HB 914: RELATING TO WATER CARRIERS.

A BILL FOR AN ACT

RELATING TO WATER CARRIERS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Chapter 271G, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§271G-     Automatic adjustment mechanisms; water carrier inflationary cost index automatic adjustment mechanism.  (a)  No later than January 1, 2026, for each water carrier subject to this chapter, the commission may establish automatic adjustment mechanisms to address, among other things, inflation and regulatory lag and, at a minimum, a water carrier inflationary cost index automatic adjustment mechanism.  The water carrier inflationary cost index automatic adjustment mechanism shall create an automatic rate adjustment that is tied to the annual per cent change in the      Index as reported by the Bureau of Economic Analysis.

     (b)  The water carrier inflationary cost index automatic adjustment mechanism shall:

     (1)  Be applied on an annual basis, regardless of whether the factor is a positive or negative per cent change; and

     (2)  Be capped at plus or minus five per cent per year."

     SECTION 2.  Section 271G-5, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

     ""Automatic adjustment mechanism" means any rate adjustment mechanism that allows a water carrier to change rates between rate cases."

     SECTION 3.  Section 271G-17, Hawaii Revised Statutes, is amended to read as follows:

     "§271G-17  Tariffs of water carriers.  (a)  Every water carrier shall file with the [public utilities] commission, and print, and keep open to public inspection, tariffs showing all the rates, fares, and charges for transportation, and all services in connection therewith, of passengers or property.  The rates, fares, and charges shall be stated in terms of lawful money of the United States.  The tariffs required by this section shall be published, filed, and posted in [such] that form and manner, and shall contain [such] information as the commission by regulations shall prescribe[; and the].  The commission may reject any tariff filed with it [which] that is not in consonance with this section and with the regulations.  Any tariff so rejected by the commission shall be void and its use shall be unlawful.

     (b)  No change shall be made in any rate, fare, charge, or classification, or any rule, regulation, or practice affecting the rate, fare, charge, or classification, or the value of the service thereunder, specified in any effective tariff of a water carrier, except after forty-five days' notice of the proposed change filed and posted in accordance with subsection (a); provided that changes to [a fuel] an automatic adjustment mechanism surcharge approved by the commission may be made after thirty days' notice of the proposed change filed and posted in accordance with subsection (a).  The notice shall plainly state the change proposed to be made and the time when it will take effect.  The commission may in its discretion and for good cause shown allow the change upon notice less than that herein specified or modify the requirements of this section with respect to posting and filing of tariffs either in particular instances or by general order applicable to special or peculiar circumstances or conditions.

     (c)  No water carrier shall engage in the transportation of passengers or property unless the rates, fares, and charges upon which the same are transported by the carrier have been filed and published in accordance with this chapter.

     (d)  Whenever there is filed with the commission any schedule stating a new rate, fare, or charge, for the transportation of passengers or property by a water carrier or any rule, regulation, or practice affecting [such] the rate, fare, or charge, or the value of the service thereunder, the carrier may on its own initiative, or shall by order of the commission served prior to the effective date of the schedule, concurrently file a pro forma statement of account, which shall be prepared under the same form and in the same manner as prescribed by the commission's uniform system of accounts.

     The commission may upon complaint of any interested person or upon its own initiative at once and, if it so orders, without answer or other formal pleading by the interested carrier or carriers, but upon reasonable notice, enter upon a hearing concerning the lawfulness of the rate, fare, or charge, or the rule, regulation, or practice, and pending the hearing and the decision thereon the commission, by delivering to the carrier or carriers affected thereby a statement in writing of its reasons therefor, may suspend the operation of the schedule and defer the use of the rate, fare, or charge, or the rule, regulation, or practice.  From the date of ordering a hearing to investigate the lawfulness of the rate, fare, or charge, the commission shall have up to six months to complete its investigation.  If the commission fails to issue a final order within the six-month period then the changes proposed by the carrier shall go into effect.  At any hearing involving a change in a rate, fare, charge, or classification, or in a rule, regulation, or practice, the burden of proof shall be upon the carrier to show that the proposed changed rate, fare, charge, classification, rule, regulation, or practice, is just and reasonable.

     (e)  When a rate increase application is filed, the commission may in its discretion and after public notice, and upon showing by a water carrier of probable entitlement and financial need, authorize temporary increases in rates, fares, and charges; provided that the commission shall by order require the carrier to keep accurate account in detail of all amounts received by reason of [such] the increase, specifying by whom and in whose behalf [such] the amounts are paid, and upon completion of the hearing and decision by further order require the interested carrier to refund, with interest, to the persons in whose behalf [such] the amounts were paid, [such] the portion of [such] the increased rates or charges by its decision shall be found not justified.  The interest to be paid shall be the rate of return authorized in the last general rate case proceedings.

     (f)  Notwithstanding subsections (a) to (e), any request to establish an automatic adjustment mechanism made by a water carrier shall be submitted as a forty‑five-day tariff transmittal filing, and the filing shall not constitute a rate increase application or request for a general rate increase.  The commission shall have broad discretion in its application of any aspect of this section or its applicable rules as it may relate to any request to establish or modify any automatic adjustment mechanism made by a water carrier.

     (g)  Notwithstanding any provision of this chapter or any law, decision, order, or rule to the contrary, the commission, sua sponte or upon the application of a water carrier, may waive or exempt a water carrier from any or all requirements of this chapter or any applicable decision, order, rule, or other law upon a determination or demonstration that any requirement or requirements should not be applied to water carriers or are otherwise unjust, unreasonable, or not in the public interest."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 3000.

Report Title:

PUC; Water Carriers; Tariffs; Water Carrier Inflationary Cost Index Mechanism; Automatic Adjustment Mechanism; Rate Adjustments

Description:

Authorizes the Public Utilities Commission to establish automatic adjustment mechanisms.  Authorizes the Public Utilities Commission to grant exemptions to any water carrier from any requirement under the Hawaii Water Carrier Act.  Effective 7/1/3000.  (HD2)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO WATER CARRIERS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Chapter 271G, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§271G-     Water carrier inflationary cost index mechanism.  (a)  No later than January 1, 2026, for each water carrier subject to this chapter, the commission shall establish automatic adjustment mechanisms to address, among other things, inflation and regulatory lag and, at a minimum, a water carrier inflationary cost index automatic adjustment mechanism.  The water carrier inflationary cost index automatic adjustment mechanism shall create an automatic rate adjustment that is tied to the annual per cent change in the Gross Domestic Product Price Index as reported by the Bureau of Economic Analysis.

     (b)  The water carrier inflationary cost index automatic adjustment mechanism shall:

     (1)  Be applied on an annual basis, regardless of whether the factor is a positive or negative per cent change; and

     (2)  Be capped at plus or minus five per cent per year."

     SECTION 2.  Section 271G-5, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

     ""Automatic adjustment mechanism" means any rate adjustment mechanism that allows a water carrier to change rates between rate cases."

     SECTION 3.  Section 271G-17, Hawaii Revised Statutes, is amended to read as follows:

     "§271G-17  Tariffs of water carriers.  (a)  Every water carrier shall file with the [public utilities] commission, and print, and keep open to public inspection, tariffs showing all the rates, fares, and charges for transportation, and all services in connection therewith, of passengers or property.  The rates, fares, and charges shall be stated in terms of lawful money of the United States.  The tariffs required by this section shall be published, filed, and posted in [such] that form and manner, and shall contain [such] information as the commission by regulations shall prescribe[; and the].  The commission may reject any tariff filed with it [which] that is not in consonance with this section and with the regulations.  Any tariff so rejected by the commission shall be void and its use shall be unlawful.

     (b)  No change shall be made in any rate, fare, charge, or classification, or any rule, regulation, or practice affecting the rate, fare, charge, or classification, or the value of the service thereunder, specified in any effective tariff of a water carrier, except after forty-five days' notice of the proposed change filed and posted in accordance with subsection (a); provided that changes to [a fuel] an automatic adjustment mechanism surcharge approved by the commission may be made after thirty days' notice of the proposed change filed and posted in accordance with subsection (a).  The notice shall plainly state the change proposed to be made and the time when it will take effect.  The commission may in its discretion and for good cause shown allow the change upon notice less than that herein specified or modify the requirements of this section with respect to posting and filing of tariffs either in particular instances or by general order applicable to special or peculiar circumstances or conditions.

     (c)  No water carrier shall engage in the transportation of passengers or property unless the rates, fares, and charges upon which the same are transported by the carrier have been filed and published in accordance with this chapter.

     (d)  Whenever there is filed with the commission any schedule stating a new rate, fare, or charge, for the transportation of passengers or property by a water carrier or any rule, regulation, or practice affecting [such] the rate, fare, or charge, or the value of the service thereunder, the carrier may on its own initiative, or shall by order of the commission served prior to the effective date of the schedule, concurrently file a pro forma statement of account, which shall be prepared under the same form and in the same manner as prescribed by the commission's uniform system of accounts.

     The commission may upon complaint of any interested person or upon its own initiative at once and, if it so orders, without answer or other formal pleading by the interested carrier or carriers, but upon reasonable notice, enter upon a hearing concerning the lawfulness of the rate, fare, or charge, or the rule, regulation, or practice, and pending the hearing and the decision thereon the commission, by delivering to the carrier or carriers affected thereby a statement in writing of its reasons therefor, may suspend the operation of the schedule and defer the use of the rate, fare, or charge, or the rule, regulation, or practice.  From the date of ordering a hearing to investigate the lawfulness of the rate, fare, or charge, the commission shall have up to six months to complete its investigation.  If the commission fails to issue a final order within the six-month period then the changes proposed by the carrier shall go into effect.  At any hearing involving a change in a rate, fare, charge, or classification, or in a rule, regulation, or practice, the burden of proof shall be upon the carrier to show that the proposed changed rate, fare, charge, classification, rule, regulation, or practice, is just and reasonable.

     (e)  When a rate increase application is filed, the commission may in its discretion and after public notice, and upon showing by a water carrier of probable entitlement and financial need, authorize temporary increases in rates, fares, and charges; provided that the commission shall by order require the carrier to keep accurate account in detail of all amounts received by reason of [such] the increase, specifying by whom and in whose behalf [such] the amounts are paid, and upon completion of the hearing and decision by further order require the interested carrier to refund, with interest, to the persons in whose behalf [such] the amounts were paid, [such] the portion of [such] the increased rates or charges by its decision shall be found not justified.  The interest to be paid shall be the rate of return authorized in the last general rate case proceedings.

     (f)  Notwithstanding the preceding provisions of this section, any request to establish an automatic adjustment mechanism made by a water carrier shall be submitted as a forty‑five-day tariff transmittal filing, and the filing shall not constitute a rate increase application or request for a general rate increase.  The commission shall have broad discretion in its application of any aspect of this section or its applicable rules as it may relate to any request to establish or modify any automatic adjustment mechanism made by a water carrier.

     (g)  Notwithstanding any provision of this chapter or any law, decision, order, or rule to the contrary, the commission, sua sponte or upon the application of a water carrier, may waive or exempt a water carrier from any or all requirements of this chapter or any applicable decision, order, rule, or other law upon a determination or demonstration that any requirement or requirements should not be applied to water carriers or are otherwise unjust, unreasonable, or not in the public interest."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 3000.

Report Title:

PUC; Water Carriers; Tariffs; Water Carrier Inflationary Cost Index Mechanism; Rate Adjustments

Description:

Requires the Public Utilities Commission to establish automatic adjustment mechanisms.  Authorizes the Public Utilities Commission to grant exemptions to any water carrier from any requirement under the Hawaii Water Carrier Act.  Effective 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

relating to water carriers.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Chapter 271G, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§271G-    Water carrier inflationary cost index mechanism.  (a)  On or before January 1, 2026, for each water carrier subject to this chapter, the commission shall establish automatic adjustment mechanisms to address, among other things, inflation and regulatory lag and, at a minimum, a water carrier inflationary cost index automatic adjustment mechanism.  The water carrier inflationary cost index automatic adjustment mechanism shall create an automatic rate adjustment that is tied to the annual per cent change in the Gross Domestic Product Price Index as reported by the Bureau of Economic Analysis of the United States Department of Commerce.

     (b)  The water carrier inflationary cost index automatic adjustment mechanism shall:

     (1)  Be applied on an annual basis, regardless of whether the factor is a positive or negative per cent change; and

     (2)  Be capped at plus or minus five per cent per year."

     SECTION 2.  Section 271G-5, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

     ""Automatic adjustment mechanism" means any rate adjustment mechanism that allows a water carrier to change rates between rate cases."

     SECTION 3.  Section 271G-17, Hawaii Revised Statutes, is amended to read as follows:

     "§271G-17  Tariffs of water carriers.  (a)  Every water carrier shall file with the public utilities commission, and print, and keep open to public inspection, tariffs showing all the rates, fares, and charges for transportation, and all services in connection therewith, of passengers or property.  The rates, fares, and charges shall be stated in terms of lawful money of the United States.  The tariffs required by this section shall be published, filed, and posted in [such] that form and manner, and shall contain [such] information as the commission by regulations shall prescribe; and the commission may reject any tariff filed with it which is not in consonance with this section and with the regulations.  Any tariff so rejected by the commission shall be void and its use shall be unlawful.

     (b)  No change shall be made in any rate, fare, charge, or classification, or any rule, regulation, or practice affecting the rate, fare, charge, or classification, or the value of the service thereunder, specified in any effective tariff of a water carrier, except after forty-five days' notice of the proposed change filed and posted in accordance with subsection (a); provided that changes to [a fuel] an automatic adjustment mechanism surcharge approved by the commission may be made after thirty days' notice of the proposed change filed and posted in accordance with subsection (a).  The notice shall plainly state the change proposed to be made and the time when it will take effect.  The commission may in its discretion and for good cause shown allow the change upon notice less than that herein specified or modify the requirements of this section with respect to posting and filing of tariffs either in particular instances or by general order applicable to special or peculiar circumstances or conditions.

     (c)  No water carrier shall engage in the transportation of passengers or property unless the rates, fares, and charges upon which the same are transported by the carrier have been filed and published in accordance with this chapter.

     (d)  Whenever there is filed with the commission any schedule stating a new rate, fare, or charge, for the transportation of passengers or property by a water carrier or any rule, regulation, or practice affecting [such] the rate, fare, or charge, or the value of the service thereunder, the carrier may on its own initiative, or shall by order of the commission served prior to the effective date of the schedule, concurrently file a pro forma statement of account which shall be prepared under the same form and in the same manner as prescribed by the commission's uniform system of accounts.

     The commission may upon complaint of any interested person or upon its own initiative at once and, if it so orders, without answer or other formal pleading by the interested carrier or carriers, but upon reasonable notice, enter upon a hearing concerning the lawfulness of the rate, fare, or charge, or the rule, regulation, or practice, and pending the hearing and the decision thereon the commission, by delivering to the carrier or carriers affected thereby a statement in writing of its reasons therefor, may suspend the operation of the schedule and defer the use of the rate, fare, or charge, or the rule, regulation, or practice.  From the date of ordering a hearing to investigate the lawfulness of the rate, fare, or charge, the commission shall have up to six months to complete its investigation.  If the commission fails to issue a final order within the six-month period then the changes proposed by the carrier shall go into effect.  At any hearing involving a change in a rate, fare, charge, or classification, or in a rule, regulation, or practice, the burden of proof shall be upon the carrier to show that the proposed changed rate, fare, charge, classification, rule, regulation, or practice, is just and reasonable.

     (e)  When a rate increase application is filed, the commission may in its discretion and after public notice, and upon showing by a water carrier of probable entitlement and financial need, authorize temporary increases in rates, fares, and charges; provided that the commission shall by order require the carrier to keep accurate account in detail of all amounts received by reason of [such] the increase, specifying by whom and in whose behalf [such] the amounts are paid, and upon completion of the hearing and decision by further order require the interested carrier to refund, with interest, to the persons in whose behalf [such] the amounts were paid, [such] the portion of [such] the increased rates or charges by its decision shall be found not justified.  The interest to be paid shall be the rate of return authorized in the last general rate case proceedings.

     (f)  Notwithstanding the preceding provisions of this section, any request to establish an automatic adjustment mechanism made by a water carrier shall be submitted as a forty‑five-day tariff transmittal filing, and the filing shall not constitute a rate increase application or request for a general rate increase.  The commission shall have broad discretion in its application of any aspect of this section or its applicable rules as it may relate to any request to establish or modify any automatic adjustment mechanism made by a water carrier.

     (g)  Notwithstanding any provision of this chapter or any law, decision, order, or rule to the contrary, the commission, sua sponte or upon the application of a water carrier, may waive or exempt a water carrier from any or all requirements of this chapter or any applicable decision, order, rule, or other law upon a determination or demonstration that any requirement or requirements should not be applied to water carriers or are otherwise unjust, unreasonable, or not in the public interest."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

Report Title:

PUC; Water Carriers; Tariffs; Water Carrier Inflationary Cost Index Mechanism; Rate Adjustments

Description:

Establishes a Water Carrier Inflationary Cost Index Mechanism.  Authorizes the Public Utilities Commission to grant exemptions to any water carrier from any requirement under the Hawaii Water Carrier Act.  Defines "automatic adjustment mechanism". 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO.  678

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 914

      H.D. 2

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 914, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO WATER CARRIERS,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Require the Public Utilities Commission to establish an automatic adjustment mechanism, including a water carrier inflation cost index automatic adjustment mechanism; and

     (2)  Authorize the Public Utilities Commission to waive or exempt a water carrier from the Hawaii Water Carrier Act.

     Your Committee received testimony in support of this measure from the Department of Transportation; Matson Navigation Company, Inc.; and Hawai‘i Harbors Users Group.  Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs; Department of Agriculture; and Public Utilities Commission.

     Your Committee finds that water carriers engage in the transportation of persons or property by water.  These carriers play a crucial role in sustaining each island's economy and community by, among other things, moving essential goods between islands.

     Your Committee further finds that water carriers are not immune from existing inflationary pressures.  While cargo volumes for these carriers have stagnated, the costs of operation have increased, leading to an ongoing struggle to establish and maintain financial sustainability.  This is further exacerbated by the regulatory lag to address increasing costs.  This measure authorizes the Public Utilities Commission to develop a mechanism that will flexibly address the increasing costs of these much-needed carriers.

     Your Committee notes that there currently is a docket regarding an automatic adjustment mechanism under consideration by the Public Utilities Commission and that this measure may not be necessary.

     Your Committee has amended this measure by:

     (1)  Authorizing, rather than requiring, the Public Utilities Commission to establish automatic adjustment mechanisms;

     (2)  Removing the reference to the Gross Domestic Product Price Index and inserting an unspecified index; and

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     Your Committee respectfully requests your Committee on Finance, should it deliberate on this measure, to consider alternative indexes other than the national Gross Domestic Product Price Index to tie to the automatic adjustment mechanism provided for in this measure.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 914, H.D. 1, as amended herein, and recommends that it be referred to your Committee on Finance in the form attached hereto as H.B. No. 914, H.D. 2.

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

STAND. COM. REP. NO.  163

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 914

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Transportation, to which was referred H.B. No. 914 entitled:

"A BILL FOR AN ACT RELATING TO WATER CARRIERS,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Require the Public Utilities Commission to establish an automatic adjustment mechanism, including a water carrier inflation cost index automatic adjustment mechanism; and

     (2)  Authorize the Public Utilities Commission to waive or exempt a water carrier from the Hawaii Water Carrier Act.

     Your Committee received testimony in support of this measure from the Department of Transportation; Office of the Mayor of the County of Kauaʻi; Matson Navigation Company, Inc.; Young Brothers, LLC; Hawaiʻi Harbors Users Group; and Lanai Oil Company, Inc.  Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs and Public Utilities Commission.

     Your Committee finds that water carriers in Hawaii face significant challenges due to inflation and regulatory lag, which hinder their ability to maintain efficient and affordable transportation services for passengers and goods.  These challenges are exacerbated by the lack of a streamlined mechanism for timely rate adjustments in response to fluctuating economic conditions.  This measure will allow water carriers to make annual rate adjustments to promote financial stability and service reliability.

     Your Committee has amended this measure by:

     (1)  Changing the effective date to July 1, 3000, to encourage further discussion; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     Your Committee notes that the Public Utilities Commission, in its written testimony to your Committee, raised concerns that the mandatory establishment of a water carrier inflationary cost index automatic adjustment mechanism may have compounding effects on rates and impact on customers.  As such, the Public Utilities Commission recommended that the establishment of such a mechanism be discretionary.  Your Committee respectfully requests your Committee on Consumer Protection & Commerce, should it deliberate on this measure, to consider the concerns raised by the Public Utilities Commission.

     As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 914, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 914, H.D. 1, and be referred to your Committee on Consumer Protection & Commerce.

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