STAND. COM. REP. NO. 984

Honolulu, Hawaii

RE:    H.B. No. 997

       H.D. 2

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committee on Transportation and Energy, to which was referred H.B. No. 997, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO CONCESSIONS,"

begs leave to report as follows:

     The purpose and intent of this measure is to provide the Department of Transportation with the authority, flexibility, and discretion to pursue and enter into airport concession contracts and other arrangements by negotiation.

     Your Committee received testimony in support of this measure from the Department of Transportation and the Airport Concessions Committee.

     Your Committee finds that awarding airport concessionaire agreements through a negotiation process, as compared to just the highest bidder, will result in improved quality of food, products, and services at Hawaii's airports.  That, in turn, will increase sales volume and airport fees, which are based on a percentage of sales.  Your Committee notes that most mainland airports award airport terminal concession agreements based on circumstances that benefit and are in the best interest of the airport.

     Your Committee has amended this measure by:

     (1)  Reinserting language that provides the Department of Transportation with the authority to grant contract extensions for no more than fifteen years for the initial term, and if amended, up to the remaining term plus any agreed upon extension;

     (2)  Inserting an effective date of July 1, 2017; and

     (3)  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 Energy that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 997, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 997, H.D. 2, S.D. 1, and be referred to your Committee on Ways and Means.

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

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LORRAINE R. INOUYE, Chair