A proposal to more than double nonresident commercial marine license fees from $100 to $250 per year will be heard by the state Board of Land and Natural Resources on Friday.
Commercial marine license (CML) fees in Hawaii have been equal for residents and nonresidents since a 2015 decision in the Ninth Circuit (Marilley v. Bonham) determined such fees violate the Privileges and Immunities Clause of the United States Constitution. The court ruled that because the state failed to justify its discriminatory treatment of non-residents, this discrepancy in fee rates was unconstitutional.
Prior to the court case, annual CML fees were $50 for Hawaii residents and $200 for nonresidents. In the wake of the court’s ruling, the state moved to a flat rate of $50 in January 2016 and then increased each to $100 per year in January 2018.
The ruling, however, has since been appealed; in December of 2016, the Ninth Circuit court overturned the 2015 decision. In doing so, the court established that because the fishery’s expenditures exceeded revenue generated, the state had given a subsidy to the commercial fishery.
Because funds for this subsidy were raised through taxes, nonresidents are considered “free-riders” to the benefit, and higher license fees on nonresidents could be justified as long as they didn’t exceed their share of benefits.
Since this appeal, the state Department of Land and Natural Resources Division of Aquatic Resources conducted an analysis determining the share of these benefits, showing that the nonresident share of this benefit was approximately $240,000 annually.
With an estimated 800 nonresident CML holders statewide, the proposed $150 annual increase would generate $120,000, leaving the state within that $240,000 cap they are constitutionally allowed to charge. These fees will go into the Commercial Fish Special Fund, which supports programs, activities and studies regarding aquatic life for commercial purposes, according to submittals to the Board of Land and Natural Resources.
This move to increase non-resident CML fees is a step the BLNR is taking in anticipation of future budget restraints related to the COVID-19 pandemic. If approved by the board, the department will conduct public hearings on the proposed rules.
Friday’s BLNR meeting is scheduled to begin at 9 a.m. Those interested in watching can tune in online at http://youtube.com/c/boardoflandandnaturalresourcesdlnr. The proposed rules are also available online at http://dlnr.hawaii.gov/dar/rules-and-public-notices.