A major trade group representing cruise lines from around the world is suing to stop key elements of Hawaiʻi’s landmark green fee, which will soon start charging their passengers for time spent in port to help the state combat environmental harm and climate change. 

The lawsuit, filed Wednesday in U.S. District Court by the Cruise Lines International Association, argues the new fee is unconstitutional. 

Specifically, it contends the green fee violates the U.S. Constitution’s Tonnage Clause and the Rivers and Harbors Act, which limit states’ abilities to charge vessels for docking in their ports and navigating their waters.

The suit looks to stop Hawaiʻi’s state and county officials from fully enforcing the fee, a first-of-its-kind approach in the U.S. to address growing climate-related concerns that Gov. Josh Green signed into law in May after finally winning support from key local hotel industry leaders.

However, it’s not clear what, if any, outreach Green or other lawmakers made toward the cruise line industry before adding its ship cabins to the green fee language so those rooms would be charged alongside hotel rooms and short-term rentals.

Starting next year, the transient-accommodations tax that visitors pay on their nightly hotel and short-term rental stays will increase by .75 percentage points to cover the new fee. 

The cruise ship passengers are to start paying the full visitor tax for the first time next year, which represents a new, 14 percentage point charge on those passengers’ stays in Hawaiʻi ports.

In a statement Thursday, Cruise Lines International said extending the Hawaiʻi visitor tax to its passengers threatens to disrupt an industry that brings around 300,000 visitors a year to Hawaiʻi, plus hurt local businesses that depend on their arrival.

Honolulu Ship Supply Co., which helps provision cruise ships when they’re in port on Oʻahu, along with tour companies on Kauaʻi and the Big Island that rely on cruise passenger business, joined the trade group’s suit.

Green’s office, meanwhile, has estimated the new fee will raise some $100 million annually toward projects that aim to address Hawaiʻi’s urgent environment needs plus bolster it against climate change and natural disasters. 

The office last week announced members of a Green Fee Advisory Council, which includes prominent local conservation and tourism leaders, to help decide where that money will go.

Green’s communications director, Makana McClellan, referred inquiries about the suit on Thursday to the state Attorney General’s Office. That office stated via email that it had just been served with the complaint and would reserve comment until it had a chance to review it.

Killing The Golden Goose?

The Constitution’s Tonnage Clause aims to keep states from interfering in interstate or foreign commerce. However, according to the Congressional record it doesn’t prevent the states from imposing other types of taxes on ships and vessels.

Meanwhile, the Rivers and Harbors Appropriation Act cited by Cruise Line International goes back to 1884. It barred any “non-federal interest” from imposing tolls or charges on “navigable waters” under authority of the U.S.

In its suit, Cruise Line International states that the cruise ships contribute more than $600 million a year and thousands of jobs to Hawaiʻi’s economy. The green fee charges, it said, will cause many passengers to sail elsewhere.

Green fee opponents and tourism leaders often raised the same, general concern before the law was passed — that increasing visitor taxes would result in fewer tourists in a tourism-dependent economy. 

However, some of the state’s top hotel executives came on board this year, saying the need for new funds to restore the fragile environment that attracts visitors to Hawaiʻi had become too great to ignore.

“We need the money to restore those beaches, to reconstruct them, to take care of invasive plants that are around our hotels and around residences,” Hawaiʻi Hotel Alliance President Jerry Gibson said at the bill-signing in May. “So we went from one end of the spectrum, you know, almost to the other.”

The .75 percentage point increase translates to roughly $3 extra on a $400 hotel stay. 

Green at a Civil Beat event earlier this year said a chance, early-morning encounter at the gym with a hotel executive helped him open a dialogue with that industry’s leaders to eventually get them on board.

The full 14 percentage point tax increase that the cruise line companies are facing next is far steeper. 

Meanwhile, the new Green Fee Advisory Council, chaired by longtime clean energy advocate Jeff Mikulina, is slated to hold an introductory public “webinar” on Sept. 24. Its 10 members will discuss the process going forward, according to a governor’s office press release, on selecting where the green fee proceeds will go.

Civil Beat’s coverage of climate change and the environment is supported by The Healy Foundation, the Marisla Fund of the Hawai‘i Community Foundation and the Frost Family Foundation.