STAND. COM. REP. NO. 1264

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.C.R. No. 207
                                        




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committees on Water, Land, and Hawaiian Affairs and
Economic Development, to which was referred S.C.R. No. 207
entitled:

     "SENATE CONCURRENT RESOLUTION REQUESTING TO DEPARTMENT OF
     BUSINESS, ECONOMIC DEVELOPMENT, AND TOURISM AND THE HAWAII
     COMMUNITY DEVELOPMENT ASSOCIATION TO COMMUNICATE TO THE
     DIRECTOR OF TRANSPORTATION THEIR INTENTIONS REGARDING PIER 2
     AT HONOLULU HARBOR,"

beg leave to report as follows:

     The purpose of this measure is to determine the future
disposition of Pier 2 in Honolulu Harbor.

     Specifically, the measure requests the Director of Business,
Economic Development, and Tourism (DBEDT) and the Chief Executive
Officer of the Hawaii Community Development Authority (HCDA) to
communicate in writing with the Director of Transportation and
the Legislature no later than twenty days prior to the convening
of the Regular Session of 2000 the following:

     (1)  The intentions of DBEDT and HCDA regarding their
          interests in Pier 2, taking into consideration the
          Department of Transportation's plans to remove the
          structures located at Pier 2 and to commence design and
          construction of the new passenger terminal by July of
          2000;


 
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     (2)  The date DBEDT plans to relocate Foreign Trade Zone
          No. 9, if at all; and

     (3)  If DBEDT or HCDA objects to removal of the building at
          Pier 2 which houses Foreign Trade Zone No. 9 and
          commencement of design and construction of the new
          passenger terminal by July of 2000, the specific
          reasons for the objections and alternate solutions.

     Testimony in support of the measure was received from DBEDT,
HCDA, and the Department of Transportation.

     Your Committees find that the rapidly growing cruise ship
industry is a promising economic opportunity for the State of
Hawaii.  The United States Congress has recently passed
legislation that would encourage development of the cruise
industry in the United States, specifically within the State of
Hawaii.  Additionally, American Classic Voyages Co., the parent
company of American Hawaii Cruises, will be providing interisland
cruise ship services in Hawaii with two new United States-built
ships accommodating 1900 passengers, with one scheduled to enter
service in 2003 and the other in 2004.  With the inclusion of
these new vessels, the cruise ship industry in Hawaii is expected
to create 2,000 jobs and generate an additional $38,000,000 in
annual tax revenues for Hawaii.

     Your Committees further find that Pier 2 at Honolulu Harbor
is the designated home-base for American Hawaii Cruises with the
capability to berth two 850 foot cruise vessels.  To accommodate
increased cruise ship capacity, the Statewide Cruise Facility
Study recommended the design and construction of new terminal
facilities at Pier 2.  The study further recommended that Foreign
Trade Zone No. 9, which is operated by DBEDT and currently
located at Pier 2, be relocated to allow for the construction of
new terminal facilities at Pier 2.

     Although Pier 2 is owned by the State, it is situated within
the Fort Armstrong property which is currently under the
jurisdiction of HCDA, not the Department of Transportation.

     In order for construction of a new passenger terminal to be
completed by 2003 to accommodate the two new ships from American
Classic Voyages, Co., design and construction at Pier 2 must
commence in the year 2000, thus necessitating an immediate and
decisive course of action by all affected agencies of the State.

     Your Committees believe that the measure will facilitate
such a clear course of action.


 
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     As affirmed by the records of votes of the members of your
Committees on Water, Land, and Hawaiian Affairs and Economic
Development that are attached to this report, your Committees
concur with the intent and purpose of S.C.R. No. 207, and
recommend that it be referred to the Committee on Transportation
and Intergovernmental Affairs.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Water, Land, and
                                   Hawaiian Affairs and Economic
                                   Development,



____________________________       ______________________________
LORRAINE R. INOUYE, Chair          COLLEEN HANABUSA, Chair

 
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