments, but if the amendment that would regulate the 21-passenger bus is included his association would not favor passage of the bill. He also noted that it is contrary to the federal preemption regulation, which states a bus is a vehicle capable of carrying 16 passengers including the driver. Mr. Alonso pointed out that section 15.5, which Mr. Broadbent’s proposed amendment addresses, had been deleted in a previous meeting. He explained that at the time it was referenced it was in another bill. Chairman O’Donnell announced section 15.5 would be deleted in its entirety. Mr. Capurro remarked his association would support the amended bill with that caveat.

Dan Tom, Director, Department of Business and Industry, stated that at this point in time his department has no position for or against the bill as it has been described.

John Mendoza remarked the TSA is taking no position on the bill. He also stated he would assist Ms. Wiswell by providing her the requested budgetary information.

Senator Coffin asked whether off-road tour operators would continue to be regulated under the amended bill. Chairman O’Donnell answered no, they would be deregulated.

*****

Chairman O’Donnell adjourned the meeting at 6:20 p.m.

RESPECTFULLY SUBMITTED:

Jo Greenslate,

Committee Secretary

APPROVED BY:

Senator William R. O’Donnell, Chairman

DATE: