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Sunday, April 18, 2021
Is the Pacific Ocean now “ceded land?”
By Andrew Walden @ 11:46 PM :: 3055 Views :: OHA, Small Business, Taxes, Tourism

Is the Pacific Ocean now “ceded land?”

by Andrew Walden

As legislators make a big show of fighting over the unfinished OHA audit and limiting OHA’s legislative appropriation, a bill creating a new OHA revenue stream at the expense of small dive-tour businesses is quietly heading to conference committee.

Under HB1019 a $1 per-passenger fee could vacuum as much as $30.3M from dive-tour operators over the next 15 years, according to testimony from the University of Hawaii.  OHA’s cut could be as high as $6M.

HB1019 gives OHA 20% of all gross revenue from a new “ocean steward user fee” and from leases of state property and equipment used for aquatic resource management.  The new moneys would be deemed “ceded land revenues” whether they originate on ceded lands, other lands, or out in the open ocean.

The State Auditor reports HB1091 “does not satisfy criteria for establishing a special fund … it is unclear whether nexus or linkage exists between the revenue sources described in the bill and payment to OHA of 20% of all funds collected….”

Under COVID regulations, dive tour operators are allowed to book only 50% of a boat’s capacity.  They have been testifying against the bill.  Catherine Kessler of Dive Maui points out: 

“The commercial ocean recreation industry already pays a 3% (of gross revenues) user fee to DLNR.  While it is appropriate to allocate a portion of existing user fee to a special conservation fund, it is inappropriate to create a second, new user fee for this sector.  Additional fees to an already hard-hit industry during pandemic could be the tipping point for small businesses struggling to survive reduced capacity.”

Double dipping?

OHA already milks ceded lands money from commercial freight wharfage fees and from the small boat harbors where dive tour boats are docked.   

Will HB1091 make it out of conference?

The SD2 version of HB1019 was given a ‘defective’ date.  House conferees have been appointed but the Senate has not yet reciprocated. 

(UPDATE: Senate conferees were appointed Monday, April 19, 2021.)

(UPDATE: Conference Committee April 23, 2021, approves CD1 version of bill,  preserving OHA's 20% cut.  House and Senate approve bill April 27, 2021, with only Rep McDermott voting 'no'.  Bill now heads to Governor's desk.)

---30---

Background:

HB1019: Text, Status  “Establishes the ocean stewardship special fund and ocean stewardship user fee for the collection and use of moneys for the conservation, restoration, and enhancement of the State's marine resources. Sunsets the special fund on 6/30/2030. Delays collection of the ocean stewardship user fee until 1/1/2024. Effective 7/1/2050. (SD2)”

2021: AUDITOR’S REPORT NO. 21-04, PROPOSED SPECIAL AND REVOLVING FUND ANALYSES (see pg 50-51)

2019: Ala Wai Development Plan Serves OHA, not Boaters

2016: Harbors Division Fee Hike designed to boost $77M OHA Slush Fund?

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