TWENTY-FIFTH LEGISLATURE, 2010
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 although motor vehicle rental concessions at Hawaii's public airports contribute over $30,000,000 a year in concession revenues to support Hawaii's public airports, the legislature in 2008 recognized that no facility improvements to those concessions would be made considering other airport priorities as to the use of the funds. Thus, in spite of years of discussions, the facilities over time have deteriorated and have not kept pace with motor vehicle rental facilities and services provided to visitors and residents at other public airports across the United States.
As a result the legislature in 2008 passed Act 226, which established a rental motor vehicle customer facility charge program similar to programs at more than seventy-five other airports across the United States. Act 226 established a rental motor vehicle customer facility charge of $1 per day. Act 226 also appropriated $10,000,000 for planning, design, and some improvements. Recognizing the importance of the program to Hawaii's construction industry and economy, the legislature required the department of transportation to provide annual reports and timelines to ensure the "fast-tracking" of the facility projects and services.
The department has sought to fast-track the program in keeping with the legislative directive and, with the assistance of planners, designers, and other consultants, has completed initial designs and plans for the statewide program. The intent of this Act is to continue the fast-tracking by:
(1) Taking the program to the next level by increasing the rental motor vehicle customer facility charge to $4.50 daily as recommended by consultants; and
(2) Making further appropriations to support the program, including but not limited to, the construction of a $230,000,000 consolidated-facility at Honolulu International Airport and an overflow storage facility at Kahului Airport.
According to reports prepared by consultants, the increased charge of $1 daily to $4.50 daily is expected to fund the planned statewide program with no anticipated future increases. This fee and one-time step up is comparable to similar charges and programs at other airports. Delayed generation of revenues by stepping up such charges as proposed could likely result in the fee rising higher than $5 daily which must be avoided.
The charge of $4.50 daily and revenues generated will strongly support the program as well as the bonds to finance the related construction projects, which will total about $500,000,000. It is very important that the program have strong financing and the stream of revenues to attract the buyers of the bonds during these turbulent economic times, to avoid program delays. The one-time-increased charge as opposed to stepped-up charges will also result in as much as $300,000,000 saved in finance costs. By fast-tracking the projects, it is anticipated the program will benefit from about thirty per cent to forty per cent in construction cost savings.
As reported by consultants, the increased charge to $4.50 daily is expected to have no negative impact as to rental motor vehicles at public airports or public airport revenues. Other cities and airports have studied similar concerns and repeatedly the studies have found no correlation or negative impact related to an increased charge. In fact, airports generally have seen an increase in revenues since the facilities attract motor vehicle rental companies to conduct their business at the airport.
The program does not require visitor and residents to rent a car at a public airport. Individuals will have the opportunity to rent vehicles from off-airport locations and thereby avoid having to pay the rental motor vehicle customer facility charge. To minimize the impact to travel agents and others marketing travel packages and quoting prices, this measure delays implementation of the increased rental motor vehicle customer facility charge until September 1, 2010.
While the goal of fast-tracking was to start the construction of the Honolulu International Airport facility as early as the first quarter of 2010 and thereby provide critical jobs and support for Hawaii's economy, the collection of the increased charge to $4.50 daily has delayed the implementation of this start date as well as any related sale of bonds. Although this Act provides that the department has the discretion to raise and adjust the rental motor vehicle customer facility charge to meet the program's goals notwithstanding any law to the contrary, the department recently commented that the law needs to be clarified and that it cannot increase charges without proceeding through the rules process, which could take twelve months or longer. The legislature finds that it is preferable that increased charges be implemented as of September 1, 2010, to avoid further delays to the program.
The intent of this Act is to continue the fast-tracking of this program and its projects, thereby providing critical jobs to Hawaii's residents and stimulating Hawaii's suffering economy by:
(1) Raising the initial rental motor vehicle customer facility charge, as established by Act 226, Session Laws of Hawaii 2008, from $1 daily to $4.50 daily as recommended by consultants so the strength of the program can be maintained and the program can benefit from various anticipated costs savings;
(2) Raising the initial collection ceiling of the rental motor vehicle customer facility charges from $10,000,000 to a minimum of $500,000,000 based upon consultant estimates and reports provided to date;
(3) Clarifying that the department can adjust the rental motor vehicle customer facility charge without having to establish rules, as recently reported by the department; and
(4) Appropriating $320,300,000 out of the rental motor vehicle customer facility charge special fund for the program for its continued fast-tracking of projects, including the construction of projects at Honolulu International Airport and Kahului Airport.
SECTION 2. Section 261-7, Hawaii Revised Statutes, is amended by amending subsection (h) to read as follows:
"(h) Notwithstanding any laws to the contrary,
the department may establish, levy, assess, and collect rental motor vehicle
customer facility charges, which shall be paid to the department periodically
as determined by the department[
.]; provided that the department
shall conduct a public informational hearing prior to implementing any charges.
These charges shall be used to pay for, or finance on a long-term basis where
appropriate, the design, planning, construction, and other uses of the rental
motor vehicle customer facility charges as set forth by the rental motor
vehicle customer facility charge special fund in section 261-5.6.
The rental motor vehicle customer facility charges shall be levied, assessed, and collected from all rental motor vehicle customers who benefit from the use of any type of rental motor vehicle facility or service provided by the department at a state airport.
All rental motor vehicle
customer facility charges shall be collected by lessors as defined in section
437D-3 and who operate a [
car] rental motor vehicle concession
awarded by the department at a state airport; provided that customers of
lessors, as defined in section 437D-3, who do not operate a [ car] rental
motor vehicle concession at a state airport but whose customers benefit
from the use of a [ car] rental motor vehicle facility or service
at a state airport paid for by rental motor vehicle customer facility charges,
shall collect from [ such car rental] rental motor vehicle
customers, rental motor vehicle customer facility charges in an amount
determined by the department that represents a fair share of the cost and
ongoing expenses relating to customer use of such a facility or service. All
rental motor vehicle customer facility charges collected by such lessor shall
be paid to the department.
Notwithstanding any law to the contrary, the department may contract the management, maintenance, and operations of the facility and related services with airport concessions or their designee that share in the use of a rental motor vehicle customer facility at a state airport."
SECTION 3. Act 226, Session Laws of Hawaii 2008, is amended by amending section 9 to read as follows:
"SECTION 9. Notwithstanding section 7 of
this Act, the department of transportation, as of September 1, [
shall levy, assess, and collect a rental motor vehicle customer facility charge
of [ $1] $4.50 per day, or any portion of a day that a rental
motor vehicle is rented or leased, by a rental motor vehicle concession where
customers pick up and return rental vehicles to a facility at a state airport
as determined by the director. Moneys shall continue to be collected only
until such time that the sum of [ $25,000,000] $500,000,000 is
collected and deposited into the rental motor vehicle customer facility charge
special fund. The $4.50 per day rental motor vehicle customer facility
charge shall not be reduced by the department of transportation for at least
twenty years following September 1, 2010, or until such time as necessary
to satisfy payment of any bonds issued or financial agreements entered into by
the department of transportation in furtherance of the purpose of the rental
motor vehicle customer facility charge special fund under section 261-5.6,
Hawaii Revised Statutes.
The provisions of this section shall not impair, limit, or restrict the department of transportation from levying, assessing, establishing, and collecting rental motor vehicle customer facility charges as set forth in section 7 of this Act."
SECTION 4. There is appropriated out of the rental motor vehicle customer facility charge special fund established by section 261-5.6, Hawaii Revised Statutes, the sum of $320,000,000 or so much thereof as may be necessary for fiscal year 2010-2011 for:
(1) Planning, design, and temporary relocation of rental motor vehicle operations and related expenses;
(2) Construction costs relating to temporary relocation of current rental motor vehicle operations during the construction of a consolidated facility at the Honolulu International Airport and related expenses;
(3) Planning and design of rental motor vehicle facilities at the Honolulu International Airport and related expenses;
(4) Planning, design, and construction of an overflow storage lot at Kahului Airport and related expenses;
(5) Initial planning and design of consolidated facilities at Kahului Airport and related expenses;
(6) Statewide development and program management of a motor vehicle rental facilities program and related expenses; and
(7) Construction of a consolidated rental motor facility at Honolulu International Airport and related expenses.
The sum appropriated shall be expended by the department of transportation for the purposes of this Act.
SECTION 5. Any unexpended or unencumbered balance of any appropriation made by section 10 of Act 226, Session Laws of Hawaii 2008, as of the close of business on June 30, 2011 shall lapse into the rental motor vehicle customer facility charge special fund.
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on July 1, 2010.
Aeronautics; Rental Motor Vehicle Customer Facility Charge Special Fund
Raises rental motor vehicle customer facility charge from $1/day to $4.50/day. Appropriates funds out of the rental motor vehicle customer facility charge special fund for multiple purposes. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.