Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs and Government Operations, to which was referred S.B. No. 1401 entitled:

begs leave to report as follows:

The purpose of this measure is to authorize the Department of Transportation (DOT) to collect a passenger facility charge (PFC) from departing airline passengers, and to create a PFC special fund.

Your Committee received testimony in support of this measure from the DOT and the Airlines Committee of Hawaii.

Your Committee finds that PFCs were authorized by federal law enacted in 1991. The purpose of a PFC is to provide public agencies an additional source of capital funding to provide for expansion and maintenance of the airport system.

Your Committee considered amending the law in years past to authorize the collection of a PFC from persons departing from Hawaii's airports. In the past, your Committee declined to do so, because interisland passengers would have also been subject to the PFC, and your Committee considered it an unfair economic burden on local residents.

Current PFC regulations allow for an exemption for interisland passengers, and therefore your Committee now fully supports this measure. PFCs are an important source of revenue collected by nearly every major airport in the United States, and your Committee finds that the State of Hawaii must take advantage of the federal law allowing PFCs.

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. 1401 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.