New inspection fee to pay for pest protection programs, raise cost of goods

HONOLULU—Gov. Neil Abercrombie signed into law yesterday a bill that increases the fee on the net weight of imported freight. The purpose of House Bill 865 is to strengthen the State’s invasive species programs, including the improvement of inspections at airports and harbors.

According to the Coordinating Group on Alien Pest Species (CGAPS), there were 663 pest interceptions of infested commodities at Honolulu International Airport before the last fee adjustment from July to December 2009. With furloughs and the loss of 23 inspectors, pest interceptions dropped to 87 from July to December 2010.

“These numbers and the incalculable cost of new pests, clearly say that something needs to be done,” said CGAPS’ Christy Martin in testimony.

The new law increases the fee from 50-cents to 75-cents for every 1,000 pounds of freight, or part thereof, brought into the state. 

The Legislature determined that, due to insufficient funds, the State is unable to adequately inspect imports that may contain prohibited items and to stop the spread of invasive species throughout Hawaii. The increased funding will go toward programs on the inspection, quarantine, and eradication of invasive species.

“The threat of invasive species to our environment has become very serious,” said Rep. Clift Tsuji, Chair of the House Agriculture Committee. “If we don’t increase our inspection and eradication activities, our natural environment will rapidly deteriorate. This is an important bill because the spread of pests like the coqui frog and others will negatively impact our economy and quality of life.”

Support for the measure came from the Board of Land and Natural Resources, Hawaii Farm Bureau Federation, Hawaii Chapter of the Sierra Club, and The Nature Conservancy of Hawaii.

“Air and sea transportation is the major pathway for invasive species that come into the State,” said Robert Harris, of Hawaii’s Sierra Club, in testimony. “Hawaii—the endangered species capitol of the world—is quickly losing the battle to invasive species. In order to make any progress on this problem, we need to stop the spread of new invasive species before they are established in Hawaii.”

While the new fee is expected to generate the approximately $4.5 million to run the necessary programs, Tax Foundation of Hawaii warns that the additional cost imposed on the transportation of goods into the state will be passed on and be reflected in higher prices at the checkout counter.

In testimony, Tax Foundation of Hawaii criticized lawmakers’ decision to fund invasive species programs through special funds rather than the general fund: “Attacking this problem with a fee is an indication that this is not a problem of high priority so as to garner general fund financing. It is also a way for lawmakers to avoid being held accountable for growing government even larger and allowing government to grow beyond its means and the ability of the taxpayer to afford government in Hawaii. Note well, that the new fee is imposed on freight coming into the state and, as such, the cost of the fee will be buried in the cost of all goods and services purchased by consumers and businesses in Hawaii.”

Opposition to the fee came from the Air Transport Association (ATA). Its members include all of the major U.S. passenger and cargo airlines, which together carry more than 90 percent of domestic passenger and cargo traffic.

Lawyers for the ATA said the new fee violates the federal Anti-Head Tax Act and Airline Deregulation Act and is presently the subject of pending legal challenges, both before the Federal District Court for the District of Hawaii and the U.S. Department of Transportation. The ATA pointed to a 2006 statement by the Federal Aviation Administration that said a State
of Hawaii fee for agricultural inspections would be “illegal” as a “violation” of the Anti-Head Tax Act.

The bill takes effect immediately upon approval.