SB634

SECTION 1. The legislature finds that three cities in Alaska have enacted marine passenger fees that are assessed for each cruise ship passenger arriving in the respective city. The fees assist in funding city projects that offset the impacts created by the cruise ship industry and enhance the tourism experience, such as improving port facilities and infrastructure, and mitigating the negative effects of natural disasters.

Juneau has imposed a $5 per passenger marine passenger fee since 1999. It also charges a $3 per passenger port development fee. In Haines, Alaska, the marine passenger fee is $9 per passenger, which will increase to $12 per passenger in 2027 and $13 in 2029. In Ketchikan, the marine passenger fee is currently $11 per passenger.

The legislature further finds that the imposition of cruise ship passenger fees by Alaskan cities has been litigated and determined by the United States District Court for the State of Alaska to be lawful. As long as the fees are used for services that are provided to the cruise ship, they do not violate the Tonnage Clause of the United States Constitution or the River and Harbors Appropriation Act of 1899. Examples of permissible fees and uses that the court discussed include wharfage from vessel owners for city-constructed wharves, quarantine fees to examine passengers at a quarantine station so that the ship could receive the necessary certification to proceed, construction of facilities that constitute a service to a vessel such as a gangplank, and services provided to a vessel entering a port, such as charges for regulation of harbor traffic, use of locks, and emergency services for vessels. Cruise Lines Int'l Ass'n Alaska v. City & Borough of Juneau, 356 F. Supp. 3d 831 (D. Alaska 2018).

The legislature also finds that, according to the Hawaii tourism authority, 149,980 visitors arrived in Hawaiʻi aboard seventy-seven out-of-state cruise ships for the period of January to November 2024. In 2023, there were 157,612 visitors who arrived on seventy-four cruise ships. These ships all stop at one or more state harbors.

Accordingly, the purpose of this Act is to establish:

(1) A cruise ship passenger fee of $10 per passenger of vessels sized to carry twenty-one or more passengers; and

(2) A cruise ship fee special fund, into which shall be deposited all collected fees for infrastructure projects benefiting cruise ships with an emphasis on climate change mitigation and adaptation.

SECTION 2. Chapter 266, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§266-A Cruise ship passenger fee. (a) It is the purpose of the fee imposed under this section to be utilized for infrastructure projects by the State that benefit cruise ships with an emphasis on climate change mitigation and adaptation projects.

(b) Beginning January 1, 2026, the department of transportation shall assess a fee of $10 per passenger per visit for every marine passenger ship not otherwise exempted. The fee shall be increased annually on January 1 based on the urban Hawaii consumer price index, or a successor index, for the twelve months prior, as calculated by the federal Department of Labor.

(c) The passenger fee for each ship shall be calculated based on the passenger manifest for the ship upon entry into any port within the State. Upon entry, the owner or authorized agent from each ship shall present the department of transportation with a passenger manifest.

(d) Passenger manifests obtained by the department of transportation under this section shall be kept confidential and shall not be subject to public inspection; provided that the following information shall be made available to the public:

(1) Names and owners of ships subject to the fee under this section;

(2) Number of passengers per ship;

(3) Names and owners of ships which have been issued an exemption certificate; and

(4) Names and owners of ships delinquent in the payment of fees, total amount outstanding, and date the fee accrued.

The department of transportation shall post on its website the public information updated on a monthly basis.

(e) The passenger fees shall be paid by the owner or agent of the ship to the state within sixty days from entry of the ship into any port within the State. Interest shall accrue at a rate of ten per cent per year on any fees not paid after sixty days.

(f) The fee shall not apply to:

(1) Ships having accommodations for twenty or fewer passengers;

(2) Ships without berths or overnight accommodations for passengers; or

(3) Noncommercial ships, ships operated by nonprofit entities as determined by the United States Internal Revenue Service, or ships operated by the State, the United States of America, or a foreign government.

The burden of proving an exemption shall be on the person claiming the exemption.

(g) Each owner or agent of a ship subject to payment of a fee under this section shall maintain and keep for a period of three years after the date of filing all of the passenger manifests, forms, supporting records, and other records prescribed by the manager by regulation. Upon the request of the department of transportation, the owner or agent of a marine passenger ship shall make available for examination in the State the books, records, and other documents of the ship.

(h) No ship delinquent in the payment of passenger fees, nor any vessel carrying passengers to or from the ship shall be allowed to moor at any port facility in the State.

(i) Any fees collected under this section shall be placed in the cruise ship passenger fee special fund.

(j) The department of transportation shall administer and enforce this section and may adopt rules pursuant to chapter 91.

(k) For the purposes of this section:

"Agent" and "authorized agent" mean the master or person in charge of the ship or any other person authorized by the owner or operator of the ship to act on behalf of the owner or operator with respect to the ship.

"Entry" into any port means anchoring or mooring and allowing passengers to disembark.

"Marine passenger" and "passenger" mean any person who has paid any amount for a ticket contract entitling that person to transportation aboard the ship. The term does not include the owner's or operator's employees or their immediate family members sharing their quarters; the owner's or operator's contractors or subcontractors; or musicians, artists, guest speakers, art auctioneers, interpreters, rangers or similar persons traveling without charge but providing passenger services for the owner or operator.

"Marine passenger ship" and "ship" mean a vessel carrying passengers for compensation.

"Person" means any individual, partnership, firm, association, joint stock company, corporation or combination of individuals of whatever form or character.

"Visit" means an entry into any port of the State more than twenty-four hours before or after another entry by the same ship, excluding visits for emergency purposes.

§266-B Cruise Ship Passenger Fee Special Fund. (a) There is established within the treasury of the State, a cruise ship passenger fee special fund, into which shall be deposited all moneys collected by the department of transportation from cruise ship passenger fees pursuant to section 266-A.

(b) Moneys in the fund may be used by the department of transportation for port infrastructure projects that benefit cruise ships with an emphasis on climate change mitigation and adaptation projects."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to be deposited into the cruise ship passenger fee special fund.

The sums appropriated shall be expended by the department of transportation for the purposes of this Act.

SECTION 4. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2025.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	634
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII