STAND. COM. REP. NO.896-02

Honolulu, Hawaii

, 2002

RE: S.B. No. 2306

S.D. 2

H.D. 1




Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii


Your Committee on Transportation, to which was referred S.B. No. 2306, S.D. 2, entitled:


begs leave to report as follows:

The purpose of this bill is to establish a passenger facility charge to finance the Department of Transportation's costs related to implementing new security measures at state airports. Specifically, the bill:

(1) Authorizes the Department of Transportation to establish a fee not to exceed $4.50 for each overseas or international passenger who uses a state airport; and

(2) Provides that interisland passengers who use state airports are not subject to the passenger facility charge.

Your Committee finds that the terrorist attacks of September 11, 2001 affected air travel in a number of ways. Air travel in the United States was completely halted for a short period of time, and as airports re-opened after the attacks, air travel was significantly reduced because many people were afraid to fly. To restore public confidence in the safety of air travel, Congress passed the Aviation and Transportation Security Act in November, 2001. The Act established the Transportation Security Administration in the U.S. Department of Transportation to implement the new federal aviation security measures. The passenger facility charge established by this measure is intended to reduce the Department of Transportation's costs of implementing new security requirements.

Your Committee further finds that the reduction in air travel also has negatively affected concessionaires at Hawaii's public airports. Historically, airport concessionaires have contributed more than sixty per cent of the revenues of Hawaii's public airports. Even before the September 11 terrorist attacks and despite a surplus of funds in the airports division's special fund account of the Department of Transportation, airlines were granted landing fee waivers. Airport concessionaires received no similar assistance. Because the airport concessions continue to suffer hardship, your Committee believes that the Department of Transportation should provide some relief that will allow airport concessionaires to remain in business and provide services to arriving and departing airline passengers.

Accordingly, your Committee has amended this bill to:

(1) Provide relief beyond April 30, 2002 to airport concessions suffering from the impact of September 11 events;

(2) Allow airport concessions suffering from those events but whose concession agreements with the Department of Transportation are terminated due to new concessionaires to recover their bonds and deposits and remove the current bar to doing business with the State for five years;

(3) Prohibit concessions suffering losses or damages from termination from making claims against the State for those losses or damages; and

(4) Provide a mechanism to allow concessions to obtain relief after a natural disaster or a continuing adverse economic condition.

As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2306, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2306, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

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