STAND. COM. REP. NO. 3636

Honolulu, Hawaii

RE:    H.B. No. 2250

       H.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committees on Transportation and International Affairs and Commerce, Consumer Protection, and Affordable Housing, to which was referred H.B. No. 2250, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TRANSPORTATION,"

beg leave to report as follows:

     The purpose of this measure is to establish a statutory scheme for state regulation of interisland air carriers, to the extent permissible under the Constitution and laws of the United States.

     Testimony in support of this measure was received from the State Representative from the 8^th District.  The Department of Transportation and Hawaiian Airlines submitted testimony in opposition.

     Your Committees find that the recent shutting down of two major airlines serving Hawaii has already had a profound effect on the State, and the long-term economic impacts are still undetermined.  Your Committees believe that all alternative solutions must be considered in order to rebuild and strengthen Hawaii's air transportation industry, and this measure provides one such solution.

     Your Committees understand the concern raised by the Department of Transportation that the federal Airline Deregulation Act of 1978 prohibits states from regulating the routes, rates, or services of airlines operating in interstate commerce.  Under this Act, Hawaii is prohibited from regulating its interisland carriers.  However, your Committees further note that the State of Alaska received an exemption for some portions of its interstate air transportation, and it may be prudent for the State of Hawaii to initiate discussions with Hawaii's congressional delegation regarding an exemption for Hawaii.

     Your Committees also note that this measure specifically addresses the federal issue by providing that the new chapter established in section 2 "shall take effect upon the enactment of federal legislation permitting implementation of that section."

     As affirmed by the records of votes of the members of your Committees on Transportation and International Affairs and Commerce, Consumer Protection, and Affordable Housing that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2250, H.D. 1, and recommend that it pass Second Reading and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committees on Transportation and International Affairs and Commerce, Consumer Protection, and Affordable Housing,

____________________________ RUSSELL S. KOKUBUN, Chair

____________________________ J. KALANI ENGLISH, Chair