A federal judge’s recent ruling regarding the use of cruise fees is not as restrictive as initially thought, according to Ketchikan Gateway Borough Attorney Glenn Brown.
The lawsuit was brought by the cruise industry against the City and Borough of Juneau over how Juneau spent its cruise fees. The judge ruled that Juneau’s cruise fees should only be spent on items that are physically tied to the ships.
But, Brown told the Ketchikan Gateway Borough Assembly on Monday, that isn’t necessarily the case for all cruise fees.
“So, the first interpretation of the case was largely if you spend it on anything beyond the end of the gangway coming from the ship, you’re violating the tonnage clause,” he said. “In reality, I think some of the language makes it clear that if it benefits the passengers while in the course of benefitting the vessel, that may not be violative of the tonnage clause.”
The tonnage clause is a clause in the U.S. Constitution that restricts how states can impose taxes on shipments and cargo. Brown says if the taxes are paid by the cruise passengers, not the ship, then they could be used for services that clearly benefit those passengers and the ship.
The Juneau lawsuit ruling was thought to apply to other cruise fees.
The City of Ketchikan charges port fees; the Ketchikan Gateway Borough does not. But the borough does receive a share of state Commercial Vessel Passenger fees, which it uses for various services.
Brown says it appears the borough’s use of CPV funds will pass scrutiny.
“I think the borough has done a good job over the last few years in trying to make sure its expenditures of CPV were logical, rational, related back to the vessel,” he said.
Brown adds that other recent court rulings show spending CPV funds for services that benefit the general public as well as cruise passengers also can be acceptable.
He said the borough needs to continue to carefully review how it spends CPV funds; and the Juneau lawsuit ruling can be used for guidance in that review process.
