Juneau cruise ship fee stands firm despite federal ban

Law could pose a problem for Yakutat

Posted: Friday, April 25, 2003

A federal law prohibiting municipalities from taxing cruise ships without providing a reasonable service in return won't affect Juneau's cruise ship passenger fees, according to the city attorney.

But a staffer for U.S. Rep. Don Young, who sponsored the amendment to the Maritime Security Act of 2002, said the law does pose a problem for Yakutat, which has had a $1.50-a-head cruise ship fee on the books since 2000, although it has yet to collect any taxes.

The law prohibits nonfederal entities from levying "taxes, tolls, operating charges, fees or any other impositions whatever" on vessels in navigable waters subject to U.S. authority. It makes exceptions for "reasonable fees charged on a fair and equitable basis."

Juneau City Attorney John Corso said he is confident Juneau's fees fit the description.

"(The law) doesn't make any fundamental changes (to Juneau's fees), but it does remind us that we have to be careful and be sure to give fair value to the fees we charge," Corso said.

Juneau charges two fees: a $5-a-person marine passenger fee that goes to tourism, transit and capital-project costs, and a temporary port development fee of $2.18 a head that is used for improvements to downtown public docks. Ships that tie up at the private Franklin Street dock are charged 18 cents per passenger instead of $2.18.

Corso said the law codifies existing precedent from several U.S. Supreme Court decisions dealing with the issue.

But the law has raised some questions about Yakutat's fee ordinance. Yakutat Borough Manager Steve Henry said although the ordinance has been on the books for three years, cruise ships have refused to pay. Ships sail into Yakutat Bay to view the Hubbard Glacier, but do not stop in Yakutat unless a passenger needs medical attention.

"When a passenger is sick or injured, they are transferred to the town of Yakutat and medical assistance is provided at the Yakutat Health Clinic," Henry said. He said it happens often, but could not provide statistics.

A statement issued Thursday by the borough noted Yakutat has only one ambulance, which is unavailable for local needs while it transports cruise ship passengers.

Henry also said the cruise ships come during seal-pupping time, affecting the marine environment and ultimately the seal population. Many Yakutat residents depend on harbor seals for subsistence food.

He said Yakutat bought a vessel to monitor the impact of cruise ships on the environment and on harbor seals, but has not had the funds to operate it. Henry estimated the fee would bring in $400,000 per year for a Marine Passenger Fund and would be used only for cruise ship-related purposes. Yakutat's yearly budget is $1.5 million. He said 160 cruise ships are scheduled to enter Yakutat Bay this year.

Jim Brennan, an Anchorage-based attorney for Yakutat, said the borough was made aware of the law this week through news reports.

The law, amended last November, was spurred by the Yakutat tax, said Steve Hansen, spokesman for Young.

"If every coastal community passed a tax on cruise ships that simply passed by the community, it would be catastrophic to the state tourism industry. ... What would be next? Are they going to start taxing airplanes passing by just because they could make emergency landings?" Hansen said.

But Brennan said no one from the congressional delegation ever talked to the borough about its purposes for imposing the fee.

"The purposes are real," Brennan said.

• Masha Herbst can be reached at masha.herbst@juneauempire.com.

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