April 10, 2019

Chairs DeFazio, Napolitano Statements from Hearing on “The Cost of Doing Nothing: Why Full Utilization of the Harbor Maintenance Trust Fund and Investment in our Nation’s Waterways Matter”

Washington, D.C. — The following are opening remarks, as prepared for delivery, from Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR), and Chair of the Subcommittee on Water Resource and Environment Grace F. Napolitano (D-CA) during today’s hearing titled: “The Cost of Doing Nothing: Why Full Utilization of the Harbor Maintenance Trust Fund and Investment in our Nation’s Waterways Matter.”

Chair DeFazio:

Thank you, Madam Chairwoman, for holding this important hearing on the need to invest in our Nation’s ports and inland waterways.

The Corps has a long history of success in addressing the nation’s water resources needs – from ensuring safe and reliable navigation along our coasts and inland systems, to providing critical flood protection for our communities, to restoring some of our nation’s environmental treasures. However, today’s hearing is an opportunity to highlight one of the more frustrating and inefficient aspects of the Federal government – how we fund the maintenance of our commercial harbors.

As we all know, Congress worked with the Reagan Administration to create a mechanism to recover the operation and maintenance dredging costs for commercial ports from maritime shippers – called the Harbor Maintenance Tax.  This fee, directly levied on importers and domestic shippers using coastal and inland ports, was meant to provide the Corps of Engineers with sufficient annual revenues to keep our ports in a good state of repair, and sustain our local, regional, and national economies that rely on the movement of goods and services through our commercial ports.

The good news is that we are currently collecting sufficient revenues to adequately maintain our commercial harbors – of all sizes – as well as critical infrastructure, such as breakwaters and jetties, associated with these commercial ports.

The bad news is that we refuse to spend this money – or more accurately, we collect this money, but then use these funds to offset other expenditures in the Federal government while the needs of our commercial ports continue to grow.

Look at the state of our Nation’s ports and harbors. The U.S. Army Corps of Engineers estimates that the full channels of the Nation’s 59 busiest ports are available less than 35 percent of the time.  For smaller commercial harbors, such as Coos Bay or Port Orford, typically their dredging situations can be far worse.

The American Society of Civil Engineers estimates that our Nation’s ports and harbors will need an additional investment of $15.8 billion between now and 2020 to meet the demands of larger and heavier ships that will use the Panama Canal. This increased investment would protect $270 billion in U.S. exports, $697 billion in GDP and 738,000 jobs annually.

Today, because the Harbor Maintenance Trust Fund collects more revenues from shippers than Congress appropriates to maintain our harbors, approximately $9.5 billion in already collected tax revenues sits idle in the Harbor Maintenance Trust Fund.

If the rate of tax collections and expenditures continue on their current trend, CBO estimates that the balance of the Harbor Maintenance Trust Fund will reach more than $14 billion within a decade.

To be clear, concern about the misuse of Harbor Maintenance taxes is not a partisan issue. Widely supported actions taken by this Committee in 2014 to enact Trust Fund appropriations targets have been integral to increasing the level of appropriations maintenance dredging over the last 5 years.

However, discretionary appropriations targets are not enough to get us to full-utilization of the Trust Fund. That is why, on a bipartisan basis, this Committee has, twice, adopted language to provide the Secretary with full access to the revenues in the Trust Fund for maintenance dredging purposes – in essence, ensuring that all the existing revenues in the Trust Fund are utilized for their intended purposes – the maintenance of our commercial harbors.

Unfortunately, this language has not been enacted into law. 

Instead, the President continues to go in the opposite direction and proposes, in his fiscal year 2020 budget request, to underfund investment in our nation’s infrastructure – virtually guaranteeing that the Federal government will do little to ensure the commercial viability of our harbors and ports, and adversely impact the economic benefits that these critical linkages to trade and local jobs provide.

It is time we use our legislative authority to correct how Congress funds the operation and maintenance of our commercial harbors – and ensure these funds are used for their intended purposes.

I will again introduce legislation to fully utilize Trust Fund proceeds for their intended purposes – and ensure that the approximately $34 billion in harbor maintenance taxes available over the next decade are spent to maintain our harbors and ports.  My bill honors our long-term commitment to U.S. shippers and taxpayers, maintains and improves the competitiveness of U.S. businesses and industry, and sustains thousands of construction jobs and jobs dependent on a vibrant and efficient marine transportation system.

I urge your continued support for this legislation which would virtually ensure Congress uses already-collected funding to maintain our nation’s ports and harbors. 

Chair DeFazio remarks as delivered can be found here.

Chair Napolitano:

There is no question about the value of ports and harbors to our country and our economy. Oceangoing vessels carry more merchandise to trade by tonnage than all other modes combined. The case for federal investment is simple: we must use what we collect to maintain our ports to ensure and maintain America’s global competitiveness.

My region is home to the largest ports in the nation, the Port of Los Angeles and the Port of Long Beach.  These ports handle over 40% of the exports and imports into the United States. Los Angeles and Long Beach have invested billions of dollars of their own money to upgrade their infrastructure for the benefit of the entire nation so that goods can get to market across the country on time.  But like other ports across the U.S., the success of the Ports of Los Angeles and Long Beach are only as strong as their partnership with the federal government in maintaining our infrastructure.

The shippers at the Ports of Los Angeles and Long Beach pay over $260 million annually in Harbor Maintenance Taxes but they receive only $10 million back in harbor maintenance.  As of a few years ago, my ports were receiving nearly nothing back, until working together with then Ranking Member DeFazio, we were successful in enacting language in WRRDA 2014 that required the Army Corps of Engineers to allocate at least 10% of Harbor Maintenance Funds to all donor ports for expanded uses, or funds to continue to use their ports. This language also recognized the important role of emerging and Great Lakes harbors, and provided a designated set-aside for them as well

There has already been a lot of interest this Congress by the House and the Senate in resolving full utilization of the Harbor Maintenance Trust Fund.  Full utilization should be supported across the board- as it benefits everyone.  This Congress must also address inequities in the harbor maintenance trust fund.  It is not fair for harbors like mine to be paying so much in the tax and receiving so little.  I look forward to working with all of my colleagues as we find common ground to address the continuing needs of all our ports and harbors. If past success is prologue, I look forward to working with Now-Chair DeFazio in finding a solution for all.

Today’s hearing will also focus on the importance of the Inland Waterways System to our nation’s heartland. They face challenges with an aging infrastructure system.  I look forward to hearing from our witnesses today on the value of the inland waterway to our country.

Thank you witnesses for being here today.  Thank you especially to Executive Director Gene Seroka, with the Port of Los Angeles for joining us.

I look forward to everyone’s testimony.  

Chair Napolitano remarks as delivered can be found here.