HB1258 HD1 HSCR608

 

STAND. COM. REP. 608

Honolulu, Hawaii

, 2003

RE: H.B. No. 1258

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committees on Consumer Protection and Commerce and Judiciary, to which was referred H.B. No. 1258 entitled:

"A BILL FOR AN ACT RELATING TO MOTOR VEHICLE FRANCHISES,"

beg leave to report as follows:

The purpose of this bill is to protect motor vehicle dealer franchises from coercive, unfair, and discriminatory practices by manufacturers and distributors of motor vehicles.

The Motor Vehicle Industry Licensing Board testified in support of this bill. The Hawaii Automobile Dealers Association, Shelly Eurocars, Inc., TheoDavies Euromotors, Tony Group, Ltd., Midpac Auto Center, and many franchised new car dealers testified in support of this bill. The Department of Commerce and Consumer Affairs testified in support of the intent of this bill and offered numerous amendments. Ford Motor Company provided comments.

Your Committees find that motor vehicle manufacturers and distributors were once licensed under the Motor Vehicle Licensing Act and subject to penalties and license suspension, revocation, or denial, if they engaged in coercive, unfair, or discriminatory practices against dealers. These provisions of the law were removed in 1996.

This bill proposes to restore the licensing of motor vehicle manufacturers and distributors and prohibitions against coercive, unfair, and discriminatory practices by these entities, which include:

(1) Unfair termination of motor vehicle franchise agreements;

(2) Threatening to cancel a franchise agreement or to franchise a competing franchisee in the same sales area;

(3) Requiring a franchisee to order unwanted vehicles;

(4) Intentionally delaying delivery of vehicles;

(5) Overcharging particular dealers for vehicles, parts, accessories and services; and

(6) Failing to adequately and fairly compensate a dealer for labor, parts, and other expenses incurred in honoring the manufacturer's new car warranty promises.

Your Committees find that passage of this bill will bring Hawaii into the overwhelming majority of states that maintain motor vehicle franchise protection laws for their locally owned businesses. Your Committees believe that this bill will protect the investments of local motor vehicle dealers in their franchises, and shield customers from inflated new motor vehicle costs.

Your Committees have amended this bill by:

(1) Changing its effective date to July 1, 2050, in order to provide for additional dialogue among concerned individuals and entities; and

(2) Making many technical, nonsubstantive amendments for purposes of clarity, consistency, and style.

As affirmed by the records of votes of the members of your Committees on Consumer Protection and Commerce and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1258, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1258, H.D. 1, and be placed on the calendar for Third Reading.

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

 

____________________________ ERIC G. HAMAKAWA, Chair		____________________________ KENNETH T. HIRAKI, Chair