Hawai‘i is set to implement a pioneering climate-impact fee for visitors, beginning in January, with expectations to generate approximately $100 million annually.
However, concerns have arisen regarding the allocation of these funds, and questions about the constitutionality of certain aspects of the act are currently being raised.
Act 96 introduces a ‘Green Fee,’ designed to bolster efforts against climate change by creating a reliable funding source aimed at environmental stewardship, hazard mitigation, and sustainable tourism.
Before any funds can be mobilized, the state and a newly formed advisory board need to outline a clear distribution process for the funds.
In parallel to these developments, cruise ship operators have filed a lawsuit asserting that the state’s new tax related to cruise ships may be unconstitutional.
Under Act 96, the transient accommodations tax (TAT) will increase by 0.75%, raising it to 11% for hotels and vacation rentals.
For the first time, the TAT will also apply to cruise ship stays at Hawaiʻi ports, a move that has drawn significant criticism.
Governor Josh Green characterized this initiative as a “generational commitment to protect Hawaiʻi’s future.”
He emphasized the importance of every dollar collected working diligently to safeguard the state’s natural and cultural treasures while also promoting shared responsibility among visitors regarding the stewardship of the islands.
To facilitate effective fund distribution, the Green Fee Advisory Council was established last month.
This 10-member council is tasked with creating criteria for project funding and evaluating proposals that utilize these resources.
The council is expected to generate a prioritized list of projects to recommend to the governor.
Meanwhile, the Green Administration plans to collaborate with the State Legislature in determining which initiatives receive funding as revenue becomes accessible.
It’s important to note that all final financial allocations and project approvals will ultimately rest with the legislature.
On September 24, the advisory council will host an introductory webinar at 10:30 a.m., detailing the council’s purpose, approach, and outlining the forthcoming process.
Janice Ikeda, the only council member representing Hawai‘i Island, serves as the founding CEO of the nonprofit Vibrant Hawaiʻi.
In a statement regarding the advisory council’s formation, the Office of the Governor noted that members were selected based on the key objectives of the legislation.
Organizations emblematic of these goals were evaluated, and selected individuals were approached for their willingness to serve in an advisory capacity without compensation.
Ikeda expressed the early stage of the process, indicating that she has yet to connect with fellow council members.
Her initial goal is to gain clarity on the fund distribution mechanisms and whether any amounts have already been designated for current projects.
In a separate development, Hawai‘i County Mayor Kimo Alameda expressed optimism regarding the capabilities of the Hawai‘i Green Fee Advisory Council to enhance transparency, inclusiveness, and expertise in managing the conservation funds.
Nevertheless, he raised concerns that the council could become bureaucratically bogged down or overly politicized if not structured properly.
Alameda is particularly interested in prioritizing funding for wastewater projects in Hawai’i County.
While only one representative is on the council from Hawai‘i Island, he expressed confidence in fair distribution owing to the strong relationship between the county and the governor.
However, Act 96 faces significant opposition from various cruise ship operators and tour companies, leading to a federal lawsuit aimed at blocking the newly implemented tax on cruise ships.
The lawsuit was filed by the Cruise Lines International Association, Inc., which contends that the new tax is unconstitutional.
The law controversially imposes an 11% surcharge on the gross fares paid by cruise ship passengers, prorated based on the duration of their stay in Hawai‘i ports.
The Cruise Lines International Association represents numerous cruise lines, such as Carnival Cruise Line and Disney Cruise Line, which frequently sail to Hawai‘i.
The lawsuit argues that financial burdens imposed by Act 96 could discourage visitors from choosing Hawai‘i as their destination, consequently impacting the state’s economy, which relies on nearly 300,000 annual cruise visitors contributing over $600 million each year.
The new tax also allows Hawai‘i counties to impose an additional 3% surcharge on cruise ship fares, creating logistical challenges for cruise ship operators.
The lawsuit makes clear the plaintiffs view the provisions of Act 96 related to cruise ships as exorbitant and potentially detrimental.
In discussing the implications of the tax, Mayor Alameda argued that it seems fair to apply a similar tax on cruise passengers as they utilize Hawai‘i’s natural resources just like other tourists—often with a more concentrated impact.
However, he noted the necessity for the tax to be implemented in a legally defensible manner that is clearly understood and viewed as equitable, particularly since many of these passengers are often not within U.S. jurisdiction during their cruise.
During a County Council meeting on September 2, Deputy Corporation Council Kira Wong detailed the lawsuit’s implications, indicating that the plaintiffs seek swift court action to declare Act 96’s provisions unconstitutional and prevent their enforcement.
The litigation could have a revealing impact on the memorandum of understanding (MOU) that facilitates the implementation of the transient accommodations tax.
The County Council deliberated on Resolution 288-25, authorizing the mayor to forge an intergovernmental agreement with other counties to streamline the TAT administration related to cruise ships docking in multiple locations on the same day.
The intent behind such an agreement would be to establish a standard approach for managing the TAT uniformly across the state.
Although there is ongoing litigation, Alameda hasn’t deemed it premature to discuss the MOU, provided it is approached as conditional preparation.
Council Member Ashley Kierkiewicz emphasized the need for Hawai‘i Island’s perspective to be adequately represented concerning the allocation of Green Fee funds.
She stressed the importance of utilizing this funding to address the underlying issues of over-tourism and its effects on the quality of life for local residents.
Kierkiewicz expressed a determination to ensure that the impact of tourism is tackled through this funding mechanism.
Additionally, Council Member Heather Kimball mentioned her engagement with consultants from the governor’s office, discussing potential district needs that might qualify for funding.
She advocated for continued local representation in efforts to soundly manage destination support needs.
At this time, it remains uncertain how the revenue collected under the new tax will be distributed among the various counties.
As the state gears up for the implementation of its first Green Fee, the interplay of environmental stewardship with tourism policies and financial implications remain areas of active dialogue and public interest.
image source from：bigislandnow
