Report Title:
Airport Concession Contracts; Force Majeure
Description:
Requires force majeure terms in contracts with airport concessions contracts as a mechanism to provide relief for airport concessionaires in the wake of catastrophic events.
HOUSE OF REPRESENTATIVES |
H.B. NO. |
836 |
TWENTY-SECOND LEGISLATURE, 2003 |
||
STATE OF HAWAII |
||
|
A BILL FOR AN ACT
relating to transportation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that various airport concession businesses suffered severe economic losses due to the events of September 11, 2001. Gross receipts for various concessions suddenly dropped by more than thirty per cent for some concessions. New security measures following these events required customers to have a plane ticket before they could shop or eat at most concessions. Many concessions are still suffering and have not recovered from the events of September 11, 2001. Under the terms of their present contracts, these concessions may lose their performance bonds and be barred from doing business with the State for five years. This punishment is not fair or reasonable to such concessions.
To provide relief for these concessions, the legislature has been informed by the department of the attorney general that legislative action is required. Apparently, the terms of the concession leases were so harsh and unfavorable to concession lessees that no relief could be negotiated between the department of transportation and the lessees of concessions who qualified for relief. The legislature finds this state of affairs to be unacceptable. Not only should such relief be made available to cushion post-September 11 losses, but a relief mechanism should be established so that legislative action is not required to provide relief for future catastrophic events barring unforseen circumstances.
The legislature further finds that the leases of the airport concessions were unfair and not businesslike due in part to their failure to provide a relief mechanism for events such as the terrorist acts of September 11, 2001. Concessionaires have repeatedly complained to the department of transportation about such harsh contract terms, without success. It is typically this type of harsh business lease terms by state government that supports repeated charges by Forbes Magazine and others that Hawaii is one of the worst states to do business. Hawaii's government must step forward and do its part to improve this image. The department of transportation should not be allowed to punish or destroy concession businesses over events that are beyond their control.
The purpose of this Act is to provide relief and require that the department of transportation be fair and businesslike in its dealings with airport concessions who now, more than ever, are susceptible to sudden business downturns over which they have no control. Such businesses generally have only a five-year contract and should not be punished and destroyed by terrorist or other unexpected events beyond their control. They should be provided fair and adequate relief so that they may survive such unexpected events and continue to serve tourist and business travelers who are so important to Hawaii's economy. Airport concessions are high-risk ventures that must be treated fairly, in a business-like fashion and in a manner that will allow the concessions to overcome such unexpected events.
SECTION 2. Chapter 102, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§102- Public-airport concession contracts; force majeure terms. (a) All public airport-concession contracts shall contain force majeure terms that state: "Neither party shall be liable to the other for any failure, delay, or interruption in the performance of any of the terms, covenants, or conditions of this agreement due to causes beyond the control of that party, including, without limitation, strikes, boycotts, labor dispute, embargoes, shortages of material, acts of God, war, hostilities, acts of the public enemy, actions of superior governmental authority, acts of terrorism (whether threatened or actual), epidemics, quarantines, weather conditions, floods, riots, rebellion, sabotage, or other cause similar to those enumerated, or any other circumstance for which a party is not responsible or that is not in its power to control."
(b) This section also includes all unanticipated acts or situations in the normal course of events that have the effect of reducing the number of passengers using the airport. These unanticipated acts or situations shall include those related to air travel, presence at airports, or use of airplanes. It is understood that actions taken by individuals, groups, or any other entity or entities seeking to injure, kill, or maim passengers or other persons in or about airports or to create the fear of injury, death, or disease are not considered to be in the normal course of events.
(c) In case of any failure, delay, interruption, act, or situation beyond the control of a party, the parties may agree to provide relief to a party by canceling the contract or modifying its terms, including and not limited to the waiver and reduction of rental payments for a period of time. If no agreement for relief is made within a reasonable time, a party may seek relief through the courts or as otherwise agreed to between the parties."
SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.
SECTION 4. New statutory material is underscored.
SECTION 5. This Act shall take effect upon its approval and shall apply retroactive to January 1, 2003.
INTRODUCED BY: |
_____________________________ |