Kelly, DeFazio Announce Bill to Finance Port, Harbor Maintenance

KELLY, DEFAZIO INTRODUCE BIPARTISAN LEGISLATION TO
GUARANTEE MAINTENANCE OF NATION’S PORTS AND HARBORS

 Kelly, DeFazio Introduce Bipartisan Legislation to Guarantee Maintenance
of Nation’s Ports and Harbors

 April 5, 2017

Washington, D.C. — Today, Representative Mike Kelly (R-PA), and Ranking Member of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR), introduced H.R. 1908, the Investing in America: Unlocking the Harbor Maintenance Trust Fund Act, bipartisan legislation that would increase investments in critical harbor and port projects and guarantee that money intended to dredge the nation’s coastal and inland commercial ports would actually go toward harbor maintenance.

The U.S. Army Corps of Engineers (Corps) estimates that full channels at the Nation’s 59 busiest ports are available less than 35 percent of the time. The Investing in America: Unlocking the Harbor Maintenance Trust Fund Act provides the necessary funding to dredge all federal commercial harbors to their constructed widths and depths, and maintain these harbors for the next decade, without adding a penny to the deficit.

“The Harbor Maintenance Trust Fund was created by the Reagan administration to ensure that our nation’s ports and harbors, like the Port of Erie, would always be properly dredged and fully operational. Unfortunately, much of its annually collected revenue is no longer making it back to the ports where it is desperately needed. The result is the inexcusable deterioration of our ports from the Great Lakes to the Gulf Coast, which negatively impacts our economy in Erie and nationwide. Failing to maintain our ports and channels destroys American jobs and forces families to pay more money for the goods they need. This commonsense, bipartisan bill will make sure that America’s ports and harbors are once again fully maintained, which will save and create jobs, grow businesses, and keep us competitive on the global stage. We will ensure that the United States is equipped with a modern and efficient transportation system to meet the needs of a 21st century economy without raising a single dime in taxes,” said Kelly.

“The Federal government has a responsibility to maintain the ports, harbors and waterways that support thousands of jobs and economic growth in communities across the country. This bipartisan, common sense legislation guarantees that funds collected in the Harbor Maintenance Trust Fund will not be diverted and will only be used for their intended purpose — harbor maintenance. Our legislation will create and sustain thousands of needed jobs, it will provide a tremendous boost to economic competitiveness, and it does all of this without adding a penny to the deficit,” said DeFazio.

The Investing in America: Unlocking the Harbor Maintenance Trust Fund Act provides more than $18 billion over the next decade, which is a 29 percent increase in investment, and will enable the U.S. Army Corps of Engineers to dredge all Federal commercial harbors to their constructed widths and depths. The bill takes the Trust Fund off budget and allows the Secretary of the Army to directly use Harbor Maintenance revenues collected each year for authorized maintenance activities. The legislation also preserves Congress’ authority to appropriate additional funds for harbor maintenance needs from the existing $9 billion balance in the Trust Fund.

To learn more about the legislation, click here.

BACKGROUND

In 1986, Congress and President Reagan enacted the Harbor Maintenance Trust Fund (HMTF) to pay for the operation and maintenance dredging costs for the nation’s commercial ports by recovering funds from maritime shippers. The HMTF is directly paid for by importers and domestic shippers using coastal or inland ports as a 0.125 percent ad valorem user fee on the value of imported cargo (e.g., $1.25 per $1,000 value) and is typically passed along to U.S. taxpayers on the purchase of imported goods or services. These revenues are deposited into a HMTF within the U.S. Treasury from which Congress currently appropriates funds to the Corps for harbor maintenance dredging.

The HMTF collects far more revenues from shippers than Congress has provided to the Corps to maintain our harbors, with approximately $9 billion in already-collected revenues sitting idle in the U.S. Treasury. As a result, shippers continue to honor their commitment to pay for promised maintenance activities that the federal government then fails to carry out. There are sufficient funds in the Trust Fund to meet the maintenance dredging needs of all Federally-authorized ports. The problem is that the Trust Fund is being treated by appropriators more like a slush fund.

According to the Congressional Budget Office (CBO), the HMTF will collect $18.5 billion in new revenues over the next decade — in addition to the estimated $8.8 billion in previously collected but unspent revenues in the Trust Fund. According to CBO, Federal appropriations from the Trust Fund over the next decade are only expected to total $14.3 billion, and would result in the balance of the Trust Fund doubling — reaching $17.2 billion in fiscal year 2026. The Investing in America: Unlocking the Harbor Maintenance Trust Fund Act would finally reverse this trend and all money collected for harbor maintenance would actually go toward harbor maintenance.

 

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 H.R. 1908
Investing in America:
Unlocking the Harbor Maintenance Trust Fund
Introduced by
Ways and Means Committee Member Mike Kelly and
T&I Committee Ranking Member Peter DeFazio

April 5, 2017

EXECUTIVE SUMMARY

H.R. 1908, the “Investing in America: Unlocking the Harbor Maintenance Trust Fund Act”, provides more than $18 billion in investment for our Nation’s coastal and inland harbors over the next decade without raising one more dime in taxes.

This bipartisan bill ensures the use of the Harbor Maintenance Trust Fund for its intended purpose — maintaining our commercial harbors — instead of using the funds to hide the size of the budget deficit. By taking the Trust Fund off budget and allowing the expenditure of Harbor Maintenance Tax revenues collected each year, the legislation provides more than $18 billion over the next decade, which is a 29 percent increase in investment and will enable the U.S. Army Corps of Engineers to dredge all Federal commercial harbors to their constructed widths and depths. The bill also preserves Congress’ authority to appropriate additional funds for harbor maintenance needs from the existing $9 billion balance in the Trust Fund.

HARBOR MAINTENANCE BACKLOG

According to the U.S. Army Corps of Engineers (Corps), full navigation channels at our Nation’s busiest 59 ports are available less than 35 percent of the time — and the conditions of our midsize and emerging harbors are far worse. With the opening of the expanded Panama Canal in June 2016, larger container ships will increasingly call on East and Gulf Coast ports, and the dredging needs of our ports will continue to grow.

In January 2017, the Corps estimated the total cost to achieve and maintain constructed widths and depths of all Federal navigation projects is $20.3 billion over the next decade. This estimate includes:

• $11.0 billion — to achieve full dimensions in the next five years ($2.2 billion annually); and

• $9.3 billion — to maintain these dimensions for an additional five years ($1.9 billion annually).

Moreover, total Corps navigation needs are likely higher. The Corps’ $20.3 billion estimate includes additional expenses related to navigation work (e.g., construction of dredged material placement facilities and other navigation infrastructure). However, this estimate does not likely include all necessary jetty and breakwater work or other needs identified by ports to maintain and expand harbor use nationwide.

HARBOR MAINTENANCE TRUST FUND

In 1986, Congress enacted the Harbor Maintenance Tax to recover the operation and maintenance dredging costs for commercial ports from maritime shippers. The Harbor Maintenance Tax is directly levied on importers and domestic shippers using coastal or inland ports as a 0.125 percent ad valorem tax on the value of imported cargo (e.g., $1.25 per $1,000 value)¹ and is typically passed along to U.S. taxpayers on the purchase of imported goods or services. These revenues are deposited into a Harbor Maintenance Trust Fund within the U.S. Treasury from which Congress currently appropriates funds to the Corps for harbor maintenance dredging.

The Harbor Maintenance Trust Fund collects far more revenues from shippers than Congress has appropriated to the Corps to maintain our harbors, with approximately $9 billion in already collected revenues sitting idle in the U.S. Treasury. As a result, shippers continue to honor their commitment to pay for promised maintenance activities that the Federal Government then fails to carry out. To be clear, there are sufficient funds in the Trust Fund to meet the maintenance dredging needs of all Federally-authorized ports. The problem is that these funds, which were collected for this express purpose, are diverted to hide the size of the budget deficit.

According to the Congressional Budget Office (CBO), the Harbor Maintenance Trust Fund will collect $18.5 billion in new revenues over the next decade — in addition to the estimated $8.8 billion in previously collected but unspent revenues in the Trust Fund. Yet, according to CBO, Federal appropriations from the Trust Fund over the next decade are only expected to total $14.3 billion, and would result in the balance of the Trust Fund doubling — reaching $17.2 billion in fiscal year 2026.² Under this scenario, the maintenance needs of commercial ports will continue to go unmet.

INVESTING IN AMERICA: UNLOCKING THE HARBOR MAINTENANCE TRUST FUND

H.R. 1908 provides more than $18 billion from the Harbor Maintenance Trust Fund over the next decade for the intended purposes of maintaining our commercial harbors.

Guaranteed Harbor Maintenance Trust Fund Investment
(FY 2017 – FY 2026)

As the bar chart above demonstrates, the bill provides significant additional funds to the Corps to address the backlog of maintenance dredging needs of our commercial ports. If Congress simply dedicates the expected receipts to the Trust Fund over the next decade for their intended purposes, we will invest more than $18 billion in our critical port and harbor needs — and all of this work could be performed without raising one dime more in taxes. At the same time, Congress may continue to appropriate funds from the almost $9 billion balance in the Trust Fund to ensure the Corps has sufficient funds to address all identified annual maintenance needs.

The Unlocking the Harbor Maintenance Trust Fund Act honors our long-term commitment to U.S. shippers and taxpayers, maintains and improves the competitiveness of U.S. businesses and industry, and creates and sustains thousands of additional construction jobs and jobs dependent on a vibrant and efficient marine transportation system.*

H.R. 1908, THE INVESTING IN AMERICA: UNLOCKING THE HARBOR MAINTENANCE TRUST FUND ACT

To honor the Federal commitment to U.S. shippers and taxpayers, to ensure the competitiveness of U.S. commercial harbors, and to create and sustain thousands of jobs, H.R. 1908:

• Provides more than $18 billion in infrastructure investment for our Nation’s coastal and inland harbors over the next decade without raising one more dime in taxes;

• Takes the Harbor Maintenance Trust Fund off budget; and

• Preserves Congress’ authority to appropriate additional funds for harbor maintenance needs from the existing $9 billion balance in the Trust Fund.