MINUTES OF THE ASSEMBLY COMMITTEE ON TRANSPORTATION Sixty-eighth Session June 15, 1995 The Committee on Transportation was called to order at 2:15 p.m., on Thursday, June 15, 1995, Vice Chairman David Goldwater 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 Mr. Vonne Chowning, Chairman Mr. David Goldwater, Vice Chairman Mr. Bernie Anderson Mr. John Carpenter Mrs. Marcia de Braga Ms. Genie Ohrenschall Mr. Dennis Nolan Ms. Patricia Tripple COMMITTEE MEMBERS EXCUSED: Mr. David Allard, Vice Chairman STAFF MEMBERS PRESENT: Mr. Paul Mouritsen, Research Analyst OTHERS PRESENT: Larry E. Bell, Whittlesea Bell Roy L. Street, Reno-Sparks Cab Terry Callender, Whittlesea Bell David Shaw, Whittlesea Bell Robert Davis, Baker and Drake Donald L. Drake, Baker and Drake, Inc. Robert Rey, Baker and Drake Robert E. Wallace, Baker and Drake S.W. Green, Baker and Drake Dennis R. Colling, Public Service Commission Galen Denio, Public Service Commission Mike Storke, Whittlesea Taxi The hearing was opened on Assembly Bill 706. ASSEMBLY BILL 706 - Authorizes public service commission of Nevada to allocate number of taxicabs in certain counties. Mr. Larry Bell, Whittlesea Bell, testified in favor of A.B. 706 from prepared remarks (Exhibit C). Chairman Chowning asked if violence was being seen in the Reno area. Mr. Bell stated the ratio of cars on the street to the business is not good. There are too many taxicabs. The net result is the drivers make less money. If the drivers are unable to make enough money to live on, some will resort to desperate measures. There is currently no law on the books to prevent "taxi wars" or to deal with such a situation if it would happen. Mrs. Chowning asked how many cab companies there were in northern Nevada and how many cabs each company has. Mr. Bell stated there were three taxi companies in northern Nevada. The companies are Whittlesea Checker Taxi, Reno-Sparks Taxi and Baker and Drake, which does business as Yellow Cab, Deluxe Taxi and Star Taxi. Mr. Don Drake of Baker and Drake informed Mr. Bell his organization had 180 taxicabs. Mr. Roy Street, Reno-Sparks Taxi informed Mr. Bell his organization had 85 taxicabs. Whittlesea Checker Taxi has 80 taxicabs. Mrs. Chowning noted there had been a 115 to 120 vehicle increase in a year. Mr. Bell agreed. Mrs. Chowning discussed the increase of vehicles. Mr. Bell informed the committee all three companies had added vehicles. His concern was where the increases would stop. Assemblyman de Braga asked if the Taxicab Authority in Clark County restricted the number of taxicabs allowed on the streets. Mr. Bell replied affirmatively. Mrs. de Braga asked Mr. Bell to comment on the idea of having a statewide Taxicab Authority rather than just a Taxicab Authority in Clark County. Mr. Bell felt a study should be conducted on whether the Taxicab Authority should be the dominant authority figure within the industry statewide or if the Public Service Commission (PSC) should hold the role. He felt the issue to be important and warned the committee to not act in haste. Mr. Bell maintained the stability of the taxi industry in Clark County had been good since the inception of the Taxicab Authority. He noted funding changes for the Taxi Authority would have to be made if it were to govern statewide. Currently in Clark County the Authority is funded by charging each cab fifteen cents per trip. Approximately five to eight million trips per year are taken. If the Taxi Authority were brought into the Reno area as much as fifty cents per trip may have to be charged to fund the governing agency. Mr. Bell feared this would price out many. Assemblyman Goldwater asked if there were many one man or smaller taxicab companies. Mr. Goldwater noted those would be "grandfathered" in by provisions in A.B. 706 and would be equitably allocated. Mr. Bell stated the firms in question would be effected by the bill. There are 14 taxi companies outside of Clark County. Under A.B. 706 nothing would happen to these companies. Mr. Goldwater asked if the proposed bill was a protection for those currently in business and a barrier to entry for others. Mr. Bell stated to enter the industry an application must be filed with the Nevada Public Service Commission. In doing so, it must be shown the existing carrier is not providing service and need exists. A hearing process is held and this is where it is determined whether or not need exists. The application could be approved or denied. Mr. Roy Street, President, Reno-Sparks Cab, stated he was in support of A.B. 706. Mrs. Chowning asked if Mr. Street had similar concerns as Mr. Bell. Mr. Street answered affirmatively. Mrs. Chowning inquired if a new company coming in would come under restriction from the Public Service Commission. Mr. Street explained companies could add as many vehicles as they wanted at the current time. Assemblyman Anderson asked how many of the new vehicles were added to Mr. Street's fleet. Mr. Street replied he had not increased his fleet. Mr. Anderson asked the same question of Mr. Bell. Mr. Bell stated he had added ten vehicles to his fleet. Mr. Street stated he had 110 vehicles a year ago. Due to the influx he had removed thirty vehicles from his fleet. Mr. Anderson asked why. Mr. Street stated this was because he could not find drivers, it was not economical and because of the age of some of the vehicles. He explained there are only so many drivers and so much business. Mr. Bell explained Whittlesea Taxi had reduced its fleet over the last three years. Within the past year ten vehicles were added. The reason for the reduction was better utilization of vehicles. As older vehicles were scheduled to go out of service due to age, newer vehicles were not purchased to replace them. Assemblyman Batten asked if all companies should reduce their fleets. Mr. Bell stated he would like to see an appropriate number of vehicles in Washoe County to provide sufficient service to the customers. He hoped the companies could collaborate on providing a sufficient quality service for the passengers and decent living for the drivers. Mr. Bell pointed out if the employees are making money, the company is making money. Mr. Peter Krueger, Baker and Drake Taxicab Company, testified in opposition to the bill. He stated no problems of violence and other conditions exist in Washoe County. Mr. Krueger explained Baker and Drake Cabs operated at 100% utilization of its fleet. It was noted Baker and Drake has the largest fleet. Mr. Krueger related how few complaints about taxicab service are received. He felt the issue was a market issue and felt legislative intervention was unwarranted. Mr. Don Drake, President, Baker and Drake Taxicab Company, testified in opposition to A.B. 706. He explained his company operated 180 taxicabs in the Reno-Sparks area. Also the organization has had a waiting list of those wishing to be employed as drivers for over two years. He believed his company offered drivers the best deal in town and this is why prospective drivers were attracted to Baker and Drake. One and one half years ago Baker and Drake instituted the use of a Lincoln Town Car as a taxicab and has approximately 35 luxury cars in use today. Mr. Drake explained the use of luxury cars as cabs was unusual but benefits the drivers and the public. He discussed the difficulties which occurred in the taxi industry in 1968 in Clark County, including customer relations problems at the airport, violence and beatings. These things are not occurring in Reno. Mr. Drake disputed the number of taxis added during the past year to the industry, claiming the numbers did not add up. He stated he added forty cars to his fleet this year, sixteen of which were replacements. Mr. Drake cited a court case from 1968, which was about the time allocations were established in Clark County. It indicated the Public Service Commission had the authority to institute allocations. Therefore, there is no need for A.B. 706 Mr. Robert Davis explained he leases a cab from Baker and Drake Taxicab Company. He expressed concern regarding the number of jobs which could be lost. Mr. Davis felt it unfair to allocate cabs and to tell drivers they no longer had a job. He also discussed the costs of establishment of a Taxicab Authority in the Reno- Sparks area. Mrs. Chowning asked Mr. Drake how many cabs had been added to his fleet in the last two years. Mr. Drake stated approximately forty cabs had been added in the last year, including sixteen replacement vehicles. Mr. Anderson asked Mr. Davis how many years he had been driving a cab. Mr. Davis replied he had been a cab driver for forty years. Mr. Anderson asked if Mr. Davis' driving experience had all been in Washoe County. Mr. Davis explained his cab driving experience. Mr. Anderson asked if Mr. Davis had always leased a cab from Baker and Drake. Mr. Davis stated the lease arrangement had been since 1991. Mr. Anderson asked if a lease arrangement changed the margin of profit for the driver. Mr. Davis said it gives the driver more reason to go after business and the driver makes more money. Mr. Anderson asked if working for Baker and Drake offered more opportunity to make a larger profit as a driver. He also asked if what was expected of Baker and Drake was to supply the vehicle. Mr. Davis agreed with Mr. Anderson's comments concerning profit. He also stated Baker and Drake provided the vehicle and the maintenance. Mr. Anderson asked if Mr. Davis bid on the type of vehicle he wished to use. Mr. Davis stated a driver could lease any type of car he or she felt could be afforded. Mr. Anderson asked if leasing a luxury car was more expensive than leasing another type of car. Mr. Davis agreed the cost was increased but it was beneficial because people were not used to luxury cars. Mr. Drake stated the taxi rate was the same for luxury cars as for other cars. Mr. Robert Wallace, lease driver, Baker and Drake Taxicabs, explained he drove a 1993 Cadillac Sedan deVille. Mr. Wallace discussed his fifteen year driving experience and noted he was a firm supporter of the lease cab operator concept due to the ability of the driver to make more money. He supported the luxury cab idea and discussed the customer popularity of luxury cabs. He felt the Baker and Drake organization was attempting to improve the cab industry. Mr. Wallace described the business in Reno as "fluctuating". He felt if allocation was instituted it would help the cab companies in the slow periods. However, he felt it would have a harmful effect during busy seasons. He reminded the committee drivers make money depending upon their own motivation. Mr. Anderson asked if Mr. Wallace felt drivers in a lease situation were more competitive. Mr. Wallace said he did not necessarily think this was true. He described the ridership system among drivers at cab stands. Mrs. Chowning asked if Mr. Wallace felt there was a violent climate in the cab industry in Washoe County. Mr. Wallace replied there was not. Mr. Robert Rey, driver, Baker and Drake, agreed with previous testimony in opposition to the bill. He felt many people were choosing to ride in luxury cars and, therefore, were waiting for rides. He noted Reno Sparks Cab charged ten percent more than other local companies. Mr. Terry Callender, lease operator, Whittlesea Bell Taxi, testified in favor of A.B. 706. He reminded the committee the issue was the number of vehicles on the road and not the type of cars being used. Mr. Callender noted there are currently more cabs on the streets in downtown Reno than "civilian" cars. He discussed what happens during slow times and expressed fears violence would occur as disagreements arise in slow periods. Mr. David Shaw, Road Supervisor, Whittlesea Taxi, explained there has been a large influx of cars in the last five years. During the time of increased cabs, there were more arguments between drivers where customers were lost. Mr. Shaw felt reasonable limitations of cabs on the roads were acceptable. He discussed fights which occurred when there were increased numbers of cabs on the roads. Mr. Callender explained most of the drivers get along well and respect each other. Mr. S.W. Green, independent operator, Baker and Drake Cab Company, reiterated there were many people who would like to drive for Baker and Drake because Baker and Drake has the best deal for drivers. Mr. Green discussed his driving experience in the Reno area and noted there is a camaraderie among the drivers he has never seen anywhere. He invited the committee to come to the airport to view the situation among the drivers. Mr. Dennis Colling, Manager of Transportation, and Mr. Galen Denio, Commissioner, Public Service Commission, testified on A.B. 706. Mr. Denio distributed a handout identifying the companies which have certificates with the Public Service Commission and the areas in which they serve (Exhibit D). He asked the committee to ignore the numbers listed under the "service description" column and to identify companies listed at the bottom left by the numerals listed on the left hand side. The sheet identifies the intrastate service areas served by each taxicab company. Additional areas where companies can serve point to point are indicated on the right. Mr. Denio stated the Commission has no position on A.B. 706. He referred the committee to N.R.S. 705.151 two subsections provide for fair and impartial regulation, to promote safe, adequate, economical and efficient service and foster sound economic conditions in motor transportation, and to discourage any practices which would tend to increase or create competition that may be detrimental to the traveling and shipping public or the motor carrier business within the state. He believed both subsections would apply to the taxicab industry which is regulated by the PSC. Assemblyman Batten asked if the PSC could currently regulate taxicabs in Washoe County. Mr. Denio stated the Commission has authority to regulate taxicabs in all counties except Clark County, where the Taxicab Authority handles the regulation. Mr. Batten asked if the PSC has seen a need for allocation in Washoe County. Mr. Denio said the request had never come to the Commission's attention. Mr. Batten asked if it was brought to the attention of the PSC if the Commission would deal with the issue. Mr. Denio stated there was no reason the Commission could not do so. Mr. Batten asserted the bill would not be necessary if the concerned parties would go to the PSC and ask for allocation. Mr. Denio said this is true if the court case cited by Mr. Drake is correct. Some provisions exist in the bill which are more specific than current authority. The court case would have to be examined in depth by the PSC. The general authority may exist now. Mr. Batten asked if the PSC would be able to study the court decision and A.B. 706 and provide the committee with information on whether or not they have the authority within two weeks. Mr. Denio answered affirmatively, stating the turn around time would be much faster than two weeks. Mrs. Chowning asked how a taxicab authority would be funded if established in the Reno-Sparks area and when the last time a new cab company asked to be approved. If the authority were established, Mrs. Chowning asked if everyone would start in the same place they are now, or if each company would have to have the same number of cabs. Mr. Denio, discussing Section 1, Subsection 3, stated it seemed the Commission would have to allocate the number of taxicabs equally according to the way the bill is written. He noted some companies would increase their fleets and others would decrease their fleets. There is similar language in the statutes of the Taxicab Authority, and a five year historical period is used to determine how much of an allocation each company gets "going forward". Mrs. Chowning noted the "going forward" idea was critical. If everyone started in the allocation with the current fleet, it was different than all fleets beginning with the same number of cabs. Mr. Denio agreed, noting it could involve some constitutional issues. Subsection 4 deals with an increase in the existing allocations, which is a distribution equally among all the taxicab motor carriers. Referring to (Exhibit D), Mr. Denio reminded the committee the issue was not only for taxicab carriers in Washoe County. The issues are for taxicabs who may provide service into Washoe County. The PSC would provide information regarding when the last time a new cab company had asked for approval. Mr. Denio explained A.B. 706 does not contain the same funding mechanism as the Taxicab Authority. He said the general funding for transportation purposes comes out of highway funds. There is no trip funding as is provided in Taxicab Authority statutes. Mr. Colling stated he did not believe the bill established a Taxicab Authority in Washoe County. It provides an allocation system. Mrs. Chowning asked if the PSC would handle the allocations from this point forward, with highway funding as the funding mechanism. Mr. Colling stated Mrs. Chowning was correct. Mr. Denio stated the PSC had not prepared a fiscal note on A.B. 706. He explained federal funds had been cut back out of the transportation highway fund and he was unsure how the activities would be funded. Mrs. Chowning asked for fiscal information from the PSC. Mr. Mike Storke, driver, Whittlesea Checker Taxi, testified there was absolutely no violence in Washoe County. He felt there was a decrease in income for drivers with more cabs being put on the streets. Mr. Storke discussed problems among drivers. He felt an allocation system was necessary but felt the PSC needed flexibility to allow for extra allocations during peak seasons or special events. Mrs. Chowning asked Mr. Storke's position on the bill. Mr. Storke replied he was for the bill. Mrs. Chowning asked if an allocation system were put in place with numbers remaining the same as they are now, if Mr. Storke were in favor of proportional increases. Mr. Storke felt the area was experiencing a growth boom. He believed there were more than enough cabs available for the slow times but there were not enough for peak times or under special circumstances. He suggested granting temporary increases or decreases as need necessitates. Mr. Bell discussed the system of allocation. There are many factors to be considered in the allocation system including gross revenue, number of vehicles, number of trips, number of telephone requests for service. He felt an equal number of cars in the fleets of each of the three companies in Washoe County would be a fair beginning. He stated the PSC would be petitioned for allocation if they show the current authority to allocate. The hearing was closed on A.B. 706. Mrs. Chowning appreciated the tactfulness and respect on the issue and complimented the witnesses. A work session was opened. SENATE JOINT RESOLUTION 20 - Urges Congress to approve designation of National Highway System. Vice Chairman Goldwater explained the measure was supported by the Nevada Department of Transportation. ASSEMBLYMAN CHOWNING MOVED FOR ADOPTION OF S.J.R. 20. ASSEMBLYMAN CARPENTER SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT. ASSEMBLYMAN CARPENTER MOVED RULE 92 BE SUSPENDED BY THE TRANSPORTATION COMMITTEE. CHAIRMAN BATTEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT. The work session was closed. The hearing on Assembly Bill 708 was opened. ASSEMBLY BILL 708 - Revises provisions relating to privilege taxes and registration fees for vehicles. Mr. Larry Stout, Assistant Chief, Registration Division, Department of Motor Vehicles (DMV), explained A.B. 708 was not sponsored by DMV. DMV neither supported or opposed the bill. The issue is when an owner sells a currently registered vehicle and turns in the license plates, no refund of the remaining privilege tax and registration fees is issued. The bill would allow the refund to be issued and would change the wording from "motor vehicle" to "vehicle" to allow refunds on trailers. Many complaints are received regarding this issue. Lawsuits have been threatened. Mr. Stout discussed the $774,000 fiscal note. This would be divided between the highway fund at $400,000 and approximately $375,000 in privilege tax which goes to counties. Vice Chairman Goldwater asked who the proponents of the bill were. Mr. Stout did not have the information. Assemblyman Anderson asked if fees from a sold vehicle were applied to a new vehicle when the owner registers the new vehicle. Mr. Stout said the fees were applied to the new vehicle. This applied only when a vehicle was sold and the plates were not transferred to a new vehicle. Mr. Anderson noted there was an economic advantage for those who sold a vehicle and bought another simultaneously as compared to a person who sold a vehicle and did not immediately buy another. Mr. Stout agreed. He said if an owner gave a vehicle to someone, and the owner kept the plates, the owner would not receive a refund on the remaining time on the plates. A.B. 708 would allow such a refund. Mr. Anderson asked if the bill provided for out of state people who come to Nevada to register their vehicle to receive credit for time left on their out of state plates against Nevada plates even though the money was not collected in Nevada. Mr. Stout stated out of state owners would receive no credit. He said there is another bill dealing with that issue. Mr. Carpenter classified the bill as a "taxpayer's bill of rights" bill. The hearing was closed on A.B. 708. Mrs. Chowning felt A.B. 708 was good policy wise for Nevada. She noted the bill would have to go to Ways and Means to have the fiscal note addressed. Mr. Carpenter noted he would not be present on June 16, 1995, and requested to have his vote recorded as a "yes" if a floor vote was taken on A.B. 708. Mr. Anderson discussed the economic advantages and disadvantages of A.B. 708. ASSEMBLYMAN CARPENTER MOVED DO PASS AND REREFER TO WAYS AND MEANS ON A.B. 708. ASSEMBLYMAN TRIPPLE SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT. There being no further business to come before the committee, the meeting was adjourned at 4:00 p.m. RESPECTFULLY SUBMITTED: Barbara Prudic Committee Secretary Assembly Committee on Transportation June 15, 1995 Page