Hawaii lawmakers are moving to reshape how the state collects climate-related funds from cruise tourism as a lawsuit over the existing green fee heads toward federal appeals court. The bills passed initial committee reviews in the House and Senate and would shift cruise ships from a statewide green fee system to a separate per-passenger charge, according to state and industry officials cited in legislative testimony.
Rep. Adrian Tam said in a hearing last week that the goal is to reduce the pressure of ongoing court fights. “The main point for this is to find a middle ground so that we avoid heavy litigation costs and a drawn-out process,” Tam said, referring to the fight over whether the cruise ship portion of the green fee is defensible. Tam also described a possible change in the state’s approach during the same hearing, saying “it seems like we’re reversing course” on that question.
The litigation backdrop is central to the legislative effort. The cruise industry is challenging the green fee as the case moves through federal appeals court, and the Trump administration joined the litigation. Oral arguments in the Cruise Lines International case are scheduled for April, while the state attorney general’s office has expressed confidence it will prevail.
In the meantime, Gov. Josh Green, who long championed the green fee and made it a priority, did not comment on the bills as they move through the Legislature, his office said. The state’s deputy attorney general, Yvonne Shinmura, also told lawmakers she did not have an answer during a hearing because she was not handling the litigation.
State estimates presented in the legislative record show why lawmakers’ proposed change matters for funding levels. The state Department of Taxation estimated that if cruise ships remain subject to the green fee, they would contribute about $26 million to the fee in fiscal year 2027, which begins July 1 and would be the first full year of collections. By contrast, bills advancing in the House and Senate would allow the cruise industry to pay about $10 million annually in passenger fees.
Officials and industry representatives argue the passenger-fee model would still pay for improvements tied to cruise operations, but on a narrower footing than the green fee. The legislation would limit the passenger-fee proceeds to harbor improvements, with the green fee proceeds primarily directed to projects funded by hotel guests. Norwegian Cruise Line Holdings, which operates the only year-round U.S.-flagged cruise ship in Hawaii, supports the changes, its officials said.
Sandra Weir, Norwegian’s vice president for government relations, told state senators that the per-passenger fee approach would improve facilities used by cruise ships. She said it “extends to improving the experience of guests and the ship itself” during a hearing, according to the record cited in the story. Other state agency positions also tilt toward the legislative change: the state Department of Transportation supports removing cruise ships from the green fee and adding the per-passenger fee, even though it would collect millions of dollars less each year.
Environmental groups that backed Hawaii’s first-in-the-nation green fee are concerned the shift would weaken what they see as the program’s climate purpose. Care for ʻĀina Now, a coalition of environmental groups, said in testimony that “It is critical that cruise visitors contribute meaningfully and equitably.” The group added that any alternative should preserve a requirement that “cruise visitors contribute on equal footing with other travelers” and should support the green fee’s “same core priorities.”
The hearing record also discusses what the cruise passenger fees could be used for under the proposed passenger-fee model. Dreana Kalili, the state deputy transportation director for harbors, said much of the passenger fee money collected from cruise companies could fund climate-related projects, including “shore power,” which would allow ships to turn off their engines and plug into cleaner electrical grids while in port. Kalili and company officials also said Norwegian ships would be compatible with shore power, while state transportation officials estimated the cost to install shore power at Honolulu Harbor’s Pier 2 alone would be around $100 million.
Kalili said the passenger fees could also be used for port infrastructure expected to change as sea levels rise, including raising piers in neighbor island harbors. Hawaii receives more than 300,000 cruise ship passengers each year, and the proposed per-passenger fee would be assessed at each of the multiple ports cruise ships visit. Weir said the charges would roughly double the $41 total fees per passenger cruise ships already pay to visit Honolulu, Nāwiliwili, Kahului and Hilo, with the new fee mostly targeting improvements that benefit cruise operations.
Tam said the bills’ expected funding tradeoff is a “huge concern,” but he also said the state values the cruise industry’s presence because it brings business. The House and Senate bills have each been referred next to money committees, where additional hearings have not yet been scheduled.