House Committee on Transportation and Infrastructure approves Harbor Maintenance Trust Fund bill

A financial mechanism that would allocate billions of dollars in already-collected fees targeted to maintain United States-based federal ports and harbors, to be put into use, may be seeing some positive movement towards that goal based on legislation recently introduced.

H.R. 2440, the Full Utilization of the Harbor Maintenance Trust Fund Act––was introduced on April 30 by Rep. Peter DeFazio (D-Ore), whom is also the Chair of the House Committee on Transportation and Infrastructure.  

This bill encourages full use of Harbor Maintenance Tax (HMT) revenues by exempting them from annual budget caps. And this budget mechanism is discretionary in that it does not require a budget offset and would apply to future revenues and the $9.3 billion Harbor Maintenance Trust Fund balance. 

When this bill was introduced late last month, DeFazio’s office explained that the Harbor Maintenance Trust Fund takes in more revenue from shippers than Congress has appropriated to the U.S. Army Corps of Engineers to maintain U.S. harbors. And it added that: the “$9.3 billion in already collected revenue is idle in the U.S. Treasury and is not being used for its intended purchase of investing in our nation’s ports and harbors. At the same time, some ports and harbors of all sizes struggle to remain competitive in the global shipment of goods and services or remain open to meet the needs of the communities that depend on a vibrant maritime and commercial fishing industry. While shippers continue to pay into the Trust Fund for congressionally-approved maintenance activities, the federal government has not carried out many of them.”

What’s more, DeFazio’s office said that this bill provides Congress with a clear path to appropriate any funds collected in the Trust Fund for authorized harbor maintenance needs, including the existing $9.3 billion balance in the Trust Fund, adding that he legislation enables the expenditure of approximately $34 billion over the next decade, which will allow the U.S. Army Corps of Engineers (Corps) to dredge all federal harbors to their constructed widths and depths.

“The federal government should be using the fees it collects at our ports for their intended purpose—harbor maintenance, said Rep. DeFazio in a statement. “By merely spending what is already being collected we can ensure our nation’s ports and harbors remain open for business and can continue to sustain our local, regional, and national economies. Ultimately it is taxpayers and consumers who pay the cost of the HMT, as a pass through on the price of goods shipped through ports. However, when harbors are inefficiently dredged and maintained it leads to delays and increased prices. So, taxpayers are paying for a service that is not being done, and as a result, have to pay MORE for the goods they buy because of the lack of maintenance. It’s time Congress fully funds the operation and maintenance of our commercial harbors, including critical jetty and breakwater work. I urge my colleagues to support this critical, bipartisan legislation.”

Prior to the introduction of DeFazio’s bill, the American Association of Port Authorities (AAPA) expressed its support for the full use of the Harbor Maintenance Trust Fund, as well as a key component of that, the Harbor Maintenance Tax (HMT), a .125% tax placed on the value of imported cargo that pays out less than what is collected through the harbor maintenance fee. 

DeFazio has said that full use of the HMT is a component of the Committee’s plan to build the nation’s infrastructure.

In an April 25 letter to House Committee on Transportation and Infrastructure leadership, AAPA President and CEO Kurt Nagle wrote that the committee has a historic opportunity to permanently solve the decades old problems associated with the HMT by expanding its legislation to address other key issues with the HMT.

“As you may know, early last year the U.S. port members of the Association jointly issued their strong support for broad HMT reform to address port members’ concerns about HMT spending and to ensure that the HMT provides value to all ports,” noted Nagle. “Your legislation presents a tremendous opportunity for the collective port industry to achieve a victory with Congress on this critical infrastructure issue if it was expanded to provide comprehensive reform.”

On May 8, the House Committee on Transportation and Infrastructure, by voice vote, approved DeFazio’s Full Utilization of the Harbor Maintenance Trust Fund Act.

A maritime stakeholder told LM that while full use of the Harbor Maintenance Trust Fund is important, there is a need to address related equity and fairness issues.

As an example, the stakeholder cited comments made this week by Rep. Alan Lowenthal (D-Calif.), in which he stated that Congress must work today to unlock the full Harbor Maintenance Trust Fund resources and commit to addressing larger inequities in the allocation of these funds this Congress, in the next Water Resources Development Act (WRDA).

“The ports of Los Angeles and Long Beach drive the American economy—handling over a third of our imports and exports,” said Lowenthal. “They collect nearly $380 million in harbor maintenance taxes each year but receive less than 1.5 percent of those funds back to pay for needed water infrastructure improvements. I hope to work with Chair Napolitano and Members on both sides of the aisle to address these inequities and make positive reforms to harbor maintenance that will enhance the productivity of our entire port and maritime transportation system. I suggest that we use the American Association of Port Authorities’ industry-wide agreement as a starting place to enact these reforms. This agreement allows for donor and energy transfer ports to fund needed improvements while ensuring that all ports receive the resources they need for operations and maintenance.”