Report Title:

Airports; Concessionaires; Economic Relief

Description:

Provides further economic relief for airport concessionaires. (CD1)

THE SENATE

S.B. NO.

44

TWENTY-SECOND LEGISLATURE, 2003

S.D. 2

STATE OF HAWAII

H.D. 2

C.D. 1

A BILL FOR AN ACT

 

RELATING TO TRANSPORTATION.

 

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

SECTION 1. The legislature finds that the September 11 terrorist attacks have had a profound impact on air travel in the United States. For a brief period, the nation's airports were shut down completely, and since reopening, security has been at heightened levels. Also, the Iraq War and other events have further reduced air travel in and to the United States.

The enactment of the Federal Aviation and Transportation Security Act in November 2001 has meant the implementation of new security measures at airports across the country to protect the public. These new security measures, however, have not come without a price.

The legislature further finds that providing meaningful relief to concessionaires continuing to suffer financially from the aftermath of September 11 is necessary to maintain the financial viability of Hawaii’s airport system because the departure of one concessionaire from the airport system could cause a devastating loss of airport revenue.

The legislature also finds that the discretion provided Hawaii’s department of transportation in this Act to terminate existing agreements with concessionaires and rebid such concessions will afford the department sufficient flexibility to ensure its compliance with federal grant assurances.

The legislature further finds that the department may cover any reduction in nonaeronautical revenue resulting from relief provided for in this Act solely from the airport division’s unrestricted surplus, which was accumulated over the years largely from nonaeronautical revenues, should ensure consistency with FAA policy prohibiting the use of aeronautical revenue to cover nonaeronautical losses.

The legislature further finds that concessionaires historically have contributed over sixty per cent of the revenues to Hawaii's public airports while airlines have contributed about thirty per cent. The department of transportation, at the time of the Third Special Session 2001, had surplus funds of about $390,000,000 in its airport division special fund account. It is now reported to be about $575,000,000 in unrestricted surplus funds. It is noted that in years immediately prior to the tragic events of September 11, 2001, airlines received waivers in landing fees totaling approximately $76,000,000 while the concessionaires received no similar benefit. In addition, Congress has assisted airlines after September 11, 2001 and again after the start of the Iraq War but has provided no assistance to concessionaires and is not likely to do so.

The ongoing problems for some concessions, especially those selling to international (eastbound) passengers or those severely affected by ongoing security restrictions, may never change, and concessions have continued to suffer hardship since April 30, 2002, the date on which economic relief, granted by the Third Special Session of 2001, ended. The department of transportation must provide further relief to concessions still suffering hardship from the events of September 11 which were made worse by the Iraq War. These concessions should continue to provide services and opportunities to arriving and departing passengers which in turn will generate rental income for the department.

The legislature further finds that during the 2002 regular session, the legislature considered extending and granting further relief to these concessionaires who qualified and passed S.B. No. 2306, S.D. 2, H.D. 2, C.D. 1, by a senate vote of 25-0 and a house of representatives vote of 46 to 5. For some concessions, their gross receipts still remain below what they were prior to September 11, 2001, by as much as thirty per cent and pushed lower after the Iraq War to as much as fifty per cent. Further, new and stringent security measures prevent anyone, other than plane-ticket holders, from shopping and doing business at airport concessions.

During the continuing relief period provided for in this Act, and if the department and concessionaire cannot reach an agreement as to payment of only percentage rents, the department can either terminate the concession contract or continue to waive the guaranteed rent payments and allow the concession to remain in business. This option will ensure some continuing income to the department if it cannot find someone willing to replace the concessionaire.

The department shall have the option of terminating the concession agreement any time during the period the concessionaire is receiving relief. With this right to terminate, the department will be assured of fair market rent at all times during the relief period since it will have the discretion to terminate the concession if someone is willing to pay more.

Obviously, a concession will seek to avoid having its contract terminated and will thus try to pay maximum rents to the State. When a contract is terminated, the concessionaire will suffer the loss of its unamortized improvements, jobs, contractual damages, and possibly other losses and damages. Under the terms of this Act, the concessionaire shall have no recourse against the department for any and all such damages and losses. However, upon termination, the concessionaire shall be allowed to recover its performance bond, security deposit, or similar instrument without penalty and will not be barred from doing business with the State for five years as provided under present law.

If a concessionaire’s contract is terminated, it would be allowed to compete with others for a new contract by way of a public-sealed bid process or revocable permit. These two options limit the possibility of discretionary mistakes and abuse and provide the department with the flexibility of temporarily allowing a new operator to pay it more revenues until economic conditions improve at which point the concession can be put out to public-sealed bid for a longer term in accordance with present law.

Deliberations and the passage of Act 15, Third Special Session Laws of Hawaii 2001 (Act 15), provided general relief to concessionaires at the total discretion of the department. Unlike the Third Special Session of 2001 where there was a tight schedule for considering a number of legislative bills, the legislature now has the time to consider additional relief due to the events of September 11, 2001, the Iraq War and other events.

In particular, the legislature finds that some concessions since September 11, 2001, have not been afforded rent relief by the department that allows the concession to reasonably survive. At least one concession has reported that due to lack of adequate relief from the department on percentage rent basis, it has had to borrow funds to survive which it cannot continue doing.

Furthermore, the legislature notes that the department has reported that some concessions are permanently damaged and may not return to pre-September 11, 2001, business levels. It is not acceptable to the legislature that any concession should suffer the loss of its performance bond and be barred from doing business with the State for five years due to events of September 11, 2001.

The legislature accordingly finds that if the concessionaire and the department cannot reach an agreement on appropriate relief, the department must either terminate the concession contract or require the concession to remain in business at a no profit, break even basis with the understanding that the concession contract may be terminated by the department at any time. The legislature finds that this is fair given the circumstances, and clearly some income to the department is better than no income until the department can find someone willing to pay more rent.

The legislature further notes that various concerns have been raised by the Federal Aviation Administration regarding legislation guaranteeing profits to concessionaires, providing relief to concessionaires at below fair market rents, and providing permanent relief to concessionaires. Clearly, that is not the intent nor the meaning of the language in this Act. This Act seeks to address the concerns expressed by the Federal Aviation Administration. There are no guaranteed profits to a concession in this Act since, if the State cannot reach an agreement with the concessionaire, it can terminate and rebid the contract. This is clearly not an attractive situation for any concessionaire or business.

Further, rent relief is not being provided to the concessionaire at below fair market value as the Federal Aviation Administration suggests since the department at any time can terminate the concession contract if someone is willing to provide more value by paying a higher rent.

Finally, this Act does not provide permanent relief because relief is provided only until gross receipts return to pre-September 11th levels, and the department may terminate the concession anytime during a relief period. Given the foregoing, and the facts that:

(1) The Denver airport has let concessionaires terminate their contracts without penalty at their option;

(2) Rather than going to court, the Los Angeles airport provided relief to a concessionaire to the end of its term in 2005 with a possible two-year option to extend;

(3) San Francisco’s airport provided relief up through December 2002 and is continuing to discuss further relief;

(4) Boston's Logan international airport has cut capital improvement spending and staff while providing relief to concessionaires; and

(5) The Dallas, Portland and many other airports, while providing relief to their concessionaires, also raised landing fees,

the legislature finds that this Act is within the bounds of Federal Aviation Administration regulations and guidelines.

This Act seeks to ensure income for Hawaii's public airports given the circumstances while seeking to avoid unfair penalties to concessionaires for the events of September 11, 2001, or other events, by causing them to forfeit their security and concession bonds and be barred from doing business with the State for five years.

The governor and department are requested not to collect guaranteed rents from the concessionaires still in need of relief due to the expiration of Act 15 on April 30, 2002. The governor and department are urged to provide relief to concessionaires in accordance with this Act.

This Act also provides for economic emergency relief for airport concessionaires having contracts with the department as of January 1, 2003, and in the future. The terms of such relief should encourage businesses to bid for airport concessions since if such an event as September 11, 2001, should occur again (an event not within the power of a party to a contract to control), the concessionaire will have an opportunity to negotiate fair relief with the department, and if such negotiations fail, seek relief with the courts unless otherwise agreed to between the parties. This should avoid the necessity of the concessionaires having to come to the legislature to seek relief. Other airports having concession contracts allow concessions to seek relief from the courts (or other means agreed to between the parties) if an agreement cannot be reached with the applicable airport authority. This is not an unreasonable way to resolve such disputes.

It is not the legislature’s intent to interfere with any claims or ongoing negotiations between concessionaires and the department. However, the parties acknowledge that such negotiations may not result in an agreement and it would be harsh to unfairly punish the concessionaires in the event no agreement is reached by demanding a concession’s performance bond and barring it from doing business with the State for 5 years. The legislature has the authority to grant relief where it deems such relief appropriate. Such negotiations may continue to take place after the legislature has adjourned and the department may ask the Governor to veto this bill if it so chooses. This Act, however, provides authority to the department to assist in its negotiations that it may not have pursuant to the terms of its agreements with concessionaires which appear to provide very limited alternatives to providing relief.

The purposes of this Act are to:

(1) Provide retroactive relief for airport concessions still suffering from the terrorist events of September 11, 2001 and subsequent events which aggravated their hardship;

(2) Allow airport concessions suffering from those events but whose concession agreements are terminated due to a new concession operator, to recover their bonds and deposits and not be barred from doing business with the State for five years as provided by present law;

(3) Require that these concessions suffering any losses and damages due to termination have no right to make any claim for damages or losses against the State; and

(4) Provide an economic emergency relief measure that will allow concessions to fairly negotiate relief with the department in the case of future events and for the parties to resolve their differences in court if an agreement cannot be reached.

SECTION 2. Section 102-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The bidding requirements of subsection (a) shall not apply to concessions or space on public property set aside for the following purposes:

(1) For operation of ground transportation services and parking lot operations at airports, except for motor vehicle rental operations under chapter 437D;

(2) For lei vendors;

(3) For airline and aircraft operations;

(4) For automatic teller machines and vending machines, except vending machines located at public schools operated by blind or visually handicapped persons in accordance with section 302A-412;

(5) For operation of concessions set aside without any charge;

(6) For operation of concessions by handicapped or blind persons; except concessions operated in the public schools by blind or visually handicapped persons in accordance with section 302A-412;

(7) For operation of concessions on permits revocable on notice of thirty days or less; provided that no such permits shall be issued for more than a one year period; provided further that revocable permits issued by the department of transportation for use by state airports may be valid for a period not to exceed two years if the director of transportation determines that an extension to the term of a contract or revocable permit is necessary in light of:

(A) A natural disaster; or

(B) A continuation of an adverse economic condition occurring within the previous twelve months that would adversely affect, in the assessment of the director of transportation, the State's ability to solicit and obtain favorable bid proposals;

(8) For operation of concessions or concession spaces for a beach service association dedicated to the preservation of the Hawaii beachboy tradition, incorporated as a nonprofit corporation in accordance with state law, and whose members are appropriately licensed or certified as required by law;

(9) For operation of concessions at county zoos, botanic gardens, or other county parks which are environmentally, culturally, historically, or operationally unique and are supported, by nonprofit corporations incorporated in accordance with state law solely for purposes of supporting county aims and goals of the zoo, botanic garden, or other county park, and operating under agreement with the appropriate agency solely for such purposes, aims, and goals;

(10) For operations of concessions that furnish goods or services for which there is only one source, as determined by the head of the awarding government agency in a writing that shall be included in the contract file; and

(11) For operation of concession or concession spaces at the convention center under chapter 201B.

For purposes of this subsection, "adverse economic condition" means a reduction of fifteen per cent or more in the gross receipts of a concession as set forth in section 102-10(b) relating to economic emergency relief."

SECTION 3. Section 102-10, Hawaii Revised Statutes, is amended to read as follows:

"§102-10 Modification of contract terms. [If] (a) With respect to contracts adversely affected by construction work, if during the term of the contract (including contracts which have been executed and are presently in force), there has been a reduction of fifteen per cent or more in the volume of business of the concessionaire for a period of sixty days or more, computed on the average monthly gross income for the eighteen months just prior to the period or as long as the concessionaire has been in the business, whichever period is shorter, and such reduction as determined by the officer letting the contract is caused by construction work conducted during the period of time on, or within or contiguous to, the public property upon which the concession is located by either the state or county governments, or both, the officer, with the approval of the governor in the case of a state officer and the chief executive of the respective county in the case of a county officer, may modify any of the terms of the contract, including the agreed upon rent, for a period [which] that will allow the concessionaire to recoup the amount lost by such reduction; provided that if the contract includes provisions allowing modification for the above contingencies, this section shall not be applicable thereto; provided further that this provision shall not apply to any particular concession if the application thereto may impair any contractual obligations with bondholders of the State or counties or with any other parties.

(b) With respect to economic emergency relief, if a public airport concession contract has suffered a reduction of fifteen per cent or more in gross receipts for a period of sixty days or more, computed on the average gross monthly receipts for the twelve months immediately prior to the date relief is requested or as long as the concessionaire has been in business under its current contract, whichever period is shorter, and that reduction was substantially caused by a reduction in the eastbound or westbound passengers arriving during the period of time on, or within or contiguous to, the public property upon which the concession is located by state government, the state official may modify the concession contract as agreed to with the concessionaire by granting rent relief to the concessionaire, including, without limitation, by waiving guaranteed rents and collecting during the period of relief only percentage rents as set forth in the concession contract or rents less than those percentage rents, or by providing other relief. Any and all disagreements relating to appropriate relief or matters related thereto shall be resolved pursuant to section 102- (d) relating to economic emergency relief."

SECTION 4. Chapter 102, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§102- Public airport concession contracts; economic emergency relief terms. (a) All public airport concession contracts may contain economic emergency relief terms that provide that neither party to the contract shall be liable to the other for any failure, delay, or interruption in the performance of any of the terms, covenants, or conditions of the contract due to causes beyond the control of that party, including, without limitation, strikes, boycotts, labor disputes, embargoes, shortages of material, acts of God, war, hostilities, acts of the public enemy, actions of superior governmental authority, acts of terrorism (whether threatened or actual), disease, epidemics, quarantines, weather conditions, floods, riots, rebellion, sabotage, other similar causes, or any other circumstance for which the party is not responsible or which it is not within the power of the party to control.

(b) This section and its economic emergency relief terms may also apply to all acts or situations that have the effect of reducing the number of passengers using the airports in the State, if the acts or situations were not anticipated to occur in the normal course of events. Such unanticipated acts or situations include, but are not limited to, those related to air travel, presence at airports, or use of airplanes. It is understood that actions taken by one or more individuals, groups, or any other entity seeking to intentionally or negligently injure, kill, or maim passengers or other persons in or about airports or to create the fear of injury, death, or disease in such persons is not considered to be in the normal course of events.

(c) In case of any such reduction, failure, delay, interruption, act, or situation beyond the control of a party or not in the normal course of events that reasonably causes a reduction in eastbound or westbound passengers and a fifteen per cent reduction in gross receipts as set forth in section 102-10(b), the parties shall agree to cancel the contract, return all security and bonds and allow the concessionaire to do business with the State without prejudice due to such cancellation or modify the contract terms, including, without limitation, the waiver and reduction of rental payments for a period of time.

(d) If such cancellation, modification, and other relief described in paragraph (c) is not agreed to in writing within sixty days, a party may seek relief through the courts or as otherwise agreed to by the parties. The concessionaire shall have no right to make any claims against the State due to such cancellation and shall not be deemed in default pursuant to section 171-13. Any and all business, proprietary, and commercial information shall be kept confidential by the court and parties as determined by the court in accordance with applicable State laws.

(e) Throughout the period of relief, the concessionaire shall provide the State monthly with a written report supporting its request for present and continuing relief. In accounting for such relief, the concessionaire and State shall reduce such relief by any applicable insurance or federal benefit or assistance received by the concessionaire for the particular concession seeking relief.

(f) The State shall submit monthly reports to the legislature to keep the legislature apprised of the relief granted under this section. The reports shall include information such as:

(1) The reasons for granting relief;

(2) The names of businesses primarily benefiting from such relief;

(3) The benefits provided by any insurance or federal agency;

(4) The amount of relief; and

(5) The source of funding, if any, for such relief."

SECTION 5. An airport concession that qualified for and received relief pursuant to Act 15 of the Third Special Session Laws of Hawaii 2001, shall be entitled to further and other relief retroactive to September 11, 2001; provided that such relief is reduced by any relief received by the concession pursuant to such Act 15 as follows:

(A) If the concession suffered a reduction of fifteen per cent or more in gross receipts for a period of thirty days or more starting on September 11, 2001, computed on the average gross monthly receipts for the six months immediately prior to the thirty-day period or as long as the concessionaire has been in business under its current contract, whichever period is shorter, and that reduction, was substantially caused by a reduction in the eastbound or westbound passengers arriving during the period of time on, or within or contiguous to, the public property upon which the concession is located by state government, the state official may modify the concession contract as agreed to with the concessionaire by granting relief to the concessionaire, including, without limitation, by waiving guaranteed rents and collecting during the period of relief only percentage rents as set forth in the concession contract;

(B) If such reduction in gross receipts averages at least twenty-five per cent for ninety days starting September 11, 2001, and was substantially caused by either a reduction in the eastbound or westbound passengers as described in paragraph (A) above, or by major difficulties the concession suffered in its ability to conduct future sales due to security changes or other reasons immediately following September 11, 2001, the state official may modify the concession contract by waiving guaranteed rents and granting rent relief for percentage rents as agreed to with the concessionaire, which may be below percentage rent amounts set forth in the concession contract, and also by extending the term of the contract for a period not to exceed two years at mutually agreed to rents and terms;

(C) For public airport concessions qualifying for economic relief as provided for in paragraphs (A) and (B), if the State and concessionaire cannot agree on relief, the State may either:

(1) Terminate the concession contract and issue a new contract in accordance with this chapter and following reasonable notice to the concessionaire; or

(2) Provide relief to such a concession by waiving guaranteed rents and providing other rent relief that will allow the concessionaire to break even at no profit from its concession operations during the period of relief. The difference between monthly income and expenses for the concession, if any, shall be paid as rent to the State with no profit to the concession. Even if monthly expenses should exceed income and the concession suffers a monthly loss, the concessionaire shall continue to pay monthly rent to the State at an amount to be determined by a court appointed arbitrator as described below in the following paragraph provided such rental amount for the month of such losses shall not be in excess of thirty-three per cent of the applicable percentage rents for gross receipts as set forth in the concession contract and provided that if such rental payments during such months of losses continues for a period more than six consecutive months, any time after the effective date of this Act, the concessionaire after at least thirty days advance notice to the State may terminate its contract unless some other agreement as to rent or other relief is mutually agreed to between the concessionaire and the State. In case of such termination pursuant to this paragraph, the concessionaire shall have no right to assert any claims against the State provided the concessionaire shall be entitled to the rights and benefits set forth in following paragraphs (G) and (I) relating to termination of a concession contract;

In accounting for the difference between income and expenses, and the amount to be paid to the State with no profit to the concessionaire, historical and reasonable administrative and support expenses may be claimed by the concessionaire. If the State and concessionaire cannot agree as to the amount of such relief or the amount of such rent that should be paid to the State on a break even, no profit basis, the amount of relief or rent shall be determined by a sole arbitrator who shall be a certified public accountant who shall base the decision in accordance with generally accepted accounting principles with consideration of applicable industry practices for such a concession. The accountant shall have no conflict of interest and shall be selected by the circuit court having jurisdiction over the geographic region in which the concessionaire is situated. The decision of the accountant shall be final and binding unless an abuse of discretion can be clearly demonstrated. The reasonable fees and costs to be paid to the accountant by each party shall be decided by the accountant with any and all disputes as to such fees and costs decided by the circuit court. All documents and information exchanged between the parties, the accountant, and the circuit court containing business, proprietary and commercial information shall be kept confidential in accordance with applicable State laws. Any and all disputes relating to the selection of the accountant, the accountant's handling of the arbitration process and decision, enforcement of accountant’s decision as a judgment in a court of law, and all matters related thereto shall be decided by the applicable circuit court;

(D) The period of relief provided under this section shall commence with the first day of the thirty-day period demonstrating a reduction of at least fifteen per cent in gross receipts as set forth in paragraphs (A) or (B), as applicable, and shall continue until gross receipts for three consecutive months are equal to or greater than the average gross monthly receipts computed and used for the six months prior to the start of the relief period, or a shorter period if the contract was not in existence for at least six months;

(E) Throughout the period of relief, the concessionaire shall provide the State monthly with a written report supporting its request for present and continuing relief. In accounting for such relief, the State shall offset the relief received by the concessionaire pursuant to Act 15 of the Third Special Session Laws of Hawaii 2001 together with any insurance or federal benefit or assistance received or anticipated to be received by the concessionaire for the particular concession seeking relief;

(F) If a concessionaire requests relief from the State pursuant to paragraphs (A), (B), or (C), as a condition for such relief, the State, following reasonable notice, may terminate the concession contract any time during the period of relief and require the concessionaire to vacate the concession premises. A concessionaire whose contract is terminated pursuant to this paragraph or paragraph (C) shall have no claims for damages or losses against the State for losses due to equipment leases, vehicle leases, warehouse leases, or any other reason and shall forfeit to the State all of its leasehold improvements in the premises. As an alternative to the foregoing right of termination by the State, a concessionaire receiving relief pursuant to paragraphs (A), (B), and (C) from the State may agree with the State to terminate the concession contract on terms mutually agreeable to both parties;

(G) Upon termination in accordance with paragraphs (C) and (F), the State shall return to the concessionaire the entire and full amounts of all deposits, collateral, bonds, or similar instruments securing the concessionaire's performance, except for such amounts as may be owed to the State prior to the commencement of the period of relief. As to rents due and owing to the State as a result of termination of the concession contract by the State pursuant to above paragraphs (C) and (F), or termination provided in paragraph (I) below, a concessionaire whose gross receipts suffered a reduction of fifteen per cent or more as set forth in above paragraph (A) shall pay the State as rent only the percentage rental amounts set for in its contract from September 11, 2001, up to the time the concessionaire vacates the concession premises. As to concession rents due and owing to the State as a result of termination of the concession contract by the State pursuant to above paragraphs (C) and (F), or termination provided in paragraph (I) below, a concessionaire whose gross receipts suffered a reduction of twenty-five per cent or more as set forth in above paragraph (B) shall pay the State as rent only break even, no profit rents as set forth and determined in accordance with paragraph (C) above from September 11, 2001, up to the time the concessionaire vacates the concession premises;

(H) All laws and rules inconsistent with this section shall be suspended during the period of relief to the extent the suspension is necessary to effectuate the purposes of this section during such period;

(I) All actions taken under this section shall comply with applicable federal laws and regulations and shall not jeopardize the receipt of any federal aid or impair the obligation of the State or any agency thereof to the holders of any bond issued by the State or any such agency. However, if the State cannot provide relief in accordance with this section, then the concessionaire's contract with the State shall be immediately terminated, and the security or collateral as described in paragraph (G) shall be immediately returned to the concessionaire, except for such amounts as may be owed to the State prior to the commencement of the period of relief. In the event of such termination, or other termination as provided for in this section, the concessionaire shall not be deemed in default and shall not be barred from doing business with the State for five years as provided in section 171-13, Hawaii Revised Statutes;

(J) The department shall submit monthly reports to the legislature to keep the legislature apprised of the relief granted under this section. The reports shall include such information as:

(1) The reasons for granting relief;

(2) The names of businesses primarily benefiting from such relief;

(3) The benefits provided by any insurance or federal agency;

(4) The amount of relief; and

(5) The source of funding for such relief;

and

(K) As to the existing in-bond concession with the Airport division of the state’s department of transportation, prior to the receipt of relief provided for in section 5 of this Act the concessionaire for that concession must first waive, dismiss, and discharge any and all claims it has or may have against the State for the recovery of the twenty-five million dollars it paid or agreed to pay the State under protest and reservation of rights on April 11, 2003.

SECTION 6. The relief granted pursuant to section 4 of this Act may be available to any and all airport concessionaires having contracts with the State on or after January 1, 2003.

SECTION 7. Concessionaires receiving relief pursuant to section 5 of this Act may not receive duplicate relief or benefits under any other provisions of this Act.

SECTION 8. For purposes of qualifying for and receiving economic relief under section 5 of this Act, only a concessionaire who qualified for and received relief pursuant to Act 15, Third Special Session Laws of Hawaii 2001, shall be deemed qualified.

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2003; provided that sections 2, 3, 4, and 6 shall apply retroactively to January 1, 2003, and sections 5, 7, and 8 shall apply retroactively to September 11, 2001.