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 S.B. No. 593, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to repeal the general ban on commissions from the sale of collision damage waivers in the rental car industry, and instead prohibit only defined "direct" commissions.

Testimony in support of the measure was received from Catrala-Hawaii, Enterprise Rent-A-Car, National Car Rental, and Alamo Car Rental. The Department of Commerce and Consumer Affairs testified in opposition to this measure.

Your Committee finds that, according to Catrala-Hawaii's testimony, Hawaii is the only state that does not allow a company to consider, directly or indirectly, the sale of collision damage waivers in evaluating or paying commissions to an employee.

However, your Committee believes that direct commissions for sales of collision damage waivers lead to "hard sell" tactics and coercion of patrons of the car rental industry. Your Committee believes that direct commissions should continue to be prohibited, as they are under this measure.

Your Committee has amended the measure by adjusting the number of car rental companies reported to have been operating in Hawaii in 1990, as stated in the measure's purpose clause, from thirty-five to sixty. Your Committee has also changed the effective date of the measure from upon approval to July 1, 2050, to ensure further discussion on this issue.

Your Committee believes that the concept of utilizing collision damage waiver sales as an indirect means of compensating or evaluating employees is worth considering and consequently, this measure should move forward in the legislative process.

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 S.B. No. 593, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 593, S.D. 2.