STAND. COM. REP. NO.  69-12

Honolulu, Hawaii

                , 2012

RE:   H.B. No. 2612

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

Sir:

     Your Committee on Transportation, to which was referred H.B. No. 2612 entitled:

"A BILL FOR AN ACT RELATING TO AIRPORT REVENUE,"

begs leave to report as follows:

The purpose of this measure is to assist the Department of Transportation in addressing its operational needs at Hawaii's airports by providing more flexibility in renting land and facilities at Hawaii's airports for revenue generation purposes.

The Department of Transportation testified in support of this measure.  The Airlines Committee of Hawaii testified in support of the intent of this measure.

     The State's airport system is required to be economically self-supporting under both Hawaii law and federal regulations.  To meet this requirement, the Department of Transportation relies on revenue from airline operations, facility and space rental from aeronautical and airport-related users, revenues from concessions, and, to a very small extent, facility and space rentals from non-aeronautical or non-airport-related users.

     Due to the events of September 11, 2001, and the worldwide economic downturn over the past few years, the airports have experienced a steady decline in concession revenue.  While revenues from landing fees, aeronautical and airport-related rentals, and non-aeronautical rentals have increased and have helped offset the decline in concession revenues, recent upheavals in the airline industry, including airline closures and mergers, reduced the overall amount of real estate rented by the airlines at Hawaii's airports.  Allowing lands that are not immediately needed for aeronautics purposes to be rented to non-aeronautical entities will allow Hawaii's airport system to generate much needed revenue from lands that would have otherwise remained vacant and unproductive.

     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 H.B. No. 2612 and recommends that it pass Second Reading and be referred to the Committee on Water, Land, & Ocean Resources.

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

____________________________

JOSEPH M. SOUKI, Chair