Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Third Special Session of 2001

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 17 entitled:

begs leave to report as follows:

The purpose of this measure is to temporarily grant certain powers to the Governor to provide immediate relief to those who have suffered due to the far-reaching impacts of the terrorist attacks of September 11, 2001, by assisting affected businesses to continue services, minimizing employee layoffs, and preventing further endangerment of the State’s fragile economy.

More specifically, this measure authorizes the Governor to declare an economic emergency during the period from September 11, 2001, to June 30, 2002, if the Governor finds that, during this time period, in addition to any determination that the slowdown of business activity in the State poses an imminent or present danger to the public health, safety, or welfare, there has been a two hundred per cent statewide increase in initial claims filed for unemployment benefits, other than claims resulting from a labor dispute, when compared with initial claims filed in the corresponding week of the preceding calendar year. The measure further specifies that, during this period of declared economic emergency, the Governor is:

Your Committee received testimony from the Attorney General, the Chairperson of the Board of Land and Natural Resources, the state Department of Transportation, and the Chamber of Commerce of Hawaii in support of this measure. Testimony in opposition was received from the Chairperson of the Hawaii Republican Party, Common Cause Hawaii, the Air Line Pilots Association Council 80, and Na Loio – Immigrant Rights and Public Interest Legal Center. The Building Industry Association submitted comments on the measure.

Your Committee finds that the terrorist attacks of September 11, 2001, have had an unprecedented impact upon the State’s economy, as visitor travel to Hawaii has fallen dramatically resulting in enormous losses for many of our businesses. In particular, the aftermath of the terrorist attacks has created tremendous challenges for our air transportation industry and related businesses. Airlines and airports across the country are faced with downturns in passenger traffic and heightened security measures, which have negatively affected airport operations and finances.

Your Committee finds that the airport concessions have seen a sudden drop in revenues, and the Governor, as a means of assisting the concessionaires, should consider waiving the minimum annual guarantee contract provision in an expeditious manner.

Your Committee is cognizant of the broad scope of the emergency powers conferred upon the Governor by this measure. Your Committee finds, however, that the uncertainty posed by the looming threat of further terrorist attacks and the likelihood of a protracted war on terrorism makes immediate economic recovery unlikely without unparalleled steps by the State to stimulate recovery. Moreover, your Committee believes that this measure contains sufficient safeguards to ensure the Governor exercises these emergency powers in a reasonable and prudent manner. The measure requires the Governor to submit public notices and detailed monthly reports to the Legislature of any power exercised. It is the intent of the Legislature that these reports be made available to the public, as well as to the Legislature. Furthermore, your Committee notes that the emergency powers conferred upon the Governor are temporary and, upon the repeal of this measure on June 30, 2002, all statutes, rules, or orders suspended and all contract obligations that were waived, suspended, deferred, or modified by the Governor are to be reinstated in the form that existed on the day before the effective date of the measure. Finally, as the Legislature will be convening in Regular Session in January 2002, a mere three months from now, your Committee believes the Legislature will be in a position to exert sufficient oversight to ensure any exercise of these emergency powers by the Governor is in keeping with the intent of this measure to address the economic crisis facing the State.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee concurs with the intent and purpose of S.B. No. 17 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.