Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 642

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Transportation, to which was referred H.B.
No. 642 entitled: 


begs leave to report as follows:

     The purpose of this bill is to remove the prohibition
against permitting motor vehicle lessors to receive commissions
for selling collision damage waivers to vehicle renters.

     Your Committee finds that the payment of commissions on
rental vehicle collision damage waivers has been barred since
1990.  Your Committee further finds that this prohibition was
enacted by the Legislature because of alleged lack of
understanding about the purposes of collision damage waivers by
renters, and the potential abuse of lessors pressuring clients to
purchase unnecessary waivers. In addition, your Committee finds
that lessees are now more aware that their own vehicle insurance
usually covers claims arising from rental car accidents, making
purchases of waivers an option, rather than a necessity.
     This bill proposes to continue the ban against vehicle
rental companies and employees from receiving direct commissions
on the sale of collision damage waivers, while allowing
commissions to be received for the sale of collision damage
waivers on an indirect basis.

                                 STAND. COM. REP. NO. 478
                                 Page 2

     Testimony in support of this bill was received from Catrala-
Hawaii which represents vehicle rental and leasing companies.
Testimony in opposition to this bill was received from the
Department of Commerce and Consumer Affairs, which foresees
pressures being put on consumers to purchase collision damage
waivers, since the commissions will generate additional profits
for companies and compensation for employees. 

     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.
642 and recommends that it pass Second Reading and be referred to
the Committee on Consumer Protection and Commerce.

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

                                   KENNETH T. HIRAKI, Chair