House committees advance bill to impose per‑passenger cruise fee, create cruise fund

HONOLULU — A joint meeting of the House Committee on Tourism and the Committee on Economic Development and Technology voted Tuesday to advance HB 2195 HT1, a measure that would require the Department of Transportation to assess a per‑passenger infrastructure fee on cruise ships and establish a cruise ship special fund.

The bill, as described to the committee, would also apply the state transient accommodations tax (TAT) to cruise ships retroactive to Jan. 1, 2026, and sets an effective date written in the draft. Chair Tam recommended advancing the measure while continuing conversations about whether a separate special fund is necessary or whether a cruise subaccount could be created within the existing Harbor Special Fund.

The measure drew industry support and cautions from policy analysts. "I stand in support and on my testimony as submitted and am available for any questions," Sandy Weir of Norwegian Cruise Line Holdings told the committee. Tom Yamachika of the Tax Foundation of Hawaii warned lawmakers to "guard against scope creep," arguing that revenues used beyond harbor purposes could raise constitutional concerns under the tonnage clause.

Dore Khalili, deputy director of transportation for harbors, told committee members that in fiscal year 2025 the harbors handled about 917,000 cruise passengers and that multiplying a per‑passenger fee of $6.50 across that count yields about $6.3 million annually. Khalili said that $6.3 million "isn't gonna get us very far" for the range of port and terminal projects DOT says are needed and that the department is asking for a fee of $10 per passenger to better support pier repairs, dredging, terminal HVAC and elevator work, bollard and fender replacements, shore power and other resilience projects tied to sea‑level rise.

Deputy Attorney General Yvonne Chanmaro told members she had submitted written comments and was available to answer questions but said she was not the attorney handling ongoing litigation related to TAT application and could not immediately address that matter.

Committee members pressed whether the revenue should flow into a newly created cruise ship special fund or be accounted for within the Harbor Special Fund. DOT officials said cruise ships already pay port entry and dockage fees and that the revenues are currently deposited into the harbor special fund; DOT suggested legislative language could create a dedicated cruise account within that existing fund or provide a new special fund but emphasized that the key outcome is a dedicated revenue stream and separate accounting for cruise‑related expenditures.

After discussion, the committee voted to advance HB 2195 HT1. The clerk recorded that the chair and vice chair voted aye; Representative Hassy was excused; Representatives Villegas, Yamashita and Gideon were recorded as voting aye and the chair's recommendation was adopted.

The record shows the committee intends to continue work with the attorney general and DOT to clarify whether a new special fund is required or whether a harbor subaccount would meet the bill's objectives. The measure will proceed from committee as recommended.