Senate Bill Report — SJM 8009, Federal Harbor Maintenance Tax (as of January 4, 2024)

Summary

Senate Bill Report on SJM 8009, as of January 4, 2024, concerning the federal harbor maintenance tax, sponsored by Senators Hasegawa and Wagoner. The memorial requests that the federal government reform the Harbor Maintenance Tax (HMT). It asks that the full amount of harbor maintenance tax revenues be appropriated and that the U.S. Army Corps of Engineers be directed to allocate 12 percent of annual appropriations to eligible donor and energy transfer ports. The background says the HMT became effective on April 11, 1987, that importers pay .125 percent of the value of commercial cargo, and that a surplus of over $9 billion in unused funds resulted. The committee activity is dated 1/09/24.

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Full text

                            SENATE BILL REPORT
                                 SJM 8009

                                      As of January 4, 2024

Brief Description: Concerning the federal harbor maintenance tax.

Sponsors: Senators Hasegawa and Wagoner.

Brief History:
     Committee Activity: Business, Financial Services, Gaming & Trade: 1/09/24.


                                     Brief Summary of Bill
           • Requests that the federal government reform the Harbor Maintenance
             Tax.


SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES, GAMING & TRADE

     Staff: Clint McCarthy (786-7319)

     Background: The Harbor Maintenance Tax (HMT) was created based on The Water
     Resource Act of 1986. The fee(s) is intended to require those who benefit from maintenance
     of U.S. ports and harbors to share the cost of the maintenance. The tax became effective on
     April 11, 1987, and has been assessed on port use associated with imports, exports, and
     movement of cargo and passengers between domestic ports.

     On March 31, 1998, the Supreme Court declared that HMT collected on exports were
     unconstitutional and as a result the HMT is no longer collected on exports. The HMT is
     only collected on imports, domestic shipments, Foreign-Trade Zone admissions, and
     passengers. The tax is assessed based on the value of the shipment. The importers are
     required to pay .125 percent of the value of the commercial cargo shipped if the loading and
     unloading occurs at a port. HMT is not collected on cargo imported or transported via air.
     This fee may be avoided by importers seeking to bring products into the U.S. by redirecting
     container traffic through Canadian ports such as the Port of Vancouver or the Port of Prince
     Rupert and shipping the cargo by rail into the U.S.



     This analysis was prepared by non-partisan legislative staff for the use of legislative
     members in their deliberations. This analysis is not part of the legislation nor does it
     constitute a statement of legislative intent.

Senate Bill Report                              -1-                                        SJM 8009
     Once the fee(s) is collected by U.S. Customs and Border Patrol, it is deposited into the
     Harbor Maintenance Fund, from which Congress may appropriate amounts to pay for
     harbor maintenance and development projects and related expenses. Over time, the value of
     imports has exceeded the appropriations of the funds, which created a surplus of over $9
     billion in unused funds. The CARES Act of 2020 increased funding and expanded the uses
     of funds for the HMT donor ports, like the ports in Seattle and Tacoma that have naturally
     deep channels that require little to no traditional maintenance and provided a path towards
     full spending of the prior year's HMF revenues.

     Summary of Bill: Congress is requested to pass, and the President to sign, legislation
     reforming the HMT. The specific reforms include:
         • the full amount of harbor maintenance tax revenues be appropriated with the budget
           cap adjustments enacted in the CARES Act of 2020;
         • specified amounts be allocated for donor and energy transfer ports consistent with the
           Water Resources Development Act of 2020;
         • the U.S. Army Corps of Engineers (USACOE) be directed to allocate its annual
           workplan 12 percent of annual appropriations to eligible donor and energy transfer
           ports; and
         • the USACOE be directed to collect appropriate data and reinstate publication of
           annual reports that were terminated in FY 2006 on the status of the Trust Fund.

     Appropriation: None.

     Fiscal Note: Not requested.

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

     Effective Date: Ninety days after adjournment of session in which bill is passed.




Senate Bill Report                            -2-                                        SJM 8009


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