{"id":11752,"date":"2019-08-31T01:28:06","date_gmt":"2019-08-31T01:28:06","guid":{"rendered":"https:\/\/www.environment-hawaii.org\/?p=11752"},"modified":"2020-03-04T19:08:22","modified_gmt":"2020-03-04T19:08:22","slug":"board-talk-cont-cruise-ship-fee-hikes-go-to-public-hearings","status":"publish","type":"post","link":"https:\/\/environment-hawaii.org\/?p=11752","title":{"rendered":"Board Talk Cont.: Cruise Ship Fee Hikes Go To Public Hearings"},"content":{"rendered":"\n
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Pride of America Credit: Wikipedia<\/figcaption><\/figure><\/div>\n\n\n\n

On June 14, the Land Board voted to increase mooring fees for the state’s small boat harbors. The vote was not unanimous and was made after the board rejected a contested case hearing request from members of the public.<\/p>\n\n\n\n

Increases in cruise ship passenger fees were initially included in the rules package approved that day, but at the request of the Department of Land and Natural Resources\u2019 Division of Boating and Ocean Recreation, that section was removed to allow the agency to work with stakeholders and make revisions, according to an August 23 report to theLand Board.<\/p>\n\n\n\n

Last month, DOBOR requested that the board approve taking the amendments to rules on cruise ship fees out to public hearings. \u201cWe have been told by [the attorney general\u2019s office], we cannot charge a ship a different fee based on its flag,\u201d division administrator Ed Underwood told the board.<\/p>\n\n\n\n

Under the current rules, DOBOR has charged foreign vessels $1.00 per passenger for each leg of an inter-island trip (specifically to the Kailua-Kona or Lahaina small boat harbors), compared to only 30 cents per passenger for domestic vessels. That works out to 60 cents for passengers on domestic vessels versus $2.00 for those on foreign-flagged vessels that stop at those two harbors on inter-island cruises.<\/p>\n\n\n\n

The proposed rules would charge foreign and domestic vessels the same, but higher rates: $3 per passenger at Lahaina, and $2 per passenger at Kailua-Kona and all other small boat harbors.<\/p>\n\n\n\n

In written testimony to the board, Charles Toguchi, the Hawai\u2018i representative for the Cruise Lines International Association-Alaska, stated that the proposed rules would significantly increase the passenger fees for Norwegian Cruise Line\u2019s Pride of America, which is the only large domestic cruise line in Hawai\u2018i.<\/p>\n\n\n\n

\u201c[T]he proposed per passenger per day fee increases 400 percent ($.60 to $3.00) in Lahaina and 233 percent ($.60 to $2.00)in Kailua-Kona. For \u2018foreign flagged\u2019 cruise lines, the proposed passenger per day fee increases 50 percent in Lahaina and there are no proposed increases in Kailua-Kona,\u201d he wrote.<\/p>\n\n\n\n

While the association did not object to the proposed fee amounts, it did want more lead time to work those fee increases into its passenger charges. Toguchi asked the board to delay implementation of the fees, should they eventually be adopted, for 18 months.<\/p>\n\n\n\n

\u201cCruise packages that have already been sold for the next two years do not include proposed fee increases. The immediate implementation of the fee increase proposal will mean a passenger fee deficit of approximately $700,000 at Lahaina and Kona during the next two years, which will have to be paid for by the cruise lines,\u201d Toguchi wrote.<\/p>\n\n\n\n

DOBOR\u2019s Underwood countered that his division is already operating at a $300,000\/year loss with regard to the services (primarily traffic control) that it provides to the cruise lines at those harbors.<\/p>\n\n\n\n

Some board members weren\u2019t very sympathetic to Toguchi\u2019s arguments.<\/p>\n\n\n\n

\u201cIf we ever implement an increase, unless we find a way to tell them two years in advance, this is going to come up. … It\u2019snot unusual for a business to sell something to someone and have incidental costs go up,\u201d Chris Yuen said.<\/p>\n\n\n\n

\u201cThat they have to absorb,\u201d board member Sam Gon added.<\/p>\n\n\n\n

Board chair Suzanne Case also pointedout that the cruise ship industry is anticipating increased visitors to Hawai\u2018i, which means that DOBOR will be operating at an even greater deficit while the industry takes in more money.<\/p>\n\n\n\n

\u201cAt the same time you\u2019re bringing in more tourists, you\u2019re making more money off those tourists, and we\u2019re losing money off those tourists. … Your revenues are going up and our expenses are going up,\u201d she told Toguchi.<\/p>\n\n\n\n

When Toguchi suggested that the division would immediately make up for its losses once the rules are implemented,Case countered, \u201cWe\u2019re required bylaw to charge not more than what we\u2019re spending for those services. … We\u2019re always going to be at or below. So even if we make more money, we\u2019re either still losing money or just breaking even.\u201d<\/p>\n\n\n\n

\u201cOnly before a brief period,\u201d Toguchi replied.<\/p>\n\n\n\n

Board member Stanley Roehrig was sympathetic to Toguchi\u2019s arguments.<\/p>\n\n\n\n

\u201cThis is going to affect all of the tourists who come from all over the world. If we don\u2019t do this right and we try to jam it, we\u2019re going to have ten times the problems [the board had with the mooring fee increases],\u201d he said.<\/p>\n\n\n\n

He agreed with Case that DOBOR shouldn\u2019t be eating some of the costs of serving the cruise lines, but recommended that some experts be employed to help craft a solution.<\/p>\n\n\n\n

\u201cMaybe next year, nobody is going to come to Hilo,\u201d he said. Even though the fees only really affect the Lahaina and Kailua-Kona small boat harbors, Roehrig said the fee increases affect the industry as a whole, filtering down to other harbors, tour companies, stores, etc.<\/p>\n\n\n\n

Case said the problem with consenting to a delay or to a phase-in of the fee increases is the legal requirement that foreign and domestic vessels be charged the same rate. \u201cI\u2019m not sure there is a way to phase it in and still charge the same rate,\u201d she said.<\/p>\n\n\n\n

Gon reminded Toguchi that the board was only being asked to allow the proposed rule amendments to go out to public hearings. \u201cThe details on how we implement this thing are in the future,\u201d he said.<\/p>\n\n\n\n

Yuen added that it could theoretically take about 18 months to hold public hearings, bring the rules back to the board for approval, and to get the governor\u2019s signature.<\/p>\n\n\n\n

\u201cRulemakings have taken a lot longer than that,\u201d he said, adding, \u201cIf we delay this 18 months and it saves Norwegian $300,000, it costs our boating division $300,000. There\u2019s no way around it.\u201d<\/p>\n\n\n\n

\u201cIt seems to me, Norwegian Cruise Lines has been the beneficiary of the lower rate. … They\u2019ve had quite a benefitfrom that for all these years and we\u2019re talking about following the law. There\u2019s no dispute from anybody the difference in rates violates the commerce clause [of the U.S. Constitution],\u201d he said.<\/p>\n\n\n\n

To address concerns expressed by Roehrig, Yuen moved to approve DOBOR\u2019s request on the condition that the attorney general\u2019s office provide the board with anopinion, not necessarily formal, prior to adoption of the rules, as to whether the commerce clause requires equal fares to be charged to different carriers.<\/p>\n\n\n\n

The board unanimously approved the motion.<\/p>\n\n\n\n

Before the vote, Yuen repeated his belief that it will likely take a while, \u201cmaybe the entire 18 months.\u201d He added that if the majority of the board wants to delay the implementation of the rules after they\u2019ve gone to public hearings, \u201call the board has to do is move to defer action for six months and then you\u2019ve added six months.\u201d \u2014 Teresa Dawson<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

On June 14, the Land Board voted to increase mooring fees for the state’s small boat harbors. The vote was not unanimous and was made after the board rejected a contested case hearing request from members of the public. Increases … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":11753,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,458],"tags":[3],"class_list":["post-11752","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-board-talk","category-september-2019","tag-teresa-dawson"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/11752","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11752"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/11752\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/11753"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}