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1 1 (September 10, 2020)

handle is hein.crs/govdbrc0001 and id is 1 raw text is: September 10, 2020 Distribution of Harbor Maintenance Trust Fund Expenditures As Congress deliberates on authorization legislation for Army Corps of Engineers water resource projects (House- passed H.R. 7575, Senate-reported S. 3591), it is considering how to direct the use of funding available for harbor maintenance. Harbor maintenance consists mo s tly of the dredging of navigation channels andharbors along the coasts and Great Lakes, and to ales ser extent at inland ports. The policy choices offeredby thesebills will have consequences for navigation efficiency and safety, recreation uses, and the levels ofstateandprivate investment in port infrastructure. They may also affect competition among U.S. ports to capture import and export cargo and the as sociated logistics-industry jobs. At the center of these policy decisions is the Harbor Maintenance Tru stFund (HMTF), created byCongress in 1986 and funded primarily by receipts froma tax on importers of waterborne cargo (assessed at a rate of $1.25 per $1,000 worth of cargo). In FY2019, harbor maintenance taxcollections totaled $1.6 billion, investment earnings totaled $214 million, and expenditures fromthe fund through annual appropriations totaled $1.6 billion. The amount of maintenance required to keep channels open varies considerably among harbors. Some of the ports that draw large flows of imports, and therefore generate a large portion of harbor maintenance taxrevenue, are naturally deep and require relatively little maintenance dredging. While channels at other major commercial ports are generally adequately maintained, some harbors with lower volumes ofcommercialcargo have maintenance backlogs, potentially affecting fishing and recreationalboat traffic. The Unmpet BSaarck The value of U.S. imports has increased at a fasterrate than HMTF expenditures, so the trust fundhas built up an unspent balanceofmore than $9 billion. H.Rt 7575 potentially facilitates spending down the unspent balance by removing this amount fromcounting toward the limits on discretionary spending setin the annualbudget resolution. These limits apply to spending providedin appropriations acts and constrain spending under the jurisdiction of each appropriations subcommittee (in this case, the Subcommittees on Energy andWater Development in each house of Congress). Thus, if H.R. 7575 were to be enacted, spending more fromthe HMTF would not require spending les s on other activities within annual Energy and Water appropriations bills. This approach would further recent enactments intended to spendmore from the tru stfund. In the CARES Act (P.L. 116-136, § 14003), Congress directed that the use of HMTF funds up to the prior fis calyear's deposits into the fund would not count against annual discretionary budget limits. In the Water Resources Reformand Development Actof 2014 (WRRDA 2014; P.L. 113-121, §2101), Congress set a target annual increase in the percentage ofeach year's harbor maintenance taxrevenue that shouldbe spent on harbor maintenance, such that by FY2025 an amount equal to the prior year's receipts would be targeted for spending. Since 2014, Congress has generally appropriated at least the targeted percentage of harbor maintenance taxrevenues for each fiscal year. Although HMTF annual outlays averaged $843 million from FY2009 to FY2013, they averaged $1.392 billion from FY2015 to FY2019. Section 1108 of the Water Resources Development Act (WRDA) of 2016 (Title I of P.L. 114-322) establisheda floor, should HMTF collections decreasefromone year to the next, which would keep spending fromdecreasing in proportion to the decreasein collections. Due to Coronavirus Disease 2019 (COVID-19) and a drop in waterborne trade, harbor maintenance taxreceipts are down 17% for the firs t half of CY2020 compared to CY2019. i ,,, , , , H.R. 7575 would guarantee that emerging harbors, defined as those handling less than 1 million tons of cargo annually, receive at least 20% of HMTF expenditures annually, in lieu of the current 10% guarantee (33 U.S.C. §2238). For context, an average-size ship transporting oil or containers internationally carries around 80,000 tons, s o an emerging harbor transits the equivalent tonnage ofone average-size shipload per month. Thebill would also increase the minimum share for the Great Lakes Navigation Systemto 12% of total HMTF expenditures, rather than the current 10% of asmaller subset of HMTF expenditures. These provisions reflect continued congressional concern that cargo volume notbe the sole criterion in setting HMTF spending priorities. Until 2014, the Corps of Engineers evaluated the economic consequences of not sufficiently maintaining a harbor's channels mainly by estimating the likely effect on cargo volume. In WRRDA 2014 (§2102), Congress directedthe Corps to also considera needs ass essmento fharbor conditions, thenational and regional significance of a harbor, and any support it provides for military readiness. WRRDA 2014 also establishedthat emerging harbors and the Great Lakes Navigation System receive at least a certain minimum percentage of HMTF spending. According to the Corps, annual appropriations have met thesetargets for emerging harbors and for the Great Lakes Navigation System The Corps is authorized to use the HMTF only for harbor operations andmaintenance, orO&M (33 U.S.C. §2241). New project construction, such as dredging to deepen or A A '2 k y\

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