MINUTES OF THE SENATE COMMITTEE ON TRANSPORTATION Sixty-eighth Session May 23, 1995 The Senate Committee on Transportation was called to order by Chairman William R. O'Donnell, at 2:35 p.m., on Tuesday, May 23, 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 Kathy Augustine, Clark County District No. 7 STAFF MEMBERS PRESENT: Don O. Williams, Chief Principal Research Analyst Diane Rea, Committee Secretary OTHERS PRESENT: George Harris, Lobbyist, City of Las Vegas Mason Hurst, Alamo Rent-A-Car Matthew Callister, Attorney, Thrifty Rent-A-Car Karen Stickel, Thrifty Rent-A-Car Steven Truss, Enterprise Rent-A-Car Maria Romano, U.S. Rent-A-Car Eric Alpert, Rebel Rent-A-Car Mae Sweeney, Thrifty Rent-A-Car Robert Crowell, Lobbyist, Grand Rent-A-Car Scott Craigie, Lobbyist, Hertz Corporation Rota Rosaschi, Chief, Benefits and Support, Welfare Division, Department of Human Resources Marlen Schultz, Office of Traffic Safety, Department of Motor Vehicles and Public Safety (DMV&PS) Gregory Harwell, Lobbyist, California State Automobile Association (CSAA) Lucille Lusk, Lobbyist, Nevada Concerned Citizens (NCC) Bernard Kaufman, Vice President, Airport Rent-A-Car Bob Adams, President Gold Car Inc., and Dollar Rent-A-Car John Mallo, Budget Rent-A-Car Steve Badilla, Budget Rent-A-Car Stephen LeBowry, Thrifty Rent-A-Car Joe Borges, Value Rent-A-Car Carl Scarborough, Management Analyst, Clark County Department of Aviation Keith Lynam, Lobbyist, Las Vegas Auto Dismantlers Allan Bloomberg, Automotive Recyclers and Dismantlers of Nevada Sandy Milmeister, President, Auto Wreckers Association Larry Stout, Assistant Chief, Registration Division, Department of Motor Vehicles and Public Safety (DMV&PS) Warren Hardy, Lobbyist, Smith & Christensen, Inc. Senator O'Donnell opened the hearing on Senate Bill (S.B.) 396. SENATE BILL 396: Prohibits short-term lessor of motor vehicle from charging lessee for use of or access to facility or property of airport. (BDR 43- 1850) Senator O'Donnell acknowledged the six pages of people in Las Vegas supporting this bill. George Harris, Lobbyist, City of Las Vegas, testified he is representing the Off Airport Rental Association. He said the people who were in Las Vegas are opposed to the bill. Mason Hurst, Alamo Rent-A-Car, testified the two major airports in Nevada impose 8 percent fees on companies engaged in the off- airport rental car business. The tax is advertised as an addition to the rental rate. He said if the shuttle bus is not used to get to the rental location, the tax does not apply. The bill will prohibit the off-airport rental car companies from collecting that separately from the rental rate. Local residents do not have to pay this fee. He said if this bill passes, the rental car companies will have to raise their rates for everybody, including the Nevada residents. He said if this bill passes, the rates will be higher and it will hurt small companies who do not have the benefit of being on the airport. Senator O'Donnell asked how a company gets on the airport? Mr. Hurst replied that is done through a bidding process. Matthew Callister, Attorney, Thrifty Rent-A-Car, testified on material he had prepared for the committee (Exhibit C). He said in the late 1980s it was decided to assess a fee to those rent- a-car companies providing service to the airports. In 1991 a court decision came about to determine a differential between the companies on and off the airport facilities, and that will be a percentage of their income. He said this is a tax which is a device to raise money for the airport. Senator Porter asked if there is an audit done on these taxes to know if the funds come from locals or travelers? And, whom is that fee paid to? Mr. Callister replied section 1, page 2 shows the percentage of taxes paid, and that goes to the airport authority. Senator Porter asked how that is audited? Mr. Callister was assisted by people in the audience stating the audits are done as needed. He said that the off-airport premises rental companies are used by the tourist who is looking for a bargain. Senator Neal asked what the fees are that are paid to the airport? Do the companies disclose the fee in their advertisement? Mr. Callister replied there is a 10 percent concession fee for on-airport companies and 8 percent fee for companies off- airport. He said the fee has to be disclosed in their advertisements. Mr. Hurst said that there is a distinction between the on- airport concession fees and the off-airport fees. The off- airport companies pay an 8 percent tax. He said the companies are forced to pay it and they collect it as a tax from non- Nevada residents and from people who are transported from the airport by the company shuttle. They are charged those taxes by county ordinance. Karen Stickel, Thrifty Rent-A-Car, testified the companies are regulated as an industry on advertising through the attorney general's office. The off-airport companies are not under mandatory regulation. This tax is disclosed in 10-point type on all advertisements. Mr. Hurst stated they are regulated by the Federal Trade Commission on the 800 phone number disclosures. Senator Washington asked if the 8 percent is disclosed when an 800 phone number is called? Are there hidden charges when the car is returned? Ms. Stickel stated that everything is disclosed at the head reservation center. If a person contacts the local offices and states they need a ride from the airport they are told about the 8 percent tax. Mr. Callister stated that there are four states where [S.B.] 396 like legislation has been adopted. Those are California, Indiana, New York, and Illinois. He stated that he does not believe the National Association of Attorneys General (NAAG) are proposing this bill. Senator O'Donnell asked if the actual fee for the 8 percent tax is listed on the contract? Mr. Hurst replied that information is listed separately right on the contract. Also stated are the off-airport charges. If the 800 phone number is called those fees are disclosed separately. Steven Truss, Enterprise Rent-A-Car, stated that 95 percent of their business is dealing with insurance companies. He said Enterprise gets calls from the other rent-a-car companies because a person is looking for a vehicle for a certain amount because of the insurance companies' payments. The insurance company will be paying the taxes as well as the rental rates. He said they are not paying a percentage tax, they are paying a per-trip-fee if they pick up from the airport. The person coming to them for insurance purposes will not be charged that fee because the renter is a local Nevadan. Senator O'Donnell asked if the companies on the airport include their tax in their rental fee? Mr. Callister replied that fee is not separately identified as it is with the companies off the airport. Mr. Harris stated that the 10 percent is an agreed upon concession fee that the companies have agreed to pay in order to have the on-airport access. Senator Lee asked how Bob Broadbent (Director of Aviation, McCarran Airport) knows how many cars have been rented each year? Mr. Hurst replied that once a year, a year end reconciliation is done by a Certified Public Accountant and then there is a periodic audit done. Senator Lee asked how Mr. Broadbent knows how many contracts are done from the airport or how many are walk-ins? Mr. Hurst replied that the contract indicates whether a person was transported on the shuttle bus. Senator Lee stated that if he came to the counter to rent a car, but lied about coming on the shuttle, is there really a track as to how many people come in on the shuttle. Mr. Hurst replied that there is a track of the people who have taken the shuttle. The regular audit shows everything that the company collects and the audit of those records show this information. Senator Porter asked how the company's growth has been in Las Vegas over the past 4 years? Mr. Callister replied that he did not have that information, but will provide a package showing that information. Senator Porter stated that his concern is that in 1993 there were 28 million visitors to Las Vegas. Of that, 22 million used McCarran Airport. Twenty percent of 28 million use rental cars. He said that it seems that the customer of the rent-a-car companies is McCarran Airport. Mr. Hurst said that there are small local companies that will be put out of business if that 8 percent fee is imposed. Senator Porter said without the airport, 5.6 million people would not be renting cars. He asked why it should be different for the people on the airport than for those off the airport? Mr. Callister replied that because the companies are not on the airport, they are not privileged to the walk-up business. The market they cater to is not the business traveler. He said the leisure tour traveler comes with a prepurchased package. Mr. Hurst stated that the 6 percent tax is applicable to all rentals. Senator Neal asked if the 8 percent fee is a onetime fee. Mr. Hurst replied that the 8 percent is listed on the contract, only if a person is picked up at the airport. Senator Washington asked: The county assesses this fee. The airport, in turn, passes it on to the on-site and off-site. The on-site pays 2 percent more than what the off-site pays. A client comes in from wherever his trip is from, wants to rent a car, uses the on-site. He pays a little bit more for the convenience. He pays maybe a few more dollars, but it is disclosed in the entire price. If it is $100, whatever the percent is, the county is already assessed in that $100? Mr. Callister replied if a person stays on the airport it is not separately itemized out. If a person goes off the airport to rent a car, it is itemized out. Senator Washington asked if he goes off the airport, the 8 percent is not in the price of the rental, but it is disclosed? If he is a local resident, he will not be charged the 8 percent fee? Mr. Callister replied that is correct. The on-airport rental company charges the renter a flat fee, which includes their 10 percent concession fee. A concession fee is not the same thing that the off-airport company pays. He said those who are not on the airport, as of 1981, are charged an 8 percent tax, that is imposed by the county commission. Senator O'Donnell said the off-airport fee is not charged to everybody. It is only charged to those who use the minivan to be transported from the airport to the rental office. Mr. Hurst said there are currently a substantial number of persons who do not have to pay the 8 percent. If the renter does not get charged the 8 percent, the rent-a-car company does not have to pay it because they did not collect it. He said if the 8 percent is required to be bundled into the rates for the off-airport companies, the rates go up for everybody, including the Nevada residents who do not have to pay the 8 percent. It will no longer be a separate item that will only apply to those people to whom the fee is relevant. The rates as a whole go up and there will be no distinction between the Nevada resident and those who take the shuttle from the airport. Senator Porter asked what the on-site companies do? Senator Washington asked if the disclosure is in the advertisement, why would the rates have to be raised? Mr. Hurst replied if this law is passed the stated rate will have to include the 8 percent or 10 percent. The rate will go up to include that amount, so it goes up for everybody. If this bill does not pass, the off-site companies will continue to disclose the separate tax in accordance with the guidelines and the FTC (Federal Tax Commission). Mr. Harris said one is a tax and one is a concession fee. The concession fee is charged by the on-site companies to help cover their rent for being on-site. The tax is charged by the off- site companies to help cover the tax they have to pay for their minivans to be allowed to come to the airport and pick up customers. The tax is put into the contract separately because it is a tax. Senator Neal said if the on-site rental company is charging a rate of $34, which includes the 10 percent fee, the bill will take out the 10 percent He said the bill will permit the on- site people to not have to advertise any fees. Mr. Hurst said the on-site companies are paying a concession fee, like rent. They cannot separately collect that, even if the bill does not pass, because it is a voluntary contractual agreement; it is like rent. He said the off-site companies can collect a tax separately; under current law. Senator Porter asked for an explanation as to why contractually on-sites cannot un-bundle? Mr. Harris said there are four more people present to give testimony. They are the car rental owners. Maria Romano, U.S. Rent-A-Car, testified as a small business owner. She does not have the "deep pockets" the large business owners have. A large portion of her business comes from package deals through travel agencies. Because this person arrives at the airport and calls her company to be picked up, there is the 8 percent charge that is added to the rental fee. Forty to fifty percent of her business is lost because of that 8 percent. Senator O'Donnell asked if he called the company personally and asked what their rates are, will he be advised of the 8 percent airport fee? Ms. Romano replied that if the company is picking up the customer at the airport, the 8 percent airport fee will be quoted to the customer. Senator O'Donnell phoned a rent-a-car company and was told of the rental fee and the 8 percent airport tax, along with all the other fees involved with renting from an off-airport company. He asked why there are so many taxes? Ms. Romano said there have been many companies trying to get an on-airport spot to be part of McCarran Airport. She said a lot of off-airport companies would gladly pay the fee to be an on- site company. Eric Alpert, Rebel Rent-A-Car, testified as to what it takes to get customers to an off-site location, and said that he cannot afford to take the "8 percent hit." Mae Sweeney, Thrifty Rent-A-Car, testified that as an employee, if this bill is passed this will have a great effect on her. She said she has been employed by Thrifty for 5 years and wants to stay there. She said she is 60 years old and cannot go out and get another job. She has never worked anywhere that she could build a pension. She is living on what she can make from the rent-a-car company. Robert Crowell, Lobbyist, Grand Rent-A-Car, testified there will be additional testimony from proponents of the bill. Scott Craigie, Lobbyist, Hertz Corporation, testified as to why this bill is needed. He provided for the committee an explanation of his handout (Exhibit D). Senator Washington asked if the 8 percent is tacked on at the end of the day? Prior to getting his car, will he know about that fee? Mr. Craigie replied that a person renting a vehicle may or may not know about that additional fee. Seventy percent of the business of several rent-a-car businesses comes from travel agencies. He said the rent-a-car agency has no control over whether the travel agency tells the customer about that additional fee. Mr. Crowell replied that the 8 percent is disclosed when the rent-a-car company is contacted. There are some cases where the additional fee may not be disclosed. Mr. Craigie said the taxes are disclosed, but the bottom line figure is not quoted to the customer. Mr. Crowell stated that the companies are operating within the National Association of Attorneys Genera (NAAG) guidelines and presented a letter from the State of Nevada Office of the Attorney General (Exhibit E). Mr. Craigie said the on-site companies pay a 25 percent higher rate for the privilege of being on the airport. Senator Shaffer asked who is responsible for establishing the inequity that is being identified? Is this a county ordinance? Mr. Crowell replied that a county ordinance established the 8 and 10 percent, and the $4 rate. The county ordinance did not establish who can and cannot charge and collect those fees. Senator Shaffer asked if the county established these rates, why did not someone go to the county and ask them why they did not make it right by ordinance? Mr. Crowell said: Mr. Kaufman will be testifying, who represents the airport, whose name is in that transcript. My reading of that transcript indicates that what was an issue before the county commission was the level of fees and the spread of fees, not how it is collected. I do not think that was addressed. Mr. Craigie said this is a problem not just in Las Vegas, but also in Reno. Senator Shaffer said he is trying to suggest that if Washoe County can initiate an ordinance and put it into the hands of people who should be responsible for their own jurisdictions, he said he thinks there is a remedy in the local jurisdictions. Mr. Craigie said the attorney general's association supports the idea that all the rates should be bundled into one figure. Senator Neal asked what is the source of the figures provided for the committee? Is the 10 percent what the car agency actually paid, or is that the amount of money that they made for 1 year? Mr. Craigie replied that the source is the McCarran Airport and comes from the annual report they do on all fees collected, and their general budget. He said the on-airport company figure is the amount paid by those eight companies, as the 10 percent assessment they are required to pay. It does not include the cost that they pay for land, ads, or any other airport service. The off-airport companies amount is the dollar amount paid by them for the 8 percent assessment they have to pay for the access to the airport to take that business off-site. He said they do not pay for land or any of those type revenues to the airport. The cost of advertising on the airport is not included. Senator Neal said that the key word to all this is "advertising." Mr. Craigie said on line 2, the word "additional" limits the charging of the 8 percent as a rate in addition to the rate charged, and must be included in the advertised rate. Senator O'Donnell said he is suspending the hearing on S.B. 396. Senator O'Donnell opened the hearing on S.B. 467. SENATE BILL 467: Revises provisions governing use of devices for restraining children in motor vehicles. (BDR 43-1037) Senator Kathy Augustine, Clark County District No. 7, gave her testimony (Exhibit F). She presented the Child Restraint, Belt Laws (Exhibit G) and a brief summary of the Nevada Child Safety Seat Program (Exhibit H). Rota Rosaschi, Chief, Benefits and Support, Welfare Division, Department of Human Resources, testified she is here on behalf of Myla Florence who is the administrator of the Welfare Division and who had a prior commitment. She said in 1992 the Office of Traffic Safety committed federal funds to the Welfare Division to support a child safety seat loaner program in Las Vegas for a 3-year period. She said without the passage of S.B. 467 the program will end September 1996. She said the major goal of the program is to lend car seats to parents of toddlers from low-income families. She said the program has been extended to Aid to Dependent Children (ADC), Medicaid, food stamps, and Maternal Obstetrical Medical Services (MOMS) recipients. She said the bill asks the courts to impose a civil penalty of not less than $35 nor more than $100 for any person who violates the child restraint law. The courts now waive such a penalty if the person presents to the court a proof of purchase, rental, or borrowing of a restraining device. She said if the bill is passed, funds generated through the courts will be used to purchase child safety seats for low-income families, educate the public on child safety seats, and support a child safety seat coordinators position. Senator O'Donnell asked how many safety seats the organization has right now? Ms. Rosaschi replied, "We order about 100 a month and we retain about 35 in case we have more than anticipated people come in." Senator O'Donnell asked if they are on a rental basis or on loan? Ms. Rosaschi replied they are loaned with the possibility of being returned. There have been about three seats returned since the beginning of the program. She said if the seats are returned, the agency is not in a position to insure the safety of the seats, so if they are returned the agency will have to destroy the seats. Marlen Schultz, Office of Traffic Safety, Department of Motor Vehicles and Public Safety (DMV&PS), testified there is an administrative fee that will not go into the proposed fund. That will remain with the court and will be in addition to the $35 to $100 fine. Gregory Harwell, Lobbyist, California State Automobile Association (CSAA), testified that they are in support of the bill. Lucille Lusk, Lobbyist, Nevada Concerned Citizens (NCC) , asked if the penalty fits the crime or if this is another revenue raiser? She said she has to question the inability of the returned car seats being inspected and reused. Senator Jacobsen asked how she feels about the parents being required to buy a safety seat instead of being fined? Ms. Lusk replied that the status of the law as it is, which states that once the fine is imposed, a person can buy the car seat and be relieved of the fine, accomplishes what he is suggesting. Senator Augustine stated the problem is that the courts have found that a person goes out and buys a seat, goes to court and says "here is my receipt" and returns the seat. The bill also refers to "currently registered" operators and she requested that it be changed to "operated." Senator Jacobsen suggested the making of these seats might be a project for prison industries. Ms. Rosaschi said that an important fact on the return of the seats is that those given out at the beginning of the program were to people with infants who have not reached the age of 5 yet, and the law states that the children will be restrained by the safety seats until 5 years of age. Senator O'Donnell asked for a subcommittee of Senator Augustine, Senator O'Donnell, Gregory Harwell, Lucille Lusk and Rota Rosaschi to amend this bill. Senator O'Donnell closed the hearing on S.B. 467. Senator O'Donnell resumed the hearing on S.B. 396. Bernard Kaufman, Vice President, Airport Rent-A-Car, testified this company was off-airport and was upset with this bill. They are now on-airport and have to compete with all the large companies. He said the fee will not be changed; it will still be there. The only difference will be that the fee for off-site companies will have to be included in their advertised fee. Several of the large rent-a-car companies are home-based out of Florida and their money goes to that office. He said they are not having to compete with the fees paid by the local agencies. When a rent-a-car company builds on the airport grounds, they do the construction of the business, but do not own the facility. Bob Adams, President Gold Car Inc., and Dollar Rent-A-Car, testified he is representing his partners and they strongly support the bill. Senator Shaffer asked for an elaboration as to why they did not go back to the county to get this matter taken care of? Mr. Kaufman replied that the bill had already been introduced when he became involved. By going through the state government, there will not be a difference between airports; they will be the same throughout the state. Senator Shaffer stated in his opinion this issue should not be before the Legislature. They are always being told to stay out of the local government issues. Mr. Kaufman said he was informed that a lot of these issues have been put through the Legislature rather than through the local entities. John Mallo, Budget Rent-A-Car, testified in support of the bill. Steve Badilla, Budget Rent-A-Car, testified disclosure is an issue with the customers, but a lot of the problem lies in the customer not listening to what they are told when they call to make the reservation. Senator O'Donnell asked about allowing on-airport people to line item the 10 percent fee? Mr. Mallo said that being an owner of his company he will have no problem with that; he thinks Mr. Broadbent will. It will be equal and parity will be there. Senator Washington asked why the industry as a whole cannot get together and resolve this issue among themselves? Mr. Mallo stated this is a fiercely competitive industry. Mr. Craigie said the NAAG guideline is the result of a 2-year long process. This set of recommendations came from that guideline. All the companies, on a national level, participated in that issue. Mr. Callister said everyone jointly imposed the imposition of the fee by the county commission in 1991. He said there has not been any evidence of complaints by consumers regarding disclosure. Mr. Hurst said that the bulk of the discussion has been concerning advertisement. The guidelines are lacking page 11 which says: When airports charging an access fee to off-airport auto rental companies, only assess that fee if the customer utilizes the auto rental company's van it can be argued that this is an optional fee and not a mandatory fee. However, to be optional, customers must be fully advised concerning the fee before arriving at the airport. If an optional airport access fee may apply to an auto rental, the existence of the fee and the fee must be clearly and conspicuously disclosed immediately adjacent to the advertised price. When the advertisement encompasses more than one rental location, the fee may be expressed as a maximum fee or range of fees. Any of the above fees may be expressed as a maximum percent or range of percentages of the advertised cost, or may be expressed as a maximum charge or range of charges. In addition, the advertisement must state clearly and conspicuously the method of avoiding the access fee. Additionally, when the reservation is made, consumers must be informed of it, either to the dollar amount or as to the percentage. Mr. Hurst stated that the on-site companies do meet these requirements. He said that he has not seen a letter from the attorney general saying she supports this bill. There is no need for the bill, these companies are complying with the guidelines. Mr. Callister asked why the bill was presented? Why, if you are in the industry, come before this body and ask for a review of the disclosure obligations under state law? Mr. Hurst said another page that is not attached states: The formation of the task force was prompted late in 1987, when the Hertz Corporation issued a press release announcing a new nationwide advertising campaign in which Hertz stated it would lower its airport rental fees by subtracting the 7 to 12 percent charged by airports as concession fees, from the advertised rates. Hertz then announced it would then add this amount back into the contract price. To the public Hertz rates would look lower in comparison to competitors' rates, although in actuality its prices would be as high or even higher than theirs. The California Attorney General's Office met with Hertz legal counsel to inform them that the campaign was deceptive. Several other states became concerned about the new advertising practice and in January 1988, California, Kansas, New York and Massachusetts informed Hertz that unless the advertisements were withdrawn Hertz would face litigation. Mr. Hurst said they did not find off-airport optional access fees to be deceptive when separately stated so long as they are disclosed in the advertisement, the reservation system, and over the 800 reservation line. He said they do every one of those things. Mr. Callister said the guidelines for the enactment of this bill came about as a result of the Hertz deceptive trade practice. He said he thinks that deception has been continued today. Senator Porter stated that he has a letter in support of this bill from the attorney general. Senator O'Donnell said there is a misconception as to why the bill came to the committee. It came because there is a perception of unfairness in the market. Mr. Craigie stated that this system does not make it possible for a person to know the price difference until they are at the desk waiting to rent a vehicle. This is not a mandatory charge. It is an optional charge. He said there is no posting at the airport that says the shuttle bus costs a person 8 percent of their bill. There is no information to tell a person that if they go on-airport it is a 10 percent concession fee or if they go off-airport it is an 8 percent tax. He said the fact is the government has ordered that rate to be driven up for those on- airport. He asked is it wrong for all the people in the marketplace to do what needs to be done? Senator Neal asked if the 10 percent is based on the gross income? Mr. Craigie replied that is based on the total gross. It is applied to the actual bill before taxes. Stephen LeBowry, Thrifty Rent-A-Car, testified in the 5 years since the companies have been under this format, if they had the great advantage they are said to have, they would have taken over the market. Joe Borges, Value Rent-A-Car, testified he is against the bill. It is against the law for the companies to get together and discuss rates. He said the travel agent is their best source of business. They are informed of the rates and additional fees. He said the disadvantage the off-airport rent-a-car company has is that the customer has to go to a remote site to be picked up. Carl Scarborough, Management Analyst, Clark County Department of Aviation, testified the department has looked at the issue and can see no revenue change for the county. Senator O'Donnell closed the hearing on S.B. 396. Senator O'Donnell opened the hearing on S.B. 440. SENATE BILL 440: Prohibits imposition of fee for issuance of certificate of dismantling. (BDR 43-1957) Keith Lynam, Lobbyist, Las Vegas Auto Dismantlers, testified in support of S.B. 440 and provided a list of states showing dismantlers fees (Exhibit I). Allan Bloomberg, Automotive Recyclers and Dismantlers of Nevada, testified the fee was imposed at the Governor's request. There is a $10 state tax per vehicle that is added on for each vehicle to be dismantled. He said a low-value vehicle becomes uneconomical to process. They would like to eliminate this $10 fee. Senator Neal said he understood this fee is put there to control individuals who engage in unlawful activities of scrapping automobiles. Mr. Bloomberg said that the law has always been there requiring a dismantling certificate. He said what they are asking for is the lowering of that fee. It was free of charge before 1991. Mr. Lynam said that the dismantlers need a free and clear title to the vehicle, which eliminates the question of the vehicle being stolen. Sandy Milmeister, President, Auto Wreckers Association, testified because of the EPA (Environmental Protection Agency) law, it is a lot more expensive to dismantle a vehicle. There is a 5-day waiting period for a salvage certificate from the Department of Motor Vehicles and Public Safety. Senator Neal asked what is meant by "dismantling"? Mr. Milmeister responded that the valuable parts are removed. If a part has not been damaged, it is pulled off the vehicle to be sold to someone who comes in looking for a replacement part. The oil and other fuels are removed and properly disposed of. The metal is then crushed. Mr. Bloomberg said that some dismantlers bring in a vehicle, keep it for 3 months, and if nobody wants anything off the vehicle, the entire thing is crushed. These people are providing a service to Nevada. If they were not here, those vehicles will be left on the streets and all over the desert. Larry Stout, Assistant Chief, Registration Division, Department of Motor Vehicles and Public Safety (DMV&PS), provided a fiscal note for the bill (Exhibit J). He said the department is opposed to the bill. The fees collected go directly to the Highway Fund. Warren Hardy, Lobbyist, Smith & Christensen, Inc., testified in the interest of revenue, when there is a user fee applied, this fee goes to benefit the people who pay the fee. He said he does not think a clear case has been made that occurs in this case. Senator O'Donnell said the issue is whether this is a valid tax. He asked if it is a valid tax on an industry for the express purpose of funding the Highway Fund? If these people cause a lot of grief for the DMV&PS and need to be investigated; they need to be taxed in order to pay for that grief. He said if they are just taxed ... Mr. Stout said the revenue collected does help to cover the staff needed within registration to process these certificates in the 5-day time. All the wrecker/dismantlers are licensed separately from this fee and those are the funds that go to pay the investigators in the auto theft department. Mr. Lynam said a lot of states just require the dismantler to declare that they have a free title. Mr. Bloomberg said in 1987 a trust fund was set up to pay for the investigators. Senator O'Donnell closed the hearing on S.B. 440. Senator O'Donnell stated that Stan Olsen from the Las Vegas Metropolitan Police Department asked to have S.B. 439 pulled. Because of the late date in the session he will not be pursuing this bill. SENATE BILL 439: Requires automobile wrecker or operator of salvage pool to forward to department of motor vehicles and public safety part of wrecked or salvaged motor vehicle which designates vehicle identification number. (BDR 43-679) Senator O'Donnell adjourned the meeting at 7:05 p.m. RESPECTFULLY SUBMITTED: Diane C. Rea, Committee Secretary APPROVED BY: Senator William R. O'Donnell, Chairman DATE: Senate Committee on Transportation May 23, 1995 Page