Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Transportation, to which was referred H.B. No. 2584 entitled:

begs leave to report as follows:

The purpose of this bill is to assist the Department of Transportation (DOT) in maintaining current concessionaires during a time of crisis when soliciting concessionaires through a bidding process may be difficult.

Specifically, this bill authorizes the Director of Transportation to extend revocable permits for concessions beyond the current, one-year limit, if an extension is necessary in light of a statewide emergency, such as a natural disaster, or, in the event that economic conditions would adversely affect the State's ability to solicit and obtain favorable bid proposals.

The DOT, APCOA, Catrala-Hawaii, testified in support of this measure. Host International and the Airport Concessionaires Committee supported the intent of this measure.

Unlike most state systems or departments that rely on general funds, the Statewide Airports System operates on funds generated by activities at state airports. The economic activity at the airports is largely dependent upon the airport's concessionaires who rely heavily upon passengers served by the air transportation

system. During times of natural disasters or poor economic conditions, the number of travelers declines translating into decreased revenue for both the State and the concessionaires. Moreover, placing a concession out to bid at a time when economic conditions are poor result in fewer and lower bids being received which means in decreased revenue for the State.

Although your Committee concurs that this is an important measure and can be a win-win situation for all parties involved, concerns were raised regarding possible abuse and favoritism by the Director of Transportation; whether a statewide emergency includes a situation that only affects one airport and not all airports throughout the State; and what exactly was meant by the term "economic condition."

Accordingly, this measure has been amended by:

As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2584, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2584, H.D. 1, and be referred to the Committee on Finance.