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Senate Bill Report — SJM 8016, Federal Harbor Maintenance Tax (January 24, 2020)

Summary

A Senate Bill Report on SJM 8016, as of January 24, 2020, from the Senate Committee on Financial Institutions, Economic Development & Trade. The joint memorial concerns the federal harbor maintenance tax, and the sponsors listed are Senators Hasegawa, Mullet and Zeiger. The brief summary states that it requests Congress to pass, and the President of the United States to sign, federal legislation reforming the Harbor Maintenance Tax. The background states that Congress enacted the tax in 1986 and that the tax rate is 0.125% of the value of cargo shipped or cruise tickets sold. The staff summary of public testimony lists testimony in support, including from Senator Bob Hasegawa, Prime Sponsor.

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Issuer
Congressional materials
Document type
Report
Date
2020-01-28
Case
2020 01 28 A26427 D211086 Bill Report 8016 Sba Fiet 20 Ta

Cite this document

“Senate Bill Report — SJM 8016, Federal Harbor Maintenance Tax (January 24, 2020).” Original at app.leg.wa.gov, dated 2020-01-28. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2020-01-28-2020-01-28-a26427-d211086-bill-report-8016-sba-fiet-20-ta/, SHA-256 c26f3c012c4bd3d0e4afdaba6862662f3f46f9db410ae5d2419f90201ee3d3c5.

Full text

                             SENATE BILL REPORT
                                  SJM 8016

                                      As of January 24, 2020

Brief Description: Concerning the federal harbor maintenance tax.

Sponsors: Senators Hasegawa, Mullet and Zeiger.

Brief History:
   Committee Activity: Financial Institutions, Economic Development & Trade: 1/23/20.

                               Brief Summary of Joint Memorial
          Ÿ Requests Congress to pass, and the President of the United States to sign,
            federal legislation reforming the Harbor Maintenance Tax.


SENATE  COMMITTEE                  ON      FINANCIAL          INSTITUTIONS,           ECONOMIC
DEVELOPMENT & TRADE

    Staff: Kellee Gunn (786-7429)

    Background: In 1986, Congress enacted the Harbor Maintenance Tax (HMT) to recover the
    operation and maintenance dredging costs for commercial ports from maritime shippers. The
    HMT Fund (HMTF) revenues come from a tax levied directly on importers and domestic
    shippers using coastal or inland ports. The tax rate is 0.125% of the value of cargo shipped
    or cruise tickets sold, representing $1.25 per $1,000 of cargo or cruise ticket value. The tax
    is generally assessed at coastal and Great Lakes ports. The HMT initially applied to both
    imported and exported goods though, in 1998, the U.S. Supreme Court unanimously held that
    imposition of the tax on exported goods was a violation of the U.S. Constitution. Under
    current law, unlike some other federal trust funds, the HMTF may be drawn on only with an
    appropriation by Congress. There is an estimated $9.3 billion currently in the trust fund.

    Congress has chosen to make the U.S. Army Corps of Engineers (USACE) responsible for
    maintaining federal navigation channels. In the bill before Congress H.R. 2440, sponsored
    by Representative DeFazio from Oregon and developed by the American Association of Port
    Authorities, the USACE would be responsible for determining annually how much a port
    may be eligible to receive from the HMTF. That determination would be founded off two
    independent evaluations. The first is whether, on a national basis, the port is an "emerging
    harbor." Emerging harbors would receive 10 percent in total of the HMT revenues. The
––––––––––––––––––––––
    This analysis was prepared by non-partisan legislative staff for the use of legislative
    members in their deliberations. This analysis is not a part of the legislation nor does it
    constitute a statement of legislative intent.

Senate Bill Report                              -1-                                         SJM 8016
    second evaluation would be to ensure each of six USACE geographic regions would receive
    10 percent of the HMT dredging funds. The six regions are the North Atlantic, South
    Atlantic, North Pacific, South Pacific, Great Lakes, and Gulf of Mexico.

    The bill would allow ports to access the revenue in the HMTF for port maintenance needs,
    including dredging without requiring an appropriation. This would result in permanent use
    of full annual HMT collections. Approximately $34 billion over the next decade would then
    be available to the USACE from the HMTF for maintaining federally-authorized harbors.

    Summary of Joint Memorial: Congress is requested to pass, and the President to sign,
    legislation reforming the HMT.

    The Joint Memorial also requests that the federal legislation ensure mandatory use of the
    HMTF revenues, including for harbor maintenance ports that traditionally have received only
    minimal benefit for the HMTF, mitigation of the cost disadvantage donor ports face relative
    to non-United States ports because of the HMT, and guarantees funding for the nation's
    smallest ports.

    Appropriation: None.

    Fiscal Note: Not requested.

    Creates Committee/Commission/Task Force that includes Legislative members: No.

    Staff Summary of Public Testimony: PRO: This puts Washington State on record that the
    HMT needs to be reformed. This tax discourages the use of our ports, and instead diverts
    cargo ships to nearby ports in other countries. Washington only gets a portion of the HMT.
    Seattle and Tacoma are considered donor ports because they are deep water and do not
    require as much dredging. There is a current diversion of funds from the tax's purpose.
    Cargo is being diverted to British Columbia in order to not pay this tax. The HMT puts our
    ports at a disadvantage. There is a request to change language in the SJM regarding wheat
    importing. There is an agreement amongst deep water ports in the United States around the
    distribution of the HMTF revenues. It would make the Columbia River dredging costs
    whole.

    Persons Testifying: PRO: Senator Bob Hasegawa, Prime Sponsor; John McCarthy, The
    Northwest Seaport Alliance; Hillary Haden, Washington Fair Trade Coalition; Gordon
    Baxter, International Longshore and Warehouse Union; Puget Sound Maritime Trades
    Council; International Organization of Masters; Chris Herman, citizen; Amber Carter, Port of
    Vancouver.

    Persons Signed In To Testify But Not Testifying: No one.




Senate Bill Report                            -2-                                      SJM 8016

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