Minutes ID: 460

*CM460*

MINUTES OF THE MEETING OF THE

ASSEMBLY COMMITTEE ON TRANSPORTATION

Seventy-Ninth Session March 16, 2017

The Committee on Transportation was called to order by Chairman Richard Carrillo at 3:16 p.m. on Thursday, March 16, 2017, in Room 3143 of the Legislative Building, 401 South Carson Street, Carson City, Nevada. The meeting was videoconferenced to Room 4406 of the Grant Sawyer State Office Building, 555 East Washington Avenue, Las Vegas, Nevada. Copies of the minutes, including the Agenda (Exhibit A), the Attendance Roster (Exhibit B), and other substantive exhibits, are available and on file in the Research Library of the Legislative Counsel Bureau and on the Nevada Legislature's website at www.leg.state.nv.us/App/NELIS/REL/79th2017. COMMITTEE MEMBERS PRESENT:

Assemblyman Richard Carrillo, Chairman Assemblywoman Ellen B. Spiegel, Vice Chair Assemblywoman Shannon Bilbray-Axelrod Assemblyman John Ellison Assemblyman Ozzie Fumo Assemblyman Richard McArthur Assemblywoman Daniele Monroe-Moreno Assemblyman Michael C. Sprinkle Assemblyman Justin Watkins Assemblyman Jim Wheeler Assemblywoman Melissa Woodbury

COMMITTEE MEMBERS ABSENT:

None GUEST LEGISLATORS PRESENT:

Assemblywoman Jill Tolles, Assembly District No. 25 STAFF MEMBERS PRESENT:

Jann Stinnesbeck, Committee Policy Analyst Joan Waldock, Committee Secretary Trinity Thom, Committee Assistant

Assembly Committee on Transportation March 16, 2017 Page 2 OTHERS PRESENT:

Benjamin Cloward, Esq., Member, Nevada Justice Association Alison Brasier, Esq., Board Member, Nevada Justice Association Elaine Chernikoff, Private Citizen, Las Vegas, Nevada Neil Chernikoff, Private Citizen, Las Vegas, Nevada Jack Chernikoff, Private Citizen, Las Vegas, Nevada Fran Almaraz, representing Teamsters Local No. 631 Thomas D. Dunn, District Vice President, Professional Fire Fighters of Nevada Ryan Beaman, President, Clark County Firefighters, Union Local 1908 Leonardo Benavides, Extern, representing Nevada Commission on Services for

Persons with Disabilities Scott Scherer, representing Regional Transportation Commission of Southern Nevada Danéll Wilson-Perlman, Owner, Reno Tahoe Limousine, Reno, Nevada Jonathan P. Leleu, representing Nevada Bus and Limousine Association Anastasia P. Boden, Staff Attorney, Pacific Legal Foundation, Sacramento, California A.R. (Bob) Fairman, Private Citizen, Carson City, Nevada Tray Abney, Director of Government Relations, The Chamber, Reno-Sparks-

Northern Nevada Lou Castro, Owner, Earth Limousines and Buses, Las Vegas, Nevada Nicole Feely, Director of Sales and Marketing, Earth Limousines and Buses,

Las Vegas, Nevada Abderrahim Mansouri, Atlas Limousines, LLC, Las Vegas, Nevada Kimberly Maxson-Rushton, representing Livery Operators Association of Las Vegas

Chairman Carrillo: [Roll was called. Committee protocols and rules were explained.] We will now open the hearing on Assembly Bill 234. Assembly Bill 234: Revises provisions governing motor carriers. (BDR 58-651) Assemblyman Ozzie Fumo, Assembly District No. 21: It is my honor to be sitting here with Ben Cloward and Alison Brasier, two attorneys who brainstormed with me to present this bill to you today. "Harvey's Law" is a narrowly-tailored law to provide protections to the most vulnerable members of the community. Before I go through the analysis of the bill, I want to explain a little bit of how it came about. Harvey Chernikoff lived in my district. He had mental disabilities. To get to and from work, he took the paratransit bus. One day while riding that bus, he began to choke. The driver did not know what to do to help him because he was not trained in cardiopulmonary resuscitation (CPR), nor did he have a first-aid kit on the bus. Harvey died. The driver was not trained in CPR because the company he worked for did not require it. The company did not require it for their drivers because Nevada did not require it by law for paratransit drivers. The company does require the training for their drivers in states that require it for paratransit drivers. Had Nevada required paratransit drivers to be trained in CPR when Harvey was on their bus, Harvey Chernikoff might still be alive

Assembly Committee on Transportation March 16, 2017 Page 3 today. When asked how much it would cost to train their drivers the way they do in other states, the company stated it would cost $88 to train each driver for a certification good for three years. Section 1 of Assembly Bill 234 amends Nevada Revised Statutes (NRS) Chapter 706 to state that a common carrier of special needs persons who transports people for compensation must ensure that: each vehicle be equipped with a first-aid kit; and each driver hired must be trained in CPR and in how to use the kit. Part of CPR training is the Heimlich maneuver. Section 2 merely states that the words and terms in section 1 of this bill have the meanings ascribed to them. Section 3 is an amendment to NRS 706.156 which talks about violations and penalties. Section 4 amends 706.745 to exclude ambulances and hearses. Section 5 makes it a misdemeanor to violate the terms of this act. I want to make it clear that my intent is not to punish any driver, but the company for not properly training the driver. My intent is for this bill to become effective in January 2019. In working with the regional transportation commission (RTC), we found that the current contract expires at the end of 2018. This would allow them to negotiate the terms for this in their new contract. The company they contract with would be responsible for the hiring and training of the drivers. This bill is specifically for paratransit drivers who handle special needs persons for a fee. It does not include businesses such as Showtime Tours, taxis, transportation network companies, or school bus drivers. Benjamin Cloward, Esq., Member, Nevada Justice Association: As was explained, I represent the Chernikoff family. Harvey Chernikoff was their son. He was on the paratransit bus that day. The paratransit company had provided training policies, procedures, and manuals to the RTC, indicating they would do certain things; however, after being awarded the contract of approximately $230 million, they ceased doing those things. At trial, it came out through the corporate spokesperson that the paratransit company did not require those things because state law did not require it. The intent is to make it a requirement, so if our tax dollars are paying for these contracts, the ones providing this service to the member's citizenry are providing the service they bargained for, and that Nevadans are ultimately paying for with our tax dollars. Alison Brasier, Esq., Board Member, Nevada Justice Association: I am also an attorney for the Chernikoff family and a board member of Nevada Justice Association. I would echo everything that has been said. Every person I talked to about the trial and what we are doing with Harvey's Law asked, "That is not already a requirement in Nevada?" I think it is an assumption that, if you are representing yourself as a company that specializes in dealing with handicapped individuals, you are prepared to deal with an emergency situation if it should arise. I am here to lodge my support for the bill on the record and to assist in questions the Committee might have. Assemblywoman Bilbray-Axelrod: Did you say that other states mandate this in contracts with paratransit? There will be no fiscal impact to companies? They will negotiate it into the contract, is that correct?

Assembly Committee on Transportation March 16, 2017 Page 4 Benjamin Cloward: At the time of trial, it came out that this company is global—they are in 270 markets, ranging from North America to Puerto Rico, Europe, and India. They have a nationwide global policy that has training pages 68, 69, and 70 on first-aid training, stroke identification, heart attack identification, CPR, Heimlich maneuver, and 911. The very first page of the manual is a statement from the president of the company indicating that no modifications should be made to the company policy without his written approval. However, it was determined here in the local Las Vegas market that because there was not a law requiring the training, their drivers were instructed that they did not need to know those three pages. We obtained training information for the orientation held for new drivers. In other markets, the template is laid out by day. Day One and Day Two are in-class training. Day Three and Day Four are over the road training. Day Five is eight hours of first-aid training. Because it was not required in Nevada, Day Five training was lopped off. The RTC requests a bid, then companies submit proposals. The proposal made by First Transit included the schedule of training. It is our belief that the RTC was under the assumption that the first aid training would be provided. Assemblywoman Spiegel: If drivers have had first aid training, do they have to act? If they panic, are they required to render aid? My second question is if a driver has the training and attempts to do CPR or the Heimlich maneuver and is unsuccessful, will he have liability or will he be covered under the Good Samaritan law? Alison Brasier: To answer the first question, the bill does not require drivers to act; it requires them to have the training that would equip them to decide whether or not they are equipped to act or whether they should call 911. There is no affirmative duty to act in the bill. In answer to the second question, the intent of the bill is not to punish drivers for acting reasonably in an attempt to save a life, then punishing them if they cannot. The intent of the bill is to provide them with the tools to save a life if faced with such a situation. Benjamin Cloward: Assemblywoman Spiegel, that is a great question. The real tragedy in this situation was the loss of Harvey Chernikoff; however, the second tragedy was the compassion the driver had for Harvey. You could tell that he cared about his passengers and his job. If you watch the video of the incident, it is heartbreaking because the driver simply was not armed with the information of how to assess and handle the situation. That is part of the purpose of the bill—to arm drivers with the information they need to know how to act so they do not panic. On the video, it is plain to see that the driver simply was not provided with the knowledge necessary to react.

Assembly Committee on Transportation March 16, 2017 Page 5 Assemblyman Ellison: You said that a driver would not have to act in a medical emergency. Is not one reason to have drivers trained in CPR is so they can act as first responders? I think it is a great idea that the driver would do whatever he could with his training to save a life, then contact paramedics second. Would the first response for a driver be to try to react? Alison Brasier: I think that is a good point. My response was that there would be no punishment if a driver used his training and was not successful in resuscitating a passenger. The intent of the bill is to give drivers the skills to keep a passenger alive, if they can, while medical professionals are on the way. Assemblyman Ellison: If companies provide their drivers with the training, will they have met the safety requirements? Alison Brasier: I am not clear on what you mean. Assemblyman Ellison: The company is usually going to be held liable, but if they have provided the drivers with the training they need, along with radios and cell phones to be able to call for help, would they still be liable in the event a passenger died? Alison Brasier: That is exactly what we want to happen. We do not want what happened to Harvey to happen to anyone else. If the company provides the training that is set forth in the bill, and meets those requirements, they have done their due diligence. We are trying to arm the companies and the drivers with the information, the training, and the knowledge to prevent something like this from ever happening again. Assemblyman McArthur: You stated that this bill would not take effect until 2019. Is that in the bill? I did not see that when I read it. Assemblyman Fumo: It is not in the bill yet; that is why I wanted to mention it. That will be added. I wanted to find out when the current contract expires. Chairman Carrillo: Could you explain the reasoning behind this bill not taking effect until 2019? I believe you mentioned that this would take effect after the current contract expires. When I met with RTC regarding this bill, they expressed concern about having this requirement take effect in the middle of a contract period.

Assembly Committee on Transportation March 16, 2017 Page 6 Assemblyman Fumo: The RTC has a contract with its 540 to 550 drivers. We did not want those drivers to have to stop working in order to take first aid training. We thought it would be reasonable to allow them to finish this term of the contract, and then start fresh with the new one. Assemblywoman Monroe-Moreno: During your testimony, you mentioned that this bill would not apply to school bus drivers. Do you know if there is anything in statute that would require our school bus drivers to be certified in CPR? They carry a very vulnerable population. Assemblyman Fumo: I am not sure if school bus drivers are required to have CPR certification. This bill applies only to paratransit drivers. They are specifically identified through the Code of Federal Regulations—requirements they must meet in order to drive special needs people. Benjamin Cloward: The other consideration was fiscal—the potential fiscal burden to schools to provide their drivers with the additional training. In the private sector, this would be addressed through the bid process. It was contained within the policies and procedures handbooks provided to the RTC as part of the bid process. It is my understanding that Assemblyman Sprinkle is sponsoring Assembly Bill 85 that would require CPR training in high schools. He also was able to get Assembly Bill 414 of the 77th Session passed in 2013. I think it would be fantastic if we could figure out a way to alleviate the fiscal burden to school districts in order to make this training required for their bus drivers. Certainly the children of Nevada are as valuable as those with special needs. Protecting them is just as important. Assemblyman Sprinkle: I would like to revisit the questions that have been brought up concerning liability. Please correct me if I am wrong. This bill requires that drivers be trained in first aid and CPR. There is nothing in their job description, and there is nothing that mandates that, as employees of the paratransit company, they must do this. This is saying that they must be trained and certified. As a result, there is no duty to respond, which means they would be covered by Good Samaritan laws. Am I correct? Benjamin Cloward: I have not analyzed that specific legal issue. I am more than happy to research it, so I can provide you with a direct answer. At the trial, the paratransit driver said he would have done anything had he been armed with the information and knowledge, but he had not been given the information. He testified that he would have done anything to save Harvey's life because he cared about him. He did not know what to do. The video of the incident shows that the driver panicked—he was not trained in assessing an airway. The goal is to provide drivers with that knowledge and allow them to choose how to respond. I think analysis would confirm that drivers would be protected by Good Samaritan laws.

Assembly Committee on Transportation March 16, 2017 Page 7 Assemblyman Sprinkle: Thank you. You referenced other bills I have worked on in the past. I think every person in this room, in this building, and in this state should at least be trained in CPR. That does not mean that any of them would be required to use it. At least having the basic training and the knowledge probably would empower somebody who otherwise would be fearful of not knowing what to do. The point I am making is that when you are not covered by Good Samaritan laws is when you have a duty to respond, and you do not. With this bill, the drivers would be covered whether they were trained or not because they were trying to do their best; they were not trying to actually harm someone. Assemblyman Fumo: It was my intent to have a Good Samaritan clause in the bill when I discussed it with the Legislative Counsel Bureau. Chairman Carrillo: Are there questions from any other Committee members? [There were none.] If there were a lockout, a strike, or a declared emergency that required hiring of replacement drivers, would those drivers be required to have first aid and CPR training? Alison Brasier: Our intent is that if there are subcontractors, or if there is a strike and positions need to be filled, the training requirements would be the same. That way, no matter what the conditions, the citizens of Nevada are still safe on paratransit buses. Chairman Carrillo: Would replacement drivers need to already be trained? There would not be time to train drivers in those situations. When the contract is up for renewal, many drivers would not already have CPR and first aid training. I want to make sure that any temporary drivers would be required to have had the first aid training. Alison Brasier: What we found out through testimony at the trial is that the training First Transit provides takes approximately eight hours. It is not a burdensome training process. If a paratransit company needed to fill driver positions, I do not think it would be a huge burden on the company to get trained drivers. Regardless of what the conditions are, the disabled members of our community would be safe and protected while riding paratransit buses. Chairman Carrillo: The bill says that common carriers, contract motor carriers, or other persons or entity shall receive training in first aid and CPR. Will the training be provided beyond duty or will employees be required to do the training on their own time? Will the employee be responsible to pay for the training?

Assembly Committee on Transportation March 16, 2017 Page 8 Benjamin Cloward: As I indicated earlier, with the contract situation we encountered, there was a day dedicated to first aid training during the week of orientation. Each employee had five days of training, two of which were classroom training, two were out on the road driving training, and one day was first aid training. It was a day of training provided by the company. The thought process is because these companies receive the large dollar contracts, they would build the training into their protocol. First Transit had that built into their training protocol when they received the contract, but because Nevada law does not require the drivers to have the certification they pulled those three pages from their manual. The goal would be to not put the burden of obtaining the training on the individual employees; the goal would be to have the companies being awarded those contracts that are paid by Nevada citizens through taxes to the RTC provide the training in a uniform manner. Assemblyman Watkins: As I understand it, Good Samaritan laws do not require a duty to act. My understanding of the intent of this bill, if someone is a Good Samaritan and does not have a duty to act, the fact that they go through this training does not create that duty. If they already have a duty to act, this bill does not take away that duty. Is that correct? Alison Brasier: You are correct. Chairman Carrillo: As there are no further questions from members, we will now take testimony in support of A.B. 234. Elaine Chernikoff, Private Citizen, Las Vegas, Nevada: Thank you for having us here today to explain to you what happened to our son. My son Harvey Chernikoff was a loving, kind, caring, friendly person. He was the happiest he had ever been, living here in Las Vegas for just the short time of a year and a half. He had a home with a caregiver. He had a job and a girlfriend. His life could not have been better. Harvey would still be alive today if on July 29, 2011, his bus driver had known how to do the Heimlich maneuver. My son died because First Transit did not give the paratransit bus drivers in the state of Nevada any first aid training because the state did not mandate that they had to do that. First Transit has its own bus manual for every employee to read and to learn the rules of the company. It states on pages 68-70 the step-by-step process that would have to be done to provide CPR, the Heimlich maneuver, and other first aid emergencies. The instructions say to then call 911. Harvey's bus driver did nothing. He finally called his dispatcher who then called 911. Precious time was lost. My son Harvey would be here today if his bus driver had been trained in first aid. It would have cost only $88 for First Transit to train him. Before the trial was over, I said, "There needs to be a law in Nevada so no one else will have to go through the heartbreak we are having, and the suffering Harvey had before he finally died." Harvey will not have died in vain if this law is passed. We are his voice.

Assembly Committee on Transportation March 16, 2017 Page 9 Chairman Carrillo: Thank you, Mrs. Chernikoff. I know that you are surrounded by family members. On behalf of the Committee, let me tell you how sorry we are for your loss. Neil Chernikoff: My brother Harvey Chernikoff was the most caring and loving person you could ever meet. He always had a smile on his face and something nice to say to you. He had a great sense of humor and told me that he loved me every day. Harvey choked on a peanut butter and jelly sandwich while riding the First Transit bus to work on July 29, 2011. He suffered for over five minutes without any assistance. Once the driver noticed Harvey was in distress, he panicked. He did nothing other than call dispatch on the radio because he did not know what to do. He did not try to administer first aid or the Heimlich maneuver, which is simple to perform and would have saved Harvey's life. First Transit had a training manual that told their employees about first aid, including CPR and the Heimlich maneuver, on pages 68-70. It explains CPR, Heimlich, and tells drivers to call 911. First Transit decided to save $88 per driver by not training them in first aid because the state of Nevada does not have a law stating that they have to, even though their employee manual included the information. We were shocked when we heard that the driver was not trained and did nothing to help Harvey. If the driver of Harvey's special needs bus was trained in first aid and Heimlich, Harvey would still be alive today. We are here with Benjamin Cloward, Alison Brasier, and Assemblyman Fumo to present A.B. 234, Harvey's Law, which will require all paratransit drivers to be certified in first aid, including CPR and the Heimlich maneuver. We know that this will save many more lives and keep our special needs and handicapped loved ones safe when they are traveling on paratransit transportation. Please help us and help Harvey to be heard by supporting A.B. 234 and making it so that Harvey's death was not in vain. Chairman Carrillo: I offer my condolences to you and your family. Jack Chernikoff: I am Harvey Chernikoff's father. I want to tell you a little bit about my son Harvey. Harvey may not have known about money concepts and about reading a lot, but he had basic reading skills. He was a friend to everyone. Even when Harvey passed away, after we came back to the house, so many people from far and wide came to be with us at the house. They introduced themselves to us because they knew Harvey. Even the lady at the taco place Harvey visited when he took a walk with Joseph was there. He knew he could stop in and she would give him a taco. He knew that she was married and how old she was, even though Elaine taught him not to ask ladies their age because it was not proper. Harvey was cheerful and outgoing; he remembered all the facts that were important to him. He did not know about bad things on television. He would sit and talk wonderfully. Now that Alison Brasier and Benjamin Cloward have given him a voice through you gracious folks who have us here today, we pray that you will let him speak for all the other handicapped people.

Assembly Committee on Transportation March 16, 2017 Page 10 Chairman Carrillo: Thank you for the testimony, and for making the trip to Carson City to speak on behalf of Harvey, who is no longer here. I again offer my condolences. Jack Chernikoff: In my being nervous about speaking to you, I left out one of our main anchors through this time—Assemblyman Fumo. Chairman Carrillo: We will now take testimony in support of A.B. 234. Fran Almaraz, representing Teamsters Local No. 631: I represent the Teamsters who drive the paratransit buses. We are in favor of this bill. We think it is great to have the drivers trained. There are some amendments we would like to have added that we think will make the bill even better. I would like to thank Assemblyman Fumo for bringing this bill because we think it will really help the citizens of Las Vegas. Thomas D. Dunn, District Vice President, Professional Fire Fighters of Nevada: We are in support of A.B. 234. We believe this bill does a lot to help some of the most vulnerable members of our community who need some of the most resources. We see fender-benders with paratransit vehicles on a monthly basis. It is a good thing to have anybody trained in a minor amount of first aid and CPR for the benefit of the public. Ryan Beaman, President, Clark County Firefighters, Union Local 1908: In my role of being a firefighter and paramedic, I respond to these types of calls and see how CPR training changes the outcomes of patients as CPR saves lives. We see the results when we transport patients to hospitals. We appreciate Assemblyman Fumo bringing this important piece of legislation forward and support A.B. 234. Leonardo Benavides, Extern, representing Nevada Commission on Services for Persons

with Disabilities: I am here on behalf of Mr. Jon Sasser. Mr. Sasser serves on the Nevada Commission on Services for Persons with Disabilities. Our clients rely on paratransit transportation. It is of utmost importance that their safety be considered. We thank Assemblyman Fumo for supporting this, and are happy to support the bill. Chairman Carrillo: Is there anyone in support in Las Vegas? [There was no one.] Is there anyone opposed in Las Vegas? [There was no one.] Is there anyone opposed in Carson City? [There was no one.] Is there anyone neutral toward A.B. 234 in Carson City? Scott Scherer, representing Regional Transportation Commission of Southern Nevada: Having heard the testimony, we could say we are in support of the bill as we support

Assembly Committee on Transportation March 16, 2017 Page 11 the concept. With the clarifications that were made on the record and comments with regard to amendments, we look forward to seeing those amendments and being able to support the bill wholeheartedly. Assemblyman Ellison: How many drivers do you have? Scott Scherer: I believe the number is over 500, but I do not know for certain. I am not involved in the day-to-day operations. [He confers with Assemblyman Fumo.] I am told that the number is 540. Assemblyman Ellison: Do you train your drivers? Scott Scherer: The RTC contracts out this service, which is one of the problems. We will definitely include this as a requirement when the next request for proposal goes out for bid. Another entity actually hires the drivers and operates the service. Chairman Carrillo: Is there any neutral testimony in Las Vegas? [There was none.] Are there any closing remarks from the bill's sponsor? Assemblyman Fumo: I am happy to answer any follow-up questions. I am looking forward to your supporting this bill. Chairman Carrillo: I do not see any questions. I will close the hearing on Assembly Bill 234. We will open the hearing on Assembly Bill 240. [Assemblyman Sprinkle assumed the Chair.] Assembly Bill 240: Makes various changes relating to transportation. (BDR 58-742) Acting Chairman Sprinkle: You may begin your presentation when you are ready. Assemblywoman Jill Tolles, Assembly District No. 25: I am honored to bring Assembly Bill 240 before you on behalf of my constituent and the small businesses that are similar to hers. They simply want greater flexibility to grow their businesses and respond to the market while maintaining high standards of safety in serving the public. I would like to answer the question of how I became involved with this issue.

Assembly Committee on Transportation March 16, 2017 Page 12 It started back in 2015 at a Women of Achievement lunch when I sat next to a dynamic, savvy, smart, enthusiastic woman with whom I bonded immediately because we were both citizen lobbyists in the 2015 Session, advocating for the little guy. [Assemblyman Carrillo reassumed the Chair.] I was advocating for child abuse prevention bills; she was advocating for small motor carriers, her industry, and her small business. We both were excited about being citizens involved in the process. I found out later that the bill I was working on passed into law, but hers did not. Understandably, that was disappointing. When I decided to run for office to represent Assembly District 25, I found out that she was my constituent. I offered to revisit this issue on her behalf. If we fast-forward to the year 2017, we could say that there have been some changes in the market. Transportation network companies (TNCs) have made this industry more competitive, and they have made it more vital that limousine and shuttle companies stay nimble to compete, while maintaining high safety standards. In northern Nevada in particular, we have experienced this on a deeper level because we are anticipating over 50,000 new people moving into our area in the next five years. That makes the need for flexibility to respond to the market greater than ever. There has been much talk this session about equality and fairness, which are good principles to promote. All we are asking for is a fair playing field for small businesses, like Danéll's, and to grow if they have proven their commitment to safe transport of the public. So we are revisiting this issue, but with some revisions, being sensitive to the concerns that were brought up in 2015 and the reasons the bill did not pass into law. We have come back with what we hope you will find strengthening provisions relating to safety to address the concerns from last session. While we were at it, we revised some other statutes to allow for not only the small motor carriers, but also all motor carriers to employ standard best business practices to benefit their clientele and to promote their businesses. I recognize that I am new to the transportation conversation, but I do have quite a bit of experience with small businesses. That is the perception that I bring—how to help these businesses succeed. With the Chairman's permission, I would like to go through a PowerPoint presentation of each of the sections, highlighting the changes that we are bringing forward. I would then like to pass it on to my constituent to give her testimony. I also have some experts on hand to help me answer questions the Committee may have. Chairman Carrillo: Yes. Proceed with your presentation. Assemblywoman Tolles: Before I begin my presentation, I would like to thank my attaché, Marissa Crook, for helping me today. Assembly Bill 240 retains health and safety regulations, but removes language relating to economic conditions and competition [page 2, (Exhibit C)]. It makes revisions to

Assembly Committee on Transportation March 16, 2017 Page 13 tariff schedule requirements and for free and reduced price rides. It adds provisions for intervenors for issues related to safety, and it revises time limits for reapplication. I will be working off an amended bill (Exhibit D). You should have received that. There are hard copies available, and it has been posted to Nevada Electronic Legislative Information System (NELIS). We will be working off the document titled "A.B. 240 as Amended" (Exhibit D). The amendment is a friendly amendment that I accepted. We will go through it, section by section. Section 1, subsection 1, paragraph (c) retains the language relating to safety; however, it removes references to economic conditions [page 3, (Exhibit C) and page 1, (Exhibit D)]. Paragraph (e) removes language referring to discouraging competition. I appreciate those of you who met with me before this meeting to ask your questions regarding the connection of economic conditions to the safety of the public. As I understand it, the theory is there is a concern that if a company is not economically viable, it might start cutting corners. There have been questions about this. It is my understanding that if a company has economic trouble, it would cut corners. Those corners cut would be related to safety. I can appreciate that concern. I talked with members within the Nevada Transportation Authority (NTA) and within the industry. It is my understanding this does not remove the requirement for these motor carriers to submit their annual reports showing that the owners have 20 percent equity in the company. It also does not negate the other safety requirements that they are regulated and required to meet. To address that concern, toward the end of the proposed amended bill [section 4, subsection 8, (Exhibit D)], we have strengthened the intervenor provisions in order to create a secondary backstop to make sure that safety is first and foremost. Section 2 relates to limousines, shuttles, and taxicabs—the language is inclusive. Subsection 3, paragraph (a) adds language allowing motor carriers to vary their tariff schedules by no more than 20 percent of scheduled rates approved by the Authority [page 4, (Exhibit C) and page 2, (Exhibit D)]. The regulated tariffs were put in place to protect the public from price gouging, as well as to protect companies from employee dishonesty. This maintains those boundaries; however, it provides more flexibility in order to compete by varying the tariffs within a 20 percent margin in order to keep up with the current industry where new competition has entered the marketplace. Section 3, subsection 3 is my favorite part of the bill [pages 2-3, (Exhibit D)]. As I started looking into the chapters, I looked at Nevada Revised Statutes (NRS) Chapter 706.351 and saw a long list of exceptions for when a motor carrier was able to offer a free or reduced ride. If you look at the original language authored in 1971, you notice exceptions such as attendants of livestock or other property [paragraph (f)]; persons providing relief in cases of common disaster [paragraph (e)]; students of institutions of learning [paragraph (i)]; and so forth [page 3, (Exhibit D)]. This list begged the question, "Why do we have a list of exceptions? Why can a business not offer a free or reduced rate as a best business practice?" At my favorite yogurt store, when I have purchased ten yogurts, the eleventh one is free just because I am a good customer. I notice that TNCs and RTCs offer free rides for St. Patrick's Day—to help in the effort for Zero Fatalities, and to curb drunken driving incidents.

Assembly Committee on Transportation March 16, 2017 Page 14 Why can a motor carrier not offer the same thing to a favorite customer or for a public safety campaign? This portion of the bill removes all those exceptions so that motor carriers are able to offer free and reduced rides as part of promoting their businesses or participating in public safety efforts. There was a concern brought to me about whether or not this might open the door too broadly. With this amended language, we amended NRS 706.351 such that free or reduced rides shall not exceed 10 percent of annual gross revenues [page 6, (Exhibit C) and page 3, (Exhibit D)]. Section 4 deals with NRS 706.391. This amends the law for hearing applications within 90 days for a certificate of public convenience, a necessity to operate a common motor carrier [page 7, (Exhibit C) and page 3, (Exhibit D)]. I will jump ahead a bit; this makes more sense when I reference the end of the bill in section 5, referring to NRS 706.396 [page 5, (Exhibit D)]. Currently, if you are denied a certificate of public convenience, you have to wait 180 days, half a year, to reapply—even if the denial is for something minor. As you can imagine, that can be cumbersome to operate your business if you have to wait half a year before you can reapply. What we did was remove that section [5] altogether so that you could reapply the next day if you have fixed the broken taillight or the missing document. On the other side, the Nevada Transportation Authority (NTA) is required to fix a time and a place for a hearing within 90 days, so that it is not open-ended. Section 4, subsections 2 and 3 deal with NRS 706.391 and remove the language on "economic conditions" and "discouraging competition" to keep consistent with the first section of the bill [page 8, (Exhibit C) and page 3, (Exhibit D)]. Section 4, subsections 7-10 deal with the same chapter in NRS and add provisions for intervenors, indicating how this criteria should be used to evaluate applicants, including their having knowledge of how to operate a vehicle safely, maintain safe vehicles, and employ safe drivers [page 9, (Exhibit C) and pages 4-5, (Exhibit D)]. I want to reiterate that we heard the concerns that safety is of utmost importance. We did not want to bring this bill forward without addressing those concerns, so we worked to strengthen that language on the intervenor to ensure that not only do they focus on the safety of the vehicles, but also on the safety of the drivers who operate them. Finally, section 5, as mentioned before, removes NRS Chapter 706.396 which put a limit on the amount of time an applicant had to reapply for a certificate [page 10, (Exhibit C) and page 5, (Exhibit D)]. Mr. Chairman, I can either stop here to answer questions or I could turn it over to my constituent, so she could tell her story to, perhaps, give a little bit more of the background for this bill. Chairman Carrillo: We can now hear from your constituent.

Assembly Committee on Transportation March 16, 2017 Page 15 Danéll Wilson-Perlman, Owner, Reno Tahoe Limousine, Reno, Nevada: Assemblywoman Tolles, thank you very much. Without you, I would not be here today. We appreciate your support. Mr. Chairman and members of the Committee, my husband Ron and I are the owner-operators of Reno Tahoe Limousine in Reno, Nevada. We comply with state laws, licensing, safety criteria, and insurance requirements. In the beginning years of Reno Tahoe Limousine, Ron and I drove the cars, answered the phones, cleaned the cars—we did everything. Today we employ 28 people. We received our Nevada license in 2006 stipulating we could only operate seven vehicles intrastate. No other company in northern Nevada is subject to this same limitation, they are all grandfathered in. They can expand their businesses at will. When we wanted to expand, we had to go through the licensing procedure again to ask permission to operate more vehicles in the state. We already own eight additional vehicles that we use for trips in California. All we want to do is move those vehicles into our Nevada fleet. Our company applied in 2012 to the NTA to expand our license and to use those vehicles for trips in Nevada. We already own those vehicles. One of our competitors protested, and we had to go to a hearing where we had to have some of our clients testify, plus we had to divulge every bit of information on how we ran our company in front of our competitor, not to mention that we were deposed by their lawyers in their offices for two hours. We filed for expansion in August 2012, and after a two-year process, in August 2014, our application to expand was denied by the NTA. The reason they gave was that we could not prove our market. They did not say that we were unsafe or underfunded. We are not asking for any special privilege or treatment. We just want to be able to grow our business to keep up with the growth of the region and state. We cannot do this with only seven Nevada-only vehicles. The ultimate dream and focus for us as entrepreneurs is to be able to grow our businesses, which will create more jobs and have a positive effect on the state's economy. Today, we thank Assemblywoman Tolles for working with us to address the following issues. Limousine operators should be able to offer free rides to charities and nonprofit organizations as they see fit. Every business should be able to give back to their community. It is the right thing to do. All passenger carriers should be allowed to vary their rates within 20 percent of their tariff, so we can respond to changing market conditions. When we file a tariff with the NTA, it has to be posted for 30 days, and then be approved by the NTA at a hearing. That filed tariff cannot be changed unless it goes through another posting, hearing, and approval. We live in the age of TNCs where they are allowed to price surge or discount as they see fit while we are not allowed to do so. We can never run a Valentine's Day special or a prom special without going through this laborious process. We want to be able to move up or down within our filed tariff. We are asking to have some flexibility when it comes to our pricing—again, as we as owners see fit.

Assembly Committee on Transportation March 16, 2017 Page 16 These outdated laws need to be changed. There are too many small- and medium-sized limousine operators statewide that have been hurt for too long. The time for change is now. We appreciate the consideration of this Committee. Thank you for your time. Assemblywoman Tolles: With your permission, I would like to bring up Jonathan Leleu, representing the Nevada Bus and Limousine Association. He helped contribute to the amended language we are reviewing today. He will help answer questions you may have as well. Jonathan P. Leleu, representing the Nevada Bus and Limousine Association: I am testifying in support of A.B. 240, as amended. As Assemblywoman Tolles just said, I am happy to answer any technical questions that the Committee may have. I would like to point out that A.B. 240, as it originally read, was opposed by our association. I would like to thank the assemblywoman for five solid weeks of discussions on this bill, on language and wordsmithing of an amendment that our association can support. As you see, the amendment in front of you is a very colorful document. We put a lot of work into wordsmithing this amendment. It is something that our association is happy to get behind. Assemblyman Watkins: I have several questions. I will try to keep them as pointed as possible. As I understand it, you are the only motor carrier in northern Nevada who is not grandfathered in. How many carriers in the entire state are not grandfathered in? How many people, groups, companies, or entities throughout the state would be affected if we passed this bill? Jonathan P. Leleu: There is an extensive list of all certificated carriers located on the NTA website. That list includes companies with unlimited licensees as well as the remainder of those that hold limited licenses. I would submit that it is my belief that there are between five and seven that have unlimited licenses, and that the remainder are limited. These numbers are estimates; I do not have the exact figures in front of me. I can tell you that the organization that I represent has 20 members; none of them is grandfathered in, holding unlimited licenses. I will get you that exact number. Assemblyman Watkins: Has anyone dug into the legislative history on these two different provisions? The first, listing the nine or so different exceptions to free or reduced rides does not trouble me. As to the second—creating restrictions and the process of going before a hearing, showing economic viability in order to expand on a fleet—why were those restrictions put in legislation in the first place? Jonathan P. Leleu: I cannot answer that question. I am happy to research the issue and get back to you. My understanding is that the testimony was fairly one-sided.

Assembly Committee on Transportation March 16, 2017 Page 17 Assemblywoman Tolles: Anastasia Boden may be able to answer that question from a national perspective. I have some of the history and would be happy to provide it to you in regards to how this originally came together as part of regulating utilities. Transportation was grouped with utilities, then branched out from there. Some of that information may be helpful in giving you answers concerning the history behind the formation of the NTA. Assemblyman Watkins: While this might make sense for your constituent, in southern Nevada, we have a public interest in keeping as few vehicles on the roadways as absolutely necessary and economically viable. If a competition is created whereby anybody can put as many limousines, shuttle buses, or motor carriers on the roadways as they want, we create a problem for the public. Is my concern unfounded? Jonathan P. Leleu: I do not believe that the concern is founded because the pricing that will be set by virtue of the bill as amended will be maintained. What we are doing is not simply turning loose a whole bunch of vehicles on the road. That was done in 2015. What we are doing by virtue of this amendment and this bill is allowing the market to dictate itself. The pricing that will be allowed will remain intact. Accordingly, there simply cannot be an unlimited number of vehicles on the road at any one time. It will not work that way. The pricing structure, the tariff structure, remains intact. We did alter the tariff structure slightly to allow businesses at least a little bit of flexibility to meet the market demands. You will see within the amendment, in section 2, subsection 3, paragraph (a) that the common carriers will be allowed to fluctuate prices from their approved tariff rates at a rate of 20 percent. That allows them to dynamically price their market. For instance, in cases of high demand, they can move their prices up—but no more than 20 percent from their approved tariff rate. If the market is slow, they can move their prices down—but no more than 20 percent from their approved tariff rate. It gives them the ability to respond to their market at least a little bit better than they can now, and hopefully, pick up additional business. What it does not do is turn a whole bunch of cars loose on the street and drive pricing down uninhibitedly, creating the safety issues that would happen if the market was not regulated. Removing the tariff entirely would create that type of situation—losing the pricing protection. You would see the pricing go way down. You would see operators cutting corners to try to keep their cars on the road to recover the revenue, even though it would be substantially less by virtue of having all those cars on the road. This bill does not do that. It maintains the pricing protection that exists. It gives them at least a little bit of latitude to respond to the market, but leaves the protections in place, so that the market cannot proceed uninhibitedly.

Assembly Committee on Transportation March 16, 2017 Page 18 Assemblywoman Tolles: Because I know your passion for conservation, I believe I understood your question to be, "Does this limit an endless number of vehicles on the roads and the impact that might have?" This bill does not seek to address any sort of limit on the number of motor carriers. I would point out that the only companies that are able to add more motor carriers are the unrestricted companies. This bill seeks to even that playing field. If the market expands, if the population expands—regardless of whether you hold a limited or an unlimited license—companies have the flexibility to respond to the market and to the population growth. That is not being regulated. Assemblyman Sprinkle: First off, this was all proposed two years ago in a bill that came forward. I was told this bill is fundamentally different, as you were focusing on safety. That is not what I am seeing in this bill. What I see is pretty much what I saw two years ago. I want to be sure I understand correctly that the reason you are using the strikeout language is that you feel that the playing field is unfair, and people are not being allowed to promote and advance their businesses with the language currently in place. Is that correct? Safety may be a part of the bill, but, truly, what you are trying to eliminate is what you perceive as a competitive advantage. Jonathan P. Leleu: No. That is not correct. What you are saying is partially accurate—we would like to level the playing field. However, Senate Bill 183 of the 78th Session made it through the Senate unanimously, made it through the Assembly, then made it to the Governor's desk, where it was vetoed. The veto letter was explicit. It said the bill created safety issues. During the interim, we talked to the NTA and to different participants in the industry. I reached out to the Livery Operators Association and discussed these concepts with their Executive Director and their General Counsel multiple times, squarely addressing Governor Sandoval's veto. We wordsmithed language that we thought would address the Governor's concern regarding safety. We then proposed some language, worked on the language, and brought it to the Livery Operators Association. The Livery Operators Association, unfortunately, will not support the language. However, we feel that we have worked hard with the industry to try to bring this legislative body an industry bill that is fundamentally different than S.B. 183 of the 78th Session. We did not see any utility in bringing back the same language that the Governor vetoed. We said this to the Office of the Governor eight months ago. If we were going to do that, we might as well try to pursue a veto override. I did not see a reason for that either as the Governor had legitimate concerns that needed to be addressed. What you see before you in the amended language at section 4, subsection 8, are the safety issues we brought up. Paragraph (b), subparagraph (i) says the Authority shall grant a petition if the petitioner "Demonstrates the petition has been filed within a period of not more than two (2) years after the original date of approval of the applicant's certificate of public convenience and necessity . . . ." Subparagraph (ii) says the Authority shall grant a petition if the petitioner "Demonstrates applicant has not been subjected to a safety audit or compliance review by the Federal Motor Carrier Safety Administration . . ." or other related agencies. What those two subparagraphs do is provide safety backstops. We wanted to ensure that

Assembly Committee on Transportation March 16, 2017 Page 19 applicants could demonstrate that they have a track record of safety, which is why you see holding the application for two years. We wanted to ensure that the applicants had been inspected and found safe by reputable agencies. We included two safety backstops that directly address the reason the Governor vetoed S.B. 183 of the 78th Session. What do these backstops do? I will cut to the chase and explain how these work from a practical standpoint. If an applicant seeks to enter the market or seeks to expand its fleet in the existing market and has not been in business for more than two years, nor undergone those inspections, then the intervenor is completely warranted and it is authorized. Go forth and conquer. Intervene on it and let us bring those issues before the Nevada Transportation Authority. Let us vet those things. But, if the carrier has been in business for two years it has clearly been under the watchful eye of the Nevada Transportation Authority. No one is in a better seat than the Nevada Transportation Authority to regulate the safety of the operators. If they have been inspected and found safe by the Nevada Highway Patrol, by the Federal Motor Carrier Safety Administration, and by the Nevada Transportation Authority itself, it would make sense that the carrier has been found safe. Those two safety backstops are what we added to directly address the reason for the veto. Assemblyman Sprinkle, you mentioned that this was basically the same bill. It is not. What we tried to do, and what we worked on with the Livery Operators Association, was address the Governor's concerns. Are we talking about competition? Yes, we are also talking about competition, but we are really talking about safety. That is what this section, in particular, does. Assemblyman Sprinkle: I would not disagree with you about that in reading that section. I have no issue with it. Those are very valid reasons for an intervenor to become involved. The original A.B. 240 changed who the intervenor could be or how the intervenor could become involved. With the amendment, the intervenor can now represent someone else or another agency. Is that correct? I am confused about what you did with the intervenor between the two bills. Jonathan P. Leleu: One of the reasons the organization I represent was opposed to A.B. 240 prior to the amendment was because it used the exact language that was used in the Senate bill last session. We saw no reason to bring that language forward again when it had already been vetoed. The new language changes that and adds those safety backstops. Assemblyman Sprinkle: Is that the only change to the part about the intervenor? I am concerned that I cannot see the difference between the two bills. Jonathan P. Leleu: There is an additional paragraph regarding a petitioner. Assemblyman Sprinkle: Could you direct me to that section?

Assembly Committee on Transportation March 16, 2017 Page 20 Jonathan P. Leleu: That is in section 4, subsection 8, paragraph (b), subparagraph (iii). We added one additional paragraph behind the two safety backstops regarding the petitioner, the one filing for leave to intervene, the intervening party. The sub-subparagraph says, "Petitioner produces tangible evidence of actual or constructive knowledge of an issue relating to the safe operation by the applicant as a common motor carrier." What that means is, as an intervening party, you must show you have some sort of proof that the carrier is unsafe. We added that language as well. The remaining language that you see that is printed in blue bold italics is language from the original bill, and I believe appeared in last session's Senate bill. The green underlined bold italics language is all new language that we, the Nevada Bus and Limousine Association, amended in with the graciousness of the sponsor, working with her to come to language that we thought was agreeable. Eight months ago, I committed that if I brought a bill forward, it would be different than what the Governor vetoed. I said I would directly address the Governor's concern. His veto concern was about safety. I addressed it not once, but twice. I wanted to make sure we had two safety backstops—I did not just want to pay lip service to it. I wanted to be sure I addressed it in a real way. This is what we came out with. Assemblyman Sprinkle: I see that, and I see where you are going with that from the safety concern standpoint. Bringing this back full circle, this bill is still taking away the ability for an intervenor to get involved when it comes to economic impact issues. That was part of the original bill from two years ago. Jonathan P. LeLeu: Yes. You are absolutely accurate. Assemblywoman Tolles: When I asked the representative from the NTA if there are still other ways to report back in regards to the economic feasibility of a company, the response I was given referred me to the annual report on the economic viability of the company. That report includes having to show that the owners have 20 percent equity in the company. There are economic factors that are being regulated that can still meet the concerns of the NTA, even though we are striking out those particular phrases. Assemblyman Sprinkle: That was not my question, but that was helpful information.

Assembly Committee on Transportation March 16, 2017 Page 21 Assemblyman Fumo: I have two questions. The first is in striking out language in section 3. I can understand the reason for giving discounted rides on New Year's Eve, Valentine's Day, and things like that. But, when we open it up this broadly, are we opening it up so that drivers could now give cash runs and discounted runs? Are we making it too broad? Assemblywoman Tolles: I asked about that as well, asking about what kind of monitoring is in place. The carriers would still have to submit their ride slips. They still have to account for all the rides, even if they are complimentary rides. Because that concern had come up in discussions with various people, we added the amendment that determined that these rides could account for no more than 10 percent of the annual revenue. That should prevent unforeseen abuses of that system. Assemblyman Fumo: I am sympathetic to your plight—having to apply and being denied, and having to be deposed for two hours. Are there other companies that have applied for growth and been denied, or are other companies being allowed to apply and grow? Jonathan P. Leleu: Yes, there are others who have applied and have been denied. The greater issue, Assemblyman Fumo, is not necessarily the denial. The greater issue is that the intervenor process in general is fairly duplicative, given the fact that it examines the same things that the Nevada Transportation Authority examines—safety and economic concerns. That said, the intervening process looks a lot like the litigation process. Those of you who are attorneys understand that in the litigation process you file a complaint; there is an answer; you enter discovery, and there are depositions and written interrogatories. Following that, you go to trial, have a hearing, and then a decision is made. The intervenor process looks a lot like that. The discovery process is long and is fairly unlimited. You can ask the number of questions and issue the number of interrogatories that you want. Ultimately, what you see here is a situation where a carrier, an applicant, is being put through a litigation process and through the expense and time of a litigation process, simply by applying to either expand or enter the market. That is the concern. The net, practical result is not necessarily a denial; what you see are folks who just do not apply and folks who just drop out of the process mid-application because it gets to be too long and too expensive. Assemblyman Fumo: Even though we have this arduous process, are there companies that apply and have their applications granted? Jonathan P. Leleu: Yes. Despite the fact that we have the intervention process, applicants are moving through the process and having their applications granted, albeit it takes time and money. During conversations with the Nevada Transportation Authority, we were told that many, if not most, applications are granted despite the intervention.

Assembly Committee on Transportation March 16, 2017 Page 22 Assemblyman Watkins: I have two more questions. What types of vehicles are included in this bill? In NRS, I have found the term "common motor carriers of passengers." Is that the limitation? Are these limousines and shuttles? What is the array of vehicles? Assemblywoman Tolles: The bulk of this bill deals specifically with limousines and shuttle buses; however, there is the section on tariff schedules that expands to relate to all "common motor carriers", which would also include taxicabs. Assemblyman Watkins: Section 4 of the bill talks about the application for a certificate of public convenience and necessity. Based on the proposed changes to this statutory scheme, I do not know that we would consider it a certificate of public convenience and necessity anymore, because we are not analyzing that. We would not be looking at whether or not it is convenient for the public to have extra carriers; we would be looking at the safety of the carriers. Is that fair? Jonathan P. Leleu: Mr. Assemblyman, as soon as this bill passes we can call it whatever we like. We can call the certificate whatever we want. Assemblyman Watkins: We are no longer analyzing whether or not it is convenient for the public to have more carriers on the roadway. The certificate process would not consider that in any way. Assemblywoman Tolles: We might want to table that question until Anastasia Boden testifies. She has analyzed this issue across the United States. She may be able to speak to that question. Chairman Carrillo: Are there any other questions from the Committee? [There were none.] How many applications have been received by the NTA in the past five years? How many of those have been denied? Jonathan P. Leleu: I have that information. I can provide it to you in a spreadsheet. Chairman Carrillo: Please send that to the Committee members. Regarding adding flexibility to the tariff—what if a driver asked a rider to pay part of his fare with a credit card and offered a discount for cash payment on the balance? Could cash rides become a problem? You said that drivers would still need to report their rides, but how would that work?

Assembly Committee on Transportation March 16, 2017 Page 23 Jonathan P. Leleu: That was the biggest reason we opposed the tariff portion of A.B. 240 as written. As written, A.B. 240 would eliminate the tariff. We wanted to ensure that not only was the public protected by virtue of giving public notification of what the pricing is, but we also wanted to ensure that the industry was protected. The industry is prone to a lot of abuse. Your scenario brings up a great point. The president of the association I represent, Lou Castro, is going to be testifying today. He brought up the same point. He was concerned that drivers would make them go broke if this were not adequately tracked. We built in protections with the amendment. To the extent that additional protection is required, we are all ears because we want to ensure that our operators remain protected even though we are giving them some flexibility by virtue of this language. Chairman Carrillo: Would you please explain how the intervenor process is anti-competitive when the statute specifically prohibits the NTA from using competition as a basis for denying an application? Jonathan P. Leleu: You are correct. The statute specifically says that the competition cannot be used as a reason for denial of an application. That said, the intervenor process is extremely long and extremely expensive. As a result of that, it can be used as a tool for anti-competitive activity. That is the issue—it is the process, not the result. Assemblywoman Tolles: I believe my constituent has information she could share regarding free rides and the reporting process. Danéll Wilson-Perlman: I am speaking for northern Nevada. I am a northern Nevada operator. Every ride we have is set up beforehand. We can be stopped by an NTA officer any second and have to give all our information about who is in the car and what the ride is. I have been in the business 15 years. We have never had this issue before. From an operator's point of view, there is no issue there. I have no concern because we have very strict rules. Every ride has a folder with all the information in it. Chairman Carrillo: I do not see any further questions from members. Did you want to bring Ms. Boden up to testify? Anastasia P. Boden, Staff Attorney, Pacific Legal Foundation, Sacramento, California: I represent entrepreneurs nationwide in constitutional lawsuits challenging licensing laws that have no relationship to protecting the public but only exist to stifle competition. Nevada's current licensing law for transportation companies is one such law, but A.B. 240 presents a chance to bring economic opportunity to hard-working people of Nevada and people in other states who want to bring business and jobs to Nevada but cannot because of the current licensing scheme. I hope I will answer some of your questions in my remarks.

Assembly Committee on Transportation March 16, 2017 Page 24 Certificates of public convenience and necessity laws essentially allow existing businesses to shield themselves from competition. Accordingly, they have repeatedly been called "the competitor's veto." The way the law works is, when a person applies for a new license or for an expansion of an existing license, anyone can protest that license on any basis. That means that an existing business can protest a new application on the basis that they do not want to compete, and that basis only. If there is no protest, the NTA can dispense with the hearing requirement, but a protest automatically subjects an applicant to a hearing requirement—akin to full-blown litigation—in which an applicant must prove to the satisfaction of the NTA, that they will not harm their competitors, and there is a market for their business. Of course, every new business is going to have some effect on the market for their goods. That is the entire point of going into business. Proving one's market in advance is a nearly impossible feat. Even the best entrepreneurs cannot guarantee that they will succeed, but that is what makes them brave—their perception of a need in the market and a willingness to invest time and funds to try to meet it. This is exactly why, despite the fact that there is a provision in the law that says an application cannot be denied for purposes of competition, these other two requirements are used as surrogates for that. You have to prove that you are not going to harm your competitors, which is explicitly anti-competitive, or you have to prove your market, which is also anti-competitive, especially in light of the fact that the only way the NTA evaluates that is whether there is an existing business that states that it can fill the need for the market. One of the most-often repeated rationales for these laws is that too much competition will force businesses to start skimping on safety measures in order to save money. One need only apply this theory to other industries to understand why it is wrong. No one would suggest that competition in the food industry is going to cause another restaurant to start serving spoiled food. Competition does not force companies to do worse; it forces them to improve, or go out of business. In the meanwhile, safety laws ensure that businesses behave safely. Evidence from lawsuits I have brought across the country challenging these laws bears out exactly how they are used. They are not used to protect the public; they are used to protect the incumbent businesses. For example, in Missouri between 2005 and 2010, every single application for a moving company was protested by an existing firm, on the basis that the existing firm did not want any new competition. Most people abandoned their applications because they were told by the authority that it is pretty much impossible to get a license. Those who had the fortitude and funds to go through with the process were denied. Every single one was denied on the basis that they would compete; nobody was denied on the basis that they were unsafe or unqualified. To answer a previously asked question about the origin of these laws in legislative history, generally these laws were invented in the late nineteenth century and were originally applied to the railroad industry. Proponents of these laws saw them as encouraging private investment in utilities because utilities had to comply with some unique regulations. That made it particularly expensive, requiring a lot of funds up-front. There was the thought that

Assembly Committee on Transportation March 16, 2017 Page 25 you would not need a lot of competition—you do not need five railroads running parallel to each other across the country. As transportation modernized, the government agencies that formerly regulated railroads, started to sweep in new transportation companies—moving companies, limousines, and taxis. The application of these laws to non-utilities like modern transportation companies is a complete historical accident. It is only a matter of inertia and historical accident that these laws are applied to fully competitive industries that are not utilities today. All told, about half of the states have these antiquated laws, although that number is quickly shrinking. In fact, after I brought lawsuits in Oregon, Missouri, Pennsylvania, and Montana, the legislatures of each of these states repealed their competitor's veto laws. After our lawsuit in West Virginia, the legislature introduced another repeal law which remains pending. Notably, my home state of California—which is often called hostile to business, or is hostile to business—does not have these laws. In California, as long as you can prove that you are qualified and have safe vehicles, you can do business there. Nevada's competitor's veto law has discouraged people from California from doing business in Nevada, like Sacramento-based mover Steven Saxon who wanted to start a new branch in Reno so that his son could dip his toes in the water of his company, getting experience in the business that he would eventually take over. The competitor's veto law kept him out. It has also kept the Perlmans from expanding their business in Nevada—not because they are unqualified or unsafe, but because they would compete. Assembly Bill 240 limits protest to instances of public safety and says that as long as the carrier is qualified, operates safe vehicles, and abides by Nevada's safety regulations that is good enough to run a transportation company in the state. I support Assemblywoman Tolles's effort to bring fairness and competition to this industry in the state. [The witness submitted a prepared legal brief to supplement her testimony (Exhibit E).] Assemblyman Watkins: I thought we had agreement that you could not challenge a certificate based on competition. You just said that all ten of those moving companies challenged based on competition. Am I missing something? Is that allowed with moving companies, but not with limousines, or are you reading between the lines of their contests? Anastasia P. Boden: I was speaking to how the law is on the books. The amendment makes it so that you can now only protest based on safety, but currently you can protest for any reason. Assemblyman Watkins: Is that what you just said? I thought you just agreed with the Chairman that current statute says you cannot contest based on competition.

Assembly Committee on Transportation March 16, 2017 Page 26 Jonathan P. Leleu: There is a misunderstanding here. Let me clarify what is going on here. There is a basis for filing an intervention action, just as there must be a basis for filing a lawsuit. Among those bases are safety, proving what your market is, and who your potential business sources are going to be. Ultimately, as you move through the intervention process, you go through discovery. If the NTA decides to accept the intervention action, a basis for denial of a license cannot be competition. That is in statute. Once you get to the end of the whole intervention process, if the NTA is looking at the intervention action and all the evidence in front of them, they can decide that a carrier is unsafe, and the intervention action proved that. They can thank the intervenor and deny the application. What the NTA cannot do is find that an operator is safe, but would present an unreasonable competitive disadvantage on existing certificate holders, and make an order based on that. The NTA would be acting illegally. The distinction is that you can move through the intervention process and be forced to show that you have a market, but a basis for denial cannot be unreasonable competition. Assemblyman Watkins: I understand that the basis for denial cannot be competition. Are there any intervenors coming in saying that a license should not be allowed because of competition? Jonathan P. Leleu: No. That said, part of the burden of proof on an applicant in an intervention action is currently to be able to prove your potential sources of revenue. Chairman Carrillo: Is that all the testifiers you have, Assemblywoman? Assemblywoman Tolles: Yes. Chairman Carrillo: I will now take testimony in support of A.B. 240 in Carson City. A.R. (Bob) Fairman, Private Citizen, Carson City, Nevada: I support this bill. It was our intention last session with Senator Gustavson's bill, S.B. 183 of the 78th Session, and with the changes that were made with this bill, this should be very good for the state of Nevada. Tray Abney, Director of Government Relations, The Chamber, Reno-Sparks-

Northern Nevada: I am also representing the National Federation of Independent Business. I want to thank Assemblywoman Tolles for bringing this bill and for Chamber member Danéll Perlman for walking us through this. To be brief, we think that every business should be allowed to compete and succeed in the marketplace under the same rules as their competitors. We think it is vital to maintain regulations that cover health, safety, and welfare, and we think this is a reasonable approach that allows job creators to flourish.

Assembly Committee on Transportation March 16, 2017 Page 27 Chairman Carrillo: Is there anyone else in support of A.B. 240 here in Carson City? [There was no one.] Is there anyone in support in Las Vegas? Lou Castro, Owner, Earth Limousines and Buses, Las Vegas, Nevada: Earth Limousines and Buses is a small limousine and bus company. I am also the president of the Nevada Bus and Limousine Association. I represent about 20 medium- to small-sized transportation companies here in southern Nevada. I am seeking passage of Assembly Bill 240 because we need regulation that is going to support the industry and allow us to grow our fleets when we need to. For example, we have CES [a consumer electronics show] here every year. Every year we run into the situation where we are not able to add vehicles to support our clients. It becomes rather cumbersome when we are constantly having to farm out our work to other carriers within our region. Even then, they run out of vehicles as well. We are looking for ways to solve our problems. We feel that this bill not only addresses some of the bill issues we previously submitted in S.B. 183 of the 78th Session, but it also encompasses other areas. It gives us more reasonable pricing, so we can compete with the TNCs that are now in our market. It gives customers a wider range of choices. I appreciate your allowing me to speak. I want to hand you over to my wife, who also works for Earth Limousines and Buses. Nicole Feely, Director of Sales and Marketing, Earth Limousines and Buses,

Las Vegas, Nevada: Alongside Lou, I help to run Earth Limousines and Buses. I wanted to address the intervention process. We are one of those carriers that has not applied to expand because of the grueling process. It is extremely expensive. It can be extended out to two-plus years, so you can imagine what the attorney fees to go through that process can look like. Plus, the process requires that we prove our market. I want to elaborate on what that means. That means we have to bring our client list to the table, so our competitors can see exactly who it is that we are working with. As intelligent business people, we are not going to expand our business if we do not have the proper clientele to support that. It has been quite frustrating. As a small operator for nine years, there have been times when we have felt bullied. We want to level the playing field, and to be able to compete with the TNCs—who can offer price surging when market demand is up, and lower their prices when demand is down, much like hotels do. We would like to be able to be more competitive in offering volume discounts to loyal clients who do send us a significant amount of business throughout the year. Chairman Carrillo: Is there anyone else in support in Las Vegas? Abderrahim Mansouri, Atlas Limousines, LLC, Las Vegas, Nevada: I support A.B. 240.

Assembly Committee on Transportation March 16, 2017 Page 28 Chairman Carrillo: Is there opposition in Carson City? [There was none.] Is there opposition in Las Vegas? Kimberly Maxson-Rushton, representing Livery Operators Association of Las Vegas: I am with the law firm Cooper Levenson, appearing on behalf of the Livery Operators Association of Las Vegas. By way of background, I note the fact that I have been associated with commercial transportation here in the state of Nevada since 2003 when Governor Kenny Guinn appointed me to what became the Nevada Transportation Authority. In every session in which I have been affiliated with commercial transportation, there has been a bill presented akin to the one currently before you. It is specifically based on a concern, which I would respectfully submit does not exist, that deals with competition and the anti-competitive vote. If you look at the language of the amended bill, I would note that under NRS 706.151, which is identified as section 1, it deals specifically with the public policy and declaration of this body, the Legislature. It pertains to not just limousine operations, but to all commercial transportation operators in the state of Nevada. That includes taxis, household goods movers, nonemergency medical providers, charter buses, shuttle services, and tow operators. When questions arise specific to the language and what the impact, or effect, of that language is, and the response is that it is old and antiquated, I would respectfully submit that the language actually is meaningful. It is specifically used by both the Nevada Transportation Authority and the Taxicab Authority (TA) in their regulatory oversight of transportation companies here in the state of Nevada. I will give you an example. Section 1, subsection 1, paragraph (e) strikes the language, "To discourage any practices which would tend to increase or create competition that may be detrimental to the traveling and shipping public or the motor carrier business within this State." That language is intended for illegal operators. Illegal operators who operate in the state of Nevada create detrimental competition. In no instance would the NTA or the TA be found to be acting above or beyond the scope of their authority simply because of the fact that they found that the actions of an illegal operator, by impounding their vehicle, or taking importunate actions against them, would not be in the best interest of the state of Nevada. It is important to remember that each of these sections as identified in A.B. 240 has broader implications and applications than those specifically enumerated earlier. In addition, you have proposed amendments to section 2, which pertains to tariffs. I would submit that the ability of a carrier to make decisions about what their rates are without having approval by the NTA would otherwise lead to disparity within the commercial transportation industry. What I mean by that is that there needs to be a specific distinction between luxury vehicles—such as limousines and charter buses—and taxicabs. If a carrier is allowed to reduce its rate at any time without NTA approval, that 20 percent could go dangerously low to be comparable to that of a taxicab. As a result, the carrier would be operating beyond the scope of its authority. It would not be safe or in the best interest of the state of Nevada.

Assembly Committee on Transportation March 16, 2017 Page 29 In Section 3, there is a request to allow the ability to offer free or complimentary services. The testimony you heard earlier was the willingness of the proponent to want to provide free or complimentary services to charitable organizations. That language currently exists in statute under NRS 706.351. It allows transportation providers to provide free or reduced services to charitable organizations. While the list of those carriers who can receive free or reduced service may seem antiquated, the language is meaningful and important. If you look at the language under paragraph (i) that refers to students of institutions of learning—that is intended to protect homeless children who have the right to attend a public school in their area, but may not have the means to get to that school. If bus service is not provided under school district policy, it is then incumbent on a common motor carrier to provide that service. In addition, there is language that talks about during states of emergency. That was contemplated by the Legislature in 2015 and deemed to be applicable to TNCs as well as common motor carriers. The intent is to ensure that, in a time of crisis, common motor carriers are available to serve their communities. While the language may not be as familiar to you, and may seem as if it is antiquated, I would submit that it is meaningful and well-used by the NTA as a tool to ensure that carriers operate consistent with their authority, always ensuring the safety of the traveling public. Of most concern are the requested amendments to section 4, specifically those provisions that apply to the application process. As I enumerated before, it states that the level of review include whether or not it will unreasonably or adversely affect other carriers in the market. That is not an anti-competitive means. It is intended to ensure that an operation is consistent with what it applied for and that the operator has an understanding of the rules and obligations in maintaining the safety of those vehicles. It is not used or abused in any purpose as an intervenor to drag on the process or otherwise unduly delay or burden the process. In fact, the intervenor authority is not contained within Nevada statute. It is specifically a regulation that a carrier or an interested party may seek at any time to amend. Following the 2015 Session, there were no requests to open a regulation workshop in which to address the intervenor process. If you look at this regulatory scheme, you will see that it states repeatedly that competition may not be used by the intervenor. It also obligates the NTA, whose three commissioners are appointed by the Governor, to ensure the intervenor does not unduly delay or increase the cost of the applicant. To do so would be strictly prohibited, and the intervenor would no longer be allowed to participate in the matter. The amended language, as it currently exists, identifies an applicant that has been in operation for two years or more would not be subject to the intervenor process, or that an intervenor would not be able to participate unless there was tangible evidence of actual or constructive knowledge of safety. On behalf of the Livery Operators Association, that is always the central point and concern that is raised in every single petition for leave to intervene—not only because the law says that it cannot be based on competition, but the NTA by practice will not allow an existing carrier to come in and intentionally and tortuously try to interfere with an application in order to prevent someone from getting into business.

Assembly Committee on Transportation March 16, 2017 Page 30 As it currently exists, the NTA is a business-friendly organization, as is the Taxicab Authority. The repeal of the language under NRS 706.396 [section 5] raises an interesting point. The NTA does not deny an application based on a broken tail light or a missing document. Instead, they make an extra effort to work with carriers and applicants to ensure that they are able to get into business, and to get into business as quickly as possible. In those instances in which they are denied, it is because there is a fundamental safety issue with that applicant and a concern raised by the NTA. The reason for waiting the 180 days is not because of the fact that there was an error or omission, it is to ensure that individuals presenting applications for consideration understand what their obligations are as potential carriers, and that they demonstrate they can meet the safety requirements that are incumbent on all carriers in the state of Nevada. Chairman Carrillo: Are there any questions from Committee members? Assemblyman Watkins: It seems that you know the history of the regulation scheme. Earlier testimony was that this was being regulated like a public utility, and that it was not the intent, but more a result of inertia. It got me thinking that we regulate utilities because they use public means, and we do not want to inundate the public means or overuse them. For instance, we do not want power lines everywhere amongst competitors, so we regulate that. Is it your understanding of the history that roadways were intentionally treated the same way, or was it accidental? Is transportation analogous to a public utility? Is it a public utility? Kimberly Maxson-Rushton: That is where the term "public convenience" comes from. It is to ensure transportation services are available for members of the traveling public. Providing taxi service is certainly a utility, one that is used as a means to get from Point A to Point B. This is clearly distinct from a limousine, which is a luxury form of transportation. The term "public convenience" comes from the Legislature's determination that operations such as taxis have a utility function. That also applies to tow operators. The changes made herein could have specific and direct impact on all other commercial transportation providers in Nevada. Assemblyman Fumo: We understand from the testimony, that it is an arduous process to grow [a motor carrier] business in the state of Nevada. The reason for that is public safety. Are companies in Nevada going through this process? Are they being denied? Are companies having their applications approved if they go through the process and meet the requirements? Kimberly Maxson-Rushton: I spoke to the NTA earlier today and asked them for statistics for the years 2015 and 2016. They reported that of all the filed applications, only one was denied. They did not specify whether that was in the limousine industry, household goods movers, or tow companies. That information is readily available. I believe that Mr. Leleu testified earlier that he had

Assembly Committee on Transportation March 16, 2017 Page 31 a snapshot relating to the last five years. Applications are regularly approved, seldom denied. That is sufficient with respect to the operations of the NTA and their interest in wanting to ensure that companies get into business. Chairman Carrillo: Having no other opposition in Las Vegas, is there neutral testimony in Carson City? [There was none.] Is there neutral testimony in Las Vegas? [There was none.] I invite the bill sponsor to make her closing remarks. Assemblywoman Tolles: I wonder if it would be possible and appropriate to address a couple of the points that were just made. There might be some confusion. Thank you for the testimony and suggestions made in the last presentation. I appreciate the feedback on section 1 from Kimberly Maxson-Rushton. The intention of this bill is to narrow the application solely to limousines and shuttle companies. We do not want this to extend to moving vans and tow trucks. I would welcome amended language in order to clarify that. In response to the concern about section 2, subsection 3, paragraph (a), and being able to distinguish between a limousine and a taxicab in terms of pricing—that is why we put in the 20 percent limit to respond to that. I am not sure if Ms. Rushton was able to see the amended language before today. We emailed it to some members of her association yesterday, but I do not know if it got to her. We wanted to be sure there would be both a floor and a ceiling to rates charged. As one representative of the NTA pointed out, otherwise we could just paint a taxicab black and call it a limousine if there is no difference between the two. Hopefully, that concern is addressed here. As to section 3, regarding the ability to offer free and reduced rides—all of the red ink does not mean that institutions of learning, attendants of livestock, or persons addressing common disasters cannot get free rides. In fact, every single category is included. The red lines are there to say that we are not making any delineation of who can receive a free ride—as long as it is within 10 percent of the gross annual revenues of the motor carrier, they can give free rides to as many attendants of livestock as they would like. They can give as many free rides to students of institutions or inmates of hospitals as they like. The amendment includes not only that entire list, but also best customers or overly-intoxicated individuals on New Year's Eve as part of a public safety program. It is meant to be more inclusive, to eliminate the exclusive language of those nine categories of people. I wanted to make sure that was very clear.

Assembly Committee on Transportation March 16, 2017 Page 32 I appreciate the requests for data. We will follow up with regard to the information requested by the Committee regarding the intervenor process and questions you had about the history. We welcome suggestions for amended language to help clarify if there are any remaining concerns after this hearing today. Chairman Carrillo: We will now close the hearing on A.B. 240. Is there anyone here for public comment in Carson City or Las Vegas? Seeing none, we are adjourned [at 5:35 p.m.].

RESPECTFULLY SUBMITTED:

Joan Waldock Committee Secretary

APPROVED BY: Assemblyman Richard Carrillo, Chairman DATE:

Assembly Committee on Transportation March 16, 2017 Page 33

EXHIBITS

Exhibit A is the Agenda. Exhibit B is the Attendance Roster. Exhibit C is a copy of a PowerPoint presentation titled "Assembly Bill 240 Motor Carriers," presented by Assemblywoman Jill Tolles, Assembly District No. 25. Exhibit D is a document titled "A.B. 240 as Amended," prepared by GreenbergTraurig, LLP, and presented by Assemblywoman Jill Tolles, Assembly District No. 25. Exhibit E is an excerpt of a legal brief titled "Comments on A.B. 240 to the Nevada Assembly Committee on Transportation," by Anastasia P. Boden, Staff Attorney, Pacific Legal Foundation, Sacramento, California, submitted as a supplement to her testimony in support of Assembly Bill 240.