HCR71

WHEREAS, the Department of Transportation (DOT) was formed shortly after Hawaii became a State in 1959, and has the responsibility of planning, designing, constructing, operating, and maintaining state facilities for all modes of transportation, including air, water, and land; and

WHEREAS, DOT currently provides, operates, and maintains 11 commercial airports, including four general aviation airports and four major airports that currently serve both domestic and overseas flights; nine commercial harbors; and 2,450 lane miles of highway; and

WHEREAS, the law requires DOT to generate its own revenues to fund its programs and projects and establishes independent special funds for DOT's three major divisions--airports, harbors, and highways--into which generated revenues are deposited; and

WHEREAS, each special fund is expected to generate enough revenue to pay for each division's program operation and maintenance costs, as well as to contribute five percent of gross revenues, after debt service, to the state general fund for central services; and

WHEREAS, these special funds must also provide a higher level of cash financing in the Capital Improvement Program to ease the burden on debt service; and

WHEREAS, primary revenue sources for the Airport Special Fund are the aviation fuel tax, landing fees, airport use charges, concession fees, rentals, investment income, and other miscellaneous income; and

WHEREAS, according to an expert analysis provided to the Legislature during the Regular Session of 2003, Hawaii's airport concessions are unique because they generate about 60 percent of airport revenues whereas concessions at most other airports generate about 20 percent of those revenues; and

WHEREAS, airport concessions generate their revenues through the sales of goods and services to residents and visitors alike; and

WHEREAS, although airport concessions provide a valuable service to airport patrons, such as food, drinks, and other forms of respite for weary travelers, and flowers, leis, gifts, and other items for travelers to take with them on their journey, concerns were raised after the earthquake in the fall of 2006 that concessions at Hawaii's airports had set the prices of their goods and services at levels far higher than what was charged for the same goods and services in areas beyond the airport; and

WHEREAS, it is unclear whether the differences in pricing are due to the numerous factors that affect the operations of concessions at Hawaii's airports; and

WHEREAS, studying the pricing methods used by airport concessions and determining whether it may be feasible to establish price controls at Hawaii's airports will ensure that Hawaii's residents and visitors receive fair pricing from airport concessions; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-fourth Legislature of the State of Hawaii, Regular Session of 2007, the Senate concurring, that the Legislative Reference Bureau, with assistance from DOT, is requested to conduct a study to determine:

(1) Pricing methods used by airport concessions when establishing the prices for their goods and services; and

(2) The feasibility of instituting price controls at Hawaii's commercial airports;

and

BE IT FURTHER RESOLVED that this study include:

(1) General methods used to determine prices for goods and services at Hawaii's commercial airports;

(2) A review of state and federal regulations that have an impact on the prices of goods and services at Hawaii's commercial airports;

(3) A review of rents, fees, bond requirements, and any other fees or requirements established by state or federal regulations, rules, or laws, with regard to airport concessions;

(4) An analysis of the impact that rents, fees, bond requirements, and any other requirements established by state or federal regulations, rules, or laws may have on the pricing of goods by airport concessions;

(5) A review of prices charged for similar goods and services by similar businesses and concessions at areas outside the airport; and

(6) An analysis of the impact price controls may have on both the prices of goods and services charged by airport concessions and their effect on the viability of airport concessions;

and

BE IT FURTHER RESOLVED that the Legislative Reference Bureau is requested to submit its report and findings to the Legislature at least 20 days prior to the beginning of the Regular Session of 2008; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the acting director of the Legislative Reference Bureau and the Director of Transportation.

	OFFERED BY:	_____________________________

Report Title:

requesting the legislative reference bureau to conduct a study on the feasibility of implementing price controls for all airport concessionaires at hawaii's commercial airports.

HOUSE OF REPRESENTATIVES	H.C.R. NO.	71
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII