Harbor Maintenance Finance and Funding (CRS Report for Congress)
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| Release Date |
Revised Sept. 12, 2013 |
| Report Number |
R43222 |
| Report Type |
Report |
| Authors |
John Frittelli, Specialist in Transportation Policy |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
The federal government has assumed principal responsibility for maintenance of the nation's harbors and shipping channels. Harbor maintenance activities are overseen by the U.S. Army Corps of Engineers (the Corps or USACE) and largely funded through the harbor maintenance trust fund (HMTF), which receives revenue from taxes on waterborne cargo and on cruise ship passengers. The future of the HMTF is a major issue in consideration of the Water Resources Development Act (WRDA), which is now pending in Congress. Legislation passed in the Senate (S. 601) and under consideration in the House (H.R. 3080), if enacted, would significantly increase, but by differing amounts, annual spending from the HMTF. Each bill would make a variety of other changes in the way federal harbor maintenance funds are allocated and spent, but there are notable differences between the two bills.
The debate over harbor maintenance is occurring in the context of heightened interest in the cost-effectiveness of industrial supply chains. In 2010, the U.S. Departments of Transportation and Commerce launched the Competitive Supply Chain Initiative, which seeks to strategically improve the nation's marine transportation system and its connecting infrastructure. Most sea-borne imports and exports move through a relatively small number of ports, but a significant proportion of HMTF spending is used to cover the cost of dredging harbors that have relatively little or no cargo. One reason for this is that the Corps still maintains navigation channels and harbors authorized a century or more ago, when maritime commerce was carried by smaller vessels utilizing a larger number of harbors and coastal channels protected from the open ocean. One key issue for Congress is the extent to which the HMTF, which is funded mainly by a tax on cargo, should give priority to improvements that do not benefit commercial shipping.
Other key policy questions for Congress include the following:
Should the HMTF continue to finance dredging only of channels, which benefits mainly ports with shallow natural harbors, or should the scope of allowable activities be increased to benefit ports with deeper harbors, including some of the nation's largest cargo ports?
Should there be a relationship between the amount of revenue collected from a port through harbor maintenance taxes and federal spending on that harbor?
Does the harbor maintenance tax, as presently levied, pose an obstacle to domestic shipping, and particularly to transshipment of international freight aboard coastal vessels?
Should the government be required to spend annual harbor maintenance tax collections when received rather than accumulating them in a trust fund, which would result in more spending for harbor maintenance but also increase the federal budget deficit?
Is the Corps compiling the necessary information to further improve the efficiency of the nation's maritime supply chain and to ensure the efficient allocation of available resources?
