HOUSE OF REPRESENTATIVES	H.B. NO.	2477
THIRTY-SECOND LEGISLATURE, 2024		H.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO COMMERCIAL OCEAN RECREATION OPERATIONS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The department of land and natural resources (department) division of boating and ocean recreation is responsible for ocean recreation management in state ocean waters, among other responsibilities. Public safety and marine natural resources can be affected by a variety of environmental factors and emerging ocean recreation technologies, some of which may change rapidly and frequently. This Act is part of a comprehensive ocean recreation management package put forth by the department to ensure effective natural resource protection by providing better management and enforcement tools.

The department is also not adequately funded to proactively address impacts of rules-based commercial activity, such as overcrowding and marine ecosystem damage, forcing a more reactionary approach that does little to address issues.

Therefore, the purpose of this Act is to:

(1) Revise the way fees applicable to commercial ocean operators are assessed; and

(2) Allow the department to issue certain new commercial use permits by public auction.

SECTION 2. Section 200-10, Hawaii Revised Statutes, is amended to read as follows:

"§200-10 Permits and fees for state small boat harbors[;], coastal areas, and ocean waters; permit transfers. (a) No person shall moor a vessel in a state small boat harbor without:

(1) First obtaining [a use permit] written authorization from the department; [and]

(2) Being the owner of the vessel[.]; and

(3) Paying appropriate fees set by subsection (c).

(b) In order to obtain [a] any use permit or [a] use permit renewal, the owner of a vessel shall provide, at the owner's own expense:

(1) A marine surveyor's inspection or a vessel inspection by the department, no more than two years old, certifying that the vessel has been inspected and fulfills the requirements set by the department;

(2) Documentation that the person is the owner of the vessel. The documentation shall meet requirements established by the department; and

(3) Satisfactory proof that the person has attained the age of eighteen years prior to obtaining [a] any use permit or being placed on the waitlist for [a] any use permit.

(c) [The] A permittee shall pay [moorage] fees to the department for [the] a use permit that shall be based on but not limited to the [use of the vessel, the vessel's effect on the harbor, use of facilities, and the cost of administering the mooring program;] impact of the permitted activity on natural resources, impact of the activity on public access to and use of state boating facilities and waters of the State, and the cost of administering the small boat harbor and coastal areas programs; provided that:

(1) Except for commercial maritime activities in which a tariff is established by the department of transportation, moorage fees shall be established by appraisal by a state-licensed appraiser approved by the department;

(2) For commercial maritime activities in which a tariff is established by the harbors division of the department of transportation, the department may adopt the published tariff of the harbors division of the department of transportation or establish the moorage fee by appraisal by a state-licensed appraiser approved by the department;

(3) An application fee shall be collected when applying for [moorage in state small boat harbors] any use permit and shall thereafter be collected annually when the application is renewed; provided that the application fee shall be set by the department;

(4) If a recreational vessel is used as a place of principal habitation, the permittee shall pay, in lieu of the moorage fee required by paragraph (1), a monthly liveaboard fee that shall be two times the moorage fee that would otherwise be assessed for a vessel of the same size;

(5) If [a vessel is used for commercial purposes from the vessel's permitted mooring,] the permittee is carrying passengers for hire, the permittee shall pay[, in lieu of the moorage fee required by paragraph (1),] a monthly fee that shall be the greater of:

(A) Three per cent of the gross revenues derived from the use of the vessel;

(B) $1.50 per passenger carried for hire; or

(C) Two times the moorage fee that would otherwise be assessed for a recreational vessel of the same size;

provided that if a permittee is using a vessel for commercial purposes from the vessel's permitted mooring, the fee required by this paragraph shall be in lieu of the moorage fee required by paragraph (1) for that vessel;

(6) The department is authorized to assess and collect utility fees, including but not limited to electrical and water charges, and common-area maintenance fees in state small boat harbors; and

(7) All fees established by appraisal pursuant to this subsection shall be set at fair market value.

(d) The department shall not renew or issue [a] any use permit to a person who is not the owner of the vessel [which] that is moored or [which] that the person desires to moor in a state small boat harbor. No use permit may be transferred unless specifically provided by law. Any individual who is an owner of a vessel used for commercial purposes, including commercial fishing as a principal means of livelihood, and who possesses a valid [mooring] commercial use permit [or commercial permit, or both,] in accordance with the rules adopted by the chairperson pursuant to chapter 91, may transfer ownership of the vessel from personal ownership to corporate or other business ownership without terminating the right to moor or operate the vessel under the commercial use permit [or permits]. [The] Any existing use permit or permits held by the transferring individual shall be reissued in the name of the transferee corporation or other business entity.

(e) [For the purposes of] As used in this section, "person" means any individual, firm, partnership, corporation, trust, association, joint venture, organization, institution, or any other legal entity, and "owner" includes the legal owner of a vessel where there is no security interest held by anyone on the vessel, a buyer under a purchase money security interest, a debtor under any security interest, a demise charterer of a vessel, or a lessee or charterer of a vessel under a lease or charter which provides the lessee or charterer with exclusive right to possession of the vessel to the exclusion of the lessor or the person from whom the vessel is chartered. "Controlled group" means parent-subsidiary corporations, brother-sister corporations, or constructive owner. "Transfer" includes any change in control, by whatever means, of any entity that owns or controls, directly or indirectly, a use permit. No permittee shall be allowed to moor a leased vessel in a berth unless the terms of the lease are set at fair market value. A "legal owner" includes a person who holds unencumbered title to a vessel or is a secured party under a security interest in the vessel. An owner who is issued a mooring permit [to moor a vessel in a state small boat harbor] shall notify the department in writing of a transfer of interest or possession in the vessel within seven days of transfer.

(f) Any person who owns an interest in a corporation or other business entity or is part of a controlled group possessing a valid commercial use permit issued by the department, in accordance with rules adopted by the chairperson pursuant to chapter 91, may transfer any or all stock or other interest to another person without terminating the right of the corporation or business entity to retain or renew its commercial use permit or any other use permit issued to it by the department; provided that:

(1) The corporation or business entity has been engaged in the same commercial vessel activity, as defined in section 200-9, for a minimum of one year;

(2) The seller shall pay the department a business transfer fee based on the passenger-carrying capacity of the vessels owned or operated by the corporation or business entity as provided by rules adopted by the chairperson pursuant to chapter 91, except for transfers of stock or interest in a corporation or other business entity between spouses or first-generation lineal descendants; and

(3) In the case of a controlled group, the transferee shall retain eighty per cent control of the transferor.

Any person possessing a commercial use permit shall be required to meet minimum revenue standards, as set forth in rules adopted by the department pursuant to chapter 91, as a condition of retaining or renewing the commercial use permit.

When an application for renewal of a commercial use permit is made at least sixty days prior to expiration of the commercial use permit, the department shall review the application and, within thirty days of receipt of the application, shall renew the commercial use permit or notify the applicant that the application is incomplete or cannot be renewed and explain any reasons for nonrenewal. Within thirty days of receipt of the applicant's amended application, the department shall either renew the commercial use permit or notify the applicant that the commercial use permit will not be renewed.

If the holder of a commercial use permit fails to timely [obtain renewal of a] renew a commercial use permit, the holder [of the permit shall automatically be granted a] may make a written request to the department for a one-time thirty-day extension from the date of the existing commercial use permit's expiration to obtain a commercial use permit renewal. Any such extension request shall be received by the department no later than the expiration date of the commercial use permit.

(g) The department may designate moorage space within state small boat harbors to accommodate commercial fishing vessels and transient vessels.

(h) Except as provided in section 200-37(l), all new commercial use permits issued for commercial ocean recreation activity occurring in an ocean recreation management area, as defined by law or rule, that are not renewals or reissuances of commercial use permits shall be issued by public auction.

[(h)] (i) All revenues from the foregoing operations shall be deposited in the boating special fund."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 3000.

Report Title:

Ocean Recreation Commercial Use Permits; ORMA; Public Auction

Description:

Specifies that the Department of Land and Natural Resources shall issue all new commercial use permits for commercial ocean recreation activity in an ORMA that are not renewals or reissuances by public auction. Revises provisions relating to boating and ocean recreation fees and permits. Effective 7/1/3000. (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.