MINUTES OF THE SENATE COMMITTEE ON TRANSPORTATION Sixty-eighth Session April 4, 1995 The Senate Committee on Transportation was called to order by Chairman William R. O'Donnell, at 1:47 p.m., on Tuesday, April 4, 1995, in Room 226 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator William R. O'Donnell, Chairman Senator Maurice Washington, Vice Chairman Senator Lawrence E. Jacobsen Senator Jon C. Porter Senator Joseph M. Neal, Jr. Senator Raymond C. Shaffer Senator O. C. Lee GUEST LEGISLATORS PRESENT: Assemblywoman Dianne Steel STAFF MEMBERS PRESENT: Don O. Williams, Chief Principal Research Analyst Diane Rea, Committee Secretary OTHERS PRESENT: Keith Lynam, Community Association Institute for, Las Vegas Auto Dismantlers Association Donna Wadey-Howell, Chief, Registration Division, Department of Motor Vehicles and Public Safety (DMV&PS) Terry Lynam, Self Jim Beasley, Auto Broker Daryl Capurro, Nevada Franchised Auto Dealers Association (NFADA) Juanita Cox, Self, People to Protect America (PTPA) Terry Stoze, Chamber of Commerce Keith Lynam, Community Association Institute, for Las Vegas Auto Dismantlers Association, stated that he had a bill draft request (BDR) that was part of a bill that had been presented to the transportation committee during the Sixty-seventh Session. The original bill had been upwards of 20-pages long. This request is a single page (Exhibit C). SENATOR PORTER MOVED TO INTRODUCE THE BILL DRAFT REQUEST. SENATOR LEE SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR WASHINGTON WAS ABSENT FOR THE VOTE.) * * * * * Senator O'Donnell opened the hearing on Senate Bill (S.B.) 276. SENATE BILL 276: Establishes program for issuance of certificates of registration and license plates by vehicle dealers. (BDR 43-102) Senator Joseph M. Neal, Jr. testified in favor of S.B. 276. Senator Neal explained that the bill is to establish a program for issuance of the registration and license plates by vehicle dealers. The intent and purpose of this bill will apply to the vehicle dealer selling new cars, allowing the dealer to give the registration and issuance of the license plates. He said that they now issue the little green slip; so you can go to DMV&PS (Department of Motor Vehicles and Public Safety) and register your car. This bill is asking for the dealer to be allowed to issue license plates to individuals. He said the individual will pay the dealer, who will verify the insurance on the car, and issue the license plates, if the plates are being transferred from a used vehicle. Senator Neal stated that this is not an original idea from him. It came from a member of the public, and he did not remember who it was. He said that he thinks the idea is a good one and seems like it will not place any undue burden upon the motor vehicle department or the dealership. Senator O'Donnell asked if the bill has any fee involved for the performance of these services? Senator Neal replied that this will be a service to the buyer. While filling out the papers for the purchase, the dealer could fill out the registration papers. He stated that this is mandatory for the dealer. Senator O'Donnell asked if a person has 6 months left on their original license plate, and they want to get that transferred over to the new car they are buying; how will that be handled? Senator Neal replied that will be just a matter of matching the vehicle identification number (VIN) to the license plate, and changing it over. Senator O'Donnell asked Mrs. Wadey-Howell to come forward to help find a solution. Donna Wadey-Howell, Chief, Registration Division, Department of Motor Vehicles and Public Safety (DMV&PS), testified that there is a credit that will have to be applied to the registration fees. That credit is calculated on a daily basis. Senator O'Donnell asked if the dealer could call the DMV&PS and get that credit? Mrs. Wadey-Howell replied that it could be done over the telephone; however, DMV&PS will prefer that the dealers actually came on-line. DMV&PS feels that will be much more beneficial to the department, if the dealers have access to the computer system and could actually enter the information into the computer. The computer automatically calculates the fee. If they call for the information and do not get the transaction done that day, the fee could change. Mrs. Wadey-Howell said, DMV&PS has to calculate the privilege tax. The privilege tax is based on the particular make, model and the year of the vehicle. If any of that information is relayed incorrectly, that will affect the fees. She said DMV&PS feels that it will be much more beneficial to have the dealer on-line; where they can actually enter the information into the system. There will be better security for issuance of the registration certificates, plates and decals. Senator O'Donnell asked how much it will cost for a dealer to come on-line? Mrs. Wadey-Howell replied DMV&PS will have to take it on a case-by-case basis. Depending upon the sophistication of the dealer's equipment; it could cost up to $7,000 if he does not have any computer equipment at all. She said that most of them have the equipment and it will cost about $2,000 per dealer, because of the connections to DMV&PS's system. Mrs. Wadey-Howell said that the department does support this bill. Senator O'Donnell asked if the dealer will have a choice? Will DMV&PS have a company to provide support staff to do the programming? How will the payment be administered? Will the car dealer only write one check? Mrs. Wadey-Howell replied that the dealer will give a credit for the time on the old registration. The buyers are able to just write one check to the dealer, and the dealer forwards a check and the paperwork to the department. The buyer could finance the registration fee. It is definitely an incentive to be able to do this. Senator O'Donnell asked if all the fees are financed, the finance company is going to write a check to the dealer, the dealer then has to write a check to DMV&PS; will that be okay with DMV&PS? Will there be anything illegal or questionable concerning the registration of the vehicle? Mrs. Wadey-Howell replied that DMV&PS currently has contracts with county assessors and other agents that do registration. They collect the fees, and then the fees are forwarded to the department in one lump sum. She said DMV&PS developed regulations on exactly how this project will work, when the pilot project for emission stations doing renewals was introduced. DMV&PS will use these same regulations. DMV&PS established the equipment that must be used, the bonding requirements, what the dealers could or could not do, and will set up training. They have not actually implemented any of the regulations, even though they are on the books. Mrs. Wadey-Howell stated that DMV&PS feels that the manual methods will be much more cumbersome for the department, as well as for the dealers. They are not sure the efficiencies will be there. There is a similar bill on the Assembly side that DMV&PS has been working on. She said Assembly Bill (A.B.) 352 is in a subcommittee today. The only difference between the two bills is that S.B. 276 allows all dealers to do registrations. A.B. 352 allows only new car dealers to register the vehicles. The reasons for that is, they feel it will be more appropriate to do this in a pilot setting; to identify the problems that will be associated with the registration before letting it out to all dealers. ASSEMBLY BILL 352: Authorizes establishment of program for issuance of certificates of registration and license plates for new vehicles sold by new vehicle dealer. (BDR 43-1147) Mrs. Wadey-Howell continued, DMV&PS has approached the new and used car dealers, to try and get this sort of legislation in place and they have not been very receptive. DMV&PS does not anticipate that there are going to be a lot of dealers who will take advantage of this, because of the problems associated with the paperwork and the collection of the fees. Senator O'Donnell stated that there may be an advantage that the dealers may not have known about. If the buyer can finance their closing costs; all the fees for the DRS (Dealer's Report of Survey) and all the registration fees, they may be more receptive. He asked if the registration of the vehicle can actually be financed? Mrs. Wadey-Howell replied, DMV&PS will allow them to do that, and will accept a check from the dealer. The higher the registration fee goes, the more likely somebody is going to want to finance that, rather than have to pay that up-front cost. Senator Washington asked if that will be more work on the dealers end? Mrs. Wadey-Howell replied, to some degree. They are already doing all the title paperwork for DMV&PS. That is already a requirement, so they are already establishing the ownership. The additional work will actually be the calculation of the fees. She said she thinks if that can be minimized, and kept as simple as possible, there will be a lot more opportunity for dealers to take advantage of this. Senator O'Donnell asked about having an express line at the DMV&PS; where there will be a $5 or $10 extra charge to use the express line? Mrs. Wadey-Howell replied DMV&PS has had a renewal line, to process just straight renewals. DMV&PS feels that is defeating the purpose of their mail-in program. She said if you make it real easy for someone to come in, stand in line; DMV&PS does not get as much compliance with their mail-in program. Last session (Sixty-seventh Session) there was a proposal to add a disincentive of $5 or $10, for being in one of DMV&PS's offices for renewals. There was quite a public outcry. They did not want to have to pay that additional fee. She said if the committee is talking about the dealers being able to come in with these transactions, and process them for their customers; with that type of fee being charged, she thinks the department will be very receptive to that. Senator O'Donnell said that the dealerships could opt for this program, or the committee could add a separate program whereby they could pay an additional fee and have a separate window designated strictly for registering those vehicles. Mrs. Wadey-Howell replied that she thinks that will work really well. Senator Neal stated that he does not have any objection to that, as long as it will be permissive and it is not a direct requirement. It allows the motor vehicle department to develop regulations, try to sell the program to the dealers; but it will not be mandatory for the dealers. Senator Porter stated that in previous sessions, the dealers were opposed because of additional costs. He said that he thinks it will be a real sales toke for some of the dealers to add a service for their customers. Mrs. Wadey-Howell said she believes the biggest disincentive that the dealers see with this, has been that they cannot charge a fee to the customers. One of the proposals that is being looked at is for them to be able to identify an additional $5 or $10 fee for this service. Senator O'Donnell said that it makes no sense for a dealer to have a computer with all the information regarding that vehicle; they type in the name of the person buying the car, and they get a printed DRS, a printed bill of sale, etc. Everything that comes out of this computer is all documentation that is needed to either take to the DMV&PS, or take to the lender for a loan. It is all computerized. He said that information stops at the door of the dealer. Then DMV&PS has to put all that information into their system. It could go direct, without having to have any manual interface. He said that is what he would like to see. If DMV&PS can build an incentive for the dealers to do this, by saying they could charge $15; they could purchase their own equipment, register these vehicles, issue the plates, and do the smog certificates. They can either do that, and keep the $15; or they can go down to an express window at DMV&PS; and the charge for the express window is $15. There will not be any additional cost to the dealership. There will be an additional $15 charge to the customer. The dealer can keep it, or it is passed to the DMV&PS for having that express window for the dealers. Senator O'Donnell asked if DMV&PS has a program that will allow them to check VIN numbers for proper format? Mrs. Wadey-Howell replied that they can check the information on the computer, and it carries through the transaction; so it makes sure they are entering the right information. DMV&PS uses it for their technicians. Senator Neal stated, if it is the committee's desire to go forward with this bill, he will ask that it be amended to include at the beginning [allow for the option of the motor vehicle department to start out with new dealerships]. He said the amendment will give them the option, through regulation, to start with new dealerships, and add what other groups they want to add depending upon how the program works. He said he thinks the committee ought to give DMV&PS the option to set the fee. Senator O'Donnell replied that will probably be worked on by the industry, as to how much it will cost to pull someone off a window to do that. Senator Porter asked if there is a title fee now? Does the dealer charge a processing fee? Mrs. Wadey-Howell replied that many of the dealers charge a document processing charge for processing the title fees. There is a $20 title fee that must be paid to the department. Most dealers do not pay that. She said that is not part of the document processing fee that is paid to the dealer. When you come down and register your vehicle and you bring in your dealer's report of sale, DMV&PS charges you the $20 title fee. The dealer does not send that to DMV&PS. Senator Porter asked if the dealer has a charge? Mrs. Wadey-Howell replied, "Currently, they do not." Senator Lee asked if someone is standing in line for 3 « hours, and a car dealer came to the window and is immediately taken care of; how will the employee deal with the other people in line who had to wait for the dealer to be taken care of? Mrs. Wadey-Howell stated that DMV&PS currently has a fleet window where the work is dropped off and the dealer comes back later. They are allowed to process a certain number over the counter, during certain hours each day. This allows DMV&PS to work on the load without taking someone away from the other customers. She said that additional staff might be needed, to keep the turnaround down to 2 days. Senator Jacobsen stated that he has some reservations. He said that he is surprised that the DMV&PS will back this. Anytime you lengthen the paper trail it gets worse. He said that if a dealer is doing these transactions, he will have to be bonded to handle state money. He asked, what happens in the rural areas if a farmer trades in a vehicle on a piece of farm equipment? Mrs. Wadey-Howell replied that currently the dealers are bonded for consumer protection, for the illegal advertising. DMV&PS could not use the current bond that the dealers have for this type of program. When the regulations were set up for the pilot project for the emission stations; the bonding was established at $250,000. That is based upon the work of one of the smaller offices on a monthly basis. She stated that the paper trail is already being done by the dealers. The only additional work will be for the fees they will collect and the insurance verification. Senator Jacobsen asked about a person who buys a vehicle outside of Douglas County, but wants to register it in Douglas County. Does the dealer have to contact Douglas County? Does that cause a problem? Mrs. Wadey-Howell replied that if the dealer system is on-line with DMV&PS's system, it allows them to enter the county you live in; and the taxes are charged according to that county. Senator O'Donnell asked if DMV&PS could develop, by regulation, instructions and formats by which they could require a bond for this particular purpose, outside of this bill? Mrs. Wadey-Howell replied that she believes the bill does allow DMV&PS to develop regulations to comply ... page 2, subsection 4 says that, "The director shall adopt such regulations as are necessary to carry out the provisions of this section." She said that DMV&PS could adopt those regulations. Senator O'Donnell said that he will feel more comfortable if DMV&PS has a bond for each dealer who opts to participate. Then DMV&PS will have to figure out what kind of an audit program will be needed to audit the dealers. Senator Neal said that the bill does not require the dealers to do anything. It just allows DMV&PS to establish a program. If the dealers want to participate, that is their option. He said, if they participate, they have to come into the program under DMV&PS's rules. Senator Jacobsen asked if he bought a truck that is required to have a commercial license; will he have to go to the county in which he will be operating the truck to get that license? Mrs. Wadey-Howell replied that if the vehicle is over 26,000 pounds they have to be registered through the Motor Carrier Bureau. At this point, DMV&PS will not be allowing dealers to handle those registrations. Senator Jacobsen asked if he bought a truck on time-payment, will that cause a problem with the dealer? Mrs. Wadey-Howell replied that the fees will be paid up-front. As far as DMV&PS is concerned, the time-payment will not have any effect on the program. Senator Porter stated that he feels there could be a problem, but it could be addressed in the contract with the lending institution. He asked, assuming that this person defaults on their payments; could the lending agency come back to DMV&PS for a refund? Senator Neal said that as he understands, the registration fee will be paid to DMV&PS up-front. The lending institution will not be able to come back to DMV&PS for a refund. That has not been a problem with registering vehicles. Senator Porter stated that he feels this is a great idea. Senator Jacobsen stated that when you buy a vehicle, the dealer talks you into extras; there will have to be a restriction in the agreement that the dealer could not add the registration fee on as a service charge. Mrs. Wadey-Howell stated that could be addressed through the regulations; how DMV&PS will identify the fees and how they will be charged. Senator O'Donnell asked: On page 5, section 12, subsection 5, line 25, [A registered dealer shall forward all fees collected for the registration of vehicles to the department.] Could that be misunderstood to include doc [document] fees and dealer fees that may be added on so that the dealer can process the paperwork? Those are fees for the registration of the vehicle. The dealer is charging those fees because of the documentation that he has to print; but they are not your fees, they are his fees. The word [all] is all encompassing, and I am not sure that is what we want to do. If we could clarify that; [all fees due the department]. Mrs. Wadey-Howell replied, "We could probably even say, [forward the registration fees and the privilege taxes due the department]. That should cover any fees, the title fee, the registration fee, the transfer fee. Those are all registration fees, and then the privilege taxes. That is typically how it is worded in other statutes, when we are talking about those fees." Senator O'Donnell stated that he feels more comfortable with that. Assemblywoman Dianne Steel, District 16, testified: Basically, we are going exactly in the same direction. Some of the things that you have raised today, were raised in our first hearing about a week ago. Some of the things that you have talked about, we have already started negotiations between DMV&PS and the car dealerships; so that we can have a smooth transition into this. I think the citizens of Nevada will profit from it in the long-run. I did have all 42 assembly people sign on the bill, so it was everybody's interest in shortening those lines at the DMV&PS. Mrs. Steel stated that they are in subcommittee today. They are ironing out some of the questions that the Senate committee raised today. The DMV&PS is responsible for writing up the regulations that the car dealerships will have to go by. She said that the regulations will be a determining factor as to whether the car dealerships will want to participate. There is one who is already participating on his own. It is a good marketing tool. Senator O'Donnell stated that historically the Legislature has gone by Bill Draft Request (BDR) numbers. If there are two bills drafted and they are pretty close to the same ... the lowest BDR number is usually processed. Mrs. Steel stated that in going door-to-door, many people had asked her to present this bill. She said that she could give a better idea after the subcommittee hearing today; but she does expect the bill to move. Mrs. Steel continued, "I believe there is a fiscal note involved. The effect is on the state. I believe this lady could give you a better idea on that. The difference is the amount of car dealerships." Mrs. Wadey-Howell stated the fiscal note, as DMV&PS anticipates, is the fee associated with connecting the dealers and the computer. As DMV&PS drafted the regulations, they came up with the exact equipment that had to be used. As to whether the dealers have to pay for that is one of the issues that the subcommittee is working on. If the state is going to have to purchase modems, ports, and all; the committee is going to have to attach a fiscal note. She said if the dealers come on- line with this and they pay the fees, then there will not necessarily be a fiscal note. Depending on how many dealers will come on-line with this, we will have to have staff to do the training and auditing requirements. If it is only one or two dealers, obviously we probably could absorb that with the staff that DMV&PS has. She said that as more dealers will come on-line, DMV&PS may have to come back and ask for additional resources to do some of the auditing. DMV&PS may see enough efficiency that they can move staff, so they will not have to ask for those resources. She said her concern, as far as the fiscal analysis, is how the computer equipment is going to be paid for. Mrs. Steel responded, "That is basically what we are working on in the subcommittee today. Who is going to be responsible for what parts of that payment program." Senator O'Donnell said that the committee needs to ask Mrs. Wadey-Howell, "Do you think this will save the department in the long run?" Mrs. Wadey-Howell replied that she believes it will save the department; especially if the dealers come on-line and do that work for DMV&PS. She stated that her concern is if they do it manually, and then people come to DMV&PS, and the information has to be reentered; there is no savings. Mrs. Steel stated, "The other thing that we are looking at today, is the insurance on the first-time buyer. How that will get streamlined so that they can have their insurance. They have to have proof of insurance before they register their car. How that mechanism will go into place." Senator Jacobsen asked if this will eliminate the need for the temporary sticker that the dealers give with the purchase of a car. Mrs. Wadey-Howell replied that if the dealer issues the license plates and registration, there will be no need for the 10-day permit. If the purchaser comes to DMV&PS to transact the business, the 10-day permit will be needed. She said that the idea is to allow the purchaser to drop off the paperwork and the DMV&PS will mail the license plates to them, but that will call for a fiscal note to cover the cost of postage. Terry Stoze, Chamber of Commerce, stated, "I have a question about how this is going to effect or impact those people who come in here, to Nevada, to buy cars; but intend that they be used and registered for the first time in California or some other place?" Senator O'Donnell replied that if you do not want your car registered in Nevada, you have to get a "transport permit" from DMV&PS to take that car back to the state of registration. It is not incumbent upon the dealership to register the car in the State of Nevada; it will be the choice of the purchaser. Mrs. Wadey-Howell stated that they will have to purchase a "drive away permit" to take the vehicle to another state. They will not have to pay Nevada sales taxes or registration fees. Anyone not wanting to have the dealer register their vehicle ... DMV&PS will write the regulations so that is permissible on the dealers part and the customers part." Mr. Stoze said that there are many people who drive in Nevada without insurance. He said that he is wondering how DMV&PS will be assured that they will have insurance if they will be registering the vehicles through the dealer; unless the dealer also becomes the insurance agent. Senator O'Donnell stated that the dealer will have to insure that the proof of insurance is there. They do not want the car leaving the lot without it being insured, nor does the lender. If it is a cash deal, there is little liability on their part. The lender will require insurance verification. Jim Beasley, Auto Broker, testified that his company automatically does this as a service to their customers at no fee. His concern is that the fiscal note, is going to take people to administer this program. A lot of the new dealers charge a documentary fee of $100 to $200, which is another word for profit. He said they could use this as a tool to increase the documentary fee that they charge now. This is something he feels needs to be considered. He said if the dealers do not have very much participation, DMV&PS could have an expense that is not going to be compensated for. Senator O'Donnell stated that it is permissive for dealers to do this; they do not have to participate in this program. The DMV&PS can draft the regulation to allow that fee to pass through. That is entirely up to the customer. If they do not want to pay that additional fee, they can go to DMV&PS and register their vehicle. Senator Jacobsen asked if this will enhance his business? Mr. Stoze replied that they feel it is part of their service. It is a convenience that he offers his customers and they use it. Senator O'Donnell stated that it is not a service that is provided for your customers. It is a service that you have to do in order to qualify for a used car. You cannot sell a car as a broker unless you register it under a special plate, and then resell it. He asked if that is correct? Mr. Stoze replied, "No, sir, that is not true. Whenever we sell an automobile, it has to be registered by the consumer. It does not have to be done by us. We do it as a service." Senator O'Donnell asked when he (Mr. Stoze) buys a car, who does he buy that car from? Mr. Stoze replied that it is purchased from a fleet dealer. Senator O'Donnell asked if he then physically goes down and registers the car? Mr. Stoze replied that they pay a $26 fee. Senator O'Donnell stated that then it becomes a car that he can resell. He asked, "If you did not register it, you cannot resell that car, because it is not yours. So, you have to go down and register it." Mr. Stoze replied that they do initially, but when they sell the car it is up to the customer. Senator O'Donnell asked if he registers the vehicle at that point? Mr. Stoze replied that they wait until the car is sold and then they do provide that service. Daryl Capurro, Nevada Franchised Auto Dealers Association (NFADA), testified, stating in about 5 minutes, the subcommittee of the Assembly Committee on Transportation is meeting on A.B. 352, which is basically the same bill. He stated he is working on some proposed amendments. There is some concern that he has relative to insurance, hooking-up with DMV&PS so that dealers can determine what the privilege taxes are; and several other things that need to be addressed before the committees can process such a bill. He asked if Senator Neal would be willing to hold his bill, if there is progress on this other bill. Senator O'Donnell stated that he had made the comment that the lowest BDR number is the one that normally gets processed. Senator Neal stated, "I am a little confused as to what you are doing with the markup. The bill that is being proposed, S.B. 276, does not require the dealers to do anything and allows the motor vehicle department to go forward, if they desire to establish regulation for this particular program. I was wondering what you will be doing in terms of a markup, as to setting out what type of equipment. It seems to me, that will be left to the motor vehicle department to set those in regulations." Mr. Capurro responded, that A.B. 352 is virtually identical to S.B. 276, with only one difference. The Assembly bill will confine this to new car licensed dealers to start with. He said he feels there are a lot of details that need to be worked out. Senator Neal replied that he has no pride of authorship on the bill. It came to him and he followed up on it. He said that he just needs to see it go forward. Senator Jacobsen asked if there is a record of how many dealers come and go in Nevada in a years time? Mr. Capurro replied that he does not know about used car dealers, but there has not been a bankrupt new car dealership during the 26 years he has been around. Senator O'Donnell closed the hearing on S.B. 276. Senator O'Donnell opened the hearing on S.B. 295. SENATE BILL 295: Revises provisions relating to liens levied for failure to pay fees and other money owed to department of motor vehicles and public safety. (BDR 43-566) Mrs. Wadey-Howell testified, Senate Bill 295 is a division requested bill. Basically, it puts into chapter 482 of the Nevada Revised Statutes (NRS) authority which the department currently has under chapter 366 of the NRS and chapter 706 of the NRS, with some minor modifications. She said the purpose of the liens, in regard to motor vehicles and the fees, is primarily for commercial vehicles that are over 26,000 pounds. They are allowed to pay their registration and privilege taxes, on a quarterly basis. In some instances, they make the first quarterly payment and then they do not remit any additional fees. She continued, the department assesses penalties and interest, but what DMV&PS will like to be able to do and has had the authority to do so under chapter 706 of the NRS and chapter 366 of the NRS, is to seize the vehicle, after notification to the registered owner that they are delinquent in the taxes. The change that DMV&PS is making in both chapter 366 of the NRS and chapter 706 of the NRS, as well as the addition to chapter 482 of the NRS; is to allow us to seize the vehicle prior to notifying the legal owner. DMV&PS will still notify the legal owner if they were to sell the vehicle, but will like to have the ability to seize that motor vehicle from operation on the highways when there are delinquent fees; without having to go through the process of notifying the legal owner. She said it has been DMV&PS's experience, when they have done this through the highway patrol, in the past, that it is a very effective means for getting those fees paid. DMV&PS identifies the delinquency, sends the certified notices, and notifies the highway patrol. In their routine patrol, they will stop these vehicles and detain them, for payment of fees. If DMV&PS has to hold that vehicle for more than a couple of days, they have to notify the legal owner and start through the lien process, so that vehicle can be sold. Senator O'Donnell asked how a person could get into a situation of owing DMV&PS money? Mrs. Wadey-Howell answered, "Commercial vehicles that are over 26,000 pounds, are allowed to pay the departments fees on a quarterly basis." Senator O'Donnell asked if these are only commercial vehicles? Mrs. Wadey-Howell replied that is correct. They do their declared gross weight, and they pay a certain fee based on that declared gross weight. They may have 10 or 12 trucks that they want to have registered. She said their fees could be upwards of $10,000. What they opt for is to pay DMV&PS on the quarterly payment. DMV&PS requires the first quarterly payment up-front; before we issue the credentials. She said each payment is due on April 1, July 1 and October 1. What happens periodically, is that some of those carriers do not pay the subsequent fees. Senator O'Donnell asked if they do not pay the registration fee on time, what does DMV&PS do with their computer system? Does DMV&PS mark them in the computer as delinquent; and then when they get stopped on the highway, what happens? Mrs. Wadey-Howell replied the computer system is marked that the account is delinquent. When they are stopped on the highway, through the dispatch center, the highway patrol can then verify this during open business hours. They contact DMV&PS's office to insure that the account is still delinquent and exactly what the taxes and fees are that are owed. She said the highway patrol informs the driver, who then informs their company. DMV&PS gets immediate response when they have one of those vehicles seized along the highway, and detained. Senator O'Donnell asked if the DMV&PS does detain the vehicles? Mrs. Wadey-Howell replied DMV&PS has in the past. It has not been done in the last couple of years, because we were challenged that we were not doing it properly. DMV&PS is now coming to the committee to ask for the authority to do so. Senator O'Donnell asked what is the problem with issuing them a ticket? Change the bill so that the requirement for reinstatement is to bring all fees and payments current to DMV&PS. Will that solve your problem? Mrs. Wadey-Howell replied, "It will with the privilege tax and registration fees. There is another area in [chapter] 366 [of the NRS], with our special fuel taxes. It will be more difficult to bring them current because we are always a quarter in arrears. They are not due at that point in time." Senator O'Donnell said, "What you will say is [the release of the vehicle, from impound ...]. If you are going to write them a ticket, you are going to essentially say [you have to appear in court]. If they do not appear in court, they get a warrant for their arrest." Mrs. Wadey-Howell replied, "I am not sure how that will work, because the ticket will probably ... will the ticket go to the driver or to the company?" Senator O'Donnell replied that it will go to the driver. Mrs. Wadey-Howell asked, "So, the driver is responsible for paying the company's debts?" Senator O'Donnell replied, "If you get into a truck with an illegal registration, you are guilty of driving a vehicle without a registration. You are responsible. The person sitting in that left seat is responsible." Mrs. Wadey-Howell said, the situation, with the special fuel taxes; we may have a situation where they have not filed a tax return. That will put them in a delinquent status. She said DMV&PS does not know the amount of money they owe because, until they file the tax return and report the miles that they have actually traveled in Nevada, DMV&PS does not have the basis on the fuel tax. Senator O'Donnell replied, "That is not due and payable, yet." Mrs. Wadey-Howell said, "Because the tax return is due at the end of each quarter, DMV&PS may also count this carrier as being delinquent if they have not filed their tax return in the proper time frame. If they have not filed it, you do not have a specific dollar amount. This is a very good means for getting companies to file that tax return. They file it right to us, and we get the funds transferred to us. Then the truck is released." Senator Washington asked, "If DMV&PS impounds their truck, is not this their livelihood and will not there be some grounds to say that it is unconstitutional; or you are keeping a person from actually earning their income to meet their obligations? If DMV&PS takes my truck away, I have no means by which to earn a living in order to pay you the registration fee or the back taxes that I might owe. My truck will be impounded until I come up with the money." Mrs. Wadey-Howell replied, "When you register your vehicle, you make an obligation to the state to pay the fees associated with operating your vehicle on the highway. The department feels that it should be able to collect those fees. You are actually using the department's highways for business purposes. Most states have this sort of mechanism in place, to attach liens on vehicles and/or real property. She said she is not aware of any constitutionality problem." Senator Lee asked, "If DMV&PS was not allowed to collect quarterly, for the commercial trucking industry, and they had to pay for a full year, just like I do, will we need this bill?" Mrs. Wadey-Howell replied, "DMV&PS will not necessarily need it in regard to the registration fees. We will still have the situation with the special fuel taxes, where DMV&PS will need to have some sort of mechanism in place to insure that they had payment." Senator Lee stated, "I really do not like this bill." He said he does not like the process of a regular citizen having to pay license and transfer fees up-front in order to license that automobile for the first year. These people do not have the option of paying DMV&PS on a quarterly basis. He commented that if that when a person goes out and creates a company; buying two, three or more trucks, at $150,000 apiece; then comes into DMV to pay these fees, if that person is not able to pay in full, up-front; he should not have gone and bought those trucks. Senator O'Donnell asked, "What is the possibility of DMV&PS creating a quarterly license tag; if they are only going to pay a quarter? How many of these individuals are there that do not pay?" Mrs. Wadey-Howell replied, "There is approximately 25 percent of DMV&PS's accounts which have some sort of delinquency problem, out of about 15,000 to 20,000 accounts. DMV&PS certainly could go to a quarterly tag." Senator O'Donnell asked, "Twenty-five percent is a small number?" Mrs. Wadey-Howell replied, "Of the number of vehicles that are actually involved in this, DMV&PS could look at a quarterly payment and a quarterly license plate. DMV&PS originally did not do that because of the administrative part of having to come in quarterly and get more decals." Senator O'Donnell stated, "If you do not want to come up with the ten g's [$10,000] to pay for your license plate, then you have to come in every 3 months and do it." Mrs. Wadey-Howell stated: This was a compromise that was reached with the industry. Some of you will remember, when we raised the registration fees dramatically, back in the 1989 [Sixty-sixth Session] session of the Legislature; when we took the registration fee from an 80,000 pound truck from $480 to $1360, there was some real concerns on the small trucking industry in Nevada about their ability to incur those costs. That was a compromise that was reached. We could certainly re-look at that quarterly payment if that was the committee's desire. Juanita Cox, representing, "Myself, my family and the People To Protect America (PTPA)", gave her testimony (Exhibit D). She stated that she feels the bill is too strong. Senator Neal asked: In our state, one does not have a right to operate a vehicle upon the highways of this state. It is a privilege ... and being as such, we can impose certain restrictions upon those individuals; such as, for a speed limit they should drive at, what stop sign they should stop at, what weight they should carry, and what roads they should have what weight upon. If you got [have] heavy vehicles, that are damaging the roads, should that obligation fall to those who actually pay their registration fee. Or, should you seek those out who are not paying? Senator O'Donnell replied, "I think the answer is yes." Mrs. Cox replied, that she thinks that is why DMV&PS should make a special incentive to pay ahead of time. Perhaps this incentive for an early fee will be good for all. Senator Washington commented that, the quarterly, half year, or three-quarters tag; with the incentive of, payment a year in advance gets a discount; maybe amending the bill to a quarterly tag versus putting a lien, or seizing their vehicle. Senator O'Donnell stated, "This idea came from Senator Lee." Senator Lee replied, he finds it not too appealing to let somebody operate off of the monies they have in a bank account; and yet you and I cannot do that. If we are going to do quarters, halves, or three-quarters; then I will like for all of us to be treated the same. Senator O'Donnell stated: We are not all treated the same because we really charge the trucks a lot more money than a vehicle; per weight. The dollars per pound are a lot more on a truck than they are on just a passenger car. The quarterly tag, DMV&PS could treat them differently because; they are charged more than a regular passenger vehicle. He said he likes the idea about the incentive. He does not know how much that is going to cost the highway department, but there will be a cost involved there. He said he believes that the committee should not be passing legislation like this. He thinks that is going to cause all kinds of lawsuits and problems, and nightmares to the department. If the department says [if you want to pay for 3 months, come on in, write your check and we will give you a tag for 3 months], that might be the solution. Senator O'Donnell asked for further testimony. Senator O'Donnell closed the hearing on S.B. 295. Senator O'Donnell opened the hearing on S.B. 297. SENATE BILL 297: Makes various changes to provisions governing regulation of motor carriers. (BDR 58-579) Mrs. Wadey-Howell testified S.B. 297 is another bill that the division has submitted for review. This bill takes the Nevada requirements and makes them consistent with the International Registration Plan (IRP) in regard to; in section 1, the retention of records. She added, in sections 2, 5 and 7, the language changes from temporary license to temporary permit. She continued, section 3 allows DMV&PS to refund for a carrier, who has lost or someone has stolen his registration certificate. Currently carriers in excess of 26,000 pounds have the ability to turn their registration certificate and plates back in, if they operate on a seasonal basis, and can either cancel the bill that they owe; or they can request a refund, if they have paid in full for those fees. Section 3 covers those carriers who have actually lost the original certificate, and just have a copy of it left. She said the current law requires the original to be returned. DMV&PS feels that they could take a copy and do the same function. She continued, section 4 clarifies exactly where a temporary permit for a commercial vehicle, not registered in Nevada, should be purchased. Senator O'Donnell asked for Mrs. Wadey-Howell to explain section 4. Mrs. Wadey-Howell explained, section 4, clarifies where a temporary permit must be purchased. Anyone who elects to purchase a temporary permit shall secure a permit from a vendor who is a department-authorized vendor. They must purchase it either along their scheduled route, before entering the state, or from the nearest available vendor after they enter the state. She continued, on some routes there is no vendor in convenient locations before they enter the state. This just makes it legal for them to enter without already having the permit. Senator O'Donnell stated that section 5 is a technical change; changing license fee to permit again. Mrs. Wadey-Howell agreed and then proceeded: Section 6 changes the interest and penalty rates to be consistent with the IRP (International Registration Plan) charges. They require 1 percent interest and 10 percent penalty. DMV&PS has a 2 percent interest, so we are reducing it back to 1 percent to be consistent with the IRP. Senator O'Donnell asked if DMV&PS is deleting a report that needs to be made? Lines 46 through 48 on page 3. Mrs. Wadey-Howell replied: What DMV&PS has done is, change the retention requirements. In subsection 3, it had the 7-year requirement. All DMV&PS is doing is keeping that consistent with 36 months to be the same as IRP. We are changing section 1, subsection 3 and deleting that same section and using the 36- month requirement because it is already listed there in section 6. Senator O'Donnell asked about subsection 9, page 4. Mrs. Wadey-Howell replied, it just says any assessments that DMV&PS's audit section assesses, are payable directly to the department; rather than through our International Registration Plan. Senator O'Donnell asked if that is a radical departure from normal? Mrs. Wadey-Howell replied that it is in compliance with what IRP recommends. Senator O'Donnell asked what IRP is. Mrs. Wadey-Howell replied, "It is the International Registration Plan, where DMV&PS registers the trucks that operate in all of the states. If trucks operate here, California, Oregon, and Washington, DMV&PS licenses them for all of those states." She continued, "Section 7 is just the language consistent with the licenses and permits." Senator Lee asked if DMV&PS really licenses the vehicles in Nevada for other states, or do they do a prorate type sticker? Mrs. Wadey-Howell replied, "A Nevada-based carrier will tell us how many miles they operate, totally, in a year. Then they will tell DMV&PS how many miles they operate in each one of the jurisdictions. DMV&PS then applies that percentage to that state's fee schedule. If they operate 25 percent in California, we charge the fees based on California's fee schedule at 25 percent and DMV&PS sends that 25 percent to California, 25 percent to Oregon, 25 percent to Washington and then we will keep 25 percent." Senator Lee asked, "I can buy my license plate in Nevada quarterly, can I?" Mrs. Wadey-Howell asked if he is referring to his personal vehicle? Senator Lee replied, "On my truck. Can I buy it quarterly through you to California?" Mrs. Wadey-Howell replied, "No you cannot." Senator Lee asked, "Do I have to buy through you for California, Washington, or Oregon on an annual basis? Mrs. Wadey-Howell replied, "That's correct." Senator O'Donnell stated, "If that is the case, what are we doing? If all the other states, that are surrounding us in the IRP, are requiring a full years registration fee, why do we hang on to this quarterly thing; whereby 25 percent of the affected vehicles are not in compliance. Is that correct? Why are we doing this?" Mrs. Wadey-Howell replied, because of the deal that was struck. She said, from the department's point of view; you will not hurt DMV&PS's feelings if you do away with the quarterly payment plan. Senator O'Donnell asked for additional testimony on S.B. 297. Senator O'Donnell closed the hearing on S.B. 297. Senator O'Donnell adjourned the meeting at 3:15 p.m. RESPECTFULLY SUBMITTED: Diane C. Rea, Committee Secretary APPROVED BY: Senator William R. O'Donnell, Chairman DATE: Senate Committee on Transportation April 4, 1995 Page