REPORT TITLE:
Harbors


DESCRIPTION:
Authorizes lessees of special facility leases let by the
department of transportation for maritime operations to sublet
the lease to another.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2357
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO HARBORS.



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

 1      SECTION 1.  The legislature finds that domestic cruise
 
 2 operations provide a much needed boost to the State's sagging
 
 3 visitor industry-based economy.  In 1998, domestic cruise
 
 4 operations employed approximately three hundred thirty Hawaii
 
 5 residents and directly contributed approximately $68.9 million to
 
 6 the local economy.  Domestic cruise vessels will be increasing
 
 7 the number and frequency of interisland cruise voyages, and in
 
 8 the near future, as many as three new ships will be added to the
 
 9 existing domestic interisland fleet.  It is anticipated that by
 
10 the year 2003, more than one thousand eight hundred Hawaii
 
11 residents will be employed and approximately $310 million will be
 
12 contributed directly to the State's economy.
 
13      The cruise industry, like the airlines, brings visitors to
 
14 the State.  Many local businesses throughout the State benefit
 
15 from the continued growth of the cruise industry, particularly on
 
16 the neighbor islands.  Cruise passengers go sightseeing and
 
17 shopping, patronize local restaurants, support the many locally-
 
18 based visitor attractions and tours while their ships are in port
 
19 on the various islands, and stay in local hotels before and after
 

 
Page 2                                                     2357
                                     H.B. NO.           
                                                        
                                                        

 
 1 their voyages.  A 1998 study commissioned by the state department
 
 2 of transportation concluded the following:
 
 3      (1)  The cruise industry contributed over $300 million to
 
 4           the Hawaii economy and supported two thousand nine
 
 5           hundred jobs;
 
 6      (2)  By 2020, the cruise industry will contribute
 
 7           approximately $1.6 billion and ten thousand five
 
 8           hundred jobs to the State's economy; and
 
 9      (3)  More than $100 million will be needed over ten years to
 
10           finance improvements on all islands.
 
11      However, with the unprecedented growth of the interisland
 
12 cruise industry, the condition of state-owned and managed piers
 
13 has become woefully inadequate since existing port facilities
 
14 were never designed to handle the volumes of cruise passengers
 
15 being transported today, nor were they designed to handle vessels
 
16 of the size in service today.  Existing port facilities ill-
 
17 advisedly mix both passengers and cargo and will become even more
 
18 inadequate as the number and frequency of interisland cruises and
 
19 the number of passengers transported increases as it is expected
 
20 to in the coming years.  Furthermore, many existing port
 
21 facilities were not designed to provide facilities and services
 
22 essential to cruise ship operations, such as telephones,
 
23 comfortable waiting areas and related amenities, access to local
 

 
Page 3                                                     2357
                                     H.B. NO.           
                                                        
                                                        

 
 1 tour and taxi services, and information on daily visitor
 
 2 activities and events.
 
 3      Small businesses throughout the State have long complained
 
 4 of the deplorable pier conditions which greet visitors.
 
 5 Improvements to the commercial piers and passenger terminal
 
 6 facilities throughout the State are critically needed to ensure
 
 7 that these visitors are left with positive experiences and
 
 8 impressions of their visits to Hawaii.
 
 9      The purpose of this Act is to facilitate pier improvements
 
10 by authorizing lessees of special facility leases let by the
 
11 department of transportation for maritime operations to sublet
 
12 the lease to another.
 
13      SECTION 2.  Section 266-52, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "§266-52  Powers.  In addition and supplemental to the
 
16 powers granted to the department by law, the department may:
 
17      (1)  With the approval of the governor, and without public
 
18           bidding, enter into a special facility lease or an
 
19           amendment or supplement thereto whereby the department
 
20           agrees with another person engaged in maritime and
 
21           maritime-related operations to construct, acquire,
 
22           remodel, furnish, or equip a special facility [solely]
 
23           for the use by such other person to a special facility
 

 
Page 4                                                     2357
                                     H.B. NO.           
                                                        
                                                        

 
 1           lease; provided that such special facility lease may be
 
 2           amendatory and supplemental to an existing lease
 
 3           between the department and such other person for the
 
 4           land upon which the special facility which is the
 
 5           subject of such special facility lease is to be
 
 6           situated[.]; and provided further that the special
 
 7           facility may be sublet by the other person to other
 
 8           persons engaged in maritime and maritime-related
 
 9           operations.
 
10      (2)  With the approval of the governor:
 
11           (A)  Issue special facility revenue bonds in such
 
12                principal amounts as may be necessary to yield the
 
13                amount of the cost of any construction,
 
14                acquisition, remodeling, furnishing, and equipping
 
15                of any special facility; provided that the total
 
16                principal amount of the special facility revenue
 
17                bonds which may be issued pursuant to the
 
18                authorization of this subparagraph shall not
 
19                exceed $100,000,000; and provided further that
 
20                revenues from special facility leases derived from
 
21                subleases may be used toward the payment of debt
 
22                service on special facility revenue bonds; and
 
23           (B)  Issue special facility revenue refunding bonds,
 

 
Page 5                                                     2357
                                     H.B. NO.           
                                                        
                                                        

 
 1                without further authorization by the legislature,
 
 2                to refund outstanding special facility revenue
 
 3                bonds, including special facility revenue
 
 4                refunding bonds, or any part thereof, at or before
 
 5                the maturity or redemption date, issued pursuant
 
 6                to this part; provided that any issuance of the
 
 7                refunding bonds shall not reduce the amount
 
 8                authorized by the legislature as provided in
 
 9                paragraph (2)(A).
 
10      (3)  Perform and carry out the terms and provisions of any
 
11           special facility lease.
 
12      (4)  Notwithstanding section 103-7 or any other law to the
 
13           contrary, acquire, construct, remodel, furnish, or
 
14           equip any special facility, or accept the assignment of
 
15           any contract therefor entered into by the other person
 
16           to the special facility lease.
 
17      (5)  Construct any special facility on land owned by the
 
18           State.
 
19      (6)  Agree with the other person to the special facility
 
20           lease whereby any acquisition, construction,
 
21           remodeling, furnishing, or equipping of the special
 
22           facility and the expenditure of moneys therefor shall
 
23           be undertaken or supervised by such other person.
 

 
Page 6                                                     2357
                                     H.B. NO.           
                                                        
                                                        

 
 1           Neither such undertaking by such other person nor the
 
 2           acceptance by the department of a contract theretofore
 
 3           entered into by such other person therefor, shall be
 
 4           subject to chapter 103D."
 
 5      SECTION 3.  Statutory material to be repealed is bracketed.
 
 6 New statutory material is underscored.
 
 7      SECTION 4.  This Act shall take effect upon its approval.
 
 8 
 
 9                       INTRODUCED BY:  ___________________________