STAND. COM. REP. NO. 1865

Honolulu, Hawaii

RE: H.B. No. 270

H.D. 1

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Health, to which was referred H.B. No. 270, H.D. 1, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO REBUILT VEHICLES,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Define "flood damage" as it relates to a rebuilt vehicle; and

(2) Expand the definition of "rebuilt vehicle" to include vehicles that have been rebuilt after sustaining flood damage or material damage to the vehicle's electronics.

Your Committee received testimony in support of this measure from the Department of Transportation, State Farm Mutual Automobile Insurance Company, and Insurance Auto Auctions.

Your Committee finds that under existing law, a vehicle that is declared a total loss can only be subject to a branded "rebuilt vehicle" title if there is material damage to its frame, unitized structure, or suspension system, and the cost to repair is greater than the vehicle's market value. When an automobile insurer makes this determination, and the car is subsequently rebuilt, it must be branded with a "rebuilt title", which warns future purchasers that the car has been declared a total loss and might have hidden defects that could affect its safe operation. However, existing law does not require a car that has sustained significant flood damage and likewise been declared a total loss to be similarly branded since the existing definition of "rebuilt vehicle" does not include flood damage or damage to a car's electronics. Because modern cars are equipped with electronics and advanced technology, this measure corrects this oversight by adding flood damage and damage to a vehicle's electronics to the determination of total loss for titling purposes. This is a consumer protection and safety issue, and is particularly relevant in Hawaii where severe storms and salt water can and do cause flood damage to vehicles and vehicle electronics.

Your Committee has amended this measure by:

(1) Clarifying the definition of "flood damage" to include potential areas of a vehicle where damage may occur;

(2) Inserting an effective date of July 1, 2019; and

(3) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 270, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 270, H.D. 1, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Health,

________________________________

ROSALYN H. BAKER, Chair