Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 44, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to provide further economic relief for airport concessions still suffering from the terrorist events of September 11, 2001.

In addition, this measure permits such airport concessions whose concession agreements are terminated due to a new concession operator to recover their bonds and deposits and provides an exemption to the five year ban on doing business with the State, provided by present law. This measure also provides that those concessions suffering any losses and damages due to termination have no claim for damages or losses against the State.

Your Committee finds that airport concessions have never fully recovered from the events of September 11, 2001. The implementation of stricter security measures following those attacks, which require a ticket to proceed beyond the security checkpoint, has also removed a large number of potential customers for concessionaires, whose businesses are located entirely beyond the security checkpoints.

Your Committee further finds that a possible war with Iraq in the near future or increasing tension with North Korea would result in a further decline in the number of air travelers to Hawaii in the coming year. Without additional relief, your Committee finds that many airport concessionaires will suffer the consequences of breaching their contracts with the State, which includes being barred from doing business with the State for five years. Your Committee believes that this measure will remedy this unfair situation by providing needed economic relief to qualifying airport concessionaires.

Your Committee has amended this measure by changing the effective date in order to promote continuing discussion.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 44, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 44, S.D. 2.