Committee clears bill to create cruise-ship fee and special fund; DOT recommends $10 per passenger

The House Committee on Transportation on March 17 voted to pass SB 2698 SD2, which would require the Department of Transportation to assess a per-passenger head fee against cruise ships docking at commercial harbors, establish a cruise ship special fund, and repeal existing transient accommodations tax obligations on cruise ships.

Deputy Director of Transportation for Harbors Dre Khili testified that HDOT supports the bill and recommended a $10 per-passenger fee to fund improvements cited in earlier versions of the proposal, including shore power. "Yes, that is the amount that DOT recommends be for uh you know some of the improvements that were cited in the original version of the bill including shore power," Khili said during testimony.

The Attorney General's office and the Department of Taxation submitted written comments; several tourism-industry stakeholders provided comment or written testimony. The Tax Foundation of Hawaii and some tourism representatives cautioned about the potential effect of higher fees on visitor demand, while harbor and shipping groups (including Matson Navigation and the Hawaii Harbors Users Group) registered support.

At reconvening, the committee adopted an HD1 and noted in the committee report a DOT-requested fee of $10 per passenger; the recommendation to pass with amendments was adopted, with reservations entered by Representatives Cochran and Mora. The committee deferred effective-date language for later resolution.

The committee recording shows DOT and industry agreement to continue work on implementation details and economic impact concerns. The bill now moves to the next steps in the legislative process with the committee report reflecting DOT's funding estimate and the recorded reservations.