Senate votes are in favor of Water Resources Development Act

The United States Senate yesterday approved S. 601, the Water Resources Development Act (WRDA) of 2013 by an 83-14 margin.

This legislation provides critical flood protection for communities across the country, maintains the flow of commerce, and will create up to 500,000 new jobs, according to the Senate’s Environment and Public Works (EPW) Committee.

“I am gratified by the overwhelming vote on final passage of our WRDA bill,” said Senator Barbara Boxer (D-CA), Chairman of the EPW Committee. “Getting 83 votes in favor when bipartisanship is missing in the Senate is very important. Now is the time for the House to act so we can ensure that the benefits of the bill are realized.”

The WRDA contains various provisions that stand to have a direct impact on shippers, including:
-project authorization for 18 projects that address all major mission areas of the Corps of Engineers, including flood risk management, navigation, hurricane and storm damage risk reduction, and environmental restoration, with an annual benefit topping $690.3 million;
-project delivery reforms that establish a new program to promote levee safety and improve inland waterways project delivery, among other efforts; and
-address the surplus of the Harbor Maintenance Trust (HMT) Fund by ensuring all revenues will be spent for port maintenance and not impact other important Corps of Engineers projects

Capital for the HMT fund is collected annually from importers and domestic shippers for deep-draft navigation maintenance dredging.

The key objectives of the Harbor Maintenance Act of 2013 as outlined in the WRDA bill include:
-ensuring that revenues collected into the Harbor Maintenance Trust Fund are used for the intended purpose of those revenues;
-to increase investment in the operation and maintenance of U.S. ports, which are critical for the economic competitiveness of the country;
-promote equity among ports nationwide; and
-to ensure U.S. ports are prepared to meet modern shipping needs, including the capability to receive large ships that require deeper drafts

Since the Harbor Maintenance Tax’s inception in 1986, the American Association of Port Authorities (AAPA) has advocated for full use of its collections for their intended purpose of dredging America’s deep-draft navigation channels to their authorized and required depths and widths. And importers and domestic shippers pay approximately double the annual amount that is drawn from the HMTF for maintenance dredging, leaving a surplus that exceeds $7 billion today. 

“We’re excited to see such strong bipartisan support for this critical legislation,” AAPA Director of Navigation Policy and Legislation Jim Walker told LM. “This is a large and complex Bill that will take some time to fully analyze but it has four key initial points in that it will increase Harbor Maintenance Tax funding to improve maintenance of the Nation’s shipping channels; streamlines the Corps of Engineers planning study and project delivery processes; establishes Harbor Maintenance Tax equity for donor ports, and authorize shipping channel improvements without earmarks.”

In a resource paper issued by the AAPA, it is noted that “most ports need regular maintenance of the federal channels leading into their harbors in order to maintain their constructed depths and widths and continue to move waterborne commerce efficiently,” with the U.S. Army Corps of Engineers overseeing Federal maintenance. The maintenance portion, according to the AAPA, is paid for through a tax on channel use, with the Harbor Maintenance Tax serving as an ad valorum tax of 0.125 percent on imports and domestic waterfront shipments and cruise passengers.

And even with more than $1.5 billion in annual Harbor Maintenance Tax revenues, the AAPA pointed out that Congress has only appropriated slightly more than half of that amount for channel maintenance, which has in turn resulted in a more than $7 billion surplus in the Harbor Maintenance Trust Fund and federal navigation channels in the U.S. being poorly maintained.

Shippers have been paying into the Harbor Maintenance Trust Fund since 1986 and it was originally applied to all import cargo moving through U.S. ports and certain domestic cargo. But AAPA Vice President of Government Relations Susan Monteverde said a U.S. Supreme Court prohibited the fund from collecting taxes for exports as per language in the U.S. Constitution.

When shippers’ cargo passes through the U.S. Customs and Border Protection to be allowed into the U.S., they pay a tax directly to Customs, with Customs then depositing it into the Harbor Maintenance Trust Fund, with Congress appropriating money to the trust fund.

“The problem is there is not a linkage between what comes in and what is appropriated,” explained Monteverde. “What the bill is trying to do is resolve that in a way that does not have a Congressional score. They are using a point of order to do this rather than take it off budget and have the funds that come in go directly to corps as other fee-based programs do. Congress decided not to do that because the score was too high; it is estimated to be anywhere from $20 billion to $22 billion to fix it that way. So instead Congress is using a point of order to try to allow a member of Congress to go on the floor and block an appropriations bill…if it does not appropriate for maintenance dredging the amount that was collected the year before along with the interest.”

The Senate’s passing of WRDA was positively received by the Coalition of America’s Gateways and Trade Corridors (CAGTC).

“I’m pleased that the Senate has again shown that there can be bipartisan action on infrastructure needs, that there’s attention to key funding issues like the Harbor Maintenance Trust Fund, and that provisions to ensure timely project delivery are included,” said Mort Downey, CAGTC Chairman and former deputy Transportation Secretary under President Clinton. “I’m hopeful that the House will also progress a bill and that this can pave the way to progress on other key transportation legislation.”