Report Title:

Rental Car Collision Damage Waivers

Description:

Allows an employee to receive any compensation, commission, bonus, award, or remuneration based on the calculation of the overall gross receipts of a location, which includes the sale of collision damage waivers as one of many factors.

 

HOUSE OF REPRESENTATIVES

H.B. NO.

1991

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO MOTOR VEHICLE RENTAL INDUSTRY.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. In 1990, the legislature barred the payment of commissions on the sale of rental vehicle collision damage waivers because of lessee confusion about the nature of collision damage waivers and the potential for abuse relating to their sale.

The legislature finds that the existing situation does not justify the total ban on the payment of commissions on the sale of collision damage waivers. In 1990, there were more than thirty-five rental vehicle companies operating in Hawaii. Today, there are fewer than fifteen. The competitive forces that may have contributed to the potential abuse in the sale of the waivers have substantially decreased. Further, section 437D-5, Hawaii Revised Statutes, in effect since 1988, provides protection to lessees by requiring rental vehicle companies to disclose in plain language, in at least ten-point boldface type, certain information regarding collision damage waivers, including:

(1) That the waiver is optional;

(2) That the waiver entails an additional charge;

(3) The actual charge per day for the waiver;

(4) All restrictions, conditions, and provision in the waiver; and

(5) That the lessee's personal automobile insurance may already provide coverage for collision damage.

The legislature further finds that many sectors of the tourist industry pay commissions and evaluate or reward their employees based on their performance in selling the various packages and programs offered by the employer. Thus, the legislature believes that the motor vehicle rental industry should no longer be singled out by a law barring the payment of commissions calculated in part from the sale of collision damage waivers.

The purpose of this Act is to allow an employee to receive any compensation, commission, bonus, award, or remuneration based on the calculation of the overall gross receipts of a location, which includes the sale of collision damage waivers as one of many factors.

SECTION 2. Section 437D-8.5, Hawaii Revised Statutes, is amended to read as follows:

"§437D-8.5 Commissions. (a) No lessor or officer, employee, agent, or other representative of the lessor shall pay or receive a direct commission for selling collision damage waivers. Any violation of this section shall be an unfair or deceptive act or practice as provided in section 480-2.

(b) Notwithstanding any law to the contrary, an employee may receive any compensation, commission, bonus, award, or remuneration based on the calculation of the overall gross receipts of a location, which includes the sale of collision damage waivers as one of many factors.

(c) As used in this section, ["commission] "direct commission for selling collision damage waivers" includes any compensation, bonus, award, or remuneration, [whether direct, indirect, or otherwise,] which is calculated by means of a formula, process, evaluation, or other mechanisms [which considers sales of collision damage waivers as a factor in any manner. "Commission for selling collision damage waivers" also includes any performance evaluation which could be used in determining promotions, raises, or other personnel decisions, or any other device which serves to encourage the sale of collision damage waivers.] by which a person is able to calculate the amount of any compensation, bonus, award, or remuneration based directly on the sales of collision damage waivers."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect July 1, 2002, and shall be repealed on June 30, 2004; provided that section 437D-8.5, Hawaii Revised Statutes, shall be reenacted in the form in which it read on June 30, 2002.

INTRODUCED BY:

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