THE SENATE

S.C.R. NO.

139

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 
   


SENATE CONCURRENT

RESOLUTION

 

requesting the department of transportation to reevaluate the use of the harbor special fund to fund improvements to accommodate the cruise industry and to explore and analyze alternative funding options.

 

WHEREAS, tourism is Hawaii's most important industry and efforts to attract more visitors to our islands are beneficial to the local economy; and

WHEREAS, the growth of the cruise industry within the State has aided the recovery of the State's visitor industry-based economy through increased visitor spending and the creation of local business and employment opportunities; and

WHEREAS, as the cruise industry grows and strengthens, the State's commitment to support it must also continue to develop; and

WHEREAS, in order to support the expansion of the cruise industry, the State must undertake extensive improvements statewide to accommodate cruise ship terminals; and

WHEREAS, the cost of improvements at eight locations--Honolulu, Kahului, Lahaina, Nawiliwili, Hilo, Kailua-Kona, Kikiaola, and Port Allen, are estimated to total in excess of $96,000,000 over a twenty-year period, and the cost of future improvements at Wailoa, Kawaihae, Kaunakakai, and Manele are estimated to total nearly $10,000,000; and

WHEREAS, the majority of these improvements are to be funded by the Harbor Special Fund; and

WHEREAS, the Harbor Special Fund is a fund utilized to pay for the costs of operation, maintenance, and repair of the statewide system of harbors and reserves, and acquisitions, constructions, additions, expansions, improvements, renewals, replacements, reconstruction, engineering, investigation, and planning, for the harbors; and

WHEREAS, the Harbor Special Fund is funded, in part, through the Department of Transportation's assessment of fees for dockage, wharfage, demurrage, and other rates and fees pertaining to harbors, wharves, and properties managed and operated by the Department of Transportation; and

WHEREAS, the Harbor Special Fund has been largely funded over the years by cargo carriers and not the cruise industry; and

WHEREAS, agreements with cruise lines are short-term obligations, generally for five-year terms; therefore, the investment of moneys from the Harbor Special Fund, into which the cruise industry has not largely contributed, may or may not support the substantial sums of moneys necessary to accommodate its presence within the State; and

WHEREAS, the considerable depletion of the Harbor Special Fund to fund improvements to accommodate the cruise industry will leave other non-tourism related harbor industries without the benefit of funding for improvements necessary for their operations; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-Second Legislature of the State of Hawaii, Regular Session of 2004, the House of Representatives concurring, that the Department of Transportation is requested to reexamine the use of the Harbor Special Fund to fund the necessary improvements to accommodate the cruise industry and explore alternative funding options; and

BE IT FURTHER RESOLVED that specifically, the Department of Transportation should consider, among other things, the following:

(1) The feasibility of implementing a rate structure for cruise ships commensurate with improvements being requested for the cruise industry;

(2) Limiting the use of the Harbor Special Fund for cruise ship improvements to the amount of the contributions of the cruise industry;

(3) The establishment of maximum monetary amounts that would be allowable to be spent upon the cruise industry improvements, in direct correlation to the amount of funds contributed to the Harbor Special Fund by the cruise industry;

(4) The feasibility of alternative funding options for the improvements, including but not limited to:

(A) Funding by cruise lines through their cash flow, guaranteed by agreement on the number of ship calls to port;

(B) Increases in passenger fees assessed by cruise lines for ports in Hawaii;

(C) Assessing transit accommodations tax and earmarking those funds for cruise ship terminal improvements;

(D) Utilization of private sources of capital; and

(E) Imposition of additional taxes on the cruise industry; and

BE IT FURTHER RESOLVED that the Department of Transportation is requested to submit a report of its findings and recommendations to the Legislature at least twenty days prior to the convening of the Regular Session of 2005; and

BE IT FURTHER RESOLVED that a certified copy of this Concurrent Resolution be transmitted to the Director of Transportation.

 

 

 

OFFERED BY:

_____________________________

Report Title:

DOT; Harbor Special Fund; Improvements for the Cruise Industry