The Senate Committee on Transportation was called to order by Chairman William R. O'Donnell, at 3:16 p.m., on Thursday, April 8, 1999, in Room 2149 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.

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:

Joan Moseid, Committee Secretary

OTHERS PRESENT:

Senator Care referred to case law regarding covenants not to compete within a reasonable geographic area depending on the nature of the business. He wanted to know if there could be circumstances under which this bill would ever allow a manufacturer to conduct any kind of business in the form of its own auto shop or something similar.

Wayne A. Frediani, Lobbyist, Executive Director, Nevada Franchised Auto Dealers Association, stated the way the bill is drafted right now it would prevent a manufacturer from owning or operating a retail repair facility within Nevada.

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Chairman O’Donnell opened the work session on Senate Bill (S.B.) 379.

Chairman O’Donnell explained the amendment is to move the numbers on the license plate to allow room for a decal.

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Chairman O’Donnell opened the work session on Senate Bill (S.B.) 336.

Chairman O’Donnell noted the amendments adjust language to show seven members on the commission, and to apply to counties with populations greater than 400,000.

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

Tony Sanchez, Lobbyist, Peter Eliades, reviewed the proposed amendment to section 25 (Exhibit C) addressing violations and fines to any dance hall, cabaret or nightclub engaging in the practice of diversion.

Chairman O’Donnell suggested reviewing the proposed amended sections to determine where the various interests agree and disagree. He stated he has no problem with a business offering a free lunch or a cup of coffee to a taxi driver, especially if there is no one in the taxi. Mr. Sanchez said a publication called the Trip Sheet shows several hotel/casinos that offer that kind of incentive. The only requirement is the driver must show his Taxicab Authority (TA) identification card, and that would continue to be allowed.

Harvey Whittemore, Lobbyist, Whittlesea-Bell, defined the concept of diversion as, "simply taking a passenger to another commercial location which is not requested by the passenger."

Chairman O’Donnell stated the proposed amendment only covers dance halls, cabarets, and nightclubs, which intimates it is alright to divert taxi passengers to places not mentioned in the bill.

Mr. Sanchez offered that diversion could be applicable to privileged business licenses, which are places that serve alcohol. He added that a wedding chapel would hold a general business license. Mr. Sanchez said he made a few changes to the proposed amendment (Exhibit D) in reference to specific businesses, and to define diversion.

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Chairman O’Donnell addressed the issue of fees on household goods movers who use a vehicle less than 10 percent of the time. He stated the option is to continue to regulate the household goods movers or to exempt the household goods people completely from the regulation, and let the Consumer Affairs Division of the Department of Business and Industry handle complaints.

Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association (NMTA), stated that if the household goods movers were to be deregulated then Nevada Revised Statutes (NRS) chapter 712 would have to be repealed.

Senator Washington opined that household goods movers are regulated and inspected by the Nevada Department of Transportation (NDOT), insurance and licensing by Department of Motor Vehicles and Public Safety (DMV&PS), regulated by workmen’s compensation, regulated by the U.S. Occupational Safety and Health Administration (OSHA); and, finally, regulated by the moving company the household goods mover represents. He averred that by deregulating the industry, there would no longer be a need to prove themselves, and the household goods movers could perform by free enterprise. He concluded the household goods movers stated they would rather operate by certification to keep the integrity in their industry.

Mr. Capurro stated that the members of NMTA have agreed that they want to be deregulated.

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Paul Mouritsen, Committee Policy Analyst, Research Division, Legislative Counsel Bureau, said after looking at the numbers on the proposed Taxicab Authority (TA) for rural Nevada, the conclusion was that it would not be self-supporting, as there are very few cabs in the rural counties. A proposed alternative is to not establish a TA in rural areas, but to allow the counties to regulate the taxis in their areas or allow the counties to join one of the existing TAs.

Senator Amodei stated that some of the jurisdictions he represents want the option of controlling the taxis in their area rather than opting into one of the two TAs. He emphasized that the counties should have that option.

John Cardinalli, representing Sunshine Taxi, stated that perhaps too much emphasis was placed on the time and cost of regulating taxicabs. Commenting further, he said in many other places taxis are regulated by the cities. A typical city ordinance consists of from 8 to 20 pages. He said most of the regulation before the committee comes from agencies like TA and TSA. He believes agencies have a tendency to exaggerate the effort needed to regulate taxis. He observed that at a city or county level the concern focuses primarily on controlling insurance, safety, price, and reliable service. He noted those concerns would not require a 15-person agency. In his opinion DMV&PS could easily handle the insurance.

Chairman O’Donnell offered some statistics to further the process. He said there are 63 cabs in all the rural counties, of which 13 are in Elko. None of the rural county cabs are under either of the TAs. He said Washoe County has over 400 taxis. The numbers indicate to him that the rural counties should regulate their own taxis, but also have the option of joining one of the TAs.

Mr. Cardinalli asserted it bothers him that the opinion is leasing is a bad thing and should be killed. He said leasing may be relatively new to Nevada, but it is standard throughout the rest of the country. He stated there are about 25 taxis in the Stateline area, and another 25 that come out of South Lake Tahoe, California. The California taxis service Stateline in an interstate fashion, and they all operate under leases. He emphasized that drivers prefer lease arrangements.

Senator Wiener brought to the committee’s attention that problems could arise primarily for taxi drivers by counties opting in and out of the TAs. She suggested there should be a time limit set for counties to decide who will regulate taxicabs.

Chairman O’Donnell suggested giving the rural counties the option of opting in or out by October 1, 1999, and must stay with their choice for 2 years before making any further decisions.

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Mr. Mouritsen noted there was a question as to the composition of the TA board in Clark County. He said testimony indicated there was a need for the members to serve full-time, and be more accessible.

Chairman O’Donnell said he has been told what is wanted is a 5 member TA board in order to deal with the issues of taxicabs, limousines, livery limousines, the airport, and all other issues.

Mr. Mouritsen stated the projected figures are around $80,000 for the five TA members in Clark County, so the addition to that budget of the TSA in Washoe County could be around $500,000.

Sandra Lee Avants, Deputy Commissioner, Transportation Services Authority, Department of Business and Industry, said she is aware that the part-time TA in Clark County is not able to keep up with the changes and growth in the area. She said it was felt that there would be more knowledge, and better and quicker decisions made if there was a full-time board.

Chairman O’Donnell observed that there would be a $200,000 shortfall in the Clark County TA budget. Alternative funding will have to be found or perhaps a fee on limousines so they are paying their fare share. He said, currently, the fee in Clark County on taxicabs is $2,880 a year. In response to discussion, Chairman O’Donnell said the TA board members could consist of one familiar with the taxicab industry, but not currently active; one familiar with the limousine industry, but not currently active; one with an accounting background; one attorney; and one appointed by the Governor at will.

Mr. Capurro expressed concern that a deregulated household goods movers industry would not be as conscientious under county ordinances.

Chairman O’Donnell temporarily closed the hearing on S.B. 491, and opened the work session on Senate Bill (S.B.) 444.

Senator Care proposed an amendment that would, "exempt a Nevada entity with the principle place of business located in Nevada, and that the Nevada entity cannot be a subsidiary of a parent company with a principle place of business located outside of Nevada."

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Chairman O’Donnell opened the work session on Senate Bill (S.B.) 208.

Chairman O’Donnell noted that some members of the committee had concerns with the bill. He proposed an amendment to the bill that would, "only apply to second or repeat offenders, and individuals whose license has been revoked."

Senator Wiener noted that there could have been a previous revocation of a license. Senator Care clarified that the amendment is addressing the driver’s second offense, no matter what car he or she is driving. Senator Wiener said she is concerned about a vehicle in the 15-day period, booted in front of that person’s property, would give the family the "Scarlet A."

Chairman O’Donnell suggested, since the committee still has concerns, that the committee rescind its previous action passing the bill, and not pass any booting bill.

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Chairman O’Donnell opened the work session on Senate Bill (S.B.) 390.

Chad Dornsife, Lobbyist, National Motorist Association (NMA), called attention to a recent report from the Office of Traffic Safety, Department of Motor Vehicles and Public Safety (DMV&PS) showing that 129 Nevada Highway Patrol Division (NHP) officers averaged 30 tickets per shift, and that was considered a successful campaign against speeders. He remarked in order to reach that average it means some officers wrote 40-50 tickets. He pointed out that putting that much pressure on officers as an expectation of performance, means not all the tickets written are good. Mr. Dornsife said, for example, the accident records for Washoe Valley between mileposts 1 to 6; during clear, dry, daylight hours the accident rate is virtually zero for any cause. He expounded that weekdays and weekends the NHP has aircraft timing vehicles between two points, and on heavy traffic weekends will run 4-5 cars to write tickets on mostly tourists. He averred the posted speed limit in Washoe Valley is 70 mile per hour (mph), but the Nevada Department of Transportation’s (NDOT) own data shows the safest speed on that section of road is closer to 80 mph. The public has found 80 mph is the most comfortable speed to commute through that area. He said a relationship curve charted on being involved in an accident shows the safest speed on the highway is the mean plus 12. The mean in Washoe Valley is 68-70 mph plus 12, making the safest speed around 80 mph.

Mr. Dornsife expounded the primary target of the entire enforcement program is vehicles traveling right at the safest point in the risk curve during periods of the day when traffic is light and no accidents are occurring for any reason. He noted that in light of this the NHP is writing 30-tickets-per-shift per officer, with 3-4 officers per shift. He asked that when the officer is going about his duties, that the number of citations written not be a part of the officer’s evaluation, but more on job performance and objectives. He stated that nobody uses the word quotas; they use the phrase "performance standards," but no matter what the name there is an expectation. He said many law enforcement organizations use premium duty as incentives for volume of tickets written. He averred that any policy based simply on volume of tickets written, is not in the public’s best interest.

Mr. Dornsife noting section 5, subsection 3, explained that often drivers would cram their vehicles into intersections, instead of waiting at the entrance until the intersection empties enough for their vehicle to go through clearing the intersection. He said when the light changes for cross traffic to proceed, it cannot until the intersection clears. He concluded this adds to gridlock and traffic congestion backing up further down the streets. Mr. Dornsife added that the only requirement in the engineering study, is already being done by NDOT. The 67 percentile is something NDOT has already determined. He pointed out that Nevada Revised Statutes (NRS) 484.781 is written into the bill because that is a national standard that is being followed, which is why there is no cost associated with the bill. He said all NMA is asking is that the state does what it is supposed to do.

Chairman O’Donnell closed the hearing on S.B. 390, and reopened the hearing on S.B. 491.

Chairman O’Donnell reiterated the proposal of one commissioner, one administrative staff, and two inspectors for the tow cars. Senator Washington suggested that the committee first consider how to regulate the tow cars, and then make the other considerations.

Mr. Mouritsen said the bill proposes a $500 fee per vehicle. He said the fee could be larger, although some testimony said that even the $500 would be a burden.

Chairman O’Donnell reviewing the issue, said presently the tow-car registration fee is $36. He observed it is a big leap to a fee of $500 per vehicle; however, the commission and the inspection staff need to be funded regardless of the umbrella under which they will function. He noted the budget shortfall is $200,000, and pointed out that the TSA will also be charged with handling appeals for the TA, which will now include limousines; increasing the number of appeals. Chairman O’Donnell proposed that some of the TA funding be diverted to the TSA to cover the needs created by appeals. He said, further, to change the $500 tow-car fee to a $250 fee, with the balance made up from the Highway Fund. He pointed out that regardless of what is recommended, it would have to be decided in the finance committee.

Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association (NMTA), asked Chairman O’Donnell if he was opposed to revisiting the issue of the regulatory end of tow cars.

Senator Care expressed concern that deregulation of tow-cars could put an undue burden on the general public.

Senator Washington noted that the TSA was given regulation authority in 1997, and now the tow-car companies are asking to be deregulated because the TSA did not know what they were doing. He added there is consumer protection at the county level.

Senator Amodei remarked there is already a substantial body of law directly affecting tow-car practices that he is not in favor of repealing. He said he is comfortable with ensuring consumer protection by enforcement of regulations handled on the local level.

Senator Jacobsen observed that deregulation could possibly result in "wars" on the local level. He agreed that enforcement has to be funded. He thought that some real teeth should be included in the law so that regulation of the tow car industry is realistic, and the consumer has protection.

Francis A. Arenas, Manager of Transportation, Transportation Services Authority, Department of Business and Industry, said the TSA does regulate the tow-car industry, and even checks on those that come into the state. He said the investigators do an operational investigation to determine if they have a certificate of public use and necessity, even if they do not operate in the law enforcement rotation, to determine if they are in compliance with the current U.S. Title 49 Code of Federal Regulations (C.F.R.s). He said a lot of the investigators’ work is handling tow-car complaints. The TSA assists the tow-car companies in setting up their "garbage piles," and their training. He said he tells his investigators the assistance given in the beginning helps protect the company and the public.

Chairman O’Donnell stated the committee is giving serious consideration to deregulating the tow-car industry, wherein the TSA would not issue certificates of need. He said a person entering the tow-car business, would have a vehicle that is safety checked and insured, obtain a business license where they are located, and inform the TSA of the address of the business. He said then if a complaint is filed, the TSA would know where the business is located and who are the principles. Chairman O’Donnell asserted the issue of deregulation has come about because of abuse of power by the TSA. He urged the TSA to be a little more flexible and friendlier towards the people being regulated. He said fining a business $1,000 for having a file cabinet in the wrong room is a bit excessive. He stated that the fees and fines will no longer go back to the TSA, but into the General Fund; and the Senate Committee on Finance will apportion the funds TSA needs every 2 years. Chairman O’Donnell pointed out that if the regulation is on the local level, then the committee would have to find a way to fund it, otherwise it becomes an unfunded mandate.

Mr. Arenas said he understands the TSA has been remiss in some of its intent and purposes; however, the TSA tries to look at whether the operator has everything needed right from the beginning.

Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association (NMTA), referenced proposed amendments (Exhibit E) by NMTA and Gene Temen of Milne Tow Service that would deal with the issues being discussed. He said it makes no sense to have an agency that solely deals with 432 tow cars statewide; when, for example, the citation level in the last 18 months in Washoe County was 12. He said under existing statute, either the attorney general or the district attorney can administer the law.

Liesl Freedman, Deputy Attorney General, Transportation Services Authority, Office of the Attorney General (AG), stated the AG does not have an opinion on the bill; the concern is the possibility of an unfunded mandate and manpower requirement. Mr. Capurro insisted the committee already indicated a willingness to ask for more funding from the finance committee.

Chairman O’Donnell wanted to know how many complaints were registered in Clark County, in the previous year. Mr. Arenas said the TSA performed a total of 74 field investigations, issued 19 Commercial Vehicle Safety Alliance (CVSA) stickers, and 11 other vehicle inspections. He added there were many more complaints, but only 74 investigated.

Senator Washington wanted to know of the 74 investigated complaints, how many were consumer complaints. Mr. Arenas responded that consumer complaints are the only type of complaints made to the TSA.

Mr. Capurro stated that 74 complaints in an 18-month period, is not an unusual amount. He said what is being said is there are a number of things to provide a comfort level to the committee and this Legislature that the TSA is willing to do to make certain the consumer also has the ability to take the tow-car company, who might be guilty of a wrongdoing, to court; and in a small claims court atmosphere, or through the district attorney’s or attorney general’s office, to be successful in making sure the undesirable activity is not carried out any more.

Chairman O’Donnell asked for an estimate of how many AGs would be required, and wanted to know what costs were involved with a deputy district attorney.

Ms. Freedman replied that statewide probably one AG for just tow cars. She said the cost would be around $55,000 plus benefits, office, staff, travel, and ancillary. She added that in her office there are two full-time people just answering consumer complaints, and many complaints deal with issues that area does not handle. She said screening complaints would be another aspect.

Mr. Capurro remarked that just a few minutes ago there was a willingness to subsidize the activities of the TSA out of the Highway Fund. Chairman O’Donnell emphasized that is the key word, "subsidize," not pay for the whole thing. Mr. Capurro acknowledged his understanding. He stressed that if the consumer affairs staff handling all complaints statewide amounts to two, then to say one is needed just for tow-car complaints, does not seem right.

Ms. Freedman interjected that the two people are in the Las Vegas office and all they do is just take all types of consumer complaint calls and route them; those two people do not handle the complaints themselves.

Mr. Arenas stated the TSA investigators handle three complaints a day. Not only do the investigators take and screen calls to see if the complaint is within the TSA’s jurisdiction, but the investigators also go into the field to determine what action is to be taken.

Mr. Capurro drew attention to figures provided by the TSA over the past couple of hearings; and although the finance committee has requested those figures in writing over 3 weeks ago, that information has yet to be provided.

Mr. Arenas iterated the requested information was submitted in the TSA’s performance indicators. He said if it is not available, he does have that information with him.

Chairman O’Donnell conveyed information indicating 433 complaints filed in the last 18 months. Seventy-four complaints were processed. Investigation of unlicensed, illegal activity of tow cars was 183. He surmised there might be a misnomer as to the regulation of tow cars. He said the TSA was responsible for unlicensed, illegal activity of people with inadequate equipment picking up vehicles heavier than their truck. That is the kind of complaints the tow-car industry can file with the TSA, and expect redress. He said otherwise there is nothing.

Mr. Capurro acknowledged the scenario happens today because the state is preempted from regulating first-party tows and proprietary tows. He said what is needed is to be able to approach law enforcement agencies, and others to develop a model contract to virtually eliminate illegal operations. He said legislation could be developed without the choking regulatory structure under which the TSA has been operating for the last 18 months.

Chairman O’Donnell said the bottom line is the industry will be regulated in some form, and the funding is the issue. He said he proposed a reasonable fee.

Mr. Capurro reiterated that when 15 percent of tow-car business is in third-party tows, then a fee of $250 is not reasonable, either. He asked the chair to poll the committee.

Chairman O’Donnell responded the committee is in favor of deregulation 5-2. He called for a motion to totally deregulate the tow-car industry.

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Senator Care stated in the interest of moving the process along because of the 4-3 split, he would be willing to entertain a floor amendment on the Senate Floor after the bill is passed from the committee.

Chairman O’Donnell asked the committee if they support a $250 fee per vehicle, per year. He pointed out that if the tow-car operators are not charged, then the funding would come from the Highway Fund.

Senator Care stated he calculated a 15 percent usage based on the proposed $500 fee would be $75. Mr. Arenas clarified the statement that 15 percent of towing is for law enforcement, but the TSA currently inspects and regulates 100 percent of the tow-car industry as it pertains to safety and insurance.

Mr. Capurro iterated that his understanding was the safety and insurance would be turned over to DMV&PS.

Chairman O’Donnell asked the committee’s preference about sending the bill to the finance committee for input on what the fee should be.

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Chairman O’Donnell asked the senators who voted no to explain their reasoning. Senator Washington stated that if it costs $88,000 for one deputy AG, and $400,000 to fund the TSA; it computes to be cheaper to go with the lesser. Senator Jacobsen stated the $75 does not seem enough to cover the costs. Chairman O’Donnell said he would go with the $75 for now, and see what the DMV&PS may have to say about their possible funding needs.

Ms. Freedman said that she also represents the DMV&PS, who have no position regarding the bill, but would have concerns about cost of administering the program.

Paul Mouritsen, Committee Policy Analyst, Research Division, Legislative Counsel Bureau, noted the situation regarding allowing independent limousine operators a license without having to prove they would not harm the competition or respond to protests from competing companies. But they would be required to maintain adequate insurance, vehicles pass inspection, and operators have a clean driving record. He said it was also discussed to allow operation of up to two limousines, but be eligible to receive allocation of additional vehicles on the same basis as presently licensed limousine companies.

Chairman O’Donnell summarized that the committee is dealing with limousines, and the ability to apply for a limousine license. It was decided to include the limousines with the taxicabs, and have an allocation process. The respective TAs would determine the allocation process. He emphasized a decision needs to be made whether to prohibit limousines from entering the market, partial admittance, or to allow all of them.

John F. Mendoza, Chairman, Transportation Services Authority, Department of Business and Industry, said research shows that of 26 jurisdictions across the country that deregulated taxicabs, almost all of them have returned to regulation. He said the issue with regulation is there ought to be a way that qualified people can enter an occupation. The independent operators are asking to be allowed to earn an honest living by avoiding, and thus violating the law. He stressed that it cannot be both ways.

Chairman O’Donnell observed the issue is whether or not to allow someone to enter the market with a small panel discussion, or whether to allow others to intervene and make them prove beyond a shadow of a doubt that they are not going to adversely affect the rest of the market. He noted the problem is the people who have the limousines can add a limousine every day; there is no prohibition. However, the person who wants to enter the market cannot add one because he might affect the profitability of another company. He said that seems incongruent. He wanted to know if there was a way to change the law to be less onerous for a person to enter the limousine business.

Mr. Mendoza emphasized the need to change the presumptions. He said time frames are needed. He said the TSA has adopted new regulations in which they propose that within a period of 45 days, that some actions be taken. The ability has been given to the applicant to apply for expeditious movement of the application. He reiterated that the majority of problems have come from the applicants. He said the system itself clearly sets out the guidelines.

Deborah Simpson, Lobbyist, Independent Limousine Owner/Operator Association (ILOA), stated that NRS 706.391 contains the adverse impact requirement. The committee’s proposed amendment would change the NRS, and only apply those licensing restrictions to tow cars. She said currently there is not objective licensing for new limousine operators to come into the market. There is an allocation process that would allow for the existing companies to have an automatic increase based on incoming tourists and population on a pro rata basis, which would just perpetuate the current problem of the few existing companies who would be able to guarantee their market share by the allocation process. She said it would not level the playing field, and it would not let new people into the market.

Chairman O’Donnell noted the allocation process has been litigated in the courts and has withstood challenge. He stressed there will be allocation.

Ms. Simpson restated that allocation would not allow new entrants in a reasonable manner to compete in the market. She said it would help to remove the intervention process, require the TSA to prove the reason for denial, such as health and safety risk. She emphasized the problem with the intervener process is the ability of existing companies to demand findings causing the applicant to give up their customer lists, and making the process so cost prohibitive that the applicant quits simply because they are running out of money. She said the intervener process is not a two-way street. Each intervener can make requests for findings, including the customer list, which gives the intervener an edge over the applicant. The applicant cannot request findings from the interveners. Ms. Simpson said all these findings requests have absolutely nothing to do with public health and safety, it is about customer lists and advertising programs.

Mr. Mendoza said some of Ms. Simpson’s issues have been addressed in the new regulations. He said it was noted from the beginning that intervention was a problem. He said in 1997 the TSA ordered the interveners to cut down on the discovery process. The TSA was taken to court and told the interveners were entitled to be part of the application process and they had to be given status. He stated the TSA started applying Rules of Civil Procedure to cut down the time. He averred the TSA is now doing what is called Rule 16.1, in which the parties are forced to get together. He said the problem with the independent operators is that they have been operating illegally for so long they do not want to reveal their incomes, so they would object to the questioning put to them by the interveners. He said the question of income is legitimate because, by statute, the TSA is required to look to operational fitness, to financial fitness, the purposes of the statutes, and various presumptions of law.

Chairman O’Donnell said the committee does want to allow some entry into the market without opening the floodgates. He suggested that Mr. Mendoza and Ms. Simpson find a common ground that they can agree upon that the committee could entertain.

Senator Washington noted there seems to be an isolated situation in northern Nevada, since Clark County does not deal with leasing. He thought leasing should be left to the local TAs, and should a situation arise, there is always the appeal process. He noted the main concern is the consumer, and so far they appear not to have been adversely affected.

Donald L. Drake, President, Baker and Drake Inc., d.b.a. De Luxe Yellow Star Cab Company, commented that the TSA study indicates leasing only happens in Washoe County; it does not. He stated the Winnemucca Cab leases, Elko Taxi leases, and he believes Fallon Taxi does some leasing. He stated that leasing is especially beneficial for the smaller taxi companies. He thinks the northern TA should make the decision on leasing. He said leasing is viable and the public is benefiting. He said that until 1993 no one used a Lincoln Towncar, a Rolls Royce, or a Cadillac as taxi service anywhere in the state. He said in comparison Reno has better taxi service than San Francisco, and leasing has helped that.

John Cardinalli, representing Sunshine Taxi, stated that leasing helped make the difference for a number of taxi companies in northern Nevada to go from a negative to making a profit. He said the difference between lease cabdrivers and salaried cabdrivers is the entrepreneurial incentive. The lease cabdriver knows the only way to make money is to hustle and be creative, whereas the salaried cabdriver does just what is necessary and seldom more.

Chairman O’Donnell remarked the consensus of the committee is to let the TA have the authority to decide whether or not to have leasing.

Senator Care noted that subcontracting had been mentioned. He stated if it does happen, it should not. He also said there is no privy of contract between the subcontractor and the vehicle’s owner, and that could lead to nightmares regarding accidents and liability, insurance, and other matters.

Mr. Drake stated that anyone who operates a taxicab is signatory to all the rules and regulations. He suggested that if each driver had a TA card, it would help ensure responsibility.

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Mr. Mouritsen brought to the committee’s attention the issue of the annual fee for taxicabs and limousines; and a related issue of finances for the TAs. He noted that in Clark County there is a 15 cent per trip fee (drop fee) for taxicabs.

Chairman O’Donnell stated the drop fee has not changed since 1987, and said he would not object to increasing the drop fee to 20 cents per trip.

Sandra Lee Avants, Deputy Commissioner, Transportation Services Authority, Department of Business and Industry, elucidated there is in excess of 2 million trips; the numbers have been projected as high as 3.8 million, outside of Clark County. She said using the conservative 2 million at 20 cents a trip paid by the riding public is $400,000, which would meet the funding needs of the TSA.

Senator Wiener asked if there were any trip figures for Clark County. Ms. Avants stated she did not have any Clark County figure with her, but provided a formula to help estimate. She said there are two shifts in a day, the vehicles run 24 hours a day, except for refueling. Each shift averages 24-26 trips per day, times 15 cents, times 365 days, equals about $2,800 per shift, per day and then add the $100 fee. There are about 3,300 drivers for about 2,000 taxicabs, which is two and a half drivers per cab.

Ms. Avants stated in defense of the TSA, the fine fund is strictly regulated by the Interim Finance Committee (IFC) rules, and can only be used for law enforcement purposes, the fines are not for the general funding of the agency. Ms. Avants said that when it was mentioned the annual fee could be $1,000, the industry almost fainted. Then $800 was mentioned, and the operators were upset. When $500 was proposed, it was pretty quiet. She added the fee would be per medallion.

Chairman O’Donnell stated a formula was developed years ago to determine allocation. He said it was complicated in that it took airport traffic, number of rooms, number of rooms occupied, and so on. He said new companies could get a medallion allowing two limousines to start. Each year thereafter, the allocation would allow adding to the fleet the same number of vehicles as existing established limousine companies may choose to add.

Mr. Mendoza reported he and Ms. Simpson have agreed on process and procedure. He said they would meet again tomorrow and prepare an approach to how to resolve the controversy. He said the process is how to get information to the decision-makers, the commission.

Ms. Simpson added that the process of getting information to the agency, which is mainly a funding issue, necessitates looking at the requirements. She said they would address the adverse requirements in the statutes to eliminate the amount the commission would have to look into as part of the application process.

Mr. Mouritsen stated the bill drafters are faced with certain statutory compliance in the area of the Nevada Administrative Code on interveners, and in areas of other statutes other than Nevada’s, which might have an effect on the process and procedure.

There being no further testimony, Chairman O’Donnell recessed the hearing on S.B. 491 until the call of the Chairman; and adjourned the meeting at 9:15 p.m.

RESPECTFULLY SUBMITTED:

Laura Adler,

Committee Secretary

APPROVED BY:

Senator William R. O'Donnell, Chairman

DATE: