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Maintenance Trust Fund collected approximately $740 million while expenditures totaled approximately $495 million. The excess was being used in a futile attempt to stem the then ever-increasing federal budget deficit.

In addition to actual harbor maintenance and related administrative expenses, monies for the Trust Fund are used to cover the entire budget of the Saint Lawrence

Seaway Development Corporation. A substantial sum also is devoted to shallow draft navigation projects not subject to the Inland Waterways Fuel Tax. In fiscal year 1995, in excess of $64.7 million was expended from the Trust Fund on this type of project in harbors and waterways utilized almost exclusively by commer- cial fishing and recreational vessels. This expenditure rose to $72.4 million in fiscal year 1996.

Challenge based on Export Clause

United States Shoe Corporation and similarly situat- ed companies contended that the HMT violated the constitutional prohibition against taxes being assessed against exports. The various courts that heard the mat- ter agreed. In a unanimous decision, the U.S. Supreme

Court held in 1998 that, although the Export Clause categorically bars Congress from imposing any tax on exports, it does not rule out a user fee. The user fee, though, must lack attributes of a generally applicable tax or duty. It may only be a charge designed as com- pensation for a government-supplied service, facility, or benefit. As the HMT lacks the indicia of a user fee, it was found to be violative of the Export Clause.

Other Challenges

Other challenges to assessment of the HMT have been largely unsuccessful. These challenges have included: (1) the tax on passenger transportation; (2) the tax on interstate shipments; (3) the tax on imports; and (4) the tax on goods unloaded at a covered port for admission into a foreign trade zone.

Claims for Rebates

Even before the ink was dry on the 1998 Supreme

Court decision, exporters started filing claims for rebates of previously paid HMT assessments. Customs resisted payments on the rebates as best it could, but various issues ended up back in the courtroom. The drawback procedure whereby duties on imported goods were credited for exports of commercially inter- changeable goods was held to be an inappropriate mechanism for obtaining a rebate of HMT payments on exports. The statute of limitations for refund claims was held to be two years. Application of the HMT to exports was held to not be a taking in violation of the

Fifth Amendment and exporters who had made HMT payments were not entitled to prejudgment interest.

While exporters were entitled to recovery of certain

HMT payments, the government was not required to pay interest on those amounts for the period between payment and rebate. A narrow victory was afforded to those exporters which had filed protests when making

HMT payments - they were allowed the benefit of the principle of laches rather than being constrained by the two-year statute of limitations.

On July 27, 2005, the Chief Judge of the U.S. Court of International Trade issued an Order that may bring to a close the many years of dispute over the Harbor

Maintenance Tax (HMT). Then again, maybe it won't.

The Order directed the dismissal of all HMT actions pending before the court after December 1, 2005. Any plaintiff who believes that its action should not be dis- missed must file a motion for a stay not later than

September 26, 2005. The Order notes that the

Bureau of Customs and Border Protection (CBP), which moved for the Order, contends that all HMT issues have been resolved and all allowable HMT claims have been paid.

GATT - the unresolved issue

Based on the above, it would appear that the

HMT issue can soon be relegated to a footnote in his- tory. Such an assumption may be premature. There is one remaining issue that could overthrow the remain- ing HMT regime.

The United States, along with almost every other nation, is party to the General Agreement on Tariffs and Trade (GATT). In addition to establishing ceilings on tariffs that may be imposed on importation of numerous goods, GATT includes some binding gener- al principles. One of those general principles provides: "All fees and charges of whatever character imposed by contracting parties on or in connection with impor- tation or exportation shall be limited in amount to the approximate cost of services rendered and shall not represent an indirect protection to domestic products or a taxation of imports or exports for fiscal purposes."

The legislative history of the HMT reveals that

Congress was well aware of this GATT provision and made the HMT assessment broad in an attempt to avoid this proscription. Several court challenges to the

HMT assessment on imports raised the GATT provi- sion as evidence that the assessment was improper.

The courts uniformly denied relief, holding that any conflict between the HMT statute and the GATT pro- vision must be resolved by Congress. Bills were intro- duced in the House of Representatives to reduce the

HMT. The sponsors stated that the growing HMT trust fund surplus may violate GATT. The European Union has contended in negotiations with the United States that the HMT assessments against imports violates the

GATT provision and has even threatened to lodge a formal complaint with the World Trade Organization (WTO).

Persons who have considered the matter are of the opinion that such a complaint by the European Union would prevail. It is unclear when, or if, a formal com- plaint will be filed.

If, though, the Congress is required to repeal the

HMT assessment with regard to imports, it seems clear that it will also repeal the assessments related to domestic shipments and to passengers.

Only time will tell when, or if, the GATT shoe will drop.

Salary Range: $46,094 - $62,874

A large organization is engaged in municipal wastewater treatment pro- grams and water quality programs. As part of accomplishing this mission, the organization employs maritime background personnel for the opera- tion and maintenance of a fleet of vessels. The fleet of vessels is used for transporting liquid sludge from treatment plants without facilities for pro- cessing. The fleet of vessels is used for inspecting, sampling and cleaning of the NYC harbor and shorelines. The organization is seeking possible candidates in the following titles:

Captain – under direction, takes command on an assigned vessel and its crew and acts as a representative in all matters concerning the vessel and its crew.

Mates (Second and Third) – carries out the orders of the Captain; pilots the vessel; directs subordinate personnel; and assumes the duties of the

Captain in emergencies.

Marine Engineers-Diesel (Chief, First Assistant and Third Assistant) – supervises and directs or assists in the supervision and direction in the operation of the main propulsion equipment and auxiliaries of a diesel-pow- ered vessel.

Mariners – performs deck duties on vessel.

Marine Oilers – under direction, lubricates and assists in the mainte- nance and operation of marine propulsion and auxiliary equipment; assists in handling mooring lines; and operates valves.

All candidates must possess the applicable US Coast Guard license and/or must possess a valid certification for titles of interest.

All interested candidates must submit 3 copies of their resume, cover let- ter and salary history to: Recruitment Coordinator, P.O. Box 22640,

Brooklyn, NY 11202.

NYC Residency is required.

Organization is an Equal Opportunity Employer

MARITIME POSITIONS

Circle 237 on Reader Service Card

Circle 212 on Reader Service Card

Government Update

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