Washington state's U.S. senators, Democrats Patty Murray and Maria Cantwell, want to repeal the harbor maintenance tax (HMT), a major funding source for dredging projects, and replace it with a new fee on maritime freight. They say their plan, announced on Aug. 15, would double funding for dredging and other port work and recapture freight that now heads to ports in Canada and Mexico.
Northwest ports, such as Seattle, back the proposal. Kristin Meira, Pacific Northwest Waterways Association executive director, says, "We view this as a positive development in the conversation about how to have a comprehensive reform and fix for the Harbor Maintenance Trust Fund." Receipts from the HMT, a levy on waterborne imports, feed the trust fund, which finances dredging projects.
The senators plan to introduce a harbor-tax bill after the August break. Barry Holliday, Dredging Contractors of America executive director, declined to comment on a not-yet-introduced bill but said, "The challenges to our nation's ports and harbors are real, and numerous legislative proposals ... attest to this fact." He added, "It is admirable that Senators Murray and Cantwell are seeking to find a way to address these challenges."
But the legislative path for their proposal is unclear. The Water Resources Development Act (WRDA) that the Senate passed on May 15 hikes trust-fund spending to $1.5 billion in five years, from 2012's $877 million. It also sets aside some trust-fund aid for "donor" ports, such as those in Washington state, that collect more in HMT receipts than they receive for projects.
But Majority Leader Harry Reid (D-Nev.) and Sen. Barbara Boxer (D-Calif.), the WRDA bill floor manager, made clear they didn't want it to include a tax provision, a Senate aide says. For one thing, traditionally, revenue bills have originated in the House.
Another possible vehicle is the WRDA that House transportation committee Chairman Bill Shuster (R-Pa.) plans to roll out soon. Rep. Jim McDermott (D-Wash.), who supports the Murray-Cantwell plan, is weighing options for adding it to the House WRDA, including a floor amendment, a spokesperson says.
John Doyle, special counsel with law and lobbying firm Jones Walker LLP, says an HMT overhaul is more likely to come in a bill other than WRDA. "I'm not convinced there is the support for that set of ideas outside the Pacific Northwest that they would need to make it happen," he says. "And there will be mighty resistance outside that area to those ideas, if past is prologue." He recalls 1980s fights between port factions over financing plans. A 1986 compromise created the HMT.
House and Senate tax-committee chairmen are pursuing broad tax-reform legislation. If that moves, it could be a vehicle for a new maritime tax.
