RELATING TO WATER CARRIERS.

SB2694

THE SENATE

S.B. NO.

2694

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

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)
�
The commission may establish
automatic adjustment mechanisms for water carriers subject to this chapter to
address inflation, regulatory lag, and other economic factors.
�
These mechanisms may be initiated and
established by the commission or upon application by a water carrier.
�
As provided in section 271G-17(f), these
mechanisms shall be submitted as a forty-five-day tariff transmittal filing or
as part of a general rate case application.

����
(b)
�
By July 1, 2026, the
commission shall establish a water carrier inflationary cost index automatic
adjustment mechanism for each water carrier of property.
�
The mechanism shall:

����
(1)
�
Reflect
the applicable annual percentage change in the increase of wharfage rates set
by the department of transportation, harbors division, pursuant to applicable administrative
rules;

����
(2)
�
Be
applied on an annual basis in accordance with subsection (c); and

����
(3)
�
Be
no more than five per cent per year.

����
(c)
�

Beginning on July 1, 2026, the mechanism shall be applied at an ongoing,
repealing three-year cycle, as follows:

����
(1)
�
In
the first and second years of the three-year cycle, the water carrier
inflationary cost index automatic adjustment mechanism shall be applied
annually; and

����
(2)
�
For
the third year of the three-year cycle, regardless of whether the water carrier
is seeking any rate changes for the transportation of property, the water
carrier shall submit an application with the rates, fares, or charges for the
transportation of property that the water carrier proposes to be effective in
the third year of the three-year cycle.
�
The
application shall be subject to the review and process requirements for a
standard rate increase application under subsections 271G-17(d) and (e).
"

����
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
]
the
form and manner, and shall contain [
such
]
information as the commission by [
regulations
]
rules
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.
]
rules.
�

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
in this section
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.

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(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
]

before
the effective date of the schedule, concurrently file a pro forma
statement of account [
which
]
that
shall be prepared under the
same form and in the same manner as prescribed by the commission's uniform
system of accounts.

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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) through (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 or as part of a rate case application.

����
(g)
�

Notwithstanding any provision of this chapter or any law, decision,
order, or rule to the contrary, the commission, 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.

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SECTION 5.
�

This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

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

Description:

Authorizes
the Public Utilities Commission to establish automatic adjustment mechanisms to
address economic factors sua sponte or on application by a water carrier.
�
Requires the Public Utilities Commission to
establish a water carrier inflationary cost index automatic adjustment
mechanism. Authorizes the Public Utilities Commissions to waive or exempt any
water carrier from any requirement under the Hawaii Water Carrier Act.

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