THE SENATE |
S.B. NO. |
50 |
THIRTY-THIRD LEGISLATURE, 2025 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO CONSUMER PROTECTION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 481A-3, Hawaii Revised Statutes, is amended to read as follows:
"[[]§481A-3[]] Deceptive trade practices. (a) A
person engages in a deceptive trade practice when, in the course of the
person's business, vocation, or occupation, the person:
(1) Passes off goods or services as those of another;
(2) Causes likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods or services;
(3) Causes likelihood of confusion or of misunderstanding as to affiliation, connection, or association with, or certification by, another;
(4) Uses deceptive representations or designations of geographic origin in connection with goods or services;
(5) Represents that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that the person does not have;
(6) Represents that goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, used, or secondhand;
(7) Represents that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;
(8) Disparages the goods, services, or business of another by false or misleading representation of fact;
(9) Advertises goods or services with intent not to sell them as advertised;
(10) Advertises goods or services with intent not to supply reasonably expectable public demand, unless the advertisement discloses a limitation of quantity;
(11) Makes false or misleading statements of
fact concerning the reasons for, existence of, or amounts of price reductions; [or]
(12) Advertises, displays, or offers a
price for goods or services that does not include all mandatory fees or charges
other than either of the following:
(A) Taxes or fees imposed by a
government on the transaction; or
(B) Postage or carriage charges that
will be reasonably and actually incurred to ship the physical good to the
consumer; or
[(12)] (13) Engages in any other conduct [which]
that similarly creates a likelihood of confusion or of misunderstanding.
(b) In order to prevail in an action under this chapter, a complainant need not prove competition between the parties or actual confusion or misunderstanding.
(c) This section does not affect unfair trade practices otherwise actionable at common law or under other statutes of this State."
SECTION 2. Section 481A-5, Hawaii Revised Statutes, is amended to read as follows:
"[[]§481A-5[]] Application. (a)
This chapter does not apply to:
(1) Conduct in compliance with the orders or rules of, or a statute administered by, a federal, state, or local governmental agency;
(2) Publishers, broadcasters, printers, or other persons engaged in the dissemination of information or reproduction of printed or pictorial matters who publish, broadcast, or reproduce material without knowledge of its deceptive character; or
(3) Actions or appeals pending on July 14, 1969.
(b) Sections 481A-3(a)(2) and 481A-3(a)(3) do not apply to the use of a service mark, trademark, certification mark, collective mark, trade name, or other trade identification that was used and not abandoned before July 14, 1969 if the use was in good faith and is otherwise lawful except for this chapter.
(c) Section 481A-3(a)(12) does not apply to
persons providing broadband internet access service on its own or as part of a
bundle of services in compliance with the broadband consumer label requirements
of title 47 Code of Federal Regulations section 8.1(a).
For the purposes of this subsection, "broadband internet access service" shall have the same meaning as in title 47 Code of Federal Regulations section 8.1(b)."
PART II
SECTION 3. Act 137, Session Laws of Hawaii 2017 (Act 137), established vehicle license recovery fees and allowed motor vehicle lessors to pass vehicle license recovery fees on to lessees. Vehicle license recovery fees include motor vehicle weight taxes; fees connected with the registration of specially constructed, reconstructed, or rebuilt vehicles; special interest vehicles or imported vehicles; license plate and emblem fees; inspection fees; highway beautification fees; and any use tax.
Prior to Act 137, the motor vehicle rental industry was only allowed to visibly pass on to lessees recurring costs, including general excise taxes, license and registration fees, surcharge taxes, and rents and fees payable to the department of transportation. Act 137 allowed for the passing on of fixed, one-time costs of doing business, including license plate fees and use taxes, in a departure from prior statutory policy favoring the visible pass-on of only recurring government fees and taxes.
In addition, the establishment of vehicle license recovery fees created an unfair method for calculating passed-on costs. Prior to Act 137, section 437D-8.4, Hawaii Revised Statutes, authorized the pass-on of fees and taxes prorated at 1/365th of the annual fees and taxes paid on the particular motor vehicle being rented. Thus, the lessee was charged only the amount of fees and taxes directly attributable to the lessee's use of the vehicle. Act 137's increased prorated rate of 1/292nd of vehicle license recovery fees has resulted in overpayments by individual lessees.
The legislature further finds that vehicle license recovery fees are an attempt by rental car companies to advertise low base rates but subtly increase the actual per-day rental rate by greatly increasing the applicable taxes and fees passed on to lessees, which may be detrimental to Hawaii's tourism industry.
Therefore, the purpose of this Act is to:
(1) Repeal the definition of "vehicle license recovery fees";
(2) Repeal the amendments made to section 437D-8.4, Hawaii Revised Statutes, by Act 137; and
(3) Repeal the requirement that rental car companies submit annual audits to the office of consumer protection of the department of commerce and consumer affairs.
SECTION 4. Section 437D-3, Hawaii Revised Statutes, is amended by deleting the definition of "vehicle license recovery fees".
[""Vehicle license recovery fees" includes motor
vehicle weight taxes under section 249-2; fees connected with the registration
of specially constructed, reconstructed, or rebuilt vehicles, special interest
vehicles, or imported vehicles as referenced in section 286-41(c); license
plate and emblem fees under section 249-7(b); inspection fees as referenced in
section 286-26; highway beautification fees as referenced in section
286-51(b)(1); and any use tax under chapter 238."]
SECTION 5. Section 437D-8.4, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Notwithstanding any law to the contrary, a lessor may visibly pass on to a lessee:
(1) The general excise tax attributable to the transaction;
(2) The vehicle license [recovery fees,]
and registration fee and weight taxes, prorated at [1/292nd] 1/365th
of the annual vehicle license [recovery fees] and registration fee
and weight taxes actually paid on the particular vehicle being rented for
each full or partial twenty-four-hour rental day that the vehicle is rented;
provided that the total of all vehicle license [recovery] and
registration fees charged to all lessees shall not exceed the annual
vehicle license [recovery fees] and registration fee actually
paid for the particular vehicle rented;
(3) The surcharge taxes imposed in chapter 251 attributable to the transaction;
(4) The county surcharge on state tax under section 46‑16.8; provided that the lessor itemizes the tax for the lessee; and
(5) The rents or fees paid to the department of transportation under concession contracts negotiated pursuant to chapter 102, service permits granted pursuant to title 19, Hawaii Administrative Rules, or rental motor vehicle customer facility charges established pursuant to section 261-7; provided that:
(A) The rents or fees are limited to amounts that can be attributed to the proceeds of the particular transaction;
(B) The rents or fees shall not exceed the lessor's net payments to the department of transportation made under concession contract or service permit;
(C) The lessor submits to the department of transportation and the department of commerce and consumer affairs a statement, verified by a certified public accountant as correct, that reports the amounts of the rents or fees paid to the department of transportation pursuant to the applicable concession contract or service permit:
(i) For all airport locations; and
(ii) For each airport location;
(D) The lessor submits to the department of transportation and the department of commerce and consumer affairs a statement, verified by a certified public accountant as correct, that reports the amounts charged to lessees:
(i) For all airport locations;
(ii) For each airport location; and
(iii) For each lessee;
(E) The lessor includes in these reports the methodology used to determine the amount of fees charged to each lessee; and
(F) The lessor submits the above information to the department of transportation and the department of commerce and consumer affairs within three months of the end of the preceding annual accounting period or contract year as determined by the applicable concession agreement or service permit.
The respective departments, in their sole discretion, may extend the time to submit the statement required in this subsection. If the director determines that an examination of the lessor's information is inappropriate under this subsection and the lessor fails to correct the matter within ninety days, the director may conduct an examination and charge a lessor an examination fee based upon the cost per hour per examiner for evaluating, investigating, and verifying compliance with this subsection, as well as additional amounts for travel, per diem, mileage, and other reasonable expenses incurred in connection with the examination, which shall relate solely to the requirements of this subsection, and which shall be billed by the departments as soon as feasible after the close of the examination. The cost per hour shall be $40 or as may be established by rules adopted by the director. The lessor shall pay the amounts billed within thirty days following the billing. All moneys collected by the director shall be credited to the compliance resolution fund."
SECTION 6. Act 137, Session Laws of Hawaii 2017, is amended by repealing section 5.
"SECTION
5. [Beginning March 1, 2019, all
rental car companies shall submit an annual audit, to be conducted by a third
party certified public accountant, to the office of consumer protection of the
department of commerce and consumer affairs by July 1 of every year.] Repealed."
PART III
SECTION 7. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 9. This Act shall take effect upon its approval; provided that the amendments made to section 437D-8.4(a), Hawaii Revised Statutes, by section 5 of this Act shall not be repealed when that section is reenacted on December 31, 2030, pursuant to section 9 of Act 247, Session Laws of Hawaii 2005, as amended by section 7 of Act 240, Session Laws of Hawaii 2015, as amended by section 6 of Act 1, Special Session Laws of Hawaii 2017.
INTRODUCED BY: |
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Report Title:
Deceptive Trade Practices; Motor Vehicle Rental Industry; Hidden Fees; False Advertising; Vehicle License Recovery Fees; Fees; Weight Taxes
Description:
Part I: Establishes as a deceptive practice advertising, displaying, or offering a price for goods or services that does not include all mandatory fees or charges, subject to certain exceptions. Part II: Repeals the definition of "vehicle license recovery fees". Limits to vehicle license and registration fees and weight taxes the fees and taxes that a motor vehicle lessor may pass on to a lessee. Amends the prorated amount of vehicle license and registration fees and weight taxes that a motor vehicle lessor may pass on to a lessee. Repeals the requirement that rental car companies submit annual audits to the Office of Consumer Protection of the Department of Commerce and Consumer Affairs.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.