Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs and Government Operations, to which was referred S.B. No. 345 entitled:

begs leave to report as follows:

The purpose of this measure is to require any person who sells more than three motor vehicles in a year to be licensed by the Motor Vehicle Licensing Board (Board) and to place additional sales site disclosure requirements on auto dealers.

Your Committee received testimony in support of this measure from the Board, the Hawaii Automobile Dealers Association, the Hawaii Independent Automobile Dealers Association and one of its board members individually, the Hawaii Insurers Council, and a concerned citizen.

Your Committee finds that licensure of auto dealers by the Board promotes accountability and helps to ensure that the vehicle being sold is legitimately registered and titled. This is especially important in Hawaii, which has one of the highest auto theft rates in the nation.

Your Committee further finds that the auto theft rate would decline if private unlicensed individuals were limited to selling three vehicles a year; this measure would target the persons who "fence" stolen vehicles.

In addition, this measure would promote fairness among auto dealers. Dealers licensed by the Board incur costs that are not borne by private parties, and thus licensed dealers are unable to sell autos as cheaply as unlicensed persons. Therefore, your Committee believes that this measure promotes several beneficial goals.

Your Committee has amended this measure based on the Board's testimony. First, your Committee amended this measure to apply the Board's licensure requirements to any individual selling three or more vehicles a year, regardless of whether the seller technically "owns" the vehicle. Your Committee finds that many sellers do not "own" title to the vehicle being sold, and therefore this amendment fills a loophole.

Your Committee also amended this measure to remove the provisions that place additional sales site disclosure requirements on dealers. The Board testified that it is aware of no situations in which licensed dealers fail to properly and adequately disclose their sales locations, and thus this amendment was unnecessary.

As affirmed by the record of votes of the members of your Committee on Transportation, Military Affairs and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 345, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 345, S.D. 1, and be referred to the Committee on Commerce, Consumer Protection and Housing.