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American Shipper

House Democrats voice opposition to WRDA after late change

The Water Resources Development Act has mostly received bipartisan support, but Democrats in the House are upset that a provision that would have protected Harbor Maintenance Tax receipts from being diverted for other uses was removed from the final draft.

   The reauthorization of the Water Resources Development Act (WRDA) appears set for a floor vote in the House next week, but Democrats who strongly supported the bill say they will vote against it because of a late change in the final draft made by the Republican leadership.
   The bipartisan legislation identifying policy reforms and funding parameters for U.S. Army Corps of Engineers’ projects to improve navigable waterways for commercial shipping, control flooding, and restore coastal and river environments, was approved by the Transportation and Infrastructure (T&I) Committee in May. The Senate passed its version of the bill last week.
   A provision included by Rep. Peter DeFazio, D-Ore., the ranking member of the T&I Committee, would have protected Harbor Maintenance Tax (HMT) receipts from being diverted for other budgetary uses, but it was stripped from the final draft of the bill that was circulated to members Thursday.
   “This is disrespectful to the Transportation Committee and its members. We cannot continue to neglect our port infrastructure and put at risk job growth and our economy. Therefore, I will not support WRDA in its current form and I encourage my colleagues to do the same,” Rep. Janice Hahn, D-Calif., whose district includes the Port of Los Angeles, said in a statement.
   During a press conference, Minority Leader Nancy Pelosi said Democrats would not vote for WRDA because of the HMT change and no inclusion of emergency funding for cities with contaminated drinking water, like Flint, Mich.
   The 2014 Water Resources and Reform Development Act (WRRDA) attempted to address the practice of using trust fund money for other purposes than dredging harbors to maintain their authorized depths and widths so vessels can safely reach port berths. The HMT receives about $1.8 billion in revenues from a tax based on the cargo value of imports and coastal shipments, as well as on cruise passengers, but Congress for years only appropriated about half of the amount for channel maintenance. The rest of the money has been used to mask the size of the federal deficit. Over time, the HMT Fund built up a surplus of more than $8.6 billion, although it is not expected that Congress will return the money.
   The Obama administration is projecting that the HMT will generate about $1.6 billion in revenue in fiscal year 2016. It is possibly less than before due to the lower price of oil, or other goods.
   WRRDA established a phased approach over 10 years for appropriating the full amount of collected taxes. In the first year, 67 percent of HMT receipts were directed for dredging and the law called for incremental increases each year until full funding is achieved in 2025. Congress slightly missed hitting the HMT target in fiscal year 2015 and exceeded it in fiscal year 2016. Current proposals would surpass the mark for fiscal year 2017. The American Association of Port Authorities is requesting $1.28 billion for HMT work, a 1.3 percent increase over the 2016 funding level.
   However, proponents of maritime infrastructure investment note that the targets are not binding and that maintenance dredging funds remain subject to annual appropriations and the political process.
   The DeFazio provision was designed to fix that by taking the HMT “off-budget” in 2027 so that Congress doesn’t have to offset the lost HMT money used in the rest of the budget. Under the Budget Control Act, every revenue increase in the budget has to be offset by cost cuts. The change would essentially seal off the HMT from being raided, much like the highway and aviation trust funds are sealed off and used for their intended purpose.
   T&I Chairman Bill Shuster “supports more investment in our infrastructure, but that provision had to be removed to ensure compliance with the rules of the House and the Congressional Budget Act,” T&I spokesman Justin Harclerode said via e-mail.
   “We had the potential chance to catch up on the massive backlog of maintenance in our harbors,” DeFazio told reporters, according to The Hill newspaper. “But the Republicans and their hypocrisy want to continue to collect the tax dedicated to harbor maintenance and divert part of that tax to other purposes.”
   Congressional observers say Republicans likely have enough votes to carry WRDA in the House, but whether a conference bill could be agreed on and pass the Senate is an open question.

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