MINUTES OF THE SENATE COMMITTEE ON TRANSPORTATION Sixty-eighth Session April 25, 1995 The Senate Committee on Transportation was called to order by Chairman William R. O'Donnell, at 1:30 p.m., on Tuesday, April 25, 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: Senator Alice Constadina (Dina) Titus STAFF MEMBERS PRESENT: Don O. Williams, Chief Principal Research Analyst Diane Rea, Committee Secretary OTHERS PRESENT: Joel Backer, Self Bruce Glover, Chief, Drivers' License Division, Department of Motor Vehicles and Public Safety (DMV&PS) Donna Wadey-Howell, Acting Chief, Registration Division, Department of Motor Vehicles and Public Safety (DMV&PS) Judy Jacoboni, Victim Advocate, Mothers Against Drunk Drivers (MADD), Lyon County Timothy Ghan, Associate Actuary, Division of Insurance, Department of Business and Industry Elizabeth King, Assistant Chief, Drivers' License Division, Department of Motor Vehicles and Public Safety (DMV&PS) Senator O'Donnell called the hearing to order and stated that the committee will hear Senate Bill (S.B.) 330 first. SENATE BILL 330: Revises provisions relating to assignment of numbers for driver's license. (BDR 43-77) Senator Alice Constadina (Dina) Titus, State Senator for District 7, Clark County, testified S.B. 330 grew out of concerns by constituents. She provided the committee with a letter (Exhibit C) from Robert Kolar and an article from the Las Vegas Sun newspaper. She is asking for the drivers' license number to be a random number that does not relate to a person's social security number. Joel Backer, Self, stated that a couple of years ago someone had decoded his social security number from his drivers' license number and stole about $1500 from him. He provided the committee with an article (Exhibit D), from the State of Virginia and a copy of decision by the court (Exhibit E). He stated that he had written letters to the Department of Motor Vehicles and Public Safety (DMV&PS) asking them to do something about the problem of people being able to decode the numbers. The reply came from the State of Nevada, Office of the Attorney General (Exhibit F) and the DMV&PS (Exhibit G). He has written to Cheryl Lau, Office of the Secretary of State (Exhibit H) and provided a copy of the reply (Exhibit I). Mr. Backer stated that he is prepared to file a lawsuit if this is not taken care of. Senator O'Donnell closed the hearing on S.B. 330. Senator O'Donnell opened the hearing on S.B. 322. SENATE BILL 322: Revises requirements for maintaining proof of financial responsibility after reinstatement or restoration of driver's license, permit or registration. Bruce Glover, Chief, Drivers' License Division, Department of Motor Vehicles and Public Safety (DMV&PS) testified: S.B. 322 is derivative of a bill where I came before you early in the session and asked that we remove all SR-22 filings for those people convicted or having offenses relating to drunk driving. In over 80 percent of those people, our records indicated, when they were stopped, had insurance and were not in violation of insurance laws, but our DUI (driving under the influence) laws. What we have done with this bill, and in our conversations with Mr. [Don O.] Williams, [Chief Principal Research Analyst] and within ourselves, is we have gone one step further and tried to eliminate SR-22 filings altogether. It is a major task in the DMV&PS to handle the filing of these SR-22 forms, and the real reason that we are able to come before you and request this, we believe; is because of the insurance program that is now intact in the registration division that monitors the vehicle registration and the insurance on it. Currently, a person that is required to file an SR-22 form, will file that form; and because of nonpayment, or the missing of it in the mail, an SR-26, which is the thing that cancels the [SR] 22 comes into us [DMV&PS] so we have to put out another suspension. The payment got there, so we get another SR-22. We can have as many as four or five different transactions on one simple .... It is taking us ... we have file cabinets full of SR- 22s. With this, I would just hope that ... this bill is not to the point where it was when it came out of the bill drafter's office in totality where we could work with it, but our intent here is to maybe recommend some amendments to it. Maybe put it in a quick work session and see if we could not get it out in a clean form and help everybody. With that, I would like Donna Wadey-Howell to speak to the registration insurance portion of it. Donna Wadey-Howell, Acting Chief, Registration Division, Department of Motor Vehicles and Public Safety (DMV&PS), testified: The concern from the registration division is in regard to section 4, subsection 5, where it removes the ability of the department to waive the suspension reinstatement fees and reinstatement requirements for nonresponse for justifiable reasons. An example of when we would do this, for example; we send out an insurance verification request to a customer and they are on vacation. They never receive the certified notices, never give an opportunity to respond to us. We make them document them to us by receipts or plane tickets, hotel receipts, those types of things. Then we would waive the suspension for not responding. I do not think that was ... the intent here, was to remove this. This has only to do with justifiable cause for not responding. It does not really have anything to do with the SR-22 filing. That was our main concern. The second concern that we have, is if you do take away the SR-22 filing from those folks that have not maintained liability insurance, where we have identified them through our insurance verification program; there is concern that the $100 reinstatement fee may not be enough of a deterrent. My explanation would be that, in the event that you have somebody who has been suspended, we have identified maybe there has been a lapse of coverage for a day or two or a couple of months, that the SR-22 filing has become a deterrent simply because of the increased cost in their insurance premiums. While we do not oppose getting rid of the SR-22 filing, it may be necessary to look at increasing the reinstatement fee for that to be a deterrent. A suggestion might be $200/$250. That is something we could work with through the subcommittee, if it was the chair's desire. Senator O'Donnell asked, "In reality, what does the SR-22 form do?" Mr. Glover replied that it causes DMV&PS a lot of extra work. It is hard to track because the person bounces from one insurance company to another and has to file a new one each time. A "failure to maintain suspension" is for nonpayment or whatever reason, results in 15,000 pieces of paper a year. Senator O'Donnell asked how does the insurance verification program work? Mrs. Howell stated that it requires that the insurance companies report to DMV&PS, every month, their activities beginning June 30, 1994. That information is loaded into a data base and all activity is reported by the 7th day of each month. That additional information is loaded into the data base. The registration file matches all the registered vehicles with the insurance information. She said that there were VIN (vehicle identification number) problems that DMV&PS has to correct and then the computer can do a comparison to verify that the vehicle does have insurance. If there is not a match, the owner is notified and if there is no response during the allowed time period the vehicle registration is suspended. Senator O'Donnell asked if DMV&PS has dealt with various companies to get the correct VIN numbers. Mrs. Howell replied that DMV&PS did a contract with a private company because they only had information to go back to the early 80 year model of vehicles. The contracted company had the VINs back to the 60's model of vehicles. Senator Porter stated that if an SR-22 is required, which is caused by the situation the driver has received, the company will quote a higher insurance rate for that vehicle and all other vehicles in the household. Once the driver has paid the required quarter or half a year's premium, the SR-22 is issued and sent to the DMV&PS. If they do not pay the additional premium when it comes due another notification is sent to DMV&PS. DMV&PS notifies the client, who goes to the insurance company of their choice and the whole process starts over. He said the piece of paper (SR-22) is worthless. It does not guarantee they will have insurance for the 3 years that the SR- 22 is supposed to represent. Mr. Glover stated in the calendar year 1994, DMV&PS received 85,983 SR-22s. DMV&PS received 66,042 SR-26s canceling the SR- 22s. This requirement just creates a shuffle of papers. Mr. Glover stated: When the officer stops them on the road, and they are cited, When they are convicted, that conviction comes to the drivers' license division and their driver's license is suspended. They [insurance companies] need to know those people. We have those on record. Their license is suspended, but they go and get this [SR] 26 and get it right back and we start the whole process all over again. It is kind of a fugal effort. It is awful tough to track. Senator O'Donnell asked if a driver does not care, he can ignore the notice and drive around without his driver's license, registration or insurance? Mr. Glover stated that is true, unless they are stopped. Senator Neal asked if DMV&PS sends out the random sampler for insurance? Mrs. Howell replied that DMV&PS takes the information from the data base and the information received from the insurance companies, and compares that to the vehicle registration data base. Those vehicles that show up as uninsured, receive a notice with a response time period of 10 days. If those people are not heard from, the vehicle registration is suspended. Senator Lee asked if this will work in reverse? What if a person has insurance on a vehicle, but the vehicle is not registered to that person? Mrs. Howell replied that it does work that way and that is an auxiliary method DMV&PS is going to use to identify people who are not registering their vehicles. The bugs have not all been worked out of that as yet. She said that most of the VINs have been corrected and she anticipates that this fall DMV&PS will be able to tell the uninsured rate for the vehicle population. Senator Washington asked if DMV&PS can go from state-to-state to verify registration and insurance? Mrs. Howell responded that DMV&PS is not interstate linked at this time. The insurance verification is being looked at as a model for other states. They cannot tell, at this time, if a registration from another state has expired. Judy Jacoboni, Victim Advocate, Mothers Against Drunk Drivers (MADD), Lyon County, stated that their concern is with the irresponsible driver; the drunk driver who is the potential killer. How will they be monitored if the SR-22 requirement is discontinued. If they have a registered vehicle and their insurance cancels, they will fall into the notification group. She asked if they are not the owner of a registered vehicle; how are we, as victims, going to be assured that offenders will have financial responsibility? Senator O'Donnell asked if Nevada insures the vehicle or does Nevada insure the person? He stated that he thinks it should be the vehicle. Whoever gets behind the wheel of a vehicle needs to have proper financial responsibility. The insurance verification program is going to determine who is not covered and they are going to be notified of that and have to pay a reinstatement fee. Senator O'Donnell asked if on the reinstatement there is any way that DMV&PS can send a citation for reinstatement concerning DUIs? If somebody drops the insurance, can DMV&PS cite them for not having insurance? Ms. Jacoboni stated that what MADD would like is for the DUI offender, and all other reckless driving offenders to have the responsibility of maintaining financial responsibility. She feels this bill will take that responsibility away. Mr. Glover said that DMV&PS's: records indicate that a person convicted of, or having a DUI offence and having a no insurance offence is less than 7 percent. Of those, they are all required to file the SR-22. They are all required to pay that ... when in fact, they were insured people. I would like to bet you that 7 percent of the people that do not have the insurance, also had a driving under a suspended license, and I bet you they have had a careless driving. I am going to bet you that they do not care if they are ever insured. That is your hard core person. This piece of paper ... he will go in and give Senator Porter $30 and Senator Porter is going to send us an SR-22 and he is not going to give him the next $22 for the next month. What I am saying, and the reason I came forward with this bill was the person that got a DUI ... first of all that is a horrendous offense, I mean we do not want that at all. But, if we compound the issue by requiring the SR-22, requiring the payments; they have got to provide insurance. You put them into those upper brackets, and we just compounding our work. There are a certain percent of those people, no matter what you do to them, the only way you are going to ever stop them from driving is to put them in prison. I can tell you that we have one person out there that is revoked to 2031, or something. How do you stop that? That person is going to continue to drive ... they have to drive now, because they cannot wait that long for a driver's license, whether they are insured or not. If the vehicle is insured, I feel at least that we are protecting ... I feel a little more comfortable requiring the vehicle to be ... instead of using it as a punitive measure, let's do something positive for the 93 percent and we will still catch the other 7 percent in our little scheme. Senator O'Donnell asked if DMV&PS is interested in financial responsibility or punishment? If financial responsibility is the answer, that will do it. Ms. Jacoboni replied: I am sure that those of you who know people who have been convicted of the crime of DUI, have personal knowledge that one of the things that is the hardest, worst part of the punishment, is the financial responsibility requirement. It is not one of the most punitive measures, certainly. Whether it is a large deterrent; that I do not know. We just feel that for the next victim of that DUI offender, we want them to be insured. I am thinking of, perhaps, the DUI offender who does not own a car any more because it was wrecked or maybe he could not afford to repair it or insure it. He did not insure it, so he's got no insurance; and he borrowed someone's car, perhaps, that does not have insurance. Then the next victim is out ... we are all paying. We are paying because our uninsured motorist coverage, if we are fortunate to have that, is paying. I am just thinking down the line. There is law in place right now that promotes financial responsibility. Without ... this is a good start toward replacing that SR-22 requirement, but I do not think it is 100 percent there yet. I do not know what, frankly, to recommend. It is a dilemma. Senator Porter stated that the SR-22 requirement is still different than what Ms. Jacoboni thinks it is. SR-22 requirement is for 3 years of insurance. It is just a piece of paper that says they need 3 years of insurance. Senator O'Donnell said the requirement for insurance should be for the period of time that you have a car. If you have a car, it should be insured. Mrs. Howell said DMV&PS requires the registered owner to have insurance on a vehicle. If a husband has had a DUI and the vehicle is insured under just the wife's name, and the husband drives the vehicle, is the vehicle still insured? Senator Porter replied that it depends on whether you are talking to a trial lawyer or an insurance company. According to statute, anyone you give permission to drive your vehicle, the insurance company is responsible only to the limits of the state financial responsibility, unless it is family. Then it is all the same limits. The problem arises if that client lies to the insurance company, then the insurance company is not responsible, but the insurance does pay. Senator O'Donnell asked how a teenager can be put on an insurance policy after getting a DUI? Senator Porter stated that most parents lie about their kids, when it comes to insuring them; but they are covered. Mrs. Howell stated that the names are one of the things DMV&PS tracks very carefully; to make sue that there is at least one name in common. That has been a problem for the insurance companies to send in all the names when the customer keeps changing insurance companies. Senator O'Donnell stated that DMV&PS makes sure that the VIN number is covered and then the name verification is second. Mrs. Howell stated that is correct. Senator Porter stated if he borrowed Senator O'Donnell's vehicle, and it is insured, his policy will pay first if Senator Porter wrecks the car. Then Senator Porter's policy will take over. If Senator O'Donnell's vehicle does not have insurance, Senator Porter's insurance will pay. The vehicle is always primary. Senator Washington asked if a discount for multiple drivers is possible? Senator O'Donnell asked if there is a multiple car discount? Mrs. Howell replied that is an "operators policy"; which insures the driver, instead of a specific vehicle policy. That is also tracked in DMV&PS's insurance verification system. Any vehicle registered to a person is considered insured under the operator's policy. Mr. Glover stated that the operator's policy will take the place of the SR-22 for the purpose that Ms. Jacoboni is referring to. Mrs. Howell stated that if an operator's policy is presented at the time of registration at DMV&PS, they establish an account number to track the insurance coverage on that person by either social security number, driver's license number or federal employer identification number. The insurance company will be required to report one of those numbers, and that is how they are matched. Senator Lee asked if a person moves to Nevada, does the prior insurance company transfer that person's insurance records to a company in Nevada? Senator Porter replied that it is done by zip code and assigned to an agent if the person does not find an agent on their own. Senator Lee asked if a person had an automobile insured out-of- state, but insured another automobile in state, how could the out-of-state policy be caught? Mrs. Howell replied that if both insurance companies report the policy information to the DMV&PS, because of the residency being in Nevada, DMV&PS will catch both policies. DMV&PS will match the vehicle registered in Nevada, and will have an insurance record that does not match to any registration record. Senator O'Donnell stated that the state is trying to deal with the vehicles that are not registered in the State of Nevada, being driven here and if there is an accident, the insurance companies are having to pay. He asked: "What about writing in a provision in the law that the insurance companies only have to reimburse up to the legal limits, if they are a resident of the state and are not insuring their car, or registering their car here?" Senator Porter answered that being a tourist industry, with 30 million people in Las Vegas alone that are tourists, you will be saying that they could only collect up to the state requirement of $15,000. Senator O'Donnell said that a vehicle that was known to be a Nevada resident, with an Oregon license plate and the insurance company is in Oregon, and you have another vehicle registered in Nevada and you are working for a Nevada entity; at that point the insurance company could say you are in violation of the law and the insurance company is only going to pay up to the limit. Senator Porter stated that will be great, but if the case is taken to court and the attorney says that there is an insurance policy in force out of Oregon, and the Nevada insurance has to pay; they pay. If there were a statute that said if the person is not being truthful with their insurance, that will be great. Senator O'Donnell stated that Nevada already has a statute that says that if you borrow somebody's car, the policy on that car only has to pay up to the limit. This will be the same kind of issue. Senator Porter stated that people moving into Nevada will wait until their current plates expire to register the vehicle in Nevada because they will lose any credit they have. Mrs. Howell stated that there is no longer a credit given for those out-of-state plates because the Legislature repealed that law. She said that she is looking into that issue and will provide her findings back to the committee. Many people go to Oregon to register their vehicles because they do not have a sales tax to pay there. The cost of registration in Oregon and Idaho are much lower than Nevada. Senator O'Donnell stated that a subcommittee needs to deal with the issues of SR-22, insurance verification and registration; and come up with an amendment to this bill to cover all the issues at hand. Mr. Glover said DMV&PS has projected revenues in their budget to help balance that budget because of the failure to maintain insurance reinstatements of $40 per vehicle. Their revenues will decrease some $350,000 to $400,000. When a person reinstates their no-insurance, if DMV&PS makes them pay for what they have done and for the extra administrative costs they have caused, the budget will not be hurt as much as it will if this bill passes. Senator O'Donnell stated that if a person does violate the law, the amount of money that they are going to have to spend to rectify this, should pay for the administration for the process or straightening out what they have done. Timothy Ghan, Associated Actuary, Division of Insurance, Department of Business and Industry, testified that they were in support of Ms. Jacoboni at first, but they did not understand the process that DMV&PS is working to verify the insurance. He suggested that there be an escalation in fees for repeat offenders. They have to get to a point where they cannot afford to be caught driving under the influence. Elizabeth King, Assistant Chief, Drivers' License Division, Department of Motor Vehicles and Public Safety (DMV&PS) commented that the bill has some language clean-ups that will clarify the roles between vehicle registration and drivers' license on the proof of financial responsibilities and what that means, and mandatory liability insurance. Senator O'Donnell appointed a subcommittee to be chaired by Senator Porter with Senator Lee and Senator O'Donnell to assist him. He asked DMV&PS to come to the subcommittee with some language that will address what has been discussed today. They will meet on Monday night at 7 p.m., or 4 p.m. if the Senate Committee on Government Affairs and the Senate Committee on Natural Resources have adjourned their meetings. Senator Washington asked about the possibilities of the insurance verification being interlinked with other states? Mrs. Howell replied that it is not a problem, DMV&PS has the linkage with other states. Other states are watching to see how well the insurance verification system works before going further. The American Association of Motor Vehicle Administration (AAMVA) and an insurance industry committee are working with DMV&PS on the systems and will adopt Nevada's system as a model. She said that there is a problem with the states that do not have mandatory insurance laws. The system will not work in those states that do not have those laws. Senator O'Donnell stated that it is encouraging to hear that Nevada is being looked at as a model. Senator O'Donnell adjourned the meeting at 3 p.m. RESPECTFULLY SUBMITTED: Diane C. Rea, Committee Secretary APPROVED BY: Senator William R. O'Donnell, Chairman DATE: Senate Committee on Transportation April 25, 1995 Page