REPORT TITLE:
Hawaii Port Authority


DESCRIPTION:
Establishes the State of Hawaii port authority as a special
political subdivision without home rule powers.  Transfers the
functions, duties, and powers exercised by the department of
transportation over aeronautics, airports, and commercial harbors
to the port authority.  Exempts the port authority from state
personnel, procurement, collective bargaining, administrative
procedure, and other laws.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.1366       
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT
RELATING TO THE PORT AUTHORITY.



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

 1      SECTION 1.  The purpose of this Act is to establish the port
 
 2 authority and to transfer, on July 1, 2001, the functions,
 
 3 duties, and powers exercised by the department of transportation
 
 4 over aeronautics, airports, and commercial harbors to the State
 
 5 of Hawaii port authority, except for those functions, duties, and
 
 6 powers relating to the civil air patrol, which will be
 
 7 transferred to the department of defense.  On July 1, 2001, the
 
 8 functions, duties, and powers exercised by the department of
 
 9 public safety relating to law enforcement at airport and
 
10 commercial harbor facilities will be transferred to the port
 
11 authority.
 
12      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 
13 a new chapter to be appropriately designated and to read as
 
14 follows:
 
15                             "CHAPTER
 
16                          PORT AUTHORITY
 
17                      PART I.  GENERAL POWERS
 
18      §   -1  Definitions.  As used in this chapter, unless the
 
19 context indicates otherwise:
 
20      "Administrator" means the administrator of the port
 

 
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 1 authority.
 
 2      "Airport" means any area of land or water that is used, or
 
 3 intended for use, for the landing and taking off of aircraft, and
 
 4 any appurtenant areas that are used, or intended for use, for
 
 5 airport buildings or other airport facilities or rights-of-way,
 
 6 including approaches, together with all airport buildings and
 
 7 facilities located thereon.
 
 8      "Commercial harbor" means a harbor or offshore mooring
 
 9 facility that is intended primarily for the movement of
 
10 commercial cargo, and passenger and fishing vessels entering,
 
11 leaving, or traveling within the State, and facilities and
 
12 supporting services for the loading, off-loading, and handling of
 
13 cargo, passengers, and vessels.
 
14      "Municipal" means pertaining to a municipality.
 
15      "Municipality" means any county or other political
 
16 subdivision or public corporation of the State.
 
17      "Person" means any individual, firm, partnership,
 
18 corporation, company, association, joint stock association, or
 
19 body politic, and includes any trustee, receiver, assignee, or
 
20 other similar representative thereof.
 
21      "Port authority" means the port authority of this State.
 
22      §   -2  Port authority; establishment; members and
 
23 administrator.(a)  There is established the State of Hawaii
 

 
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 1 port authority, which shall be a body corporate and a special
 
 2 political subdivision of the State for the purposes of this
 
 3 chapter.  The port authority is placed within the department of
 
 4 budget and finance for administrative purposes only.
 
 5      (b)  The port authority shall consist of seven voting
 
 6 members.  The administrator shall be an ex officio voting member
 
 7 of the port authority.  Two members shall be appointed by the
 
 8 governor pursuant to section 26-34, except as specifically
 
 9 provided to the contrary in this section.  Two members shall be
 
10 appointed by the governor from a list of            names
 
11 provided by the senate; and two members shall be appointed by the
 
12 governor from a list of            names provided by the house of
 
13 representatives; provided that:
 
14      (1)  Those members appointed by the governor from lists
 
15           provided by the senate and the house of representatives
 
16           shall be selected from lists of prospective appointees
 
17           recommended by the county councils;
 
18      (2)  The governor shall stagger the terms of those members
 
19           appointed from lists provided by the senate and the
 
20           house of representatives so there will always be one
 
21           member from each county at all times; and
 
22      (3)  Those members appointed by the governor from lists
 
23           provided by the senate and the house of representatives
 

 
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 1           shall be exempt from senate confirmation.
 
 2 All members, except for the administrator, shall continue in
 
 3 office until their respective successors have been appointed and,
 
 4 if required, confirmed by the senate.  The port authority shall
 
 5 establish bylaws providing for the automatic succession of a
 
 6 deputy administrator to the vacant post of administrator on an
 
 7 interim basis and until a permanent administrator is appointed.
 
 8 Except as provided in this chapter, no member appointed under
 
 9 this section shall be an officer or employee of the State or the
 
10 counties.
 
11      (c)  The port authority shall be headed by a single
 
12 executive to be known as the administrator of the port authority.
 
13 The administrator:
 
14      (1)  Shall be appointed by the vote of not less than four
 
15           members of the port authority, excluding the
 
16           administrator;
 
17      (2)  Shall be a voting member of the port authority; and
 
18      (3)  May be removed from office by a vote of not less than
 
19           four members of the port authority, excluding the
 
20           administrator.
 
21 The administrator shall have such powers as are described in this
 
22 chapter, and as may be delegated by the members of the port
 
23 authority.  The administrator, with the majority consent of the
 

 
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 1 members voting thereon, shall appoint a division chief for the
 
 2 port authority's airport responsibilities and a division chief
 
 3 for the port authority's harbor responsibilities.  Each division
 
 4 chief shall exercise and discharge the division chief's
 
 5 respective responsibilities, whether or not in the
 
 6 administrator's presence, and shall not exercise the
 
 7 responsibilities of the other division chief.  Each division
 
 8 chief shall report to, and be under the supervision of, the
 
 9 administrator.  The administrator, with the majority consent of
 
10 the members voting thereon, may appoint such deputy
 
11 administrators as the administrator deems appropriate.  Each
 
12 deputy administrator shall exercise such powers as may be
 
13 delegated by the administrator, whether or not in the
 
14 administrator's presence.  The administrator may hire staff and
 
15 employees to fill such positions as may be provided for in the
 
16 port authority's annual budget.  The functions and duties of all
 
17 positions, and the discharge of any staff or person hired by the
 
18 administrator, shall be provided for in the bylaws of the port
 
19 authority.
 
20      §   -3  Powers; generally.(a)  Except as otherwise
 
21 provided in this chapter, the port authority:
 
22      (1)  Shall exercise power and control over airports, air
 
23           navigation facilities, buildings, and other facilities
 

 
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 1           belonging to, or controlled by, the port authority to
 
 2           provide for:
 
 3           (A)  The landing, taking-off, and servicing of
 
 4                aircraft, and the loading and unloading of
 
 5                passengers and cargo;
 
 6           (B)  The comfort, accommodation, and convenience of air
 
 7                travelers; and
 
 8           (C)  Any matter related to the foregoing;
 
 9      (2)  Shall exercise power and control over all commercial
 
10           harbors and roadsteads, and commercial harbor and
 
11           waterfront improvements belonging to, or controlled by,
 
12           the port authority, all vessels and shipping within the
 
13           commercial harbors and roadsteads, and any matter
 
14           related to the foregoing;
 
15      (3)  Shall exercise such powers and controls over ferries as
 
16           it may deem proper in carrying out its duties
 
17           concerning water transportation in the State;
 
18      (4)  Shall:
 
19           (A)  Exercise general supervision over aeronautics
 
20                within the State and, in connection therewith,
 
21                encourage, foster, and assist in the development
 
22                of aeronautics in the State, and encourage the
 
23                establishment of airports and air navigation
 

 
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 1                facilities;
 
 2           (B)  Cooperate with and assist the federal government
 
 3                and other persons in the development of
 
 4                aeronautics; and
 
 5           (C)  Seek to coordinate the aeronautical activities of
 
 6                the State with those activities of the federal
 
 7                government;
 
 8      (5)  May use the facilities and services of any department,
 
 9           board, commission, or agency of the State or counties;
 
10      (6)  May sue and be sued;
 
11      (7)  Shall have a seal and may alter the same at its
 
12           pleasure;
 
13      (8)  May make and execute contracts and all other
 
14           instruments necessary or convenient for the exercise of
 
15           its powers and functions under this chapter;
 
16      (9)  Shall establish bylaws for its organization and
 
17           internal management;
 
18     (10)  Shall establish bylaws for the adoption of rules, and
 
19           shall adopt rules, through the administrator, to
 
20           effectuate this chapter;
 
21     (11)  Shall adopt an annual budget for its operations and
 
22           maintenance program, and its capital facilities
 
23           program;
 

 
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 1     (12)  Shall appoint, through the administrator, officers,
 
 2           agents, and employees; prescribe their duties and
 
 3           qualifications; and fix their salaries;
 
 4     (13)  May own, sell, lease, hold, clear, improve, and
 
 5           rehabilitate real, personal, or mixed property, and
 
 6           assign, exchange, transfer, convey, lease, sublease, or
 
 7           encumber any airport or commercial harbor, or any
 
 8           project, improvement, or facility related thereto;
 
 9     (14)  Shall develop, construct, reconstruct, rehabilitate,
 
10           improve, alter, or repair, or provide for the
 
11           development, construction, reconstruction,
 
12           rehabilitation, improvement, alteration, or repair of,
 
13           any airport or commercial harbor, or any project,
 
14           improvement, or facility related thereto, and designate
 
15           a qualified person as its agent for that purpose; and
 
16           own, hold, assign, transfer, convey, exchange, lease,
 
17           sublease, or encumber any airport or commercial harbor
 
18           or any project, improvement, or facility related
 
19           thereto;
 
20     (15)  Shall arrange or initiate appropriate action for the
 
21           planning, replanning, opening, grading, relocating, or
 
22           closing of streets, roads, roadways, alleys, easements,
 
23           piers, or other places; the furnishing of facilities;
 

 
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 1           the acquisition of property or property rights; and the
 
 2           furnishing of property, development rights, or services
 
 3           in connection with any airport or commercial harbor, or
 
 4           any project, improvement, or facility related thereto;
 
 5     (16)  May grant options or renew any lease entered into by it
 
 6           in connection with any project, on terms and conditions
 
 7           as it deems advisable;
 
 8     (17)  May provide advisory, consultative, training, and
 
 9           educational services; technical assistance; and advice,
 
10           to any person, either public or private, in order to
 
11           carry out the purposes of this chapter, and engage the
 
12           services of consultants on a contractual basis for
 
13           rendering professional and technical assistance, and
 
14           advice;
 
15     (18)  Shall procure insurance against any loss in connection
 
16           with its property and other assets and operations in
 
17           such amounts and from such insurers as it deems
 
18           desirable, or provide for self-insurance;
 
19     (19)  May accept and receive gifts or grants in any form from
 
20           any person, public entity, or source; provided that the
 
21           grants and gifts shall be used for port authority
 
22           purposes;
 
23     (20)  May pledge or assign all or any part of the moneys,
 

 
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 1           fees, rents, charges, or other revenues and proceeds
 
 2           derived by the port authority from the proceeds of
 
 3           insurance or condemnation awards for the loss of
 
 4           revenues or incurring of costs and expenses because of
 
 5           any action taken by the port authority;
 
 6     (21)  Shall impose, prescribe, and collect rates, rentals,
 
 7           fees, or charges for the lease, use, and services of
 
 8           its airport and commercial harbor facilities at least
 
 9           sufficient to pay the costs of operation, maintenance,
 
10           and repair, if any, and the required payments of the
 
11           principal of, and interest on, all bonds issued or
 
12           assumed by the port authority, and reserves therefor;
 
13     (22)  May engage in economic development programs, and
 
14           contract with the department of business, economic
 
15           development, and tourism or nonprofit corporations in
 
16           the furtherance of economic development;
 
17     (23)  May take all actions necessary under emergencies such
 
18           as hurricanes, tsunamis, and other natural disasters;
 
19     (24)  Shall plan, construct, operate, and maintain all
 
20           commercial harbor and airport facilities in the State,
 
21           including, but not limited to, the acquisition and use
 
22           of lands necessary to stockpile dredged spoils without
 
23           the approval of county agencies, notwithstanding any
 

 
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 1           other law to the contrary;
 
 2     (25)  May issue revenue bonds and special facility revenue
 
 3           bonds in its name pursuant to chapter 39 without
 
 4           limitations, but not in excess of such principal
 
 5           amounts as are necessary for its purposes or specified
 
 6           in covenants with bondholders;
 
 7     (26)  May invest and secure its moneys in accordance with
 
 8           chapters 36 and 38;
 
 9     (27)  May take public and private property for use in
 
10           furthering any of the purposes of the port authority or
 
11           as otherwise provided by law; provided that all such
 
12           proceedings for condemnation shall be conducted in
 
13           accordance with chapter 101;
 
14     (28)  May provide compensation, allowance, or other
 
15           assistance to any person for relocation or displacement
 
16           caused by the acquisition of land for airport or
 
17           commercial harbor purposes;
 
18     (29)  May hire or contract law enforcement personnel,
 
19           notwithstanding any other law to the contrary; and
 
20     (30)  May do any and all things necessary to carry out its
 
21           purposes and exercise the powers given to it in this
 
22           chapter.
 
23      (b)  Except for the power to exercise home rule, which the
 

 
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 1 port authority shall not have, nothing in this chapter shall be
 
 2 construed to restrict or limit any powers that a special
 
 3 political subdivision might otherwise have under any other laws
 
 4 of the State.
 
 5      §   -4  Certain exemptions; procedures and rules.(a)  The
 
 6 port authority shall be exempt from chapters 76, 77, 89, 103,
 
 7 103D, 171, and 353C.  Any rules adopted by the port authority
 
 8 shall be exempt from the public notice and public hearing
 
 9 requirements of chapter 91.
 
10      (b)  The administrator, with the majority consent of the
 
11 members voting thereon, shall adopt such rules, including minimum
 
12 standards, as may be necessary to effectuate this chapter in
 
13 connection with the port authority's projects, operations,
 
14 properties, and facilities.  The rules shall have the force and
 
15 effect of law.
 
16      (c)  The rules of the port authority shall not apply to
 
17 airports, air navigation facilities, or harbor facilities owned
 
18 or operated by the United States.
 
19      (d)  The administrator shall adopt rules relating to:
 
20      (1)  The imposition, prescription, and collection of rates,
 
21           rentals, fees, and charges as required by
 
22           section    -3(21);
 
23      (2)  Safety measures, requirements, and practices in or
 

 
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 1           about the premises of airports and commercial harbors;
 
 2      (3)  The licensing and regulation of persons engaged in
 
 3           commercial activities in or about the premises of
 
 4           airports and commercial harbors;
 
 5      (4)  The regulation of equipment and motor vehicles operated
 
 6           in or about the operational areas of airports and
 
 7           commercial harbors;
 
 8      (5)  Airport and commercial harbor security measures or
 
 9           requirements, and the designation of sterile passenger
 
10           holding areas and operational areas;
 
11      (6)  The regulation of motor vehicles, parking, and traffic
 
12           in or about the premises of airports and commercial
 
13           harbors;
 
14      (7)  The permitting and operation of tour aircraft using any
 
15           airport under the port authority's control;
 
16      (8)  The regulation of rubbish, refuse, garbage, fuel, oils,
 
17           or other substances that may affect water quality or
 
18           contribute to making harbors unsightly, unhealthful, or
 
19           unclean, or that may accumulate on shoals or in shallow
 
20           waters near to, or affecting, commercial harbors;
 
21      (9)  The imposition of liens, impoundment, and notices
 
22           relating thereto;
 
23     (10)  The use of credit cards;
 

 
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 1     (11)  Aircraft registration, abandoned aircraft, trespass to
 
 2           aircraft, the licensing of airports, and airport
 
 3           zoning;
 
 4     (12)  Lost and found money and property;
 
 5     (13)  Hazard pay differential for employees; and
 
 6     (14)  Any other matter relating to the health, safety, and
 
 7           welfare of the general public, and comfort,
 
 8           accommodations, and convenience of persons operating,
 
 9           using, or traveling in aircraft, ships, or vessels.
 
10      §   -5  Port authority funds established; separate
 
11 accounting of airport and harbor functions; disposition.(a)
 
12 There are established the port authority airport fund and the
 
13 port authority harbor fund, which shall be held and administered
 
14 by, or at the direction of, the port authority.  All airport
 
15 functions, assets, revenues, expenses, grants, and related items
 
16 of the port authority shall be accounted for in the port
 
17 authority airport fund.  All harbor functions, assets, revenues,
 
18 expenses, grants, and related items of the port authority shall
 
19 be accounted for in the port authority harbor fund.  The port
 
20 authority may establish such other accounts in the port authority
 
21 airport fund and the port authority harbor fund as may be
 
22 necessary and appropriate to account for, respectively, all
 
23 airport and harbor functions, assets, revenues, expenses, and
 

 
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 1 grants, and to satisfy all covenants made in respect of revenue
 
 2 bonds and special facility revenue bonds issued for airport and
 
 3 harbor purposes.  The port authority airport fund and the port
 
 4 authority harbor fund are not special funds of the State and
 
 5 shall not be subject to section 37-53.
 
 6      (b)  All taxes collected by the State under chapter 243 with
 
 7 respect to gasoline or other aviation fuel sold for use in, or
 
 8 used for, airplanes shall be paid to the port authority airport
 
 9 fund.  All moneys received by the port authority from rates,
 
10 fees, income, or other revenue received from leases, landing
 
11 fees, and operations of the port authority's airports shall be
 
12 deposited in the port authority airport fund.
 
13      (c)  All moneys received by the port authority from rates,
 
14 fees, income, or other revenue received from wharfage, demurrage,
 
15 and the entry, anchorage, and wharfage of all vessels and other
 
16 craft entering the ports of the State, shall be paid into the
 
17 port authority harbor fund.  All moneys derived pursuant to this
 
18 chapter from harbor properties of the statewide system of
 
19 commercial harbors shall be paid into the port authority harbor
 
20 fund.
 
21      (d)  All funds paid into the port authority airport fund and
 
22 the port authority harbor fund, and all real and personal
 
23 property for airport and harbor purposes, shall remain
 

 
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 1 segregated, and neither this chapter nor any action of the port
 
 2 authority shall result in their commingling, except as may be
 
 3 allowed under federal or state law.
 
 4      (e)  All moneys paid into the port authority airport fund
 
 5 may be applied or expended by the port authority for any purpose
 
 6 within the jurisdiction, powers, duties, and functions of the
 
 7 port authority relating to the statewide system of airports,
 
 8 including, without limitation, the cost of operation,
 
 9 maintenance, and repair of the statewide system of airports and
 
10 reserves therefor, and acquisitions (including real property and
 
11 interests therein), construction, additions, expansions,
 
12 improvements, renewals, replacements, reconstruction,
 
13 engineering, investigation, and planning for the statewide system
 
14 of airports, all or any of which, in the judgment of the port
 
15 authority, may be necessary to the performance of its duties or
 
16 functions.  The port authority shall generate sufficient revenues
 
17 from its airport properties to meet all of the expenditures of
 
18 the statewide system of airports, and to comply with section
 
19 39-61.
 
20      (f)  All moneys paid into the port authority harbor fund may
 
21 be applied or expended by the port authority for any purpose
 
22 within the jurisdiction, powers, duties, and functions of the
 
23 port authority relating to the statewide system of commercial
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1 harbors, including, without limitation, the cost of operation,
 
 2 maintenance, and repair of the statewide system of commercial
 
 3 harbors and reserves therefor, and acquisitions (including real
 
 4 property and interests therein), construction, additions,
 
 5 expansions, improvements, renewals, replacements, reconstruction,
 
 6 engineering, investigation, and planning for the statewide system
 
 7 of commercial harbors, all or any of which, in the judgment of
 
 8 the port authority, may be necessary to the performance of its
 
 9 duties or functions.  The port authority shall generate
 
10 sufficient revenues from its commercial harbor properties to meet
 
11 all of the expenditures of the statewide system of commercial
 
12 harbors, and to comply with section 39-61.
 
13      (g)  The port authority, at any time, may withdraw from the
 
14 port authority airport fund all or any portion of the moneys
 
15 received by the port authority, under a contract entered into
 
16 pursuant to section    -13 on account of the display, sale, and
 
17 delivery of in-bond merchandise displayed or sold at locations in
 
18 the State not on airport properties, as permitted under federal
 
19 law and federal grant agreements, that the administrator,
 
20 pursuant to rules, determines to be in excess of one hundred
 
21 fifty per cent of the requirements of the port authority airport
 
22 fund for the ensuing twelve months.
 
23      (h)  Any other law to the contrary notwithstanding, the port
 

 
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 1 authority shall not be obligated to pay any amount for the
 
 2 purpose of defraying the prorated share of central service
 
 3 expenses of state government, including those expenses described
 
 4 in chapter 36.
 
 5      (i)  All moneys that are received by the port authority from
 
 6 federal, state, and other sources as grants or gifts, and are
 
 7 earmarked for specific projects, shall be deposited in the port
 
 8 authority airport fund if the projects relate to airport uses, or
 
 9 the port authority harbor fund if the projects relate to harbor
 
10 uses, and shall be expended by the port authority upon such terms
 
11 and conditions as are prescribed by the grants or gifts.
 
12      §   -6  Compliance with state laws and county ordinances;
 
13 preemption.  In addition to the rules of the port authority, all
 
14 users of the port authority's facilities shall be subject to:
 
15      (1)  State laws and county ordinances relating to the
 
16           construction, operation, and maintenance of any
 
17           project; and
 
18      (2)  Zoning laws and ordinances, building and health codes,
 
19           and other ordinances pertaining to the project;
 
20           provided that any rule of the port authority adopted
 
21           pursuant to this chapter and relating to zoning shall
 
22           preempt an inconsistent county ordinance.
 
23      §   -7  Limitation of powers.  Except as otherwise provided
 

 
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 1 by this chapter, the jurisdiction and powers conferred on the
 
 2 port authority shall be subject to such restrictions as may be
 
 3 imposed by the laws of the State, and shall be exercised in
 
 4 accordance with the provisions thereof.
 
 5      §   -8  Public purpose of activities.  The acquisition of
 
 6 any lands or interests therein pursuant to this chapter; the
 
 7 planning, acquisition, establishment, construction, improvement,
 
 8 maintenance, equipping, and operation of airports and air
 
 9 navigation facilities; and the exercise of any other powers
 
10 granted by this chapter to the port authority, are declared to be
 
11 public and governmental functions, exercised for a public
 
12 purpose, and matters of public necessity.  All privileges, lands,
 
13 and other property acquired and used by, or on behalf of, the
 
14 port authority in the manner and for the purposes described in
 
15 this part shall be, and are declared to be, acquired and used for
 
16 public and governmental purposes and as a matter of public
 
17 necessity.
 
18      §   -9  Disposition of public land; reservation of right-of-
 
19 way.  Whenever any disposition of public land is made by the port
 
20 authority, under its powers relating to public lands under its
 
21 jurisdiction, to any persons, organizations, associations,
 
22 corporations, or clubs for recreational or social purposes, the
 
23 leases, licenses, permits, or right-of-entry, or any extensions
 

 
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 1 thereof, covering the disposition of the public lands shall
 
 2 contain provisions reserving adequate public right-of-way or
 
 3 public access to adjacent public areas over and across the public
 
 4 land disposed.
 
 5      §   -10  Expenditures.(a)  Expenditures by the port
 
 6 authority shall be made upon vouchers signed by the
 
 7 administrator; provided that the administrator, in writing, may
 
 8 designate a qualified subordinate to sign vouchers, make routine
 
 9 reports, and perform other routine business duties, subject to
 
10 the direction of the administrator, for whose acts the
 
11 administrator shall be responsible.
 
12      (b)  The port authority may cause work to be performed by
 
13 day labor, contract, or any other method deemed by the port
 
14 authority to be most advantageous to it.
 
15      §   -11  Relocation compensation not treated as income.  No
 
16 payment received by any person under this chapter as
 
17 compensation, allowance, or other assistance for relocation or
 
18 displacement caused by the acquisition of land by the port
 
19 authority for airport or commercial harbor purposes shall be:
 
20      (1)  Considered as income for purposes of the state income
 
21           tax law; or
 
22      (2)  Considered as income to any recipient of public
 
23           assistance or deducted from the amount of aid to which
 

 
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 1           the recipient would otherwise be entitled to under the
 
 2           State's public assistance programs.
 
 3      §   -12  Assistance by state and county agencies.  Every
 
 4 state and county agency shall render services to the port
 
 5 authority upon request of the port authority.
 
 6      §   -13  Operation and use privileges.(a)  In operating an
 
 7 airport or air navigation facility that is owned or controlled by
 
 8 the port authority, or in which it has a right or interest, the
 
 9 port authority may enter into contracts, leases, licenses, and
 
10 other arrangements with any person:
 
11      (1)  Granting the privilege of using or improving the
 
12           airport or air navigation facility, or any portion or
 
13           facility thereof or space therein, for commercial
 
14           purposes;
 
15      (2)  Conferring the privilege of supplying goods,
 
16           commodities, things, services, or facilities at the
 
17           airport or air navigation facility;
 
18      (3)  Making available the services, facilities, goods,
 
19           commodities, or other things to be furnished by the
 
20           port authority or its agents at the airport or air
 
21           navigation facility; or
 
22      (4)  Granting the use and occupancy, on a temporary basis
 
23           and by license or other device, of any portion of the
 

 
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 1           land under its jurisdiction, which, for the time being,
 
 2           may not be required by the port authority, so that it
 
 3           may put the area to economic use and thereby derive
 
 4           revenue therefrom.
 
 5 All licenses and other devices shall contain a clause specifying
 
 6 that the land may be repossessed by the port authority when
 
 7 needed for aeronautic purposes upon not less than thirty days'
 
 8 notice in writing of the intention to repossess.
 
 9      (b)  Except as otherwise provided in this section, the port
 
10 authority may establish the terms and conditions of a contract,
 
11 lease, license, or other arrangement, and may fix the charges,
 
12 rentals, or fees for the privileges, services, or things granted,
 
13 conferred, or made available, for the purpose of meeting the
 
14 expenditures of the statewide system of airports.  The charges
 
15 shall be reasonable, and uniform for the same class of privilege,
 
16 service, or thing.
 
17      (c)  The port authority shall enter into a contract with not
 
18 more than one person ("contractor") for the sale and delivery of
 
19 in-bond merchandise at Honolulu International Airport, in the
 
20 manner provided by law.  The contract shall confer the right to
 
21 operate and maintain commercial facilities within the airport for
 
22 the sale of in-bond merchandise, and the right to deliver in-bond
 
23 merchandise to the airport for sale to departing foreign-bound
 

 
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 1 passengers.
 
 2      (d)  The port authority shall grant the contract pursuant to
 
 3 the laws of the State and may take into consideration:
 
 4      (1)  The payment to be made on in-bond merchandise sold at
 
 5           Honolulu International Airport, and displayed or sold
 
 6           elsewhere in the State and delivered to the airport;
 
 7      (2)  The ability of the applicant to comply with all federal
 
 8           and state laws concerning the sale and delivery of in-
 
 9           bond merchandise; and
 
10      (3)  The reputation, experience, and financial capability of
 
11           the applicant.
 
12      (e)  The port authority shall actively supervise the
 
13 operation of the contractor to ensure the contractor's
 
14 effectiveness.  The port authority shall develop and implement
 
15 such guidelines as may be necessary and proper to actively
 
16 supervise the operations of the contractor, and shall include
 
17 guidelines relating to the port authority's review of the
 
18 reasonableness of the contractor's price schedules, quality of
 
19 merchandise, merchandise assortment, operations, and service to
 
20 customers.
 
21      (f)  Apart from the contract described in this section, the
 
22 port authority shall not confer a right upon, or suffer or allow,
 
23 any person to offer to sell, sell, or deliver in-bond merchandise
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1 at Honolulu International Airport; provided that this section
 
 2 shall not prohibit the delivery of in-bond merchandise as cargo
 
 3 to the Honolulu International Airport.
 
 4      (g)  The port authority, by contract, lease, or other
 
 5 arrangement, upon a consideration fixed by it, may grant to any
 
 6 qualified person the privilege of operating, as an agent of the
 
 7 port authority or otherwise, any airport owned or controlled by
 
 8 the port authority; provided that no such person shall be granted
 
 9 any authority to operate the airport other than as a public
 
10 airport, or to enter into any contracts, leases, or other
 
11 arrangements in connection with the operation of the airport that
 
12 the port authority might not have undertaken under subsection
 
13 (a).
 
14      (h)  The port authority:
 
15      (1)  May impose, prescribe, and collect rates, rentals,
 
16           fees, and charges for the use and enjoyment of the
 
17           statewide system of airports, and the services and
 
18           facilities furnished by the port authority in
 
19           connection therewith, by aeronautical users of the
 
20           system, including the establishment of statewide
 
21           landing fees and system support charges that may vary
 
22           among different classes or groups of users such as
 
23           foreign carriers, domestic carriers, interisland
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1           carriers, air taxi operators, and such other classes or
 
 2           groups as may be determined by the administrator, and
 
 3           the establishment of joint use charges for the use of
 
 4           space shared by users; and
 
 5      (2)  Shall revise its rates, rentals, fees, and charges
 
 6           whenever necessary to meet the expenditures of the
 
 7           statewide system of airports described in
 
 8           section    -5(e), which include expenditures for
 
 9           capital improvement projects of the port authority for
 
10           the system, and complying with covenants and agreements
 
11           with holders of revenue bonds issued for the system.
 
12      (i)  The administrator shall adopt such rules as may be
 
13 necessary to impose, prescribe, and collect the rates, rentals,
 
14 fees, and charges authorized by this chapter.  In adopting the
 
15 rates, rentals, fees, and charges, the administrator may develop
 
16 formulae for the various rates, rentals, fees, and charges
 
17 imposed, prescribed, and collected and, in the administrator's
 
18 discretion, may determine usage of space, estimate landed
 
19 weights, and apply such portion of non-aeronautical revenue to
 
20 aeronautical purposes as the administrator deems appropriate, in
 
21 determining the rates, rentals, fees, and charges applicable to
 
22 aeronautical users of the statewide system of airports.  The port
 
23 authority shall apply any non-aeronautical revenue not included
 

 
Page 26                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 in determining the rates, rentals, fees, and charges applicable
 
 2 to aeronautical users of the statewide system of airports solely
 
 3 to capital improvement projects of the port authority for the
 
 4 system.
 
 5      (j)  The port authority may enter into contracts, leases,
 
 6 licenses, and other agreements with aeronautical users of the
 
 7 statewide system of airports containing such terms, conditions,
 
 8 and provisions as may be deemed advisable.  In the event the port
 
 9 authority does not enter into contracts, leases, licenses, and
 
10 other agreements with any of the aeronautical users of the
 
11 statewide system of airports, or in the event the port authority
 
12 enters into contracts, leases, licenses, and other agreements
 
13 with less than all of the aeronautical users of the statewide
 
14 system of airports, the administrator shall adopt rules to
 
15 implement these agreements.
 
16      (k)  To enforce the payment of any charges for repairs or
 
17 improvements to, or storage or care of, any personal property
 
18 made or furnished by the port authority or its agent in
 
19 connection with the operation of an airport or air navigation
 
20 facility owned or operated by the port authority, the port
 
21 authority shall have liens on the property, which shall be
 
22 enforceable by it as provided in sections 507-18 to 507-22.
 
23      (l)  The port authority, from time to time, may establish
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1 developmental rates for buildings and land areas used exclusively
 
 2 for general aviation activities at rates not less than fifty per
 
 3 cent of the fair market rentals of the buildings and land areas,
 
 4 and may restrict the extent of buildings and land areas to be
 
 5 utilized in connection therewith.
 
 6      §   -14  Liens for landing fees and other charges and fees.
 
 7 (a)  The port authority shall have a lien upon any aircraft
 
 8 landing upon any airport operated by it for landing fees and
 
 9 other charges and fees for the use of the services or facilities
 
10 of the airport when payment of those charges and fees is not made
 
11 immediately upon demand therefor to the operator or owner of the
 
12 aircraft by a duly authorized employee of the port authority.
 
13 The lien shall be for the full amount of the charges and fees,
 
14 and shall attach to any aircraft owned or operated by the person
 
15 owing those charges and fees.  The port authority shall not
 
16 execute on the lien until it complies with the procedures set out
 
17 in rules adopted pursuant to this chapter.
 
18      (b)  The port authority shall have a lien upon any freight
 
19 for demurrage or other charges and fees for the use of the
 
20 services or facilities of the commercial harbors operated by it
 
21 when payment of those demurrage or other charges and fees is not
 
22 made immediately upon demand therefor by a duly authorized
 
23 employee of the port authority.  The lien shall be for the full
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1 amount of the demurrage or other charges and fees, and shall
 
 2 attach to the freight.  The port authority shall not execute on
 
 3 the lien until it complies with the procedures set out in rules
 
 4 adopted pursuant to this chapter.
 
 5      §   -15  Enforcement.(a)  The administrator, officers, and
 
 6 employees of the port authority, and every state and county
 
 7 officer charged with the enforcement of state laws and county
 
 8 ordinances, shall enforce, and assist in the enforcement of, this
 
 9 chapter, and the rules and orders issued pursuant thereto.  In
 
10 connection with the enforcement of this chapter, each of the
 
11 aforemention persons may inspect and examine at reasonable hours
 
12 any premises, and the buildings and other structures thereon,
 
13 where port authority facilities or other activities are operated
 
14 or conducted.  To aid in the enforcement of this chapter, and the
 
15 rules and orders issued pursuant thereto, the powers of police
 
16 officers are conferred upon the administrator, and such officers,
 
17 employees, agents, and representatives of the port authority as
 
18 may be designated by the administrator to exercise these powers,
 
19 including the power to serve and execute warrants, arrest
 
20 offenders, and serve notices and orders.  For the purposes of
 
21 this subsection, the term "agents and representatives" includes
 
22 persons performing services at port authority facilities under
 
23 contract with the port authority.
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1      (b)  The port authority may enforce this chapter, and the
 
 2 rules and orders issued pursuant thereto, by injunction or other
 
 3 legal process in the courts of the State.
 
 4      §   -16  Arrest or citation.(a)  Except when required by
 
 5 state law to take immediately before a district court judge a
 
 6 person arrested for violating this chapter, including any rule
 
 7 adopted pursuant thereto, any person authorized to enforce this
 
 8 chapter ("enforcement officer"), upon arresting a person for
 
 9 violating this chapter, including any rule adopted pursuant
 
10 thereto, in the discretion of the enforcement officer, shall
 
11 either:
 
12      (1)  Issue to the purported violator a summons or citation,
 
13           printed in the form hereinafter described, instructing
 
14           the purported violator to appear and answer to the
 
15           charge against the purported violator at a certain
 
16           place and time within seven days after the arrest; or
 
17      (2)  Take the purported violator without unnecessary delay
 
18           before a district court judge.
 
19      (b)  The summons or citation shall be printed in a form
 
20 comparable to the form of other summonses and citations used for
 
21 arresting offenders, and shall be designed to provide for the
 
22 inclusion of all necessary information.  The form and content of
 
23 the summons or citation shall be adopted or prescribed by the
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1 district courts.
 
 2      (c)  The original of a summons or citation shall be given to
 
 3 the purported violator and the other copy or copies distributed
 
 4 in the manner prescribed by the district courts; provided that
 
 5 the district courts may prescribe alternative methods of
 
 6 distribution for the original and any other copies.  Summonses
 
 7 and citations shall be consecutively numbered and the carbon copy
 
 8 or copies of each shall bear the same number.
 
 9      (d)  Any person who fails to appear at the place and time
 
10 specified in the summons or citation issued to the person by the
 
11 enforcement officer, upon the person's arrest for violation of
 
12 this chapter, including any rule adopted pursuant thereto, shall
 
13 be guilty of a misdemeanor and, on conviction, shall be fined not
 
14 more than $1,000, or be imprisoned not more than six months, or
 
15 both.
 
16      (e)  In the event any person fails to comply with a summons
 
17 or citation issued to the person, or in the event any person
 
18 fails or refuses to deposit bail as required, the enforcement
 
19 officer shall cause a complaint to be entered against the person
 
20 and secure the issuance of a warrant for the person's arrest.
 
21      §   -17  Court proceedings; preferences, venue.  Any action
 
22 or proceeding to which the port authority, the State, or a county
 
23 may be a party, in which any question arises as to the validity
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1 of this chapter, shall be preferred over all other civil cases,
 
 2 except election cases, in any court of this State, and shall be
 
 3 heard and determined in preference to all other civil cases
 
 4 pending therein except election cases, irrespective of position
 
 5 on the calendar.  The same preference shall be granted upon
 
 6 application of counsel to the port authority in any action or
 
 7 proceeding, questioning the validity of this chapter, in which
 
 8 the port authority may be allowed to intervene.  In addition to
 
 9 the preference provided in this section, any such action or
 
10 proceeding to which the port authority, the State, or a county
 
11 may be party, in which any question arises as to the validity of
 
12 this chapter or any action of the authority, may be filed in the
 
13 supreme court of the State, which court is hereby vested with
 
14 original jurisdiction over the action and, notwithstanding any
 
15 other law to the contrary, the power to provide declaratory
 
16 relief for any such action.
 
17      §   -18  Annual report.  The authority shall submit a
 
18 complete and detailed report of its activities to the governor
 
19 and the legislature at least twenty days prior to the convening
 
20 of each regular session of the legislature.  The report shall
 
21 contain:
 
22      (1)  A summary of its proceedings during the preceding
 
23           fiscal year;
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1      (2)  A detailed and itemized statement of:
 
 2           (A)  All revenue; and
 
 3           (B)  All expenditures made by, or on behalf of, the
 
 4                port authority during the preceding fiscal year;
 
 5      (3)  An estimate of anticipated revenues and expenses for
 
 6           the next succeeding fiscal year;
 
 7      (4)  Such other information as it may deem necessary or
 
 8           useful; and
 
 9      (5)  Any additional information that may be requested by the
 
10           governor or the legislature.
 
11 The fiscal year of the port authority shall conform to the fiscal
 
12 year of the State.
 
13      §   -19  Construction of this chapter.  The powers conferred
 
14 by this chapter shall be in addition and supplemental to the
 
15 other powers conferred by other laws.  If the provisions of this
 
16 chapter are inconsistent with the provisions of any other law,
 
17 the provisions of this chapter shall control.
 
18      §§   -20 to -30 Reserved.
 
19                   PART II.  HAWAII AIR CARRIERS
 
20      §   -31  Application of part; interstate or foreign
 
21 commerce.  This part shall not apply to commerce with foreign
 
22 nations or territories of the United States, or to interstate
 
23 commerce, except insofar as the application thereof is permitted
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1 under the laws of the United States.
 
 2      §   -32  Definitions.  As used in this part, unless the
 
 3 context indicates otherwise:
 
 4      "Air transportation" means the holding out to the general
 
 5 public of, or the undertaking to provide for, the carriage of
 
 6 persons or property, except for United States mail, by air, for
 
 7 compensation or hire, between any pair of points within the State
 
 8 unless the carriage is part of the continuous carriage of the
 
 9 persons or property to or from a point outside the State.  For
 
10 the purposes of this part, the term "continuous carriage" means
 
11 transportation by air that does not include a stopover of more
 
12 than twenty-four hours.
 
13      "Aircraft" means any craft or other artificial contrivance
 
14 of whatever description that is used or capable of being used, or
 
15 intended to be used, as a means of transportation by air.
 
16      "Certificate" means a certificate of public convenience and
 
17 necessity issued under this part to a Hawaii air carrier.
 
18      "Citizen of the United States" shall have the same meaning
 
19 as defined in section 101(16) of the Federal Aviation Act of 1958
 
20 (49 U.S.C. §1301 et seq.), as amended.
 
21      "Control", in reference to a relationship between any person
 
22 or persons and another person or other persons, includes actual
 
23 as well as legal control, indirect as well as direct control, and
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1 the power to exercise substantial influence whether or not
 
 2 exercised.
 
 3      "Hawaii air carrier" or "carrier" means any person who has
 
 4 received a certificate issued by the port authority, and who
 
 5 undertakes or holds oneself out to the general public as engaging
 
 6 directly or indirectly in the transportation by air of passengers
 
 7 or property, or both, for compensation or hire, within the State
 
 8 or between points within the State.
 
 9      "Rates" includes rates, fares, and charges of whatever kind
 
10 and nature.
 
11      "Related company" means a company or persons that directly,
 
12 or indirectly through one or more subsidiaries, affiliates, or a
 
13 holding company, controls or is controlled by, or is under common
 
14 control with, a Hawaii air carrier.
 
15      "Transportation of persons" includes every service in
 
16 connection with, or incidental to, the comfort or convenience of
 
17 persons transported, and the receipt, carriage, and delivery of
 
18 these persons and their baggage.
 
19      "Transportation of property" includes every service in
 
20 connection with, or incidental to, the transportation of
 
21 property, including in particular its receipt, carriage,
 
22 preservation, and delivery, and all incidental services affecting
 
23 these activities.
 

 
Page 35                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1      §   -33  Exemptions, generally.  Notwithstanding any other
 
 2 provision of this part to the contrary, this part shall not apply
 
 3 to:
 
 4      (1)  Persons transporting their own property in the
 
 5           furtherance of a primary business purpose or enterprise
 
 6           of that person, except where the transportation is
 
 7           undertaken by a Hawaii air carrier to evade the
 
 8           regulatory purposes of this part; or
 
 9      (2)  Persons engaged in the business of transporting persons
 
10           solely for sightseeing and other recreational
 
11           activities not involving point-to-point travel.
 
12      §   -34  General powers and duties.  The port authority
 
13 shall have general supervision over all Hawaii air carriers
 
14 providing air transportation and, to the extent determined by the
 
15 port authority to be necessary to effectuate the purposes of this
 
16 part, over any related company, and shall perform the duties and
 
17 exercise the powers imposed or conferred upon it by this part.
 
18 The general powers of the port authority shall include, but not
 
19 be limited to:
 
20      (1)  Regulating Hawaii air carriers by utilizing, in
 
21           addition to its other powers, the investigative powers
 
22           set forth in section    -35;
 
23      (2)  Establishing reasonable classifications of Hawaii air
 

 
Page 36                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           carriers based upon the nature of the services provided
 
 2           by the carriers, and adopting rules pursuant to this
 
 3           chapter to regulate those classes of Hawaii air
 
 4           carriers; and
 
 5      (3)  Exempting from this part, in whole or in part, when
 
 6           determined to be in the public interest, any Hawaii air
 
 7           carrier engaging in air transportation solely with
 
 8           aircraft with a maximum seating capacity of not more
 
 9           than seventeen passengers or a maximum cargo capacity
 
10           of not more than three thousand pounds.
 
11      §   -35  Investigative powers.(a)  The port authority
 
12 shall have the power to examine the condition of each Hawaii air
 
13 carrier and, to the extent determined by the port authority to be
 
14 necessary to effectuate the purposes of this part, any related
 
15 companies, including, but not limited to:
 
16      (1)  The manner in which carriers are operated with
 
17           reference to the accommodation of the public;
 
18      (2)  The fares and rates charged by carriers;
 
19      (3)  The value of the physical property of carriers;
 
20      (4)  The issuance of stocks and bonds, and the disposition
 
21           of the proceeds thereof, by carriers;
 
22      (5)  The amount and disposition of the income, and all
 
23           financial transactions, of carriers;
 

 
Page 37                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1      (6)  The business relations of carriers with other persons,
 
 2           companies, or corporations;
 
 3      (7)  The compliance of carriers with all applicable state
 
 4           and federal laws, and with the provisions of their
 
 5           franchise, charter, and articles of association, if
 
 6           any;
 
 7      (8)  The classifications, rules, regulations, practices, and
 
 8           service of carriers; and
 
 9      (9)  All matters of every nature affecting the relations and
 
10           transactions between carriers and the public, persons,
 
11           or corporations.
 
12      (b)  Any investigation may be made by the port authority on
 
13 its own motion, or on a sworn written complaint that the port
 
14 authority determines sets forth any prima facie cause of
 
15 complaint.
 
16      (c)  A related company shall be deemed to have consented to
 
17 examination and investigation pursuant to this section by
 
18 entering into, or maintaining a control relationship with, a
 
19 Hawaii air carrier.
 
20      §   -36  Certificates of public convenience and necessity.
 
21 (a)  Except as otherwise provided in this part, no person shall
 
22 engage in air transportation unless the person holds a
 
23 certificate issued by the port authority authorizing its
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1 operation.
 
 2      (b)  Applications for certificates shall be made in writing
 
 3 to the port authority.  Applications shall be in the proper form
 
 4 and contain the required information, with proof of service upon
 
 5 the interested parties, as the port authority shall require by
 
 6 rule.
 
 7      (c)  A certificate shall be issued to any qualified
 
 8 applicant, authorizing the whole or any part of the operations
 
 9 covered by the application, if it is found that:
 
10      (1)  The applicant is a citizen of the United States and
 
11           fit, willing, and able to properly perform the service
 
12           proposed, and to conform to this part and the
 
13           requirements and rules of the port authority; and
 
14      (2)  The proposed service, to the extent to be authorized by
 
15           the certificate, is required by the public convenience
 
16           and necessity;
 
17 otherwise the application shall be denied.  The applicant shall
 
18 have the burden of proof to establish that any proposed service
 
19 is required by the public convenience and necessity.  The port
 
20 authority shall institute an oral evidentiary hearing to consider
 
21 any application for a certificate that would authorize the holder
 
22 to use aircraft capable of carrying more than seventeen persons.
 
23      (d)  Any applicant receiving a certificate under this part
 

 
Page 39                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 shall pay, upon receipt of the certificate, a registration fee
 
 2 and subsequent annual fee that shall be determined by the port
 
 3 authority and deposited into the port authority airport fund.
 
 4      (e)  Any Hawaii air carrier engaging in air transportation
 
 5 under a certificate issued by the port authority may occasionally
 
 6 deviate from the route over which it is authorized to operate
 
 7 under the certificate, in accordance with rules adopted by the
 
 8 port authority.
 
 9      §   -37  Temporary authority.  To enable the provision of
 
10 service for which there is an immediate and urgent need to a
 
11 point or points having no Hawaii air carrier service capable of
 
12 meeting, and willing to meet, the need, the port authority, in
 
13 its discretion and without hearings or other proceedings, may
 
14 grant temporary authority for the service by a Hawaii air
 
15 carrier.  The temporary authority, unless suspended or revoked
 
16 for good cause, shall be valid for the time the port authority
 
17 shall specify, but not for more than a period of one hundred
 
18 twenty days for any one immediate and urgent need.
 
19      §   -38  Transfer of certificates of public convenience and
 
20 necessity, carrier property, and control of carriers.(a)  No
 
21 Hawaii air carrier shall:
 
22      (1)  Sell, lease, assign, mortgage, or otherwise dispose of
 
23           or encumber any certificate, in whole or in part, or
 

 
Page 40                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           any of its property necessary or useful in the
 
 2           performance of transportation services for the public;
 
 3           or
 
 4      (2)  Merge or consolidate its property, certificates, or any
 
 5           part thereof, with any other carrier, by any means,
 
 6           directly or indirectly, without in each case first
 
 7           having secured from the port authority an order
 
 8           authorizing it to do so.
 
 9 Every such sale, lease, assignment, mortgage, disposition,
 
10 encumbrance, merger, or consolidation, made other than in
 
11 accordance with an order of the port authority authorizing the
 
12 same, shall be void and of no effect.
 
13      (b)  No Hawaii air carrier shall purchase or acquire, take,
 
14 or hold, any part of the capital stock of any other common
 
15 carrier without having been first authorized to do so by the port
 
16 authority.  Every assignment or transfer of any stock by or
 
17 through any person to any other person, or otherwise, in
 
18 violation of this section, shall be void and of no effect, and no
 
19 such transfer shall be made on the books of any air carrier.
 
20 Nothing in this section shall be construed to prevent the holding
 
21 of stock lawfully acquired prior to the effective date of this
 
22 part.
 
23      (c)  No person shall acquire control of any Hawaii air
 

 
Page 41                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 carrier without first receiving the approval of the port
 
 2 authority.
 
 3      (d)  Whenever a transaction is proposed under subsection
 
 4 (a), (b), or (c), the Hawaii carriers or persons seeking approval
 
 5 thereof shall present an application to the port authority in the
 
 6 form that the port authority shall require.  The port authority
 
 7 may act upon the application with or without first holding a
 
 8 public hearing; provided that, if requested, the port authority
 
 9 shall afford reasonable opportunity for interested parties to be
 
10 heard.  If the port authority finds, subject to terms and
 
11 conditions that it finds to be just and reasonable, that the
 
12 proposed transaction will be consistent with the public interest,
 
13 the port authority shall enter an order approving and authorizing
 
14 the transaction, upon the terms and conditions, and with the
 
15 modifications found to be just and reasonable.  The proponent of
 
16 the transaction, within the scope of subsection (a), (b), or (c),
 
17 shall have the burden of proof to establish that the transaction
 
18 is consistent with the public interest.
 
19      (e)  Pending the determination of an application filed with
 
20 the port authority for approval of:
 
21      (1)  A consolidation or merger of the properties of two or
 
22           more Hawaii air carriers;
 
23      (2)  A purchase, lease, charter, or contract to operate the
 

 
Page 42                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           properties of one or more Hawaii air carriers; or
 
 2      (3)  An acquisition of control of a Hawaii air carrier;
 
 3 the port authority, in its discretion and without hearings or
 
 4 other proceedings, may grant temporary approval, for a period not
 
 5 exceeding one hundred twenty days, or for an additional period as
 
 6 the determination of an application may require, of the operation
 
 7 of the Hawaii air carrier properties sought to be acquired by the
 
 8 persons proposing in the pending application to acquire the
 
 9 properties, if it appears that failure to grant this temporary
 
10 approval may result in the destruction of, or an injury to, the
 
11 Hawaii air carrier properties sought to be acquired, or in
 
12 substantial interference with their future usefulness in the
 
13 performance of adequate and continuous service to the public.
 
14      (f)  This section shall apply to any transaction entered
 
15 into, or proposed to be entered into, by a related company that
 
16 is determined by the port authority to have a potential impact
 
17 upon the related Hawaii air carrier or its operations.  A related
 
18 company shall notify the port authority of any such transaction
 
19 at least sixty days prior to its consummation.
 
20      §   -39  Suspension, change, and revocation of certificates.
 
21 (a)  Certificates shall be effective from the date specified
 
22 therein, and shall remain in effect until suspended or terminated
 
23 as provided in this section.
 

 
Page 43                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1      (b)  Any certificate, upon application of the holder thereof
 
 2 and in the discretion of the port authority, may be amended or
 
 3 revoked, in whole or in part.  Upon complaint, or on the port
 
 4 authority's own initiative, a certificate may be suspended,
 
 5 changed, or revoked, in whole or in part, for wilful failure by
 
 6 the holder or any related company to comply with this part, any
 
 7 lawful order or rule of the port authority, or any term,
 
 8 condition, or limitation of the certificate.  No certificate
 
 9 shall be revoked, except upon application of the holder, unless
 
10 the holder thereof or any related company wilfully fails to
 
11 comply, within a reasonable time that shall not be less than
 
12 thirty days and fixed by the port authority, with a lawful order
 
13 or rule of the port authority, or a term, condition, or
 
14 limitation of the certificate or permit.
 
15      (c)  The right to engage in transportation by virtue of any
 
16 certificate issued pursuant to section    -36, or by virtue of
 
17 temporary authority granted under section    -37 or    -38, may
 
18 be suspended by the port authority upon reasonable notice of not
 
19 less than fifteen days to the carrier, but without a hearing or
 
20 other proceedings, for failure by the carrier or any related
 
21 company to comply with the terms of the certificate or temporary
 
22 authority, or with any lawful order or rule of the port authority
 
23 regarding the certificate or temporary authority.
 

 
Page 44                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1      §   -40  Rates, fares, and charges of air carriers.(a)  In
 
 2 the transportation of persons, every Hawaii air carrier shall:
 
 3      (1)  Provide safe and adequate service, equipment, and
 
 4           facilities for the transportation of the passengers;
 
 5           and
 
 6      (2)  Establish, observe, and enforce just and reasonable:
 
 7           (A)  Rates, fares, and charges;
 
 8           (B)  Regulations and practices relating to rates,
 
 9                fares, and charges; and
 
10           (C)  Regulations and practices relating to the
 
11                issuance, form, and substance of tickets; the
 
12                carrying of personal, sample, and excess baggage;
 
13                facilities for transportation; and all other
 
14                matters relating to or connected with the
 
15                transportation of passengers as determined by the
 
16                port authority.
 
17      (b)  In the transportation of property every Hawaii air
 
18 carrier shall:
 
19      (1)  Provide safe and adequate service, equipment, and
 
20           facilities for the transportation of the property; and
 
21      (2)  Establish, observe, and enforce just and reasonable:
 
22           (A)  Rates, charges, and classifications;
 
23           (B)  Regulations and practices relating to rates,
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1                charges, and classifications; and
 
 2           (C)  Regulations and practices relating to the manner
 
 3                and method of presenting, marking, packing, and
 
 4                delivering property for transportation; the
 
 5                facilities for transportation; and all other
 
 6                matters relating to, or connected with, the
 
 7                transportation of property as determined by the
 
 8                port authority.
 
 9      (c)  All charges made for any service rendered by any Hawaii
 
10 air carrier in the transportation of persons or property, or in
 
11 connection therewith, shall be just and reasonable.  Every unjust
 
12 and unreasonable charge for the service, or any part thereof, is
 
13 prohibited and declared to be unlawful.
 
14      (d)  Any person or body politic may make a complaint in
 
15 writing to the port authority that any rate, fare, charge, rule,
 
16 or practice, in effect or proposed to be put into effect, is or
 
17 will be in violation of this section.  If, upon complaint or in
 
18 an investigation on its own initiative and after a hearing, the
 
19 port authority is of the opinion that any individual rate, fare,
 
20 or charge demanded, charged, or collected by any Hawaii air
 
21 carrier, or any rule or practice whatsoever of the Hawaii air
 
22 carrier affecting the rate, fare, or charge, or the value of the
 
23 service thereunder, is or will be unjust or unreasonable, it
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1 shall determine and prescribe the lawful rate, fare, or charge,
 
 2 the maximum or minimum rate, fare, or charge to be observed, or
 
 3 the lawful rule or practice to be made effective.
 
 4      (e)  In the exercise of its power to prescribe just and
 
 5 reasonable rates, fares, and charges for the transportation of
 
 6 persons or property by Hawaii air carriers, and to prescribe
 
 7 classifications, rules, and practices relating thereto, the port
 
 8 authority shall give consideration, among other factors, to the
 
 9 following:
 
10      (1)  The effect of the rates upon the movement of traffic by
 
11           the Hawaii air carrier or carriers for which the rates
 
12           are prescribed;
 
13      (2)  The need, in the public interest, of adequate and
 
14           efficient transportation service by the carriers at the
 
15           lowest cost consistent with the furnishing of the
 
16           service; and
 
17      (3)  The need of revenues sufficient to enable the carriers,
 
18           under honest, economical, and efficient management,
 
19           including the operation of service at reasonable load
 
20           factors, to provide the service.
 
21      (f)  The port authority shall establish and periodically
 
22 adjust the recognized level of the fare rate or charge.  The port
 
23 authority may adjust the recognized level by increasing or
 

 
Page 47                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 decreasing it, as appropriate, by the percentage change in the
 
 2 aggregate cost per available seat-mile of similarly situated
 
 3 carriers for fares, and per available ton-mile for general
 
 4 commodity rates.
 
 5      (g)  The port authority shall have no authority to find that
 
 6 any fare, rate, or other charge for service established by any
 
 7 Hawaii air carrier is unjust, unreasonable, or unjustified, or to
 
 8 suspend the fare, rate, or other charge on the basis that the
 
 9 fare, rate, or charge is too low or too high, if the fare, rate,
 
10 or charge is not more than five per cent higher or ten per cent
 
11 lower than the recognized level of the fare, rate, or charge.
 
12 Separate recognized levels shall be established and periodically
 
13 adjusted on a peak and off-peak basis for first class fares,
 
14 normal economy fares, tour basing fares, group fares, kamaaina
 
15 fares, and for general commodity rates.  The port authority shall
 
16 have no authority to find that a contract freight rate is unjust
 
17 or unreasonable.
 
18      §   -41  Tariffs.(a)  Every Hawaii air carrier shall file
 
19 with the port authority, and keep open to public inspection,
 
20 tariffs showing all the rates, fares, and charges for
 
21 transportation, and all services in connection therewith, of
 
22 persons or property.  The rates, fares, and charges shall be
 
23 stated in terms of lawful money of the United States.  The
 

 
Page 48                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 tariffs required by this section shall be published, filed, and
 
 2 posted in the form and manner, and shall contain the information,
 
 3 that the port authority shall prescribe by rule.  The port
 
 4 authority may reject any tariff filed with it and which is not
 
 5 consistent with this section.  Any tariff rejected by the port
 
 6 authority shall be void and its use shall be unlawful.
 
 7      (b)  No change shall be made in any rate, fare, charge, or
 
 8 classification, or any rule or practice affecting the rate, fare,
 
 9 charge, or classification, or the value of the service
 
10 thereunder, specified in any effective tariff of a Hawaii air
 
11 carrier, except after thirty days notice of the proposed change
 
12 filed and posted in accordance with subsection (a).  The port
 
13 authority, in its discretion and for good cause shown, may allow
 
14 the change upon notice less than that specified, or may modify
 
15 the requirements of this section with respect to the posting and
 
16 filing of tariffs, either in particular instances or by general
 
17 order applicable to special or peculiar circumstances or
 
18 conditions.
 
19      (c)  No Hawaii air carrier shall engage in the
 
20 transportation of persons or property unless the rates, fares,
 
21 and charges upon which the same are transported by the carrier
 
22 have been filed and published in accordance with this part.
 
23      (d)  Whenever any schedule is filed with the port authority
 

 
Page 49                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 stating a new rate, fare, or charge for the transportation of
 
 2 persons or property by a Hawaii air carrier, or any rule or
 
 3 practice affecting the rate, fare, or charge, or the value of the
 
 4 service thereunder, the carrier, on its own initiative, may, or
 
 5 by order of the port authority served prior to the effective date
 
 6 of the schedule, shall, concurrently file an economic
 
 7 justification.  The justification shall be prepared under the
 
 8 same form and in the same manner as prescribed by the port
 
 9 authority unless the changed fare or rate is within the zone of
 
10 fare or rate flexibility established pursuant to
 
11 section    -40(g).
 
12      (e)  Except as provided in section    -40(g), the port
 
13 authority upon complaint of any interested person or upon its own
 
14 initiative, at once and, if it so orders, without answer or other
 
15 formal pleading by the interested carrier or carriers, but upon
 
16 reasonable notice, may enter upon a hearing concerning the
 
17 lawfulness of a rate, fare, or charge, or a rule or practice, and
 
18 pending the hearing and decision the port authority may suspend
 
19 the operation of the schedule and defer the use of the rate,
 
20 fare, or charge, or the rule or practice, by delivering to the
 
21 affected carrier or carriers, not less than five days prior to
 
22 the effective date of the schedule, a statement in writing of its
 
23 reasons for the suspension.  The port authority shall have not
 

 
Page 50                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 more than six months from the date of ordering a hearing to
 
 2 investigate the lawfulness of the rate, fare, or charge, to
 
 3 complete its investigation.  If the port authority fails to issue
 
 4 a final order within the six-month period, the changes proposed
 
 5 by the carrier shall go into effect.  At any hearing involving a
 
 6 change in a rate, fare, charge, or classification, or a rule or
 
 7 practice, the burden of proof shall be upon the carrier to show
 
 8 that the proposed changed rate, fare, charge, classification,
 
 9 rule, or practice, is just and reasonable.  In exercising its
 
10 authority under this subsection and subsection (f), the port
 
11 authority shall consider the factors regarding reasonableness set
 
12 forth in section    -40(e).
 
13      (f)  When a fare or rate increase application is filed, the
 
14 port authority, in its discretion, may authorize temporary
 
15 increases in rates, fares, and charges, upon a prima facie
 
16 showing by a Hawaii air carrier that such fares, rates, or
 
17 charges are just and reasonable; provided that the port
 
18 authority, by order, shall require the carrier to keep an
 
19 accurate account of all amounts received from the increase.  The
 
20 port authority, after a hearing and decision, shall require a
 
21 carrier to refund the unjustified portion of the increased rates
 
22 or charges to persons on whose behalf the amounts were paid.
 
23      §   -42  Investigation of unfair or deceptive practices.
 

 
Page 51                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 The port authority, upon its own initiative or upon complaint, if
 
 2 it considers the action to be in the public interest, may
 
 3 investigate and determine whether any Hawaii air carrier has been
 
 4 or is engaged in unfair or deceptive practices, or unfair methods
 
 5 of competition in air transportation or the sale thereof.  If the
 
 6 port authority, after notice and a hearing, finds that a carrier
 
 7 is engaged in unfair or deceptive practices, or unfair methods of
 
 8 competition, it shall order the carrier to cease the practices or
 
 9 methods of competition.  Notwithstanding section 480-2(d) to the
 
10 contrary, a complaint may be made by any person, a government
 
11 agency, or a competing carrier, and may relate to practices
 
12 involving advertising and marketing, service and ancillary
 
13 services, pricing, or any other aspect of the operations of a
 
14 Hawaii air carrier.
 
15      §   -43  Issuance of securities; execution of leases.(a)
 
16 A Hawaii air carrier, with the approval of the port authority,
 
17 may issue stocks and stock certificates, bonds, notes, and other
 
18 evidences of indebtedness, payable at periods of more than twelve
 
19 months after the date thereof, and may enter into long-term
 
20 leases of more than five years and leverage leases, for the
 
21 following purposes:
 
22      (1)  For the acquisition or use of property;
 
23      (2)  For the construction, completion, extension, or
 

 
Page 52                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           improvement of, or addition to, its facilities or
 
 2           service;
 
 3      (3)  For the discharge or lawful refunding of its
 
 4           obligations; and
 
 5      (4)  For the reimbursement of moneys actually expended from
 
 6           income or any other moneys in its treasury not secured
 
 7           by, or obtained from, the issue of its stocks or stock
 
 8           certificates, or bonds, notes, or other evidences of
 
 9           indebtedness, except maintenance of service,
 
10           replacements, and substitutions not constituting
 
11           capital expenditure in cases where the air carrier has
 
12           kept its accounts for the expenditure in a particular
 
13           manner to enable the port authority to ascertain the
 
14           amount of moneys expended and the purposes for which
 
15           the expenditures were made, and the sources of the
 
16           funds in its treasury applied to the expenditures.
 
17      (b)  A Hawaii air carrier may not issue securities, or enter
 
18 into long-term leases of more than three years and leverage
 
19 leases, to acquire or use property, or to construct, complete,
 
20 extend, improve, or add to its facilities or service, if the port
 
21 authority determines that the proposed transaction will have a
 
22 materially adverse effect on the carrier's operations.  No
 
23 carrier shall repurchase or reissue its own common stock without
 

 
Page 53                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 the approval of the port authority.
 
 2      (c)  This section shall apply to a transaction involving a
 
 3 related company to the extent that the port authority determines
 
 4 that the transaction may have a potential impact upon the
 
 5 relevant Hawaii air carrier or its operations.  A related company
 
 6 shall notify the port authority of any transaction at least sixty
 
 7 days prior to its consummation.
 
 8      §   -44  Accounts, records, and reports.  The port authority
 
 9 may require annual, periodic, or special reports from all Hawaii
 
10 air carriers and related companies.  The port authority shall
 
11 prescribe the manner and form in which the reports are to be
 
12 made.
 
13      §   -45  Unlawful actions; penalties.(a)  Any person who
 
14 knowingly and wilfully violates any provision of this part, or
 
15 violates any certificate for which a penalty is not otherwise
 
16 provided in this section, shall be fined not less than $500 nor
 
17 more than $2,000 for the first offense, and not less than $1,000
 
18 nor more than $10,000 for any subsequent offense.  Each day of
 
19 the violation shall constitute a separate offense.
 
20      (b)  Any person, whether carrier, shipper, or consignee, or
 
21 any officer, employee, agent, or representative thereof, who
 
22 knowingly offers, grants, or gives, or solicits, accepts, or
 
23 receives any rebate, concession, or discrimination in violation
 

 
Page 54                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 of any provision of this part, or who by means of any false
 
 2 statement or representation, or by the use of any false or
 
 3 fictitious bill, bill of lading, receipt, voucher, roll, account,
 
 4 claim, certificate, affidavit, deposition, lease, or bill of
 
 5 sale, or by any other means or device, knowingly and wilfully
 
 6 assists, suffers, or permits any person or persons, natural or
 
 7 artificial, to obtain transportation of persons or property
 
 8 subject to this part for less than the applicable rate, fare, or
 
 9 charge, or who knowingly and wilfully by any such means or
 
10 otherwise fraudulently seeks to evade or defeat laws in this part
 
11 provided for Hawaii air carriers, shall be fined not less than
 
12 $100 nor more than $5,000 for each offense.
 
13      (c)  Any person who knowingly and wilfully divulges any fact
 
14 or information that may come to the person's knowledge during the
 
15 course of any examination or inspection made under the authority
 
16 of this part, except as the person may be directed by the port
 
17 authority or a court or judge of competent jurisdiction, shall be
 
18 guilty of a misdemeanor, and shall be subject to a fine of not
 
19 more than $1,000 or imprisonment for not more than one year, or
 
20 both.
 
21      (d)  Any Hawaii air carrier or related company, or any
 
22 officer, agent, employee, or representative thereof, who
 
23 knowingly and wilfully fails or refuses to comply with any
 

 
Page 55                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 provision of this part, or any rule, filed tariff, requirement,
 
 2 or order thereunder, shall pay a civil penalty in the sum of not
 
 3 less than $100, nor more than $5,000 for each offense, and, in
 
 4 the case of continuing violation, a penalty not to exceed $1,000
 
 5 for each additional day during which the failure or refusal
 
 6 continues.  A penalty shall become due and payable when the
 
 7 person incurring it receives a notice in writing from the port
 
 8 authority, reasonably describing the violation and advising that
 
 9 the penalty is due.  Penalties assessed against a related
 
10 company, at the discretion of the port authority, may be
 
11 collected from the related Hawaii air carrier.
 
12      (e)  The port authority may compromise any fine or civil
 
13 penalty taking into consideration, among other factors, the
 
14 impact on consumers and remedial measures to be taken.
 
15      (f)  All fines imposed under this section shall accrue to
 
16 the interest of the port authority and be deposited into the port
 
17 authority airport fund.
 
18      §   -46  Hearings.(a)  Unless otherwise provided in this
 
19 part, all hearings, investigations, and proceedings shall be
 
20 governed by the rules of the port authority, and in the conduct
 
21 thereof, the rules of evidence need not be applied; provided that
 
22 in all evidentiary hearings a person has the burden of:
 
23      (1)  Justifying the reasonableness of its rates, fares,
 

 
Page 56                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           charges, or classifications;
 
 2      (2)  Establishing the need for service in the public
 
 3           convenience and necessity, or of demonstrating that a
 
 4           proposed transaction is consistent with the public
 
 5           interest; or
 
 6      (3)  Proving the reasonableness of expenditures, contracts,
 
 7           leases, or other transactions between the carrier and
 
 8           corporate affiliates of the carrier.
 
 9 The burden shall be satisfied only if the reliable, probative,
 
10 and substantial evidence is clear and convincing.  No informality
 
11 in any hearing, investigation, or proceeding, or in the manner of
 
12 taking testimony shall invalidate any order, decision, or rule
 
13 made, approved, or confirmed by the port authority.
 
14      (b)  Complaints may be made, in writing, by the port
 
15 authority on its own motion or by any person or body politic
 
16 setting forth any act or thing done, or omitted to be done, by
 
17 any person subject to the port authority's jurisdiction,
 
18 including any rule, rate, or charge, heretofore established or
 
19 fixed by or for any Hawaii air carrier, in violation or claimed
 
20 to be in violation, of any law or any order or rule of the port
 
21 authority.
 
22      §   -47  Review and appeals.(a)  Within ten days after the
 
23 issuance of any final decision or order of the port authority
 

 
Page 57                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 under this part, any party aggrieved by the action of the port
 
 2 authority may submit a petition to the administrator of the port
 
 3 authority requesting the administrator to review the decision or
 
 4 order.  The filing of any petition shall stay the effectiveness
 
 5 of the decision or order until the administrator has issued a
 
 6 final decision on review.  The administrator may affirm in whole
 
 7 or in part the order or decision of the port authority or remand
 
 8 it to the port authority for further consideration, in which case
 
 9 the order or decision shall remain stayed until it is again
 
10 submitted to, and approved by, the administrator.
 
11      (b)  An appeal from an order of the port authority under
 
12 this part, whether or not reviewed by the administrator of the
 
13 port authority, shall be made to the supreme court in the manner
 
14 and within the time provided by chapter 602 and the rules of
 
15 court if the order is final.  If the order is preliminary, an
 
16 appeal may be made pursuant to the rules of the port authority.
 
17 The appeal shall not of itself stay the operation of the order
 
18 appealed from, but the court may stay the order after a hearing
 
19 upon a motion therefor, and may impose such conditions as it
 
20 deems proper as to giving a bond and keeping the necessary
 
21 accounts or otherwise securing restitution of the excess charges,
 
22 if any, made during the pendency of the appeal in case the order
 
23 appealed from should be sustained, revised, or modified, in whole
 

 
Page 58                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 or in part.
 
 2      (c)  Any party injured by a violation of this part may file
 
 3 an action to enjoin the violation before any court of general
 
 4 jurisdiction of the State.
 
 5      §   -48  Existing service.(a)  As of the effective date of
 
 6 enactment of all required federal legislation, any person who:
 
 7      (1)  Is providing air transportation with turnaround service
 
 8           between two points, both of which are within the State,
 
 9           pursuant to authority granted by the United States
 
10           Department of Transportation; or
 
11      (2)  Has previously applied to the United States Department
 
12           of Transportation for authority to provide air
 
13           transportation as a direct air carrier, and has
 
14           proposed in documents filed with the United States
 
15           Department of Transportation only to operate turnaround
 
16           service between points within the State pursuant to
 
17           that authority;
 
18 shall be deemed qualified, and shall be issued a certificate
 
19 pursuant to this part.
 
20      (b)  For the purposes of this section, "turnaround service"
 
21 means the operation of an aircraft that only serves points within
 
22 the State.
 
23      §§   -49 and -50 Reserved.
 

 
Page 59                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1            PART III.  TRANSPORTATION USE SPECIAL FUND
 
 2      §   -51  Transportation use special fund; established.
 
 3 There is created in the port authority airport fund as a separate
 
 4 account, the transportation use special fund.  There shall be
 
 5 credited to the foregoing account that portion of the moneys
 
 6 received by the port authority paid under any contract entered
 
 7 into pursuant to section    -13 on account of the display, sale,
 
 8 and delivery of in-bond merchandise displayed or sold at
 
 9 locations in the State not on airport properties, in the manner
 
10 provided by rules adopted by the administrator, as permitted
 
11 under federal law and federal grant agreements, or as mutually
 
12 agreed upon by the State and any appropriate agency of the
 
13 federal government; provided that no moneys so credited may be
 
14 appropriated, applied, or expended from the transportation use
 
15 special fund except for purposes provided under section    -5(e).
 
16 The administrator shall administer the fund.
 
17      §   -52  Disposition of the transportation use special fund.
 
18 For so long as airport revenue bonds issued before June 13, 1989,
 
19 are outstanding, the administrator shall transfer to the port
 
20 authority airport fund from moneys credited to the transportation
 
21 use special fund, an amount that, together with moneys on deposit
 
22 in the port authority airport fund other than moneys on credit to
 
23 the transportation use special fund therein, will cause the
 

 
Page 60                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 aggregate amount of moneys on deposit in the port authority
 
 2 airport fund other than moneys on credit to the transportation
 
 3 use special fund therein, to be at least one hundred fifty per
 
 4 cent of the requirements of the port authority airport fund for
 
 5 the ensuing twelve months determined by rules adopted by the
 
 6 administrator.  At any time after complying with the provisions
 
 7 of the preceding sentence or after no airport revenue bonds
 
 8 issued before June 13, 1989, are outstanding, the administrator
 
 9 may transfer all or any portion of the balance of the moneys
 
10 credited to the transportation use special fund to any special
 
11 fund under the control of the port authority.
 
12                    PART IV.  CIVIL AIR PATROL
 
13      §   -61  Civil air patrol.(a)  The sum of $190,600
 
14 annually, or so much thereof as may be necessary, shall be
 
15 granted from the general fund, in accordance with chapter 42F to
 
16 carry on the operations and defray the expenses of the Hawaii
 
17 wing, civil air patrol; provided that not less than $3,000 shall
 
18 be allocated to each Hawaii-based civil air patrol unit that
 
19 meets minimum requirements establish by national headquarters and
 
20 has demonstrated its capability to respond to emergencies within
 
21 the State.
 
22      (b)  There shall be expended from the sum granted under this
 
23 section only those amounts needed for:
 

 
Page 61                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1      (1)  Repair or replacement of equipment that is not repaired
 
 2           or replaced by the United States government;
 
 3      (2)  Defraying expenses incurred in emergency services
 
 4           operations, or mercy or hazard mitigating missions;
 
 5      (3)  Aviation and emergency services training, including
 
 6           supplies required to administer and implement the
 
 7           training;
 
 8      (4)  Payment of utilities on state-owned properties;
 
 9      (5)  Upkeep, replacement, or purchase of communication
 
10           systems; provided that only those amounts needed for
 
11           the procurement or replacement of communication systems
 
12           not otherwise obtainable by grant or gift from any
 
13           other source shall be expended on communication
 
14           systems;
 
15      (6)  Purchase of aviation and vehicular fuels, oils,
 
16           inspection services, maintenance, and overhaul work
 
17           solely for the use of the Hawaii wing, civil air
 
18           patrol;
 
19      (7)  Travel expenses related to aviation and emergency
 
20           services training and coordination, not available
 
21           within the State; and
 
22      (8)  The cost incurred in meeting the auditing requirements
 
23           of CAP Manual 173-2 and the State.
 

 
Page 62                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 No portion of this grant shall be expended for uniforms or
 
 2 personal equipment of any contractor, employee, or member of the
 
 3 Hawaii wing, civil air patrol, nor shall any portion of this
 
 4 grant be used to pay for salaries except as provided in this
 
 5 section.
 
 6      (c)  The commander, Hawaii wing, civil air patrol may employ
 
 7 salaried assistants, who shall not be subject to chapters 76 and
 
 8 77, at a salary of not more than the SR-21 salary range.  The
 
 9 assistants shall perform administrative and fiscal duties, and
 
10 other duties as may be required by the wing commander.
 
11      (d)  All expenditures from the amount granted in subsection
 
12 (a) shall be upon vouchers signed by the wing commander and the
 
13 finance officer of the Hawaii wing, civil air patrol.
 
14      (e)  A record of expenditures and a current financial
 
15 statement shall be provided to the State on the last day of
 
16 business of the months of September, December, March, and June of
 
17 each fiscal year.
 
18      (f)  In expending the sum granted, the Hawaii wing, civil
 
19 air patrol shall assure further that it will consult and
 
20 cooperate with the department of defense and the port authority
 
21 to the end that the maximum education and development in
 
22 aeronautical matters may be afforded and the maximum contribution
 
23 to emergency operations and preparedness be made.
 

 
Page 63                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1      (g)  The Hawaii wing, civil air patrol shall:
 
 2      (1)  Comply with chapter 42F in its application for grants
 
 3           and subsidies;
 
 4      (2)  Execute an annual contract with the department of
 
 5           defense by the third day of July; and
 
 6      (3)  Submit to the department of defense an annual
 
 7           expenditure plan to ensure the disbursement of funds by
 
 8           the tenth day of July, October, January, and April of
 
 9           each fiscal year."
 
10      SECTION 3.  Chapter 39, Hawaii Revised Statutes, is amended
 
11 by adding a new part to be appropriately designated and to read
 
12 as follows:
 
13            "PART    .  SPECIAL FACILITY REVENUE BONDS
 
14      §39-  Definitions.(a)  Whenever used in this part,
 
15 unless a different meaning clearly appears from the context:
 
16      "Remodeling" means any reconstruction, renovation,
 
17 rehabilitation, improvement, betterment, or extension of a
 
18 special facility.
 
19      "Special airport facility" means one or more buildings,
 
20 structures, or facilities, and the land thereof, for the
 
21 servicing of aircraft, for aeronautics, for airports, or for the
 
22 comfort, accommodation, and convenience of air travelers and
 
23 airline employees, which is the subject of a special facility
 

 
Page 64                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 lease.
 
 2      "Special facility" means any special airport facility or any
 
 3 special harbor facility.
 
 4      "Special facility lease" means any contract, lease, or other
 
 5 agreement, or any combination thereof, the subject matter of
 
 6 which is the same special facility.
 
 7      "Special facility revenue bonds" means all bonds payable
 
 8 solely from, and secured by, the revenue by the port authority
 
 9 pursuant to a special facility lease.
 
10      "Special harbor facility" means one or more buildings,
 
11 structures, or facilities on land owned by the State for maritime
 
12 and marine operations, including cargo handling and control;
 
13 storage, repair, maintenance, and servicing of marine and marine-
 
14 related equipment; processing and canning of fish and fish
 
15 products; and offices and accommodations for the personnel and
 
16 employees of persons engaged in maritime and maritime-related
 
17 operations, which are the subject of a special facility lease.
 
18      (b)  All terms used in this part that are not otherwise
 
19 defined in this part shall have the same meaning set forth in
 
20 section 39-51 unless the context clearly requires otherwise.
 
21      §39-  Powers.  The port authority may:
 
22      (1)  Without public bidding under chapter 103D or any other
 
23           law, enter into with any person a special facility
 

 
Page 65                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           lease, or an amendment or supplement thereto, whereby
 
 2           the port authority agrees to construct, acquire, or
 
 3           remodel, and furnish or equip a special facility solely
 
 4           for the use by the person pursuant to the special
 
 5           facility lease;
 
 6      (2)  Issue special facility revenue bonds in such principal
 
 7           amounts as is authorized by law, and as may be
 
 8           necessary to yield the amount of the cost of any
 
 9           construction, acquisition, remodeling, furnishing, and
 
10           equipping of any special facility, including the costs
 
11           of acquisition of the site thereof;
 
12      (3)  Perform and carry out the terms and provisions of any
 
13           special facility lease;
 
14      (4)  Notwithstanding section 103-7 or any other law to the
 
15           contrary, acquire, construct, or remodel, and furnish
 
16           or equip any special facility, or accept the assignment
 
17           of any contract therefor entered into by the other
 
18           person to the special facility lease;
 
19      (5)  Construct any special facility on land owned by the
 
20           State or the port authority; provided that no funds
 
21           derived herein shall be expended for land acquisition;
 
22           and
 
23      (6)  Agree with the other person to the special facility
 

 
Page 66                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           lease whereby any acquisition, construction,
 
 2           remodeling, furnishing, or equipping of the special
 
 3           facility, and the expenditure of moneys therefor, shall
 
 4           be undertaken or supervised by the other person.
 
 5           Neither the undertaking by the other person, nor the
 
 6           acceptance by the port authority of a contract
 
 7           theretofore entered into by the other person therefor,
 
 8           shall be subject to chapter 103D.
 
 9      §39-  Findings and determination for special facility
 
10 leases.  The port authority shall not enter into any special
 
11 facility lease unless the port authority, at or prior to the
 
12 entering into of the special facility lease, finds and determines
 
13 that:
 
14      (1)  The building, structure, or facility that is to be the
 
15           subject of the special facility lease will not be used
 
16           to provide services, commodities, supplies, or
 
17           facilities that are then adequately being made
 
18           available through the undertaking owned and operated by
 
19           the port authority;
 
20      (2)  The result of the use or occupancy of the building,
 
21           structure, or facility under the special facility lease
 
22           would not result in the reduction of the revenues
 
23           derived from the undertaking to an amount below the
 

 
Page 67                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           amount required to be derived therefrom by section
 
 2           39-61; and
 
 3      (3)  The entering into of the special facility lease would
 
 4           not be in violation, or result in a breach, of any
 
 5           covenant contained in any resolution or certificate
 
 6           authorizing any bonds of the port authority then
 
 7           outstanding.
 
 8      §39-  Special facility lease.(a)  In addition to the
 
 9 conditions and terms set forth in this part, any special facility
 
10 lease entered into by the port authority shall contain provisions
 
11 obligating the other person to the special facility lease to:
 
12      (1)  Pay to the port authority during the initial term of
 
13           the special facility lease, whether the special
 
14           facility is capable of being used or occupied, or is
 
15           being used or occupied by the other person, a rental or
 
16           rentals at such time or times and in such amount or
 
17           amounts that will be sufficient to pay the principal
 
18           and interest on all special facility revenue bonds
 
19           issued for the special facility, establish or maintain
 
20           any reserves for the payments, and pay all fees and
 
21           expenses of the trustees, paying agents, transfer
 
22           agents, and other fiscal agents for the special
 
23           facility revenue bonds issued for the special facility;
 

 
Page 68                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1      (2)  Pay to the port authority a ground rental, equal to the
 
 2           fair market rental of the land, if the land on which
 
 3           the special facility is situated was not acquired from
 
 4           the proceeds of the special facility revenue bonds, or
 
 5           pay to the port authority a properly allocable share of
 
 6           the administrative costs of the port authority in
 
 7           carrying out the special facility lease and
 
 8           administering the special facility revenue bonds issued
 
 9           for the special facility, if the land was acquired from
 
10           the proceeds of the special facility revenue bonds; and
 
11      (3)  Either operate, maintain, and repair the special
 
12           facility and pay the costs thereof, or pay to the port
 
13           authority all costs of operation, maintenance, and
 
14           repair of the special facility.
 
15 Any moneys received by the port authority pursuant to paragraphs
 
16 (a)(2) and (a)(3) shall be paid into the appropriate fund of the
 
17 port authority, and shall not be, or be deemed to be, revenues of
 
18 the special facility.
 
19      (b)  The term, and all renewals and extensions of the term,
 
20 of any special facility lease (including any amendments or
 
21 supplements thereto) shall not extend beyond the lesser of the
 
22 reasonable life of the special facility that is the subject of
 
23 the special facility lease, as estimated by the port authority at
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1 the time of the entering into thereof, or thirty years.
 
 2      (c)  Any special facility lease entered into by the port
 
 3 authority shall contain such other terms and conditions as the
 
 4 port authority deems advisable to effectuate the purposes of this
 
 5 part.
 
 6      §39-  Special facility revenue bonds.  All special
 
 7 facility revenue bonds authorized to be issued shall be issued
 
 8 pursuant to the provisions of sections 39-51 to 39-70, except as
 
 9 follows:
 
10      (1)  No such revenue bonds shall be issued unless, at the
 
11           time of issuance, the port authority has entered into a
 
12           special facility lease with respect to the special
 
13           facility for which the revenue bonds are to be issued;
 
14      (2)  The revenue bonds shall be payable solely from, and
 
15           secured solely by, the revenues derived by the port
 
16           authority from the special facility for which they are
 
17           issued;
 
18      (3)  The final maturity date of the revenue bonds shall not
 
19           be later than either the estimated life of the special
 
20           facility for which they are issued or the initial term
 
21           of the special facility lease;
 
22      (4)  If deemed necessary or advisable by the port authority,
 
23           or to permit the obligations of the other person to the
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1           special facility lease to be registered under the U.S.
 
 2           Securities Act of 1933, the port authority may appoint
 
 3           a national or state bank within or without the State to
 
 4           serve as trustee for the holders of the revenue bonds,
 
 5           and may enter into a trust indenture or trust agreement
 
 6           with the trustee.  The trustee may be authorized by the
 
 7           port authority to collect, hold, and administer the
 
 8           revenues derived from the special facility for which
 
 9           the revenue bonds are issued, and to apply the revenues
 
10           to the payment of the principal and interest on the
 
11           revenue bonds.  In the event that any such trustee
 
12           shall be appointed, any trust indenture or agreement
 
13           entered into by the port authority with the trustee may
 
14           contain the covenants and provisions authorized by part
 
15           III of this chapter, which shall be inserted in a
 
16           resolution adopted, or certificate issued, as though
 
17           the words "resolution" or "certificate" as used in
 
18           those sections read "trust indenture or agreement".
 
19           The covenants and provisions shall not be required to
 
20           be included in the resolution or certificate
 
21           authorizing the issuance of the revenue bonds if they
 
22           are included in the trust agreement or indenture.  Any
 
23           resolution, certificate, trust indenture, or trust
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1           agreement adopted, issued, or entered into by the port
 
 2           authority pursuant to this part may also contain any
 
 3           provisions required for the qualification thereof under
 
 4           the U.S. Trust Indenture Act of 1939.  The port
 
 5           authority may pledge and assign to the trustee the
 
 6           special facility lease and the rights of the port
 
 7           authority, including the revenues thereunder;
 
 8      (5)  If the port authority has appointed, or shall appoint,
 
 9           a trustee for the holders of the revenue bonds, then
 
10           notwithstanding the provisions of section 39-68, the
 
11           director of finance may elect not to serve as fiscal
 
12           agent for the payment of the principal and interest,
 
13           and for the purchase, registration, transfer, exchange,
 
14           and redemption, of the revenue bonds, or may elect to
 
15           limit the functions the director of finance shall
 
16           perform as the fiscal agent.  The port authority may
 
17           appoint the trustee to serve as such fiscal agent, and
 
18           may authorize and empower the trustee to perform such
 
19           functions with respect to such payment, purchase,
 
20           registration, transfer, exchange, and redemption, as
 
21           the port authority may deem necessary, advisable, or
 
22           expedient, including, without limitation, the holding
 
23           of the revenue bonds and coupons that have been paid
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1           and the supervision and conduct of the destruction
 
 2           thereof;
 
 3      (6)  The port authority may sell the revenue bonds either at
 
 4           public or private sale;
 
 5      (7)  If no trustee has been be appointed to collect, hold,
 
 6           and administer the revenues derived from the special
 
 7           facility for which the revenue bonds are issued, the
 
 8           revenues shall be held in a separate fund of the port
 
 9           authority or the State, separate and apart from any
 
10           other funds or accounts, to be applied solely to the
 
11           carrying out of the resolution, certificate, trust
 
12           indenture, or trust agreement authorizing or securing
 
13           the revenue bonds;
 
14      (8)  Proceeds of the revenue bonds may be used and applied
 
15           by the port authority to reimburse the other person to
 
16           the special facility lease for all preliminary costs
 
17           and expenses, including architectural and legal costs;
 
18           and
 
19      (9)  If the special facility lease requires the other person
 
20           to operate, maintain, and repair the special facility,
 
21           which is the subject of the lease, at the other
 
22           person's expense, the requirement shall constitute
 
23           compliance by the port authority with section
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1           39-61(a)(2), and none of the revenues derived by the
 
 2           port authority from the special facility shall be
 
 3           required to be applied to the purposes of section
 
 4           39-62(2).  Sections 39-62(4), 39-62(5), and 39-62(6)
 
 5           shall not be applicable to the revenues derived from a
 
 6           special facility lease."
 
 7      SECTION 4.  Section 26-8, Hawaii Revised Statutes, is
 
 8 amended by amending subsection (d) to read as follows:
 
 9      "(d)  The employees retirement system as constituted by
 
10 chapter 88 is placed within the department of budget and finance
 
11 for administrative purposes.  The functions, duties, and powers,
 
12 suject to the administrative control of the director of finance,
 
13 and the composition of the board of trustees of the employees
 
14 retirement system shall be as heretofore provided by law.
 
15      The public utilities commission is placed within the
 
16 department of budget and finance for administrative purposes
 
17 only.
 
18      The part authority is placed within the deparmtnet of budget
 
19 and finance for administrative purposes only."
 
20      SECTION 5.  Section 26-19, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 
22      "§26-19  Department of transportation.  The department of
 
23 transportation shall be headed by a single executive to be known
 

 
Page 74                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 as the director of transportation.
 
 2      The department shall establish, maintain, and operate the
 
 3 land transportation facilities of the State, including highways[,
 
 4 airports, harbors,] and such other land transportation facilities
 
 5 and activities as may be authorized by law.
 
 6      The department shall plan, develop, promote, and coordinate
 
 7 various land transportation systems management programs [that
 
 8 shall include], including, but not [be] limited to, alternate
 
 9 work and school hours programs, bicycling programs, and
 
10 ridesharing programs.
 
11      The department shall develop and promote ridesharing
 
12 programs [which shall include], including, but not [be] limited
 
13 to, carpool and vanpool programs, and may assist organizations
 
14 interested in promoting similar programs, arrange for contracts
 
15 with private organizations to manage and operate these programs,
 
16 and assist in the formulation of ridesharing arrangements.
 
17 [Ridesharing] For the purposes of this section, ridesharing
 
18 programs include informal arrangements in which two or more
 
19 persons ride together in a motor vehicle.
 
20      The functions and authority heretofore exercised by the
 
21 department of public works with respect to highways are
 
22 transferred to the department of transportation established by
 
23 this chapter.
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1      [On July 1, 1961, the Hawaii aeronautics commission, the
 
 2 board of harbor commissioners and the highway commission shall be
 
 3 abolished and their remaining functions, duties, and powers shall
 
 4 be transferred to the department of transportation.
 
 5      Upon the abolishment of the Hawaii aeronautics commission,
 
 6 the board of harbor commissioners, and the highway commission,
 
 7 there shall be established within the department of
 
 8 transportation a commission to be known as the commission on
 
 9 transportation which shall sit in an advisory capacity to the
 
10 director of transportation on matters within the jurisdiction of
 
11 the department of transportation.  The commission on
 
12 transportation shall consist of not more than eleven members,
 
13 with the number of members from each county insofar as
 
14 practicable being approximately proportional to the population of
 
15 the respective counties to the population of the State; provided
 
16 that each of the four counties shall be represented by at least
 
17 one member.]"
 
18      SECTION 6.  Section 26-21, Hawaii Revised Statutes, is
 
19 amended to read as follows:
 
20      "§26-21  Department of defense.(a)  The department of
 
21 defense shall be headed by a single executive to be known as the
 
22 adjutant general.  The adjutant general shall also be the
 
23 director of civil defense.
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1      There shall be a full-time vice director of civil defense
 
 2 who shall be appointed and may be removed by the director.
 
 3      The department shall be responsible for the defense of the
 
 4 State and its people from mass violence, originating from either
 
 5 human or natural causes[.] and for the civil air patrol.
 
 6      The devolution of command of the military forces in the
 
 7 absence of the adjutant general shall be within the military
 
 8 establishment.  The devolution of command of the civil defense
 
 9 agency in the absence of the director of civil defense shall be
 
10 within the civil defense agency.
 
11      (b)  There shall be within the department of defense a
 
12 commission to be known as the civil defense advisory council
 
13 which shall sit in an advisory capacity to the director of civil
 
14 defense on matters pertaining to civil defense.  The composition
 
15 of the commission shall be as heretofore provided by law for the
 
16 civil defense advisory council existing immediately prior to
 
17 November 25, 1959.
 
18      (c)  The functions and authority heretofore exercised by the
 
19 military department and the civil defense agency as heretofore
 
20 constituted are transferred to the department of defense
 
21 established by this chapter.
 
22      The office of veterans' services and the advisory board on
 
23 veterans' services as constituted by chapter 363 are placed
 

 
Page 77                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 within the department of defense for administrative purposes.
 
 2      (d)  The functions and authority heretofore exercised by the
 
 3 department of transportation with regard to the civil air patrol
 
 4 are transferred to the department of defense."
 
 5      SECTION 7.  Part III of chapter 39, Hawaii Revised Statutes,
 
 6 is amended as follows:
 
 7      1.  By amending sections 39-51 to 39-53 to read:
 
 8      "§39-51  Definitions.  Whenever used in this part, unless a
 
 9 different meaning clearly appears from the context:
 
10      "Bonds" means bonds, notes, and other instruments of
 
11 indebtedness.
 
12      "Department" means any state department, board, commission,
 
13 officer, authority, or agency (other than a ["municipality"]
 
14 "county" defined by section 49-1) which is charged by law with
 
15 the administration of an undertaking or loan program.
 
16      ["Department head" means any officer having charge of a
 
17 department for which there is no governing body.]
 
18      "Governing body" means any board, commission, agency,
 
19 authority, public corporation, instrumentality, or other body
 
20 consisting of more than one person, having charge of a
 
21 department[.] and the port authority.
 
22      "Issuer" means any department or the port authority.
 
23      "Issuer head" means any officer having charge of an issuer
 

 
Page 78                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 for which there is no governing body.
 
 2      "Loan program" means the activities and policies undertaken
 
 3 by any [department] issuer to provide assistance to any
 
 4 [department] issuer or to any county or board, agency, or
 
 5 instrumentality thereof, or to members of the general public who
 
 6 are residents of the State, by making loans or causing loans to
 
 7 be made available to them or by buying, refinancing, or
 
 8 guaranteeing loans made to or other obligations incurred by them
 
 9 for purposes as may be authorized by law.
 
10      "Port authority" means the port authority of this State.
 
11      "Policy of hurricane property insurance" means a policy or
 
12 endorsement of insurance issued by the Hawaii hurricane relief
 
13 fund under section 431P-10.
 
14      "Revenue" means the moneys collected, including any moneys
 
15 collected from the State or any [department] issuer, or any
 
16 county or board, agency, or instrumentality thereof, from the
 
17 rates, rentals, fees, and charges prescribed for the use and
 
18 services of, and the facilities and commodities furnished by, an
 
19 undertaking or the use and services and benefits of a loan
 
20 program; provided that the term shall include all insurance
 
21 premium payments, assessments, surcharges, investment earnings,
 
22 and all other income of the Hawaii hurricane relief fund.
 
23      "Revenue bonds" means all bonds payable solely from and
 

 
Page 79                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 secured by the revenue, or user taxes, or any combination of
 
 2 both, of an undertaking or loan program or any loan made
 
 3 thereunder for which bonds are issued and as otherwise provided
 
 4 in this part; provided that the term shall include all bonds
 
 5 issued by the director of finance under the authority of section
 
 6 10(a), Act 339, Session Laws of Hawaii 1993, as amended, for the
 
 7 purposes of the hurricane bond loan fund.
 
 8      "System" means an organized plan or arrangement under which
 
 9 one or more undertakings are operated or implemented as a
 
10 harmonious whole.
 
11      "Undertaking" means any public works and properties,
 
12 improvement, or system, tangible or intangible, owned or operated
 
13 by the State or [a department] an issuer thereof, and any public
 
14 activity, policy, or program undertaken by the State or [a
 
15 department] an issuer thereof, and from which the State or
 
16 [department] issuer may derive revenues, or with respect to which
 
17 the State or [department] issuer may derive user taxes.
 
18      "User taxes" means taxes on goods or services or on the
 
19 consumption thereof, the receipts of which are substantially
 
20 derived from the consumption, use, or sale of goods and services
 
21 in the utilization of the functions or services furnished by the
 
22 undertaking.
 
23      §39-52  Declaration of policy.  It is declared to be the
 

 
Page 80                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 policy of the State that any [department] issuer acquiring,
 
 2 purchasing, constructing, reconstructing, improving, bettering,
 
 3 or extending an undertaking or establishing or administering a
 
 4 loan program pursuant to this [chapter] part or providing
 
 5 policies of hurricane property insurance to the general public,
 
 6 shall manage the undertaking, loan program, or the Hawaii
 
 7 hurricane relief fund in the most efficient manner consistent
 
 8 with sound economy and public advantage, and consistent with the
 
 9 protection of bondholders."
 
10      §39-53  Additional powers of [departments.] issuers.  In
 
11 addition to the powers which [departments] issuers may otherwise
 
12 have, any [department] issuer shall have the power pursuant to
 
13 this part:
 
14      (1)  To construct, acquire by gift, purchase, or the
 
15           exercise of the right of eminent domain, reconstruct,
 
16           improve, better, or extend any undertaking within its
 
17           jurisdiction, and to acquire by gift, purchase, or the
 
18           exercise of the right of eminent domain, lands or
 
19           rights in land or water in connection therewith within
 
20           its jurisdiction or to undertake the establishment and
 
21           administration of a loan program as authorized by law
 
22           within its jurisdiction;
 
23      (2)  To operate and maintain any undertaking or administer,
 

 
Page 81                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           operate, and maintain a loan program as authorized by
 
 2           law within its jurisdiction and furnish the services,
 
 3           facilities, and commodities thereof for its own use and
 
 4           for the use of public and private consumers;
 
 5      (3)  [To] In the case of any department, to issue revenue
 
 6           bonds of the State in the amounts authorized by
 
 7           specific act or acts of the legislature, or in the case
 
 8           of the port authority, to issue revenue bonds in its
 
 9           name in the amounts authorized by law, to finance in
 
10           whole or in part the cost of the acquisition, purchase,
 
11           construction, reconstruction, improvement, betterment,
 
12           or extension of any undertaking or the establishment
 
13           and administration of any loan program as authorized by
 
14           law;
 
15      (4)  Subject to the provisions of section 39-61, to impose,
 
16           prescribe, and collect rates, rentals, fees, and
 
17           charges for the use and services of, and the facilities
 
18           and commodities furnished by, the undertaking or for
 
19           the use and services of the loan program as authorized
 
20           by law; and
 
21      (5)  To pledge to the punctual payment of the revenue bonds
 
22           and interest thereon, or to covenant to pay into any
 
23           special funds from which any of the revenue bonds may
 

 
Page 82                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           be payable, all or any portion of the revenue of the
 
 2           undertaking or loan program or of any part thereof, or
 
 3           the user taxes derived therefrom, or any combination of
 
 4           both (including improvements, betterments, or
 
 5           extensions thereto thereafter constructed or acquired)
 
 6           sufficient, among other things, to pay the revenue
 
 7           bonds and interest as they shall become due and to
 
 8           create and maintain reasonable reserves to pay the
 
 9           principal and interest; provided that no user taxes
 
10           shall be pledged to the payment unless the legislature
 
11           in the specific act or acts authorizing the issuance of
 
12           the revenue bonds shall have provided that the revenue
 
13           bonds may be payable from and secured by user taxes.
 
14      The [department,] issuer, in determining the cost, may
 
15 include all costs and estimated costs of the issuance of the
 
16 revenue bonds, all architectural, engineering, inspection,
 
17 financial and legal expenses, all costs of establishing or
 
18 administering a loan program authorized by law, the cost of
 
19 causing the payment of the principal or interest or both of the
 
20 revenue bonds to be insured or guaranteed, the initial cost of
 
21 any support facility obtained as permitted by section 39-59, and
 
22 interest which it is estimated will accrue during the
 
23 construction period and for six months thereafter on money
 

 
Page 83                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 borrowed or which it is estimated will be borrowed pursuant to
 
 2 this part."
 
 3      2.  By amending subsections (a) and (b) of section 39-54 to
 
 4 read:
 
 5      "(a)  The issuance of revenue bonds for the acquisition,
 
 6 purchase, construction, reconstruction, improvement, betterment,
 
 7 or extension of any undertaking; the establishment and
 
 8 administration of any loan program authorized by law; or the
 
 9 coverage of policies of hurricane property insurance issued by
 
10 the Hawaii hurricane relief fund shall be authorized:
 
11      (1)  By a resolution or resolutions of the governing body of
 
12           the [department] issuer, which may be adopted at the
 
13           same meeting at which the same are introduced by a
 
14           majority of all the members of the governing body of
 
15           the [department] issuer then in office[,] and entitled
 
16           to vote on the matter, and shall take effect in the
 
17           case of any department immediately upon filing with the
 
18           director of finance[;], and in the case of the port
 
19           authority as provided in the resolution or resolutions;
 
20           or
 
21      (2)  By a certificate or certificates of [a department] an
 
22           issuer head, which shall take effect in the case of any
 
23           department immediately upon filing with the director of
 

 
Page 84                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           finance[.], and in the case of the port authority as
 
 2           provided in the resolution or resolutions.
 
 3      (b)  The revenue bonds shall bear interest at such rate or
 
 4 rates payable at such time or times, may be in one or more
 
 5 series; may bear such date or dates; may mature at such time or
 
 6 times not exceeding thirty years from their respective dates; may
 
 7 be payable in such medium of payment and at such place or places
 
 8 within or without the State; may carry registration privileges;
 
 9 may be subject to such terms of redemption, to tenders for
 
10 purchase or to purchase prior to their stated maturity at the
 
11 option of the State or the port authority, or the holder, or
 
12 both; may contain terms, covenants, and conditions; and may be in
 
13 such form, either coupon or registered, as the resolution or
 
14 certificate and subsequent resolutions or certificates, may
 
15 provide; provided that notwithstanding the foregoing the
 
16 department, with the approval of the governor and the director of
 
17 finance, may provide for deeply discounted revenue bonds which do
 
18 not bear interest but are subject to redemption or retirement at
 
19 their accreted value so long as the discounted value of the
 
20 revenue bonds shall not exceed ten per cent of any series or
 
21 issue of revenue bonds."
 
22      3.  By amending subsections (a) to (c) of section 39-55 to
 
23 read:
 

 
Page 85                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1      "(a)  The port authority, or the director of finance in the
 
 2 case of any department, may make such arrangements as may be
 
 3 necessary or proper for the sale of each issue of revenue bonds
 
 4 or part thereof as are issued pursuant to this part, including,
 
 5 without limitation, arranging for the preparation and printing of
 
 6 the revenue bonds, the official statement and any other documents
 
 7 or instruments deemed required for the issuance and sale of
 
 8 revenue bonds and retaining such financial, accounting and legal
 
 9 consultants, all upon such terms and conditions as the port
 
10 authority or the director of finance deems advisable and in the
 
11 best interest of the port authority or the State.  The
 
12 [department] issuer head or the governing body may offer the
 
13 revenue bonds at competitive sale or may negotiate the sale of
 
14 the revenue bonds to any person or group of persons, to the
 
15 United States of America, or any board, agency, instrumentality,
 
16 or corporation thereof, to the employees retirement system of the
 
17 State, to any political subdivision of the State, or to any
 
18 board, agency, instrumentality, public corporation, or other
 
19 governmental organization of the State or of any political
 
20 subdivision of the State.
 
21      (b)  The sale of the revenue bonds by the [department]
 
22 issuer head or the governing body by negotiation shall be at such
 
23 price or prices, and upon such terms and conditions, and the
 

 
Page 86                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 revenue bonds shall bear interest at such rate or rates or such
 
 2 varying rates determined from time to time in the manner as the
 
 3 [department] issuer head or the governing body, with the approval
 
 4 of the governor[,] in the case of a department, shall approve.
 
 5      (c)  The sale of the revenue bonds by the [department]
 
 6 issuer head or the governing body at competitive sale shall be at
 
 7 such price or prices and upon such terms and conditions, and the
 
 8 revenue bonds shall bear interest at such rate or rates or such
 
 9 varying rates determined from time to time in the manner as
 
10 specified by the successful bidder, and the revenue bonds shall
 
11 be sold in accordance with this subsection.  The revenue bonds
 
12 offered at competitive sale shall be sold only after published
 
13 notice of sale advising prospective purchasers of the proposed
 
14 sale.  The revenue bonds offered at competitive sale may be sold
 
15 to the bidder offering to purchase the revenue bonds at the
 
16 lowest interest cost, the interest cost, for the purpose of this
 
17 subsection, being determined on any one of the following bases as
 
18 selected by the [department] issuer head or the governing body,
 
19 with the approval of the governor[:] in the case of a department:
 
20      (1)  The figure obtained by adding together the amounts of
 
21           interest payable on the revenue bonds from their date
 
22           to their respective maturity dates at the rate or rates
 
23           specified by the bidder and deducting from the sum
 

 
Page 87                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           obtained the amount of any premium offered by the
 
 2           bidder;
 
 3      (2)  Where the interest on the revenue bonds is payable
 
 4           annually, the annual interest rate (compounded
 
 5           annually), or where the interest on the revenue bonds
 
 6           is payable semiannually, the rate obtained by doubling
 
 7           the semiannual interest rate (compounded semiannually),
 
 8           necessary to discount the principal and interest
 
 9           payments on the revenue bonds from the dates of payment
 
10           thereof to the date of the revenue bonds and to the
 
11           price bid (the price bid for the purpose of this
 
12           paragraph shall not include the amount of interest
 
13           accrued on the revenue bonds from their date to the
 
14           date of delivery and payment); or
 
15      (3)  Where the interest on the revenue bonds is payable
 
16           other than annually or semiannually or will vary from
 
17           time to time upon such basis as, in the opinion of the
 
18           [department] issuer head or the governing body, shall
 
19           result in the lowest cost to the State[;] or the port
 
20           authority;
 
21 provided that in any case the right shall be reserved to reject
 
22 any or all bids and waive any irregularity or informality in any
 
23 bid."
 

 
Page 88                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1      4.  By amending sections 39-56 and 39-57 to read:
 
 2      "§39-56  Form and execution of revenue bonds.  Revenue bonds
 
 3 issued pursuant to this part shall be in such form as the
 
 4 [department] issuer head or governing body may determine; shall
 
 5 be lithographed or engraved; shall be manually signed by the
 
 6 [department] issuer head or a deputy [department] issuer head
 
 7 designated by the [department] issuer head; shall be sealed with
 
 8 the seal or a lithographed or engraved facsimile of the seal of
 
 9 the [department] issuer; and in the case of any department, shall
 
10 be countersigned with a lithographed or engraved facsimile of the
 
11 signature of the director of finance.  In addition, fully
 
12 registered revenue bonds may be authenticated with the manual
 
13 signature of the registrar, if any, thereunto duly appointed by
 
14 the director of finance.  Notwithstanding the preceding
 
15 provisions of this section, the [department] issuer head or a
 
16 deputy [department] issuer head designated by the [department]
 
17 issuer head, with the approval of the governor[,] in the case of
 
18 any department, may provide that revenue bonds issued pursuant to
 
19 this part may be typewritten, printed, or otherwise reproduced,
 
20 and that the signature of the director of finance upon the
 
21 revenue bonds may be the director of finance's manual signature.
 
22 The coupons pertaining to the revenue bonds shall be executed
 
23 with the lithographed or engraved facsimile signatures of the
 

 
Page 89                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 department head and the director of finance.  In the case of [a
 
 2 department] an issuer having a governing body, for purposes of
 
 3 this section, the member who is the presiding officer or, if
 
 4 authorized by the governing body, the executive director or other
 
 5 officer of the board, commission, agency, authority or public
 
 6 corporation, instrumentality, or other body shall be deemed the
 
 7 [department] issuer head.  Pending the preparation of the
 
 8 definitive revenue bonds, interim receipts or certificates in
 
 9 such form and with such provisions as the [department] issuer
 
10 head or governing body may decide upon, may be issued to the
 
11 purchaser or purchasers of revenue bonds sold pursuant to this
 
12 part.
 
13      §39-57  Same, signatures.  The revenue bonds bearing the
 
14 signature of officers in office on the date of the signing
 
15 thereof shall be valid and sufficient for all purposes, and shall
 
16 have the same effect as if the persons officially signing the
 
17 revenue bonds had remained in office until the delivery of the
 
18 revenue bonds to the initial purchasers thereof, and in the case
 
19 of fully registered revenue bonds upon any exchange or transfer
 
20 between subsequent holders thereof, notwithstanding that the term
 
21 of office of those persons or any of them may have expired or
 
22 they may otherwise have ceased to be those officers before the
 
23 delivery, exchange, or transfer.  If the director of finance
 

 
Page 90                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 shall have designated a registrar for fully registered revenue
 
 2 bonds, the certificate or resolution authorizing the revenue
 
 3 bonds may provide that none of those fully registered revenue
 
 4 bonds shall be valid or obligatory for any purpose unless
 
 5 certified or authenticated by the registrar.  If the certificate
 
 6 or resolution so provides, then all signatures of the officers of
 
 7 the State or the port authority upon the fully registered revenue
 
 8 bonds may be facsimiles of the signatures, and the fully
 
 9 registered revenue bonds shall be valid and sufficient only if
 
10 certified or authenticated by the manual signature of an
 
11 authorized officer or signatory of the registrar.
 
12      Anything to the contrary notwithstanding, if blanks of fully
 
13 registered revenue bonds shall be held by a registrar pending
 
14 exchange or transfer for other fully registered revenue bonds of
 
15 the same series, then upon delivery of revenue bonds in an
 
16 exchange or transfer, the revenue bonds shall be valid and
 
17 sufficient for all purposes, notwithstanding that the signatures
 
18 of the officers of the State appearing thereon shall be those of
 
19 the persons in office at the time of initial delivery of the
 
20 revenue bonds or those of the persons in office at the time of
 
21 the exchange or transfer.  The validity of the revenue bonds
 
22 shall not be dependent on or affected by the validity or
 
23 regularity of any proceedings relating to the acquisition,
 

 
Page 91                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 purchase, construction, reconstruction, improvement, betterment,
 
 2 or extension of the undertaking or establishment or
 
 3 administration of the loan program authorized by law for which
 
 4 the revenue bonds are issued.
 
 5      The resolution or certificate authorizing the revenue bonds
 
 6 shall provide that the revenue bonds shall contain a recital that
 
 7 they are issued pursuant to this part, which recital shall be
 
 8 conclusive evidence of their validity and of the regularity of
 
 9 their issuance."
 
10      5.  By amending sections 39-59 to 39-61 to read:
 
11      "§39-59  Support facility for variable rate revenue bonds.
 
12 If revenue bonds issued pursuant to this part are issued bearing
 
13 interest at a rate or rates which vary from time to time and with
 
14 a right of holders to tender the revenue bonds for purchase, the
 
15 [department] issuer head or the governing body, with the approval
 
16 of the governor[,] in the case of any department, may contract
 
17 for such support facility or facilities and remarketing
 
18 arrangements as are required to market the revenue bonds to the
 
19 greatest advantage of the State or [department] issuer upon such
 
20 terms and conditions as the [department] issuer head or governing
 
21 body deem necessary and proper.
 
22      The [department] issuer head or the governing body may enter
 
23 into contracts or agreements with the entity or entities
 

 
Page 92                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 providing a support facility; provided that any contract or
 
 2 agreement shall provide, in essence, that any amount due and
 
 3 owing by the [department] issuer under the contract or agreement
 
 4 on an annual basis shall be payable solely from the revenue of
 
 5 the undertaking or loan program and any obligation issued or
 
 6 arising pursuant to the terms of the contract or agreement in the
 
 7 form of revenue bonds, notes, or other evidences of indebtedness
 
 8 shall only arise at such time as either:
 
 9      (1)  Moneys or securities have been irrevocably set aside
 
10           for the full payment of a like principal amount of
 
11           revenue bonds issued pursuant to this part; or
 
12      (2)  A like principal amount of the issue or series of
 
13           revenue bonds to which the support facility relates are
 
14           held in escrow by the entity or entities providing the
 
15           support facility.
 
16      §39-60  Covenants in resolution or certificate authorizing
 
17 issuance of revenue bonds.  Any resolution or certificate
 
18 authorizing the issuance of revenue bonds pursuant to this part
 
19 may contain covenants as to:
 
20      (1)  The purpose or purposes to which the proceeds of sale
 
21           of the revenue bonds shall be applied and the use and
 
22           disposition thereof;
 
23      (2)  The use and disposition of the revenue of the
 

 
Page 93                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           undertaking, the Hawaii hurricane relief fund, or the
 
 2           loan program for which the revenue bonds are to be
 
 3           issued, or the user taxes derived therefrom, or both
 
 4           revenue and user taxes, to the extent pledged to the
 
 5           payment of the revenue bonds, including the priority of
 
 6           payments from the revenue and the creation and
 
 7           maintenance of reserves and the investment thereof;
 
 8      (3)  The issuance of other or additional revenue bonds
 
 9           payable from the revenue of the loan program, the
 
10           Hawaii hurricane relief fund, or of the undertaking, or
 
11           the user taxes derived therefrom, or both revenue and
 
12           user taxes, to the extent pledged to the payment of the
 
13           revenue bonds;
 
14      (4)  The operation, maintenance, and repair of the
 
15           undertaking or the administration, operation, and
 
16           maintenance of the loan program, or the Hawaii
 
17           hurricane relief fund;
 
18      (5)  The insurance to be carried on an undertaking or on the
 
19           security for the Hawaii hurricane relief fund, or a
 
20           loan program and the use and disposition of insurance
 
21           proceeds, the insurance policies being by this section
 
22           authorized to be carried, and no undertaking shall have
 
23           recourse to the state insurance fund for the repair or
 

 
Page 94                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           replacement of any property in the undertaking, or for
 
 2           payment of claims under chapter 386 (relating to
 
 3           workers' compensation);
 
 4      (6)  Books of account and the inspection and audit thereof;
 
 5           and
 
 6      (7)  The terms and conditions upon which the holders of the
 
 7           revenue bonds or any proportion of them or any trustee
 
 8           therefor shall be entitled to the appointment of a
 
 9           receiver by any court of competent jurisdiction, which
 
10           court shall have jurisdiction in the proceedings, and
 
11           which receiver may enter and take possession of the
 
12           undertaking, operate, maintain, and repair the same,
 
13           enforce or foreclose loans made under a loan program,
 
14           impose and prescribe rates, rentals, fees, or charges,
 
15           collect, receive, and apply all revenue, and receive
 
16           and apply all user taxes, thereafter arising therefrom
 
17           in the same manner and to the same extent as the
 
18           [department] issuer itself might do;
 
19 provided that all covenants shall be subject to review by the
 
20 governor[;] in the case of any department; and provided further
 
21 that the provisions of this section with respect to user taxes
 
22 shall be applicable only if the legislature in the specific act
 
23 or acts authorizing the issuance of the revenue bonds in the case
 

 
Page 95                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 of a department, or in the law authorizing the issuance of the
 
 2 revenue bonds in the case of the port authority, has provided
 
 3 that the revenue bonds may be paid from and secured by the user
 
 4 taxes derived from an undertaking.
 
 5      The provisions of this part and any resolution or
 
 6 certificate shall be a contract with the holder or holders of the
 
 7 revenue bonds.  The duties of the [department] issuer, its
 
 8 governing body and [department] issuer head, pursuant to this
 
 9 part, and any resolution or certificate shall be enforceable by
 
10 any bondholder, by mandamus or other appropriate suit, action, or
 
11 proceeding in any court of competent jurisdiction.
 
12      §39-61  Rates, rentals, fees, and charges; undertakings and
 
13 loan programs to be self-sustaining.(a)  The [department]
 
14 issuer issuing revenue bonds pursuant to this part shall impose,
 
15 prescribe, and collect rates, rentals, fees, or charges for the
 
16 use and services of, and the facilities and commodities furnished
 
17 by, the undertaking or for the use and services and benefits of
 
18 the loan program for which the revenue bonds are issued, and
 
19 shall revise the rates, rentals, fees, or charges from time to
 
20 time whenever necessary, so that, together with the proceeds of
 
21 the user taxes derived with respect to the undertaking pledged to
 
22 the payment of those revenue bonds, the undertaking or loan
 
23 program shall be and always remain self-sustaining.  The rates,
 

 
Page 96                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 rentals, fees, or charges imposed and prescribed shall produce
 
 2 revenue which, together with the proceeds of the user taxes, will
 
 3 be at least sufficient:
 
 4      (1)  To make the required payments of the principal of and
 
 5           interest on all revenue bonds issued for the
 
 6           undertaking or loan program, including the payment of
 
 7           all revenue bonds and interest thereon for the payment
 
 8           of which the revenue, or user taxes, or combination of
 
 9           both, are or shall have been pledged, charged or
 
10           otherwise encumbered, or which are otherwise payable
 
11           from the revenue or user taxes, or combination of both,
 
12           or are payable from a special fund maintained, or to be
 
13           maintained, from the revenue or user taxes, or
 
14           combination of both, including reserves therefor, and
 
15           to maintain the special fund in an amount at least
 
16           sufficient to pay when due all revenue bonds and
 
17           interest thereon which are payable from the special
 
18           fund, including reserves therefor;
 
19      (2)  To pay the cost of operation, maintenance, and repair
 
20           of the undertaking, or to pay the cost of the
 
21           administration, operation, and maintenance of the loan
 
22           program, including reserves therefor; and
 
23      (3)  To carry out the covenants of the resolution or
 

 
Page 97                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1           resolutions or certificate or certificates authorizing
 
 2           the issuance of the revenue bonds, including any
 
 3           covenants approved by the governor in the case of a
 
 4           department, as to the minimum amounts of revenue to be
 
 5           produced by the undertaking or loan program for which
 
 6           the revenue bonds are issued.
 
 7      (b)  The legislature hereby covenants, pledges, and
 
 8 obligates itself, whenever it shall have authorized the issuance
 
 9 for an undertaking or loan program, or the port authority shall
 
10 have authorized the issuance for an undertaking or loan program,
 
11 of revenue bonds payable from and secured by the user taxes
 
12 derived with respect to the undertaking, or payable from and
 
13 secured by user taxes and the revenue, or any combination of
 
14 both, of the undertaking or loan program to impose, or continue
 
15 to impose, user taxes with respect to the undertaking or loan
 
16 program in amounts at least sufficient, together with the revenue
 
17 of the undertaking or loan program pledged to the payment and
 
18 security, so that the undertaking or loan program shall be and
 
19 always remain self-sustaining, and all payments referred to in
 
20 subsection (a), including reserves therefor, may be made when
 
21 due, and that compliance with any covenants referred to in the
 
22 provisions is assured."
 
23      6.  By amending section 39-64 to read:
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1      "§39-64  Revenue bonds not a general or moral obligation of
 
 2 State[.] or the port authority.  Unless otherwise provided in
 
 3 this section, revenue bonds issued pursuant to this part shall be
 
 4 payable solely from and secured by the revenue, or the user
 
 5 taxes, or combination of both, of the undertaking or loan program
 
 6 for which the revenue bonds have been issued, pledged to the
 
 7 payment thereof, or secured solely by and payable solely from a
 
 8 special fund to be maintained from the revenue, or user taxes, or
 
 9 combination of both, pledged to the special fund, and shall not
 
10 constitute a general or moral obligation of the State or the port
 
11 authority, or a charge upon the general fund of the State[,] or
 
12 the port authority, nor shall the full faith and credit of the
 
13 State or the port authority be pledged to the payment of the
 
14 principal and interest thereof.
 
15      Revenue bonds issued for the purpose of establishing and
 
16 administering a loan program authorized by law may also be
 
17 secured by a pledge of all or a portion of undertakings,
 
18 mortgages, and other obligations held by the [department] issuer
 
19 as security for a loan made under the program.  Each revenue bond
 
20 issued pursuant to this part shall recite in substance that the
 
21 revenue bonds and the interest thereon are payable from and
 
22 secured by the revenue, or the user taxes, or combination of
 
23 both, of the undertaking or loan program for which the revenue
 

 
Page 99                                                    
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 bond is issued, pledged to the payment thereof, or secured by and
 
 2 payable from a special fund to be maintained from the revenue, or
 
 3 user taxes, or combination of both, pledged to the special fund,
 
 4 and that the revenue bond is not a general or moral obligation of
 
 5 the State or the port authority, and the full faith and credit of
 
 6 the State or the port authority are not pledged to the payment of
 
 7 principal and interest."
 
 8      7.  By amending subsection (a) of section 39-66 to read:
 
 9      "(a)  Revenue bonds issued pursuant to this part, to the
 
10 extent practicable, shall be issued to comply with requirements
 
11 imposed by applicable federal law providing that the interest on
 
12 such revenue bonds shall be excluded from gross income for
 
13 federal income tax purposes (except as certain minimum taxes or
 
14 environmental taxes may apply).  The [department] issuer head or
 
15 presiding officer of the governing body is authorized to enter
 
16 into agreements, establish funds or accounts and take any action
 
17 required in order to comply with applicable federal law.  Nothing
 
18 in this part or this [chapter] part shall be deemed to prohibit
 
19 the issuance of revenue bonds, the interest on which may be
 
20 included in gross income for federal income tax purposes."
 
21      8.  By amending section 39-67 to read:
 
22      "§39-67  Revenue bonds legal investments.  All public
 
23 officers and bodies of the State, all political subdivisions, all
 

 
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                                     H.B. NO.1366       
                                                        
                                                        

 
 1 insurance companies and associations, all banks, savings banks,
 
 2 and savings institutions, including building or savings and loan
 
 3 associations, all credit unions, all trust companies, all
 
 4 personal representatives, guardians, trustees, and all other
 
 5 persons and fiduciaries in the State who are regulated by law as
 
 6 to the character of their investment, may legally invest funds
 
 7 within their control and available for investment in revenue
 
 8 bonds of the State.  The purpose of this section is to authorize
 
 9 any person, firm, corporation, association, political
 
10 subdivision, body, or officer, public or private, to use any
 
11 funds owned or controlled by them, including (without prejudice
 
12 to the generality of the foregoing), sinking, insurance,
 
13 investment, retirement, compensation, pension, trust funds, and
 
14 funds held on deposit, for the purchase of any revenue bonds [of
 
15 the State.] issued pursuant to this part."
 
16      9.  By amending subsections (a) and (b) of sections 39-68 to
 
17 read:
 
18      "(a)  The director of finance, when requested by the
 
19 department, shall render full and complete assistance to any
 
20 department in the preparation and sale of revenue bonds issued
 
21 pursuant to this part.  The director of finance shall be the
 
22 fiscal agent of the department and, upon the request of the port
 
23 authority and with the consent of the director of finance, may be
 

 
Page 101                                                   
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 the fiscal agent of the port authority, for the payment of all
 
 2 principal and interest, and for the transfer of revenue bonds.
 
 3 Sections 36-3 and 39-13, relating to the appointment by the
 
 4 director of finance of other fiscal agents and transfer agents,
 
 5 and to the status of funds held by these fiscal agents, to the
 
 6 extent that they may appropriately be applied, shall be deemed
 
 7 incorporated in this part.
 
 8      (b)  The director of finance shall cause to be set up in the
 
 9 treasury of the State in every instance where the director serves
 
10 as a fiscal agent suitable accounts for the deposit of all
 
11 revenues of the undertaking or loan program, and for the payment
 
12 of all revenue bonds and the interest thereon and for all other
 
13 payments provided or required by this part, and for the holding
 
14 of all reserves created pursuant to this part."
 
15      10.  By amending sections 39-69 to 39-71 to read:
 
16      "§39-69  Investment of reserves, etc.  The port authority,
 
17 or the director of finance[,] in the case of a department and
 
18 with the approval of the department, may invest any money held as
 
19 reserves or in sinking funds or not required for immediate
 
20 disbursement, including proceeds of the revenue bonds, which in
 
21 the [department's] issuer's judgment are in excess of the amounts
 
22 necessary for the meeting of immediate requirements, in
 
23 securities permitted by the resolution or certificate and which
 

 
Page 102                                                   
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 constitute legal investments for public funds.  Income derived
 
 2 therefrom shall be treated as revenue of the undertaking or loan
 
 3 program; expenses of purchase, safekeeping, sale, and redemption,
 
 4 and all other expenses attributable to the investments shall be
 
 5 proper expenses of the undertaking or loan program.  [Securities]
 
 6 In the case of any department, securities so purchased shall be
 
 7 considered as being deposited in the custody or control of the
 
 8 director of finance by the department, and shall be legally
 
 9 secured as provided in section 38-3.
 
10      §39-70  Bond anticipation notes.  In anticipation of the
 
11 issuance of revenue bonds pursuant to this part theretofore
 
12 authorized by the legislature for an undertaking or a loan
 
13 program and of the receipt of the proceeds of such revenue bonds,
 
14 the [department] issuer having jurisdiction over the undertaking
 
15 or a loan program, with the approval of the governor[,] in the
 
16 case of a department, may issue and sell revenue bond
 
17 anticipation notes for the purposes for which the revenue bonds
 
18 have been authorized, the maximum principal amount of which shall
 
19 not exceed the authorized principal amount of the revenue bonds.
 
20 The notes shall be payable solely from and secured by the
 
21 proceeds of the sale of the revenue bonds in anticipation of
 
22 which they were issued and the revenue, or the user taxes, or a
 
23 combination of both, which would be payable from and secured by
 

 
Page 103                                                   
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 the revenue bonds; provided that to the extent the principal of
 
 2 the notes is paid from moneys other than the proceeds of sale of
 
 3 the revenue bonds, the maximum amount of revenue bonds in
 
 4 anticipation of which the notes are issued that has been
 
 5 authorized shall be reduced by the amount of the notes paid.  The
 
 6 issuance of notes and the details thereof shall be governed by
 
 7 this part with respect to revenue bonds insofar as it may apply;
 
 8 provided that each note, together with all renewals and
 
 9 extensions thereof or refundings thereof by other notes issued
 
10 pursuant to this section, shall mature within five years from the
 
11 date of the original note.
 
12      §39-71  Refunding revenue obligations.(a)  Whenever the
 
13 State or any [department thereof] issuer shall have outstanding
 
14 any revenue bonds, and the [department] issuer, with the approval
 
15 of the governor and the director of finance[,] in the case of a
 
16 department, determines that it will be financially sound and
 
17 advantageous to the State or the port authority to refund any
 
18 outstanding revenue bonds, the [department] issuer with the
 
19 approval of the governor in the case of a department but without
 
20 further authorization of the legislature[,] in all cases, shall
 
21 have the power to provide for the issuance of refunding revenue
 
22 bonds with which to provide for the payment of the outstanding
 
23 revenue bonds or any part thereof at or before the maturity or
 

 
Page 104                                                   
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 redemption date thereof, with the right to include various series
 
 2 and issues of the outstanding revenue bonds in a single issue of
 
 3 refunding revenue bonds, to pay any redemption premium and
 
 4 interest to accrue and become payable on the outstanding revenue
 
 5 bonds being refunded, and to establish reserves for the refunding
 
 6 revenue bonds and partly to refund outstanding revenue bonds and
 
 7 partly for the construction or acquisition of improvements and
 
 8 additions to and extensions of the undertaking for the
 
 9 construction or acquisition of which the outstanding revenue
 
10 bonds were issued or, in the case of a loan program, partly to
 
11 extend the loan program.
 
12      (b)  The refunding revenue bonds shall be payable solely
 
13 from and secured by the revenue of the loan program or
 
14 undertaking, or the user taxes derived with respect to the
 
15 undertaking, or a combination of both, from which were payable
 
16 and by which were secured the outstanding revenue bonds to be
 
17 refunded, and shall be a valid claim only as against the revenue
 
18 or user taxes, or combination of both.  Refunding revenue bonds
 
19 issued for the purpose of establishing and administering a loan
 
20 program may also be secured by a pledge of all or a portion of
 
21 undertakings, mortgages, and other obligations held by the
 
22 [department] issuer as security for a loan made under the
 
23 program.  The interest rate or rates of the refunding revenue
 

 
Page 105                                                   
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 bonds shall not be limited by the interest rate or rates borne by
 
 2 any of the revenue bonds to be refunded thereby.
 
 3      The refunding revenue bonds, in the discretion of the
 
 4 [department] issuer and with the approval of the governor and the
 
 5 director of finance[,] in the case of any department, may be
 
 6 exchanged at par for the revenue bonds which are being refunded
 
 7 or may be sold in the manner provided in this part for revenue
 
 8 bonds, as the [department] issuer deems to be in the best
 
 9 interest of the State[.] or the port authority.
 
10      The refunding revenue bonds may be issued and delivered at
 
11 any time prior to the date of maturity or redemption date of the
 
12 revenue bonds to be refunded that the [department] issuer deems
 
13 to be in the best interest of the State[.] or the port authority.
 
14 The refunding revenue bonds, except as specifically provided in
 
15 this section, shall be issued in accordance with the provisions
 
16 of this part with respect to revenue bonds.  Pending the time the
 
17 proceeds derived from the sale of refunding revenue bonds issued
 
18 under this part are required for the purposes for which they were
 
19 issued, the proceeds, upon authorization or approval of the
 
20 governor[,] in the case of a department, may be invested in
 
21 obligations of, or obligations unconditionally guaranteed by the
 
22 United States of America, or in savings accounts, time deposits,
 
23 or certificates of deposit of any bank or trust company within or
 

 
Page 106                                                   
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 without the State, to the extent that such savings accounts, time
 
 2 deposits, or certificates of deposit are collaterally secured by
 
 3 a pledge of obligations of, or obligations unconditionally
 
 4 guaranteed by, the United States of America; or in obligations of
 
 5 any state of the United States of America or any agency,
 
 6 instrumentality, or local government thereof, the provision for
 
 7 payment of the principal and interest which shall have
 
 8 irrevocably been made by deposit of obligations of, or
 
 9 obligations unconditionally guaranteed by the United States of
 
10 America.
 
11      To further secure refunding revenue bonds, or the revenue
 
12 bonds being refunded, or both, the State or the port authority
 
13 may enter into a contract with any bank or trust company, within
 
14 or without the State, with respect to the safekeeping and
 
15 application of the proceeds of refunding revenue bonds, and the
 
16 safekeeping and application of the earnings of investment.  All
 
17 revenue bonds refunded and redeemed by the issue and sale or
 
18 issue and exchange of refunding revenue bonds shall be canceled.
 
19      (c)  Nothing in this section shall require the [department]
 
20 issuer to elect to redeem or prepay revenue bonds being refunded,
 
21 or to redeem or prepay revenue bonds being refunded which were
 
22 issued in the form customarily known as term bonds in accordance
 
23 with any sinking fund installment schedule specified in any
 

 
Page 107                                                   
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 proceedings authorizing the issuance thereof, or in the event the
 
 2 [department] issuer elects to redeem or prepay any bonds, to
 
 3 redeem or prepay as of any particular date or dates.  The
 
 4 determination of the [department] issuer with respect to the
 
 5 financial soundness and advantage of the issuance and delivery of
 
 6 refunding revenue bonds authorized, when approved by the governor
 
 7 and the director of finance in the case of a department, shall be
 
 8 conclusive, but nothing in this section shall require the holders
 
 9 of any outstanding revenue bonds being refunded to accept payment
 
10 thereof otherwise than as provided in the revenue bonds to be
 
11 refunded."
 
12      11.  By amending section 39-76 to read:
 
13      "§39-76  Validation of proceedings.  All proceedings taken
 
14 with respect to the contracting of revenue bonded indebtedness
 
15 and the issuance, sale, execution, and delivery of revenue bonds
 
16 by or on behalf of this State[,] or the port authority, are
 
17 hereby validated, ratified, approved, and confirmed,
 
18 notwithstanding any defects or irregularities in any proceedings
 
19 or in the issuance, execution, sale, or delivery, and the revenue
 
20 bonds so issued or to be issued are and shall be valid
 
21 obligations of the State[.] or the port authority."
 
22      12.  By amending sections 39-54(c), 39-55(d), 39-58, 39-62,
 
23 39-65, 39-66(b), 39-68(c), 39-72, and 39-73 by substituting the
 

 
Page 108                                                   
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 word "issuer", or like terms, wherever the word "department", or
 
 2 like terms, appears, as the context requires.
 
 3      SECTION 8.  Section 248-8, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "§248-8  Special funds in treasury of State.  (a)  There are
 
 6 created in the treasury of the State three special funds to be
 
 7 known, respectively, as the state highway fund, the port
 
 8 authority airport [revenue] fund, and the boating special fund.
 
 9 All taxes collected under chapter 243 in each calendar year,
 
10 except the "county of Hawaii fuel tax", "city and county of
 
11 Honolulu fuel tax", "county of Maui fuel tax", and "county of
 
12 Kauai fuel tax", shall be deposited in the state highway fund;
 
13 provided that:
 
14      (1)  All taxes collected under chapter 243 with respect to
 
15           gasoline or other aviation fuel sold for use in or used
 
16           for airplanes shall be set aside in the port authority
 
17           airport [revenue] fund; and
 
18      (2)  All taxes collected under chapter 243 with respect to
 
19           liquid fuel sold for use in or used for small boats
 
20           shall be deposited in the boating special fund.
 
21      (b)  As used in this section, "small boats" means all
 
22 vessels and other watercraft except those operated in overseas
 
23 transportation beyond the State, and ocean-going tugs and
 

 
Page 109                                                   
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 dredges.  The chairperson of the board of land and natural
 
 2 resources, from July 1, 1992, and every three years thereafter,
 
 3 shall establish standards or formulas that will as equitably as
 
 4 possible establish the total taxes collected under chapter 243 in
 
 5 each fiscal year that are derived from the sale of liquid fuel
 
 6 for use in or used for small boats.  The amount so determined
 
 7 shall be deposited in the boating special fund.
 
 8      (c)  An amount equal to 0.3 per cent of the highway fuel tax
 
 9 but not more than $250,000 collected under chapter 243 shall be
 
10 allocated each fiscal year to the special land and development
 
11 fund for purposes of the management, maintenance, and development
 
12 of trails and trail accesses under the jurisdiction of the
 
13 department of land and natural resources established under
 
14 section 198D-2."
 
15      SECTION 9.  Section 263A-7, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "§263A-7 Notice to Federal Aviation Administration.  When
 
18 it is determined under this chapter that a nonresident's
 
19 privilege to operate an aircraft from a state or private airport
 
20 shall be prohibited, the [director of transportation]
 
21 administrator of the port authority shall so inform the
 
22 administrator of the Federal Aviation Administration in writing."
 
23      SECTION 10.  Section 263A-8, Hawaii Revised Statutes, is
 

 
Page 110                                                   
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 amended to read as follows:
 
 2      "§263A-8 Test results to be collected.  The results of any
 
 3 test for alcohol content made upon the operator of an aircraft
 
 4 involved in an accident shall be sent to the [state director of
 
 5 transportation] administrator of the port authority who shall
 
 6 compile the data without revealing the identity of any individual
 
 7 tested.  This data shall be available only to the State and the
 
 8 administrator of the Federal Aviation Administration, but may be
 
 9 made available to other government agencies as the [director of
 
10 transportation] administrator of the port authority deems
 
11 necessary and advisable."
 
12      SECTION 11.  Chapters 261, 261C, 261D, 262, 266, and 268,
 
13 Hawaii Revised Statutes, are repealed.
 
14      SECTION 12.  Not less than twenty days prior to the
 
15 convening of the regular session of 2000, each county council
 
16 shall submit to the legislature a list of candidates for
 
17 appointment to the port authority in the manner described in
 
18 section 2 of this Act.  The governor shall make all appointments
 
19 to the port authority by July 1, 2000, in the manner described in
 
20 section 2 of this Act.
 
21      The director of transportation, the director of finance, and
 
22 the administrator of the port authority shall appoint a
 
23 management team and may hire necessary staff, who shall be exempt
 

 
Page 111                                                   
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 from chapters 76 and 77, Hawaii Revised Statutes, to develop
 
 2 transition plans, rework position descriptions, revise personnel
 
 3 classifications, develop organizational structures, and attend to
 
 4 other administrative details so that the transfer of the airport
 
 5 and harbor functions of the department of transportation can be
 
 6 implemented on July 1, 2001.  The port authority shall not
 
 7 exercise any of its functions, duties, and powers until July 1,
 
 8 2001, except those functions, duties, and powers necessary to
 
 9 effect the orderly transfer of the airport and harbor functions,
 
10 duties, and powers.
 
11      SECTION 13.  (a)  All rights, powers, functions, and duties
 
12 previously conferred upon the department of transportation by
 
13 chapters 261, 261C, 261D, 262, 266, and 268 Hawaii Revised
 
14 Statutes, which are transferred to, or conferred upon, the port
 
15 authority by this Act, shall be performed and enforced by the
 
16 port authority in the same manner that the department of
 
17 transportation was previously authorized, entitled, or obligated.
 
18      (b)  All rules, policies, procedures, guidelines, and other
 
19 materials adopted or developed by the department of
 
20 transportation to implement the laws that are reenacted or made
 
21 applicable to the port authority by this Act, in effect on the
 
22 effective date of this Act, shall remain in full force and effect
 
23 until new rules, policies, procedures, guidelines, and other
 

 
Page 112                                                   
                                     H.B. NO.1366       
                                                        
                                                        

 
 1 materials are adopted by the port authority.  During that
 
 2 interim, every reference to the department of transportation in
 
 3 those rules, policies, procedures, guidelines, and other
 
 4 materials is amended to refer to the port authority.
 
 5      (c)  All deeds, leases, contracts, loans, agreements, or
 
 6 other documents executed or entered into by, or on behalf of, the
 
 7 department of transportation, and which are reenacted or made
 
 8 applicable to the port authority by this Act, shall remain in
 
 9 full force and effect.  After the effective date of this Act,
 
10 every reference to the department of transportation therein shall
 
11 be construed to be a reference to the port authority.
 
12      (d)  All appropriations, records, equipment, machines,
 
13 files, supplies, contracts, books, papers, documents, maps, and
 
14 other personal property and real property heretofore made, used,
 
15 acquired, or held by the department of transportation, relating
 
16 to the functions transferred to the port authority, shall be
 
17 transferred or assigned with the functions to which they relate.
 
18 Title to all lands managed and controlled by the department of
 
19 transportation for airport and harbor purposes shall be
 
20 transferred to the port authority.
 
21      SECTION 14.  (a)  All funds appropriated for the fiscal year
 
22 2000-2001, directly or indirectly relating to the functions,
 
23 programs, or organizational units transferred under this Act,
 

 
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 1 shall be appropriately transferred to the State of Hawaii port
 
 2 authority with the functions, programs, or units to which they
 
 3 relate.
 
 4      (b)  All balances outstanding in, and obligations payable
 
 5 from, any revolving, special, or trust fund administered by the
 
 6 director of finance with respect to the airports and harbors
 
 7 divisions of the department of transportation are transferred to,
 
 8 and made the obligations of, the port authority airport fund or
 
 9 harbor fund, as the circumstances require.
 
10      SECTION 15.  It is the intent of this Act neither to
 
11 jeopardize the receipt of any federal aid, nor to impair the
 
12 obligation of the State, or any agency thereof, to persons with
 
13 which it has existing contracts, or to the holders of any bonds
 
14 issued by the State, or by any agency thereof, and to the extent,
 
15 and only to the extent, necessary to effectuate this intent, the
 
16 governor may modify the strict provisions of this Act, but shall
 
17 promptly report any such modification with reasons therefor to
 
18 the legislature at its next regular session.
 
19      SECTION 16.  All acts passed during this regular session of
 
20 1999, whether enacted before or after the passage of this Act,
 
21 shall be amended to conform to this Act unless these acts
 
22 specifically provide that this Act is being amended.  Any
 
23 amendment made by an Act of the regular session of 1999 to a law
 

 
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 1 that is administered by the department of transportation, and
 
 2 which is reenacted and made applicable to the port authority by
 
 3 this Act, shall be deemed to be an amendment to this Act.
 
 4      SECTION 17.  (a)  All officers and employees whose functions
 
 5 are transferred by this Act shall be transferred with their
 
 6 functions, and shall retain their positions and continue to
 
 7 perform their regular duties upon their transfer, subject to the
 
 8 state personnel laws and this Act, including, but not limited to,
 
 9 chapters 76, 77, 89, and 89C.  All positions of the airports
 
10 division and harbors division of the department of
 
11 transportation, with their respective organizational structure
 
12 and functions, shall be transferred intact to the State of Hawaii
 
13 port authority.  As these officers and employees leave their
 
14 positions, the new officers and employees hired to fill the
 
15 positions shall be exempt from the State's personnel laws.
 
16      (b)  No officer or employee of the State having tenure who
 
17 is transferred as a result of this Act shall suffer any loss of
 
18 salary, seniority, prior service credit, vacation, sick leave, or
 
19 other employee benefit or privilege as a consequence of this Act,
 
20 and any such officer or employee may be transferred or appointed
 
21 to a civil service position without the necessity of examination;
 
22 provided that the officer or employee shall possess the minimum
 
23 qualifications for the position to which the employee is
 

 
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 1 transferred or appointed; and provided further that subsequent
 
 2 changes in employee status may be made pursuant to applicable
 
 3 civil service and compensation laws.
 
 4      (c)  No officer or employee of the State who is on
 
 5 probational status in a civil service position shall suffer any
 
 6 loss of salary, service credit, vacation, sick leave, or other
 
 7 employee benefit or privilege as a consequence of this Act, and
 
 8 any such officer or employee may be transferred or appointed to a
 
 9 civil service position without the necessity of examination;
 
10 provided that the officer or employee shall possess the minimum
 
11 qualifications for the position to which the employee is
 
12 transferred or appointed; and provided further that the transfer
 
13 or appointment shall be made on a probational basis.
 
14      (d)  An officer or employee of the State who does not have
 
15 tenure, at the discretion of the administrator of the port
 
16 authority, may be transferred or appointed to a civil service
 
17 position as a consequence of this Act, and shall become a civil
 
18 service employee without the loss of salary, seniority, prior
 
19 service credit, vacation, sick leave, or other employee benefits
 
20 or privileges, and without the necessity of examination; provided
 
21 that any such officer or employee shall possess the minimum
 
22 qualifications for the position to which the employee is
 
23 transferred or appointed.
 

 
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 1      (e)  In the event that an office or position held by an
 
 2 officer or employee is relocated or reclassified, the officer or
 
 3 employee shall not suffer any loss of salary, seniority, prior
 
 4 service credit, vacation, sick leave, or other employee benefit
 
 5 or privilege.
 
 6      (f)  In the event that an office or position held by an
 
 7 officer or employee having tenure is abolished, the officer or
 
 8 employee shall not be thereby separated from public employment,
 
 9 but shall remain in the employment of the State with the same pay
 
10 and classification, and shall be transferred to some other office
 
11 or position for which the officer or employee is eligible under
 
12 the personnel laws of the State, as determined by the director of
 
13 human resources development or the governor.
 
14      SECTION 18.  This Act shall be liberally construed in order
 
15 to accomplish the purposes set forth herein.  If any provision of
 
16 this Act, or the application thereof to any person or
 
17 circumstance, is held invalid, the invalidity shall not affect
 
18 the other provisions or applications of this Act that can be
 
19 given effect without the invalid provision or application, and to
 
20 this end the provisions of this Act are severable.
 
21      SECTION 19.  Statutory material to be repealed is bracketed.
 
22 New statutory material is underscored.
 

 
 
 
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 1      SECTION 20.  This Act shall take effect on July 1, 2001,
 
 2 except that section 12 shall take effect upon its approval.
 
 3 
 
 4                           INTRODUCED BY:  _______________________