Report Title:
Airport Concessionaires; Economic Relief
Description:
Grants economic relief to airport concessionaires. Authorizes the Director of Transportation to extend revocable permits for concessions beyond the current one-year limit if extensions are necessary in light of an emergency, such as a natural disaster, or in the event of an economic emergency. (SD1)
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THE SENATE |
S.B. NO. |
2600 |
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TWENTY-FIRST LEGISLATURE, 2002 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to concessionaires.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Concessionaires historically have contributed over sixty per cent of the revenues to Hawaii’s public airports while the airlines have contributed about ten per cent. The State’s airports division has surplus funds of about $390,000,000 in its special fund and some concessionaires, especially those dealing primarily with international passengers, are likely to continue suffering hardship beyond April 30, 2002, the date on which economic relief previously granted to the concessionaires by the State will terminate. The airports division can afford and should continue to provide further relief to concessionaires that qualify. These concessions must continue to provide services and opportunities to arriving and departing passengers.
A special session to provide relief to airport concessionaires could have been avoided if the present law providing relief in the event of construction disruption were extended to apply to economic events such as those resulting in the aftermath of September 11, 2001. The relief mechanism under present law for construction activities should be similarly applied to economic downturns resulting from an unexpected and significant drop in the number of arriving passengers.
If the airports division does not have the financial ability or cannot provide necessary relief to concessionaires suffering from unexpected economic events or construction disruptions, the concessionaires should not be forced to pay what they cannot afford given the circumstances. The concessionaire contracts should be canceled without hardship and the concessionaire's deposits and bonds should be returned. The concessionaires in the event of such cancellation should not be barred from doing business with the airports in the future as provided under present law.
The purposes of this Act are to:
(1) Provide further relief beyond April 30, 2002, for airport concessionaires who qualify and are still suffering from the terrorist events of September 11, 2001;
(2) Without having to call for a special legislative session, provide a mechanism that will allow airport concessionaires to receive economic relief if events similar to September 11, 2001, occur in the future; and
(3) Allow airport concessionaires whose agreements with the State are canceled due to events such as those of September 11, 2001, to recover their bonds and deposits, and continue to do business with the State in the future.
SECTION 2. Section 102-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) The bidding requirements of subsection (a) shall not apply to concessions or space on public property set aside for the following purposes:
(1) For operation of ground transportation services and parking lot operations at airports, except for motor vehicle rental operations under chapter 437D;
(2) For lei vendors;
(3) For airline and aircraft operations;
(4) For automatic teller machines and vending machines, except vending machines located at public schools operated by blind or visually handicapped persons in accordance with section 302A-412;
(5) For operation of concessions set aside without any charge;
(6) For operation of concessions by handicapped or blind persons; except concessions operated in the public schools by blind or visually handicapped persons in accordance with section 302A-412;
(7) For operation of concessions on permits revocable on notice of thirty days or less; provided that no such permits shall be issued for more than a one year period; provided further that revocable permits issued by the department of transportation for use of state airports may be extended for an additional period not to exceed one year if the director of transportation determines that an extension of the term of the revocable permit is necessary due to:
(A) A natural disaster; or
(B) A continuation of an economic condition occurring within the previous twelve months that, in the assessment of the director of transportation, would adversely affect the State's ability to solicit and obtain favorable bid proposals;
For purposes of this paragraph, "economic condition" means a reduction of fifteen per cent or more in the volume of business of a concessionaire for a period of thirty days or more, computed on the average monthly gross receipts for the six months immediately prior to the extension;
(8) For operation of concessions or concession spaces for a beach service association dedicated to the preservation of the Hawaii beachboy tradition, incorporated as a nonprofit corporation in accordance with state law, and whose members are appropriately licensed or certified as required by law;
(9) For operation of concessions at county zoos, botanic gardens, or other county parks which are environmentally, culturally, historically, or operationally unique and are supported, by nonprofit corporations incorporated in accordance with state law solely for purposes of supporting county aims and goals of the zoo, botanic garden, or other county park and operating under agreement with the appropriate agency solely for such purposes, aims, and goals; and
(10) For operations of concessions that furnish goods or services for which there is only one source, as determined by the head of the awarding government agency in a writing that shall be included in the contract file."
SECTION 3. Section 102-10, Hawaii Revised Statutes, is amended to read as follows:
"§102-10 Modification of contract terms. (a) Construction relief. If during the term of the contract (including contracts which have been executed and are presently in force) there has been a reduction of fifteen per cent or more in the volume of business of the concessionaire for a period of [sixty] thirty days or more, computed on the average monthly gross [income] receipts for the [eighteen] six months just prior to the period or as long as the concessionaire has been in the business, whichever period is shorter, and such reduction as determined by the officer letting the contract is caused by construction work conducted during the period of time on, or within or contiguous to, the public property upon which the concession is located by either the state or county governments, or both, the officer, with the approval of the governor in the case of a state officer and the chief executive of the respective county in the case of a county officer, may modify any of the terms of the contract, including the agreed upon rent, for a period which will allow the concessionaire to recoup the amount lost by such reduction; provided that if the contract includes provisions allowing modification for the above contingencies, this section shall not be applicable thereto; provided further that this provision shall not apply to any particular concession if the application thereto may impair any contractual obligations with bondholders of the State or counties or with any other parties.
(b) Economic relief. If during the term of the contract (including contracts which have been executed and are presently in force) there has been a reduction of fifteen per cent or more in the volume of business of the concessionaire for a period of thirty days or more, computed on the average monthly gross receipts for the six months immediately prior to the period or as long as the concessionaire has been in business, whichever period is shorter, and such reduction as determined by the officer letting the contract is caused by a reduction in international or domestic passengers arriving during the period of time on, or within or contiguous to, the public property upon which the concession is located by state government, the officer, with the approval of the governor may modify any of the terms of the contract, including the agreed upon rent, for a period which will allow the concessionaire to recoup the amount lost by such reduction; provided the period of recoupment shall end when for six consecutive months the average gross monthly receipts is equal to or greater than the average gross monthly receipts computed and used for the six months or less prior to the start of the recoupment period; provided further that if the contract includes provisions for modification for the above contingencies, this section shall not be applicable thereto; provided further that this provision shall not apply to any particular concession if the application thereto may impair any contractual obligations with bondholders of the State or with any other parties.
(c) Cancellation. If a concession which has suffered a reduction of fifteen per cent or more in its volume of business and which qualifies for construction or economic relief as provided in subsection (a) or (b) is not provided with relief that will allow it to recoup the amount lost by the reduction in its volume of business, the concession agreement with the State or county shall be deemed canceled without fault or penalty to any party to the agreement except that the concessionaire shall remain obligated to pay the State or county amounts owed prior to the commencement of the period of relief.
In case of such cancellation and except for such amounts as may be owed, the entire and full amounts of all deposits, collateral, bonds, or similar instruments securing the concessionaire's performance shall be returned by the agency or State to the concessionaire."
SECTION 4. 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[.] except for a cancellation which occurs pursuant to section 102-10(c) and provided the concessionaire has paid to the State or county the amounts owed prior to the commencement of the period of relief."
SECTION 5. For purposes of qualifying for and receiving economic relief under this Act, a concessionaire in Hawaii may rely upon the reduction in volume of business following the aftermath of the September 11, 2001, terrorist attacks against the United States.
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall be deemed effective on May 1, 2002.