Report Title:

Transportation; Concessionaires; Reduction in Business; Economic Relief; Vehicle Inspection Timeframes; Air Carrier Commission Sunset Repealed

 

Description:

Extends further relief to concessionaires whose businesses were harmed by reduced air arrivals. Amends Hawaii Revised Statutes to provide permanent mechanism to provide economic relief to concessionaires whose businesses are not profitable. Requires force majeure clause in all concessions contracts. Reduces the motor vehicle safety inspection requirement for heavy commercial vehicles to once a year. Repeals the June 30, 2002 sunset date of the law authorizing the establishment of the Air Carrier Commission, and the collateral deposit deadline for loan guarantees. (SD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

1722

TWENTY-FIRST LEGISLATURE, 2002

S.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

Relating to transportation.

 

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

PART I

SECTION 1. The purposes of this Part are to:

(1) Provide relief beyond April 30, 2002, for airport concessions still suffering from the terrorist events of September 11, 2001;

(2) Allow airport concessions that are still suffering from such events but whose concessions agreements are terminated due to a new concession operator, to recover their bonds and deposits and not be barred from doing business with the State for five years as provided by present law;

(3) Provide that such concessions suffering any losses and damages due to such termination shall have no right to make any claim for damages or losses against the State;

(4) Avoid another legislative session or future special sessions to consider relief for concessions by enacting a mechanism to allow concessions to receive relief due to the events of September 11, 2001, and similar future events; and

(5) Provide a force majeure provision common to most commercial leases to hold neither the State (as lessor) and concessionaire (as lessee) responsible for acts or causes beyond a party’s control, including acts of God, sabotage, and terrorist acts like those which occurred on September 11, 2001, in New York.

SECTION 2. Chapter 102, Hawaii Revised Statutes, is amended to add a new section to be appropriately designated and to read as follows:

"§102- Force majeure. Notwithstanding any other provision of law, every contract for the operation of a concession at a state airport shall contain a provision stating that neither party to the contract shall be liable to any other party to the contract for any failure, delay, or interruption in the performance of any of the terms, covenants, or conditions of the contract due to a cause beyond the control of the breaching party, including strikes, boycotts, labor disputes, embargoes, material shortages, acts of God or any other deity, acts of a public enemy, acts of superior governmental authority, weather conditions, floods, riots, rebellion, sabotage, or any other circumstance beyond the control of the breaching party."

SECTION 3. Section 102-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The bidding requirements of subsection (a) shall not apply to concessions or space on public property set aside for the following purposes:

(1) For operation of ground transportation services and parking lot operations at airports, except for motor vehicle rental operations under chapter 437D;

(2) For lei vendors;

(3) For airline and aircraft operations;

(4) For automatic teller machines and vending machines, except vending machines located at public schools operated by blind or visually handicapped persons in accordance with section 302A-412;

(5) For operation of concessions set aside without any charge;

(6) For operation of concessions by handicapped or blind persons; except concessions operated in the public schools by blind or visually handicapped persons in accordance with section 302A-412;

(7) For operation of concessions on permits revocable on notice of thirty days or less; provided that no such permits shall be issued for more than a one year period; provided further that a revocable permit issued by the department of transportation for operation of a concession at a state airport may be valid for a period not to exceed two years if the director of transportation determines that an extension of a permit is necessary due to:

(A) A natural disaster; or

(B) A continuation of an adverse economic condition occurring within the previous year that would adversely affect, in the assessment of the director of transportation, the State's ability to solicit and obtain favorable bid proposals. For purposes of this paragraph, "adverse economic condition" means that the business operating under the revocable permit has suffered a reduction in business volume sufficient to meet the requirements of section 102-10(b);

(8) For operation of concessions or concession spaces for a beach service association dedicated to the preservation of the Hawaii beachboy tradition, incorporated as a nonprofit corporation in accordance with state law, and whose members are appropriately licensed or certified as required by law;

(9) For operation of concessions at county zoos, botanic gardens, or other county parks which are environmentally, culturally, historically, or operationally unique and are supported, by nonprofit corporations incorporated in accordance with state law solely for purposes of supporting county aims and goals of the zoo, botanic garden, or other county park and operating under agreement with the appropriate agency solely for such purposes, aims, and goals; and

(10) For operations of concessions that furnish goods or services for which there is only one source, as determined by the head of the awarding government agency in a writing that shall be included in the contract file."

SECTION 4. Section 102-10, Hawaii Revised Statutes, is amended to read as follows:

"§102-10 Modification of contract terms. (a) Construction relief. If during the term of the contract (including contracts which have been executed and are presently in force) there has been a reduction of fifteen per cent or more in the volume of business of the concessionaire for a period of sixty days or more, computed on the average monthly gross income for the eighteen months just prior to the period or as long as the concessionaire has been in business, whichever period is shorter, and such reduction as determined by the officer letting the contract is caused by construction work conducted during the period of time on, or within or contiguous to, the public property upon which the concession is located by either the state or county governments, or both, the officer, with the approval of the governor in the case of a state officer and the chief executive of the respective county in the case of a county officer, may modify any of the terms of the contract, including the agreed upon rent, for a period which will allow the concessionaire to recoup the amount lost by such reduction; provided that if the contract includes provisions allowing for modification for the above contingencies, this section shall not be applicable thereto; provided further that this provision shall not apply to any particular concession if the application thereto may impair any contractual obligations with bondholders of the State or counties or with any other parties.

(b) Economic relief. If during the term of any contract to operate a concession at an airport (including contracts which have been executed and are presently in force) there has been a reduction of fifteen per cent or more in volume of business of the concessionaire for a period of thirty days or more, computed using the average gross monthly receipts for the six months immediately prior to the period or as long as the concessionaire has been in business, whichever period is shorter, and such reduction is determined by the officer letting the contract to be caused by a reduction in the east bound or west bound passengers arriving during that period of time at the airport property upon which the concession is located, the officer, with the approval of the governor, may modify any of the terms of the contract, including an extension of the contract term, for not more than two years, and the agreed upon rent, for a period which will allow the concessionaire to recoup the amount lost by such reduction; provided the period of recoupment shall end when for three consecutive months the average gross monthly receipts of the concessionaire is equal to or greater than the average gross monthly receipts computed and used for the six months or less prior to the start of the recoupment period; provided further that if the contract includes provisions allowing for modification for the above contingencies, this section shall not apply thereto; provided further that this provision shall not apply to any particular concession if the application thereto may impair any contractual obligations with bondholders of the State or with any other parties.

(c) Other relief. For public-airport concessions requesting economic relief as provided for in subsection (b), if the State does not provide relief that will allow the concession to recoup the amount lost due to the reduction in volume of business in accordance with the provisions set forth in this section, the State shall provide relief to such a concession that will allow it to break even in its concession operations until such time that the concession’s average gross monthly receipts for three consecutive months is equal to or greater than the average gross monthly receipts computed and used for the six months prior to the start of the recoupment period.

(d) Termination. If a concession is receiving relief from the State under subsection (c), as a condition for such relief the State shall have the right to terminate the concession contract and require the concessionaire to vacate the concession premises when the State has a new concessionaire for the premises who is willing to pay:

(1) To the State at least ten per cent more than the latest rental amount the concessionaire receiving relief was paying to the State; and

(2) To the concessionaire being terminated at least fifty per cent of the losses and damages being suffered by the concession as a result of such termination.

The new concessionaire may take over the premises pursuant to a revocable permit which shall not exceed more than two years, or if for a period longer than two years, the take over of the premises shall be pursuant to the award of a public bid in accordance with chapter 102. A concessionaire receiving relief pursuant to subsection (c) shall be allowed to participate in such a public bid. A concessionaire whose contract is terminated in keeping with this subsection shall have no claims for damages or losses against the State and shall forfeit to the State all of its leasehold improvements in the premises. As an alternative to the foregoing right of termination by the State, a concessionaire receiving relief pursuant to subsection (c) and the State may agree to terminate the concession contract on terms mutually agreeable to both parties.

(e) Security or collateral. Upon termination in accordance with subsection (d), the State shall return to the concessionaire the entire amount of all deposits, collateral, bonds, or similar instruments securing the concessionaire’s performance, except for any amounts that may be owed to the State prior to the commencement of the period of relief."

SECTION 5. Section 171-13, Hawaii Revised Statutes, is amended to read as follows:

"§171-13 Disposition of public lands. Except as otherwise provided by law and subject to other provisions of this chapter, the board may:

(1) Dispose of public land in fee simple, by lease, lease with option to purchase, license, or permit; and

(2) Grant easement by direct negotiation or otherwise for particular purposes in perpetuity on such terms as may be set by the board, subject to reverter to the State upon termination or abandonment of the specific purpose for which it was granted, provided the sale price of such easement shall be determined pursuant to section 171-17(b).

No person shall be eligible to purchase or lease public lands, or to be granted a license, permit, or easement covering public lands, who has had during the five years preceding the date of disposition a previous sale, lease, license, permit, or easement covering public lands cancelled for failure to satisfy the terms and conditions thereof[.], except for cancellation or termination that occurs pursuant to section 102-10(d); provided the concessionaire has paid to the State all amounts owed prior to commencement of the period of relief under section 102."

SECTION 6. For purposes of qualifying for and receiving economic relief pursuant to this Part and the amendments to the Hawaii Revised Statutes contained in this Act, a concessionaire that qualified for and received economic relief pursuant to Act 15, Third Special Session Laws of Hawaii 2001, shall be deemed qualified. Any other concessionaire seeking relief may rely upon reduction in business volume at any time following September 11, 2001.

PART II

SECTION 7. The commercial trucking and transportation industry in Hawaii provides vital services to its citizens through the movement of goods and people on a daily basis. These companies serve as a lifeline for many of Hawaii's citizens, bringing them needed goods and transporting these goods throughout the islands on a daily basis. In fact, the latest data shows that over sixty-nine million passengers and twelve thousand tons of goods were transported throughout the State in 1999.

Heavy commercial motor vehicles are currently regulated through federal and state guidelines which require an annual inspection of all commercial vehicles. Furthermore, these regulations require:

(1) An inspection of a commercial motor vehicle prior to a driver operating that vehicle for the day;

(2) Documentation of vehicle inspections after the driver is done with the vehicle for the day; and

(3) Documentation that each vehicle is maintained on a periodic and systemic basis. Moreover, commercial motor vehicles are also subject to roadside vehicle inspections by the state motor vehicle safety office.

Although these regulations are already in effect, heavy commercial vehicles (i.e., trucks over ten thousand pounds and buses) are also required to pass state certified inspections every six months. This appears to be redundant since these vehicles are already subject to stringent annual inspections and are already subject to surprise inspections by the state motor vehicle office.

The purpose of this Part is to reduce the motor vehicle safety inspection requirement for heavy commercial vehicles from twice a year to once a year.

SECTION 8. Section 286-26, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The following vehicles shall be certified as provided in subsection (e) once every six months:

(1) Ambulances;

[(2) Trucks, truck-tractors, semitrailers, and pole trailers having a gross vehicle weight rating of more than 10,000 pounds;

(3) Buses;

(4)] (2) Rental or U-drive motor vehicles one year of age or older; and

[(5)] (3) Taxicabs."

SECTION 9. Section 286-209, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Motor carrier vehicles including but not limited to trucks, truck-tractors, semitrailers, trailers, or pole trailers having a gross vehicle weight rating of more than 10,000 pounds, and motor carrier vehicles having a gross vehicle weight rating of 10,000 pounds or less which transport passengers in the furtherance of a commercial enterprise, including car rental transport vehicles shall be inspected and certified once every [six] twelve months."

PART III

SECTION 10. Act 332, Session Laws of Hawaii 1993, is amended by amending section 11 to read as follows:

"SECTION 11. This Act shall take effect upon its approval; provided that section 2 shall take effect upon the enactment of federal legislation permitting implementation of that section; provided further that section 8 shall take effect on July 1, 1993; and provided further that the collateral required by section 4(c) of this Act is deposited into the Hawaii interisland loan guarantee trust fund on such terms and conditions acceptable to the director of the department of business, economic development, and tourism[, by June 30, 1993; and provided further that this Act shall be repealed on June 30, 2002]."

PART IV

SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 12. This Act shall take effect on July 1, 2050, provided:

(1) Sections 3, 4, and 5 shall apply retroactively to concessionaires with contracts with the State at any point between September 11, 2001, and the effective date of this Act;

(2) Section 2 shall take effect on July 1, 2050; and

(3) Section 10 shall take effect on June 29, 2050.