The Senate Committee on Transportation was called to order by Chairman William R. O'Donnell, at 1:35 p.m., on Tuesday, April 6, 1999, in Room 2149 of the Legislative Building, Carson City, Nevada. This meeting was videoconferenced to the Grant Sawyer State Office Building, 555 East Washington Avenue, Room 4401, Las Vegas, 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.

COMMITTEE MEMBERS PRESENT:

Senator William R. O'Donnell, Chairman

Senator Mark Amodei, Vice Chairman

Senator Lawrence E. Jacobsen

Senator Maurice Washington

Senator Raymond C. Shaffer

Senator Valerie Wiener

Senator Terry Care

STAFF MEMBERS PRESENT:

Crystal Suess, Committee Secretary

OTHERS PRESENT:

Chairman O’Donnell opened the meeting on Senate Bill (S.B.) 491.

Paul Mouritsen, Committee Policy Analyst, Research Division, Legislative Counsel Bureau, gave an overview of the proposed amendments to S.B. 491. He noted the amendment would create three new Taxicab Authorities (TAs) for Clark County, Washoe County, and rural Nevada. He said the bill also includes the mandatory provisions for S.B. 296; deregulation of buses.

Mr. Mouritsen brought the committee’s attention to specific areas of the proposed amendment the committee may want to address (Exhibit C. Original is on file in the Research Library.). Referring to section 12, which creates the TA for southern Nevada, he noted the oversight of not providing for full-time commissioners, and suggested the committee may want to consider inclusion of full-time commissioners. He noted beginning with section 27, the amendment gets into issues applied to common carriers outside of Clark County. He stated the committee would need to make some decisions as to whether these sections should apply to taxicabs as well.

Chairman O’Donnell inquired as to how much of the tow-car industry the TA would regulate, if any. Mr. Mouritsen replied section 33 applies only to the non-consent tow cars.

Continuing, Mr. Mouritsen pointed out sections 60 through 70, and sections 72 through 76 were taken from S.B. 296. He noted that the issue of independent limousines was unintentionally omitted in section 71, and would need to be addressed. Commenting further, he said sections 81, 86, and 87 also came from S.B. 296. He explained that section 90, which refers to the automatic allocations, would need to be cross-referenced with section 16 of the proposed amendment. Referring to section 94, he mentioned the committee may want to address the standard for refusing to transport a person. He said in previous testimony, taxi drivers pointed out particularly high standards. Mr. Mouritsen noted section 111.5 sets the deadline of October 1, 1999, for the TAs to adopt regulations.

Senator Wiener asked if it would make breaking a tie difficult with only two people on the rural TA. Mr. Mouritsen answered the figure came from testimony based on concern for costs to maintain a large board. He said it would be a policy decision.

Craig Harris, Taxicab Driver, Yellow Checker Star Cab Company; Union Steward, International Technical Professional Employees Association; and Associate Editor, Trip Sheet Magazine, opined that section 25 of the proposed amendment is faulty, because of periodic special promotions offered by hotels and other business, usually something like a lunch or a show, directly to taxicab drivers.

Chairman O’Donnell clarified the bill only applies for a solicitation or recommendation to a patron to go to a different establishment other than the place requested. It is already illegal for cabdrivers to engage in "diversion." The bill codifies the practice of "diversion" to penalize the owner/manager of an establishment for participating in the practice.

Senator Wiener called attention to the definition of "diversion" in section 25, page 18, of the amendment, "… for the solicitation or recommendation of patronage of the licensed establishment." She remarked the way she reads the language, it would be if she asked for a recommendation, and received one, then that would be a "diversion."

Discussion ensued as to the various forms of advertising used to promote businesses, including paid signs on and inside passenger transport vehicles. There were questions regarding what is a recommendation, what is a diversion, and circumstances regarding compensation and promotions. Clarification of the Clark County "diversion" ordinance was solicited.

Sandra Lee Avants, Deputy Commissioner, Transportation Services Authority, Department of Business and Industry, said the City of Las Vegas has a "diversion" ordinance, and Clark County also has a "diversion" ordinance. The ordinances provide that any establishment that has a business license and a privilege license, which is the liquor license, cannot pay any kickback or fee to any taxicab driver.

Tony Sanchez, Lobbyist, Peter Eliades, said there is a Nevada Administrative Code (NAC) 706.552 that deals with driver acceptance, directly or indirectly, of a gratuity or any form of compensation from any person except his/her employer or a passenger for services connected with the operation of a taxicab. It also states the cab driver shall also not divert or attempt to divert a prospective customer from any commercial establishment. He added that a business that openly offers a promotional package or advertisement in order to introduce themselves to cab drivers and the cab driver accepts, there is no violation because there was no passenger involved.

Senator Amodei observed that the language in section 25 is rather broad and could be interpreted by a prosecutor any way they wanted. He concluded it would help to see the Clark County ordinance.

Daryl K. Poelman, representing Professional Drivers Association (PDA), stressed the onus of "diversion" has been placed just on cab drivers. He argued that tips and gratuities are standard practice and, therefore, should be allowed. He stated the law should be changed. He submitted PDA’s responses to sections of the bill (Exhibit D).

Michael Bartsch, Concerned Citizen, Taxicab Driver, wanted to know if receiving a Form 1099 from a business other than the taxi company would be considered a gratuity. Chairman O’Donnell stated that compensation in any form from a business to which he brings patrons is against the existing law.

Gary Johnson, representing United Steel Workers Union, 711 Alpha, said he had talked with the current TA administrator about some establishments pay the cabdriver, instead of paying for a physical sign on the taxi. At the end of the year these establishments issue a Form 1099 showing the amount paid out. Mr. Johnson said the TA administrator said that was not a gratuity, it was an advertising commission and legal. Chairman O’Donnell responded that person at the TA had no authority to tell Mr. Johnson the advertising commission was okay. That information has put Mr. Johnson and others in jeopardy.

Mr. Sanchez offered clarification. He said the provision being cited is contained in the Clark County code and the Las Vegas Municipal Code. It applies to promotional packages or advertisements, whereby the advertiser or licensee, pursuant of contract, pays the licensed taxicab company and not individual drivers.

Chairman O’Donnell emphasized it is an ordinance in Las Vegas and Clark County that a cab driver cannot accept a gratuity from a business establishment to which the driver brings patrons. He added that the intent of S.B. 491 is to make it illegal for the establishment to offer the gratuity.

Mr. Johnson noted that as things stand now, if a patron is taken to an establishment in another county, it is not illegal to accept a gratuity from the establishment.

Garland Knopp, representing Action Moving and Storage, asked what is the procedure, since he would like to have time to study the amendment. Chairman O’Donnell said the amendment needs additional work, and there would be another review date.

Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association (NMTA), asked to consider eliminating non-consent tow-cars, which represent 15-20 percent of the tow-car operations. He stated the $500 per vehicle fee for tow-car and household goods moving operations is a real concern. He explained the way the amendment is written, it puts an operator’s entire fleet in jeopardy regardless of the vehicles’ uses. He illustrated that one mover of household goods has 40 vehicles of which, only 2 vehicles are engaged in the moving of household goods; but as the amendment reads now, the mover would have to pay $500 for every vehicle in his fleet. He stressed the fee structure is a serious deficiency that unfairly charges companies for vehicles that are not involved in the activity regulated by the TSA. Mr. Capurro stated another item of concern is it does not make sense to leave safety with the TSA, and let the Department of Motor Vehicles & Public Safety (DMV&PS) handle the insurance. He stated the NMTA thinks the DMV&PS should handle both the safety and insurance. He said the need for regulation with respect to the industries outside of passenger vehicles, has to be questioned. He added there are only a handful of states that continue to regulate the non-passenger vehicle activity.

Gene Temen, representing Milne Tow Service, said tow cars over 26,000 pounds must have a certain license from DMV&PS. He said the City of Reno requires tow-car operators to have a background check and carry a police card. He averred cities, such as Orlando, Florida; San Francisco, California; and many tourist cities do not have regulated towing. He stated the $500 a vehicle is just the tip of the iceberg when it comes to fees for non-consent towing, which is a small part of the tow-car business. He added city ordinances cap the amount of a tow-away.

Senator Washington asked if the no-parking signs state the vehicle’s owner is responsible for towing and impound fees, and if it is by city ordinance. Mr. Temen replied that was correct. He articulated the TSA is not qualified to perform safety inspections for tow-cars, and cannot provide the stickers. The TSA leaves the inspection and sticker to the Nevada Highway Patrol (NHP), while DMV&PS takes care of insurance certificates.

John F. Mendoza, Chairman, Transportation Services Authority, Department of Business and Industry, showed an investigative video of illegal tow-car practices in southern California. He expressed concern, based on the video, for any consideration of deregulating the tow-car industry. He stated the TSA receives at least two phone calls a day regarding undesirable practices by tow-car operators in the Las Vegas area. He said S.B. 491 would do away with any complaint process, and deletes the requirements for tow-car operators to keep records and detailed accounts of their business transactions. The bill removes the requirement that the tow-car operators furnish adequate services and facilities and charge reasonable fees. He said the federal statutes and laws allow the TSA to deal in matters of service, insurance, and fines. He said the law also requires the tow-car operator to clear away the debris from a highway accident. He said the NHP issues a bill and the tow-car company is required to pay that bill. If the operator does not pay the bill, the NHP can bring the operator before the TSA, who has the jurisdiction to issue certificates to operate. Mr. Mendoza insisted the attempt at deregulation is an obvious maneuver to get out of obligations. He assured the committee that someone would have to answer to the citizens and tourists if there is not some form of regulatory mechanism to prevent unethical operations.

Mr. Capurro commented the law enforcement tows work well in California. He stated the violations shown in the video were admitted to be covered by existing ordinances, and would be no different than if state law was violated. He stated the whole industry should not be penalized for the actions of a few. He added it is a matter of adequate law enforcement.

Senator Washington stated he would be opposed to regulating non-consent tows due to local and county ordinances already in place to handle illegal tows. He said the $500 fee placed on each vehicle could definitely be a burden on the tow companies. He said, as for safety and insurance, he has no problem with the existing method of the NHP and DMV&PS continuing to handle their areas.

Senator Wiener said she tends to support continued regulation. She sees it as too inviting to the industry to deregulate them.

Senator Jacobsen expressed the regulation is for the public’s protection. He stated as a result of his own experience involving a tow-car company, he strongly supports regulating the tow-car industry.

Carl Tucker, Concerned Citizen, Taxicab Driver, stated since there are county and city ordinances already covering cab drivers, state involvement is not needed. He said there is already too much regulation to track. He claimed 50 percent of his income is dependent on tips. He said it is common practice for apartment managers to offer finders fees for renters or realtors to reward someone for bringing in a buyer. He wanted to know what was wrong with taxi drivers accepting tips for bringing patrons. He expounded that legislators receive perks (perquisites), waiters get tips, and so on; so do not single out cab drivers.

Clark C. Whitney, General Manager, Quality Towing, pointed out that section 7 is in conflict with federal regulations, and is too narrow in addressing safety issues because it only addresses non-consent tows. He noted section 33, subsection 1, paragraph (e), does not fit with federal law. Section 38, subsection 3, and section 44, subsection 1, do not work with section 7. He pointed out that section 47, subsection 1, does not cover use of towing equipment inadequate for the job. Mr. Whitney asked the reason for the change in section 60, subsection 3, for notice of rate change to the TSA from 30 to 60 days. In section 71, subsection 1, the tow-car exemption has been stricken, when in previous legislation it was put back in. He said Nevada Revised Statutes (NRS) 706.398 does not require tow cars to file an annual report, but section 73, subsection 1, paragraph (a) is saying tow-car operators would now. He strongly objected to the $500 fee in section 77, subsection 1; as it is like a new tax. Referring to section 80, Mr. Whitney explained his personal experience in transferring ownership of his tow company resulted in a fine to him because of delays caused by the TSA, not him. Mr. Whitney submitted a proposed amendment (Exhibit E) that would make it easier to transfer ownership of a tow company. He said he has appeared at numerous hearings of the TSA who are trying to get their administrative codes in line with the NRS statutes passed in 1997. He stated the enforcement officers are confused as to what codes to follow, and believes the TSA has been remiss in bringing the regulations into line.

Senator Washington inquired if the TSA had abided by what was passed in 1997, then Mr. Whitney would not have a problem. Mr. Whitney responded there have been abuses on the part of the TSA. He added the TSA has delayed in setting fees, has tried to enforce regulations they are not familiar with resulting in misunderstandings, passed regulations without informing the people they regulate, and so on. Senator Washington queried if these are some of the reasons why the tow-car industry is asking to be deregulated. Mr. Whitney responded in the affirmative.

Mr. Knopp asked if the amendment is the bill or only part of the original bill. Chairman O’Donnell articulated the amendment replaces the original bill in its entirety.

Michael R. Reed, Lobbyist, Baker and Drake Inc., referencing section 14, suggested a commissioner from each of the two largest populated rural counties for the rural TA, and a member at large. He said this would provide broader representation and also deal with the problem of a tiebreaker. He asked that the annual $500 fee in section 17, be lowered to $100 for the rural counties. He explained the $500 would put some taxi operators out of business since they do not generate enough revenue. Mr. Reed noted sections 18, 19, 20, and 21, which address leases. He said those sections set up a standard that drives lease taxicab operators out of business. He stated leasing should be left to the local transportation authorities to make determinations. Bottom line is remove those sections or include a grandfather clause to address lease taxicab operators.

Mr. Mendoza stated there was a problem with a certain operator who established leases with contractors that were not approved by the commission. Closer examination of the leases not approved by the commission, showed a forgery on the lease indicating commission approval. It was then discovered the amount charged the drivers was also not authorized.

Chairman O’Donnell stated that the committee looks at a situation such as he described and asks if the people are being unfairly treated, are the people in a dangerous situation, and are the people unjustly taken advantage of in terms of rates, fares, or handling in the community. He said that is more of a consideration than whether documents have a seal of approval or filed correctly.

Mr. Mendoza asked that he be given the opportunity to gather facts, figures, and perceptions from the previous manager of transportation, Mr. Collins, who dealt closely with these issues in northern Nevada.

Mr. Reed pointed out that the TSA would no longer represent taxicabs from the point of writing regulations. He suggested things should be left to the new TA to make leasing determinations. He opined another aspect of this bill would put the largest taxicab operator in northern Nevada out of business.

Donald L. Drake, President, Baker and Drake Inc., d.b.a. Deluxe Yellow Star Cab Company, stated since the company started leasing there has been a waiting list of from 30 to 100 potential drivers. He emphasized that is unprecedented in the taxi business. Leasing is more desirable to drivers because they can make more money.

Chairman O’Donnell stated the primary concern of the committee is how the public is being treated; not necessarily with how the cab companies deliver the service. Mr. Reed remarked the public appears satisfied with the services provided because business has been growing steadily.

Senator Washington added the comments he has heard from the public have indicated satisfaction with the taxi service in northern Nevada.

Mr. Reed stated he did not understand how the language in section 44, subsection 2, was derived. He said it seems to be allowing cities, counties, and regional transportation authorities into the taxi business, and he is not sure that was intended.

Al Puliz, Puliz Moving and Storage Company, told the committee the proposed $500 fee on all vehicles, even though only 15 percent are actively engaged in household goods moving, is a very important point. He said movers turn in annual reports to the TSA, which show, on analysis, that most larger companies lose money on intrastate traffic.

Deborah Simpson, Lobbyist, Independent Limousine Owner/Operator Association (ILOA), said she would like to focus on seven sections. She referenced ILOA proposed amendments (Exhibit F. Original is on file in the Research Library.) to create an open entry into the limousine market, to create a fair process to obtain a license, for review of agency decisions, and the imposition of reasonable penalties.

Ray Dowdle, Concerned Citizen, Taxicab Driver, drew attention to the sting operations in Las Vegas. He said all three incidents were dismissed by the court for entrapment. He said the "Chicken Ranch run" (bordello) is like the lottery, in that a driver may get one every 2 or 3 years, because the bordello is 65 miles from Las Vegas. He communicated many cities around the country allow drivers to own their own cabs. Mr. Dowdle wanted to know why Nevada did not permit ownership.

There being no further testimony, Chairman O’Donnell adjourned the meeting at 8:01 p.m.

RESPECTFULLY SUBMITTED:

Laura Adler,

Committee Secretary

APPROVED BY:

Senator William R. O'Donnell, Chairman

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