STAND. COM. REP. NO.346

Honolulu, Hawaii

, 2003

RE: S.B. No. 44

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs and Government Operations, to which was referred S.B. No. 44 entitled:

"A BILL FOR AN ACT RELATING TO TRANSPORTATION,"

begs leave to report as follows:

The purpose of this measure is to provide a statutory procedure to require the Department of Transportation (DOT) to provide airport concessionaires economic relief if they qualify due to a significant downturn in business following the terrorist attacks of September 11, 2001 (9/11).

Your Committee received testimony in support of this measure from the Airport Concessions Committee, APCOA, DFS Galleria, Greeters of Hawaii, Ltd., and five employees of HMS Host. The Airlines Committee of Hawaii submitted testimony in opposition to this measure, and the Office of Information Practices submitted testimony in opposition to the arbitration confidentiality provisions of this measure. The DOT submitted written testimony expressing no opinion on this measure.

This measure is identical to a measure passed by both houses of the Legislature during the 2002 Regular Session, which was subsequently vetoed by Governor Cayetano.

Your Committee finds that the events of 9/11 devastated airport concessions. Following the attacks, air travel was stopped completely for several days by federal mandate. Once air travel resumed, the number of passengers decreased dramatically.

In addition, implementation of stricter security measures, which require a ticket to proceed beyond the security checkpoint, has taken away a huge pool of potential customers for concessionaires, whose businesses are located entirely beyond the security checkpoints. This month, the federal government has taken over security checkpoints at the nation's airports, and security restrictions show no sign of easing in the future.

Your Committee further finds that with war looming in the Middle East, the number of air travelers is likely to further drop in the coming year.

Against this backdrop, your Committee finds that it has been nearly impossible for airport concessionaires to survive. While the Legislature provided limited economic relief during the Third Special Session of 2001, and the Governor and DOT extended economic relief a bit further, the Administration has not indicated that it will extend relief any further. Without further relief, most airport concessionaires will suffer the consequences of breaching their contracts with the State, including being barred from doing business with the State for five years.

Your Committee finds this situation unfair, and believes that the Legislature should do its part to provide limited relief to concessionaires. To do nothing opens the possibility that no concessions will operate at the airport, which would have a negative impact on travelers using our State's airports.

Your Committee made numerous technical, nonsubstantive amendments to this measure for accuracy and clarity.

 

As affirmed by the record of votes of the members of your Committee on Transportation, Military Affairs and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 44, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 44, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Transportation, Military Affairs and Government Operations,

____________________________

CAL KAWAMOTO, Chair