The Senate's passage of the Water Resources Development Act on Wednesday paves the way for increased investment in ports, and speedier completion of maritime and inland waterway projects. Because the bill is 294 pages and far from a page-turner, The Journal of Commerce decided to break down what the Senate version calls for and what challenges the legislation faces ahead.
Q. What is WRDA?
A. The legislation is the major vehicle for the authorization of port navigation, inland waterway and flood control projects. The bill is intended to be biennial but that hasn’t been the case recently, considering the last WRDA bill was passed in 2007. The Senate version would authorize about $12.5 billion over the next 10 years, according to the Congressional Budget Office.
Q. How does the Senate version propose to increase port funding?
A. By forcing the U.S. Army Corps of Engineers to spend all the money it collects through Harbor Maintenance Taxes on ports. Historically, only about half of the money collected through the 0.125 percent levy on the value of imported cargo goes back to ports, with the rest being used to fill general budget holes. Although ports would get a slightly larger share under President Obama’s budget for fiscal 2014, they would still only receive $834 million of the some $1.8 billion in taxes expected to be collected. The Army Corps could complete deepening projects on all commercial ports to authorized depths if it could spend $2 billion annually for five years on dredging work, Jo-Ellen Darcy, assistant secretary of the Army for Civil Works, which heads the corps, told the House on May 15.
Q. What is the timeline for full use of HMT funding?
A. Starting in fiscal 2014, the Army Corps would have to spend at least $1 billion of collected HMT on port projects. The minimum base would increase by $100 million each fiscal year afterward until all the collected dollars would head to ports in fiscal 2020.
Q. How would this additional revenue be allocated?
A. Once all the ports receive their needed dollars for maintenance dredging and jetty repair, a special group of port projects would be first in line for the remaining dollars. Great Lakes navigation projects would get 20 percent, while ports that are more than 14 feet deep and handle more than 10 million tons of cargo annually would be in line for the rest.
Q. How will ports that already have naturally deep channels be affected?
A. Because naturally deep ports generally pay far more in HMT dollars than they receive, the Senate bill aims to be more "equitable" in allocations. If there is still money after the first two waves of projects receive funding, ports in select states could get money for adjacent berthing and contaminated sediment. There likely will be money left over after the first two rounds of funding distribution, particularly as the minimum amount the corps has to spend on port projects rises. The amount of money available to ports in select states — California, New York, Pennsylvania, Virginia, South Carolina, Maryland, Washington and Texas — is limited to whichever is lower: 40 percent of the excess dollars or 20 percent of the ports' total operations and maintenance budget
Q. How would the Senate bill speed up the permitting of maritime and inland waterway projects?
A. The bill aims to streamline permitting by forcing the environmental agencies involved in the process to agree to a deadline for either giving the project their blessing or not. If those agencies, including the Environmental Protection Agency and National Marine Fisheries Services, fail to meet the deadlines, they face fines of up to $20,000 a day.
Q. How many projects would WRDA authorize and what are the major ones?
A. The bill would authorize 27 port, inland waterway and flood prevention projects. WRDA would give the go-ahed for a fix at the Port of Jacksonville and reauthorize the Port of Savannah’s deepening project. The bill would allow the federal government to transfer ownership of the future site of the Port of Virginia’s planned container terminal to the state, allowing the project to move forward.
Q. What type of reform would the Senate version bring to how inland waterway projects are completed?
A. Most noticeably, the bill would no longer require Inland Waterway Trust Fund dollars to be put toward the overbudget and delayed Olmsted lock and dam project. By shifting the burden away from the trust fund to other federal coffers, approximately $750 million will be freed up for other inland waterway project. Under the bill, the threshold for major rehabilitation would be raised from $14 million to $20 million. The bill also instructs the Corps to prioritize navigation projects and speed the completion of construction work.
Q. Does WRDA address inland waterway funding needs?
A. No, because revenue enhancement measures have to come from the House. The barge industry wants to raise its fuel tax by 30 to 45 percent, or between 6 and 9 cents a gallon. The Obama administration, however, wants to increase project funding by charging a per-vessel user fee, a move the industry says would unfairly burden operators that operate in stretches where locks are more plentiful.
Q. When will the House introduce its version of WRDA?
A. The House Transportation and Infrastructure Committee is expected to take it up this summer, as it's a top priority for Chair Bill Shuster, R-Pa.
Q. What will the House’s version of WRDA look like?
A. It’s too soon to tell, but some stab at HMTF reform looks likely. Members of a special House panel on freight transport expressed their frustration on Wednesday that the corps doesn’t spend all HMT revenue on ports. “In other words, the income from the trust fund is being used to change the figure in the national deficit without any actual impact...,” said Rep. Jerrold Nadler, D-N.Y.
Q. How could the House version be different?
A. The largest potential departure House Republicans have signaled is on how projects will be authorized. Under the Senate version, projects authorized by the corps will move forward. But House Republicans say that approach cedes too much control to the Obama administration. With an earmark in place, though, it’s unclear how the House could put its stamp on the authorization process.
Q. Will Obama sign it WRDA into law?
A. Too soon to say, especially because much depends on the House’s approach. Plus, the Obama administration isn’t a big fan of the Senate version.
Q. What doesn’t the Obama administration like about the Senate version?
The administration criticized the chamber’s push to use the full amount of HMT revenue, writing in a letter that it would force the government to triple how much it spends on port projects “over the next 10 years without regard to the return to the nation from this investment.” In other word, the administration doesn't want to be forced to cut other program as a result. The Senate originally proposed a bill that would use all HMT dollars starting in fiscal 2014, instead of the adopted phase-in approach.
In the same letter, the administration argued that in trying to streamline corps project permitting the Senate was “jeopardizing bedrock environmental law.” The Obama administration says it's already working to fast-track infrastructure projects without running afoul of the environmental concerns. Obama, for example, sped up the review and permitting projects for seven big infrastructure projects on the East Coast in July.