STAND. COM. REP. NO. 2154-26

Honolulu, Hawaii

, 2026

RE: S.B. No. 2698

S.D. 2

H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

Your Committee on Finance, to which was referred S.B. No. 2698, S.D. 2, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TRANSPORTATION,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Require the Department of Transportation to assess a per-passenger fee against cruise ships docking in the State's commercial harbors in addition to existing port user fees;

(2) Establish the Cruise Ship Special Fund, to be funded in part by per-passenger fee revenues, to be used solely for port facility and capital improvement projects to support authorized cruise ship operations;

(3) Repeal existing law imposing the Transient Accommodations Tax on cruise ships; and

(4) Appropriate funds to implement this measure.

Your Committee received testimony in support of this measure from the Department of Transportation; The Maritime Group; McCabe, Hamilton & Renny Co., Ltd.; Matson Navigation Company, Inc.; MC&A, Inc.; Hawaii Tour Consultants; Kilohana Plantation; Hawaiʻi Harbors Users Group; Norwegian Cruise Line Holdings Ltd.; American Institute of Architects, Hawaiʻi State Council; and Polynesian Adventure Tours. Your Committee received testimony in opposition to this measure from the Care for ʻĀina Now Coalition; The Nature Conservancy Hawaiʻi and Palmyra; and Kupu. Your Committee received comments on this measure from the Department of Taxation; Hawaiʻi Tourism Authority; Maui Chamber of Commerce; and Tax Foundation of Hawaii.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2698, S.D. 2, H.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,

____________________________

CHRIS TODD, Chair