Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 271, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to allow indirect commissions for selling collision damage waivers.

Your Committee received testimony in support of this measure from Catrala-Hawaii, Dollar Rent-A-Car, and Enterprise Rent-A-Car. Testimony in opposition was received from the Department of Commerce and Consumer Affairs (DCCA).

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 thirty-five rental companies operating in Hawaii.

Your Committee further finds that at present, there are fewer than fifteen rental companies in Hawaii and as such, 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 believes 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 the measure by making a technical, nonsubstantive amendment to conform to preferred drafting procedures.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 271, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 271, H.D. 1, S.D. 1.