MINUTES OF THE
SENATE Committee on Transportation
Seventy-second Session
May 20, 2003
The Senate Committee on Transportation was called to order by Chairman Raymond C. Shaffer, at 1:39 p.m., on Tuesday, May 20, 2003, in Room 2149 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to the Grant Sawyer State Office Building, Room 4406, 555 East Washington Avenue, Las Vegas, 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 Dennis Nolan, Vice Chairman
Senator Mark Amodei
Senator Warren B. Hardy II
Senator Michael Schneider
Senator Terry Care
Senator Maggie Carlton
GUEST LEGISLATORS PRESENT:
Assemblyman David R. Parks, Assembly District No. 41
STAFF MEMBERS PRESENT:
Marsheilah Lyons, Committee Policy Analyst
Lee-Ann Keever, Committee Secretary
OTHERS PRESENT:
Carole A. Vilardo, Lobbyist, Nevada Taxpayers Association
Dino DiCianno, Deputy Executive Director, Department of Taxation
Michael K. Sullivan, Lobbyist, Bell Transportation
Gary E. Milliken, Lobbyist, Yellow-Checker-Star Cab Company
Norman Ty Hilbrect, Lobbyist, Frias Holding Company
Brent Bell, President, Bell Transportation
Ray Chenoweth, Owner, Nellis Cab Company, and Ambassador Limousines
Tony F. Sanchez
Bill Shranko, Star Limousine and Yellow, Checker, Star Taxicab Companies
Robert E. Campbell, Lobbyist, On Demand Sedan/Desert Cab, and Ambassador Limousine/Nellis Cab
John Mendoza, Legal Counsel, Double Down Transportation
A.R. Fairman
Chairman Shaffer opened the hearing on Assembly Bill (A.B.) 267.
ASSEMBLY BILL 267 (1st Reprint): Revises provisions relating to certain fees and surcharges charged and collected in regard to vehicles leased for short term. (BDR 43-961)
Assemblyman David R. Parks, Assembly District No. 41, explained the genesis for A.B. 267. Assembly Bill No. 460 of the 71st Session was been passed. The measure was a major piece of legislation helping to fund the salaries of Nevada’s teachers. The bill required cleanup, which would be provided by A.B. 267. Assemblyman Parks requested A.B. 267 after discussing the matter with Carole A. Vilardo, Lobbyist, Nevada Taxpayers Association.
Assemblyman Parks explained the bill’s provisions. The bill prohibited a short‑term lessor of a passenger car, when charging and/or collecting the governmental services fee, from including in the total amount for the passenger car rental the amount of any charges for recovery, fuel, delivery, insurance, or vehicle damage. Additionally, a short-term lessor, who collected the recovery surcharge, could not include in the total rental amount, charges for the governmental services fee, collision damage waiver, fuel, delivery, handling, insurance damages, or the concession fees for doing business at an airport.
The measure also required a short-term lessor to report quarterly to the Department of Taxation (DOT) the amount of recovery surcharge collected during the immediately preceding calendar quarter. The bill transferred the authority for the adoption and enforcement of regulations from the Department of Motor Vehicles (DMV) to the DOT.
Ms. Vilardo said she supported A.B. 267. Ms. Vilardo said two members of the Nevada Taxpayers Association had brought the problems with A.B. No. 460 of the 71st Session to her attention.
The Department of Taxation (DOT) is responsible for collecting the 6 percent tax generated by A.B. No. 460 of the 71st Session. The DOT is unable to provide an explanation of the manner in which the tax is to be collected. The DOT is currently operating on a memorandum of understanding from the Nevada Department of Transportation outlining the collection process. Ms. Vilardo stated it is insane for the DOT not to have the authority to draft the necessary regulations required to collect the 6 percent tax. It is necessary for the DOT to have control over the collection process.
A second issue came to light when an interpretation was requested on which businesses should be charging the 6 percent tax. Due to the ambiguous wording of A.B. No. 460 of the 71st Session, businesses were not sure whether or not they should be charging the 6 percent tax. The issue of taxes otherwise imposed by a government was also raised when the interpretation was requested.
The gasoline tax is substantive, but had been added to the provisions of A.B. No. 460 of the 71st Session at full price. Many employees do not know the correct percentage of the tax to remove from a customer’s bill. Ms. Vilardo said she discussed the matter with Assemblyman Parks and the Legislative Counsel Bureau’s Legal Division. During the meeting, Ms. Vilardo had been told the correct method of collecting the tax would have been to list the exclusions rather than using the original list which confused people.
The two issues addressed in A.B. 267 were major issues. The bill cleaned up the confusion created by A.B. No. 460 of the 71st Session. The 6 percent tax would be both easier to administer under the provisions and make compliance by businesses easier should A.B. 267 be enacted.
Ms. Vilardo made reference to section 8 in its entirety. She said the section outlined the exclusions to the 6 percent tax. Ms. Vilardo urged the committee members to pass A.B. 267 as she thought it an important piece of legislation.
Senator Carlton asked whether the measure had been opposed in the Assembly. Ms. Vilardo replied, “No, not when I was present for testimony.”
Senator Carlton said the bill seemed clean and thanked Ms. Vilardo for her testimony.
Dino DiCianno, Deputy Executive Director, Department of Taxation, said he supported A.B. 267. Mr. DiCianno said the measure provided a bright line for administrative purposes and the taxpayers. The provisions of the bill segregated the exclusions with respect to the 6 percent tax and provided the necessary calculation for the surcharge mentioned in the bill.
Mr. DiCianno reiterated his testimony to the Assembly Committee on Ways and Means in which he did not support the bill’s fiscal note. He did not feel comfortable with the fiscal note’s original language. Mr. DiCianno cited his reasons for not supporting the fiscal note. He said there were 354 short-term lessors reporting to the DOT. When the questionnaire for the fiscal note was distributed among the short-term lessors, only three replied. The lack of response made the fiscal impact suspect. Mr. DiCianno said due to the confusion within the industry about the collection of the 6 percent tax, the short-term lessors might have provided inaccurate reports to the DOT. He stressed he was not accusing those individuals of deliberately filing inaccurate reports. Mr. DiCianno stated those individuals did not have sufficient knowledge to complete a report containing the correct information. The possibility that the reports contained faulty or inaccurate data contributed to Mr. DiCianno’s suspicions regarding the fiscal note. Mr. DiCianno said the fiscal impact would probably be negligible.
Ms. Vilardo said she would appreciate an immediate vote on A.B. 267. Chairman Shaffer explained the committee members were not all present and until such time as the full committee membership was available, a vote would be improper.
Chairman Shaffer closed the hearing on A.B. 267 and opened the hearing on A.B. 518.
ASSEMBLY BILL 518 (2nd Reprint): Temporarily prohibits increase in number of limousines in operation and directs legislative study of issues relating to allocation of limousines. (BDR S-1102)
Michael K. Sullivan, Lobbyist, Bell Transportation, presented the committee members with a proposed amendment to A.B. 518 (Exhibit C) and a letter of support for the measure (Exhibit D).
Mr. Sullivan said the bill’s preamble stated the point he wished to make and supported his belief that the legislation is important. Mr. Sullivan said A.B. 518 affected the limousine industry only in southern Nevada. The limousine industry would benefit from the bill’s passage due to the competitive nature of the limousine business in Las Vegas. Mr. Sullivan stated the limousine owners in Las Vegas do not agree on many subjects, but were 100 percent in support of A.B. 518. The southern Nevada limousine owners represented approximately 75 percent of all limousines currently operating in Las Vegas.
Mr. Sullivan compared A.B. 518 to the measures enacted for the Nevada taxicab industry in the 1960s and 1970s. Mr. Sullivan recommended a system of allocation to bring new limousines on line when necessary and when the Transportation Services Authority (TSA) believed the market could support additional limousines. Under the bill’s provisions, a study would be conducted by the TSA and the limousine industry. The results of the study would be presented to the 73rd Legislative Session and the TSA. The study would recommend the best method of allocation and the means by which the allocations could be implemented.
The bill contained a provision for a moratorium on applications for limousine licenses. Mr. Sullivan stated he believed such a moratorium to be important as it allowed the study to concentrate on the best system of limousine licensing in Nevada. A full report would be made to the next Legislature. Mr. Sullivan stressed A.B. 518 applied only to limousine owners and operators in southern Nevada.
Mr. Sullivan referred to the amendment contained in Exhibit C. Another section had been added to the bill’s preamble to state the industry’s objectives:
WHEREAS, the statistics maintained by the Transportation Services Authority show an increased number of citations issued to limousine operators for operation of improperly maintained vehicles, operation of which vehicles without insurance, and other violations affecting the safety and welfare of passengers.
Originally, the study would have been conducted by the TSA commissioners. It was believed the TSA staff should participate in the study. The reason for this being, the commissioners could not vote on any matter they investigated or studied.
Gary E. Milliken, Lobbyist, Yellow-Checker-Star Cab Company, complimented Mr. Sullivan on his presentation of A.B. 518. He said in recent years, there had been a proliferation of limousines. At one time, Taxicab Authority (TA) figures indicated there were three cabs for every limousine in service. The figure was now one and one-half cabs for every limousine in service.
Mr. Milliken said there were occasions when limousine was service cheaper than a taxicab and easier to get. Many taxicab drivers did not think it fair that people could rent a limousine at a lesser rate than they could a cab.
Norman Ty Hilbrect, Lobbyist, Frias Holding Company, said the language in the proposed amendment (Exhibit C) was intended to address the bill’s perceived shortcomings. The whereas language Mr. Sullivan referred to was intended to dispel any questions about the legality or constitutionality of the proposed moratorium.
Mr. Hilbrect said section 1 had been changed from, ”… accept the submission or filing of any application for …“ to “… approve any application filed after January 1, 2003, for … .“ The TSA chairman believed the moratorium required a fixed date for commencement and conclusion. It had been the consensus of those involved with the legislation that using the end of the year as a start date would be the fairest in terms of imposing a moratorium.
Mr. Hilbrect referred to section 1, subsection 1, paragraph (a), of A.B. 518 which regulated unrestricted certificate holders. The unrestricted certificate holders could operate as many limousines as they wanted. The moratorium would be imposed on all classes of certificate holders including the unrestricted certificate holders.
Mr. Hilbrect said in order for the moratorium to be enforceable, it had to be tied to the annual reports filed by the industry with the TSA. The reports for 2002 would be filed in May 2003. From a regulatory standpoint it was logical to have a fixed start date for the moratorium.
Mr. Hilbrect said section 2, subsection 1, paragraph (a), had been changed from “Three members of the Transportation Services Authority …” to “staff of the Transportation Services Authority … .“ He explained Chapter 233B, the Administrative Procedures Act, prohibited those participating in an investigation from also participating from making decisions regarding the investigation’s results. Mr. Hilbrect said he thought it vital the TSA commissioners be free to make decisions. Staff decisions were not binding on the TSA. Mr. Hilbrect said the industry wanted to avoid any suggestions of impropriety which might occur if the TSA commissioners both investigated the industry during the moratorium and then ruled on the results of the investigation.
Mr. Hilbrect said the proposed amendment changed section 2, subsection 4, from “… the Legislative Commission.“ to “… the Legislative Commission and the Transportation Services Authority.” Mr. Hilbrect explained it is important for the TSA to put in place a system of allocation by regulation for the limousine industry. Industry members believed the report should be made to both the Legislative Commission and the TSA. The report would be used by the TSA as evidence when developing and voting on regulations.
Mr. Hilbrect said the following language had been added to section 2, subsection 6:
In counties with a population of 400,00 or more, the authority shall, on or before February 15, 2005, adopt a system of allocation for the number of traditional limousines and livery limousines to be operated in such county. In addition, to the information provided by the Study Committee, the allocation system must reflect the number of traditional and livery limousines registered in Nevada by each certificated carrier as of the effective date of the allocation.
Mr. Hilbrect said the language provided for a regulatory alternative by the TSA and would apply only to Clark County. As Nevada’s population increased, other counties might be affected by this provision. The provision allowed the TSA to regulate the allocation of certificates before the 73rd Legislative Session convened.
Mr. Hilbrect reiterated his previous testimony that the involvement of the TSA staff in the study would allow the TSA commissioners to hear and vote on the study’s findings.
Mr. Hilbrect said A.B. 518 directed the TSA to deal with each certificate holder proportionally. When compared to the statutes regulating taxicabs in Nevada, the direction was gentle. Mr. Hilbrect stated the Legislature would receive a copy of the study mandated by the measure. Deficiencies in the TSA’s regulations could be addressed during the next Legislative Session.
Mr. Hilbrect concurred with testimony previously presented indicating there were serious disorderly conditions existing within Nevada’s limousine industry. He believed such conditions were a major threat to the limousine industry in Clark County. He said he had lived through the ”Taxi Wars” during the 1960s. Mr. Hilbrect noted consumers would be adversely affected by shoddy practices of limousine owners or operators resulting from excessive competition.
Senator Hardy stated he did not understand the manner in which the limousine industry operated. He said he understood the regulations governing taxicabs were more stringent than those governing limousines. Senator Hardy said when he had been stranded at McCarran International Airport, it had been cheaper to hire a limousine than a taxicab. He said he had not ridden in a standard limousine, but had been chauffeured in a Lincoln Town Car. Senator Hardy asked whether a Lincoln Town Car would fall in the same category as a limousine under the law.
Brent Bell, President, Bell Transportation, said a sedan or a Lincoln Town Car were both considered limousines for regulation purposes. Mr. Bell reiterated previous testimony in that a ride in a limousine was cheaper than a ride in a taxicab.
Senator Hardy asked for an explanation for the differences in the regulations for the limousine industry versus the regulations for the taxicab industry. Mr. Bell said the taxicab industry experienced controlled growth under the allocation system. As the population of Las Vegas grew through new residents moving in and an increased tourist trade, the TA allocated additional taxicabs on a temporary basis to operate during the period of increased population. When demand slacked off, the taxicabs were pulled out of service. As the permanent population grew, the TA allocated additional taxicabs to take care of the increased demand for taxicabs. Mr. Bell said such actions by the TA were instances of controlled growth and such actions worked well.
Senator Hardy asked how the need for additional cabs was verified. Specifically, could taxicab companies request additional vehicles or would the industry make the request for additional vehicles? Mr. Bell said a company could file for additional taxicabs. The other taxicab companies would be given an opportunity to voice their opinion on the first company’s request. At the same time, all concerned parties, including the unions, could offer testimony and statistics on the request to the TA and staff.
Senator Hardy asked whether the allocation would be predetermined based on the size of the company requesting the additional vehicles. Mr. Bell said the additional taxicabs were allocated equally among all the taxicab operators. The size of the company did not matter as the TA operated on the equal allocation system. The minimum number of cabs allotted at one time was 17. As there were 17 cab companies operating in southern Nevada, each company would receive one additional taxicab medallion for its fleet.
Senator Hardy asked whether or not a taxicab operator could refuse a medallion given to his company under the provisions of the equal allocation system. Mr. Bell said he did not know of any instances where a taxicab operator refused additional medallions. He added a taxicab operator had the option of refusing medallions if he or she chose.
Mr. Bell said the limousine industry in Nevada did not have controlled growth under the equal allocation program, which presented the problems referred to by other witnesses. There were too many limousines on the roads leading to competition between the limousine and taxicab drivers for the same fares. The limousine industry traditionally operated by reservation and was not supposed to compete with taxicab drivers for fares. Mr. Bell said there should not be limousine drivers struggling to make a living or limousine companies struggling for a positive cash flow.
Senator Hardy asked should the equal allocation issue be set aside, would the taxicab and limousine industries be on equal footing in terms of additional regulation. Senator Hardy asked whether taxicabs were regulated only for allocation purposes or were there other issues connected with that industry at a greater level than were limousines. Senator Hardy asked whether the reverse was true in that limousines were regulated at a greater level than taxicabs. Senator Hardy stated he was trying to understand the regulatory inequities between the two industries. Mr. Bell said there were other regulated issues which were addressed by S.B. 192.
SENATE BILL 192 (1st Reprint): Makes various changes to provisions governing certain motor carriers and drivers. (BDR 58-537)
The regulations for taxicabs are tighter and more stringent than those for limousines due to the allocation system. Senator Hardy said he was trying to separate the allocation system from other regulations. Senator Hardy asked whether the stricter regulations under which taxicabs operated put the limousine industry at a competitive disadvantage. Mr. Bell said that stricter regulations did not put the limousine industry at a competitive disadvantage.
Senator Hardy said there were justifiable reasons for the stricter regulations under which taxicabs operated. He stated the committee members were looking at the allocation system for growth. Senator Hardy asked whether Mr. Bell had complaints about the differences in the regulatory scheme for the two industries. Mr. Bell replied in the affirmative.
Mr. Bell said doormen at the major hotel-casinos were a factor in the competition between the taxicab and limousine drivers. The doormen pulled taxicab customers out of the cab line and placed those customers in limousines. The doormen received a kickback from limousine drivers for providing customers in this fashion. The doormen’s actions created a major problem for the limousine industry.
Mr. Bell told the committee members that McCarran International Airport did not have sufficient space for the limousines to park. To combat the parking problem, airport officials instituted an automatic vehicle indicator (AVI) system for limousines. The limousine operators are charged for the time their vehicles spend parked at the airport. The limousines are equipped with meters which relay a limousine’s parking time to the AVI. Charges are based on the information provided by the limousine to the AVI. The airport installed the AVI due to the excess number of limousines attempting to park at the airport.
Senator Hardy stated the testimony provided a good opportunity for him to understand the limousine industry in Nevada. Senator Hardy asked whether there were regulations prohibiting doormen from accepting kickbacks from the taxicab drivers. He asked whether limousine drivers would be governed by those regulations.
Mr. Bell said there was a regulation requiring a limousine to stay 50 feet or more from a cab line. However, the regulation had no impact as most of the limousines parked farther than 50 feet from the cab lines. Even when a limousine violated the regulation, there was not enough manpower to enforce it. Mr. Bell stated the doormen controlled the traffic flow at the hotel casinos in Las Vegas. They have great latitude in the performance of their job duties.
Senator Hardy asked whether there is a regulation prohibiting taxicab drivers from accepting money from businesses to deliver customers to a business. Senator Hardy said he saw Mr. Sullivan shaking his head. Senator Hardy said it appeared there are no regulations preventing a taxicab driver from making the same arrangement a limousine driver made with a doorman. It appeared to be a matter of convenience as a limousine driver was on site making it easier for a limousine driver to make a deal with the doormen than it is for a taxicab driver.
Mr. Bell said it was not a convenience. It was about the money generated by the limousine drivers. The doormen do not receive kickbacks from the taxicab drivers. Senator Hardy stated the doormen could receive kickbacks from the taxicab drivers. Mr. Bell said the doormen received kickbacks from the limousine drivers for loading the limousines. The only time a doorman might receive a kickback from a taxicab driver would be in those instances where a person was driven to a cabaret. It was not a taxicab industry practice to give kickbacks for a traditional fare because each taxicab is equipped with a meter. Taxicab drivers could not afford to pay the kickbacks a limousine driver could because of the meters.
Senator Hardy asked how a limousine driver could afford to pay a kickback when business was bad. Mr. Bell replied it was because the limousine drivers overcharged the customers in the first place. By overcharging the customer, a limousine driver would have cash in hand to pay the doormen.
Senator Hardy said Mr. Bell’s testimony confused him as he thought Mr. Bell said a person could ride in a limousine at the same price or less than the fare charged by a taxicab driver. Mr. Bell said when the limousine industry was busy, limousine prices were high and customers were gouged. When business was slow, the limousine drivers tried to increase their customer base by a drop in fares.
Senator Hardy said he thought the answer to the problem would be deregulation of the taxicab industry. A free enterprise person could say the limousine market in southern Nevada was saturated. The number of companies going out of business could measure market saturation. Senator Hardy said the problem appeared to be the taxicab industry was regulated while the limousine industry was not regulated.
Senator Hardy said he wanted to know why one industry should be regulated while another was not. Senator Hardy said he wanted to know the reasons behind the regulations. Mr. Bell told Senator Hardy that he was representing both the limousine and taxicab industries. He said other witnesses testifying before the Senate Committee on Transportation also operated both types of vehicles. Mr. Bell said the regulation of taxicabs in Nevada worked and was a model to other states and countries. Taxicabs in Las Vegas are cleaner than most of the taxicabs operating elsewhere, the drivers spoke English, the fares were regulated, and the taxicabs were new. Mr. Bell said the taxicab industry in Las Vegas is respected worldwide.
Mr. Bell stated the limousine owners and operators in Las Vegas wanted their industry to operate in the same manner as the taxicab industry operated. Deregulating the taxicab industry in Nevada would set the industry back to the days of the “Taxicab Wars” during the 1960s resulting in numerous problems with infighting among the taxicab drivers. Mr. Bell said he did not know whether he had answered Senator Hardy’s question. Senator Hardy replied, “No.” Mr. Bell stressed he did not favor deregulating the taxicab industry in Nevada.
Senator Hardy said he found Mr. Bell’s testimony helpful. Senator Hardy said he did not like regulating industry. He said he understood regulation was necessary, especially when an industry requested regulation. Senator Hardy stated he understood there would be occasions when two industries were similar in nature and only one of the industries regulated. In that situation, when one industry was regulated, it would be at a disadvantage due to the huge competitive advantage the unregulated industry had over the regulated industry.
Senator Hardy said he was trying to get a feel for the history of the limousine and taxicab industries in Las Vegas as well as the reasons for regulating taxicabs in Nevada. Senator Hardy said Mr. Bell’s answers were helpful.
Mr. Bell said he appreciated Senator Hardy taking the time to be educated on the taxicab and limousine industry in Nevada. Regarding the issue of free enterprise, Mr. Bell said operating a taxicab or limousine was not the same as operating other types of business. Both the taxicab and limousine industries required a certain amount of insurance as well as other regulations under which they operated. Deregulating the taxicab industry would result in chaos as anybody would be able to operate a taxicab business and not be worried about following rules and regulations.
Senator Hardy noted that for free enterprise to work, the consumer had to be in a position to shop for the best deal. When Senator Hardy needed a ride home from the airport at 2 o’clock in the morning, he was not in a position to shop for the best deal.
Chairman Shaffer reminded the witnesses, especially those in Las Vegas, that their testimony was being recorded and they were under oath. Chairman Shaffer also reminded those present that when accusations were made, the accusations might haunt them.
Mr. Bell said he appreciated the Chairman’s reminder and continued his testimony. He stated there were too many limousines operating in southern Nevada. Mr. Bell spoke about the annual report Mr. Hilbrect referenced. The figures from the 2002 report were not available. However, the information from the 2001 report was available and Mr. Bell shared that information with the committee members.
There are 23 limousine businesses reporting to the TSA; 8 of those companies showed a profit in 2001. In 2002, there were approximately 20 new limousine companies operating in Nevada. Mr. Bell said there had been a 100 percent increase in the number of limousines operating, yet the profits had not increased.
When a limousine company failed to show a profit, safety was one of the first things to go. Limousine owners could not pay their insurance premiums when they failed to make money. The lack of insurance presented a problem in the insurance industry. When uninsured limousines were involved in accidents, the passengers had no recourse to receive compensation for their medical bills and other expenses.
Mr. Bell said there were limousine companies who willingly surrendered their certificates of operation when they could not make their insurance payments, while other companies had their certificates of operation confiscated by the TSA. When a limousine company suffered financially, price gouging occurred. Additionally, the required tariffs were not filed during periods of economic hardship.
Mr. Sullivan mentioned the limousine tariffs and noted the limousine drivers were supposed to charge one price. When a limousine driver varied the rate and paid kickbacks, the limousine owner did not realize all the profits. Mr. Bell agreed with Mr. Sullivan.
Senator Carlton asked whether the committee members would address the proposed amendment to A.B. 518, (Exhibit C). Chairman Shaffer said the committee members would concentrate on the bill.
Mr. Hilbrect said limousines are required to file tariffs. When a limousine driver freelanced, he or she violated State regulations and law. It is difficult to police the fees charged by limousine drivers. The taxicabs are easier to police as those vehicles are equipped with meters. Mr. Hilbrect said he thought the TSA previously tried to address those issues in S.B. 192.
Chairman Shaffer said A.B. 518 became effective upon passage and approval. He asked Mr. Hilbrect if the bill would become effective when signed by the Governor. Mr. Hilbrect replied, “That’s my understanding.” Chairman Shaffer said the public perception would not be favorable should the bill become effective when signed by the Governor. He noted potential limousine owners and operators might be surprised by the bill’s immediate implementation, especially if they could not apply for a limousine license until after the next Legislative Session. Mr. Hilbrect said, “That’s true,” adding those individuals who did not file their limousine applications prior to the bill’s implementation would have difficulty being granted a limousine license until the system of allocation was in place. Once the system of allocation was operational, the TSA would make all limousine-licensing decisions. Before a new certificate of operation could be issued, the limousine owners and operators would have to show the TSA there was an unserved market for limousines.
Chairman Shaffer told those present that the committee members would hear alternating testimony: first, from Las Vegas, then from Carson City, and so on until all witnesses testified.
Ray Chenoweth, Owner, Nellis Cab Company and Ambassador Limousines, said he had been in the taxicab business for 43 years. He said he had seen the many phases of competition in the industry as well as many changes. Mr. Chenoweth said the taxicab industry had not kept pace with the growth in Las Vegas.
Mr. Chenoweth said the TSA had a laissez-faire attitude toward applicants for limousine licenses. Out of 40 applicants, only two licensing requests were denied. The taxicab owners and operators were at a distinct disadvantage as the limousine owners and operators enjoyed uncontrolled growth in southern Nevada.
Mr. Chenoweth said taxicab drivers did not pay the doormen at the hotel casinos due to the need for taxicab services in Las Vegas. The limousine drivers needed the doormen to steer potential customers to the limousines and were willing to pay the doormen for doing so.
Mr. Chenoweth stated the bill’s preamble outlined the situation in Las Vegas with regard to the limousine business. Mr. Chenoweth said when there were too many taxicabs and limousines on the streets, the drivers would start “burning each other down.”
Mr. Chenoweth reiterated previous testimony on the “Taxicab Wars” in Las Vegas during the 1960s. He stated he was involved in those wars and was aware of what could happen should the limousine industry remain unregulated. Mr. Chenoweth stressed the need for guidelines and direction for the limousine industry.
Tony F. Sanchez, Lobbyist, Jones Vargas/Las Vegas, said he represented BLS Limousine Service of Las Vegas. Mr. Sanchez stated BLS Limousine Service did not own taxicabs and for that reason, it was important for him to testify.
Mr. Sanchez said BLS Limousine Service had a certificate of operation for 15 limousines in Las Vegas. The company had offices in New York City, and Los Angeles, in addition to its Las Vegas operation.
Mr. Sanchez said he supported A.B. 518 and the proposed amendment. Mr. Sanchez stated BLS Limousine Service had an application pending before the TSA to increase its fleet size.
Chairman Shaffer asked Mr. Sanchez what should be done with the approximately 19 applications pending before the TSA. Mr. Sanchez said he could only answer the question on behalf of BLS Limousine Service, who filed an application in November 2002. Mr. Sanchez said he anticipated the TSA would conduct a hearing on BLS Limousine Services’ application within the next month. Mr. Sanchez stressed he was not familiar with the other applicants.
Chairman Shaffer said due to the membership of the proposed study committee, people might believe the proposed study commission was stacked. He said there was concern even though TSA staff, not TSA commissioners, would conduct the study. The reason for that being the TSA staff members report to the TSA commissioners.
Mr. Sanchez said he agreed with Mr. Hilbert’s testimony concerning the staffing of the study commission. He said the Public Service Commission of Nevada (PSCN), which previously regulated utilities and transportation, had previously employed him. Mr. Sanchez said, as a former staff member, he had the highest regard for the TSA staff.
Chairman Shaffer asked the witnesses in Las Vegas to continue their testimony and cautioned them not to be repetitious.
Bill Shranko, Star Limousine and Yellow, Checker, Star Taxicab Companies, said he would try to answer Senator Hardy’s questions. The City of Las Vegas had one of the finest taxicab operations in the world. International companies studied the taxicab industry in southern Nevada. The reason for the international interest was due to the structured regulation of the industry. Mr. Shranko said doormen loaded taxicabs, as State law requires the queuing of taxicabs. Regulation prevented a taxicab driver from negotiating fares with passengers. When regulation is not in place, each taxicab driver could quote a different price at attract customers.
Mr. Shranko said he studied industry regulations both in Nevada and nationwide. His studies indicated 23 cities deregulated the taxicab industry within their city boundaries. Mr. Shranko stated once an industry was deregulated, it would be difficult to return the industry to regulation. The 23 cities that deregulated the taxicab industry were horrified by the results. Regulation of the taxicab industry had been reinstated by 19 of the 23 cities, with two other cities beginning the reinstatement of regulations for taxicab companies.
Mr. Shranko said the possibility of merging the TA into the TSA had been discussed by the taxicab industry. Should the two agencies be merged, it was possible Nevada’s taxicab industry would be deregulated. A result of the merger might be settlements in the millions of dollars to passengers due to a lack of insurance by taxicab owners and operators. Mr. Shranko cited a $13 million settlement made by the local bus company in Las Vegas.
Mr. Shranko said many of the advancements in transportation were due to the regulation of the taxicab industry in Nevada. He stated it was fortunate the merger between the TA and the TSA had not occurred.
Mr. Shranko said the limousine industry had grown in southern Nevada and there were now 50 limousine companies operating legally in Clark County. There were other limousine companies operating illegally on a part-time basis. Those companies drove up the prices for legitimate limousine services. The public deserved fair pricing, a concept Mr. Shranko and his colleagues supported.
Mr. Shranko said when a municipality regulated the taxicab industry within its borders, there were many people who wanted to own a taxicab company, but could not due to regulation. Deregulation led to taxicab companies physically fighting over fares in cities including Seattle, Phoenix, San Diego, and Cincinnati.
Mr. Shranko said Las Vegas is one of the biggest resort destinations in the world, making regulation of the taxicab industry in Nevada important to the tourist-based economy. Mr. Shranko said his company, Star Limousine, originally had 29 vehicles in operation, but decreased to 20 operating limousines. His company currently operates three limousines a day due to the lack of business. Mr. Shranko said other limousine owners and operators were in the same situation. Mr. Shranko asked the committee members to give A.B. 518 their consideration.
Robert E. Campbell, Lobbyist, On Demand Sedan/Desert Cab, and Ambassador Limousine, said he had worked in the transportation business for the past 6 years. The situation with the limousine owners and operators both supporting A.B. 518 was very unusual. Mr. Campbell urged passage of the measure.
John Mendoza, Legal Counsel, Double Down Transportation, said the company filed an application for three limousines in November 2002. The bill’s effective language exempted Double Down Transportation’s application and allowed the company to proceed with the application process. Mr. Mendoza said the TSA would conduct a hearing on Double Down Transportation’s application on May 29, 2003.
Mr. Mendoza said Double Down Transportation was a chartered bus company operating in Nevada. The company had been chartered in September 2002 with a fleet of ten buses. Company officials determined there was a demand for additional limousines in Las Vegas. When people telephoned the company to reserve a bus, they usually asked whether the company provided limousine service or other types of vehicles for lease. Based on those telephone calls, Double Down Transportation decided the time was right to submit an application to provide limousine service. Mr. Mendoza said the application received no opposition. Mr. Mendoza said he supported A.B. 518 as amended. He would oppose the bill if the original language was left intact.
Mr. Mendoza said he previously served as the chairman of the PSCN which regulated taxicabs in northern Nevada and limousines throughout the State. During his tenure at the PSCN, he heard comments by industry officials. The primary complaint had been that both the PSCN and the TSA were short staffed.
Mr. Mendoza said the PSCN had been involved in litigation due to the illegal activities of the unlicensed limousine owners and operators. As additional limousine licenses were issued, the activities of the illegal companies decreased. Mr. Mendoza said America was a country where an individual could make a very good living if he or she was willing to work hard. The major limousine owners and operators proved this point by their success.
Mr. Mendoza reiterated his belief that the TSA is understaffed. During his tenure at the PSCN, stings had been conducted at major hotel casinos with the end result being doormen were fired for receiving kickbacks. The doormen had been placing passengers in uninsured limousines. Mr. Mendoza said he had the highest praise for the TSA commissioners and staff. Due to the large increase in Clark County’s population, both permanent and tourist, the TSA could not adequately perform all of its duties at current staffing levels.
Mr. Mendoza stated he supported the amended version of the bill as it excluded Double Down Transportation, and its application for limousines would not be affected. He added the average processing time for a limousine license application was 6 months.
Senator Carlton said she heard the testimony regarding the surplus of limousines operating in Las Vegas. The testimony concerned her as she recently attempted to hire a limousine for her daughter’s high school prom, but was unable to do so. She could not hire a limousine due to the unwillingness of the limousine owners to leave the Strip. Senator Carlton noted the limousine owners did not make it easy for parents to hire a limousine.
Senator Carlton added she knew of other parents who were not able to rent limousines for their children. Based on her experience, Senator Carlton wanted to know how the limousine owners and operators could say there were too many limousines operating in Las Vegas.
Senator Carlton said she had concerns about the amendment for A.B. 518, which she would like to address. Mr. Hilbrect stated he would be happy to address Senator Carlton’s concerns about the amendment. Senator Carlton said the original “Whereas” had given her concern. The amended “Whereas” referenced the statistics the TSA maintained for uninsured limousine drivers. Senator Carlton asked how the statistics were compiled and the source of the database.
Mr. Hilbrect said the whereas which concerned Senator Carlton was based on the official records of the TSA, enforcement division. One of the division’s employees had shown Mr. Hilbrect information relating to the number of uninsured limousine drivers in Nevada. The information had not been available when the bill was drafted; otherwise it would have been included in the bill.
Mr. Hilbrect said the only justification for taking the action outlined in the amended “Whereas” would be matters of public safety. The increase in the number of citations for uninsured limousine drivers alarmed Mr. Hilbrect. Another source of concern was improperly maintained limousines. The limousine industry prided itself on high-quality rolling stock. The TSA discovered a limousine could look perfect cosmetically, but have mechanical problems. The TSA did not expect to make such a discovery in the limousine industry. Both the TSA and Mr. Hilbrect were concerned with the limousine owners and operators who let their liability insurance lapse. Again, letting liability insurance on a limousine lapse was almost unheard of in the limousine industry. Limousines were considered to be a high-end part of the transportation business.
Senator Carlton said some of her questions had been answered when discussing the use of the TSA staff to conduct the study rather than the TSA commissioners.
Senator Carlton said she was concerned about the membership of the study committee. She referred to section 2, subsection 1, paragraph (b), of the bill which read, “Three members who represent certificated owners of limousines in this state.” She said the provision meant the limousine industry would be studying itself. Senator Carlton was unsure about the quality of information that would be provided to the 73rd Legislative Session should the limousine owners and operators help conduct the study. She suggested hiring an outside firm to conduct the study.
Mr. Hilbrect said he suggested the language mandating the TSA commissioners conduct the study was illegal should the commissioners make decisions based on the study.
Mr. Hilbrect said before the TSA promulgated regulations concerning the allocation of additional limousine licenses it would be necessary to conduct hearings under the procedure prescribed by the Administrative Procedure Act. The act called for substantial evidence to support any order issued by a State agency. The substantial evidence would come from all sources. Mr. Hilbrect said it would be beneficial to hire an outside firm to conduct the study. The outside company would evaluate the statistical material collected and compiled by the TSA. The findings would then be presented to the TSA to assist it in making an enlightened decision concerning the allocation process.
Mr. Hilbrect said he believed the Legislature was disinclined to expend money on special interest problems. He noted the limousine industry’s problems should not be considered special interest as they affected Nevada’s core industry, tourism.
Mr. Hilbrect said he believed the limousine industry would finance the use of an outside firm to conduct the study. The study would include the following: (1) outline the guidelines for a system of allocation; (2) raise issues associated with a system of allocation; and (3) conduct hearings to develop a system of regulation. The regulation hearings would be conducted after July 1, 2004. The findings could either be presented to the next Legislature or enacted through regulation subject to Legislative review.
Mr. Hilbrect said he shared Senator Carlton’s concerns, but believed the Administrative Procedure Act assured public interest sources had access to the decision-making process. All agency decisions were subject to judicial review.
Senator Carlton stated:
Just to clarify, Mr. Chairman, with what was just said. I would be very concerned about any regulations being implemented before we came back for the next session. If this study does go through and the moratorium is part of the study, I would be very concerned about any regulations being enacted before we had an opportunity to review the study and the process in the next session. Put that on the record. Thank you, Mr. Chairman.
A.R. Fairman stated he supported A.B. 518. He said he agreed with Senator Carlton on the manner in which the study should be conducted and presented a copy of the bill’s fiscal note (Exhibit E) and Internet news articles relating to the TSA (Exhibit F) for the committee members’ review.
Chairman Shaffer said the committee members would consider A.B. 267 and A.B. 518 during the work session on Thursday, May 22, 2003.
There being no further business, Chairman Shaffer adjourned the Senate Committee on Transportation at 2:54 p.m.
Lee-Ann Keever,
Committee Secretary
APPROVED BY:
Senator Raymond C. Shaffer, Chairman
DATE: