Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 2630, H.D. 2, entitled:

begs leave to report as follows:

The purpose of this measure is to remove the prohibition against commissions for the sale of fuel-purchase options to lessees.

Testimony in support of this measure was submitted by The Hertz Corporation, Dollar Thrifty Automotive Group, Inc., and Catrala-Hawaii. Testimony in opposition to this measure was submitted by Advocates for Consumer Rights. The Department of Commerce and Consumer Affairs also submitted comments on the measure.

Your Committee finds that since 1996, U-drive companies have been authorized to offer fuel-purchase options to their lessees. A fuel-purchase option is provided as a convenience to lessees, whereby lessees are offered the option of purchasing a full tank of fuel at the time of taking delivery of the rental vehicle and are not required to later return a refueled vehicle. However, unlike their mainland counterparts, U-drive companies in Hawaii are prohibited from providing commissions to their officers, agents, employees, or representatives for the sale of such options.

Your Committee further finds that a lessee may opt out of a fuel-purchase option by returning a rental vehicle with a full tank of fuel. Additionally, there have been no significant reports of complaints or abuse associated with the sale of fuel-purchase options. Therefore, as the law also provides for adequate penalties and deterrents for abuse in the motor vehicle rental industry, employees of U-drive companies should be afforded the opportunity to earn commissions related to their efforts in selling fuel-purchase options.

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. 2630, H.D. 2, and recommends that it pass Third Reading.