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American Shipper

Senate committee passes pro-port WRDA bill

The Water Resources Development Act reauthorization includes provisions sought by the nation’s port authorities related to how harbor deepening projects are funded, getting more money for maintenance dredging in the pipeline and authorizing new projects.

   The U.S. Senate Environment and Public Works Committee on Thursday approved a Water Resources Development Act reauthorization bill that aims to improve port and inland waterway infrastructure used by commercial vessels.
   The bill, S. 2848, includes modernization of the cost-share formula for deepening projects, extension of funding authorization for donor and energy-transfer ports, and new language to improve the approach of appropriating annual Harbor Maintenance Tax (HMT) revenues until full use of the funds is achieved in 2025.
   Other provisions authorize more than two dozen harbor deepening projects recommended by the U.S. Army Corps of Engineers, including Port Everglades in Fort Lauderdale, Fla. Once authorized, federal funds for project construction can be sought through annual Energy and Water Development appropriations bills.
   The new cost-share formula would establish 50-feet as the depth where the federal government would cover 75 percent of the dredging cost and local sponsors would pay the balance for deepening projects. For three decades, deepening projects for depths greater than 45 feet have been split 50/50. The Water Resources Reform and Development Act (WRRDA) of 2014 revised the cost-share depth to 50 feet from 45 feet for maintenance dredging. The Senate provision aligns new construction and maintenance dredging policies and reflects the fact that the standard depth at many ports must be 50 feet to accommodate next-generation cargo vessels without restriction.
   The HMT funding tweak is intended to correct an Obama administration budget decision that would undermine efforts to increase dredging activity at ports. The HMT is assessed on the value of imports and domestic cargo that moves through ports. About $1.7 to $1.8 billion is now collected each year, but Congress was only appropriating about 50 percent of the money. The rest was held as surplus to mask the overall government budget deficit and now totals more than $8.6 billion.
   The 2014 legislation instructs congressional appropriators to utilize 100 percent of the HMT Trust Fund, phased in over 10 years, for maintenance dredging and establishes a new prioritization schedule for ports.
   Under the bill, the amount of money applied from the HMT Fund for its intended purpose is supposed to gradually increase over 10 years. In fiscal year 2015, HMT Fund distributions was targeted to reach 67 percent of revenue.
   But the Obama administration’s fiscal year 2017 budget request estimates HMT revenues will be $225 million less than the prior year. The WRRDA legislation assumed that revenues would always increase and, therefore, funding would automatically move toward full use by 2025.
   Based on the 2017 percentage targeted to be used from the HMT Fund, there will be $123 million less for maintenance dredging than appropriated in 2016 if Congress adopts the Obama request, according to Jim Walker, director of navigation policy and legislation at the American Association of Port Authorities.
   The new WRDA bill, supported by the AAPA, calls for the annual authorized target funding level to be either the greater of the existing target, or 103 percent of the prior year’s HMT appropriation until full use of HMT revenues is achieved.
   The Senate bill also extends the authorization period by two years for so-called “donor” ports and energy transfer ports to be eligible for funding from the Harbor Maintenance Tax. WRRDA provided some equity to ports that require minimal dredging to maintain their authorized depths so that they could use funds for other improvements. Ports with a large percentage of their throughput tied to energy products such as oil also qualified to use HMT funding for alternative uses, such as berth deepening and environmental remediation.
   WRRDA authorizes appropriators to direct $50 million of HMT money each fiscal year over four years for alternative uses at ports that paid more into the system, as well as energy ports, with four additional years of such authorization if Congress hit the appropriation target for HMT spending in each of the first four years. But Congress came up short in fiscal year 2015, primarily because appropriators had almost wrapped up the annual Energy and Water Development appropriation bill by the time WRRDA passed in the summer of 2014, Walker said.
   Missing the target means that donor-port authorization would expire in 2018, but the Senate bill extends that authorization through 2020 and if the HMT targets are hit the authorization will get extended through 2025. 
   The Senate bill also includes several AAPA technical recommendations on how to streamline and expedite dredging projects:
     • Authorizes the Army Corps to provide technical assistance to non-federal sponsors that are developing their own feasibility study for harbor deepening;
     • Expands the existing authority of the Army Corps to accept funds from states and local governments to carry out water resources projects;
     • Allows the Army Corps to accept financial donations, in addition to services and materials, to expedite projects;
     • And allows partnerships with non-federal entities to carryout maintenance dredging at their own expense to alleviate the Corps’ work backlog, essentially privatizing some of the dredging function.
   “This bill, which would ensure the viability of the U.S. Army Corps of Engineers’ Civil Works programs including navigation, flood risk management, recreation, and infrastructure and environmental stewardship, would be an important step toward providing critical economic benefits to the nation,” the U.S. Chamber of Commerce said in a letter to the EPW Committee.
   The Waterways Council applauded the committee for rejecting the idea of tolling locks to finance public-private partnerships on inland waterways and for other steps that would preserve use of Inland Waterways Trust Fund money for capital projects during the next five years.
   It has been almost  two years since Congress passed the WRRDA legislation following a seven-year span without any change in funding ceilings or policy changes related to dredging, navigational upgrades, environmental protection and other federal responsibilities carried out by the U.S. Army Corps of Engineers.
   Senate and House transportation committee leaders committed in 2014 to keep WRDA reauthorizations on a two-year cycle. The Senate bill, which passed 19-1, now goes to the full Senate for a vote. Senate EPW Committee Chairman James Inhofe, R-Okla., and ranking Democrat Barbara Boxer, will now try to convince Senate leadership to bring the bill up for a vote soon. Whether, or when, that will happen in the middle of a rancorous presidential election season is unclear.
   The House Transportation and Infrastructure Committee has yet to release a draft WRDA bill of its own, but Chairman Bill Shuster, R-Pa., has indicated he wants to get a bill to the full House for consideration by June.

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