STAND. COM. REP. NO. 2125

Honolulu, Hawaii

RE: S.B. No. 2108

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committee on Water and Land, to which was referred S.B. No. 2108 entitled:

"A BILL FOR AN ACT RELATING TO CONCESSIONS ON PUBLIC PROPERTY,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Increase the term of a concession from fifteen to twenty-five years;

(2) Broaden requirements to permit all types of entities to be eligible to compete for certain concessions that are exempt from sealed bid requirements; and

(3) Provide that a county director of parks and recreation shall designate which county parks are environmentally, culturally, historically, or operationally unique for the purpose of determining whether a concession at the park is exempt from sealed bid requirements.

Your Committee received testimony in opposition to this measure from the Palekaiko Beachboys Club.

Your Committee finds that concessions on public properties are granted by sealed top-dollar bids, with limited exceptions. In some instances, concessions may be exempt from bidding requirements because a person or entity offering the most money may not be the best suited or qualified to meet the government's goals to preserve public-owned assets such as parks, or may not be suited or qualified to serve the needs of the public. In addition, requiring concessionaires to bear construction costs pose challenges as concession contracts are valid for fifteen years, making some investors unwilling to make time or improvement efforts because of the short timeframe.

To serve the public's interest in activities located on public properties, this measure exempts certain concessionaires operating on public properties from sealed-bidding requirements and extends terms of leases from fifteen to twenty-five years.

Your Committee has amended this measure by:

(1) Inserting an effective date of July 1, 2050, to encourage further discussion; 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 Water and Land that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2108, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2108, S.D. 1, and be referred to your Committees on Judiciary and Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Water and Land,

________________________________

LORRAINE R. INOUYE, Chair