S.B.2747 also risked violating FAA grant assurances.

A bill that threatened to impose exorbitant insurance rates on air tour operators in Hawaii officially died in legislative conference this week.

Hawaii State Senate Bill 2747 (S.B.2747), which initially passed both the Hawaii Senate and House, required air tour operators to maintain aircraft liability insurance coverage of $20 million per person per incident (as amended). State Sen. Chris Lee (D-District 25) had introduced the bill in January with a liability coverage requirement of at least $1 million per person per incident. The Senate Committee on Transportation and Culture and the Arts, however, removed the $1 million threshold and advanced the bill to the House Committee on Consumer Protection & Commerce (CPC) to review the language and assign a more accurate rate, given the committee’s expertise in addressing insurance limits.

The House CPC amended the bill in early April, increasing the liability insurance requirement for air tour operators to $20 million per person per incident.

VAI took proactive steps to oppose S.B.2747, collaborating with industry peers including the Aircraft Owners and Pilots Association, the National Business Aviation Association, and the National Air Transportation Association. In addition, VAI engaged in productive dialogue with Hawaii state legislators to address the vertical aviation industry’s concerns about the bill, emphasizing the potential financial burden and regulatory conflicts the bill posed. Primary industry concerns included the impracticality of obtaining the specified insurance coverage at a reasonable cost and the risk of violating FAA grant assurances, potentially jeopardizing Hawaii’s federal funding for airport improvement programs.

VAI appreciates the constructive dialogue with Hawaii state legislators and their receptiveness to our members’ input.

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