HOUSE OF REPRESENTATIVES	H.B. NO.	2815
TWENTY-SIXTH LEGISLATURE, 2012
STATE OF HAWAII

A BILL FOR AN ACT

relating to airport concessions.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Due to Transportation Security Administration regulations which greatly restrict the ability of passengers to bring liquid through airport security, it is imperative that consumers be given the option to purchase bottled water at the airport at a reasonable price.  In Hawaii's airports, the pricing of goods and services is often far higher than what is charged for the same goods and services in areas outside of the airport.  However, eighteen of the nation's twenty-one busiest airports have set pricing policies for various items sold at their facilities, requiring items to be sold at prices that do not exceed a specific percentage of the street price for that item.

     The purpose of this Act is to require the price of bottled water sold by an airport concession to be the average price of bottled water offered for sale to the public elsewhere in the same county without precluding that product from being sold at a price lower than the average price.

     SECTION 2.  Section 261-7, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:

     "(b)  Except as otherwise provided in this section, in each case mentioned in subsection (a)(1), (2), (3), and (4), the department may establish the terms and conditions of the contract, lease, license, or other arrangement, and may fix the charges, rentals, or fees for the privileges, services, or things granted, conferred, or made available, for the purpose of meeting the expenditures of the statewide system of airports set forth in section 261-5(a), which includes expenditures for capital improvement projects approved by the legislature.  [Such] These charges shall be reasonable and uniform for the same class of privilege, service, or thing[.]; provided that each contract, lease, license, or other arrangement for an airport concession at public airports shall contain a clause that the price of bottled water offered for sale at an airport concession shall be the average price of bottled water offered for sale to the public elsewhere outside the airport concession in the same county but does not preclude bottled water from being offered for sale at a price lower than the average price of bottled water.  For purposes of this subsection, "average price" means the range of prices of bottled water varying within five per cent above the mean price of bottled water within a county.

     (c)  The department shall enter into a contract with no more than one person ("contractor") for the sale and delivery of in-bond merchandise at Honolulu International Airport, in the manner provided by law[.]; provided that the contract shall contain a clause that the price of each in-bond bottled water offered for sale at an in-bond merchandise commercial facility inside the airport shall be the average price of bottled water not in-bond that is offered for sale to the public elsewhere in the same county but does not preclude bottled water from being offered for sale at a price lower than the average price of bottled water.  For purposes of this subsection, "average price" means the range of prices of bottled water varying within five per cent above the mean price of bottled water within a county.  The contract shall confer the right to operate and maintain commercial facilities within the airport for the sale of in-bond merchandise and the right to deliver to the airport in-bond merchandise for sale to departing foreign-bound passengers.

     The department shall grant the contract pursuant to the laws of this State and may take into consideration:

     (1)  The payment to be made on in-bond merchandise sold at Honolulu International Airport and on in-bond merchandise displayed or sold elsewhere in the State and delivered to the airport;

     (2)  The ability of the applicant to comply with all federal and state rules and regulations concerning the sale and delivery of in-bond merchandise; and

     (3)  The reputation, experience, and financial capability of the applicant.

     The department shall actively supervise the operation of the contractor to insure its effectiveness.  The department shall develop and implement such guidelines as it may find necessary and proper to actively supervise the operations of the contractor, and shall include guidelines relating to the department's review of the reasonableness of contractor's price schedules, quality of merchandise, merchandise assortment, operations, and service to customers.

     Apart from the contract described in this subsection, the department shall confer no right upon nor suffer nor allow any person to offer to sell, sell, or deliver in-bond merchandise at Honolulu International Airport; provided that this section shall not prohibit the delivery of in-bond merchandise as cargo to [the] Honolulu International Airport."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2012.

INTRODUCED BY:

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Report Title:

Airport Concessions; Price Controls; Bottled Water

Description:

Requires the price of bottled water offered for sale by an airport concession to be at the average price of bottled water offered for sale to the public elsewhere in the same county but does not preclude bottled water from being offered for sale at a price lower than the average price.  Defines "average price" as the range of prices of bottled water varying within five per cent above the mean price of bottled water within a county.  Provides similar requirements for Duty-Free shops at Honolulu International Airport.  Effective July 1, 2012.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.