| 47 | | - | SECTION 1. Act 137, Session Laws of Hawaii 2017, established vehicle license recovery fees, which allow lessors of rental vehicles to pass vehicle license recovery fees on to lessees. Vehicle license recovery fees impose an additional fee upon lessees by passing on motor vehicle weight taxes; fees connected with the registration of specially constructed, reconstructed, or rebuilt vehicles; special interest vehicles, or imported vehicles, license plate and emblem fees; inspection fees; highway beautification fees; and any use tax. The vehicle license recovery fees are in addition to existing law that allows for visibly passing on to lessees general excise taxes attributable to the transaction such as rental motor vehicle, tour vehicle, and car-sharing vehicle surcharge taxes; county surcharge on state tax; and rents or fees paid to the department of transportation. Allowing the passing on of fixed, one-time costs of doing business, such as license plate fees and use taxes, is a departure from statutory policy favoring the visible pass on of only recurring government fees and taxes. In addition, vehicle license recovery fees create an unfair method for calculating the passed-on costs. Previously, the law authorized the pass on of fees and taxes prorated at 1/365th of the annual fees and taxes actually paid on the particular motor vehicle being rented. Thus, the lessee was charged only the amount of fees and taxes directly attributable to their use of the vehicle. Vehicle license recovery fees increase the prorated rate to 1/292nd, resulting in overpayment by individual lessees. The legislature further finds that vehicle license recovery fees are an attempt by rental car companies to advertise low base rates but subtly increase the actual per day rental rate by greatly increasing the applicable taxes and fees passed on to lessees, which may be detrimental to Hawaii's tourism industry. The purpose of this Act is to repeal vehicle license recovery fees. SECTION 2. Section 437D-3, Hawaii Revised Statutes, is amended by deleting the definition of "vehicle license recovery fees". [""Vehicle license recovery fees" includes motor vehicle weight taxes under section 249-2; fees connected with the registration of specially constructed, reconstructed, or rebuilt vehicles, special interest vehicles, or imported vehicles as referenced in section 286-41(c); license plate and emblem fees under section 249-7(b); inspection fees as referenced in section 286-26; highway beautification fees as referenced in section 286-51(b)(1); and any use tax under chapter 238."] SECTION 3. Section 437D-8.4, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows: "(a) Notwithstanding any law to the contrary, a lessor may visibly pass on to a lessee: (1) The general excise tax attributable to the transaction; (2) The vehicle license [recovery fees,] and registration fee and weight taxes, prorated at [1/292nd] 1/365th of the annual vehicle license [recovery fees] and registration fee and weight taxes actually paid on the particular vehicle being rented for each full or partial twenty-four-hour rental day that the vehicle is rented; provided the total of all vehicle license [recovery] and registration fees charged to all lessees shall not exceed the annual vehicle license [recovery fees] and registration fee actually paid for the particular vehicle rented; (3) The surcharge taxes imposed in chapter 251 attributable to the transaction; (4) The county surcharge on state tax under section 46‑16.8; provided that the lessor itemizes the tax for the lessee; and (5) The rents or fees paid to the department of transportation under concession contracts negotiated pursuant to chapter 102, service permits granted pursuant to title 19, Hawaii Administrative Rules, or rental motor vehicle customer facility charges established pursuant to section 261-7; provided that: (A) The rents or fees are limited to amounts that can be attributed to the proceeds of the particular transaction; (B) The rents or fees shall not exceed the lessor's net payments to the department of transportation made under concession contract or service permit; (C) The lessor submits to the department of transportation and the department of commerce and consumer affairs a statement, verified by a certified public accountant as correct, that reports the amounts of the rents or fees paid to the department of transportation pursuant to the applicable concession contract or service permit: (i) For all airport locations; and (ii) For each airport location; (D) The lessor submits to the department of transportation and the department of commerce and consumer affairs a statement, verified by a certified public accountant as correct, that reports the amounts charged to lessees: (i) For all airport locations; (ii) For each airport location; and (iii) For each lessee; (E) The lessor includes in these reports the methodology used to determine the amount of fees charged to each lessee; and (F) The lessor submits the above information to the department of transportation and the department of commerce and consumer affairs within three months of the end of the preceding annual accounting period or contract year as determined by the applicable concession agreement or service permit. The respective departments, in their sole discretion, may extend the time to submit the statement required in this subsection. If the director determines that an examination of the lessor's information is inappropriate under this subsection and the lessor fails to correct the matter within ninety days, the director may conduct an examination and charge a lessor an examination fee based upon the cost per hour per examiner for evaluating, investigating, and verifying compliance with this subsection, as well as additional amounts for travel, per diem, mileage, and other reasonable expenses incurred in connection with the examination, which shall relate solely to the requirements of this subsection, and which shall be billed by the departments as soon as feasible after the close of the examination. The cost per hour shall be $40 or as may be established by rules adopted by the director. The lessor shall pay the amounts billed within thirty days following the billing. All moneys collected by the director shall be credited to the compliance resolution fund." SECTION 4. Section 5 of Act 137, Session Laws of Hawaii 2017, is repealed. SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 6. This Act shall take effect on January 1, 2050; provided that the amendments made to section 437D-8.4(a), Hawaii Revised Statutes, by section 3 of this Act shall not be repealed when that section is reenacted on December 31, 2030, pursuant to section 9 of Act 247, Session Laws of Hawaii 2005, as amended by section 7 of Act 240, Session Laws of Hawaii 2015, as amended by section 6 of Act 1, Special Session Laws of Hawaii 2017. |
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| 47 | + | SECTION 1. Act 137, Session Laws of Hawaii 2017, established vehicle license recovery fees, which allow lessors of rental vehicles to pass vehicle license recovery fees on to lessees. Vehicle license recovery fees impose an additional fee upon lessees by passing on motor vehicle weight taxes; fees connected with the registration of specially constructed, reconstructed, or rebuilt vehicles; special interest vehicles, or imported vehicles, license plate and emblem fees; inspection fees; highway beautification fees; and any use tax. The vehicle license recovery fees are in addition to existing law that allows for visibly passing on to lessees general excise taxes attributable to the transaction such as rental motor vehicle, tour vehicle, and car-sharing vehicle surcharge taxes; county surcharge on state tax; and rents or fees paid to the department of transportation. Allowing the passing on of fixed, one-time costs of doing business, such as license plate fees and use taxes, is a departure from statutory policy favoring the visible pass on of only recurring government fees and taxes. In addition, vehicle license recovery fees create an unfair method for calculating the passed-on costs. Previously, the law authorized the pass on of fees and taxes prorated at 1/365th of the annual fees and taxes actually paid on the particular motor vehicle being rented. Thus, the lessee was charged only the amount of fees and taxes directly attributable to their use of the vehicle. Vehicle license recovery fees increase the prorated rate to 1/292nd, resulting in overpayment by individual lessees. The legislature further finds that vehicle license recovery fees are an attempt by rental car companies to advertise low base rates but subtly increase the actual per day rental rate by greatly increasing the applicable taxes and fees passed on to lessees, which may be detrimental to Hawaii's tourism industry. The purpose of this Act is to repeal vehicle license recovery fees. SECTION 2. Section 437D-3, Hawaii Revised Statutes, is amended by deleting the definition of "vehicle license recovery fees". [""Vehicle license recovery fees" includes motor vehicle weight taxes under section 249-2; fees connected with the registration of specially constructed, reconstructed, or rebuilt vehicles, special interest vehicles, or imported vehicles as referenced in section 286-41(c); license plate and emblem fees under section 249-7(b); inspection fees as referenced in section 286-26; highway beautification fees as referenced in section 286-51(b)(1); and any use tax under chapter 238."] SECTION 3. Section 437D-8.4, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows: "(a) Notwithstanding any law to the contrary, a lessor may visibly pass on to a lessee: (1) The general excise tax attributable to the transaction; (2) The vehicle license [recovery fees,] and registration fee and weight taxes, prorated at [1/292nd] 1/365th of the annual vehicle license [recovery fees] and registration fee and weight taxes actually paid on the particular vehicle being rented for each full or partial twenty-four-hour rental day that the vehicle is rented; provided the total of all vehicle license [recovery] and registration fees charged to all lessees shall not exceed the annual vehicle license [recovery fees] and registration fee actually paid for the particular vehicle rented; (3) The surcharge taxes imposed in chapter 251 attributable to the transaction; (4) The county surcharge on state tax under section 46‑16.8; provided that the lessor itemizes the tax for the lessee; and (5) The rents or fees paid to the department of transportation under concession contracts negotiated pursuant to chapter 102, service permits granted pursuant to title 19, Hawaii Administrative Rules, or rental motor vehicle customer facility charges established pursuant to section 261-7; provided that: (A) The rents or fees are limited to amounts that can be attributed to the proceeds of the particular transaction; (B) The rents or fees shall not exceed the lessor's net payments to the department of transportation made under concession contract or service permit; (C) The lessor submits to the department of transportation and the department of commerce and consumer affairs a statement, verified by a certified public accountant as correct, that reports the amounts of the rents or fees paid to the department of transportation pursuant to the applicable concession contract or service permit: (i) For all airport locations; and (ii) For each airport location; (D) The lessor submits to the department of transportation and the department of commerce and consumer affairs a statement, verified by a certified public accountant as correct, that reports the amounts charged to lessees: (i) For all airport locations; (ii) For each airport location; and (iii) For each lessee; (E) The lessor includes in these reports the methodology used to determine the amount of fees charged to each lessee; and (F) The lessor submits the above information to the department of transportation and the department of commerce and consumer affairs within three months of the end of the preceding annual accounting period or contract year as determined by the applicable concession agreement or service permit. The respective departments, in their sole discretion, may extend the time to submit the statement required in this subsection. If the director determines that an examination of the lessor's information is inappropriate under this subsection and the lessor fails to correct the matter within ninety days, the director may conduct an examination and charge a lessor an examination fee based upon the cost per hour per examiner for evaluating, investigating, and verifying compliance with this subsection, as well as additional amounts for travel, per diem, mileage, and other reasonable expenses incurred in connection with the examination, which shall relate solely to the requirements of this subsection, and which shall be billed by the departments as soon as feasible after the close of the examination. The cost per hour shall be $40 or as may be established by rules adopted by the director. The lessor shall pay the amounts billed within thirty days following the billing. All moneys collected by the director shall be credited to the compliance resolution fund." SECTION 4. Section 5 of Act 137, Session Laws of Hawaii 2017, is repealed. SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 6. This Act shall take effect on July 1, 2021; provided that the amendments made to section 437D-8.4(a), Hawaii Revised Statutes, by section 3 of this Act shall not be repealed when that section is reenacted on December 31, 2030, pursuant to section 9 of Act 247, Session Laws of Hawaii 2005, as amended by section 7 of Act 240, Session Laws of Hawaii 2015, as amended by section 6 of Act 1, Special Session Laws of Hawaii 2017. INTRODUCED BY: _____________________________ |
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| 48 | 48 | | |
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| 49 | 49 | | SECTION 1. Act 137, Session Laws of Hawaii 2017, established vehicle license recovery fees, which allow lessors of rental vehicles to pass vehicle license recovery fees on to lessees. Vehicle license recovery fees impose an additional fee upon lessees by passing on motor vehicle weight taxes; fees connected with the registration of specially constructed, reconstructed, or rebuilt vehicles; special interest vehicles, or imported vehicles, license plate and emblem fees; inspection fees; highway beautification fees; and any use tax. |
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| 50 | 50 | | |
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| 51 | 51 | | The vehicle license recovery fees are in addition to existing law that allows for visibly passing on to lessees general excise taxes attributable to the transaction such as rental motor vehicle, tour vehicle, and car-sharing vehicle surcharge taxes; county surcharge on state tax; and rents or fees paid to the department of transportation. |
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| 52 | 52 | | |
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| 53 | 53 | | Allowing the passing on of fixed, one-time costs of doing business, such as license plate fees and use taxes, is a departure from statutory policy favoring the visible pass on of only recurring government fees and taxes. |
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| 54 | 54 | | |
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| 55 | 55 | | In addition, vehicle license recovery fees create an unfair method for calculating the passed-on costs. Previously, the law authorized the pass on of fees and taxes prorated at 1/365th of the annual fees and taxes actually paid on the particular motor vehicle being rented. Thus, the lessee was charged only the amount of fees and taxes directly attributable to their use of the vehicle. Vehicle license recovery fees increase the prorated rate to 1/292nd, resulting in overpayment by individual lessees. |
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| 56 | 56 | | |
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| 57 | 57 | | The legislature further finds that vehicle license recovery fees are an attempt by rental car companies to advertise low base rates but subtly increase the actual per day rental rate by greatly increasing the applicable taxes and fees passed on to lessees, which may be detrimental to Hawaii's tourism industry. |
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| 58 | 58 | | |
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| 59 | 59 | | The purpose of this Act is to repeal vehicle license recovery fees. |
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| 60 | 60 | | |
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| 61 | 61 | | SECTION 2. Section 437D-3, Hawaii Revised Statutes, is amended by deleting the definition of "vehicle license recovery fees". |
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| 62 | 62 | | |
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| 63 | 63 | | [""Vehicle license recovery fees" includes motor vehicle weight taxes under section 249-2; fees connected with the registration of specially constructed, reconstructed, or rebuilt vehicles, special interest vehicles, or imported vehicles as referenced in section 286-41(c); license plate and emblem fees under section 249-7(b); inspection fees as referenced in section 286-26; highway beautification fees as referenced in section 286-51(b)(1); and any use tax under chapter 238."] |
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| 64 | 64 | | |
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| 65 | 65 | | SECTION 3. Section 437D-8.4, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows: |
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| 66 | 66 | | |
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| 67 | 67 | | "(a) Notwithstanding any law to the contrary, a lessor may visibly pass on to a lessee: |
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| 68 | 68 | | |
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| 69 | 69 | | (1) The general excise tax attributable to the transaction; |
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| 70 | 70 | | |
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| 71 | 71 | | (2) The vehicle license [recovery fees,] and registration fee and weight taxes, prorated at [1/292nd] 1/365th of the annual vehicle license [recovery fees] and registration fee and weight taxes actually paid on the particular vehicle being rented for each full or partial twenty-four-hour rental day that the vehicle is rented; provided the total of all vehicle license [recovery] and registration fees charged to all lessees shall not exceed the annual vehicle license [recovery fees] and registration fee actually paid for the particular vehicle rented; |
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| 72 | 72 | | |
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| 73 | 73 | | (3) The surcharge taxes imposed in chapter 251 attributable to the transaction; |
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| 74 | 74 | | |
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| 75 | 75 | | (4) The county surcharge on state tax under section 46‑16.8; provided that the lessor itemizes the tax for the lessee; and |
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| 76 | 76 | | |
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| 77 | 77 | | (5) The rents or fees paid to the department of transportation under concession contracts negotiated pursuant to chapter 102, service permits granted pursuant to title 19, Hawaii Administrative Rules, or rental motor vehicle customer facility charges established pursuant to section 261-7; provided that: |
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| 78 | 78 | | |
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| 79 | 79 | | (A) The rents or fees are limited to amounts that can be attributed to the proceeds of the particular transaction; |
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| 80 | 80 | | |
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| 81 | 81 | | (B) The rents or fees shall not exceed the lessor's net payments to the department of transportation made under concession contract or service permit; |
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| 82 | 82 | | |
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| 83 | 83 | | (C) The lessor submits to the department of transportation and the department of commerce and consumer affairs a statement, verified by a certified public accountant as correct, that reports the amounts of the rents or fees paid to the department of transportation pursuant to the applicable concession contract or service permit: |
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| 84 | 84 | | |
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| 85 | 85 | | (i) For all airport locations; and |
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| 86 | 86 | | |
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| 87 | 87 | | (ii) For each airport location; |
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| 88 | 88 | | |
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| 89 | 89 | | (D) The lessor submits to the department of transportation and the department of commerce and consumer affairs a statement, verified by a certified public accountant as correct, that reports the amounts charged to lessees: |
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| 90 | 90 | | |
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| 91 | 91 | | (i) For all airport locations; |
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| 92 | 92 | | |
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| 93 | 93 | | (ii) For each airport location; and |
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| 94 | 94 | | |
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| 95 | 95 | | (iii) For each lessee; |
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| 96 | 96 | | |
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| 97 | 97 | | (E) The lessor includes in these reports the methodology used to determine the amount of fees charged to each lessee; and |
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| 98 | 98 | | |
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| 99 | 99 | | (F) The lessor submits the above information to the department of transportation and the department of commerce and consumer affairs within three months of the end of the preceding annual accounting period or contract year as determined by the applicable concession agreement or service permit. |
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| 100 | 100 | | |
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| 101 | 101 | | The respective departments, in their sole discretion, may extend the time to submit the statement required in this subsection. If the director determines that an examination of the lessor's information is inappropriate under this subsection and the lessor fails to correct the matter within ninety days, the director may conduct an examination and charge a lessor an examination fee based upon the cost per hour per examiner for evaluating, investigating, and verifying compliance with this subsection, as well as additional amounts for travel, per diem, mileage, and other reasonable expenses incurred in connection with the examination, which shall relate solely to the requirements of this subsection, and which shall be billed by the departments as soon as feasible after the close of the examination. The cost per hour shall be $40 or as may be established by rules adopted by the director. The lessor shall pay the amounts billed within thirty days following the billing. All moneys collected by the director shall be credited to the compliance resolution fund." |
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| 102 | 102 | | |
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| 103 | 103 | | SECTION 4. Section 5 of Act 137, Session Laws of Hawaii 2017, is repealed. |
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| 104 | 104 | | |
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| 105 | 105 | | SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. |
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| 106 | 106 | | |
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