Senators note that in the end consumer pays for Port increases
Some senators have voiced their support of an Administration bill seeking to increase port fees and charges, which has remained the same for more than three decades.
At the same time, a handful of senators noted that like all new taxes and fees as well as any increase in taxes and fees, it’s the consumer who will — in the end — pay for it.
Senators’ reactions and public comments were made Tuesday during the Senate Transportation/Port Committee hearing where Port Administration director Taimalelagi Dr. Claire Poumele explained that current fees and rates have been unchanged for 33 years.
Responding to a committee question on whether public hearings were held on the proposed fees, as required by local statute, Taimalelagi said this was carried out in 2015 as required by the American Samoa Administrative Procedures provision, as part of a regulation of local law.
She shared with the committee a May 21, 2015 “Notice of Intended Action” letter sent to Lt. Gov. Lemanu Peleti Mauga, the Secretary of American Samoa, regarding the proposal to increase port fees.
Among the requirements of the Administrative Procedures, is that the agency is to hold a public hearing, and the letter states that a hearing was held Apr. 23, 2015. Additionally, the department allowed an additional 20-days for all interested parties to submit written comments. Further, the department, as required by the Administrative Procedures, fully reviewed and considered all oral and written submissions.
Port Administration “has determined that the need to raise port fees, in an effort to enhance the port services, is not only warranted, but needs to be implemented within the next six months,” according to the letter, which also says port was looking at implementing the fee changes, after the proper Executive and Legislative approval processes.
It also says that Port Administration, in collaboration with the Commerce Department, completed its review of the rates and fees and has successfully completed a rate study with viable solutions to increasing revenues for port operations.
During her testimony in the House more than a week ago, Taimalelagi said Port worked with DOC on the rate structure and study. Additionally, there was also another public hearing — with port users — held last year (aside from the 2015 hearing) about the proposed fees hikes.
At the Senate hearing this week Taimalelagi reiterated, that port fees have remained the same for over 30 years and this set off a round of support from senators for the proposed fee increases, saying they think this is necessary after so many years of no fee hikes.
While supportive of the measures, Sen. Tuiagamoa Tavai said he’s worried that hiking fees and charges would result in a decrease in the number of vessels calling into Pago Pago port.
Taimalelagi said that in 2015 they looked at other neighboring countries, such as Samoa, New Zealand, as well as the state of Hawai’i, for a comparison of fees. She said it was found that Pago Pago has the lowest rates and she doesn’t believe the fee hikes will affect the number of vessels stopping in Pago Pago.
As to how all port fees are collected, Taimalelagi said the local agent for the vessel pays them, and all revenues go into the ASG General Fund.
Sen. Magalei Logovi’i wanted to get a better understanding of why the fees will be hiked. For example, when the services of a pilot are actually required for a deep draft vessel, the minimum charge is hiked from $100 to $170. Additionally, the “base rate for pilot tow fees shall be $85 for all vessels; and $5.10 per foot for all vessels over 12 feet.”
He suggested that port revisit some of the proposed fee hikes because the amount appears too high and vessels may end up bypassing American Samoa for other ports due to the high costs.
“All these fees,” said Magalei, “will be passed on by the shipper to the business, to the public — all of us — who will in the end have to pay.”
This was echoed by at least three other senators, who agreed that it’s the public that will pay for all the increased costs, but the same senators were also supportive of the goal behind the bill.
According to the bill, fees for inbound containers increase from 50-cents per day to 85-cents per day when 120 hours have passed after arrival and the containers haven't left the dock. After 3 days the fee jumps to $1.70 per day. The same fee will apply to outbound containers.
Asked by the committee if these fees also apply to StarKist Samoa containers, Taimalelagi said “no”, adding that there are many empty StarKist containers on the dock, waiting to be filled for outbound shipment.
Attorney General Talauega Eleasalo Ale, who was also present at the hearing, said StarKist’s tax exemption covers many of these fees and charges. This prompted Sen. Satele Galu Satele Sr., to inquire about StarKist’s tax exemption, to which Talauega repeated that the tax exemption certificate covers many taxes and includes port fees and charges.
Responding to a committee question, Taimalelagi estimates that the government collects about $2.2 million annually under the current fees and charges, but if the new proposal is approved, an additional $2 million is estimated to be collected.
The measure also gives the Port Administration director the authority to review fees and charges every five years, and if necessary, initiate modification. Sen. Nuanuaolefeagaiga inquired, for clarification, if the director does in fact have that authority.
Talauega said, “no” and elaborated further on what is stated in the bill and that is, the director follows the Administrative Procedure process, which requires calling a public hearing. And if the public is against it, then there is no increase, said Talauega, who is also chairman of the ASG Revenue Task Force, which came up with the proposal as well as other revenue measures pending in the Fono.
Taimalelagi is also a member of this task force.