SB3072 SD1.DOC

SECTION 1. The legislature finds that Hawaii's air transportation planning, management, marketing, and development functions are currently spread out among a number of agencies, including the department of transportation's airports division, Hawaii tourism authority, department of health with respect to environmental concerns, and office of Hawaiian affairs when ceded lands issues arise.

This multijurisdictional situation has resulted in inefficiencies and conflicts that are difficult to resolve between agencies. In addition, this situation sometimes leads to conflicting plans of action among the different agencies seeking to implement differing goals.

The economic well-being of the State depends in part on the efficient use of all of its air transportation resources, which will enhance and complement efforts to revitalize and sustain Hawaii's economy. The legislature believes that coordinated planning and development of air transportation would be implemented more effectively by a single entity having overall consolidated jurisdiction.

The legislature further finds that the establishment of an airport authority will assist in the following important statewide objectives:

(1) Increasing security for the State;

(2) Providing an appropriate forum for all affected interests;

(3) Increasing efficiency in land use and related lease processes;

(4) Improving administrative efficiency by streamlining administrative processes;

(5) Coordinating environmental issues affecting the airports, particularly relating to alien invasive species, as an airport authority will be able to oversee everything that enters the State by air, thereby allowing that entity to serve as the agency responsible for comprehensive alien invasive species protection and control;

(6) Increasing economic opportunities for the State in collaboration with the Hawaii tourism authority;

(7) Making possible more responsive planning;

(8) Increasing financial flexibility;

(9) Increasing responsiveness to customer needs and economic demands; and

(10) Improving the efficiency and expedience of the airports capital improvement program implementation.

The legislature finds that the rational allocation and administration of scarce and increasingly valuable airport resources through the establishment of an airport authority is vital for the well-being of the people and the economy of the State.

The purpose of this Act is to establish the Hawaii airport authority.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

HAWAII AIRPORT AUTHORITY

§ -1 Definitions. As used in this chapter:

"Administrator" means the administrator of the Hawaii airport authority.

"Aeronautics" shall have the same meaning as defined in section 261-1.

"Air navigation facility" shall have the same meaning as defined in section 261-1.

"Airport" means any area of land or water that is used, or intended for use, for the landing and taking-off of aircraft, and any appurtenant areas that are used, or intended for use, for airport buildings or other airport facilities or rights-of-way, including approaches, together with all airport buildings and facilities located thereon.

"Airport authority" or "authority" means the Hawaii airport authority.

§ -2 Airport authority; establishment; members and administrator. (a) On July 1, 2018, there is established the Hawaii airport authority, which shall be a body politic and corporate, constituting a public instrumentality and a special political subdivision of the State created for the performance of an essential public and governmental function, as provided in this chapter. The authority shall not be construed to be a department, institution, or agency of the State. The authority shall be established and shall operate as an independent subdivision of the State, for the purpose of developing and implementing management structures, policies, and procedures based on airport industry best practices, and expressly configured to support the efficient development, management, and operation of the State's airports and aeronautical facilities.

Prior to July 1, 2018, the department of transportation shall complete an implementation plan which shall include, but not be limited to:

(1) Identification of amendments to this Act as may be required to fully empower the airport authority to develop, manage, and operate the State's airports and aeronautical facilities;

(2) The specific actions necessary to transfer jurisdiction, powers, rights, functions, employees, and assets to the airport authority; and

(3) A timetable for the transfer under paragraph (2). A qualified consultant shall be engaged to assist in the development of the implementation plan and to identify related issues such as procurement and employment.

(b) The powers of the airport authority shall be vested in and exercised by a board of directors, which shall consist of five voting members, who shall be appointed as follows:

(1) Three members appointed by the governor pursuant to section 26-34;

(2) One member appointed by the speaker of the house of representatives; and

(3) One member appointed by the president of the senate.

All members shall be appointed for terms of four years; provided that the initial terms of the members appointed by the governor shall be staggered. Members shall be removed from office by the appointing authority only for inefficiency, neglect of duty, turpitude, or misconduct in office, after giving the member a copy of the charges against the member and allowing the member an opportunity to be heard, in person or by counsel, upon not less than ten days notice.

Members shall have business and management experience, including experience in one or more of the following areas: financial planning, budgeting, hospitality, tourism, commercial development, construction program management, marketing, law, and aviation.

All members shall continue in office until their respective successors have been appointed.

Except as provided in this chapter, no member appointed under this section shall be an officer or employee of the State or the counties.

(c) The airport authority shall be headed by a single executive to be known as the administrator of the Hawaii airport authority, who shall:

(1) Not be a member of the board;

(2) Serve at the pleasure of the board; and

(3) Receive such compensation as shall be fixed by the board.

(d) The administrator:

(1) Shall be selected based on criteria approved by the board, including experience in airport management at an executive level, management of significant scale capital programs, domestic and international air service development, and knowledge of the unique requirements of the State’s airport system;

(2) Shall be appointed by the vote of not less than three members of the board;

(3) Shall be employed subject to a formal contract, the terms of which shall be approved by the board;

(4) May be removed from office only by a vote of not less than three members of the board; provided that the basis for removal is consistent with the terms of the applicable employment contract;

(5) May establish management organization structures;

(6) May appoint such deputy administrators as the administrator deems appropriate. Each deputy administrator shall exercise those powers that may be delegated by the administrator;

(7) Shall have such powers as described in this chapter and as may be delegated by the members of the board;

(8) Shall attend all meetings of the board, keep a record of the proceedings, and shall maintain and be the custodian of all books, records, documents, and papers filed with the authority, of the minute book of the authority, and of its official seal;

(9) Shall be the chief administrative officer of the authority and shall direct and supervise the administrative affairs and technical activities in accordance with the directives of the board;

(10) Shall approve all accounts for salaries and allowable expenses of the authority or of any employee or consultant thereof;

(11) Shall perform such other duties as may be directed by the board in carrying out the purpose of the authority; and

(12) May hire staff and employees to fill positions that may be provided for in the airport authority's annual budget; provided that the functions and duties of all positions shall be provided for in the bylaws of the airport authority.

(e) The airport authority shall establish bylaws providing for, upon the vacancy of the position of administrator, the automatic succession of a deputy administrator on an interim basis until a permanent administrator is appointed.

(f) The number of members of the authority necessary to constitute a quorum to do business shall be a majority of the members.

§ -3 Powers; generally. Except as otherwise provided in this chapter, the airport authority:

(1) Shall exercise power and control over airports, air navigation facilities, buildings, and other facilities belonging to, or controlled by, the airport authority;

(2) Shall provide for the landing, taking-off, and servicing of aircraft, and the loading and unloading of passengers and cargo;

(3) Shall provide for the comfort, accommodation, and convenience of air travelers;

(4) Shall establish performance targets and performance standards to achieve the highest levels of customer service;

(5) Shall exercise general supervision over aeronautics within the State and, in connection therewith, encourage, foster, and assist in the development of aeronautics in the State, and encourage the establishment of airports and air navigation facilities;

(6) Shall cooperate with and assist the federal government and other persons in the development of aeronautics;

(7) Shall seek to coordinate the aeronautical activities of the State with those activities of the federal government;

(8) Shall ensure that appropriate mission statements, business plans, minimum development standards, and strategic goals are established and that progress towards their accomplishment is regularly assessed and reported;

(9) Shall develop an organization and management structure to best accomplish the goals of the Hawaii airport system and the authority;

(10) Shall develop and implement policies and procedures for the timely and efficient procurement of professional services; planning, engineering, and construction services; and such other services and materiel as may be required for the development, management, and operation of the airport system, consistent with accepted standards of probity, transparency, and accountability for a public body and consistent with chapter 103D;

(11) Shall develop and implement policies and procedures for the classification of staff positions and for the hiring, management, and administration of staff; provided that the authority shall not be required to comply with the personnel policies and procedures of the department of human resources development with regard to the creation of new positions, the number of those positions, the decision and process to fill those positions, or the time for filling such positions;

(12) Shall appoint officers, agents, and employees through the administrator, prescribe their duties and qualifications, and fix their salaries;

(13) May use the facilities and services of any department, board, commission, or agency of the State or counties, subject to the provisions of memoranda of understanding approved by the board;

(14) May sue and be sued;

(15) Shall have a seal and may alter the seal at its pleasure;

(16) May make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter;

(17) Shall establish bylaws for its organization and internal management;

(18) Shall adopt rules pursuant to chapter 91 to carry out the purpose of this chapter;

(19) Shall adopt an annual budget for its operations, maintenance, and capital improvements;

(20) May own, sell, lease, hold, clear, improve, and rehabilitate real, personal, or mixed property, and assign, exchange, transfer, convey, lease, sublease, or encumber any airport, or any project, improvement, or facility related thereto;

(21) Shall develop, construct, reconstruct, rehabilitate, improve, alter, or repair, or provide for the development, construction, reconstruction, rehabilitation, improvement, alteration, or repair of, any airport, or any project, improvement, or facility related thereto;

(22) May own, hold, assign, transfer, convey, exchange, lease, sublease, or encumber any airport or any project, improvement, or facility related thereto;

(23) Shall arrange or initiate appropriate action for the planning, opening, grading, relocating, or closing of streets, roads, roadways, alleys, easements, or other places; the furnishing of facilities; the acquisition of property or property rights; and the furnishing of property, development rights, or services in connection with any airport or any project, improvement, or facility related thereto;

(24) May grant options or renew any lease entered into by it in connection with any project, on terms and conditions as it deems advisable;

(25) May engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice;

(26) Shall procure insurance against any loss in connection with its property and other assets and operations, in such amounts and from such insurers as it deems desirable, or provide for self-insurance;

(27) May accept and receive gifts or grants in any form from any person, public entity, or source; provided that the grants and gifts shall be used for airport authority purposes;

(28) May pledge or assign all or any part of the moneys, fees, rents, charges, or other revenues and proceeds derived by the airport authority from the proceeds of insurance or condemnation awards for the loss of revenues or incurring of costs and expenses because of any action taken by the airport authority;

(29) Shall impose, prescribe, and collect rates, rentals, fees, or charges for the lease, use, and services of its airport facilities at least sufficient to pay the costs of operation, maintenance, and repair, if any, and the required payments of the principal of, and interest on, all bonds issued or assumed by the airport authority and reserves therefor;

(30) May engage in economic development programs and contract with the department of business, economic development, and tourism or nonprofit corporations in the furtherance of economic development;

(31) May take all actions necessary under emergencies such as hurricanes, tsunamis, and other natural disasters;

(32) Shall plan, construct, operate, and maintain all airport facilities in the State, including the acquisition and use of lands necessary to stockpile dredged spoils without the approval of county agencies, notwithstanding any other law to the contrary;

(33) May issue revenue bonds and special facility revenue bonds in its name pursuant to chapter 39, but not in excess of such principal amounts as are necessary for its purposes or specified in covenants with bondholders;

(34) May invest and secure its moneys in accordance with chapters 36 and 38;

(35) May take public and private property for use in furthering any of the purposes of the airport authority or as otherwise provided by law; provided that all proceedings for condemnation shall be conducted in accordance with chapter 101;

(36) May provide compensation, allowance, or other assistance to any person for relocation or displacement caused by the acquisition of land for airport purposes;

(37) May hire or contract law enforcement personnel, notwithstanding any other law to the contrary; and

(38) May do any and all things necessary to carry out its purposes and exercise the powers given to it in this chapter."

SECTION 3. Section 261-2, Hawaii Revised Statutes, is amended to read as follows:

"§261-2 Development of aeronautics, general. The department of transportation shall have general supervision over aeronautics within the State[.]; provided that beginning July 1, 2018, the general supervision shall be transferred to the Hawaii airport authority. It shall encourage, foster, and assist in the development of aeronautics in the State and encourage the establishment of airports and air navigation facilities. It shall cooperate with and assist the federal government and other persons in the development of aeronautics and shall seek to coordinate the aeronautical activities of the State with those of the federal government. Municipalities may cooperate with the department in the development of aeronautics and aeronautics facilities in the State."

SECTION 4. The Hawaii airport authority shall be a successor agency, and jurisdiction over aeronautics and airports, including airport functions under the department of transportation's airports division, shall be transferred to the Hawaii airport authority on July 1, 2018.

To the extent that the Hawaii airport authority is authorized in this Act to exercise powers and duties with respect to the airports and aeronautical facilities, which powers are also granted to other departments, offices, or boards of the State, from July 1, 2018, the Hawaii airport authority shall exercise such powers and perform such duties in lieu of such other departments, offices, and boards.

SECTION 5. The Hawaii airport authority and the State shall enter into one or more memoranda of understanding to facilitate the authority's governance over such airports, and provide an orderly transition of ownership, jurisdiction, and authority to control, operate, develop, and maintain such airports and facilities from the department of transportation to the authority. Such memoranda of understanding shall include, but not be limited to:

(1) The administrative support functions to be provided by the department of transportation, as mutually agreed;

(2) Those powers that will be exercised and duties that will be performed by each party;

(3) Those assets, funds, accounts, contracts, and liabilities that will be transferred to the Hawaii airport authority, and when such transfers will be made;

(4) Transfer of employees and when such transfers will be made;

(5) The time when services will be provided under the memorandum of understanding; and

(6) The reimbursement to the State for the services provided under such memoranda of understanding; provided that the memoranda of understanding shall provide for the lease, assignment, or transfer of ownership jurisdiction or authority to control the airports together with all assets, funds, accounts, contracts, and assumption of liabilities, and the manner and timing of any such lease, assignment or transfer; provided further that the department of transportation shall receive no compensation in consideration of any such leases, assignments, or transfers.

SECTION 6. Beginning on July 1, 2018, the revisor of statutes shall substitute the "Hawaii airport authority" in chapter 261, Hawaii Revised Statutes, wherever the word "department" appears, except for the amendments made to section 261-2, Hawaii Revised Statutes, in section 3 of this Act.

SECTION 7. It is the intent of this Act not to jeopardize the receipt of any federal aid nor to impair the obligation of the State or any agency thereof to the holders of any bond issued by the State or by any such agency, and to the extent, and only to the extent, necessary to effectuate this intent, the governor may modify the strict provisions of this Act, but shall promptly report any such modification with reasons therefor to the legislature at its next session thereafter for review by the legislature.

SECTION 8. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 9. This Act shall be liberally construed to accomplish the purposes set forth herein. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity shall not affect the other provisions or applications of this Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 10. All rights, powers, functions, and duties of the department of transportation's airports division are transferred to the Hawaii airport authority on July 1, 2018.

The Hawaii airport authority shall be a successor employer to the State, and shall recognize all bargaining units and collective bargaining agreements existing at the time of transfer to the authority. The employees of the authority shall be considered employees of the State as provided in this section.

All employees who occupy civil service positions and whose functions are transferred to the Hawaii airport authority by this Act shall retain their civil service status, whether permanent or temporary. Employees shall be transferred without loss of salary, seniority (except as prescribed by applicable collective bargaining agreements), retention points, prior service credit, any vacation and sick leave credits previously earned, and other rights, benefits, and privileges, in accordance with state personnel laws and this Act; provided that the employees possess the minimum qualifications and public employment requirements for the class or position to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

Any employee who, prior to this Act, is exempt from civil service and is transferred as a consequence of this Act may retain the employee's exempt status, but shall not be appointed to a civil service position as a consequence of this Act. An exempt employee who is transferred by this Act shall not suffer any loss of prior service credit, vacation or sick leave credits previously earned, or other employee benefits or privileges as a consequence of this Act; provided that the employees possess legal and public employment requirements for the position to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable employment and compensation laws. The administrator of the Hawaii airport authority may prescribe the duties and qualifications of these employees and fix their salaries without regard to chapter 76, Hawaii Revised Statutes.

No employee covered by a collective bargaining unit as an employee of the department of transportation shall be laid off as a result of the creation of the Hawaii airport authority. Employees who are offered the opportunity to transfer to the Hawaii airport authority may decline to do so. An employee who elects not to transfer to the Hawaii airport authority shall be retained by the department of transportation or assigned with the employee's position and seniority to another State agency.

In addition to the positions transferred to the Hawaii airport authority, the authority may create one or more new classifications of employees as determined by the board of directors. Such classifications shall not be deemed comparable to other classifications in State service, and shall be exempt from classified service.

On and after July 1, 2018, the Hawaii airport authority may hire employees into new unclassified positions without regard to any collective bargaining agreement then in effect and may set initial terms and conditions of employment for all employees in new unclassified positions.

The officers and all other employees of the Hawaii airport authority shall be State employees for the purposes of benefits and retirement. The authority shall reimburse the appropriate State agencies for all costs incurred by such designation.

SECTION 11. On July 1, 2018, all appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the department of transportation relating to the functions transferred to the Hawaii airport authority shall be transferred with the functions to which they relate.

SECTION 12. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2016-2017 to carry out the purposes of this Act, including the hiring of consultants.

The sum appropriated shall be expended by the department of transportation for the purposes of this Act.

SECTION 13. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 14. This Act shall take effect on June 22, 2022.

THE SENATE	S.B. NO.	3072
TWENTY-EIGHTH LEGISLATURE, 2016		S.D. 1
STATE OF HAWAII