Congress reforms harbor maintenance funding

Friday [March 27, 2020]  Congress enacted H.R. 748, tee Coronavirus Aid, Relief and Economic Security Act (CARES Act). The legislation provides more than $2 trillion in assistance to help the nation confront the health and economic challenges of the COVID-19 pandemic. Buried deep in the 800+ page legislation is a provision (below) to help ensure full use of the Harbor Maintenance Tax (HMT).

The maritime industry has worked for over a decade to convince Congress to increase spending from the Harbor Maintenance Trust Fund (HMTF) and fully utilize tax revenue generated by the HMT. The primary purpose of the tax is to fund the U.S. Army Corps of Engineers operation and maintenance program. In the Great Lakes this includes dredging of navigation channels, repair and rehabilitation of breakwater and jetty structures, and operation and maintenance of the Soo, Chicago and Black Rock locks.

While Congress has been incrementally increasing annual appropriations from the trust fund, that generosity is not guaranteed and could change in the future. The provision enacted in H.R. 748, will remove any motivation for the House and Senate Appropriations Committees to underfund the program.

The provision states that any appropriations from the trust fund for the Corps of Engineers will be exempt from federal budgetary caps up to the amount of revenue received into the trust fund the previous fiscal year. While this provision does not force Congress to fully fund the program, it takes away any budgetary motivation not to. The provision is permanent and will apply to future years. It has a delayed implementation date of either January 1, 2021, or the date of enactment of the next water resources legislation - which ever is earlier. The reason for the delay is to allow the House and Senate time to consider a structured funding distribution plan developed by the American Association of Port Authorities (AAPA). That plan would ensure that a guaranteed share of annual HMTF distributions go to donor and energy transfer ports, emerging harbors (those handling less than 1 million tons) and the Great Lakes Navigation System.

This is a huge win for the navigation industry and the many people who have worked for more than a decade to convince Congress to reform harbor maintenance funding. Special thanks go to Senator Richard Shelby (R-AL), who as Chairman of the Senate Appropriations Committee, championed this provision and insisted on its enactment.

The text of the provision states:

"Section 14003: Any discretionary appropriation for the Corps of Engineers derived from the Harbor Maintenance Trust Fund (not to exceed the total amount deposited in the Harbor Maintenance Trust Fund in the prior fiscal year) shall be subtracted from the estimate of discretionary budget authority and outlays for any estimate of an appropriations Act under the Congressional Budget and Impoundment Control Act of 1974 or the Balanced Budget and Emergency Deficit Control Act of 1985: Provided, That the modifications described in this section shall not take effect until the earlier of January 1, 2021 or the date of enactment of legislation authorizing the development of water resources and shall remain in effect thereafter."<>