RELATING TO AIR CARRIERS.

SB1638

THE SENATE

S.B. NO.

1638

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

Relating
to Air Carriers
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

����
SECTION 1.
�
The
legislature finds that since January 2021, only one passenger airline has
provided service to the general public out of Molokai airport.
�
While the airline has done its best to
accommodate the needs of passengers, including adding additional routes and
flight times and ordering larger planes, the cost of plane tickets remains a
hindrance to many Molokai residents who need to travel for essential reasons,
including work, medical appointments, and family.

����
The legislature further finds that
alleviating the costs of air travel, primarily for small, rural communities
reliant on air travel for essential services and other needs, is a public
purpose; and encouraging additional airlines to provide reliable airline
services to and from Molokai to assist the residents who need to travel for
essential reasons is a public purpose.
�
The
legislature recognizes that providing a subsidy can help airlines offset the
cost of passenger tickets while encouraging other airlines to also provide
service at Molokai airport.

����
Accordingly, the purpose of this Act is to
require the department of transportation to establish a Molokai air carrier
subsidy program to provide subsidies to airlines operating out of Molokai
airport.

����
SECTION 2.
�

Chapter 261E, Hawaii Revised Statutes, is amended by adding a new
section to be appropriately designated and to read as follows:

����
"
�261E-
��
��
Molokai
air carrier subsidy program.
�
(a)
�

There is established within the department of transportation the Molokai
air carrier subsidy program to provide subsidies to air carriers operating out
of Molokai Airport.

����
(b)
�
The Molokai air carrier subsidy program shall
provide state subsidies to qualified applicants pursuant to the following
terms, conditions, and standards:

����
(1)
�
Any
subsidy shall be used exclusively for the purposes of the program;

����
(2)
�
The
applicant shall indicate the capability to properly use the subsidy for the
costs of operation in and out of Molokai airport;

����
(3)
�
The
applicant shall comply with all applicable federal and state laws prohibiting
discrimination against any person on the basis of race, color, national origin,
religion, creed, sex, age, sexual orientation, disability, or any other
characteristic protected under applicable federal or state law;

����
(4)
�
The
subsidy shall not be used for purposes of entertainment or perquisites;

����
(5)
�
All
activities undertaken with subsidy funds received shall comply with all
applicable federal, state, and county statutes and ordinances;

����
(6)
�
The
applicant shall:

���������
(A)
�
Indemnify and hold harmless the State and its officers, agents,
and employees from and against any and all claims arising out of or resulting
from activities carried out or projects undertaken with funds received from the
program; and

���������
(B)
�
Obtain sufficient insurance to provide the indemnification under
subparagraph (A), if requested to do so by the department;

����
(7)
�
The
applicant shall agree to make available to the department of transportation all
records the applicant may have relating to the subsidy to monitor the
applicant's compliance with the requirements of the program; and

����
(8)
�
The
applicant shall comply with other requirements as the department may prescribe.

����
(c)
�

The department shall submit an annual report to the legislature
regarding the program, including subsidy funds disbursed and detailed
accounting and descriptions of expenditures of subsidy funds, no later than
twenty days prior to the convening of each regular session
.

����
(d)
�
As used in this section:

����
"Applicant"
means a qualified air carrier operating, or planning to operate, out of Molokai
airport seeking a subsidy.

����
"Department"
means the department of transportation.

����
"Program"
means the Molokai air carrier subsidy program.

����
"Subsidy"
means the sum of money appropriated by the legislature to the department to be
disbursed to qualified air carriers operating out of Molokai airport.
"

����
SECTION 3.
�

In establishing the Molokai air carrier subsidy program pursuant to
section 2 of this Act, the department of transportation shall request the
assistance of Hawaii's congressional delegation, the Federal Aviation
Administration, and other pertinent federal officials.

����
SECTION 4.
�

There is appropriated out of the general revenues of the State of Hawaii
the sum of $
���������
�
or so much thereof as may be necessary for
fiscal year 2025-2026 and the same sum or so much thereof as may be necessary
for fiscal year 2026-2027 for the Molokai air carrier subsidy program.

����
The sums

appropriated shall be expended by the department of transportation
for the purposes of this Act.

����
SECTION 5.
�

New statutory material is underscored.

����
SECTION 6.
�

This Act shall take effect on July 1, 2025.

INTRODUCED BY:

_____________________________

Report Title:

HDOT;
Airlines; Air Carriers; Subsidy; Molokai Airport; Appropriation

Description:

Establishes

within the Department of Transportation
the
Molokai air carrier subsidy program to provide
subsidies to airlines operating out of Molokai airport.
�
Appropriates moneys.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.