REPORT TITLE:
Rent-A-Car Pass On Fees


DESCRIPTION:
Allows rent-a-car lessors to visibly pass on to lessees, airport
concession and access fees paid to the department of
transportation for access to public airports, provided that an
annual report showing how such fees and charges are computed,
together with their amounts, shall be submitted to the department
of transportation and the department of commerce and consumer
affairs. (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        765
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1        
TWENTIETH LEGISLATURE, 1999                                S.D. 1        
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO MOTOR VEHICLE RENTAL INDUSTRY.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that it will not be
 
 2 deceptive or misleading to allow lessors in the motor vehicle
 
 3 rental industry (U-drive) to separate out or "unbundle" their
 
 4 airport concession rents and service permit fees.  This practice
 
 5 is taking place in many tourist destinations which compete with
 
 6 Hawaii.
 
 7      By allowing such "unbundling," U-drive lessees clearly will
 
 8 be able to see whether Hawaii's U-drive companies are providing
 
 9 them with a nationally-advertised or quoted daily rate.  Under
 
10 Hawaii's current law which does not allow the separate statement
 
11 of such expenses, tourist lessees often feel they are being
 
12 cheated.
 
13      While the legislature is aware of the continuing efforts by
 
14 the National Association of Attorney Generals to update their
 
15 guidelines relating to "unbundling" practices, the legislature
 
16 finds no problem with such practices as long as they fairly
 
17 disclose these expenses.
 
18      To avoid possible mistakes or abuses as to the separately
 
19 stated fees and charges, the legislature needs to ensure that
 
20 such "unbundling" is monitored and that reports are regularly
 

 
Page 2                                                     765
                                     H.B. NO.           H.D. 1        
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 1 made to appropriate state agencies for purposes of addressing
 
 2 violations. 
 
 3      The purpose of this Act is to promote the understandable and
 
 4 nondeceptive disclosure of airport concession rents and service
 
 5 permit fees paid to the department of transportation for access
 
 6 to public airports, while requiring U-drive lessors to provide
 
 7 annual reports showing how such expenses were computed and
 
 8 stating their total amounts.
 
 9      SECTION 2.  Section 437D-8.4, Hawaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "[[]437D-8.4[]]  License and registration fees.  (a)
 
12 Notwithstanding any law to the contrary, a lessor may visibly
 
13 pass on to a lessee:
 
14      (1)  The general excise tax attributable to the transaction;
 
15      (2)  The vehicle license and registration fee and weight
 
16           taxes, prorated at 1/365th of the annual vehicle
 
17           license and registration fee and weight taxes actually
 
18           paid on the particular vehicle being rented for each
 
19           full or partial twenty-four hour rental day that the
 
20           vehicle is rented; provided the total of all vehicle
 
21           license and registration fees charged to all lessees
 
22           shall not exceed the annual vehicle license and
 
23           registration fee actually paid for the particular
 

 
Page 3                                                     765
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                                                        S.D. 1        
                                                        

 
 1           vehicle rented; [and]
 
 2      (3)  The rental motor vehicle surcharge tax as provided in
 
 3           section 251-2 attributable to the transaction[.]; and
 
 4      (4)  The rents or fees paid to the department of
 
 5           transportation under concession contracts, negotiated
 
 6           pursuant to chapter 102, or service permits, granted
 
 7           pursuant to title 19, Hawaii Administrative Rules,
 
 8           provided that:
 
 9           (A)  The rents or fees are limited to amounts that can
 
10                be attributed to the proceeds of the particular
 
11                transaction;
 
12           (B)  The rents or fees shall not exceed the lessor's
 
13                net payments to the department of transportation
 
14                made under concession contract or service permit;
 
15           (C)  The lessor submits to the department of
 
16                transportation and the department of commerce and
 
17                consumer affairs a statement, audited in
 
18                accordance with generally accepted auditing
 
19                standards by an independent certified public
 
20                accountant, that reports the amounts of the rents
 
21                or fees paid to the department of transportation
 
22                pursuant to the applicable concession contract or
 
23                service permit:
 
24                (i)   for all airport locations; and
 
25                (ii)  for each airport location;
 

 
Page 4                                                     765
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 1           (D)  The lessor submits to the department of
 
 2                transportation and the department of commerce and
 
 3                consumer affairs a statement, audited in
 
 4                accordance with generally accepted auditing
 
 5                standards by an independant certified public
 
 6                accountant, that reports the amounts charged to
 
 7                lessees:
 
 8                (i)   for all airport locations;
 
 9                (ii)  for each airport location; and
 
10                (iii) for each lessee;
 
11           (E)  The lessor includes in these reports the
 
12                methodology used to determine the amount of fees
 
13                charged to each lessee; and
 
14           (F)  The lessor submits the above information to the
 
15                department of transporation and the department of
 
16                commerce and consumer affairs within three months
 
17                of the end of the preceding annual accounting
 
18                period or contract year as determined by the the
 
19                applicable concession agreement or service permit.
 
20           The respective departments, in their sole discretion,
 
21           may extend the time to submit the statement required in
 
22           this subsection.  If the director determines that an
 
23           exam of the lessor's activities is appropriate under
 
24           this subsection, the director may conduct an exam and
 

 
Page 5                                                     765
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 1           charge a lessor an examination fee based upon the cost
 
 2           per hour per examiner for evaluating, investigating,
 
 3           and verifying compliance with this subsection, as well
 
 4           as additional amounts for travel, per diem, mileage,
 
 5           and other reasonable expenses incurred in connection
 
 6           with the examination, which shall relate solely to the
 
 7           requirements of this subsection, and which shall be
 
 8           billed by the departments as soon as feasible after the
 
 9           close of such examination.  The cost per hour shall be
 
10           forty dollars or as may be established by rules adopted
 
11           by the director.  The lessor shall pay the amounts
 
12           billed within thirty days following the billing.  All
 
13           moneys collected by the director shall be credited to
 
14           the compliance resolution fund.
 
15 (b)  A representation by the lessor to the lessee which states
 
16 that the visible pass on of the charges in [paragraphs (1) to
 
17 (3)] this section is mandatory or that it is a government
 
18 assessment upon the consumer shall be a per se violation of
 
19 section 480-2."
 
20      SECTION 3.  Statutory material to be repealed is bracketed.
 
21 New statutory material is underscored.
 
22      SECTION 4.  This Act shall take effect upon its approval.