Report Title:

Economic Emergency

Description:

Extends Governor's temporary emergency powers by one year; clarifies certain aspects of Governor's powers.

THE SENATE

S.B. NO.

2485

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

Relating to economic emergency.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The September 11, 2001, terrorist attacks on the United States severely affected Hawaii's economy. To mitigate the negative effects of these events, the legislature passed Act 15, Third Special Session Laws of Hawaii 2001, giving the governor certain temporary emergency powers to facilitate continuity of business activity and services, minimize employee layoffs, and prevent the endangerment of public health, safety, or welfare during this time of economic crisis.

Act 15, in part, provided relief to airport concessionaires and other businesses that could demonstrate a measurable loss of business within thirty days following September 11, 2001. However, for advertising and other concessionaires who have multi-month contracts, such losses may not have been apparent within thirty days, and Act 15, therefore, does not provide relief for these businesses.

Act 15 is scheduled to be repealed on April 20, 2002. However, some concessionaires, especially those that are dependent on tourists from Japan and elsewhere, relief may be required for a period of time beyond April 30, 2002.

The airport concessionaires have historically contributed over sixty per cent of all airport revenues, and have not been afforded relief like the airlines who have historically contributed about ten per cent of all airport revenues, and who have received waivers of landing fees equal to about $38,000,000 per year. The department of transportation also has a surplus in its special fund that can be used to support qualified concessionaires.

The State, as a landlord, must set an example for other landlords who are dealing with tenants suffering from the events of September 11, 2001. If the State cannot provide adequate relief to any tenant suffering from the events of September 11, 2001, the tenant should be allowed to cancel the lease with the State without having to forfeit any security deposit or performance bond and should not be barred from bidding for a State contract in the future as provided under present law.

The purpose of this Act is to:

(1) Provide relief to airport concessionaires who do not qualify for relief under the thirty-day formula provided in Act 15;

(2) Extend the repeal date of Act 15 to April 30, 2003; and

(3) Clarify provisions in the law that would penalize tenants of the State if they default in their payments due to losses suffered as a result of the events of September 11, 2001.

SECTION 2. Act 15, Third Special Session Laws of Hawaii 2001, is amended as follows:

1. By amending section 5 to read:

"SECTION 5. Existing state contracts. (a) The governor may suspend, waive, or defer any contract obligations owed to the State up to April 30, 2002, and upon such terms and conditions as shall be necessary to minimize losses that are attributable to the economic emergency. For the purposes of this section, the term "contracts" includes leases, including agricultural leases with the department of land and natural resources or department of agriculture; land licenses; land permits; easements; concessions, including airport concessions; and subsidies and grants that have been awarded, extended, or renewed pursuant to law and rules.

(b) A person under contract with the State may be eligible for consideration for relief if the person requests such relief and satisfies the following conditions:

(1) The person under contract with the State submits:

(A) Written evidence proving the amount and the extent of any losses attributable to the economic emergency; and

(B) An accounting of any insurance or federal benefit or assistance received or anticipated due to the economic emergency; and

(2) The losses, at a minimum, must be at least a fifteen per cent reduction in the volume of business (including the volume of any business upon which the person under contract with the State must pay to the State rents, fees, or other amounts to the department or agency attributable to such volume of business) covered by the contract for a period of at least thirty days after September 10, 2001, computed on the average monthly gross income attributable to the business covered by the contract for the shorter of the following periods:

(A) The six months just prior to September 11, 2001; or

(B) As long as the person under contract with the State has had the contract with the State.

In computing the loss under paragraph (2), the person under contract shall appropriately increase the volume of business by any amounts reported in paragraph (1)(B). The written evidence required to be submitted to the department or agency by the person under contract with the State seeking relief under this paragraph must include at least a weekly submission of daily sales and activity data, clearly indicating sales and activity volume, the revenue received, derived, or realized from or attributable to the sales and activities, and such other sales and activity data deemed appropriate by the department or agency; [and]

(3) If the person under contract with the state department of transportation is an airline or air carrier, the person may qualify for the relief described in this section if the person satisfies paragraph (1) and, in lieu of paragraph (2), the following conditions:

(A) The losses suffered by the airline or air carrier comprise at least a fifteen per cent reduction in the volume and number of passengers enplaned and deplaned or cargo handled, at state airports by the airline or air carrier for a period of at least thirty days, computed on the average monthly volume of passengers enplaned and deplaned or cargo handled, as appropriate, for the six months just prior to September 11, 2001;

(B) Each such airline and air carrier submits at least weekly to the department of transportation traffic reports on aircraft operations, including the daily flight schedules and the following for each aircraft landing and taking off from a state airport: volume and number of passengers enplaned and deplaned, volume and type of cargo handled, type of aircraft, passenger and cargo capacity, date of landing or take-off, and origin and destination[.];

or

(4) If the person under contract with a department or agency of the State is able to reasonably demonstrate that its business has suffered hardship or losses due to the September 11, 2001, terrorist attacks that significantly impair its ability to make payments to the department or agency."

2. By amending section 12 to read:

"SECTION 12. Section 171-13, Hawaii Revised Statutes, is amended to read as follows:

"171-13 Disposition of public lands. Except as otherwise provided by law and subject to other provisions of this chapter, the board may:

(1) Dispose of public land in fee simple, by lease, lease with option to purchase, license, or permit; and

(2) Grant easement by direct negotiation or otherwise for particular purposes in perpetuity on such terms as may be set by the board, subject to reverter to the State upon termination or abandonment of the specific purpose for which it was granted, provided the sale price of such easement shall be determined pursuant to section 171-17(b).

No person shall be eligible to purchase or lease public lands, or to be granted a license, permit, or easement covering public lands, who has had during the five years preceding the date of disposition a previous sale, lease, license, permit, or easement covering public lands cancelled for failure to satisfy the terms and conditions thereof, unless such cancellation relates to a breach or default by the person in payments to any agency of the State due to losses in volume of business or monthly gross income, or hardship suffered by the person during a period of economic emergency declared by the governor [in accordance with chapter 209]. A person suffering from such an economic emergency and cancellation resulting therefrom shall have returned to the person without penalty any and all deposits, bonds, and security except for payments and/or obligations owed to the State prior to September 11, 2001.""

3. By amending section 13 to read:

"SECTION 13. This Act shall take effect upon its approval and shall be repealed on April 30, [2002.] 2003."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on April 29, 2002.

INTRODUCED BY:

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