MINUTES OF THE meeting
of the
ASSEMBLY Committee on Transportation
Seventy-Second Session
February 11, 2003
The Committee on Transportationwas called to order at 1:35 p.m., on Tuesday, February 11, 2003. Chairwoman Vonne Chowning presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Ms. Vonne Chowning, Chairwoman
Ms. Genie Ohrenschall, Vice Chairman
Mr. Kelvin Atkinson
Mr. John C. Carpenter
Mr. Jerry D. Claborn
Mr. Tom Collins
Mr. Pete Goicoechea
Mr. Don Gustavson
Mr. Ron Knecht
Mr. Mark Manendo
Mr. John Oceguera
Mr. Rod Sherer
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
Assemblywoman Kathy McClain, Assembly District No. 15
STAFF MEMBERS PRESENT:
Marji Paslov-Thomas, Committee Policy Analyst
Jackie Valley, Committee Manager
William E. Fowler, Committee Secretary
OTHERS PRESENT:
Ginny Lewis, Director, Nevada Department of Motor Vehicles (DMV)
Kim A. Huys, Chief Accountant, Office of the State Controller
Dennis Colling, Administrative Services Division Chief, DMV
Bob Roshak, Sergeant, Las Vegas Metropolitan Police Department
Gaylyn Spriggs, Nevada Taxpayers Association
Robert S. Hadfield, Executive Director, Nevada Association of Counties
Gary Wolff, Nevada Highway Patrol Association
Bob Ostrovsky, President, Ostrovsky and Associates
Chairwoman Chowning called the meeting to order at 1:35 p.m. Ms. Chowning asked the Committee secretary to mark Mr. Manendo excused from the Committee meeting of February 4, 2003. She then opened the hearing on A.B. 30.
Prior to the hearing, Assemblyman Carpenter asked Ms. Marji Paslov-Thomas, Transportation Committee Policy Analyst, to review A.B. 30. Ms. Paslov-Thomas provided her written comments to members of the Committee (Exhibit C). During the meeting, there was no accompanying testimony with respect to Exhibit C by any of the Committee members.
Assembly Bill 30: Revises provisions regarding registration of motor vehicles. (BDR 43-67)
Chairwoman Chowning stated that Assemblywoman Kathy McClain was the sponsor of the bill.
Assemblywoman McClain introduced herself and said that she represented District 15 in Clark County. She stated that the bill did two things. First, in 1997, a bill was passed that provided for a cash refund to anyone who turned in his or her vehicular license plates to the DMV. The bill became effective in January 2001, and Ms. McClain opined the reason for the delayed effective date was that the legislation would be reviewed to determine if it was still desired by the Legislature. She said it appeared that when the bill was signed into law, no one had understood its monetary effects. Because of this, the state had lost millions of dollars in revenue. Ms. McClain said she thought that existing revenue issues such as this should be addressed prior to the introduction of large tax increase initiatives. She explained that the second part of the bill dealt with requiring new residents of Nevada to register their vehicles as soon as they moved to Nevada. She said although these people quickly acquired a driver’s license, they delayed registering their vehicles. Ms. McClain stated that the bill required that when people moved to Nevada, they would have to obtain license plates for their vehicles at the same time they received their driver’s licenses. She said this was only fair because new citizens of Nevada should be paying for the upkeep of roadways and schools.
Assemblyman Collins said that he thought this was an example of the state using good business practices.
Ms. McClain also stated that the bill would allow people buying a new vehicle to transfer the credit for their existing vehicle to their new vehicle. She explained that only those turning in their license plates and leaving Nevada would receive a refund from the state.
Chairwoman Chowning asked where the bill addressed this issue.
Assemblywoman McClain said the language concerning refunds was covered in pages 2, 3, 4, and 7. She pointed out that Subsection 2 of Section 6 provided for the transfer of license plates from one vehicle to another. She stated that language contained on pages 5 and 9 required that persons must acquire license plates for their vehicles before they can obtain their drivers’ licenses.
Chairwoman Chowning asked that if a person purchased a vehicle that cost more than the vehicle that was being sold, would a credit from the state be given. She also wanted to know if a person sold a vehicle that had a $600 annual registration fee and bought a vehicle for which there was an annual $300 registration fee, if that person would be entitled to a $300 credit.
Assemblywoman McClain said that would be the outcome in both cases. She added she could not envision too many people buying a vehicle that was cheaper than the vehicle that was being replaced.
Chairwoman Chowning wondered if Subsection 2 of Section 7 provided for the issuance of a Nevada driver’s license under similar provisions applicable to the renewal of a driver’s license in another state. She asked Ms. McClain if she could give any examples that would apply to Nevada.
Assemblywoman McClain stated that under existing law, the state already honored the driver’s licenses of other states. What the added language provided was that an applicant for a driver’s license was required to have proof that he or she had acquired license plates for all the vehicles he or she owned.
Assemblyman Goicoechea said that current law provided that if a person wished to discontinue providing insurance for a vehicle, the license plates for that vehicle had to be surrendered to the Department of Motor Vehicles (DMV). He wanted to know what would happen if license plates were surrendered under those circumstances.
Ginny Lewis, Director, DMV, opined that a person in that circumstance would receive a credit, but not a refund. She stated in such an event, that person could apply the credit to a subsequent vehicle registered by that person.
Assemblyman Goicoechea asked, based on that explanation, if a person would receive a credit that could be maintained for future use.
Ms. Lewis responded that a person could maintain the credit for 12 months, then the credit would progressively decline each month until such time as the credit was exhausted.
Assemblyman Gustavson stated that this matter had come up in the past. He said the problem was if persons had come to Nevada to seek employment, they could not afford to register their vehicles until such time as they became employed. He wondered why persons should be required to register their vehicles if they did not have the prospect of employment. He also questioned why the citizens of the state could not receive cash refunds.
Assemblywoman McClain said she understood that the immediate registration of vehicles could cause a hardship for some people. She said the purpose of the bill was to require people to acquire license plates for their vehicles when they moved to Nevada. She believed that about 80 percent of the people who relocated to Nevada had viable job offers and were able to afford housing and to pay for license plates for their vehicles. She stated that the refund provisions provided for in the measure passed in 1997 lacked foresight, and it was time that the refund provisions were rescinded.
With respect to refunds, Chairwoman Chowning mentioned that she had asked Ms. Paslov-Thomas to conduct some research. She said that it appeared that Nevada and Arizona were the only states that provided full refunds. She stated that Arizona was in the process of changing its refund policy because it had lost about $9 million in revenues. She mentioned that all of the other states gave refunds in limited situations. Chairwoman Chowning then asked Ms. McClain if her research had yielded a similar result.
Assemblywoman McClain confirmed the research that had been done by Ms. Paslov-Thomas.
Assemblyman Knecht wondered if information was available for transaction costs related to processing refunds.
Assemblywoman McClain said that such information was available. She said that Kim Huys, of the State Controller’s Office, could speak to this issue, and data from DMV was available regarding how much money had been refunded and the cost to rebate such money.
Assemblyman Knecht said that a useful format would compare the typical refund amount with cost for each transaction. As a hypothetical example, one could then see that an $18 transaction fee was associated with a $30 refund.
Ms. Lewis said there were two distinct issues associated with A.B. 30, and she believed they needed to be discussed separately. She pointed out that Dennis Colling of the DMV had information on the refund issue, and Ms. Huys was also available to speak about refunds. Ms. Lewis stated that she wished to talk about registering out-of-state vehicles on a timely basis. She commented on a November 11, 2002, article from USA TODAY (Exhibit D), which explained that out-of-state vehicle registrations were a problem throughout the United States. She also talked about a handout entitled “New ResidentSurvey-2003” (Exhibit E), which outlined how other states dealt with this issue. The seven states that responded to the survey stated they relied on law enforcement to check to determine whether vehicles were appropriately licensed.
Ms. Lewis said DMV had looked at A.B. 30, and that she believed the DMV could be part of the solution; she opined, however, that the DMV could not resolve the entire issue. She stated that she was concerned with any effect on customer wait time and any adverse impact on the image the DMV had been trying to improve during the past three years. If the bill passed as currently envisioned and a person who had just moved to Nevada went into a DMV office to transfer his or her driver’s license from another state to Nevada, that person would be told that he or she would have to register all of his or her vehicles in order to receive that driver’s license. The DMV technician then would calculate the costs to register the vehicles. If that person believed the cost was too high, he or she could leave the DMV office without completing the transaction. The result was that a technician had spent an excessive amount time with one customer, had not completed the undertaking, and other customers at the DMV would have been required to wait longer in line. The DMV then would have had a very dissatisfied customer, and the DMV would not have collected any revenue. Moreover, the DMV’s customers could state that they did not have any vehicles to register, and they would then be requested to sign an affidavit. The problem was that many people were aware that affidavits of this nature were not enforced. Ms. Lewis wondered if the bill actually resolved this issue, and she worried that the DMV’s customers might react in a negative way. She envisioned that customers of the DMV would either not register their vehicles or they would be upset and leave the DMV offices when told what it would cost for them to register their vehicles.
Ms. Chowning commented that according to the USA TODAY article, the current time requirements for registering vehicles in many states were more restrictive than those for Nevada. She said she understood the DMV’s concerns about its image, but Arizona and California now had stricter time requirements than did Nevada.
Assemblyman Atkinson asked Ms. Lewis to comment on what happened to people who signed an affidavit affirming that they did not have a vehicle when they knew this was not true.
Ms. Lewis said the purpose of the affidavit was to let applicants know that they should be telling the truth.
Chairwoman Chowning stated there would be instances when a person would have a driver’s license, but not own a vehicle. She cited as an example a person who drove a vehicle owned by a corporation.
Assemblywoman McClain opined that under current law if one were stopped for just cause or were involved in an accident and had a Nevada driver’s license and vehicle that was registered out-of-state, a substantial fine could be levied against the driver.
Assemblyman Atkinson wondered if a driver would be subject to an additional penalty in the event he or she had signed an affidavit.
Assemblywoman McClain said no, and that the affidavit essentially put a driver on notice that he or she should be paying for certain services furnished by the state. She re-emphasized that 80 percent of the people relocating to Nevada would willingly pay their license plate fees when requested, and a minority of people would take advantage of loopholes.
Assemblyman Goicoechea stated that it appeared this was an enforcement issue, and existing law provided that new citizens of Nevada were required to obtain their Nevada license plates within 30 days of moving to the state. He thought that many people would continue to drive with their out-of-state license plates until such time as they were about to expire.
Mr. Knecht asked if one who falsely signed an affidavit would be subject to perjury.
Ms. Lewis explained that from a DMV standpoint, there was not much that her agency could do. She said an affidavit would not be referred to law enforcement authorities, as there always would be the question of which law enforcement agency had jurisdiction. She stated that while it was the DMV’s hope that affidavits would encourage the DMV’s customers to register their vehicles on a timely basis, enforcement in this regard was not a role of the DMV.
Assemblyman Collins said that for about ten years the Nevada Highway Patrol (NHP) had been given the authority to police whether vehicles were properly registered in the state. He suggested that when a person obtained a driver’s license, the NHP or Department of Public Service should go to that person’s residence and confirm if their vehicles were registered in the state. He also thought that the DMV should post signs at their facilities informing people that when they obtained their driver’s licenses, they would also be required to register their vehicles.
Assemblywoman McClain said she had spoken with the DMV personnel about the possibility of putting this information on the DMV’s Web site. She thought that people investigating a planned move to Nevada should become aware of this information during their decision-making process. She said that law officials throughout the state were very involved with criminal activities, and enforcement of vehicular registration took a very low priority.
Assemblyman Gustavson agreed that law enforcement resources were stretched to the limit, and he wondered why this measure was being considered when enforcement resources were not available.
Assemblywoman McClain said that the new law was designed to make existing law more effective. She again mentioned that most people would comply with the measure. Finally, she stated if the bill did not work as envisioned, it could be reviewed in two years to find ways enforcement could be improved.
Kim Huys, Chief Accountant, Office of the State Controller, said her office supported the measure as good fiscal policy. She mentioned that she was prepared to give information about how the state’s cost to do business was related to the measure. In Fiscal Year 2002, the state processed about 101,000 refund checks in connection with license plate transactions. DMV had calculated that the average refund was about $49 per transaction. She indicated that about 10 percent of the refund checks issued by the state were not cashed. Each time this happened, the State Controller’s Office performed a variety of clerical functions, and it incurred a cost of about $17 to $20. Ms. Huys stated that based on an annual average of 9,600 checks not cashed, the state absorbed a cost of about $68,000 a year. She pointed out that of the 101,000 refund checks, over 9,100 of them were for less than one dollar, and a number of those were for one cent. She pointed out that some studies had shown that it cost at least of $4.86 to produce a check, based on a highly-mechanized process and a large volume of check production. With this cost for each check times 101,019, the result was an annual cost of about $491,000. Ms. Huys next talked about a higher-end cost of $25 to issue a check, in which the annual cost would be approximately $2.5 million. She opined that the state’s actual cost to produce a check was somewhere in the middle of the low and high numbers. She then calculated a cost of about $15 per check for the state, and based on 101,000 checks per annum, she estimated the state’s annual cost to be approximately $1.5 million.
Dennis Colling, Administrative Services Division Chief, DMV, provided a handout titled A.B. 30 DMV Refunds Fiscal Note (Exhibit F), which summarized the revenue return for the last two calendar years, beginning with January 1, 2001. Mr. Colling also provided a revenue projection for calendar year 2003. He pointed out that during the past 2 years, more than $2.3 million had been taken from the Highway Fund and more than $5.9 million had been removed from the budgets of city and county school districts. Mr. Colling explained that a portion of the Governmental Services Tax that went to the city and county school districts went directly to the Distributive School Fund and was potentially offset by the General Fund. He said the DMV issued about 400 refund checks each day. He stated that the DMV estimated that more than $5 million would be refunded during calendar year 2003. Mr. Colling stated that even if the measure were passed, the DMV would continue to make refunds for other reasons, such as when it had inadvertently collected too much money.
Chairwoman Chowning observed that according to Exhibit F, Clark County had lost about $3.8 million to $4 million during 2001 and 2002. She also stated that Nye County had lost about $120,000 during the same period. Her point was that large and small counties had not received relatively significant amounts of money.
Assemblywoman McClain pointed out that when the Governmental Services Tax that went to school districts experienced a decrease, the deficit was made up from the General Fund. She said that as a result, the state lost revenue in this type of situation.
Assemblyman Knecht wondered if the $15 transaction fee mentioned by Ms. Huys included other costs such as handling returned plates and other processing costs related to the transaction.
Ms. Huys said the $15 transaction fee included essentially all direct and indirect costs.
Assemblyman Knecht calculated that there was an added cost of about 35 percent for the state to handle refund transactions.
Ms. Huys confirmed that sounded accurate and that would be a cost in addition to the refund amount.
Chairwoman Chowning said she found this information interesting in view of the fact that the accompanying fiscal note provided there was not an impact on local or state government.
Mr. Colling pointed out that this bill would take effect upon its approval. As a result, he said the bill addressed this fiscal year, as well as future years. He emphasized there was a 35-day delay built into the refund process, so refunds would continue to made for 35 days after the bill became law.
Bob Roshak, Sergeant, Las Vegas Metropolitan Police Department, and also representing the Nevada Sheriff’s and Chief’s Association, said that these organizations supported the bill. He stated that passage of the measure could help aid in investigations of vehicles involved in hit-and-run incidents. He mentioned that currently about 600 hit-and-run events occurred each month in southern Nevada. Out of those 600 incidents, investigations reflected that approximately 40 to 50 of vehicles involved in the Las Vegas area had out-of-state license plates. Sergeant Roshak said that a greater number of vehicles with license plates issued by the state would help with the investigations conducted by law enforcement authorities in southern Nevada.
Chairwoman Chowning asked Sergeant Roshak if he could talk about the enforcement aspects of the bill.
Sergeant Roshak said that law enforcement could not stop a vehicle merely because it had an out-of-state license plate. He explained that there had to be reason for stopping a vehicle. He stated if a vehicle had been stopped by law enforcement for cause, and there was a violation of the 30-day waiting period, a citation could be issued.
Assemblyman Collins wondered if a vehicle being operated on a Nevada highway was carrying painting and construction supplies, and the vehicle had out-of-state plates, could law enforcement stop the vehicle for cause.
Sergeant Roshak responded only if there was an accompanying violation involving operation of the vehicle.
Chairwoman Chowning then asked former Assemblywoman Gaylyn Spriggs to speak before the Committee.
Gaylyn Spriggs, Nevada Taxpayers Association, spoke in favor of the portion of the bill that provided for ending refunds. She stated that since the inception of granting refunds in 2001, the state had lost significant amounts of money.
Chairwoman Chowning opined that in 2001, when refunds were approved, no one had envisioned the extent of lost revenue that would be incurred by the state.
Chairwoman Chowning invited Robert Hadfield to make his presentation to the Committee.
Robert Hadfield, Executive Director, Nevada Association of Counties (NACO), stated that NACO had been concerned about the refund process years ago. He explained NACO’s position was that the state should be efficiently collecting revenues, and that NACO was concerned that refunds were being made to owners of vehicles who did not seem to care whether they received refunds. He said that NACO supported the bill. He stated that the school systems and the counties shared the same tax base, and when the school systems did not receive sufficient monies, counties had less money to spend for various purposes.
Chairwoman Chowning then asked Gary Wolff, who represented the Nevada Highway Patrol Association, to speak before the Committee.
Gary Wolff, Nevada Highway Patrol Association (NHPA), said that the NHPA supported the bill. He stated, however, there would be problems with enforcing the measure, because there was a lack of law enforcement personnel.
Chairwoman Chowning talked about her experiences with constituents who complained about people who lived nearby and who had vehicles with out-of-state license plates.
Assemblyman Manendo said he was aware of people who were doing their best to be good citizens, but they felt cheated by people who continued to have out-of-state license plates on their vehicles. He believed that if people left the state, they should not be entitled to refunds. He wondered if funding could be made for a couple of positions to enforce vehicle registration in Nevada, and he opined that the positions would easily pay for themselves.
Mr. Wolff said that at one time there were officers assigned to police this type of activity; however, subsequently they were assigned to work in more traditional policing activities. He suggested that perhaps the DMV, with limited law enforcement authority, might be able to work in this area.
Assemblyman Manendo reminded the Committee that a few sessions ago, a law had been placed into effect that permitted citizens to write tickets for violators parking in areas reserved for those with handicaps. He suggested that perhaps this could be done for vehicles with out-of-state license plates.
Mr. Wolff believed that some type of law enforcement would be required. He opined that parking enforcement personnel could issue summons to those with out-of-state license plates. He thought actions of this nature could force people to come into court to prove that they had appropriate documentation. He said that the DMV could have its personnel locate vehicles that had been parked in the same location for weeks, and those vehicles could be brought to the attention of the NHP or other law enforcement agencies for ticketing.
Chairwoman Chowning wondered if this bill were passed, would it not be yet another basis for requiring citizens to have current Nevada license plates.
Mr. Wolff agreed with Chairwoman Chowning. He also thought that if people signed an affidavit and had out-of-state plates on their vehicles and subsequently appeared before a judge, they might receive an “unwelcomed reception.”
Assemblyman Collins thought that funds for enforcement would be brought up before the Ways and Means Committee on February 24, 2003. He believed proof of insurance for vehicles could be tied to vehicular registration and that insurance companies could notify the state when a vehicle no longer was insured. Mr. Collins pointed out that vehicles with out-of-state license plates were insured by some unknown process or possibly not at all. Mr. Collins stated that when drivers surrendered their license plates for a vehicle, they should be entitled to a refund. Mr. Collins, however, recognized that the state should be compensated for its transaction costs. Mr. Collins suggested that a minimum refund threshold of $50, $100, or $200 be established for those who surrendered their license plates. He also suggested that the DMV might be able to determine whether a person who had a driver’s license also had insurance for his or her vehicle.
Chairwoman Chowning said in view of Mr. Collins’ concerns, she would like for him to work with the sponsor of the bill. She also stated that it seemed that Nevada was the only state to give refunds of this type.
Assemblyman Atkinson said his concerns were similar to those of Assemblyman Collins. He said that he would work with Assemblywoman McClain and Assemblyman Collins to develop a solution. He explained he was not in agreement with the affidavit process, but that he could not offer an alternative at the time.
Assemblyman Knecht said that he thought there was a very practical solution to the transaction costs. He explained that the transaction costs were about one-third of the money that was refunded to those who surrendered their license plates. Based on this, those who turned in their license plates should be allowed to receive two-thirds of the monies that were due to them. He also said there were other costs incurred by the state, so perhaps half of the original amounts should be returned to those who had surrendered their plates. Mr. Knecht suggested that under this concept, those entitled to refunds of $5 or more would be compensated if they surrendered their license plates. He stated that he would work with other Committee members and Assemblywoman McClain to reach a consensus in this regard.
Chairwoman Chowning asked that members of the Committee work with the bill’s sponsor, and the bill would be handled in a subsequent work session. She pointed out that no one desired to increase the gasoline tax to pay for roadways, and people did not wish to raise the fees for driver’s licenses or anything else to pay for roadways, but the state was losing almost $2 million in connection with the refund process. That money was not available to pay for things such as roadway maintenance and building bridges.
Bob Ostrovsky, President, Ostrovsky and Associates, representing Hertz Corporation, said that his client did not object to the bill. He commented, however, on how the bill had been drafted. He said that he thought that parts of the bill were difficult to understand, and he wanted to make sure that there was not a negative impact on the DMV by the way in which credits would be processed.
Chairwoman Chowning thanked Mr. Ostrovsky. She stated that she had a similar problem with the bill, and she said this would be addressed prior to the Committee voting on the bill.
Assemblywoman McClain stated that Ms. Kim Morgan, Chief Deputy, Legislative Counsel Legal Division, had assured her that the language in the bill negated that refund concept which was passed into law in 2001.
Ms. McClain thanked Chairwoman Chowning for hearing her presentation.
Chairwoman Chowning asked Ms. Paslov-Thomas to speak with Legislative Counsel Bureau’s Legal Division to ensure that the bill, as drafted, did what it was purported to do.
Chairwoman Chowning closed the hearing on A.B. 30.
Chairwoman Chowning then introduced BDR 43-85 (A.B. 83), which dealt with various changes concerning certain motor vehicles and was introduced on behalf of the Nevada Motor Transport Association, Inc.
ASSEMBLYMAN MANENDO MOVED FOR A COMMITTEE INTRODUCTION OF BDR 43-85.
ASSEMBLYWOMAN OHRENSCHALL SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
There being no further business, the meeting was adjourned at 2:49 p.m.
RESPECTFULLY SUBMITTED:
William E. Fowler
Committee Secretary
APPROVED BY:
Assemblywoman Vonne Chowning, Chairwoman
DATE: