MINUTES OF THE
SENATE Committee on Transportation
Seventy-second Session
April 29, 2003
The Senate Committee on Transportation was called to order by Chairman Raymond C. Shaffer, at 1:35 p.m., on Tuesday, April 29, 2003, in Room 2149 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Raymond C. Shaffer, Chairman
Senator Mark Amodei
Senator Warren B. Hardy II
Senator Michael Schneider
Senator Terry Care
Senator Maggie Carlton
COMMITTEE MEMBERS ABSENT:
Senator Dennis Nolan, Vice Chairman (Excused)
GUEST LEGISLATORS PRESENT:
Assemblyman Jason D. Geddes, Assembly District No. 24
STAFF MEMBERS PRESENT:
Marsheilah Lyons, Committee Policy Analyst
Lee-Ann Keever, Committee Secretary
OTHERS PRESENT:
John Sande III, Lobbyist, Western States Petroleum Association
Peter D. Krueger, Lobbyist, Nevada Petroleum Marketers and Convenience Store Association
Jim Werbeckes, Lobbyist, Farmers Insurance Group
Chairman Shaffer opened the hearing on Assembly Bill (A.B.) 237.
ASSEMBLY BILL 237 (1st Reprint): Revises provisions relating to use of alternative fuels by certain fleets of motor vehicles. (BDR 43-796)
Assemblyman Jason D. Geddes, Assembly District No. 24, distributed a presentation outlining the reasons low-sulfur diesel should be removed from Nevada Revised Statutes (NRS) (Exhibit C).
Assemblyman Geddes explained when the alternative fuel laws and regulations were enacted under NRS 445, low-sulfur diesel fuel had been added as an acceptable alternative. At that time, the standard sulfur concentration for diesel fuel was 5000 parts per million (ppm). The sulfur concentration for low-sulfur diesel fuel is 500 ppm. It is considered a cleaner alternative to standard diesel fuel. In 2001, diesel fuel in Nevada averaged 265 ppm. The federal Environmental Protection Agency approved ultra-low-sulfur diesel for use in this country by 2007. The ultra-low-sulfur diesel will replace the low-sulfur diesel fuel currently in use.
Assemblyman Geddes said A.B. 237 removed low-sulfur diesel fuel from the list of approved alternative fuels, replaced it with ultra-low-sulfur diesel fuel, and added two additional alternative fuels. One alternative fuel had been developed and approved for use by the California Air Resources Board and is known as CARB diesel. The other diesel is known as B5 BioDiesel fuel. The B5 BioDiesel is comprised of 5 percent biodiesel and 95 percent petroleum diesel. The intent of the bill is to replace the standard diesel fuel with cleaner alternatives.
Assemblyman Geddes said S.B. No. 177 of the 71st Legislative Session sought to remove low‑sulfur diesel fuel from the statute. Assemblyman Geddes inserted three alternative fuels as replacement fuels in the statute. The consumer could decide which fuel to use based on his or her financial situation.
An ultra-low-emission vehicle category was added to the bill and those vehicles met the alternative fuel requirements described in A.B. 237. The goal of the bill is to lower air emissions.
Assemblyman Geddes said the following organizations supported A.B. 237: Clark County Regional Transportation Commission; Washoe County Regional Transportation Commission, Barry Hinkley Industries, Western States Petroleum Association, Sierra Club, Department of Agriculture, Washoe County District Health Department, Nevada Motor Transport Association, Nevada Petroleum Marketers and Convenience Store Owners, Clark County School District, and Washoe County School District. Assemblyman Geddes noted the endorsement of the Washoe County School District was contingent on the fiscal impact of the bill on the district.
Assemblyman Geddes said the bill’s fiscal notes were addressed in Exhibit C. Assemblyman Geddes said one of the alternative diesel fuels is CARB diesel fuel which is less expensive on today’s market than other diesel fuels. The new diesel fuels mentioned by Assemblyman Geddes could be used in existing diesel-powered vehicles without engine modifications.
Senator Care asked Assemblyman Geddes for the time line contained in the bill. Assemblyman Geddes explained the bill would become fully effective on January 1, 2007. Low-sulfur diesel fuel had become standard and was no longer considered an alternative fuel source. By January 2007, all distributors would be required to sell CARB diesel fuel, which meant it would no longer be considered an alternative fuel source. The B5 BioDiesel fuel and ultra-low-emissions vehicles would still be considered alternative fuel sources under A.B. 237. By January 2007, CARB and B5 BioDiesel fuels would be the only diesel fuels in use. Based on that fact, the bill contained a sunset provision of December 31, 2006, for those fuels. The date matched the federal government’s date for the implementation of low emissions fuels.
John Sande III, Lobbyist, Western States Petroleum Association, commended Assemblyman Geddes for introducing A.B. 237 and said he supported the measure.
Peter D. Krueger, Lobbyist, Nevada Petroleum Marketers and Convenience Store Association, said he supported the bill. Mr. Krueger stated flexibility was the key to A.B. 237. He said flexibility would give consumers a choice of fuels for their vehicles. Mr. Kruger urged the committee members to pass the bill.
Senator Carlton told Mr. Krueger the Senate Committee on Natural Resources heard A.B. 36 and wanted to know whether or not A.B. 237 would “true up” with that bill. Mr. Krueger replied “yes,” adding A.B. 237 would not affect A.B. 36 in any manner.
ASSEMBLY BILL 36: Revises provisions relating to control of emissions from engines of certain motor vehicles. (BDR 40-196)
Senator Care asked about the future of diesel fuel and diesel passenger vehicles. He said in the past there had been an attempt to manufacture diesel passenger vehicles. Senator Care said the diesel fuels mentioned in the bill appeared to differ from the diesel fuel he remembered from 20 years ago.
Mr. Krueger said diesel fuel had been modified through formulation to achieve better air quality. Diesel-powered vehicles were being reexamined to see whether they would be comparable in performance and air emissions with gas‑powered vehicles. Studies conducted by various government agencies in California suggested ultra-low-sulfur diesel fuels would have air quality features equal to other alternative fuel sources. Mr. Krueger said other alternative fuel sources included propane and compressed natural gas. Based on the studies, Mr. Krueger said the future of diesel-powered passenger vehicles would be reexamined. He noted other technologies, including electric-powered vehicles, required further development.
Chairman Shaffer closed the hearing on A.B. 237 and opened the hearing on A.B. 367.
ASSEMBLY BILL 367 (1st Reprint): Makes various changes relating to repair of motor vehicles. (BDR 43-216)
Jim Werbeckes, Lobbyist, Farmers Insurance Group, said A.B. 367 was not his bill. Assemblywoman Vonne Stout Chowning, Assembly District No. 28 introduced the measure for one of her constituents. Mr. Werbeckes testified on the bill when the Assembly Committee on Transportation heard the measure.
The components of rebuilt vehicles had been changed in section 1, subsection 3, by adding “roof assembly” and in section 1, subsection 6, by adding “complete front inner structure for a unibody.”
Mr. Werbeckes explained when a unibody vehicle was involved in an accident and required repairs, the entire front clip or front end of the vehicle had to be removed and either repaired or replaced. Unibody vehicles with those types of repairs or replacements would be considered rebuilt vehicles under the provisions of A.B. 367. Repairs to vehicles with conventional frames would be considered standard repairs. On standard-frame vehicles, repairs could be accomplished by bolting the replacement parts in place. Replacement parts had to be welded in place on unibody vehicles.
Mr. Werbeckes reiterated unibody vehicles receiving front-end repairs should be titled as rebuilt vehicles since they are considered to be total loss vehicles.
Section 2 mandated insurance companies with direct repair programs offer alternative repair facilities to their customers. Section 2, subsection 2, paragraph (b), added the phrase “or a claimant,” to NRS 487.002.
Section 2, subsection 3, added the phrase “The provisions of this section do not require an insurer to pay more than the reasonable rate required pursuant to a policy of insurance for repairs to a motor vehicle.”
Senator Care asked whether or not it was industry policy to tell an insured party where to take his or her vehicle for repairs, and whether A.B. 367 deviated from that policy by allowing an insured party to select the repair facility.
Mr. Werbeckes said the contract between an insurance company and an insured party did not mandate using specific repair facilities. He cited the Circle of Dependability (CD) program operated by Farmers Insurance. The program designated 21 repair shops in Las Vegas and 10 repair shops in northern Nevada to perform repairs for Farmers Insurance customers. When a Farmers Insurance customer had his or her vehicle repaired at one of those shops, the repairs were guaranteed for as long as the customer owned the vehicle. Farmers Insurance did not require its customers to use repair facilities participating in the CD program.
Mr. Werbeckes stated customers of Farmers Insurance received better prices and better workmanship when their vehicles were repaired at a CD participant. All repair facilities participating in the CD were required to use top-of-the-line repair equipment and employ certified mechanics.
Senator Care said it appeared to him that the insurance companies were already complying with the provisions of A.B. 367 and there would be no change in the law. Mr. Werbeckes replied, “Correct,” and reminded the committee members he had not requested the legislation. Senator Care said a facility that had not been designated as preferred by an insurance company might charge more for repairs than a preferred repair facility. He asked whether vehicle owners would be responsible for the difference in repair charges when they took their vehicles to a non-preferred repair facility. Mr. Werbeckes said the insurance company would pay only the going rate of repair for a vehicle. The customer would be responsible for the difference should the repair bill exceed the going rate.
Mr. Werbeckes said when a Farmers Insurance customer took his or her vehicle to a non-preferred repair facility, an insurance adjuster would be sent to the facility. An estimate would be written and payment made based on the adjuster’s estimate. During the repair process, additional needed repairs might be detected. Farmers Insurance paid for additional repairs when they were detected. Mr. Werbeckes reiterated Farmers Insurance would not pay more than the going rate to repair a vehicle.
Senator Care asked whether some insurance companies demanded that their customers use a specific repair facility. Mr. Werbeckes said some insurance companies did require their customers to use specific repair facilities which resulted in section 2 of A.B. 367. Insurance contracts did not require customers to take their vehicles to a specific repair facility.
Senator Care asked Mr. Werbeckes to explain the repair process for the front end of a unibody vehicle. Mr. Werbeckes said unibody construction was part of the frame of a vehicle. The replacement parts had to be welded in place due to the unibody construction. The consumer had to be aware that a unibody vehicle with extensive front-end repairs should be classified as a rebuilt vehicle. The title for the car had to be stamped salvage. A salvage title classification was important for anybody who might wish to purchase the vehicle. It informed potential purchasers of the extensive repair work done to the vehicle.
Senator Care wanted to know if a salvage vehicle classification would impact the vehicle’s registration and insurance fees. Mr. Werbeckes said he did not understand the question. Senator Care rephrased the question by asking whether a salvage classification diminished the value of a vehicle. Mr. Werbeckes said the value would only be diminished for whoever bought the vehicle. For insurance purchases, the vehicle would be insured according to the make and model of the vehicle without taking into consideration the salvage title.
Senator Hardy said a salvage title significantly diminished the value of a vehicle. He said unless a person knew the exact nature and extent of repairs done to a rebuilt vehicle, it was best not to purchase such a vehicle. Senator Hardy said many rebuilt vehicles had been repaired properly and functioned as intended on the street. He reiterated a salvage title significantly decreased the value of a vehicle.
Mr. Werbeckes said A.B. 325 was the companion bill to A.B. 367. The salvage title provisions of the NRS would be reviewed and amended under the provisions of A.B. 325.
ASSEMBLY BILL 325: Makes various changes relating to motor vehicles that have sustained certain damages. (BDR 43-222)
Currently, there are no statutory definitions for the terms “flood vehicle,” or “non-repairable vehicle.” Mr. Werbeckes said non-repairable or flood vehicles should not be on the road. Such vehicles and their titles needed to be destroyed.
Senator Carlton said she was concerned a vehicle’s value would decrease when a person chose to repair the vehicle instead of heeding the insurance company’s advice to “total the vehicle.” She noted insurance rates would not be affected by such a decision.
Mr. Werbeckes said insurance companies would consider vehicles requiring a front-end clip or repair a total loss. A salvage title was issued when the vehicle was purchased at auction by a salvage company, repaired, and then sold to a consumer. The statutory provision protected potential buyers by informing them when a vehicle had been salvaged and rebuilt.
Senator Carlton said she thought there would be instances where an insurance company would not “total out” a unibody vehicle requiring extensive front-end repairs. She said it would be a matter of balances between the value of the vehicle and the cost of repairs. Mr. Werbeckes said insurance companies do not want to repair unibody vehicles with front-end damage.
Chairman Shaffer closed the hearing on A.B. 367.
SENATOR CARE MOVED TO DO PASS A.B. 237.
SENATOR CARLTON SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NOLAN WAS ABSENT FOR THE VOTE.)
SENATOR HARDY MOVED TO DO PASS A.B. 367.
SENATOR AMODEI SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NOLAN WAS ABSENT FOR THE VOTE.)
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Chairman Shaffer said the committee members would vote on A.B. 192.
ASSEMBLY BILL 192 (1st Reprint): Revises provisions relating to special license plates. (BDR 43-181)
SENATOR HARDY MOVED TO DO PASS A.B. 192.
SENATOR SCHNEIDER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR NOLAN WAS ABSENT FOR THE VOTE.)
*****
There being no further business, Chairman Shaffer adjourned the Senate Committee on Transportation at 1:59 p.m.
Lee-Ann Keever,
Committee Secretary
APPROVED BY:
Senator Raymond C. Shaffer, Chairman
DATE: