Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 271 entitled:

begs leave to report as follows:

The purpose of this bill is to:

Catrala submitted testimony in support of the intent of the bill and suggested amendments. Testimony in opposition to the bill was received from the Department of Commerce and Consumer Affairs.

Your Committee finds that in 1990, the Legislature barred the payment of commissions on the sale of rental vehicle collision damage waivers because of lessee confusion about the nature of collision damage waivers and the potential for abuse relating to their sale. At the time, there were over 35 rental companies operating in Hawaii.

Related disclosure law, which required a boldface plain language description of the scope, optional nature, and cost of the collision damage waiver, as well as of the possibility that the lessee might already be covered by the lessee's personal automobile policy, had only been in existence since 1988.

Your Committee further finds that at present, there are fewer than 15 rental companies in Hawaii and, in part due to the disclosure law, there exists much less of a basis to regulate the rental car industry through the prohibition of commissions on the sale of collision damage waivers. In addition, your Committee finds that there are many segments of the tourism industry that pay commissions and evaluate or reward their employees based on their performance in selling the various packages and programs offered by the employer.

Based on the foregoing, your Committee finds that the motor vehicle rental industry should no longer be singled out by a law barring the payment of commissions calculated in part from the sale of collision damage waivers.

Your Committee has amended this bill by:

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. 271, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 271, H.D. 1, and be placed on the calendar for Third Reading.