Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs and Government Operations, to which was referred S.B. No. 756 entitled:

begs leave to report as follows:

The purpose of this measure is to earmark a portion of the tax revenues from the passenger cruise industry between 2003 and 2012 to be used for improvements to passenger cruise harbor facilities throughout the State.

Your Committee received testimony supporting this measure from American Classic Voyages, Inc., the Maritime Committee of the Hawaii Chamber of Commerce, Waldron Steamship Co., Ltd., and the Ocean Tourism Coalition. The Department of Budget and Finance submitted testimony opposing this measure and the Department of Transportation deferred to that testimony. The Tax Foundation of Hawaii provided comments.

Your Committee recognizes the importance of the passenger cruise ship industry in generating revenues for the State. Your Committee also understands that many harbor facilities in Hawaii are in dire need of repair, maintenance, and additional construction.

Without state financial assistance to construct and repair harbor facilities, the carriers themselves would have to finance that task and would likely pass those costs on to consumers. Such an approach may ultimately harm the industry and the revenues it generates. Your Committee finds that a better approach is to earmark state funds for this purpose for a limited time, as proposed by this measure.

Your Committee, recognizing that small boat harbors are also in need of repair and maintenance, amended this measure to authorize the department of land and natural resources to request moneys from the harbor special fund to finance passenger cruise facilities at Lahaina harbor and Kailua-Kona pier.

As affirmed by the record of votes of the members of your Committee on Transportation, Military Affairs and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 756, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 756, S.D. 1, and be referred to the Committee on Ways and Means.