STAND. COM. REP. NO. 346-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 2291

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Transportation, to which was referred H.B. No. 2291 entitled:

"A BILL FOR AN ACT RELATING TO TRANSPORTATION,"

begs leave to report as follows:

The purpose of this bill is to provide further economic relief to airport concessionaires. Among other things, this bill:

(1) Provides retroactive relief for previously qualified airport concessions still suffering from the events of September 11, 2001, who have not negotiated relief with the Department of Transportation (DOT) and whose gross receipts are still 15 percent or more below their gross receipts prior to September 11, 2001;

(2) Allows airport concessions suffering from the events of September 11, 2001, whose agreements are terminated due to replacement by a new concession operator to recover their bonds and deposits;

(3) Provides that concessions whose agreements are terminated due to the events of September 11, 2001, shall not be barred from doing business with the State for a period of five years as provided by present law;

(4) Ensures that DOT, as landlord, treats all airport tenants fairly;

(5) Clarifies that lei vendors may also sell Hawaii floral products;

(6) Provides DOT with the flexibility to negotiate lei greeting service contracts;

(7) Clarifies that the period from which relief may be measured is the date a person submits a bid;

(8) Provides flexibility to DOT to grant economic relief to concessionaires if a number of conditions are met; and

(9) Gives DOT the flexibility to further extend revocable permits for an additional period of up to one year.

Greeters of Hawaii and the Airport Concessionaires Committee testified in support of this measure. DOT, Department of the Attorney General, and Airlines Committee of Hawaii opposed this measure.

Some airport concessionaires have never fully recovered from the events of September 11, 2001. Continued restricted access to areas of the airport due to increased security measures has resulted in a large loss of customers for concessionaires, which translates into lost earnings for these companies. Moreover, recent global events and the war in Iraq continue to affect these concessionaires.

In 2003, the Legislature attempted to provide further economic relief to qualified, multi-year airport tenants. Although that measure was eventually vetoed by the Governor, many concessionaires were able to negotiate either direct or indirect relief with DOT. However, your Committee notes that one vendor continues to be in negotiations with DOT for economic relief.

Although your Committee realizes that negotiation through legislation is not the way this situation should be dealt with, these negotiations have been ongoing for over a year and something needs to be done to help facilitate them.

However, your Committee understands the concerns raised by DOT. Accordingly, your Committee has amended this measure by deleting its substance and replacing it with language that:

(1) Authorizes the Governor to grant rent relief to airport concession lessees in amounts determined by the Governor and at the Governor's sole discretion;

(2) Allows the Governor, or DOT with the approval of the Governor to:

(A) Negotiate changes to the airport concession leases with the lessees;

(B) Modify airport concession leases to implement the grant of relief; and

(C) Waive any contract obligation owed to the State during an economic emergency period;

(3) Requires the Governor to waive and discharge the condition barring a concession from doing business with the State for a period of five years as provided by present law if the grant of relief is implemented;

(4) Limiting the economic relief provided by this bill to concessions that:

(A) Qualified for and received relief pursuant to Act 15, Third Special Session Laws of Hawaii, 2001;

(B) Continue to suffer a reduction in gross receipts of more than 15 percent since September 11, 2001;

(C) Are in need of relief for the concession to economically survive for the duration of its lease or contract; and

(D) Have not had their leases or revocable permits withdrawn or modified since September 11, 2001.

In addition, technical, nonsubstantive amendments were made for clarity, consistency, and style.

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. 2291, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2291, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Transportation,

 

____________________________

JOSEPH M. SOUKI, Chair