STAND. COM. REP. NO. 2122

Honolulu, Hawaii

RE:    S.B. No. 2337

       S.D. 1

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

Sir:

     Your Committee on Transportation and International Affairs, to which was referred S.B. No. 2337 entitled:

"A BILL FOR AN ACT RELATING TO TRANSPORTATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to provide the Department of Transportation with the authority and discretion to reach an agreement with an airport concession to modify the terms of any concession lease or permit, in exchange for revenue-enhancing improvements that are made or paid for by the concession.

     Your Committee received testimony in support of this measure from the Department of Transportation; Airport Concessionaires Committee; Greeters of Hawaii; Tiare Enterprises; HMS Host; Island Shoppers, Inc.; and International Currency Exchange.  Testimony in opposition was received from the Office of Hawaiian Affairs.

     Your Committee finds that modernization and improvements at Hawaii's airports concessions have not kept pace with passenger needs and demands.  A recent study by the State indicates that various areas at our public airports are lacking in concession space by as much as forty percent.  The study finds that Hawaii's public airports are not maximizing the revenues they could be receiving from airport concession operations if additional concession spaces were provided and locations were also improved.  These improvements reportedly would not only pay for themselves but would also generate additional revenues for Hawaii's public airports.  The Department of Transportation needs to fast-track construction and encourage improvements that will not only benefit Hawaii's public airports but also provide critical jobs and help stimulate Hawaii's economy.

     Your Committee has amended this measure by:

     (1)  Adding to the authority of the Department of Transportation under this measure the authority to modify, alter, or amend concession contracts; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Transportation and International Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2337, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2337, 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 and International Affairs,

____________________________

J. KALANI ENGLISH, Chair