REPORT TITLE:
Motor Vehicle Rental Industry


DESCRIPTION:
Increases rental motor vehicle surcharge tax from $2 to $3;
exempts persons renting a vehicle to replace a vehicle being
repaired; allows U-drive operators to unbundle their airport
concession rents and service permit fees; designates state
highway fund moneys to be deposited into the state general fund.
(HB765 CD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        765
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                S.D. 2
STATE OF HAWAII                                            C.D. 1
                                                             
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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                              PART I
 
 2      SECTION 1.  Section 251-2, Hawaii Revised Statutes, is
 
 3 amended by amending subsection (a) to read as follows:
 
 4      "(a)  There is levied and shall be assessed and collected
 
 5 each month a rental motor vehicle surcharge tax of $2 a day,
 
 6 except that for the period of September 1, 1999, to August 31,
 
 7 2007, the tax shall be $3 a day, or any portion of a day that a
 
 8 rental motor vehicle is rented or leased.  The rental motor
 
 9 vehicle surcharge tax shall be levied upon the lessor[.];
 
10 provided that the tax shall not be levied on the lessor during
 
11 the period September 1, 1999, to August 31, 2007, if:
 
12      (1)  The lessor is renting the vehicle to replace a vehicle
 
13           of the lessee that is being repaired; and
 
14      (2)  The repair order for the vehicle is retained by the
 
15           lessor for four years for verification purposes."
 
16                              PART II
 
17      SECTION 2.  The purpose of this part is to promote the
 
18 understandable and nondeceptive disclosure of airport concession
 
19 rents and service permit fees paid to the department of
 
20 transportation for access to public airports, while requiring U-
 

 
Page 2                                                     765
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 1 drive lessors to provide annual reports showing how such expenses
 
 2 were computed and stating their total amounts.
 
 3      SECTION 3.  Section 437D-8.4, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "[[]�437D-8.4[]]  License and registration fees.  (a)
 
 6 Notwithstanding any law to the contrary, a lessor may visibly
 
 7 pass on to a lessee:
 
 8      (1)  The general excise tax attributable to the transaction;
 
 9      (2)  The vehicle license and registration fee and weight
 
10           taxes, prorated at 1/365th of the annual vehicle
 
11           license and registration fee and weight taxes actually
 
12           paid on the particular vehicle being rented for each
 
13           full or partial twenty-four hour rental day that the
 
14           vehicle is rented; provided the total of all vehicle
 
15           license and registration fees charged to all lessees
 
16           shall not exceed the annual vehicle license and
 
17           registration fee actually paid for the particular
 
18           vehicle rented; [and]
 
19      (3)  The rental motor vehicle surcharge tax as provided in
 
20           section 251-2 attributable to the transaction[.]; and
 
21      (4)  The rents or fees paid to the department of
 
22           transportation under concession contracts, negotiated
 
23           pursuant to chapter 102, or service permits, granted
 

 
Page 3                                                     765
                                     H.B. NO.           H.D. 1
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 1           pursuant to title 19, Hawaii Administrative Rules,
 
 2           provided that:
 
 3           (A)  The rents or fees are limited to amounts that can
 
 4                be attributed to the proceeds of the particular
 
 5                transaction;
 
 6           (B)  The rents or fees shall not exceed the lessor's
 
 7                net payments to the department of transportation
 
 8                made under concession contract or service permit;
 
 9           (C)  The lessor submits to the department of
 
10                transportation and the department of commerce and
 
11                consumer affairs a statement, verified by a
 
12                certified public accountant as correct, that
 
13                reports the amounts of the rents or fees paid to
 
14                the department of transportation pursuant to the
 
15                applicable concession contract or service permit:
 
16                (i)  For all airport locations; and
 
17               (ii)  For each airport location;
 
18           (D)  The lessor submits to the department of
 
19                transportation and the department of commerce and
 
20                consumer affairs a statement, verified by a
 
21                certified public accountant as correct, that
 
22                reports the amounts charged to lessees:
 
23                (i)  For all airport locations;
 

 
Page 4                                                     765
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                                                        C.D. 1

 
 1               (ii)  For each airport location; and
 
 2              (iii)  For each lessee;
 
 3           (E)  The lessor includes in these reports the
 
 4                methodology used to determine the amount of fees
 
 5                charged to each lessee; and
 
 6           (F)  The lessor submits the above information to the
 
 7                department of transportation and the department of
 
 8                commerce and consumer affairs within three months
 
 9                of the end of the preceding annual accounting
 
10                period or contract year as determined by the
 
11                applicable concession agreement or service permit.
 
12           The respective departments, in their sole discretion,
 
13           may extend the time to submit the statement required in
 
14           this subsection.  If the director determines that an
 
15           examination of the lessor's information is
 
16           inappropriate under this subsection and the lessor
 
17           fails to correct the matter within ninety days, the
 
18           director may conduct an examination and charge a lessor
 
19           an examination fee based upon the cost per hour per
 
20           examiner for evaluating, investigating, and verifying
 
21           compliance with this subsection, as well as additional
 
22           amounts for travel, per diem, mileage, and other
 
23           reasonable expenses incurred in connection with the
 

 
Page 5                                                     765
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 1           examination, which shall relate solely to the
 
 2           requirements of this subsection, and which shall be
 
 3           billed by the departments as soon as feasible after the
 
 4           close of the examination.  The cost per hour shall be
 
 5           $40 or as may be established by rules adopted by the
 
 6           director.  The lessor shall pay the amounts billed
 
 7           within thirty days following the billing.  All moneys
 
 8           collected by the director shall be credited to the
 
 9           compliance resolution fund.
 
10      (b)  A representation by the lessor to the lessee which
 
11 states that the visible pass on of the charges in [paragraphs (1)
 
12 to (3)] this section is mandatory or that it is a government
 
13 assessment upon the consumer shall be a per se violation of
 
14 section 480-2."
 
15                             PART III
 
16      SECTION 4.  The legislature determines that there is in the
 
17 state highway fund at least $11,000,000 in excess of the
 
18 requirements of the fund.  There is hereby authorized and
 
19 appropriated from the retained earnings in the state highway fund
 
20 created by section 248-8, Hawaii Revised Statutes, the sum of
 
21 $11,000,000 for fiscal year 1999-2000 to be deposited into the
 
22 general fund.
 
23      SECTION 5.  The legislature determines that there is in the
 

 
Page 6                                                     765
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 1 state highway fund at least $11,000,000 in excess of the
 
 2 requirements of the fund.  There is hereby authorized and
 
 3 appropriated from the retained earnings in the state highway fund
 
 4 created by section 248-8, Hawaii Revised Statutes, the sum of
 
 5 $11,000,000 for fiscal year 2000-2001 to be deposited into the
 
 6 general fund.
 
 7                              PART IV
 
 8      SECTION 6.  If any provision of this Act, or the application
 
 9 thereof to any person or circumstance is held invalid, the
 
10 invalidity does not affect other provisions or applications of
 
11 the Act which can be given effect without the invalid provision
 
12 or application, and to this end the provisions of this Act are
 
13 severable.
 
14      SECTION 7.  Statutory material to be repealed is bracketed.
 
15 New statutory material is underscored.
 
16      SECTION 8.  This Act shall take effect upon its approval,