Report Title:

Wharfage Fees; Local Ports; Exemption


Exempts interstate and intrastate shipping cargo from wharfage fees at intermediate ports within the State.


S.B. NO.









relating to wharfage fees.



SECTION 1. The legislature finds that domestic overseas or foreign cargo transshipped to the neighbor islands via Honolulu on through bills of lading are exempted from wharfage fees at the intermediate port. However, other domestic overseas or foreign cargo bound for the neighbor islands, which must be stored, repackaged, or processed in Honolulu before being shipped on to its ultimate destination, are subject to wharfage fees at the intermediate port, as is cargo shipped between neighbor islands.

The waiver of wharfage fees on transshipped cargo shipped on through bills of lading discriminates against local merchants and manufacturers who must store, repackage, or process the goods they ship in from domestic or foreign ports before shipping them to the neighbor islands. The additional wharfage fee makes it difficult for local merchants and manufacturers to compete with mainland concerns that can ship their goods on through bills of lading straight to the neighbor islands. As those local businesses are primarily Honolulu-based, the legislature believes that this exemption in wharfage charges by the State hurts the local economy.

Cargo shipped to the neighbor islands after a stop in Honolulu bears a disproportionately large share of the cost recovery intended to be accomplished by the wharfage fees, thus subsidizing cargo moved by interstate and foreign carriers. As noted above, under the current rules, a forty-foot container shipped on a through bill of lading to a neighbor island destination would be charged $129.60 in wharfage fees. That same container shipped and warehoused in Honolulu for a short period of time before moving on to the neighbor island would be assessed $l82 in wharfage fees, despite the fact that the usage of state facilities by both containers is exactly the same.

In order to provide equitable treatment to all users of the state wharves and more importantly, to promote local businesses in the State of Hawaii, wharfage fees at the intermediate port for both interstate and intrastate cargo destined for the neighbor islands should be eliminated.

SECTION 2. Section 266-17, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The department of transportation shall adjust, fix, and enforce the rates assessable and chargeable by it in respect to dockage, wharfage, demurrage, and other rates and fees pertaining to harbors, wharves, and properties managed and operated by it so as to produce from the rates and fees, in respect to all harbors, wharves, and other properties, except those that are principally used for recreation or the landing of fish, revenues sufficient to:

(1) Pay when due the principal of and interest on all bonds and other obligations for the payment of which the revenue is or has been pledged, charged, or otherwise encumbered, or which are otherwise payable from the revenue or from a special fund maintained or to be maintained from the revenue, including reserves therefor, and to maintain the special fund in an amount at least sufficient to pay when due all bonds or other revenue obligations and interest thereon, which are payable from the special fund, including reserves therefor;

(2) Provide for all expenses of operation and maintenance of the properties, including reserves therefor, and the expenses of the department in connection with operation and maintenance; and

(3) Reimburse the general fund of the State for all bond requirements for general obligation bonds which are or have been issued for harbor or wharf improvements, or to refund any of the improvement bonds, excluding bonds, the proceeds of which were or are to be expended for improvements which are or will be neither revenue producing nor connected in their use directly with revenue producing properties[.];

provided that cargo moved over state wharves through intermediate ports for both interstate and intrastate commerce shall be exempt from wharfage charges.

For the purpose of this section, "through intermediate ports" means in or out of the port of Honolulu, or from or to a neighbor island port."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.