STAND. COM. REP. NO. 957

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 765
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 765 entitled: 

     "A BILL FOR AN ACT RELATING TO MOTOR VEHICLE RENTAL
     INDUSTRY,"

begs leave to report as follows:

     The purpose of this bill is to permit rent-a-car lessors to
visibly pass on their airport concession and access fees to
lessees, as an amount separate from the periodic rental rate.

     Testimony in favor of this bill was received from Alamo Rent
A Car, Catrala-Hawaii, and Budget Rent-A-Car in Hawaii.
Supporting testimony stated that lessors in this State do factor
in their concession and access fees when quoting rates for rental
vehicles, but are not allowed to unbundle and show these fees
separately from the basic rental rate.  Other competing tourist
destinations, such as Florida, allow such "unbundling," which
permits those lessors to quote base prices consistent with
nationally advertised rates, while separately adding on airport
fees.  Lessors in our State, however, must quote a price which is
higher than a nationally advertised price since the airport fees
must be included in the quoted price.

     The Department of Transportation and the Department of
Commerce and Consumer Affairs submitted testimony in opposition
to this bill.  


 
 
 
                                 STAND. COM. REP. NO. 957
                                 Page 2

 
     Your Committee finds that consumers who compare quoted
prices against nationally advertised prices can be confused and
conclude that they are being overcharged in Hawaii.  This can
have a negative impact upon our tourist industry.  Furthermore,
since this bill provides for disclosure of any separate airport
fees, your Committee believes that the consumer is not being
deceived by separately and visibly showing such fees in addition
to the basic rental cost.  In fact, the visible separation of
airport fees could add clarity to the quoted prices, and allow
this State's tourist industry to compete more fairly with other
tourist destinations.

     Your Committee has amended the bill by:

     (1)  Including a legislative findings and purpose section;

     (2)  Requiring that lessors submit an annual report to the
          Department of Transportation and the Department of
          Commerce and Consumer Affairs in order to further
          protect the consumer and assure that the airport fees
          passed on to consumers are fairly assessed; and

     (3)  Making technical and nonsubstantive amendments for
          purposes of clarity and style.

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 765, as amended herein, and recommends that
it pass Third Reading in the form attached hereto as H.B. No.
765, H.D. 1.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,



                                   ______________________________
                                   RON MENOR, Chair