STAND. COM. REP. 277

Honolulu, Hawaii

, 2003

RE: H.B. No. 837

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Transportation, to which was referred H.B. No. 837 entitled:

"A BILL FOR AN ACT RELATING TO TRANSPORTATION,"

begs leave to report as follows:

The purpose of this bill is to, among other things:

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

(2) Allow airport concessions still suffering from the events of September 11, 2001, but whose concession 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) Require that concessions suffering any losses and damages due to termination of their concession agreements have no right to make any claim for damages or losses against the State; and

(4) Authorize the Department of Transportation (DOT) to establish passenger facility charges (PFCs) on overseas or international passengers who use a state airport.

The Airport Concessionaires Committee, HMS Host, APCOA, DFS Galleria, and Island Shoppers, Inc., testified in support of this measure. DOT, the Office of Information Practices, Airlines Committee of Hawaii, and Airport & Aviation Professionals, Inc., testified in opposition to this measure.

The tragic events of September 11, 2001, had a tremendous impact on airlines, airports, and air travelers. Airport concessions, especially those in Hawaii, were one of the most negatively impacted sections of the airline industry as access to many of the areas served by these concessions was restricted only to ticketed passengers. Decreasing flight schedules and numbers of travelers also had an adverse impact upon airport concessions. Even today, almost one and a half-years after September 11th , many airport concessions are seeing a reduction in sales of 30 percent.

Although, to date, no concessionaires have been evicted from state airports, many concessionaires cannot afford to make the stated contract payments and their outstanding rent obligations continue to grow and remain unpaid to DOT's Airports Division. This has caused problems for the concessionaires, creditors, and investors.

Your Committee feels that this situation is not a fair one since many of the circumstances surrounding the demise of the airport concessionaires are due to forces beyond the concessionaires' control. Without some sort of relief, these businesses will be forced into bankruptcy or forced to leave the airport, further damaging the State's economy.

As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 837 and recommends that it pass Second Reading and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committee on Transportation,

 

____________________________

JOSEPH M. SOUKI, Chair