STAND. COM. REP. NO.547

Honolulu, Hawaii

, 2003

RE: S.B. No. 1478

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs, and Government Operations, to which was referred S.B. No. 1478 entitled:

"A BILL FOR AN ACT RELATING TO AIRPORT CONCESSIONAIRES,"

begs leave to report as follows:

The purpose of this measure is to require all public contracts for the operation of concessions at airports in the State to contain force majeure terms to absolve the parties of liability for failure to perform due to outside forces.

Your Committee received testimony in support of this measure from the Airport Concessionaires Committee, HMS Host, Greeters of Hawaii, Ltd., APCOA/Standard Parking, Island Shoppers, Inc., ANC Rental Corporation, and DFS Galleria. Testimony in opposition to this measure was submitted by the Department of Transportation (DOT) and the Airlines Committee of Hawaii.

Your Committee, and indeed the entire Legislature, has spent many days over the past sixteen months debating the plight of our airport concessionaires. The terrorist attacks of September 11, 2001, the subsequent decrease in air travel, and heightened security restrictions all combined to severely affect the concessionaires' businesses, putting them at risk of breaching their contracts with the State.

Your Committee finds that the terrorist attacks which led to the concessionaires' problems were not foreseeable, and certainly not the fault of either the concessionaires or the DOT. This is precisely the type of situation a force majeure clause is intended to address: an unforeseeable event beyond the control of either party to a contract, which renders performance under the contract impossible.

Although your Committee is not sure that it would necessarily be appropriate to insert a force majeure clause in every contract as called for by this measure, your Committee believes this measure warrants further review.

Your Committee amended this measure to mandate that the concession for taxi services at the airport be granted to a single management company, which may then subcontract with one or more taxi companies to provide taxi services at the airport.

By contracting with a third party management company and giving that company the authority to subcontract for taxi services, your Committee finds that the provision of taxi services at our airports will be greatly improved.

As affirmed by the record of votes of the members of your Committee on Transportation, Military Affairs, and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1478, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1478, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Transportation, Military Affairs, and Government Operations,

____________________________

CAL KAWAMOTO, Chair