Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs and Government Operations, to which was referred S.B. No. 2842 entitled:

begs leave to report as follows:

The purpose of this measure is to authorize the Director of Transportation (Director) to extend revocable permits for concessionaires for up to one year if such an extension is necessary due to a natural disaster or an adverse economic condition.

Your Committee received testimony in support of this measure from the Department of Transportation (DOT), the Airports Concessionaires Committee, HMS Host International, APCOA, and Catrala-Hawaii.

Through legislation enacted during the 2001 regular session, the Director was given the authority to issue revocable permits to airport concessionaires for up to one year for any purpose. Your Committee supports this measure, as amended, which authorizes extensions of such permits for up to one additional year.

Your Committee finds that this measure is necessary in light of the economic downturn resulting from the September 11, 2001, terrorist attacks against the United States. Air travel has declined significantly, and consequently, airport concessionaires have been devastated.

As a result, it has proven difficult to obtain responsive bidders for airport concessions. Therefore, your Committee finds that it makes sense to authorize extensions of revocable permits for concessions, so that the concessions can remain open to serve visitors and other passengers at the airport.

Your Committee amended this measure to limit the duration of any extension to one year, and to delete the requirement that a "statewide" emergency occur to justify an extension. In addition, your Committee amended this measure to define exactly what type of "economic condition" may justify an extension.

Your Committee finds that these amendments strike the appropriate balance between giving the Director the flexibility necessary to ensure that airport concessions remain open, while providing a measurable standard for the Director to follow in making such a determination.

As affirmed by the record of votes of the members of your Committee on Transportation, Military Affairs and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2842, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2842, S.D. 1, and be referred to the Committee on Ways and Means.