STAND. COM. REP. NO. 925

Honolulu, Hawaii

RE:    H.B. No. 1166

       H.D. 1

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Madam:

     Your Committee on Transportation, International and Intergovernmental Affairs, to which was referred H.B. No. 1166, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE PASSENGER FACILITY CHARGE SPECIAL FUND,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Clarify that the passenger facility charge is a charge for the use and services of an undertaking for the purposes and within the meaning of the law relating to the financing of revenue bonds;

     (2)  Allow moneys paid into the passenger facility charge special fund to be appropriated, applied, or expended by the Department of Transportation for airport capital improvement program projects approved by the Legislature and as permitted by federal law; and

     (3)  Allow the establishment of other accounts within the passenger facility charge special fund; and require the transfer of the passenger facility charge into the other accounts to pay debt service on the related bonds.

     Your Committee received testimony in support of this measure from the Department of Transportation.  Written testimony presented to the Committee may be reviewed on the Legislature's website.

     Your Committee finds that the passenger facility charge provides the Department of Transportation with an additional capital funding source to provide for the expansion of the airport system.  Current law is unclear regarding the use of the passenger facility charge for the indirect financing of structures through the issuance of bonds.  This measure, among other things, enables the Department to finance the cost of airport projects with the proceeds of bonds completely or partially backed by the passenger facility charge.  Accordingly, this measure supplies the Department with the appropriate flexibility needed to fund the expansion of the airport system.

     Your Committee has amended this measure by making technical, nonsubstantive amendments.

     As affirmed by the record of votes of the members of your Committee on Transportation, International and Intergovernmental Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1166, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1166, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Transportation, International and Intergovernmental Affairs,

____________________________

J. KALANI ENGLISH, Chair