SB29 would revise Hawaii’s motor vehicle rental law by eliminating the statutory definition of “vehicle license recovery fees” and narrowing what rental car companies may visibly pass through to customers. The bill replaces the broader category created by Act 137 (Session Laws of Hawaii 2017) with a more limited pass-through for vehicle registration fees and weight taxes, and it changes the prorating formula from 1/292nd back to 1/365th of the annual amount actually paid on the vehicle. In practical terms, the bill is intended to reduce the amount rental customers are charged for government-related fees and taxes on a per-day basis.
The measure also repeals the 2017 requirement that rental car companies submit annual third-party audits to the Office of Consumer Protection. It leaves in place other visible pass-through items already authorized under chapter 437D, including general excise tax, surcharge taxes, county surcharge on state tax, and certain airport-related rents and fees, while retaining reporting and examination provisions for those airport-related charges. The bill is framed as a correction to what the legislature describes as an unfair and inflated fee structure that allowed companies to overrecover costs from lessees.
If enacted, SB29 would amend chapter 437D of the Hawaii Revised Statutes and partially undo changes made by Act 137. It would also repeal section 5 of Act 137 and alter the statutory treatment of rental car fee disclosures and pass-through calculations. The bill’s effective-date language indicates the changes would take effect upon approval, with the amended pass-through language preserved even when the underlying section is later reenacted under existing sunset provisions.
The overall sentiment reflected in the bill text is strongly supportive of consumer protection and skeptical of rental car industry pricing practices. The legislature’s findings characterize vehicle license recovery fees as a way to advertise low base rates while increasing the actual cost to consumers, with a stated concern that this may harm Hawaii’s tourism industry. No committee testimony or vote record is provided, so there is no additional evidence of support or opposition from hearings or floor action.
The main point of contention is the allocation of costs between rental companies and lessees. Supporters of the bill appear to view the current recovery-fee structure as excessive, opaque, and inconsistent with prior law, while the affected rental car industry would likely prefer to preserve the broader pass-through authority created in 2017. The bill also reduces compliance obligations by repealing annual audits, which may be viewed favorably by industry but as a loss of oversight by consumer advocates.
Impact
SB29 would amend Hawaii Revised Statutes chapter 437D governing motor vehicle lessors by deleting the definition of “vehicle license recovery fees,” limiting pass-through charges to vehicle registration fees and weight taxes, and restoring the 1/365th proration method for those charges. It would also repeal the annual audit requirement imposed on rental car companies by Act 137, while leaving intact other authorized pass-throughs and airport-related reporting/examination provisions. The bill would therefore reduce the amount and scope of fees rental companies may itemize to customers and lessen one consumer-protection compliance obligation for the industry.
Sentiment
The bill’s tone is consumer-protective and critical of rental car fee practices. The findings state that the current recovery-fee system overcharges lessees and may be harmful to tourism, suggesting a legislative intent to roll back a prior industry-favorable change. Because no committee transcripts or vote history are included, there is no recorded debate or roll-call evidence here, but the text itself indicates a clear preference for lower, more transparent charges to consumers.
Contention
The central controversy is whether rental car companies should be allowed to pass through a broad set of vehicle-related costs, including fixed and one-time fees, or whether they should be limited to narrower, more directly attributable charges. Another point of contention is the prorating formula: SB29 would restore the lower 1/365th rate, which benefits lessees, while the existing 1/292nd rate under Act 137 is described as producing overpayments. The repeal of annual audit requirements is also notable, as it reduces oversight and may be opposed by consumer advocates even as it is likely welcomed by rental car companies.
Health: substance use disorder prevention; competitive grant program to provide grants for recovery community organizations; modify. Amends sec. 273b of 1974 PA 258 (MCL 330.1273b).