STAND

STAND. COM. REP. NO. 896-04

Honolulu, Hawaii

, 2004

RE: S.B. No. 2998

S.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 S.B. No. 2998, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PASSENGER FACILITY CHARGES,"

begs leave to report as follows:

The purpose of this bill is to ensure that the state passenger facility charges (PFC) law complies with the federal PFC law by:

(1) Renaming the Passenger Facility Charge Revenue Fund (Revenue Fund) to the Passenger Facility Charge Special Fund (Fund);

(2) Clarifying that passenger facility charges are exempt from transfers to pay for central service and administrative expenses; and

(3) Exempting the Fund from transfers to the Works of Art Special Fund and Airport Revenue Fund.

The Department of Transportation (DOT) and Airlines Committee of Hawaii testified in support of this bill.

In 2003, the Revenue Fund was established and DOT was authorized to collect PFCs from enplaning overseas domestic and international passengers. Federal regulations regarding PFCs require that these funds only be used to finance approved projects. Your Committee finds that payment of central service expenses from the Fund would be a violation of federal regulations and could result in the State being found in noncompliance, thus resulting in the termination of the PFC program and a future inability to receive Federal Airport Improvement Program grants.

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 S.B. No. 2998, S.D. 1, and recommends that it pass Second Reading and be referred to the Committee on Finance.

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

		____________________________ JOSEPH M. SOUKI, Chair