STAND. COM. REP. NO. 1400

Honolulu, Hawaii

RE: H.B. No. 24

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Transportation and Culture and the Arts, to which was referred H.B. No. 24, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO WATER COMMON CARRIERS,"

begs leave to report as follows:

The purpose and intent of this measure is to remove the requirement that water common carriers secure prior approval of the Public Utilities Commission to enter into long-term leases of more than three years and leverage leases.

Your Committee received testimony in support of this measure from Hawaii Harbor Users Group; Matson Navigation Company, Inc.; and Young Brothers, LLC. Your Committee received testimony in opposition to this measure from the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs. Your Committee received comments on this measure from the Public Utilities Commission.

Your Committee finds that as an island state, Hawaii relies on commercial harbors and water common carriers to ensure the continued and unimpeded flow of cargo throughout the State. Over ninety percent of goods in the State are imported, including fuel, food, goods, construction materials, and motor vehicles. While the current regulatory framework provides safeguards to water common carrier operations, certain requirements may impede the timely flow of goods in the State. This measure improves regulatory efficiency for water common carriers while also ensuring an uninterrupted supply chain in the State.

Your Committee has amended this measure by:

(1) Clarifying that a water common carrier, upon prior approval of the Public Utilities Commission, may:

(A) Enter into vessel leases longer than five years; or

(B) Enter into leverage leases for vessels;

(2) Clarifying the definitions of "property" and "facilities" to prohibit water common carriers from entering into vessel leases longer than five years or enter into leverage leases for vessels to acquire property or to construct, complete, extend, improve, or add to its facilities or service;

(3) Clarifying that any vessel leases longer than five years and all leverage leases for vessels without an authorizing order of the Public Utilities Commission shall be deemed void; and

(4) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Transportation and Culture and the Arts that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 24, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 24, H.D. 1, S.D. 1, and be referred to your Committee on Commerce and Consumer Protection.

Respectfully submitted on behalf of the members of the Committee on Transportation and Culture and the Arts,

________________________________

CHRIS LEE, Chair