Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 642
                                        H.D. 1
                                        S.D. 1

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Commerce and Consumer Protection, to which
was referred H.B. No. 642, H.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this measure is to allow the payment and
receipt of indirect commissions from the sale of collision damage
waivers in car rental transactions. 

     Catrala-Hawaii and Budget Rent A Car presented testimony in
support of the measure.  Alamo Rent A Car, while not present,
submitted supporting testimony.  The Department of Commerce and
Consumer Affairs (DCCA) presented testimony in opposition to the

     Your Committee finds Hawaii is the only state that does not
allow a car rental company to consider, directly or indirectly,
the sale of collision damage waivers (CDWs) in evaluating or
paying commissions to its employees.  This measure will allow
companies to use the sale of CDWs as one factor in evaluating and
compensating employee performance.  The direct payment or receipt
of commissions for CDW sales will continue to be prohibited. 

     Your Committee has amended this measure by:

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                                   STAND. COM. REP. NO. 1581
                                   Page 2

     (1)  Establishing a requirement that car rental companies
          submit annual reports to the Director of DCCA regarding
          its employee compensation plans that reflect all
          factors, including indirect CDW commissions, used to
          calculate employee compensation, employee performance
          standards and benchmarks used in determining promotions
          and raises, and other devices used by the lessor that
          encourage the sale of CDWs; and

     (2)  Providing for its repeal on June 30, 2001.

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 642, H.D. 1, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 642, H.D. 1, S.D. 1, and be placed on the
calendar for Third Reading.

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

                                   BRIAN KANNO, Co-Chair

                                   BRIAN T. TANIGUCHI, Co-Chair

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