MINUTES OF THE ASSEMBLY COMMITTEE ON TRANSPORTATION Sixty-eighth Session March 28, 1995 The Committee on Transportation was called to order at 1:15 p.m., on Tuesday, March 28, 1995, Chairman Thomas Batten presiding in Room 331 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Thomas Batten, Chairman Mrs. Vonne Chowning, Chairman Mr. Dennis Allard, Vice Chairman Mr. David Goldwater, Vice Chairman Mr. Bernie Anderson Mr. John Carpenter Mrs. Marcia de Braga Mr. Dennis Nolan Ms. Genie Ohrenschall Ms. Patricia Tripple GUEST LEGISLATORS PRESENT: Ms. Dianne Steel STAFF MEMBERS PRESENT: Paul Mouritsen, Senior Research Analyst Jackie L. Valley, Committee Secretary OTHERS PRESENT: John F. Mendoza, Public Service Commission Galen D. Denio, Public Service Commission Donna Wadey, Dept. Of Motor Vehicles and Public Safety Daryl Capurro, Nevada Motor Transport Association & Nevada Franchised Auto Dealers Association Chairman Batten opened the meeting with a request that a bill draft be prepared repealing NRS 487.002 which deals with the advisory board on automotive affairs creation, members, expenses, terms, meetings, proposals and regulations. ASSEMBLYMAN DENNIS ALLARD MOVED FOR PREPARATION OF A BILL DRAFT REQUEST THAT WOULD REPEAL NRS 487.002 DEALING WITH THE ADVISORY BOARD ON AUTOMOTIVE AFFAIRS CREATION, MEMBERS, EXPENSES, TERMS, MEETINGS, PROPOSALS AND REGULATIONS. ASSEMBLYMAN DENNIS NOLAN SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMAN BERNIE ANDERSON VOTED NO. Mr. Mouritsen, staff researcher, stated he would take the proposed bill draft request to the bill drafters. ASSEMBLY BILL 352 - Authorizes establishment of program for issuance of certificate of registration and license plates for new vehicles sold by new vehicle dealer. Assemblywoman Steel explained A.B. 352 resulted from discussions she had with constituents who were tired of waiting in long lines at the Department of Motor Vehicles (DMV) to register their new cars. Ms. Steel emphasized A.B. 352 was permissive legislation so dealerships would not be required to participate but would be able to provide the service if they wanted to. Assemblywoman Tripple asked why A.B. 352 was limited to new car dealers. Ms. Steel replied the program was a pilot program and the bill's proponents wanted to work all the bugs out of the system before including all car dealerships. She mentioned how important collection of vehicle registration fees is to Nevada's revenue and added the bill drafters had not wanted "just anyone" to be collecting those fees. Assemblyman Nolan asked if the dealers would be collecting all the state registration fees, privilege taxes and other fees and passing those on to the state. Ms. Steel concurred. Vice Chairman Allard, substituting for Chairman Batten, asked whether passage of A.B. 352 would alleviate waiting in registration lines at DMV. Ms. Steel reiterated under A.B. 352, DMV would have the right to prepare some regulations for working with their system and offer online capability. She agreed if dealerships could input registration information statewide it would help with the workload at DMV. Donna Wadey, Chief of the Registration Division, Department of Motor Vehicles, spoke in support of A.B. 352. She felt, depending upon the number of dealers who would participate, passage of the bill would have a positive effect, particularly on lines at DMV in Las Vegas. Ms. Wadey mentioned some concerns expressed by industry members include no real incentive for the dealers to participate because they cannot charge an additional fee nor receive any remuneration from the department for performing the registration function for DMV. In addition, industry and DMV concerns regard collection of the fees; determination of the privilege tax is a very complicated process. Determination of credits involved in the transfer of registration from one car to another is also quite complex. As a result, DMV felt it would be much more advantageous if the dealers were actually online with DMV's computer system because the computer system would calculate those fees rather than relying on manual calculation. Ms. Wadey pointed out having the dealerships online was where a fiscal impact to DMV showed up. She mentioned costs could range from $4,000 to $7,000 per dealership depending upon compatibility of computer equipment and the type of equipment DMV would have to install. Assemblyman Allard questioned how many dealers might be interested in participating. Ms. Steel replied no poll had been done and she did not know how many would participate. Daryl Capurro, representing the Nevada Franchised Auto Dealers Association, testified Ms. Steel had told him problems with long lines at the DMV had been a very important issue mentioned by voters during her campaign. He added some dealers had expressed interest with the issue while others wanted no part of it so making participation optional was a good way to start out. Mr. Capurro did not anticipate a lot of dealers taking part in the pilot program. He pointed out some dealers currently do register vehicles, but with great difficulty because they must take a blank check down to DMV and stand in line to register the vehicles. He mentioned he and the auto dealers had offered to help iron out any problems with A.B. 352. Mr. Capurro expressed concern regarding the need for evidence of insurance when registering a car and noted that may not be readily available at the dealership, especially with the purchase of a first car. He explained if one already had a car or was trading one in, the owner obviously had insurance and it became a simple matter to call the insurance agent and request automatic 30 day coverage adding the new car to the existing policy. However, a first time car buyer may not even have an insurance agent and must basically start from scratch. Mr. Capurro did not have any idea how big a problem that might be, but noted the registration process could not be completed without proof of insurance so the entire sales transaction would be held up. Another potential problem involved the fact some dealers absolutely did not want to be involved in DMV's business. Mr. Capurro requested language within the bill, perhaps a legislative declaration, that would indicate the intention for the program to be optional or voluntary. He noted if DMV liked the program, he would not be surprised to have them come back to the legislature and request it be made mandatory. Mr. Capurro would like to see the program remain voluntary until a lengthy time for evaluation had occurred. Mr. Capurro also commented implementation of the plan required computer hookup directly with DMV for the calculation of privilege tax, especially with trade-ins where a credit must be calculated against the registration and titling fees of the new vehicle. He noted A.B. 352 prohibits additional charges for registration services and also prohibits any recompense from DMV. Mr. Capurro testified he was not concerned about that part, however he believed there should be some shared responsibility if it starts costing money to participate. Alternatively, if DMV would be saving money by having agents do the job, there should be some participation on their part by providing the software necessary to perform that function. Mr. Capurro also testified the dealerships did not want to physically handle the license plates because that could turn into an inventory or liability problem. Mr. Capurro would like the dealerships to do the paperwork and send it to DMV, then the plates could be sent to the registering party by DMV. He mentioned that would require the Dealers Report of Sale (DRS) to have a longer time limit, probably up to 20 days. He also emphasized the necessity for a "dealer window" at DMV where representatives from the various dealerships could go with their multiple transactions because the dealerships did not want to have their representatives standing in line. Mr. Allard inquired whether any other states had similar programs and whether any problems had been identified. Mr. Capurro replied he thought California provided for dealers to register vehicles. However, he pointed out in Nevada the license plate goes with the vehicle but in California the plate goes with the individual. Mr. Allard asked about proof of insurance but Mr. Capurro did not know what the situation was in California or any other states. Mr. Anderson wondered if the 20 day length of time to register a car would apply only to dealerships participating in the program. Mr. Capurro agreed and noted there would have to be some adjustment to the bill. Mr. Anderson questioned whether the savings to DMV projected in A.B. 352 would really occur if DMV had the responsibility to mail out plates. He stressed the legislation was really intended to shorten registration lines at DMV. Mr. Capurro pointed out it would be hard to say what savings or additional costs might be incurred because he felt no one had done any cost allocation studies. Mr. Anderson clarified it had not been Mr. Capurro's intention that the valid time period for DRS stickers for all vehicle purchases be extended, only for the program's participants. Mr. Capurro replied yes, and for the record he stated, "the only reason would be because the extra time would be necessary to get the paperwork to DMV and to get the plates out. That would not be a problem with respect to anybody who was not participating in the program." Donna Wadey, Chief of the Registration Division, testified DMV believed insurance agents could fax proof of insurance to the dealership and noted it was currently being handled that way. Ms. Wadey agreed DMV would need to provide fiscal information on the cost of mailing license plates. She added the cost would depend upon the number of dealers who participate in the program and the number of vehicles they register. Ms. Wadey also testified DMV would have no problem providing a special dealer window. Assemblywoman Chowning mentioned she believed this idea had been thought of before and wondered what problems had been encountered previously. She also asked if there were a dealer who really wanted to be the first to participate in this program. She questioned where the incentive might be for the dealers and why they would want to take on the additional work. Mr. Capurro responded a couple of dealers had expressed interest in participating. Those dealers were currently registering vehicles for their customers but under very difficult circumstances because they are subject to the same lines everyone else is and have to take blank checks with them because they cannot calculate the privilege taxes. He emphasized a two year pilot program would enable refinement of the operation and resolution of issues such as issuance of license plates. Mr. Capurro added there was limited interest but he felt enough dealers would participate to give them a baseline to work with regarding any changes needed in the program. Mentioning the faxing of insurance information, Mr. Capurro agreed someone currently insured could be dealt with on a fax basis, however he still had reservations about first time buyers who did not have an agent or insurance policy. He noted that policy must be written over the telephone but had no idea how many situations like that they might run into. Ms. Wadey, responding to a question posed by Mrs. Chowning, stated DMV had approached new and used car dealers many times over the years with this proposal but had always been met with a negative response. Dealers were not interested in taking on this responsibility, basically for the reasons previously stated such as insurance, calculation of fees, credit transfers and the cumbersome nature of taking care of plates, decals and certificates of registration. Mr. Capurro mentioned one other issue dealers were not anxious to face was the expense of car registration. Now any dealership that participates will be the focus of unhappiness over privilege taxes. Mr. Allard commented upon an earlier statement by Mr. Capurro about language being incorporated in A.B. 352 and asked what that would include. Mr. Capurro replied a legislative declaration that participation is optional and voluntary was very important. Mr. Allard questioned if it would be for a set period of time and asked if A.B. 352 stated participation was voluntary. Mr. Capurro, emphasizing he had been lobbying for 26 years, replied institutional memory seemed to fade after two sessions and he feared DMV would think this was a great idea and demand that every dealership participate. Mr. Capurro stated the auto dealers were agreeing to A.B. 352 because it was a voluntary pilot program. If it did not work out, the dealers wanted to be able to come back to the legislature, explain all the problems and say they no longer will participate. Mr. Allard commented if A.B. 352 passed he did not know what language could be written to prevent that from happening. Mr. Capurro responded that was why he liked legislative declarations or possibly a sunset provision. Mr. Allard stated a sunset law would allow DMV to bring it back again and Mr. Capurro agreed, but noted they would need to pass a bill to continue the program and at least the auto dealers would be able to present their case at hearings. Ms. Steel believed language could be drafted into statute stating it was the intent of this legislature that this be a voluntary program and it was not their intent to make participation mandatory. In that way, even if the bill were being reviewed ten years from now, that language could not be avoided. Mr. Allard agreed that could be done. Ms. Steel added she would not be against adding something like that to the bill. In summary, she noted A.B. 352 provides DMV put forth regulations and work with the dealerships in order to make this a good program. Ms. Steel believed once a few dealerships start doing this and others see how well it works and that it could be used in their advertising and promotion, many more would probably join the program and hopefully lower the costs to DMV by lowering the number of man- hours they must utilize inputting all the registration materials. Ms. Tripple, mentioning she realized A.B. 352 did not provide for the new car dealers to make any money, commented participation would cost those dealers. She wanted to know why the legislation was so adamant that the new dealers could not make a uniform charge. Ms. Steel suggested after a time, possibly after the two year pilot program, the money savings to DMV because of dealer participation should be calculated. At that time DMV might want to provide some financial incentive to the dealers to stay online with them. Mr. Allard questioned whether the customer could voluntarily pay the dealership a fee to register their car. That would basically be compensating the dealer for the service and the customer would not have to wait in line. Ms. Steel replied DMV would have to be consulted. Mr. Allard stated his intention to place A.B. 352 in a subcommittee and appointed Assemblymen Nolan and Ohrenschall to that subcommittee. ASSEMBLY BILL 334 - Clarifies authority of public service commission of Nevada to revoke or suspend certificate of public convenience and necessity of common motor carrier for failure to comply with certain laws or regulations. John Mendoza, Chairman of the Public Service Commission (PSC), requested A.B. 334 and A.B. 335 be deferred. Both bills had been submitted by the PSC during the latter part of 1994 pursuant to agency submissions. After the submissions the PSC was faced with a court case in which much of their transportation area was preempted. The preemption had a direct effect on A.B. 334 and A.B. 335 because the preemption legislation they prepared and submitted to the Legislature was not drafted. They spoke to Senator William O'Donnell, Chairman of the Senate Transportation Committee, who was willing to ask that the matter be submitted for immediate bill drafting. The bill will completely revise the present transportation statute. Mr. Mendoza continued the reason for the deferral was that the two bills were pre- preemption bills and would be incorporated into the document now being drafted by the Senate Transportation Committee. He stated it would save time for everyone because A.B. 334 and A.B. 335 are referred to in the proposed legislation. Mr. Allard suggested indefinite postponement or deferral of the measures. Mr. Mendoza agreed. He wanted to discuss the bills at one time after the Senate bill had passed and come to the Assembly. Daryl Capurro, representing the Nevada Motor Transport Association, concurred with Mr. Mendoza's testimony. He stated the association had worked extensively with the PSC and DMV in the drafting of major changes to chapter 706. He agreed A.B. 334 and A.B. 335 were "bits and pieces" within the overall legislation and recommended no action be taken until the major bill was produced. Mr. Allard closed the hearing on A.B. 334 and because A.B. 335 was involved in the same situation, did not open a hearing on that measure. There being no further business, the meeting was adjourned at 2:10 p.m. RESPECTFULLY SUBMITTED: Terry Horgan, Committee Secretary APPROVED BY: Assemblyman Thomas Batten, Chairman Assemblywoman Vonne Chowning, Chairman Assembly Committee on Transportation March 28, 1995 Page