MINUTES OF THE
SENATE Committee on Transportation
Seventy-First Session
April 5, 2001
The Senate Committee on Transportationwas called to order by Chairman William R. O'Donnell, at 1:46 p.m., on Thursday, April 5, 2001, 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 Terry Care
Senator Maggie Carlton
STAFF MEMBERS PRESENT:
Donald O. Williams, Committee Policy Analyst
Micheline N. Fairbank, Senior Research Analyst
Alice Nevin, Committee Secretary
OTHERS PRESENT:
Richard Kirkland, Director, Department of Motor Vehicles and Public Safety
Virginia (Ginny) Lewis, Deputy Director, Motor Vehicles, Department of Motor Vehicles and Public Safety
Gary H. Wolff, Lobbyist, Nevada Highway Patrol Association
Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association
Russ Benzler, Administrator, Compliance Enforcement Division, Department of Motor Vehicles and Public Safety
Dennis Colling, Chief, Administrative Services Division, Department of Motor Vehicles and Public Safety
Pat A. Zamora, Lobbyist, Clark County School District
Dana Mathiesen, Administrator, Central Services and Records Division, Department of Motor Vehicles and Public Safety
Carol Falk, Vehicle Programs Manager, Management Services and Programs Division, Department of Motor Vehicles and Public Safety
Karen E. Daly, Driver Programs Manager, Management Services and Programs Division, Department of Motor Vehicles and Public Safety
Rhonda A. Bavaro, Business Programs Manager, Management Services and Programs Division, Department of Motor Vehicles and Public Safety
Ronald Fong, Lobbyist, Nevada Credit Union League
Dennis Flannigan, Executive Vice President, Great Basin Federal Credit Union
SENATE BILL 481: Provides for reorganization of department of motor vehicles and public safety into two departments. (BDR 43-1107)
Chairman O'Donnell opened the hearing on Senate Bill (S.B.) 481. He announced there was a conflict notice with S.B. 59. He noted both bills affect the following: Nevada Revised Statutes (NRS) 482.313 and section 9 of chapter 475, Statutes of Nevada 1991, at page 1953, and section 30 of chapter 491, Statutes of Nevada 1991, at page 1448.
SENATE BILL 59: Changes designation of privilege taxes on motor vehicles to governmental services taxes. (BDR 32-39)
Richard Kirkland, Director, Department of Motor Vehicles and Public Safety (DMV/PS), said the Governor had requested a fundamental review of all state governmental agencies. He noted Senator Carlton had chaired the subcommittee which reviewed the DMV/PS, with hearings held in Las Vegas and Carson City. He indicated significant study, work, and input went into the review process.
Mr. Kirkland continued at the conclusion of the fundamental review the Governor requested S.B. 481. He said this bill would divide the current director’s office in half, divide the administrative services division in half, but have no other impact upon the current structure. The Governor’s directions were, he noted, to keep department budgets within the parameters of a standard departmental budget. He presented a copy of the final report along with a copy of the organizational chart depicting the proposed division of the Department of Motor Vehicles and Public Safety (Exhibit C).
Mr. Kirkland said presently there is a request for additional positions, but they were not connected with the “split bill.” They were positions to be paid for by growth and fees collected, with no additional negative financial impact. Chairman O'Donnell queried if the division would be revenue neutral and the answer was yes.
Virginia (Ginny) Lewis, Deputy Director, Motor Vehicles, Department of Motor Vehicles and Public Safety, said when talk of a division of the DMV/PS was initially discussed, departmental functions were reviewed. She stressed some key things stood out: the missions of both departments were very different and very hard to manage, the customers were very different for both departments, the core training needs of employees were different, the citizens of Nevada thought the two departments were separate. She commented, “No customer makes the illogical association between getting a vehicle registered and the intense supervision of probationers within the Division of Parole and Probation.”
Ms. Lewis continued, the director for either side would be totally committed and focused to support and direct the mission of each agency. On the motor vehicle side, that individual would focus on customer service and service delivery because it was what the citizens expected and deserved. She expressed this split would remove an internal layer of bureaucracy currently existing within the department.
Ms. Lewis stated:
If the Department of Motor Vehicles is to be held accountable for delivering services to the motoring public, we must have the authority and control. In my 20 years with the department, there have been six directors. Each director has had his own style, but they have all shared a law enforcement background. Handling customer service issues requires a different approach than handling enforcement issues. Motor vehicles would benefit from a director with an understanding of the challenges facing all motor vehicle agencies around the country.
The motor vehicle branch underwent a fundamental review and reorganization in July 1999. We now have all the components to be a stand-alone agency. We have defined an integrated, service-oriented organization; we have developed an efficient support infrastructure; we have aligned the efforts of the organization with our mission; and, on an ongoing basis, we focus on both internal and external customers.
Ms. Lewis further stated when the budgets were developed all positions were reviewed to determine how to divide the department. She stressed the focus was minimizing any fiscal impact and it was felt this had been accomplished. In addition, Ms. Lewis noted, it was recognized that in the first six months of the split there would be some reorganization, elimination of positions, and elimination of duplication of effort so an efficient organizational structure would exist.
Chairman O'Donnell asked how the “split” would impact the public. Mr. Kirkland answered the actual division would be an allocation of the current services into the proposed Department of Public Safety and the proposed Department of Motor Vehicles. He clarified the division would create new administrative positions on the motor vehicles side.
Senator Carlton noted the interim subcommittee had emphasized there was no intention of any state employee losing his or her job. It was hoped employees would be able to move forward and understand the subcommittee was trying to do the best thing for everyone, she said.
Chairman O'Donnell said:
I have concerns because there is a commonality between vehicle registration and enforcement on the road. If we continue to split this into two separate agencies, without someone at the very top, then basically a conflict will arise down the road that will cause a problem. I will go along with it; however, my reservations are to be noted because I feel eventually someone will have to break the tie or bring the parties together in a cohesive manner.
Mr. Kirkland responded the Governor’s plan is to ask the Legislature to readjust the entire structure and realign reporting relationships in the next session.
Senator Washington asked if all investigative services would go under the proposed Department of Public Safety. Mr. Kirkland replied there would be some investigative functions in compliance enforcement (Compliance Enforcement Division), which by statute and law would require them to remain where they were and had always been; but, as it currently exists, all other law enforcement under public safety would be on the public safety side. Ms. Lewis added under the compliance enforcement division, there were investigators who regulated the automobile dealership industry and they would remain under the Department of Motor Vehicles because their function supported that mission.
Chairman O'Donnell said, “There is a bill in the Assembly that deals with the 22 percent cap.”
ASSEMBLY BILL 611: Removes limitation on amount of money in state highway fund that may be used to pay costs of administration. (BDR 35‑1322)
Chairman O’Donnell continued:
We really cannot pass this bill until we know that bill is coming [Assembly Bill 611] because this bill [Senate Bill 481] is predicated on the passage of that bill. We will exceed the 22 percent cap with this bill. We need to see the Assembly bill very soon. I know the Governor is very interested in solving the DMV/PS problems, and the only way to solve it is to get the bill. If you can bring a message to the Governor, let him know we are very excited about getting A.B. 611 so we can move forward.
Ms. Lewis clarified the 22 percent issue is not associated with the split of the department. The overall demand for service, the ability to provide the services and the sheer growth of the state has brought on a bill to eliminate the 22 percent cap. Mr. Kirkland added the 22 percent issue is a problem even without the departmental split. He stressed the 22 percent issue had to be dealt with or services would be reduced by $750,000.
Chairman O'Donnell clarified the three new positions were part of the $750,000 bill. Mr. Kirkland confirmed the department had requested a fairly significant increase in employees and part of the increase was contained in the $750,000 request. He pointed out without elimination of the 22 percent cap, there would be an impact on the department’s ability to provide services.
Senator Jacobsen said he was concerned about the DMV/PS services such as training volunteer firemen in the rural areas. He asked if the change would affect or dilute those services. Mr. Kirkland said, “Nothing in this bill would damage, in any way, those services.”
Senator Carlton said, “There are many more sections in the bill than were discussed originally. Who will present those parts of the bill?”
Mr. Kirkland said:
Those are existing agencies that are being addressed because they exist and need to be included. Let me reemphasize there are only two changes: the split of the director’s office into two directors, the split of the administrative services division into two administrative services divisions; nothing else changes.
Gary H. Wolff, Lobbyist, Nevada Highway Patrol Association, testified the association favored S.B. 481.
Daryl E. Capurro, Lobbyist, Nevada Motor Transport Association, said he was not opposed to the division of the DMV/PS, but was concerned about several changes it would bring about. For example, the Commercial Enforcement Division, currently within the Nevada Highway Patrol Division, would be placed in a different division, in the same department, headed by the director. He reiterated motor carrier activities would be contained in two different sections of the Department of Motor Vehicles; the two agencies, compliance and enforcement, would have to work closely together in the collection of both fuel and gas taxes as of the first of the year.
Mr. Capurro continued there were several areas where agencies would work with the Commercial Enforcement Division. Previously, the chief of the Nevada Highway Patrol Division came to the Legislature and said it would be far more efficient to take all of the enforcement people and put them in the highway patrol, but it never worked well. He stated:
My concern is on issues where they must communicate and work together, now we will have two separate agencies. I think it is a question of whether or not the enforcement on one side will work as well with the administrative and regulatory function on the other side, as it does now. Even now we have problems. I testified at the fundamental review committee hearings about the very things I am saying today.
Other concerns I have are the table of organization within the highway patrol as it deals with traffic on the one side and commercial enforcement on the other. Part of the overall problem is the highway patrol is down about 80 [positions] in strength because of salary issues; they are losing people at a fast rate because of cross transfers to positions where they are being paid more than they are now. This also impacts commercial enforcement. When they decentralized the command, they formed the regions in Las Vegas, Reno and Elko; those commands were given a great deal of autonomy. Those commands were traffic-oriented and not commercial enforcement; there have been many instances where commercial enforcement officers have been pressed into traffic duty and away from their responsibilities under commercial enforcement.
There is a great deal of federal money involved here which means additional requirements for meeting certain targets in the enforcement area. It is a very complicated issue, much more complicated than just the simple registration of a car and highway enforcement.
Mr. Capurro continued:
We have worked with the previous director on this issue and have also talked with the new regime regarding our concerns. One thing I want to make perfectly clear to you is there needs to be a reemphasis on commercial enforcement. In our opinion, we are not getting the enforcement necessary to meet our federal obligations and our obligations to the general public at this time.
Russ Benzler, Administrator, Compliance Enforcement Division, Department of Motor Vehicles and Public Safety, said he would be on the “Department of Motor Vehicles side” in the Compliance Enforcement Division. Chairman O'Donnell asked if the enforcement division dealt with trucks and Mr. Benzler answered yes, the division had the motor carrier unit and they administered the state’s fuel tax law. Chairman O'Donnell asked how the division would change this area and Mr. Benzler answered it would be done the same way it was done at this time. He clarified the highway patrol had on-street enforcement capabilities; his division had the audit revenue collections, licensing, and administrative aspects.
Mr. Kirkland said, before he came on the job, the commercial officers were being directed to primarily work traffic duty, because there was a shortage of troopers and officers needed in that area. He stated that had changed; however, the problem now was finding qualified people to test for open positions. Mr. Kirkland said, “We are doing the best we can within the limitations of salary and benefits compared to the other agencies.”
Mr. Kirkland continued:
Quite frankly, the turnover of labor is so fast, the majority of the new folks are not yet fully experienced and trained enough to get the job done. We have a very serious challenge in front of us. Hopefully the Governor’s recommendations for a salary increase will help.
As to the other issues of state agencies not being able to work with each other or communicate, I am beginning to have some sense of these issues, but it is not tolerable by this Governor and in my opinion is not an option. I do not believe it will be an issue as the Governor is taking additional steps to ensure accountability of agencies. He has made it very clear all state agencies are to cooperate completely; I think you will see much improved, customer-oriented, cooperative working relationships between state agencies.
Mr. Capurro said in his 30 years of experience he had found laws are passed and people changed positions, Mr. Kirkland’s attitude might not be expressed by his successor. He repeated, “I am concerned once the bill is passed and the changes are made, memories get short . . . I am also concerned that with the two directors, communication will not be as direct as it has been in the past.”
Chairman O'Donnell closed the hearing on S.B. 481 and opened the hearing on S.B. 503.
SENATE BILL 503: Increases service charge assessed by department of motor vehicles and public safety for checks dishonored upon presentation for payment. (BDR 43-1312)
Dennis Colling, Chief, Administrative Services Division, Department of Motor Vehicles and Public Safety, presented Exhibit D, a proposed amendment to section 1, subsection 2, to change the word “check” to the word “payment.”
Mr. Colling explained this bill would change the bad check charge from $10 to $25. He noted the proposed amendment would allow a fee to be charged if the payment failed, no matter what the mode of payment was when it was presented for payment.
Chairman O'Donnell closed the hearing on S.B. 503 and opened the hearing on S.B. 520.
SENATE BILL 520: Authorizes optional registration of vehicles for 2-year period and makes various changes in provisions governing imposition and procedure for distribution of vehicle privilege tax. (BDR 43-1171)
Ms. Lewis said this bill would accomplish two things: provide an optional 2‑year registration renewal and change the imposition of the privilege tax assessed on vehicles.
Ms. Lewis stated in order to balance the demand for service with available resources, innovative solutions are continually sought. By offering customers an optional 2-year registration renewal, she said, the number of customers coming into the field offices would be reduced. She noted it was hard to predict the number of people who would choose this alternative, but it was important the DMV/PS offer this as an alternative to standing in line at the field office. She clarified the process that would occur with the 2-year registration.
Senator Care questioned why there was no duty to search for grounds to cancel but there was a duty to notify them (the department) that you have the grounds.
Ms. Lewis answered it was felt that 35 days prior to an expiration, the system would be queried for any sanctions, for example, insurance or bad debt with the department. How a sanction would be addressed subsequent to the 35-day query, Ms. Lewis reflected, would have to be discussed with staff. She noted she could not answer how a situation like that would be dealt with.
Senator Washington asked if on-line registration would be possible for the 2‑year registration and the answer was yes.
Chairman O'Donnell asked Micheline N. Fairbank, Senior Research Analyst, Research Division, Legislative Counsel Bureau, to explain the portion of the bill that dealt with the privilege tax. Presenting several charts for review (Exhibit E), Ms. Fairbank said S.B. 520 provided for extending the depreciation schedule for motor vehicles such as passenger vehicles, motorcycles, travel trailers, trailers under 4000 pounds, and trucks under 10,000 pounds. The depreciation schedule for those vehicles would extend out 20 years at a 5 percent deduction every year as opposed to the current schedule of 100 percent the first year, dropping to 15 percent and 10 percent every year thereafter to 5 percent. Ms. Fairbank continued to give an explanation of the bill using Exhibit E.
Ms. Fairbank clarified the bill spread the cost over a longer duration, reducing the cost on a new vehicle and increasing the cost on an older vehicle. Senator Carlton queried if extending the depreciation schedule would increase the amount people pay for their registration every year. Ms. Fairbank answered the effect of extending the cost over a 20-year period of time was the cost was spread over a longer duration. Additionally, the bill reduced the assessment rate from the current 35 percent rate to a 25 percent rate.
Using the Life Cycle Comparison of a 2001 Ford Explorer (page 1, Exhibit E), Ms. Fairbank pointed out the differences in costs between the current statutory structure and the fee structure in S.B. 520 as introduced. She noted the intent was to flatten out the cost and spread it over a larger group of vehicles.
Chairman O'Donnell clarified the average cost of the privilege tax for registering a new vehicle is about $360, with the cost declining each year thereafter. Funds from this tax go into the local government tax distribution account to be used by school districts and local governments. He stated this bill would lower the privilege tax initially but also spread the income over 20 years, providing the revenue over a longer period of time.
Senator Carlton voiced concern that people, for instance in her district, bought older cars because they did not have the financing or capability to pay off a more expensive car. She noted people with less money and older cars would pay more in this tax proposal. Chairman O'Donnell said yes, but if those same people decided to buy a new car, they would save money initially; and if they kept the car for 20 years, they would pay exactly the same tax. He said, “The school districts need more revenue. The question is, how to fund education over a period of time?”
Senator Washington said the types of vehicles purchased today were big sedans and luxury cars. He added payment of the privilege tax, or government usage fee, had been a detriment for those who wished to purchase those types of vehicles in the past and this bill might be a plus because the privilege tax would be at a lower cost for new cars.
Chairman O'Donnell said an important issue was, “Would S.B. 520 benefit local government, especially school districts?” He asked, “Why would I promulgate a law that does not benefit the state?”
Pat A. Zamora, Lobbyist, Clark County School District, presented his written testimony for the record (Exhibit F).
Chairman O'Donnell asked why the Clark County School District had no position on S.B. 520. Mr. Zamora said staff from the school district was currently working with the Legislative Counsel Bureau staff to analyze Department of Motor Vehicle and Public Safety data, on the motor vehicle privilege tax, to determine the effect of the bill on the tax funds received by the school districts. He said the school district was in favor of anything that broadened the tax base and this bill would accomplish it through extending the depreciation over 20 years. The question was how many vehicles would change hands and whether the change in registrations would change the revenue generated causing a possible loss in revenue, a neutral-revenue solution, or a gain in revenue. Mr. Zamora said the school district really needed something revenue neutral.
Chairman O’Donnell asked if Ms. Fairbank could provide this information. Ms. Fairbank answered to accurately project the impact of this legislation would be very difficult because of the variables. Of the figures she had been able to project, there could be a $25 million deficit the first year.
Donald O. Williams, Committee Policy Analyst, Research Division, Legislative Counsel Bureau, suggested the Legislative Counsel Bureau staff work on options to make this issue revenue-neutral in the first years, and present this information to the committee.
Chairman O'Donnell closed the hearing on S.B. 520 and opened the hearing on S.B. 522.
SENATE BILL 522: Clarifies certain provisions concerning administration of money in state highway fund. (BDR 43-566)
Mr. Colling testified this bill was brought on behalf of the Department of Motor Vehicles and Public Safety, to allow the department to be funded by authorizations, in addition to the appropriations. He noted the Legislative Counsel Bureau had pointed out the law needed to be clarified regarding certain provisions governing use of money in the state highway fund; this bill would address the problem.
Chairman O'Donnell noted there was a conflict notice on this bill which would require an amendment. Chairman O’Donnell closed the hearing on S.B. 522 and opened the hearing on S.B. 523.
SENATE BILL 523: Makes various changes relating to licensing and registration of motor vehicles, drivers and instructors. (BDR 43-511)
Chairman O'Donnell stated there was a conflict notice on this bill requiring an amendment to change the language.
Ms. Lewis provided “Senate Bill 523 - Cleanup of Various Chapters” (Exhibit G). She said this bill addressed various chapters of the statutes and the exhibit contained an explanation of the change requested in each area.
Dana Mathiesen, Administrator, Central Services and Records Division, Department of Motor Vehicles and Public Safety, reviewed section 1 of S.B. 523 which addressed driver privacy protection laws.
Mr. Benzler testified section 3 of the bill related to the use of Dealer Reassignments of Title forms to transfer ownership. He also provided a letter (Exhibit H) suggesting an amendment to NRS 482.400 to incorporate language related to the issuance of temporary placards by dealers and lessors.
Carol Falk, Vehicle Programs Manager, Management Services and Programs Division, Department of Motor Vehicles and Public Safety, discussed section 2 of S.B. 523 which pertained to authorizing the department to issue a temporary movement permit for up to 60 days.
Karen E. Daly, Driver Programs Manager, Management Services and Programs Division, Department of Motor Vehicles and Public Safety, discussed section 5 of the bill, which pertained to the National Driver’s License and Non-Resident Violators Compacts which are currently being revised and incorporated into a new compact called the Driver’s License Agreement. Ms. Mathiesen clarified a portion of section 5 may be revised by combining two compacts into the Driver’s License Agreement.
Chairman O'Donnell asked if there was currently an inter-county compact and Ms. Mathiesen answered no. He asked if it could be established in Nevada. Ms. Lewis said to address this issue would require action from the judicial branch. She added the Driver’s License Compact is a national issue.
Senator Care pondered whether there were other compact agreements in the state. He questioned the wording in section 5, which said the department may enter into an agreement, but it is not mandatory. He noted without an agreement the information would not be shared.
Chairman O'Donnell said, “I will draft a letter to Senator James, Chairman of Senate Committee on Judiciary, asking if there is a way we can . . . establish an inter-county compact whereby we could have someone tried in the county of their domicile and send the funds to the other county.”
Rhonda A. Bavaro, Business Programs Manager, Management Services and Programs Division, Department of Motor Vehicles and Public Safety, reviewed section 6 which would give the department statutory authority to require applicants for a license, to operate or instruct at a driver training school, to submit a full set of fingerprints. Ms. Bavaro also noted the proposed amendment to sections 9-11 removing the requirement that applicants for a license to operate a driver training school hold a driving instructor’s certificate issued by the Department of Education.
Ms. Mathiesen explained section 7 had to do with the period of time required to notify the DMV/PS when a person changed their name. She also reviewed section 8 which allowed the department to change demerit points in certain situations.
Chairman O'Donnell closed the hearing on S.B. 523 and opened the hearing on S.B. 524.
SENATE BILL 524: Authorizes electronic submission and storage of documents relating to vehicle registration. (BDR 43-1222)
Ronald Fong, Lobbyist, Nevada Credit Union League, presented a letter of support and explanation of S.B. 524 (Exhibit I).
Dennis Flannigan, Executive Vice President, Great Basin Federal Credit Union, said the bill is supported by the DMV/PS. He said the bill would enable the DMV/PS to enter a process to share data with a third-party vendor; financial institutions and dealers would also transit independently to a third party provider; that data, relating to the title and liens, would be matched and held independently. He stressed this would be accomplished almost immediately which was a very important step forward.
Mr. Flannigan remarked, “Nevada is currently using a cumbersome paper trail method to register used and new motor vehicles with DMV/PS and this would provide a much more efficient motor vehicle registration record keeping system.”
Chairman O'Donnell said the bill allowed for “donations of materials, equipment and labor for the establishment and maintenance of a program.” He noted this would benefit the members. He asked if the DMV/PS had a problem with accepting materials? Mr. Kirkland replied there was no funding to provide the equipment which would be needed at the department.
Senator Care asked what the anticipated criteria would be as discussed in section 3, subsection 2, paragraph (c). Ms. Falk answered one of the components would be the background investigation.
In response to a question for further clarification, Mr. Flannigan explained how the process would work at his office. He noted independently the DMV/PS would gather information and transmit files on specific titles. He said at some point there would be a comparison of information to match up the files. He emphasized this would simplify and streamline the procedure.
Ms. Falk said the department supported S.B. 524 but an amendment had been requested for a change in the implementation date to January 1, 2003.
Mr. Fong recommended the bill be effective July 1, 2001, so that after moving funds, finding software, finding a vendor and having the Department of Motor Vehicles start, the regulations could begin. He indicated there would be no problem delaying operations until January 2003.
Ms. Falk said the following would have to be done to implement this program: determine bonding requirements, draft regulations and contracts, hold public hearings, develop an audit process and provide training to their business partners. She remarked the department hoped to go online with the program before January 1, 2003, but to be cautious they were requesting that amount of time.
Chairman O'Donnell closed the hearing on S.B. 524 and opened the hearing on S.B. 525.
SENATE BILL 525: Revises provisions governing issuance of replacement license plates. (BDR S-1223)
Ms. Lewis explained this bill extended the date to December 31, 2002, for completing the replacement of the bighorn sheep license plate. She noted the bill also allowed the department to revert remaining funds, appropriated for this project, to the Highway Fund.
Chairman O'Donnell closed the hearing on S.B. 525 and announced the work session would be postponed until the next meeting.
There being no further business, Chairman O'Donnell adjourned the meeting at 4:16 p.m.
RESPECTFULLY SUBMITTED:
Alice Nevin,
Committee Secretary
APPROVED BY:
Senator William R. O'Donnell, Chairman
DATE: