Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Transportation, to which was referred S.B. No. 481, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this bill is to allow for the payment and receipt of commissions that may be related to, but do not directly correspond to, the sale of collision damage waivers (CDWs) for rental vehicles.

The Hertz Corporation and Cendant Car Rental Group, Inc., testified in support of this measure. Catrala-Hawaii, Avis Rent A Car Systems, Inc., Dollar Rent A Car Systems, Inc., Enterprise Rent-A-Car, and Wholesale Motors, Inc., dba JN Truck & Car Rental supported the intent of this bill. The Department of Commerce and Consumer Affairs commented on this bill.

A CDW is a contractual agreement in which a rental car company, in exchange for a certain fee, waives its right to recover the cost of damages done to a motor vehicle by the individual that rented the vehicle. Due to inappropriate practices by certain rental car companies with regards to the sale of CDWs and payments of direct commissions to employees for these sales, the Legislature enacted a law barring the payment of any commissions based on the sales of CDWs. Your Committee notes that this has lead to inequity between rental car company employees working in Hawaii and the mainland since companies often factor the sale of CDWs into overall gross receipts when evaluating an employee for a bonus, and comparing the performance of branches of the company located in different states. This bill attempts to correct this inequity while still continuing to ban direct commissions for CDW sales.

As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 481, S.D. 1, and recommends that it pass Second Reading and be referred to the Committee on Consumer Protection and Commerce.