Trust Fund

  • “How can we have a 21st century economy with a 20th century infrastructure?” Vice President Joe Biden recently posed this question to an audience at the American Association of Port Authorities (AAPA) annual meeting in Houston, Texas. He went on to say, “the greatest economic power in the world needs the most dynamic port system in the world.” I happen to agree with this statement. We must find a better way to manage the funding needs of our marine transportation infrastructure. In fact, you will find many politicians, business leaders, economists, and transportation specialists that are quite outspoken on this matter. It seems everybody talks infrastructure, and how deteriorated our roads, rails, highways, bridges, and ports have become. But all these fundamental transportation systems are still continuing to deteriorate.
    We were all encouraged by the passage of the Water Resources and Reform Development Act of 2014 (WRRDA), and the acknowledgement by substantial votes in both the House and Senate that our ports and waterways need additional investment and more resources to maintain the channels, harbors and waterways. A lot of effort went into educating the large number of House members that had never experienced or even heard of a WRRDA bill.
    The WRRDA bill authorized improvements to several deep-draft ports, and authorized a phased-in funding approach of the Harbor Maintenance Trust Fund for maintenance dredging of ports and harbor infrastructure. But this has not solved the problem, and we still have 20th century infrastructure, not able to support our 21st century economy.  
    How can this be, you might ask? WRRDA authorizes Congress to implement these funding approaches, but it does not mandate this investment strategy. The Appropriations Committees must actually make the decisions on how these navigation infrastructure projects will be funded. What makes the lack of funds for maintenance of the ports and harbors even more frustrating is the fact that Congress, back in the 20th century, 1986 to be exact, passed a WRDA that established the Harbor Maintenance Trust Fund. The Harbor Maintenance Trust Fund and its Harbor Maintenance Tax were authorized in the Water Resources Development Act of 1986, P.L. 99-662. The purpose of the Tax, a 0.125% ad valorem tax levied on cargo imported or domestically moved through federally maintained channels and harbors, is to pay for Army Corps of Engineers operations and maintenance dredging.
    The Tax is collected by the Bureau of Customs and Border Protection and directed to the Trust Fund. However, the monies are not immediately eligible for dredging activities. Those monies can only be spent if the funding is actually appropriated by Congress. The Trust Fund has continued to increase and now has a surplus in excess of $8 billion dollars.  The reason for the large surplus is that only a little more than half of the annual revenues collected are appropriated for maintenance of the harbors and ports.  Last year, $1.6 billion were collected, but the Corps was only reimbursed $979 million.  So, since 1986, the shippers have been paying a tax that is supposed to fund the maintenance needs of Federal ports and harbors. But, it has not worked out as authorized by the law. One could quickly conclude that we have been in port infrastructure denial. There is no easy way to resolve this as long as the Harbor Maintenance Trust Fund monies for maintenance must be appropriated and subject to the political vulnerabilities of the current budget process.  
    I keep wondering why we would want to subject our ports and waterways to this burden of political process and continued uncertainty. For the most part, these Federal navigation projects have gone through a rigorous economic evaluation, public comment, environmental compliance review, and in many cases, hundreds of millions of dollars have been invested to develop these ports and waterways, and yet these projects only receive a percentage of the actual maintenance dollars they need to keep the channels at full project dimensions (width and depth).
    These ports and waterways serve us all, and are the lifeblood of our economic engine. Why would we want to allow them to deteriorate, and not be able to receive the commodities we need, and to export the grain, coal, and manufactured goods that make our Nation strong? We must find a way to keep our ports and waterways fully capable of supporting the increasing flow of goods efficiently and ensure our ability to compete in world markets.
    It is time to legislate solutions, not just continue to talk about how bad our maritime infrastructure has become. It will be challenging and it will require bipartisan support.  Early on, in the 114th Congress, we are hearing discussions about our highway infrastructure, and the need for a tax increase. To hear this rhetoric from leadership gives me hope that maybe a 2016 WRDA can offer a solution that will not just kick the infrastructure can to another day, or pass the responsibility to another Committee. There is a solution. The revenue is there, and now is the time to fully use the Harbor Maintenance Trust Fund tax for its intended purpose. Now is the time to move our ports and harbors into the 21st century.



    (As published in the February 2015 edition of Marine News - http://magazines.marinelink.com/Magazines/MaritimeNews)
     

  • companies across the entire national system – are the only beneficiary to contribute 29-cents-per-gallon diesel fuel tax to a dedicated Inland Waterways Trust Fund, matched by General Treasury Funds, that pays for the costs of construction and major rehabilitation of the system. Other system beneficiaries –

  • rehabilitation will decide the fate of the waterway industry's plan, said federal and commercial officials. Under present requirements, the waterways trust fund, financed through fuel taxes on towboats, must supply half the money for major rehabilitation work. However, new rules proposed last year by

  • the funding are: —$142.1 million to be funded by the Department of Defense for transfer to Coast Guard; —$31.9 million from the Oil Spill Liability Trust Fund; —$35 million from the Boat Safety account. Capital Improvement—The $414-million request funds continued replacement and modernization of major

  • WCI: Olmsted Federalization: permanent cost-sharing for the remaining cost of the Olmsted project will be 85% General Fund, 15% Inland Waterways Trust Fund, freeing up approximately $105 million per year for funding other Trust Fund priority projects with Olmsted funded at $150 million per year.

  • appropriated $1.086 billion in FY 2014, up slightly from the previous year, to USACE for navigation projects reimbursed by the Harbor Maintenance Trust Fund. The federal Harbor Maintenance Tax, established in 1986, is imposed on shippers based on the value of goods moving through ports. The tax is no

  • (D-MN), Sen. Lamar Alexander (R-TN), Sen. Tom Harkin (D-IA), Sen. Al Franken (D-MN), and Sen. Pat Roberts (R-KS). They are:  Changing Inland Waterways Trust Fund (IWTF) cost-sharing for the over-budget Olmsted lock and dam project, with the remainder of the cost of the project to be paid 100% by general treasury

  • few other important milestones for us. Recent highlights include the cost-share for Olmsted Lock and Dam being changed from 50 percent Inland Waterways Trust Fund/50 percent General Fund to 15 percent Inland Waterways Trust Fund/ 85 percent General Fund. This will free more Trust Fund dollars to be spent on

  • , but with this difference: the 2013 studies included proposals to use some portion of the fuel tax revenues that are paid into the Inland Waterways Trust Fund to provide the necessary debt service and return on equity for such financing.   Sorting out the Funding Rules The use of funds received by the

  • emerge between the Administration and Congress. For example, the Administration does not propose spending all of the money in the Inland Waterways Trust Fund (IWTF), paid for by the $0.29/gallon tax on maritime diesel fuel. To be fair, President Obama similarly withheld trust fund revenue, but for FY18

  • user fee. The increase will be effective April 1, 2015 and funds – around $40 million from industry levies – will be deposited into the Inland Waterways Trust Fund for the benefit of priority navigation project construction and major rehabilitation. On December 3, 2014, the House of Representatives passed

  • level enacted by Congress.Beyond the reduction to the Corps’ budget, most disappointing in the budget was a request for $0 from the Inland Waterways Trust Fund (IWTF) for construction of inland waterways lock projects. The FY20 Administration budget requested $111 million for the Lower Mon project near Pittsburgh

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