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Update and Additional Information on WRRDA

Posted in Capital and Funding, Legislation, Tax, Water Quality

As expected, the Senate passed WRRDA yesterday by a vote of 91-7.

The importance of the first water resources bill in seven years cannot be overstated, particularly if you are a port on the west coast. For years, your shippers have been paying into the Harbor Maintenance Trust Fund (HMTF), presumably for maintaining the harbors being used (the use of which caused the tax to be incurred in the first place). Instead, appropriations from the HMTF have lagged behind the revenues collected (to the tune of a $7 billion surplus at the end of fiscal year 2012, which was used to make an accounting dent in the federal debt and deficit), while navigation channels got narrower and shallower and vessels grew bigger and bigger. WRRDA solves this problem by tying HMTF appropriations to HMTF revenue. Now, taxes collected from shippers can help create channels for shippers to keep shipping, easing the pain of charging the HMTF in the first place.

If you are a west coast port, you had a different problem, referred to by the Port of Seattle CEO as “the HMT land border loophole.”  Because the HMT does not apply to cargo that comes through non-U.S. ports (for instance, in Prince Rupert and Vancouver, British Columbia) and then over land into the U.S., it incentivizes the use of Canadian or Mexican ports to the detriment of ports up and down the west coast, particularly those in the northwest who compete very directly with Canadian ports that have become well suited over the past few years to handle container ships.

WRRDA includes $25 million for “donor ports” (like the Ports of Seattle and Tacoma) to use for port infrastructure improvements and rebates to importers and shippers. I’m not sure WRRDA completely fixes the land border loophole, but the spending should help our west coast ports keep pace with some necessary upgrades and rebates to encourage ships to travel this way to get their goods to market.