Airport concessionaires are asking state lawmakers to pass legislation that gives the Department of Transportation the discretion to grant broader relief to their businesses while restoring language to make COVID-19 and other sudden emergencies a triggering event.

James Stone, legislative liaison for the Airport Concessionaires Committee trade group, said the Senate Committee on Transportation last week moved out a “skinny down” version of House Bill 1953. Stone said that while grateful to the committee for keeping the measure alive, concessionaires hope that some of the bill’s prior language is restored when it gets a hearing today from the Senate Ways and Means Committee.

“We can’t support the ‘skinny down’ version. The ‘skinny down’ version talks about giving relief which is provided under the existing law when there is construction disruption. It doesn’t address COVID or significant­-hardship situations, which is what we are trying to achieve,” Stone said.

The Ways and Means Committee has scheduled a public decision-making hearing for HB 1953 for 10:30 a.m. today in Conference Room 211 of the state Capitol.

Stone said the measure was inspired by the unprecedented economic downturn during the COVID-19 pandemic. It originally sought to allow the DOT during COVID-19 or other sudden emergencies to extend leases, raise the maximum terms of contracts and allow businesses to cancel contracts to avoid defaulting and being barred from doing business with the state.

The Transportation Committee amended the bill to apply only to concessionaires who are affected by construction and experience a reduction of 15% or more in business volume for a period of at least 60 days, computed on the average monthly gross income for the prior 18 months or for as long as the concessionaire has been in business, whichever period is shorter. The committee also pushed the bill’s effective date far into the future.

Even before the amendments, the measure had received pushback from DOT, which oversees the state’s airports, and the Airlines Committee of Hawaii, comprising 20 signatory air carriers that underwrite the state airport system.

DOT Director Jade Butay opposed the measure in testimony submitted March 17, noting his agency already has the discretion to grant relief to airport concessions under provisions in its lease agreements and state law.

Butay said that since April 1, 2020, DOT has provided financial relief of approximately $125 million by allowing concessionaires to pay a percentage of gross receipts rather than a minimum rent guarantee.

“The proposed bill is unnecessary and goes beyond providing relief for a ‘sudden event’ by including other relief triggers that may not be directly related to a ‘sudden event’ and will create undue risk and obligation to the (DOT Airports Division),” he said.

Brendan Baker and Mark Berg, co-chairs of the Airlines Committee of Hawaii, also opposed the measure.

In written testimony dated March 17, the pair said, “Legislating the ability of one party to a valid contract to reduce their financial commitment is inequitable and creates revenue uncertainty which bond rating agencies could view as a risk. Further, any reduction in concessions revenue to the DOT is directly passed on to the airlines. The airline industry is still recovering from the pandemic and this would add to our already heavy financial burden.”

In 2021, state transportation officials opposed a similar measure, Senate Bill 1308, saying they already had discretion to provide lessees with relief during sudden events such as the pandemic. The Airlines Committee of Hawaii didn’t like that bill, either.

“Last session, a bill similar to this one made the news and failed to pass because Hawaii DOT and others said not to worry,” Stone said. “They were wrong, and unfairness has occurred and COVID hardships are continuing.”

Many airport businesses have complained that COVID-19 relief money was not given to all vendors equally, he said, with some getting no help.

Hawaii laws and contract provisions are too restrictive when compared with mainland airports like Seattle, Atlanta, Dallas/Fort Worth and Las Vegas that have utilized a variety of pandemic-inspired relief to prop up concessionaires, according to Stone.

“There is no logical reason for this bill not to pass since it does not mandate the DOT to do anything. It just gives the department the option to consider all types of relief opportunities,” he said.