Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Transportation, to which was referred S.B. No. 2330, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this bill is to provide equitable treatment to all users of state wharves and to assist local businesses by exempting interstate and intrastate shipping cargo destined for the neighbor islands from wharfage fees at the intermediate port.

Young Brothers, Limited, Meadow Gold Dairies, Hawaii Farm Bureau Federation, and the Hawaii Food Industry Association testified in support of this measure. The Department of Transportation and Matson Navigation Company, Inc. testified in opposition to this measure.

Current law provides for an exemption of wharfage fees of domestic overseas or foreign cargo, transshipped to the Neighbor islands via Honolulu, from wharfage fees at intermediate ports. However, cargo bound for the Neighbor Islands, which must be stored, repacked, or processed in Honolulu before being shipped to its ultimate destination, is subject to wharfage fees at the intermediate port. This is also true for cargo being shipped between Neighbor Islands. Your Committee feels that this fee makes it difficult for local companies to compete with mainland concerns who can ship their goods directly to the Neighbor islands on through bills of lading. This bill will correct this inequity and level the playing field among shipping companies throughout Hawaii.

Your Committee has amended this measure by changing the effective date from July 1, 2050, to upon its approval.

As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2330, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2330, S.D. 1, H.D. 1, and be referred to the Committee on Finance.