MINUTES OF THE
SENATE Committee on Transportation
Seventy-second Session
May 13, 2003
The Senate Committee on Transportation was called to order by Chairman Raymond C. Shaffer, at 2:31 p.m., on Tuesday, May 13, 2003, in Room 2149 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to the Grant Sawyer State Office Building, Room 4406, 555 East Washington Avenue, Las Vegas, 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 Raymond C. Shaffer, Chairman
Senator Mark Amodei
Senator Warren B. Hardy II
Senator Michael Schneider
Senator Terry Care
Senator Maggie Carlton
COMMITTEE MEMBERS ABSENT:
Senator Dennis Nolan, Vice Chairman (Excused)
GUEST LEGISLATORS PRESENT:
Assemblyman Kelvin D. Atkinson, Assembly District No. 17
STAFF MEMBERS PRESENT:
Marsheilah Lyons, Committee Policy Analyst
Lee-Ann Keever, Committee Secretary
OTHERS PRESENT:
Virginia (Ginny) Lewis, Director, Department of Motor Vehicles
Peter D. Krueger, Lobbyist
Dan Wulz, Senior Attorney, Clark County Legal Services Program
Russ Benzler, Administrator, Compliance Enforcement Division, Department of Motor Vehicles
Chairman Shaffer opened the hearing on Assembly Bill (A.B.) 324.
ASSEMBLY BILL 324 (1st Reprint): Revises provisions governing frequency of renewal of registration of certain vehicles. (BDR 43-1097)
Virginia (Ginny) Lewis, Director, Department of Motor Vehicles, said she had not sponsored A.B. 324. Assemblyman Griffin introduced the measure, which affected the Department of Motor Vehicles (DMV).
Ms. Lewis stated the DMV sponsored similar legislation in the form of Senate Bill (S.B.) 213.
SENATE BILL 213: Authorizes Department of Motor Vehicles to establish pilot program pursuant to which period of registration for certain motor vehicles is expanded. (BDR S-484)
Assembly Bill 324 provides for a 2-year period for car registration in Nevada. The 2-year registration program would be optional for the DMV customers. Ms. Lewis presented a proposed amendment to the bill (Exhibit C). The proposed amendment mirrored S.B. 213 by providing a pilot program and implementation dates. The implementation dates were necessary due to the time required to update existing computer programs and develop regulations.
Senator Care asked about section 1, subsection 3, which read:
The Department shall work in cooperation with the State Environmental Commission and each local air pollution control agency concerning the testing of emissions of vehicles that are registered for a period of 24 months. The State Environmental Commission may adopt such regulations as are necessary to provide for the testing of emissions of such vehicles.
He said he wanted to know whether the DMV discussed the proposed regulations with the State Environmental Commission (SEC). Senator Care asked whether the proposed regulations would be stricter for vehicles registered under a 2‑year registration program than those registered under the traditional 1-year registration program. Senator Care said vehicles might not pass emission inspection if allowed to go 2 years between inspections.
Ms. Lewis said the point had been raised in hearings conducted on a 2-year registration program. The DMV’s bill provided for emission testing of vehicles every 12 months. The provisions of S.B. 213 mandated the DMV to work with the SEC on emission testing standards. Ms. Lewis stated the DMV had not pursued making the regulations stricter.
Peter D. Krueger, Lobbyist, said he supported the bill. For the record, Mr. Krueger said, “This in no way is an attempt to go to biennial testing and that the emission standard will still be an annual requirement.”
Chairman Shaffer asked whether Mr. Krueger was aware of the proposed amendment to A.B. 324. Mr. Krueger replied in the affirmative.
Chairman Shaffer closed the hearing on A.B. 324 and opened the hearing on A.B. 417.
ASSEMBLY BILL 417 (1st Reprint): Establishes procedures for claims against bonds and deposits of certain persons licensed by Department of Motor Vehicles. (BDR 43-1077)
Assemblyman Kelvin D. Atkinson, Assembly District No. 17, said A.B. 417 would amend chapter 482 of Nevada Revised Statutes (NRS) in a meaningful way on behalf of all Nevada consumers who purchase a vehicle.
The bill requires vehicle dealers to file a $50,000 bond with the DMV in order to obtain a license to do business in Nevada. A vehicle dealer could submit a cash deposit in lieu of a bond. The bond or cash deposit would cover any act or acts by a vehicle dealer causing a loss to a consumer, manufacturer, or the DMV.
Assemblyman Atkinson read from NRS 482.345, subsection 1:
… and conditioned that the applicant shall conduct his business as a dealer, distributor, manufacturer or rebuilder without breaching a consumer contract or engaging in a deceptive trade practice, fraud or fraudulent representation, and without violation of the provisions of this chapter.
Assemblyman Atkinson read from NRS 482.345, subsection 5:
The bond must provide that any person injured by the action of the dealer, distributor, rebuilder, manufacturer, representative or salesman in violation of any provisions of this chapter may apply to the director, for good cause shown and after notice and opportunity for hearing, for compensation from the bond. The director may determine the amount of compensation and the person to whom it is to be paid. The surety shall then make the payment.
Assemblyman Atkinson said he believed the procedure outlined in NRS 482.345, subsection 5, lacked an important detail which had been corrected through amendment. He said the Assembly’s amendments to the bill described the bill’s intent.
Dan Wulz, Senior Attorney, Clark County Legal Services Program, read from prepared text (Exhibit D) in support of A.B. 417.
Senator Care said he had received e-mail from Jim Marsh, president, First Acceptance Corporation. Mr. Marsh was concerned about the provisions of A.B. 417. Copies of the e-mail had been sent to the members of the Senate Committee on Government Affairs, instead of the Senate Committee on Transportation.
Senator Care read from the e-mail:
As the owner of First Acceptance Corporation, our company finances the inventory of used-car dealers in Nevada. This is a high-risk business. Because of high losses, is not served by traditional financial institutions. The bill would put us in a secondary position to consumers, adversely abolish any claim we have or would have against a client’s bond in the event of a default.
I would also like to point out that our secured position is already compromised by regulation that in the event a vehicle, which we have financed or hold title to, is sold to a retail customer and we are not paid by the dealer, that we must forfeit the title to the retail customer with no compensation.
Senator Care asked for Mr. Wulz’ reaction to Mr. Marsh’s e-mail, and asked Mr. Wulz to pay attention to the second part as Senator Care was not sure what issues Mr. Marsh was addressing in that paragraph.
Mr. Wulz said he thought a DMV representative would be better able to answer Senator Care’s question regarding the first paragraph of the e-mail. Regarding the second paragraph of the e-mail, Mr. Wulz explained floor planners finance the vehicles purchased by car dealers and A.B. 417 would place them in a secondary position as a nonconsumer for collection purposes.
Mr. Wulz said it is good policy to protect consumers over the position of a floor planner. Floor planners are in a better position to protect themselves through dealer audits. When a dealer encountered financial difficulties, in the course of doing business, consumers needed to be protected. Consumer protection is the primary reason for the dealer-bond bill.
Senator Care said a person could file an interpleader in situations with conflicting claims. He asked Mr. Wulz whether Mr. Wulz was talking about claims other than the preferred claims as crafted in the bill. Senator Care said a completing claim would not take precedence over a preferred claim of a consumer. Mr. Wulz replied, “That would be correct.”
Russ Benzler, Administrator, Compliance Enforcement Division, Department of Motor Vehicles, thanked Assemblyman Atkinson for introducing the legislation and said he supported A.B. 417.
Should A.B. 417 be enacted, it would reduce to writing the State policy regarding dealer bonds and deposits. The funds are intended to protect the vehicle-buying public. The bill clearly proclaims consumers have superior claims against bonds or deposits and all other claims would be secondary. The bill provides for minimal notification requirements which eliminate the first-come, first-served situations which could occur under existing law. Currently, a single claimant could deplete the bond or deposit amount leaving other consumers without recourse.
Mr. Benzler said he thought the bill was a good one for all concerned parties, especially the vehicle-buying public. Mr. Benzler urged passage of A.B. 417.
Mr. Benzler said he would answer Senator Care’s question and reminded the committee members he was not an attorney. Mr. Benzler said he understood the issue discussed by Senator Care fell under the provisions of the Uniform Commercial Code (UCC). The UCC provision addressed a person lending funds during the normal course of business, with a secondary claim to an innocent third-party purchaser.
Chairman Shaffer requested the amendment (Exhibit C) to A.B. 324 be distributed to the committee members.
Chairman Shaffer said A.B. 358 appointed Assemblywoman Vonne Chowning and himself to a national organization. However, the bill failed to provide funding for travel and per diem expenses for them when participating in the national organization.
ASSEMBLY BILL 358: Revises provisions relating to certain special license plates. (BDR 43-1140)
Assemblywoman Chowning asked to amend A.B. 358 by providing for the per diem and travel expenses which Senator Shaffer and she would incur when participating in the national organization’s activities.
Senator Amodei said he had served on the Assembly Committee on Transportation. It had been his experience that the committee members’ actions did not count. The reason for this being, Chairwoman Chowning telephoned the Governor to inform him what action she wanted taken on a particular measure.
Senator Amodei stressed he was not being mean-spirited in his comments. Assemblywoman Chowning was proud of her telephone calls to the Governor and made no secret of those calls. Senator Amodei said he did not know why the committee members should amend the bill when there was a chance they would be overruled. Chairman Shaffer agreed with Senator Amodei and said the committee members would not amend the bill.
Chairman Shaffer asked the committee members whether they had reviewed the amendment to A.B. 324 (Exhibit C). The committee members indicated they had reviewed the proposed amendment.
SENATOR CARE MOVED TO AMEND AND DO PASS AS AMENDED A.B. 324.
SENATOR CARLTON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS NOLAN AND SCHNEIDER WERE ABSENT FOR THE VOTE.)
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SENATOR CARE MOVED TO DO PASS A.B. 417.
SENATOR CARLTON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS NOLAN AND SCHNEIDER WERE ABSENT FOR THE VOTE.)
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Chairman Shaffer said the committee members would consider and possibly vote on A.B. 223, A.B. 394, and A.B. 444 on Thursday, May 15, 2003.
ASSEMBLY BILL 223 (1st Reprint): Requires certain vehicle dealers to provide copies of certain documents translated into Spanish for viewing by purchaser or prospective purchaser of motor vehicle under certain circumstances. (BDR 43-941)
ASSEMBLY BILL 394 (1st Reprint): Revises provisions governing removal by police officer of vehicle or part of vehicle from highway to garage or other place of safekeeping. (BDR 43-1037)
ASSEMBLY BILL 444 (1st Reprint): Makes various changes relating to traffic laws. (BDR 43-1098)
There being no further business, Chairman Shaffer adjourned the Senate Committee on Transportation at 2:55 p.m.
RESPECTFULLY SUBMITTED:
Lee-Ann Keever,
Committee Secretary
APPROVED BY:
Senator Raymond C. Shaffer, Chairman
DATE: