STAND. COM. REP. NO. 171-22

Honolulu, Hawaii

, 2022

RE: H.B. No. 1971

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committee on Transportation, to which was referred H.B. No. 1971 entitled:

"A BILL FOR AN ACT RELATING TO PEER-TO-PEER CAR-SHARING,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Authorize peer-to-peer car-sharing and establish regulations;

(2) Impose the car-sharing surcharge tax on peer-to-peer car-sharing programs;

(3) Set the car-sharing vehicle surcharge tax at a rate equal to one-twelfth of the rate of the rental motor vehicle surcharge tax; and

(4) Require those persons engaging or continuing in a peer-to-peer car-sharing program to register with the Department of Taxation.

Your Committee received testimony in support of this measure from the Hawaii Insurers Council, Enterprise Holdings, and Avail. Your Committee received testimony in opposition to this measure from the Hawaii Association for Justice. Your Committee received comments on this measure from the Department of Taxation, Department of Commerce and Consumer Affairs Office of Consumer Protection, Turo, Tax Foundation of Hawaii, and Getaround.

Your Committee finds that peer-to-peer car sharing has emerged as a new car sharing model in the rental car marketplace, allowing vehicle owners to rent out their vehicles directly to consumers through online platforms. However, peer-to-peer car-sharing programs are not regulated under state law. This measure establishes regulations for these car sharing programs to ensure appropriate insurance coverage and recordkeeping.

Your Committee notes that the Department of Transportation's Airports Division, under its administrative authority, should oversee and permit activities in regard to peer-to-peer car sharing programs at airport facilities.

Your Committee has amended this measure by:

(1) For the purposes of consistency, inserting similar insurance provisions from H.B. 1619, H.D. 1, Regular Session of 2022, relating to insurance coverage requirements, exclusions, recordkeeping, right of recovery, insurable interest, and disclosure and notice;

(2) Requiring peer-to-peer car-sharing programs to verify that a shared car is not subject to a recall at the car-sharing start time;

(3) Inserting provisions that subject peer-to-peer car sharing to the general excise tax and rental motor vehicle surcharge tax and require peer-to-peer car sharing programs to collect and remit taxes and surcharges to the Department of Taxation;

(4) Deleting language that would have amended provisions relating to the car-sharing vehicle surcharge tax;

(5) Changing the effective date to July 1, 2050, to encourage further discussion; and

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

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 H.B. No. 1971, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1971, H.D. 1, and be referred to your Committee on Consumer Protection & Commerce.

Respectfully submitted on behalf of the members of the Committee on Transportation,

____________________________

HENRY J.C. AQUINO, Chair