Washington state senators introduce bill for a new maritime goods user fee.
By Chris Dupin
U.S. Sens. Patty Murray and Maria Cantwell said they will introduce legislation when the Senate returns in September to repeal the Harbor Maintenance Tax (HMT) on imports and replace it with a new Maritime Goods Movement User Fee that would also be used to fund port improvements.
Murray and Cantwell expressed concern that HMT, an ad valorem tax charged to importers bringing goods through U.S. ports is diverting international cargo bound to the United States to ports in Canada and Mexico because when cargo moving through those ports subsequently crosses the U.S. border by rail or truck it’s currently not subject to HMT. That, they say, harms U.S. ports such as Seattle and Tacoma.
HMT “makes it harder for our ports to compete with Prince Rupert to the North or the Port of Lazaro Cardenas to the South. The threat is real,” Cantwell said.
The rate on the new fee would be the same as HMT — 0.125 percent of the cargo’s value.
Money collected by HMT tax goes into the Harbor Maintenance Trust Fund, and is used to pay for maintenance dredging of federal navigation channels. But for years, the shipping industry has complained that only half the money that goes into the fund gets spent. The rest is used to reduce the federal deficit.
The surplus in the fund was estimated to be $7 billion at the end of fiscal year 2012, and is growing by hundreds of millions of dollars each year.
For several years, Congress has considered a bill called the RAMP (Restore America’s Maritime Promise) Act that would require all money collected by the HMT to be spent for its intended purpose immediately. The Water Resources Development Act of 2013, enacted by the Senate in May, would accomplish that gradually by 2020.
The Murray-Cantwell bill calls for all proceeds from the new user fee to be made fully available to Congress to provide for port operations and maintenance. This would double the amount of funds available for American ports, they said, and help exports.
Ports complain silting is reaching crisis proportions. The American Association of Port Authorities said the 59 busiest ports on average only have their channel dimensions available 35 percent of the time.
Murray and Cantwell said their legislation would “set aside a portion of the user fee for low-use, remote and subsistence harbors that are at a competitive disadvantage for federal funding.” It would also create a competitive grant program using a percentage of the collected user fees to improve the U.S. intermodal transportation system so imports and exports can more efficiently reach their intended destinations. That later provision could make the bill appealing to ports on the West Coast that do not need to spend a lot of money on dredging. Murray noted while Seattle and Tacoma generate 7 percent of the funds for HMT, they only receive a penny for every dollar collected.
AAPA had not yet taken a position on the Murray-Cantwell proposal, but does support full use of HMT revenues and “more equity for HMT donors.”
Imports that originate in Canada or Mexico would not be subject to the proposed user fee.
Kristin Meira, executive director of the Pacific Northwest Waterways Association, said her group will support the Murray-Cantwell legislation when it’s introduced. Northwest ports are a “microcosm of the U.S. port community,” she said, with both large and small ports; ports that require maintenance dredging on an annual basis or every few years, including major export gateways on the lower Columbia River; and Seattle and Tacoma, which handle lots of imports and exports, but are naturally deep.
Wendy Zatylny, executive director of the Association of Canadian Port Authorities, told the Toronto Globe and Mail the new fee was of great concern and “would have a big impact on the container ports here in Canada, and it’ll have an impact as well on consumers.”
