STAND. COM. REP. NO. 1116

                                   Honolulu, Hawaii
                                                     , 1999

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




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred H.B. No. 765, H.D. 1, 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 concession rents and service permit fees to
lessees, as an amount separate from the periodic rental rate set
forth in the rental agreement.

     Catrala-Hawaii, Budget Rent-a-Car and Alamo Rent A Car
presented testimony in support of the measure.  The Office of the
Consumer Protection and the Department of Transportation
presented testimony in opposition to the measure.

     Your Committee finds that automobile lessors are not allowed
to "unbundle" costs such as concession rents and service permit
fees in the rental agreement, as they do general excise tax and
licensing and registration fees.  Other competing tourist
destinations, such as Orlando, Florida, allow such "unbundling",
which allows lessors in those destinations to quote base prices
consistent with nationally advertised rates.

     Your Committee finds that consumers who compare quoted
prices against nationally advertised prices may be confused and

 
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                                   Page 2


conclude that they are being overcharged in Hawaii.  This may
have a negative impact on the State's tourist industry.  

     Your Committee has amended this measure to:

     (1)  Specify the information that lessors are required to
          include in the annual reports to the Department of
          Transportation and Department of Commerce and Consumer
          Affairs in order to assure that the concession rents
          and service permit fees passsed onto the consumer are
          fairly assessed;

     (2)  Allow the Director of the Department of Commerce and
          Consumer Affairs to conduct an exam of the annual
          reports filed by lessors, and to require the lessors to
          pay for the cost of the exam; and

     (3)  Make technical and non-substantive amendments for the
          purpose of style and clarity.

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

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



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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