An object's draw distance is declared in the IDE files.
The draw distance value tells the engine how far away any given object should be rendered relative to the player's position (Line of Sight) or viewpoint. Close range normal objects are rendered for a distance no greater then 299 units however LOD objects are rendered from 300 to 3000 units.
In GTA 3 and Vice City, collision data for an LOD object (draw distance is greater than 300) is ignored by the engine.
In San Andreas' LOD models can share the same collision with no mesh or collision spare but the same rule applies where every LOD model or Normal model much have a collision.
Same models can have the collision data stored within where you can link the LOD object to another object. As long as the object has an LOD flag which is -1 in the IPL file the game searches for a collision.