Sens. Patty Murray and Maria Cantwell, D-Wash., next month will introduce legislation that would repeal the controversial harbor maintenance tax and replace it with a user fee to fund harbor dredging and maritime-related intermodal infrastructure projects.
Sens. Murray and Cantwell announced the details of the Maritime Goods Movement Act for the 21st Century at a press conference Thursday at the Port of Seattle.
A unique feature of the legislation, which will be introduced in September when Congress returns from its summer break, is that it will set aside some of the revenue for smaller ports that usually do not receive federal funding.
A key goal of the proposed legislation is that it seeks to prevent the diversion of U.S.-bound cargo to ports in Canada or Mexico by importers seeking to avoid payment of the harbor maintenance tax.
The 0.125 percent levy on imports can add several hundred dollars to the cost of shipping a container through a U.S. port. The ports of Seattle and Tacoma have been outspoken in charging that some importers ship through Vancouver or Prince Rupert, British Columbia, and then rail or truck the containers into the U.S., to avoid paying the HMT.
A fact sheet released by the senators said the legislation will “ensure that shippers cannot avoid the maritime goods movement user fee by using ports in Canada and Mexico.” The process for collecting the user fee on cargo shipped through other countries is detailed in the legislation.
Another feature of the proposed legislation is that 100 percent of the revenue generated by the user fee must be spent on port and intermodal projects. U.S. ports estimate that less than half of the almost $2 billion that is collected each year from the HMT is actually spent on port projects. The remainder is diverted to the general fund.
Smaller ports find it difficult to secure harbor maintenance fund revenue, and the maritime goods movement act seeks to address that issue by setting aside some of the revenue for “low-use, remote and subsistence harbors that are at a competitive disadvantage for federal funding.”
Therefore, in addition to generating support from Seattle and Tacoma, the proposed bill also has the support of smaller Washington ports such as Grays Harbor and Vancouver.
The senators said the new maritime goods movement user program would be funded by “closing loopholes that allow the largest oil and gas companies in America to receive billions of dollars in taxpayer revenue, even though they enjoy profits in excess of $100 billion annually.”
This legislation would conflict with the Water Resources Development Act bill passed in May by the Senate.
That bill seeks to reform the harbor maintenance tax by directing that the Army Corps of Engineers spend HMT revenue fully by 2020. The WRDA bill would spend $1 billion of the approximately $1.8 billion to be collected in fiscal year 2014 on port projects. The intention is to increase the expenditures by $100 million a year until full spending is achieved.
The WRDA bill, which calls for speeding up the approval process for port and waterway projects, must be acted upon by the House of Representatives.