STAND. COM. REP. NO.1347

Honolulu, Hawaii

, 2003

RE: H.B. No. 140

H.D. 1

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 140, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE MOTOR VEHICLE RENTAL INDUSTRY,"

begs leave to report as follows:

The purpose of this measure is to authorize the determination of a damaged rental vehicle's diminution in value by judicial process or public auction when the value cannot be agreed upon by the lessor and lessee.

Your Committee heard testimony on a proposed Senate draft of this measure that replaces the contents of this measure with language allowing motor vehicle rental companies to visibly pass on to their customers other state taxes and county taxes paid on motor vehicle rental transactions. The proposed draft also clarified that concession rents that are allowed to be passed on to rental car customers arise out of concession contracts awarded pursuant to bid under chapter 102, Hawaii Revised Statutes.

Testimony in support of the proposed draft was submitted by Catrala-Hawaii, Dollar Rent A Car, ANC Rental Corporation, and Avis Rent A Car. The Department of Commerce and Consumer Affairs expressed concerns about the measure.

Your Committee finds that the Legislature is currently considering a measure that would authorize the counties to enact a sales tax. That measure, if approved, would likely result in motor vehicle rental transactions being taxed by the counties, since this type of transaction is already subject to state general excise tax.

Presently, the law allows motor vehicle rental companies to visibly pass on to their customers general excise tax, rental motor vehicle surcharge tax, and prorated annual motor vehicle weight tax paid in connection with a motor vehicle rental transaction. Your Committee finds that it is reasonable and consistent with existing law to allow the companies to also visibly pass on any county sales tax that might be imposed on rental transactions.

Your Committee has amended this measure, as received, by replacing its contents with language to:

(1) Allow motor vehicle rental companies to visibly pass on to their customers county sales taxes paid on rental transactions; and

(2) Establish an effective date of July 1, 3000.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 140, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 140, 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, Consumer Protection and Housing,

____________________________

RON MENOR, Chair