Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 2523, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to ensure state laws relating to the passenger facility charges are consistent with federal law.

More specifically, this measure changes the passenger facility charge revenue fund to a special fund, provides that passenger facility charges are exempt from transfers to pay for central service expenses and from deposits into the airport revenue fund, and makes conforming amendments.

Your Committee finds that the passenger facility charge is a fee imposed on departing domestic and international passengers, the proceeds of which are to be used for airport capital improvement projects approved by the Legislature. Federal law limits the use of the proceeds to airport capital improvement projects only and payment of central service expenses would violate federal law. This measure ensures that the use of these proceeds is in compliance with federal law.

Your Committee has amended this measure by changing the effective date to facilitate continued discussion on this matter.

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 H.B. No. 2523, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 2523, H.D. 1, S.D. 1.