STAND. COM. REP. NO. 1751

Honolulu, Hawaii

RE: H.B. No. 24

H.D. 1

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred H.B. No. 24, H.D. 1, S.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 clarify that a common water carrier may enter into vessel leases longer than five years or enter into leverage leases for vessels upon prior approval of the Public Utilities Commission (PUC).

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

Your Committee finds that the ability for residents and business to move goods between the islands at affordable rates is critical to the neighbor island communities' economic well-being, as they are reliant on the interisland cargo services that water common carriers provide. Long-term leases and leverage lease agreements impact and add to a water common carriers' costs, which in turn, are a component of the rates that water common carriers impose on residents and businesses. Under existing law, a water common carrier must receive approval from the PUC before entering into a long-term lease of more than three years or a leverage lease. However, the approval process can impede a water common carrier's ability to timely secure needed equipment or property. This measure would narrow the scope of the types of leases that require PUC approval, thus streamlining necessary business processes for water common carriers.

Your Committee has amended this measure by 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 Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 24, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 24, H.D. 1, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

________________________________

JARRETT KEOHOKALOLE, Chair