[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
THE COST OF DOING NOTHING: WHY FULL UTILIZATION OF THE HARBOR
MAINTENANCE TRUST FUND AND INVESTMENT IN OUR NATION'S WATERWAYS MATTER
=======================================================================
(116-12)
HEARING
BEFORE THE
SUBCOMMITTEE ON
WATER RESOURCES AND ENVIRONMENT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
APRIL 10, 2019
__________
Printed for the use of the
Committee on Transportation and Infrastructure
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transportation
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
PETER A. FAZIO, Oregon, Chair
ELEANOR HOLMES NORTON, SAM GRAVES, Missouri
District of Columbia DON YOUNG, Alaska
EDDIE BERNICE JOHNSON, Texas ERIC A. ``RICK'' CRAWFORD,
ELIJAH E. CUMMINGS, Maryland Arkansas
RICK LARSEN, Washington BOB GIBBS, Ohio
GRACE F. NAPOLITANO, California DANIEL WEBSTER, Florida
DANIEL LIPINSKI, Illinois THOMAS MASSIE, Kentucky
STEVE COHEN, Tennessee MARK MEADOWS, North Carolina
ALBIO SIRES, New Jersey SCOTT PERRY, Pennsylvania
JOHN GARAMENDI, California RODNEY DAVIS, Illinois
HENRY C. ``HANK'' JOHNSON, Jr., ROB WOODALL, Georgia
Georgia JOHN KATKO, New York
ANDRE CARSON, Indiana BRIAN BABIN, Texas
DINA TITUS, Nevada GARRET GRAVES, Louisiana
SEAN PATRICK MALONEY, New York DAVID ROUZER, North Carolina
JARED HUFFMAN, California MIKE BOST, Illinois
JULIA BROWNLEY, California RANDY K. WEBER, Texas
FREDERICA S. WILSON, Florida DOUG MALFA, California
DONALD M. PAYNE, Jr., New Jersey BRUCE WESTERMAN, Arkansas
ALAN S. LOWENTHAL, California LLOYD SMUCKER, Pennsylvania
MARK SAULNIER, California PAUL MITCHELL, Michigan
STACEY E. PLASKETT, Virgin Islands BRIAN J. MAST, Florida
STEPHEN F. LYNCH, Massachusetts MIKE GALLAGHER, Wisconsin
SALUD O. CARBAJAL, California, Vice GARY J. PALMER, Alabama
Chair BRIAN K. FITZPATRICK, Pennsylvania
ANTHONY G. BROWN, Maryland JENNIFFER GONZALEZ-COLON,
ADRIANO ESPAILLAT, New York Puerto Rico
TOM MALINOWSKI, New Jersey TROY BALDERSON, Ohio
GREG STANTON, Arizona ROSS SPANO, Florida
DEBBIE MUCARSEL-POWELL, Florida PETE STAUBER, Minnesota
LIZZIE FLETCHER, Texas CAROL D. MILLER, West Virginia
COLIN Z. ALLRED, Texas GREG PENCE, Indiana
SHARICE DAVIDS, Kansas
ABBY FINKENAUER, Iowa
JESUS G. ``CHUY'' GARCIA, Illinois
ANTONIO DELGADO, New York
CHRIS PAPPAS, New Hampshire
ANGIE CRAIG, Minnesota
HARLEY ROUDA, California
(ii)
Subcommittee on Water Resources and Environment
GRACE F. NAPOLITANO, California, Chair
DEBBIE MUCARSEL-POWELL, Florida, BRUCE WESTERMAN, Arkansas
Vice Chair DANIEL WEBSTER, Florida
EDDIE BERNICE JOHNSON, Texas THOMAS MASSIE, Kentucky
JOHN GARAMENDI, California ROB WOODALL, Georgia
JARED HUFFMAN, California BRIAN BABIN, Texas
ALAN S. LOWENTHAL, California GARRET GRAVES, Louisiana
SALUD O. CARBAJAL, California DAVID ROUZER, North Carolina
ADRIANO ESPAILLAT, New York MIKE BOST, Illinois
LIZZIE FLETCHER, Texas RANDY K. WEBER, Sr., Texas
ABBY FINKENAUER, Iowa DOUG LaMALFA, California
ANTONIO DELGADO, New York BRIAN J. MAST, Florida
CHRIS PAPPAS, New Hampshire GARY J. PALMER, Alabama
ANGIE CRAIG, Minnesota JENNIFFER GONZALEZ-COLON,
HARLEY ROUDA, California Puerto Rico
FREDERICA S. WILSON, Florida SAM GRAVES, Missouri (Ex Officio)
STEPHEN F. LYNCH, Massachusetts
TOM MALINOWSKI, New Jersey
PETER A. DeFAZIO, Oregon (Ex
Officio)
(iii)
CONTENTS
Page
Summary of Subject Matter........................................ vii
STATEMENTS OF MEMBERS OF CONGRESS
Hon. Grace F. Napolitano, a Representative in Congress from the
State of California, and Chair, Subcommittee on Water Resources
and Environment:
Opening statement............................................ 1
Prepared statement........................................... 2
Hon. Bruce Westerman, a Representative in Congress from the State
of Arkansas, and Ranking Member, Subcommittee on Water
Resources and Environment:
Opening statement............................................ 3
Prepared statement........................................... 4
Hon. Peter A. DeFazio, a Representative in Congress from the
State of Oregon, and Chair, Committee on Transportation and
Infrastructure:
Opening statement............................................ 5
Prepared statement........................................... 5
WITNESSES
Rick Goche, Commissioner, Port of Bandon, Bandon, Oregon:
Oral statement............................................... 7
Prepared statement........................................... 9
Eugene D. Seroka, Executive Director, Port of Los Angeles, San
Pedro, California:
Oral statement............................................... 12
Prepared statement........................................... 14
Bonnie Brady, Executive Director, Long Island Commercial Fishing
Association, Montauk, New York:
Oral statement............................................... 16
Prepared statement........................................... 18
Kevin Ross, First Vice President, National Corn Growers
Association, Minden, Iowa:
Oral statement............................................... 19
Prepared statement........................................... 21
Phyllis Harden, Executive Assistant, Pine Bluff Sand and Gravel
Co., Pine Bluff, Arkansas:
Oral statement............................................... 22
Prepared statement........................................... 24
Peter H. Stephaich, Chairman and CEO, Campbell Transportation
Company, Inc., Houston, Pennsylvania, on behalf of Waterways
Council, Inc.:
Oral statement............................................... 26
Prepared statement........................................... 27
Kirsten Wallace, Executive Director, Upper Mississippi River
Basin Association, St. Paul, Minnesota:
Oral statement............................................... 29
Prepared statement........................................... 31
SUBMISSIONS FOR THE RECORD
Statement of Kurt J. Nagle, President and CEO, American
Association of Port Authorities, Submitted for the Record by
Hon. Napolitano................................................ 51
Six Letters from 2014-2019 from Hon. Jared Huffman, a
Representative in Congress from the State of California, et
al., Submitted for the Record by Hon. Huffman.................. 53
Statement of the American Society of Civil Engineers, Submitted
for the Record by Hon. Napolitano.............................. 64
Statement of the Association of Equipment Manufacturers,
Submitted for the Record by Hon. Napolitano.................... 65
Letter from Captain John W. Murray, Port Director and CEO,
Canaveral Port Authority, Submitted for the Record by Hon.
Napolitano..................................................... 66
Letter from Nicole Vasilaros, Senior Vice President of Government
Relations and Legal Affairs, National Marine Manufacturers
Association, Submitted for the Record by Hon. DeFazio.......... 68
APPENDIX
Questions from Hon. Grace F. Napolitano for Eugene D. Seroka,
Executive Director, Port of Los Angeles, San Pedro, California. 71
Questions from Hon. Angie Craig for Kevin Ross, First Vice
President, National Corn Growers Association, Minden, Iowa..... 73
Question from Hon. Angie Craig for Kirsten Wallace, Executive
Director, Upper Mississippi River Basin Association, St. Paul,
Minnesota...................................................... 74
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
April 8, 2019
SUMMARY OF SUBJECT MATTER
TO: Members, Subcommittee on Water Resources and
Environment
FROM: Staff, Subcommittee on Water Resources and
Environment
RE: Subcommittee Hearing on ``The Cost of Doing
Nothing: Why Full Utilization of the Harbor Maintenance Trust
Fund and Investment in our Nation's Waterways Matter''
PURPOSE
The Subcommittee on Water Resources and Environment will
meet on Wednesday, April 10, 2019, at 9:30 a.m. in HVC 210,
Capitol Visitor Center, to receive testimony related to ``The
Cost of Doing Nothing: Why Full Utilization of the Harbor
Maintenance Trust Fund and Investment in our Nation's Waterways
Matter.''
The purpose of this hearing is to examine the key role that
ports, harbors, and inland waterways play in our communities
and their economies. The hearing will also discuss the
importance of full utilization of the Harbor Maintenance Trust
Fund (HMTF) for its authorized purposes--namely, the
maintenance dredging of authorized commercial coastal and
inland harbors. The Subcommittee will hear from representatives
from large and small ports, inland shippers and tow operators,
as well as businesses that rely on our coastal ports and inland
harbors.
BACKGROUND
THE ROLE OF HARBORS AND HARBOR MAINTENANCE NEEDS
According to the Congressional Research Service \1\,
oceangoing vessels carry more merchandise trade (measured in
tons) to and from the United States than all other modes
combined (air, trucks, rail, and pipeline). This accounts for
80 percent of the total merchandise trade volume for the
country. The dependence of trade on ports and shipping channels
makes the operation and maintenance of these facilities crucial
to the U.S. economy.
---------------------------------------------------------------------------
\1\ https://www.crs.gov/Reports/
R43222?source=search&guid=dc51bbd2aa55499184e5ad610aa4
e590&index=0.
---------------------------------------------------------------------------
Congress provided authority to the U.S. Army Corps of
Engineers (Corps) for the maintenance of the Nation's roughly
1,067 harbors and shipping channels. These ports are
categorized as high use, moderate, and emerging, and defined by
statute \2\ based on how much tonnage each port handles.
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\2\ 33 U.S.C. 2238.
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According to the Corps, navigation channels at our Nation's
59 ``high use'' ports are at their authorized depths less than
35 percent of the time. A ``high use'' port is a port that
handles more than 10 million tons of freight per year. The
conditions of midsize or ``moderate'' harbors (ports that
handle between one million and 10 million tons of cargo) and
``emerging'' harbors (ports that handle one million tons or
less of cargo annually) are far worse. The dredging needs of
our ports will only continue to grow unless more resources are
devoted to maintenance dredging needs. The opening of the
expanded Panama Canal in June 2016 has already increased demand
for larger container ships to call on east and gulf coast
ports.
In 2016, the Corps estimated the total cost to dredge and
maintain authorized widths and depths of all Federal navigation
projects is $20.5 billion over the next decade. This estimate
includes:
$11.5 billion--to achieve authorized dimensions
in the next 5 years ($2.3 billion annually); and
$9.0 billion--to maintain authorized dimensions
for an additional 5 years ($1.8 billion annually).
Moreover, total navigation needs are likely higher. The
Corps' $20.5 billion estimate includes additional expenses
related to navigation (e.g., construction of dredged material
placement facilities). However, this estimate does not likely
include all necessary jetty and breakwater work or other needs
identified by ports to maintain and expand harbor use
nationwide.
THE HARBOR MAINTENANCE TAX AND TRUST FUND
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 is directly
levied on importers and domestic shippers using coastal or
inland ports as a 0.125 percent ad valorem tax on the value of
imported cargo (e.g., $1.25 per $1,000 value) \3\ and is
typically passed along to U.S. taxpayers on the purchase of
imported goods or services. These revenues are deposited into
HMTF within the U.S. Treasury from which Congress currently
appropriates funds to the Corps for harbor maintenance
dredging.
---------------------------------------------------------------------------
\3\ The HMT initially applied to both imported and exported goods;
however, 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.
---------------------------------------------------------------------------
As noted in Table 1, the HMTF has collected far more
revenues from shippers than Congress has appropriated to the
Corps to maintain our Nation's harbors. Approximately $10
billion in already collected revenues sits unused for its
intended purpose in the U.S. Treasury. As a result, while
shippers continue to pay into the HMTF for promised maintenance
activities, the Federal Government has not carried out many of
them.
Table 1: Collections to and Appropriations from Harbor Maintenance Trust Fund (in billions)-- FY 2015-2020 \4\
----------------------------------------------------------------------------------------------------------------
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
----------------------------------------------------------------------------------------------------------------
HMT Collections \5\ $1.51 $1.38 $1.47 $1.65 $1.78 $1.91
----------------------------------------------------------------------------------------------------------------
HMT Appropriations \6\ $1.05 $1.16 $1.23 $1.34 $1.49 --
----------------------------------------------------------------------------------------------------------------
Est. Balance in the HMTF $8.68 $8.78 $9.10 $9.33 $9.50 --
----------------------------------------------------------------------------------------------------------------
The funds sitting unused in the HMTF would be sufficient to
meet the maintenance dredging needs of all federally authorized
ports. The Water Resources Reform and Development Act of 2014
(WRRDA14) (P.L. 113-121) created discretionary appropriations
targets for expenditures from the Trust Fund, increasing each
year, so that by fiscal year 2025 and beyond, 100 percent of
the funds collected for harbor maintenance purposes go towards
required operation and maintenance activities. In recent fiscal
years, appropriations from the Trust Fund have exceeded the
discretionary targets outlined in WRRDA14; however, Congress
has not yet achieved the goal of full-utilization of Trust Fund
collections.
---------------------------------------------------------------------------
\4\ Levels obtained from Budget Message of the President,
Appendixes (fiscal years 2015-2020).
\5\ HMT Collections reflects the 0.125% HMT and the HMTF's earnings
on investments.
\6\ HMT Appropriations reflects the amounts appropriated for the
operations and maintenance costs of U.S. commercial navigation harbors
and the amounts appropriated for the operations and maintenance costs
of the Saint Lawrence Seaway that are operated and maintained by the
Saint Lawrence Seaway Corporation. The number does not include any HMT
appropriations for activities on Mississippi Rivers and Tributaries
projects or construction related activities currently eligible from the
HMT (e.g. construction of dredged material disposal facilities that are
necessary for the operation and maintenance of any harbor or inland
harbor.
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The Committee, on a bipartisan basis, has twice approved
legislation \7\ to fully utilize HMT collections for the
intended purpose of maintenance dredging; yet this provision
has yet to be enacted into law. Enactment of such a provision
honors our Nation's long-term commitment to U.S. shippers and
taxpayers for harbor maintenance dredging, maintains and
improves the competitiveness of U.S. businesses and industry,
and creates and sustains thousands of additional construction
jobs and jobs dependent on a vibrant and efficient marine
transportation system.
---------------------------------------------------------------------------
\7\ Section 108 of H.R. 5303 [https://www.congress.gov/114/bills/
hr5303/BILLS-114hr5303rds.pdf], the Water Resources Development Act of
2016 (RH), and Section 102 of H.R. 8 [https://www.congress.gov/115/
bills/hr8/BILLS-115hr8rh.pdf], the Water Resources Development Act of
2018 (RH).
---------------------------------------------------------------------------
THE PRESIDENT'S FISCAL YEAR 2020 BUDGET REQUEST FOR HARBOR MAINTENANCE
The President's Budget request for Fiscal Year 2020
proposed to transfer $965 million from the Trust Fund to the
Corps for commercial navigation operation and maintenance
activities. This level is significantly less than the target
appropriations for fiscal year 2020 outlined in WRRDA 2014, as
amended. For fiscal year 2020, the target HMTF appropriation
would be $1.5 billion--the greater of 80 percent of the total
level of harbor maintenance taxes collected in fiscal year 2019
(est. $1.782 billion) or 103 percent of the fiscal year 2019
appropriations from the Trust Fund ($1.4 billion), as provided
in the Energy and Water Development and Related Agencies
Appropriations bill, 2019 (Pub. L. 115-244).
The President's Budget request proposes to spend a total of
$889.95 million of the total proposed to be transferred from
the HMTF on project specific navigation operation and
maintenance activities at commercial ports and harbors.
According to the Corps, 70.2 percent of these funds would be
used for high-use commercial harbors, 18.2 percent for
moderate-use commercial harbors, and 11.1 percent for low-use
(emerging) commercial harbors.
THE INLAND WATERWAY SYSTEM
Inland waterways are a significant component of the
Nation's marine transportation system. These waterways carry
approximately one-sixth of the national volume of intercity
cargo on 25,000 miles of navigable waters throughout the United
States. Of these waters, approximately 12,000 miles make up the
commercially active inland and intracoastal waterways which are
federally managed by the Corps.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Figure 1: U.S. Inland Waterways (Source: U.S. Army Corps of Engineers)
The federally managed Inland Waterway System (IWS) is
comprised of 237 lock chambers at 191 sites, and is responsible
for ports and waterways in 41 States. The IWS handles
approximately half of all inland waterway freight (and one-
twelfth of all national freight). The Corps plans, develops,
operates, and maintains the infrastructure of these commercial
waterways (e.g. navigation channels, harbors, and locks and
dams), and also maintains and regulates the channel depths
through dredging and water management.
The primary mechanism for moving commodities on the IWS is
with barges. Barges are well suited for the movement of large
quantities of bulk commodities and raw materials at relatively
low cost. The IWS handles about 630 million tons of cargo
annually, or about 17 percent of all intercity freight by
volume. The principle commodities transported include coal
(28%), petroleum (20%), grain exports (11%) and stone, sand,
gravel (13%).\8\
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\8\ https://www.mvp.usace.army.mil/Portals/57/docs/Navigation/
InlandWaterways-Value.pdf.
---------------------------------------------------------------------------
Beyond enabling commercial transportation, the inland
waterways system may aid in flood control, provide a stable
water supply for nearby communities and industries, at some
locations generate hydropower, offer water recreation, provide
for regional economic development opportunities, and enhance
national security capabilities.
INLAND WATERWAYS TRUST FUND_FINANCING
The IWS is facing significant challenges due to aging
infrastructure. Over half of the IWS structures are more than
50 years old, and nearly 40 percent are more than 70 years old.
Many of these projects are approaching the end of their design
lives and are in need of modernization or major rehabilitation.
To help solve this problem Congress created the Inland
Waterways Trust Fund (IWTF).
The IWTF was authorized by two separate acts of Congress.
The original authorization was contained in the Inland
Waterways Revenue Act of 1978 (P.L. 95-502) (the 1978 Revenue
Act). Under the 1978 Revenue Act, the U.S. Congress created the
IWTF within the U.S. Treasury for the purpose of supporting the
construction and rehabilitation of structures for navigation on
the inland and coastal waterways of the United States. Congress
funded the IWTF with a tax on fuel used in commercial
transportation on inland waterways and statutorily defined 26
specific segments of the inland and intracoastal waterways as
being subject to the tax and to be eligible for construction
and rehabilitation expenditures from the IWTF.
The second piece of enabling legislation was the Water
Resources Development Act of 1986 (P.L. 99-662) (WRRDA 1986).
This legislation reset the IWTF by a graduated increase in the
inland waterways commercial fuel tax rates, that was
statutorily capped at the current $0.20 per gallon tax; \9\
added the Tennessee-Tombigbee Waterway to the list of fuel-
taxed inland and intracoastal waterways (now totaling 27
segments); implemented the current funding and cost-share
allocations; and authorized the construction of eight new
inland waterways system modernization projects. Previously
authorized projects and uncompleted projects were allowed to
continue at 100 percent Federal funding without drawing from
the IWTF.
---------------------------------------------------------------------------
\9\ The initial $0.20 per gallon diesel tax was increased to $0.29
per gallon by Pub. L. 113-295, Division B, Title II, Section 205(a).
However, unlike the ad valorem tax on imports that funds the Harbor
Maintenance Trust Fund, the fuel tax that funds the Inland Waterways
Trust Fund is not adjusted to reflect increases in inflation.
---------------------------------------------------------------------------
The same legislation in the 1970s and 1980s created user
cost-sharing requirements for a subset of the inland waterway
costs. Current cost sharing requirements include:
Operation and Maintenance--100 percent to be paid
from the General Revenue fund; and
New Construction--50 percent to be paid from the
IWTF and 50 percent from the General Revenue fund.
States on the gulf coast and throughout the Midwest and
Ohio Valley are especially dependent upon the IWS and account
for the majority of the collected fuel tax revenues. Only one
Inland Waterways System segment, the Lower Mississippi,
actually covers the cost of their annual Operation and
Maintenance expenditures with collected fuel tax revenues. The
Lower Mississippi has the largest amount of tonnage moved on
the waterway. The remainder of the IWS segments all have
operation and maintenance costs that far exceed the amount of
revenue that they generate through fuel taxes. The fuel-taxed
IWS includes 207 lock chambers, located at 171 sites, on 27
inland rivers and intracoastal waterways system segments.\10\
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\10\ IMTS Capital Investment Strategy Team. 2010. Inland Marine
Transportation Systems (IMTS) Capital Projects Business Model. Final
Report.
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As noted in Table 2, appropriations from the IWTF have
nearly matched estimated annual revenues into the IWTF since
the increase in diesel tax in 2015. Additionally, as annual
revenues deposited into the IWTF continue to increase, the
Corps has begun to complete longstanding IWTF-supported
projects, including Olmsted Locks and Dam on the Ohio River,
and LaGrange Lock and Dam on the Illinois River.
Table 2: Collections to and Appropriations from Inland Waterways Trust Fund (in millions)-- FY 2015-2020 \11\
----------------------------------------------------------------------------------------------------------------
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
----------------------------------------------------------------------------------------------------------------
IWTF Collections $97.9 $111.1 $114.4 $116.8 $116.0 $106.0
----------------------------------------------------------------------------------------------------------------
IWTF Appropriations $68.5 $108.0 $108.4 $112.0 $110.7 --
----------------------------------------------------------------------------------------------------------------
Est. Balance in the IWTF $54.2 $57.4 $63.4 $40.4 $33.3 --
----------------------------------------------------------------------------------------------------------------
PRESIDENT'S FY2020 IWTF REQUEST
---------------------------------------------------------------------------
\11\ Levels obtained from Inland Waterways Users Board Annual
Reports and Budget Message of the President, Appendixes (fiscal years
2015-2020).
---------------------------------------------------------------------------
The President's Budget request documents that $106 million
will be collected into the IWTF from the existing $0.29 per
gallon diesel fuel tax in the coming fiscal year, but the
budget request utilizes only $55.5 million for inland projects
in FY 2020. The budget request could have an adverse impact on
the scheduling and completion of projects on the inland
waterways, which are typically funded 50 percent from the Trust
Fund and 50 percent from general revenues.
If the President's Budget request was fully implemented, at
the end of FY 2020, the IWTF would carry a balance of $354
million; yet only $55.5 million would be expended from the
Trust Fund for construction activities on the inland waterways
system.
WITNESSES
Mr. Rick Goche, Commissioner, Port of Bandon,
Bandon, Oregon
Mr. Eugene Seroka, Executive Director, Port of
Los Angeles, San Pedro, California
Ms. Bonnie Brady, Executive Director, Long Island
Commercial Fishing Association, Montauk, New York
Mr. Kevin Ross, First Vice President, The
National Corn Growers Association, Minden, Iowa
Ms. Phyllis Harden, Legislative and Special
Projects, Pine Bluff Sand and Gravel Co., Pine Bluff, Arkansas
Mr. Peter H. Stephaich, Chairman, Campbell
Transportation Company, Houston, Pennsylvania, on behalf of the
Waterways Council Inc.
Ms. Kirsten Wallace, Executive Director, Upper
Mississippi River Basin Association, St. Paul, Minnesota
THE COST OF DOING NOTHING: WHY FULL UTILIZATION OF THE HARBOR
MAINTENANCE TRUST FUND AND INVESTMENT IN OUR NATION'S WATERWAYS MATTER
----------
WEDNESDAY, APRIL 10, 2019
House of Representatives,
Subcommittee on Water Resources and Environment,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 9:30 a.m., in
room HVC-210, Capitol Visitor Center, Hon. Grace F. Napolitano
(Chair of the subcommittee) presiding.
Mrs. Napolitano. Good morning, everybody. I am calling this
hearing to order this morning. Today's hearing focuses on the
significant role of our Nation's harbors, our ports, our inland
waterways play for the Nation and the importance of maintaining
an investment in the infrastructure.
There is no question about the value of the ports and
harbors to our country and our economy. Oceangoing vessels
carry more merchandise to trade by tonnage than any other modes
of transportation combined. The case for Federal investment is
simple: We must use what we collect to maintain our ports to
ensure and maintain America's global competitiveness.
My region is home to the largest ports in the Nation, the
Port of Los Angeles and the Port of Long Beach. These two ports
handle over 40 percent of the exports and imports into the
United States. Los Angeles and Long Beach have invested
billions of their own money to upgrade their infrastructure for
the benefit of the entire Nation so that goods can get to
market across the country on time.
But like other ports in the U.S., the success of the Ports
of Los Angeles and Long Beach are only as strong as their
partnership with the Federal Government in maintaining our
infrastructure. The shippers at the Ports of Los Angeles and
Long Beach pay over $260 million annually in harbor maintenance
taxes but receive only $10 million back in harbor maintenance.
As of a few years ago, my ports were receiving nearly
nothing back until, working together with then-Ranking Member
DeFazio, we were successful in enacting language in WRRDA 2014
that required the Army Corps of Engineers to allocate at least
10 percent of harbor maintenance funds to all donor ports for
expanded uses, or funds to continue to use their ports. This
language also recognizes the importance of emerging and Great
Lakes harbors and provided a designated set-aside for them as
well.
There already has been a lot of interest this Congress by
the House and the Senate in resolving full utilization of the
Harbor Maintenance Trust Fund. Full utilization should be
supported across the board, as it benefits everyone. This
Congress must also address inequities in the Harbor Maintenance
Trust Fund. It is not fair for harbors like mine to be paying
so much in tax and receive so little.
I look forward to working with all of my colleagues, my
ranking member, as we find common ground to address continuing
needs of all our ports and harbors. If past success is
prologue, I look forward to working with the now-Chair DeFazio
in finding a solution for all.
Today's hearing will also focus on the importance of the
inland waterways system to our Nation's heartland. They face
challenges and an aging infrastructure system. I look forward
to hearing from witnesses today on the value of the inland
waterways to our economy. Thank you for all the witnesses for
being here today. We will be having votes soon, so we tried to
be on time and get everybody heard. Thank you especially to
Executive Director Gene Seroka from the Port of Los Angeles for
joining us, and I look forward to his testimony.
At this time, I am pleased to yield to my colleague Mr.
Ranking Member Westerman for any thoughts he may have.
[Mrs. Napolitano's prepared statement follows:]
Prepared Statement of Hon. Grace F. Napolitano, a Representative in
Congress from the State of California, and Chair, Subcommittee on Water
Resources and Environment
There is no question about the value of ports and harbors to our
country and our economy. Oceangoing vessels carry more merchandise to
trade by tonnage than all other modes combined. The case for Federal
investment is simple: we must use what we collect to maintain our ports
to ensure and maintain America's global competitiveness.
My region is home to the largest ports in the nation, the Port of
Los Angeles and the Port of Long Beach. These ports handle over 40
percent of the exports and imports into the United States. Los Angeles
and Long Beach have invested billions of dollars of their own money to
upgrade their infrastructure for the benefit of the entire nation so
that goods can get to market across the country on time. But like other
ports across the U.S., the success of the Ports of Los Angeles and Long
Beach are only as strong as their partnership with the Federal
government in maintaining our infrastructure.
The shippers at the Ports of Los Angeles and Long Beach pay over
$260 million annually in Harbor Maintenance Taxes but they receive only
$10 million back in harbor maintenance. As of a few years ago, my ports
were receiving nearly nothing back, until working together with then
Ranking Member DeFazio, we were successful in enacting language in
WRRDA 2014 that required the Army Corps of Engineers to allocate at
least 10 percent of Harbor Maintenance Funds to all donor ports for
expanded uses, or funds to continue to use their ports. This language
also recognized the important role of emerging and Great Lakes harbors,
and provided a designated set-aside for them as well
There has already been a lot of interest this Congress by the House
and the Senate in resolving full utilization of the Harbor Maintenance
Trust Fund. Full utilization should be supported across the board--as
it benefits everyone. This Congress must also address inequities in the
harbor maintenance trust fund. It is not fair for harbors like mine to
be paying so much in the tax and receiving so little. I look forward to
working with all of my colleagues as we find common ground to address
the continuing needs of all our ports and harbors. If past success is
prologue, I look forward to working with Now-Chair DeFazio in finding a
solution for all.
Today's hearing will also focus on the importance of the Inland
Waterways System to our nation's heartland. They face challenges with
an aging infrastructure system. I look forward to hearing from our
witnesses today on the value of the inland waterway to our country.
Thank you witnesses for being here today. Thank you especially to
Executive Director Gene Seroka, with the Port of Los Angeles, for
joining us.
I look forward to everyone's testimony.
Mr. Westerman. Thank you, Chairwoman Napolitano. It is an
exciting time to be working on this issue together. I had the
great honor of visiting your State and visiting the Port of
Long Beach in Representative Lowenthal's district and to see
that amazing facility out there with the Port of Los Angeles.
And it is good to have such a diverse panel here so that we
can gain perspectives on different issues that are facing
ports, harbors, and inland waterways as well as stakeholder and
other users' issues.
I especially want to thank Phyllis Harden for her
participation here today. She is a constituent of mine who was
recently inducted into the Arkansas River Hall of Fame.
The needs of our ports, harbors, and inland waterways are
substantial, and they continue to grow. Oceangoing vessels
carry more merchandise trade to and from the United States than
all other modes of transportation combined. My home State of
Arkansas is third in the Nation in the number of inland
waterway miles, one of only 24 States in the United States to
have the unique resource of inland waterways.
Major products that move along the Arkansas waterways
include grain, steel, fertilizers, petroleum and petroleum
products, aggregates, paper and wood products, among others.
This means there is a very good chance that everything from the
bread your sandwich is made with to the components of your car
were carried at some point on a waterway. Yet, more often than
not, our ports and inland waterways are not maintained to their
fully authorized widths and depths, severely jeopardizing our
way of life, competitiveness, American jobs, and the
communities that depend on them.
In order to address the maintenance of our ports, Congress
enacted the harbor maintenance tax for the purpose of covering
dredging costs. The tax is directly levied on importers and
domestic shippers using coastal or inland ports and deposited
into a trust fund within the Treasury.
However, for too long, more tax revenue has been collected
annually than Congress has appropriated. And because of this
fact, a balance has been accruing that currently stands at
approximately $10 billion. That is enough to address our
currently authorized maintenance needs if spent down.
That Congress has allowed this to persist as our needs only
continue to grow represents a problem in dire need of a
solution. This committee has twice in recent years passed
measures that would dedicate the taxes to their intended
purposes, and I look forward to continue working to solve this
problem.
It is not just our ports that are in need but also the
structures that support the inland waterway system, which
require maintenance, repairs, and upgrades. Over half of the
inland waterway structures are more than 50 years old, and
nearly 40 percent are more than 70 years old. Many of these
projects have reached or are approaching the end of their
design lives.
The Upper Mississippi alone, from St. Louis to the
headwaters in Minnesota's Lake Itasca, generates almost $600
billion in annual economic activity and is used to transport 60
percent of all grain products in America. And we are the
world's number-one grain producer. As the amount of goods
traveling on the inland system is expected to increase by more
than 20 percent by 2050, we must continue to invest in this
vital system. The risk of failure is too great. It is critical
that, as we work to address our infrastructure challenges in
this Congress, that our ports, harbors, and inland waterways
are not left behind.
I again look forward to hearing the witnesses' perspectives
and solutions to address our Nation's infrastructure needs, and
I yield back the balance of my time.
[Mr. Westerman's prepared statement follows:]
Prepared Statement of Hon. Bruce Westerman, a Representative in
Congress from the State of Arkansas, and Ranking Member, Subcommittee
on Water Resources and Environment
I'm happy we have such a diverse panel so that we can gain their
perspectives on the issues facing ports, harbors, and inland waterways,
as well as their stakeholders and users. I especially want to thank Ms.
Phyllis Harden for her participation here today. She is a constituent
of mine who was recently inducted into the Arkansas River Hall of Fame.
The needs of our ports, harbors, and inland waterways are
substantial, and they continue to grow.
Oceangoing vessels carry more merchandise trade to and from the
United States than all other modes of transportation combined. My home
state of Arkansas is third in the Nation in the number of inland
waterway miles--one of only 24 states in the United States to have the
unique resource of inland waterways. Major products that move on
Arkansas waterways include grains, steel, fertilizers, petroleum and
petroleum products, aggregates, paper, and wood products, among others.
This means there is a very good chance that everything from the bread
for your sandwiches to the components of your car were carried at some
point on a waterway.
Yet more often than not, our ports and inland waterways are not
maintained to their fully authorized widths and depths, severely
jeopardizing our way of life, competitiveness, American jobs, and the
communities that depend on them.
In order to address the maintenance of our ports, Congress enacted
the Harbor Maintenance Tax (HMT) for the purpose of covering dredging
costs. The tax is directly levied on importers and domestic shippers
using coastal or inland ports, and deposited into a trust fund within
the Treasury.
However, for too long more tax revenue has been collected annually
than Congress has appropriated. And because of this fact, a balance has
been accruing that currently stands at approximately 10 billion
dollars--enough to address our currently authorized maintenance needs
if spent down. That Congress has allowed this to persist, as our needs
only continue to grow, represents a problem in dire need of a solution.
This Committee has twice, in recent years, passed measures that
would dedicate the taxes to their intended purposes--and I look forward
to continue working to solve this problem.
But it is not just our ports that are in need, but also the
structures that support the inland waterways system which require
maintenance, repair, and upgrade. Over half of the inland waterways
structures are more than 50 years old, and nearly 40 percent are more
than 70 years old. Many of these projects are approaching the end of
their design lives.
The upper Mississippi alone, from St. Louis to the headwaters in
Minnesota's Lake Itasca, generates almost $600 billion in annual
economic activity and is used to transport 60 percent of all grain
products in America, the world's number-one grain producer.
As the amount of goods traveling on the inland system is expected
to increase by more than 20 percent by 2050, we must continue to invest
in this vital system--the risk of failure is too great.
It is critical that as we work to address our infrastructure
challenges this Congress, our ports, harbors, and inland waterways are
not left behind. I look forward to hearing the witnesses' perspectives
and solutions to address our water resources infrastructure needs.
Mrs. Napolitano. Thank you. I now recognize the chair of
the full committee, Mr. DeFazio.
Mr. DeFazio. Thank you, Madam Chair. The good news is that
we do have a revenue source to maintain our harbors, a law
enacted during the Reagan administration with a Democratic
Congress. The bad news is that Congress, on a bipartisan basis,
has frequently underspent the collected taxes, meaning we are
taxing the American people for a specific purpose where we have
great needs, and yet that money is being essentially stolen by
the Congress and stuck into a theoretical trust fund for
theoretical deficit offset. It is absurd.
And, you know, 4 years ago, when I first offered an
amendment in this committee to a WRDA bill, Water Resources
Development Act bill, the chairman, Bill Shuster, was shocked
when it was adopted unanimously by the committee. He didn't
realize that, you know, this would be such a bipartisan issue.
Twice I have gotten that provision into WRDA bills, and twice
Paul Ryan personally removed it in the Rules Committee or had
it removed in the Rules Committee. Paul is now retired. I hope
he is enjoying it, and I hope for better treatment by the Rules
Committee this year when we move similar legislation.
As was mentioned previously, our 59 busiest ports have
about 35 percent of their available authorized depths on a
daily basis. And for smaller harbors, which we will hear from
today, it is absolutely the lifeblood. If we didn't have the
small and emerging ports money, many of these communities would
be absolutely devastated. So I will soon reintroduce that bill,
and it will be part of the infrastructure initiatives that this
committee will undertake this year.
We are still having trouble with the White House, not quite
as bad as last year. Last year, they came up with a solution on
underspending the tax. They said, well, let's just cut the tax.
Maybe some of my conversations penetrated at least a little bit
with people downtown. So, this year, they are not proposing to
reduce the tax, but they are proposing to underspend the
revenues by almost $1 billion. And I am determined, and I am
certain this committee will be determined to see that that
doesn't happen.
With that, Madam Chair, I would yield back the balance of
my time.
[Mr. DeFazio's prepared statement follows:]
Prepared Statement of Hon. Peter A. DeFazio, a Representative in
Congress from the State of Oregon, and Chair, Committee on
Transportation and Infrastructure
Thank you, Madam Chairwoman, for holding this important hearing on
the need to invest in our Nation's ports and inland waterways.
The Corps has a long history of success in addressing the Nation's
water resources needs--from ensuring safe and reliable navigation along
our coasts and inland systems, to providing critical flood protection
for our communities, to restoring some of our Nation's environmental
treasures. However, today's hearing is an opportunity to highlight one
of the more frustrating and inefficient aspects of the Federal
government--how we fund the maintenance of our commercial harbors.
As we all know, Congress worked with the Reagan Administration to
create a mechanism to recover the operation and maintenance dredging
costs for commercial ports from maritime shippers--called the Harbor
Maintenance Tax. This fee, directly levied on importers and domestic
shippers using coastal and inland ports, was meant to provide the Corps
of Engineers with sufficient annual revenues to keep our ports in a
good state of repair, and sustain our local, regional, and national
economies that rely on the movement of goods and services through our
commercial ports.
The good news is that we are currently collecting sufficient
revenues to adequately maintain our commercial harbors--of all sizes--
as well as critical infrastructure, such as breakwaters and jetties,
associated with these commercial ports.
The bad news is that we refuse to spend this money--or more
accurately, we collect this money, but then use these funds to offset
other expenditures in the Federal government while the needs of our
commercial ports continue to grow.
Look at the state of our Nation's ports and harbors. The U.S. Army
Corps of Engineers estimates that the full channels of the Nation's 59
busiest ports are available less than 35 percent of the time. For
smaller commercial harbors, such as Coos Bay or Port Orford, typically
their dredging situations can be far worse.
The American Society of Civil Engineers estimates that our Nation's
ports and harbors will need an additional investment of $15.8 billion
between now and 2020 to meet the demands of larger and heavier ships
that will use the Panama Canal. This increased investment would protect
$270 billion in U.S. exports, $697 billion in GDP and 738,000 jobs
annually.
Today, because the Harbor Maintenance Trust Fund collects more
revenues from shippers than Congress appropriates to maintain our
harbors, approximately $9.5 billion in already collected tax revenues
sits idle in the Harbor Maintenance Trust Fund.
If the rate of tax collections and expenditures continue on their
current trend, CBO estimates that the balance of the Harbor Maintenance
Trust Fund will reach more than $14 billion within a decade.
To be clear, concern about the misuse of Harbor Maintenance taxes
is not a partisan issue. Widely supported actions taken by this
Committee in 2014 to enact Trust Fund appropriations targets have been
integral to increasing the level of appropriations maintenance dredging
over the last 5 years.
However, discretionary appropriations targets are not enough to get
us to full-utilization of the Trust Fund. That is why, on a bipartisan
basis, this Committee has, twice, adopted language to provide the
Secretary with full access to the revenues in the Trust Fund for
maintenance dredging purposes--in essence, ensuring that all the
existing revenues in the Trust Fund are utilized for their intended
purposes--the maintenance of our commercial harbors.
Unfortunately, this language has not been enacted into law.
Instead, the President continues to go in the opposite direction
and proposes, in his fiscal year 2020 budget request, to underfund
investment in our Nation's infrastructure--virtually guaranteeing that
the Federal government will do little to ensure the commercial
viability of our harbors and ports, and adversely impact the economic
benefits that these critical linkages to trade and local jobs provide.
It is time we use our legislative authority to correct how Congress
funds the operation and maintenance of our commercial harbors--and
ensure these funds are used for their intended purposes.
I will again introduce legislation to fully utilize Trust Fund
proceeds for their intended purposes--and ensure that the approximately
$34 billion in harbor maintenance taxes available over the next decade
are spent to maintain our harbors and ports. My bill honors our long-
term commitment to U.S. shippers and taxpayers, maintains and improves
the competitiveness of U.S. businesses and industry, and sustains
thousands of construction jobs and jobs dependent on a vibrant and
efficient marine transportation system.
I urge your continued support for this legislation which would
virtually ensure Congress uses already-collected funding to maintain
our Nation's ports and harbors.
Mrs. Napolitano. Thank you, Mr. DeFazio.
Let me start by asking unanimous consent that the chair be
authorized to declare a recess during today's hearing.
Without objection, so ordered.
Now we will proceed to hear from our witnesses who will
testify today, and thank you very much, all of you, for being
hero. We have Mr. Rick Goche, commissioner, Port of Bandon,
Oregon; Mr. Gene Seroka, executive director, Port of Los
Angeles; Ms. Bonnie Brady, executive director, Long Island
Commercial Fishing Association, New York, welcome; Mr. Kevin
Ross, first vice president of the National Corn Growers
Association from Minden, Iowa; Ms. Phyllis Harden, executive
assistant, Pine Bluff Sand and Gravel Company, Arkansas; Mr.
Peter H. Stephaich, chairman, Campbell Transportation Company,
Pennsylvania, on behalf of the Waterways Council, Incorporated;
and Ms. Kirsten Wallace, executive director, Upper Mississippi
River Basin Association from St. Paul, Minnesota.
Without objection, your prepared statements will be entered
into the record, and all witnesses are limited to 5 minutes.
Commissioner Goche, you may proceed.
TESTIMONY OF RICK GOCHE, COMMISSIONER, PORT OF BANDON, BANDON,
OREGON; EUGENE D. SEROKA, EXECUTIVE DIRECTOR, PORT OF LOS
ANGELES, SAN PEDRO, CALIFORNIA; BONNIE BRADY, EXECUTIVE
DIRECTOR, LONG ISLAND COMMERCIAL FISHING ASSOCIATION, MONTAUK,
NEW YORK; KEVIN ROSS, FIRST VICE PRESIDENT, NATIONAL CORN
GROWERS ASSOCIATION, MINDEN, IOWA; PHYLLIS HARDEN, EXECUTIVE
ASSISTANT, PINE BLUFF SAND AND GRAVEL CO., PINE BLUFF,
ARKANSAS; PETER H. STEPHAICH, CHAIRMAN AND CEO, CAMPBELL
TRANSPORTATION COMPANY, INC., HOUSTON, PENNSYLVANIA, ON BEHALF
OF WATERWAYS COUNCIL, INC.; AND KIRSTEN WALLACE, EXECUTIVE
DIRECTOR, UPPER MISSISSIPPI RIVER BASIN ASSOCIATION, ST. PAUL,
MINNESOTA
Mr. Goche. Thank you and good morning, Chairwoman
Napolitano.
Mrs. Napolitano. Can you turn your mic on?
Mr. Goche. Is that good now?
Mrs. Napolitano. That is better.
Mr. Goche. Good morning, Chairwoman Napolitano, Ranking
Member Westerman, and members of the subcommittee. Thank you
for the opportunity to talk about the importance of fully
utilizing harbor maintenance tax revenue to ensure the Army
Corps of Engineers is able to maintain navigation channels and
jetties at small ports in the Pacific Northwest and around the
country.
I am here from Bandon, Oregon, which has a population of
3,112. I am commissioner at the Port of Bandon, and I am a
small business owner. I have been a commercial fisherman for
most of my life. Now I primarily fish for tuna. Our region's
tuna fleet includes about 600 boats that fish off of Oregon and
Washington.
My brother and I pack our boat with supplies for 2 weeks at
a time and spend most of that time between 100 and 200 miles
offshore. Because our boats are only capable of about 7 knots
in heavy weather and because we are so far offshore, if unsafe
weather is forecast, we go into whatever port is closest. If
the weather is really bad, our only safe course is downwind to
whatever port is on that trajectory.
This is where the term ``safe harbor'' comes from. When
weather is bad, any harbor, large or small, is safer than being
at sea. From a fisherman's perspective, every port, large and
small, is important. Whether we can use a particular port for
safe harbor has everything to do with the condition of the bar
in the Pacific Northwest.
The phrase ``crossing a bar'' may not be familiar to
everyone here, but for the people in the Pacific Northwest that
take boats out into the ocean, understanding this term is a
matter of life and death. The bar is the term used where a hump
is formed where sediment builds up as the downstream river
water comes up against the ocean swells.
During ebb tides, river and tidal flows combine to create a
stronger current than comes up against the incoming ocean
swell. If the swell is large and the bar is shallow, the energy
of the swell is tipped over, resulting in a breaker. Breakers
are dramatically higher and steeper than the swell, and the
life-threatening danger comes when a boat is attempting to
cross the bar and encounters a sneaker wave that is larger than
expected. The wave builds and steepens, and the boat goes out
of control as it essentially turns into a surfboard, goes
broadside and rolls over. This dangerous condition is referred
to as a breaking bar.
And it wasn't until I came to DC the first time advocating
for dredging of the bars of our small ports that I realized
breaking bars is a phenomenon mostly unique to the Pacific
Northwest. Until that realization, I couldn't understand how
budget after budget could zero out small port dredging when so
many lives were at stake.
Now, there are a couple of ways to minimize the threat of a
breaking bar. One way is for the Army Corps of Engineers to
build jetties that steer the current a few degrees off of the
dominant swell direction. This was done on every bar in the
Pacific Northwest many decades ago, but today most of those
jetties are in dire need of repair and are getting less and
less effective. Another way to minimize the deadliness of a
breaking bar is to regularly dredge out the sediment hump that
builds up every year from the torrential rains that
characterize the Pacific Northwest coast.
Now, there is one thing that both of these remedies have in
common, and that is funding. The Portland district of the Army
Corps of Engineers does a good job of maintaining our jetties
and dredging our navigation channels, given the resources
Congress provides. But when sufficient funding for these
activities are not available, as is often the case for small
ports, the bar shallows and breaks and lives are lost.
As a commercial fisherman, safety is paramount, but for
thousands of others on land, their economic livelihood also is
tied to the maintenance of navigation channels and jetties. In
Oregon, there are 15 communities with small ports. Nearly all
of these are located in rural areas. In every one of those
communities, the port is the equivalent of their anchor
business.
The Port of Bandon recently commissioned a study of the
impact of our port on the local economy. It found that $52
million of economic benefit is generated annually as a result
of the dredging that gives us access to the sea, and nearly $5
million in Federal tax payments are returned to the Treasury.
So let me highlight this. It costs about $500 a year to dredge
the bar----
Mr. DeFazio. Not $500. You mean $500,000--you said $500.
Mr. Goche. I am sorry. Excuse me. Wow. OK. Yes, thank you,
Congressman. $500,000 to dredge the channel. And in return, the
Treasury receives $5 million. So a 10-to-1 return on
investment, which I imagine everybody would like to see in
theirs.
Operation and maintenance of our Nation's navigation
infrastructure is a Federal responsibility, yet small ports
around the country have to fight like heck for funding that
will allow the Army Corps of Engineers to do its job. It is a
real shame, but it wouldn't have to be this way if the HMT
funds were fully utilized.
Due to the leadership of this committee, we have seen a
substantial increase in the amount of harbor maintenance tax
revenue that is dedicated to dredging and jetty maintenance,
but a lot of this money is still being used to fund other
Government programs or to balance the Federal budget. This is
why I appreciate your continuing efforts to get to full
utilization of the Harbor Maintenance Trust Fund. I also
appreciate the opportunity to talk about what funding means to
me, my community, and for rural communities around the country.
Mrs. Napolitano. All right, sir.
Mr. Goche. So what I am really here to ask----
Mrs. Napolitano. You are over you time limit.
Mr. Goche. I am sorry.
[Mr. Goche's prepared statement follows:]
Prepared Statement of Rick Goche, Commissioner, Port of Bandon, Bandon,
Oregon
Good morning, Chairwoman Napolitano, Ranking Member Westerman and
members of the Subcommittee. Thank you for the opportunity to talk
about the importance of fully utilizing Harbor Maintenance Tax revenue
to ensure the Army Corps of Engineers is able to maintain navigation
channels and jetties at small ports in the Pacific Northwest, and
around the country.
I'm here from Bandon, Oregon, which has a population of 3,112. I
have been a commercial fisherman for most of my life. I'm a small
business owner. And I'm a port commissioner for the Port of Bandon. I
should be home preparing my boat for its annual maintenance but I have
something I need to talk with you about.
I've been involved in the seafood business from research to retail
for most of the past 50 years. As a commercial fisherman I've crossed
every bar from San Francisco to Canada at one time or another. Now I
fish primarily for tuna off of Oregon and Washington. Our region's tuna
fleet includes about 600 boats.
My brother and I pack our boat with supplies for two weeks at a
time and spend most of that time between 100 and 200 miles off shore.
Because our boats are only capable of about 7 knots in heavy weather,
and because we are so far offshore, if unsafe weather is forecasted, we
must go into whatever harbor is closest. If the forecast is wrong, we
can be in a situation where our only course is downwind to whatever
port is on that trajectory. This is where the term ``safe harbor''
comes from. When weather is bad, any harbor, big or small, is safer
than being at sea.
So from a fisherman's perspective EVERY port, large and small, is
important. Whether we can use a particular port for safe harbor has
everything to do with the condition of the bar.
The term ``bar'' may not be familiar to everyone here, but for
people in the Pacific Northwest that take boats out into the ocean,
understanding of this term is a matter of life or death. Bar is the
term used for the point where the harbor entrance, in my region
normally near the mouth of a river, forms a ``hump'' where sediment
builds up as the downstream river water comes up against the ocean
waves. During ebb tides, river and tidal flows combine to create a
stronger current that comes up against the incoming ocean swell. If the
swell is large and the bar is shallow, the energy of the swell is
tipped-over resulting in a ``breaker''. Breakers are dramatically
steeper than the swell and the life threatening danger is when a boat
is attempting to come into the entrance, and the boat encounters a
``sneaker'' wave that is larger than expected--the wave steepens, and
the boat goes out of control as it essentially turns into a surfboard,
goes broadside and rolls over. This dangerous condition is referred to
as a ``breaking bar''.
It wasn't until I came to D.C. the first time advocating for
dredging of the bars of our small ports that I realized breaking bars
are a phenomenon mostly unique to the Pacific Northwest. Until that
realization dawned, I couldn't understand how budget-after-budget could
zero out small port dredging when so many lives are at stake.
There are a couple of ways to minimize the threat of a breaking
bar. One way is for the Army Corp of Engineers to build jetties that
steer the current a few degrees off the dominant swell direction. This
was done on every bar in the Pacific Northwest many, many decades ago,
but today, most of those jetties are in dire need of repair and are
getting less and less effective. Another way to minimize the deadliness
of a breaking bar is to regularly dredge out the sediment that builds
up every year from the torrential rains that characterize the Pacific
Northwest coast.
There is one thing that both of these have in common, and that is
funding. The Portland District of the Army Corp of Engineers does a
fantastic job maintaining our jetties and dredging our navigation
channels given the resources made available to them by Congress. But
when sufficient funding for these activities is not available, as is
often the case for small ports, the bar shallows, and breaks, and
inevitably, lives are lost.
For me, safety is paramount. But for thousands of others on the
Oregon coast and around the country, their economic livelihood is tied
to the maintenance of navigation channels and jetties.
Oregon's ports and harbors rank amongst our state's most valuable
assets and are critical to maintaining and creating jobs across our
great state. In Oregon there are 15 communities with small ports with
ocean access. Nearly all of these ports are located in rural
communities. In every one of those communities the port is the
equivalent of their anchor business. These small ports provide an
important employment base and are often primary drivers of local
prosperity. They are hubs for international trade, recreation, and
commercial fishing.
The Port of Bandon is a case study for this. Our port attracts
approximately 300 vessels per year, and has gained a strong tourism
presence through sport-fishing and recreational crabbing. Tourists
enjoy a full range of recreational activities including full marina
facilities, crab docking, a scenic river walk and nature pathway,
amphitheater and a new boardwalk. The Bandon Marina includes a public
boat ramp and 90 moorage slips that are typically occupied, especially
in the summer months. In addition to the Bandon Marina, crab dock and
boat launch, the Port of Bandon owns several real estate holdings that
provide lease space for businesses. A Coast Guard motor lifeboat is
based in the Port marina during summer months.
The Port of Bandon, along with approximately 54 port-related
businesses, employs an estimated 484 workers. This includes a charter
service, a bait shop, two fish markets, two marine insurance
businesses, as well as numerous restaurants and hotels. We contracted a
study in 2014 of the impact of our port on the local economy. It found
that $62 million ($35.1 million direct and $27 million indirect/
induced) of economic benefit is generated annually by our port as the
result of the funding that allows the Army Corps of Engineers to
maintain our navigation channels and jetties. This output results in
nearly $5 million in federal tax payments returned to the treasury due
to our access to the sea.
Operation and Maintenance of our nation's navigation infrastructure
is a Federal responsibility. Yet small ports around the country have to
fight like heck for funding that will allow the Army Corps of Engineers
to do its job. The real shame is that it doesn't have to be this way.
Due to the leadership of this committee, we have seen a substantial
increase in the amount of harbor maintenance tax revenue that is
dedicated to dredging and jetty maintenance. But a lot of this money is
still being used to fund other government programs or to balance the
federal budget. This is why I appreciate your continuing efforts to get
to full utilization of the harbor maintenance trust fund.
Thank you, again, for the opportunity to talk about what funding
means to me, my community, and to rural communities around the country.
I have included additional documentation to support my testimony,
including an illustration of the breaking bar that I described, and a
chart that provides additional detail about the dangers of breaking
bars in the Pacific Northwest.
I know it may not make sense to you but if everything you have is
wrapped up in your boat, and your boat feeds your family, you go
fishing. Even when everything is optimal some of us don't make it home.
I'm here asking you to give us the best chance you can, so we can make
it in, and home, to our families.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mrs. Napolitano. Thank you very much. I am sorry, sir.
Mr. Seroka, you are on. You are next.
Mr. Seroka. Good morning, Chairman DeFazio, Chairwoman
Napolitano, Ranking Member Westerman, our California delegation
and members of the committee.
My name is Gene Seroka. I am the executive director at the
Port of Los Angeles and dually I hold the position of vice
president of the California Association of Port Authorities.
The Port of Los Angeles is the largest container port in
the United States, moving more than 9\1/2\ million container
units per year and accounting for more than $300 billion in
goods movement through our port complex.
We support about 150,000 jobs in Los Angeles and more than
1.6 million in the country. Our gateway is the traditional move
for cargo imported and exported to this Nation through Asia and
the Pacific Rim. About half of the cargo that comes through our
port complex goes direct to consumers. The other half, in
component form, goes to the manufacturing stream here in the
United States. All combined, we reach each and every
congressional district in the United States. This truly is a
conversation of national significance when it comes to the Port
of Los Angeles.
The goods moved in industry underpins what we are doing as
an economy. Seventy percent of consumer spend goes directly to
our top line of GDP, and the ports industry supports 31 million
jobs nationwide and approximately 26 percent of our country's
GDP. We are looking for a consistent and sustainable stream of
funding for our ports and harbors across the country, and the
harbor maintenance trust is a great place to start as we have a
broader conversation about infrastructure in our Nation.
We are grateful to this committee and Congress for the work
that has been done in water resources in 2014 and 2016, which
greatly moved us forward in the conversation and realization of
full spend.
Today I ask for three areas of consideration: first, full
utilization of the harbor maintenance tax; second, a fair and
equitable allocation of those funds; and, thirdly, limited but
expanded use of these capabilities through the funds. I will
take you through each one very quickly.
On full utilization, this can get us to a place of
continued investment not only by our country but by others who
will see trade increase and continued opportunity for
investment in our ports and harbors. On fair and equitable
allocation, for the first time in memory--and I have been in
this industry more than 30 years--we have industry unanimity on
this subject of the harbor maintenance trust and how to
allocate between so-called donor ports like Los Angeles that
bring in the majority of this revenue, dredge ports that
require this money to continue to combat silting, and other
areas to make sure their channels are deep, and the energy
transport ports, which are so important to our Nation's
economy.
Overall, the donor ports today, the top six, bring in about
60 percent or nearly half of all the revenue on the HMT side,
yet, in return, we receive about 2 percent of those proceeds to
work at our individual and local locations.
With respect to limited expansion, because we are not a
port that is continuing to work on the sedimentation effects on
our main channel or making sure that we have a certain depth on
a regular basis, we have other needs. Larger ships and the
advent of that change in our industry requires us to do
additional work in water alongside wharves, to fortify those
areas and make sure they are strong to handle those larger
ships. Looking at those limited possibilities for expansion
would greatly drive our competitiveness and that of our Nation.
We have approximately $260 million in projects along those
lines that are coming up quite swiftly in order to manage the
changes in the industry.
We also have a responsibility to maintain and improve our
seismic requirements in southern California. That also has an
application in this discussion.
I encourage the committee to look at the framework that has
been put forward by the American Association of Port
Authorities. And, as mentioned, our industry is on the cusp of
not only agreeing on how to move forward, but also recommending
how we could put a framework together in concert with this
committee and Congress at large.
This hearing is timely. And the work that you are doing to
support our industry is greatly appreciated. We are also happy
to answer any questions you may have at the conclusion of the
testimony. Thank you for your time today.
[Mr. Seroka's prepared statement follows:]
Prepared Statement of Eugene D. Seroka, Executive Director, Port of Los
Angeles, San Pedro, California
Good Morning Chairman DeFazio, Chairwoman Napolitano, Ranking
Member Westerman, and Members of the Committee.
Thank you for this opportunity to testify before you this morning.
My name is Eugene D. Seroka and I serve as the Executive Director of
the Port of Los Angeles. The Port of Los Angeles is our nation's
largest and busiest container port. In 2018, we handled 9.5 million
twenty-foot equivalent units--or TEUs, the standard measure of
container cargo. This cargo generated over $200 billion in economic
impact for our country, supports about 148,000 jobs in Los Angeles, and
nearly 1.6 million jobs nationwide.
Combined with our neighboring port, the Port of Long Beach, we
comprise the San Pedro Bay Port Complex, which handles over 40 percent
of the nation's containerized imports and 30 percent of all
containerized exports. One in nine jobs in Southern California is
connected to the Port Complex, and 2.8 million jobs nationwide. We
anticipate doubling the quantity of containers traveling through our
gates in the next 15 years.
We are the gateway for imports from and exports to Asia and the
Pacific Rim. Half of the cargo arriving at our berths are consumer
products, and the other half are goods that are incorporated in
domestic manufacturing. There is not a single Congressional district
that is not touched by an import or export handled through the San
Pedro Bay. This morning, I'm confident everyone in this room used a
good that crossed the wharves of the Port of Los Angeles before
arriving here today.
The goods movement industry underpins our economy and supports our
standard of living. We know that this Committee is keenly aware of the
need to invest in and sustain the freight infrastructure that makes our
work possible. A reliable, sustainable source of funding to support the
competitiveness of our ports and harbors is essential and we are
grateful to the Committee for recognizing the fundamental importance
and gravity of this issue.
The Harbor Maintenance Tax (HMT) is one such source funding. It is
a unique and important revenue source that can keep our nation's ports
and harbors operating at their maximum potential. Shippers pay the tax
with the expectation that it will be used to keep our ports in optimal
condition. But, over its history, HMT has been underutilized, leading
to a backlog of operations and maintenance projects and the
accumulation of a large balance in the Harbor Maintenance Trust Fund
(HMTF). In addition to the many ports and harbors that need these funds
for traditional dredging, there are ``donor ports'' where a large
proportion of HMT revenues are collected, yet a small amount of HMT
funding is returned. The Port of Los Angeles is an HMT donor port.
We are thankful for the Committee's leadership role in the Water
Resources Reform and Development Act (WRRDA) of 2014 and the Water
Infrastructure Improvements for the Nation Act (WIIN) of 2016. Both
pieces of legislation made significant progress towards fully
utilization of HMT revenues and recognizing the needs of HMT donor
ports. We ask that you build upon this progress and consider full
utilization of HMT as part of a comprehensive package of closely
interrelated reforms.
We believe the building blocks of comprehensive HMT reform should
include:
1. Guaranteed full utilization of HMT revenues;
2. A fair allocation of funding for all the nation's ports and
harbors, including HMT donor ports; and
3. Expanded project eligibility for donors.
First, comprehensive HMT reform must be built upon full utilization
of HMT revenues. Full utilization means increased funding and
accessibility for all types of ports and across all geographical
regions. Since the enactment of WRRDA 2014, HMT expenditures have
adhered closely to the target expenditures outlined in that bill. For
that, we are grateful. In FY19, Congress appropriated 91% of HMTF
receipts, totaling $1.54 billion. Full spend would result in an
additional $80 million this year for the nation's ports and harbors.
More importantly, guaranteed full use of HMT revenues is needed to
create a virtuous circle wherein investment in port infrastructure
supports additional growth in trade volumes which, in turn, supports
more investment in our ports and harbors.
Second, a fair and equitable allocation framework ensures every
port region of the country--including traditional dredge ports,
emerging harbors, and donor ports alike--receive a fair share of HMT
funding each year. As a donor port, we believe this is both a
fundamental issue of fairness and critical to the long term health of
the HMTF. To the issue of fairness, historically, cargo into the Port
of Los Angeles generates over $200 million in HMT revenue, but we
received only $3 million in HMT spending.
In 2017, which is the last year this information was
available, HMT revenue generated at the Port of Los Angeles was $225
million. This represents 17.3% of the nation's HMT revenues.
In contrast, the Port of Los Angeles received $5.46
million from the $50 million appropriated for the Donor and Energy
Transfer Port Program funding (under WRRDA Section 2106).
With respect to the health of the HMTF, the six donor ports as
defined in WRRDA 2014 account for 50% of all HMT revenue, but receive
less than two percent in return. It's important that HMT funding be
used to support these high net contributors to the HMTF, especially as
these ports face increasing competition from international ports. Cargo
diversion from donor ports to international ports could undermine the
long-term growth in the HMTF.
Third, donor ports need a limited expansion in the types of
projects eligible for HMT. At the Port of Los Angeles, part of what
makes us donors to the HMTF is that our federal channel does not
experience the sedimentation that other ports do. We have in-water
infrastructure needs that are not currently HMT-eligible expenditures.
To provide context, the infrastructure at the Port of Los Angeles
is at a scale that reflects our role as the nation's premier trade
gateway:
7,500 acres (4,300 acres of land and 3,200 acres of
water)
43 miles of waterfront
Minus 53, main channel water depth
27 terminals and 270 berths
15 marinas with 3,736 recreational vessel slips and dry
docks
91 ship-to-shore container gantry cranes
However, we face an ever changing maritime shipping industry and
evolving infrastructure demands. We were honored in December 2015 to
receive the first 18,000 TEU ship to visit an American port; earlier
this year, we received the first 20,000 TEU ship. In addition to
capital berth dredging necessitated by the advent of these larger
container ships, we have nearly $260 million in container terminal
wharf maintenance for in-water structures, such as decks, beams,
mooring bitts and piles. Additionally, we need support to fortify and
maintain seismic compliance of in-water structures. These expanded uses
of funds will assist donor ports in applying funds towards projects
that provide our customers world-class infrastructure and keep us
competitive against international competition.
Full use, fair and equitable allocation, and expanded uses for
donor ports. We view these as the critical and interconnected parts of
comprehensive HMT reform. To this end, I recommend the Committee start
with the HMT spending framework developed by the American Association
of Port Authorities (AAPA). Moving forward, I understand this Committee
and Congress as a whole will develop its own HMT spending plan. As a
starting point for those discussions, I would encourage you to look at
the AAPA framework to help inform those deliberations as you move
forward. That framework represents a balanced consensus forged between
a wide variety of ports--both by type and geography--and is built upon
the key reform elements I have described.
The last thing I would like to underscore is the need to create a
strong link between any full use solution and an allocation plan that
addresses the port community's needs and concerns. Throughout our
ongoing HMT discussions within the industry, two things have become
clear: 1) broad-based port community support for full utilization of
the HMT exists, especially if it's tied to an equitable spending
framework; and, 2) an agreement on a spending framework is eminently
reachable.
Chairman DeFazio, Chairwoman Napolitano, Ranking Member Westerman
and Members, thank you for holding this very timely hearing. We are
truly poised at a moment in time when comprehensive HMT reform is
within reach and I appreciate this opportunity to address you. I thank
you for your leadership in addressing this crucial freight
infrastructure issue and stand ready to support and work with you.
Thank you for your time today. I am happy to answer any questions
you have.
Mrs. Napolitano. Thank you, Mr. Seroka.
And, Ms. Brady, you are now recognized.
Ms. Brady. Thank you. Chairman DeFazio, Chairwoman
Napolitano, Ranking Member Westerman, and members of the
subcommittee, my name is Bonnie Brady. I am here again today
representing the Long Island Commercial Fishing Association as
its executive director. Our membership represents commercial
fisherman from 11 different gear groups at 14 ports throughout
Long Island. It is an honor to be called back again to speak to
your committee about what I hope will finally be the full
utilization of the Harbor Maintenance Trust Fund.
For those of you on the subcommittee that may remember my
face, I first spoke to you back in 2011 as a guest of my then-
Congressman Timothy Bishop, who represented the First District
of the State of New York, when H.R. 104, the Realize America's
Maritime Promise Act, otherwise known as the RAMP Act, was on
the congressional front burner. I would like to thank all of
you and your staff for the opportunity to present my comments
to you today.
Commercial fishing on Long Island is responsible for 99
percent of New York's land and seafood catch. In 2017, that
translated to over 24 million pounds of seafood, worth just
under $48 million at the dock. That year-round commercial
fishing income powers the economic engines of hundreds of Long
Island businesses, approximately over $200 million, when adding
the industry standard economic multiplier.
Montauk, our State's largest port and within the First
District, was the 55th largest commercial fishing port in the
Nation in 2017, based on poundage. We landed 10.1 million
pounds of seafood worth $14 million at the dock, to the boats
themselves, what is termed ex-vessel value. As a way to
describe that in relation to Montauk itself, a town of 3,100
people, that is equal to 322 pounds of fish caught for every
man, woman, and child.
Montauk brings in millions of year-round dollars, which
then make their way to our local mom-and-pop shops, whether it
is via the captain and/or crew of a fishing boat, the ice
supplier, welder or gear shop, seafood market, grocery store or
restaurant. These people and their small businesses are the
very fabric which makes up all of our coastal fishing port
communities of Long Island.
Our coastal waterways and ports are our version of your
Metro and beltway here in DC. And without properly maintained
dredging, hundreds of local businesses and families could be
negatively impacted yearly on Long Island. We have had a series
of maintenance dredges. Montauk in 2008, 2012 and 2018;
Shinnecock in 2004, 2010, and 2017; and Moriches in 2013. Plus,
emergency dredges took place in Moriches this past year and in
Montauk in 2011 and Shinnecock in 2014. But that doesn't really
paint the true picture of the needs of our fishing ports, the
need for consistent methodical maintenance dredging that the
Harbor Maintenance Trust Fund was, I believe, set up to do.
Time and time again, the maintenance dredging that we have
received, though greatly appreciated, did not do the job
necessary because it was not on a consistent 3-year cycle.
While I don't have a crystal ball into the future to see what
nor'easters Mother Nature is ready to serve us, I do know the
consequences of not being able to get in or out of port as a
commercial fisherman on Long Island due to a shoaled-in port.
As a commercial fisherman, you lose income when your inlet
isn't dredged deep enough. Say you have a boat that draws, for
example, 12 feet, meaning its depth under the waterline, but
the inlet, because of shoaling, is only 10 feet deep. What that
means is your boat must wait to leave on higher tide or you
risk running aground, which equals more lost income via a trip
to the shipyard.
As a commercial fisherman, you lose income, because having
to leave on a high tide because of shoaling of your port means
sometimes you lose a day getting to your fishing grounds.
Because if you can't get out of the inlet on time, on fishing
time, to steam where you know the fishing has been red hot of
late, by the time you do leave, you get to the grounds late and
the fish are on the move again.
As a commercial fisherman, you lose income when you can't
land your catch because you cannot get into your inlet until
the tide is high again to package your fish to send into New
York City. If you miss the truck and the market doesn't take
place the following day or until after the weekend, you could
risk spoil of part or possibly your whole catch. And while I am
very grateful that, as far as Long Island goes, we have not
lost any fishermen due to a boat going aground in shoaling
waters in our ports that I can recall in recent memory, we have
in the past come far too close. All of these issues are
unacceptable sequelae due to inadequate maintenance dredging,
which the Harbor Maintenance Trust Fund was set up to protect
against.
Having to wait 6 or 7 years for maintenance dredging or
scramble for emergency dredging funding is just not the way to
support the people and ports that harvest and feed this Nation
and beyond. And it does nothing to guarantee our safety and the
safety of the thousands of commercial fishermen that do this
job day in and day out through the U.S.
Thank you all sincerely for holding this hearing today
focusing on fully utilizing the fund as it was intended. Doing
nothing, in my opinion, at best, creates a panacea of economic
losses for commercial fishermen and their port towns. In its
very worst, it could cost commercial fishermen their lives.
Thank you for allowing me to express these views today, and I
look forward to any questions from you or any members of the
subcommittee.
[Ms. Brady's prepared statement follows:]
Prepared Statement of Bonnie Brady, Executive Director, Long Island
Commercial Fishing Association, Montauk, New York
Mr. Chairman and members of the subcommittee, my name is Bonnie
Brady. I am here again today representing the Long Island Commercial
Fishing Association as its executive director. Our membership
represents commercial fishermen from 11 different gear groups at 14
ports throughout Long Island. It is an honor to be called back again to
speak to your subcommittee about what I hope will finally be the full
utilization of the Harbor Maintenance Trust Fund.
For those of you on the subcommittee that may remember my face, I
first spoke to you back in 2011 as a guest of my then Congressman
Timothy Bishop, who represented the First District of the State of New
York, when HR 104, the Realize America's Maritime Promise act otherwise
known as the RAMP act, was on the Congressional front burner. I would
like to thank all of you, and your staff, for the opportunity to
present my comments to you today.
Commercial fishing on Long Island is responsible for 99 percent of
New York's landed seafood catch. In 2017, that translated to over 24
million pounds of seafood worth just under $48 million dollars at the
dock. That year-round commercial fishing income powers the economic
engines of hundreds of Long Island businesses, approximately over $200
million dollars when adding the industry-standard economic multiplier.
Montauk, our state's largest port, and within the First District,
was the 55th largest commercial fishing port in the nation in 2017
based on poundage. We landed 10.1 million pounds of seafood, worth
$14.8 million dollars at the dock, to the boats themselves, what is
termed ex-vessel value. As a way to describe that in relation to the
Montauk itself, a town of 3100 people, that's equal to 322 pounds of
fish caught for every man, woman and child.
Montauk brings in millions of year-round dollars, which then make
their way to our local mom and pop shops, whether it is via the captain
and/or crew of a fishing boat, the ice supplier, welder or gear shop,
seafood market, grocery store, or restaurant, these people and their
small businesses are the very fabric which makes up all of our coastal
fishing port communities of Long Island. Our coastal waterways and
ports are our version of your Metro and Beltway here in DC, and without
properly maintained dredging, hundreds of local businesses and families
could be negatively impacted yearly on Long Island.
We have had a series of maintenance dredges, Montauk in 2008, 2012,
and 2018, Shinnecock in 2004, 2010, and 2017, and Moriches in 2013.
Plus emergency dredges took place in Moriches this past year, and in
Montauk in 2011 and Shinnecock in 2014. But that doesn't really paint
the true picture of the needs of our fishing ports; the need for
consistent, methodical maintenance dredging that the Harbor Maintenance
Trust Fund was, I believe, set up to do.
Time and time again, the maintenance dredging that we have
received, though greatly appreciated, did not do the job necessary
because it was not on consistent three-year-cycles.
While I don't have a crystal ball into the future to see what Nor-
Easters Mother Nature is ready to serve us, I do know the consequences
of not being able to get in or out of port as a commercial fisherman on
Long Island due to a shoaled in port.
As a commercial fisherman, you lose income when your inlet isn't
dredged deep enough. Say you have a boat that draws, for example, 12
feet (meaning its depth under the water line) but the inlet, because of
shoaling, is only ten feet deep. What that means is your boat must wait
to leave on higher tide or you risk running aground, which equals more
lost income via a trip to the shipyard.
As a commercial fisherman, you lose income because having to leave
on a high tide because of shoaling of your port means sometimes you
lose a day getting to your fishing grounds, because if you can't get
out of the inlet on time, on fishing time, to steam to where you know
the fishing has been red-hot of late, by the time you do leave, you get
to the grounds late and the fish are on the move again.
As a commercial fisherman, you lose income when you can't land your
catch, because you cannot get into your inlet until the tide is high
again to pack your fish to send into New York City. If you miss the
truck and the market doesn't take place the following day, or until
after the weekend, you could risk spoil of part, or possibly your whole
catch.
And while I am very grateful that as far as Long Island goes, we
have not lost any fishermen due to a boat going aground in shoaling
waters in our ports that I can recall in recent memory, we have in the
past come far too close. All of these issues are unacceptable sequelae
due to inadequate maintenance dredging, which the Harbor Maintenance
Trust Fund was set up to protect against.
Having to wait six or seven years for maintenance dredging, or
scramble for emergency dredging funding is just not the way to support
the people and ports that harvest and feed this nation and beyond. And
it does nothing to guarantee our safety and the safety of the thousands
of commercial fishermen that do this job day in and day out throughout
the US.
Thank you all sincerely for holding this hearing today focusing on
fully utilizing the Fund as it was intended. Doing nothing, in my
opinion, at best creates a panacea of economic losses for commercial
fishermen and their port towns, and at its very worst, it could cost
commercial fishermen their lives.
Thank you for allowing me to express these views today, and I look
forward to any questions from you or any other members of the
subcommittee.
Mrs. Napolitano. Thank you, Ms. Brady.
And I now recognize Mr. Ross.
Mr. Ross. Thank you, Chairwoman Napolitano and Ranking
Member Westerman, and Chairman DeFazio. I appreciate the
opportunity to testify today on behalf of the National Corn
Growers Association. NCGA represents nearly 40,000 dues-paying
corn farmers and the interests of more than 300,000 farmers who
contribute through the corn checkoff programs in their States.
My name is Kevin Ross. I am a sixth-generation farmer from
Iowa, where my wife, Sara, and I grow corn, soybeans, and
alfalfa as well raise cattle. I am also first vice president of
NCGA. My farm sits about 20 miles east of the Missouri River
near Council Bluffs, the heart of the recent floods.
America's corn farmers need reliable means of moving our
crops to customers, whether it is to livestock feedyards, grain
elevators, ethanol plants, or to river ports for export.
Farmers use many modes of transportation, with the inland
waterway system being a vital artery for our products and
especially for farmers in the Midwest.
With 12,000 miles of commercially navigable channels and
more than 240 lock sites, inland waterways allow our Nation's
corn growers to move their product to and from 38 States,
including Arkansas, Illinois, Iowa, Minnesota, Missouri, Ohio,
Tennessee and Wisconsin as well as internationally through the
Mississippi, Missouri, Illinois and Ohio Rivers. There are six
States represented on the committee that do not have any
accessible coastline of the ocean or gulf. The Mississippi
River System is the coastline of the Midwest and helps gain
access to those outer coastal markets.
Given that more than half of corn exports are transported
via the inland waterway system, continuing to invest in this
system is critically important to our competitiveness and
livelihoods. Much of the physical infrastructure is aging and
in need of improvements. For example, commercial navigation
locks typically have a design life of 50 years, and yet, by the
end of 2020, 78 percent of the U.S. locks will have outlived
that designated lifespan. While volumes of grain, ethanol, and
byproduct exports increase, the efficiency of the locks
decrease. Barge tows must be split in two because lock chambers
aren't large enough to accommodate them. Efficiency lags cost
money, which flows down to the farmer in the form of lower
prices for our corn.
By one estimate, America's transportation deficiencies will
cost U.S. agriculture $1.3 billion in exports because our
current infrastructure system increases the cost of the
production process and makes access to markets more expensive.
Continued low commodity prices and consecutive years of
declining farm income coupled with recent trade disruptions and
the aging infrastructure system of locks and dams are taking a
toll on farmers. The United States is the world's largest
exporter of corn, shipping more than 2 billion bushels overseas
last year, but we face tough competition from other countries,
such as Brazil and Argentina. The majority of corn exports are
shipped through the inland waterway system, with 54 percent of
them being transported by barge, according to a recent USDA Ag
Marketing Service report. Transportation efficiencies and costs
are a major variable that keeps our farmers competitive in
overseas markets.
Investing in lock and dam upgrades and their operation and
maintenance, to ensure an efficient inland waterway system, is
a major NCGA infrastructure priority. NCGA has identified 25
locks and dams that are in need of upgrade and repairs. And we
urge special attention to the Navigation and Ecosystem
Sustainability Program, otherwise known as NESP. The 2007 WRDA
bill first authorized NESP as a long-term program of navigation
improvements and ecological restoration for the Mississippi
River System. The NESP program allows the U.S. Army Corps of
Engineers to increase capacity at seven key locations, while
investing in ecosystem improvements along the river systems.
The Upper Mississippi is generally where most grain export
originates.
Modernizing these seven locks will increase the efficiency
of the inland waterways transportation system, which means that
the cost of transportation will decrease and keep farmers like
myself competitive in foreign markets. We realize the
infrastructure upgrades we seek have a cost. Established
public-private partnerships in our waterways have previously
been a success story.
A strong partnership between the Army Corps of Engineers
and commercial operators through the Inland Waterways Trust
Fund allow commercial users of the inland waterway system to
contribute substantial revenues for rehabilitation and
modernization of the system. The revenues are generated through
tax collected as a levy on fuel used in commercial
transportation on the inland waterways at 29 cents per gallon.
These revenues are placed in the Inland Waterways Trust Fund
and matched with public funds for capital improvements on
infrastructure. This partnership is what helps make the inland
waterway system such an efficient and viable way to transport
our product to market.
While there is success in other toll-based partnerships in
transportation programs, there is significant difference in the
waterway system. Unlike the highway program, where users have a
choice to use a tolled or untolled facility, waterway users
will be faced with no choice.
Production agriculture will be negatively impacted, as
family farmers upstream will be double-tolled once the
fertilizer they are using comes upstream and then crops they
are exporting move downstream. Studies show that cost could be
up to 31.5 cents per bushel of corn. That is an extra cost that
farmers cannot bear.
On behalf of the National Corn Growers Association, I am
grateful for the subcommittee's support for farmers and the
other users of the inland waterway system. We appreciate the
opportunity to provide input in today's discussion and stand
ready to work with you and serve as a resource for further
discussions regarding water transport. Again, thank you for the
opportunity, and I look forward to your questions.
[Mr. Ross's prepared statement follows:]
Prepared Statement of Kevin Ross, First Vice President, National Corn
Growers Association, Minden, Iowa
Thank you, Chairwoman Napolitano and Ranking Member Westerman. I
appreciate the opportunity to testify today on behalf of the National
Corn Growers Association (NCGA). NCGA represents nearly 40,000 dues-
paying corn farmers and the interests of more than 300,000 farmers who
contribute through corn checkoff programs in their states.
My name is Kevin Ross. I am a sixth-generation Iowa farmer, where
my wife Sara and I grow corn, soybeans and alfalfa, as well as raise
cattle. I am also the First Vice President of NCGA. My farm sits about
20 miles east of the Missouri River.
America's corn farmers need reliable means of moving our crops to
customers, whether it's to livestock feed yards, grain elevators, the
ethanol plant, or ports for export. Farmers use many modes of
transportation, with the inland waterway system being a vital artery of
transportation for our products, especially for farmers in the Midwest.
With 12,000 miles of commercially navigable channels and more than
240 lock sites, inland waterways allow our nation's corn growers to
move their product to and from 38 states including Alabama, Illinois,
Iowa, Minnesota, Missouri, Ohio, Tennessee, and Wisconsin as well as
internationally through the Mississippi, Missouri, Illinois, and Ohio
Rivers. Moving our product through the inland waterways system allows
us to transport our product in a way that is beneficial to both the
economy and the environment.
Given that more than half of corn exports are transported via the
inland waterways system, continuing to invest in this system is
critically important to our competitiveness and livelihoods. Much of
the physical infrastructure is aging and in need of improvements. For
example, commercial navigation locks typically have a design life of 50
years, yet by the end of 2020, 78 percent of U.S. locks will have
outlived that designated lifespan. While volumes of grain, ethanol, and
by-product exports increase, the efficiency of the locks decrease.
Barge tows must split into two because the lock chambers aren't large
enough to accommodate them. Efficiency lags cost money, which flows
down to the farmer in the form of lower prices for our corn.
By one estimate, America's transportation deficiencies will cost
U.S. agriculture $1.3 billion in exports because our current
infrastructure system increases the cost of the production process and
makes access to markets more expensive.
Continued low commodity prices and consecutive years of declining
farm income, coupled with recent trade disruptions and the aging
infrastructure system of locks and dams are taking a toll on farmers.
The United States is the world's largest exporter of corn, shipping
more than 2 billion bushels overseas last year, but we face tough
competition from Brazil and Argentina. The majority of corn exports are
shipped through the inland waterway system with 54 percent of corn
exports being transported by barge, according to a recent USDA
Agricultural Marketing Service report. Transportation efficiencies and
costs are a major variable keeping our farmers competitive in overseas
markets. Every market counts and we need to be able to compete.
Investing in lock and dam upgrades their operation and maintenance
to ensuring an efficient inland waterway system is a major NCGA
infrastructure priority. NCGA has identified 25 locks and dams that are
in need of upgrades and repairs. We urge special attention to the
Navigation and Ecosystem Sustainability Program (NESP). The 2007 WRDA
bill first authorized NESP as a long-term program of navigation
improvements and ecological restoration for the Mississippi River
System. NESP allows the U.S. Army Corps of Engineers to increase
capacity at seven key locations, while also investing in ecosystem
improvements along the river systems. The Upper Mississippi River is
generally where most grain export originates. Modernizing these seven
locks will increase the efficiency of the inland waterways
transportation system, which means that the cost of transportation will
decrease, and keep farmers like myself competitive in foreign markets.
This program promotes collaboration between agriculture, trade,
organized labor and conservation groups to work together to build new
locks and dams on the Illinois and Mississippi Rivers, supporting the
more than half-million jobs that depend on the inland waterways.
We realize the infrastructure upgrades we seek have a cost.
Established public private partnerships in our waterways have been a
success story.
A strong partnership between the Army Corps of Engineers and
commercial operators through the Inland Waterway Trust Fund, allow
commercial users of the inland waterway system to contribute
substantial revenues for rehabilitation and modernization of the
system. The revenues are generated through a tax collected as a levy on
fuel used in commercial transportation on the inland waterways at $.29
cents-per-gallon. These revenues are placed in the Inland Waterways
Trust Fund and matched with public funds for capital improvements on
infrastructure. This partnership is what helps make the inland waterway
system such an efficient and viable way to transport our product to
market. While there is success in other toll-based partnerships in
transportation programs, there is a significant difference in the
waterways system. Unlike the highway program, where users have the
choice to use a tolled or un-tolled facility, waterway users would be
faced with no choice. The result would be moving product by other
modes. Production agriculture would be negatively impacted as family
farmers living upstream would be tolled doubled, once for the
fertilizer that they use comes upstream, and then transporting export
crops to market on the waterways. Studies have shown that farmers could
potentially have to pay approximately $31.5 cents per-bushel in toll
fees, which would force the transportation of grain onto other modes
leaving less transportation options for the family farmer, compounding
our current road and railway system. We must maintain and invest in the
future of our waterway system, amplifying our advantage instead of
continuing to watch its slow erosion.
On behalf of the National Corn Growers Association, I am grateful
for this subcommittee's support for farmers and the other users of the
inland waterway system. We appreciate the opportunity to provide input
into today's discussion and stand ready to work with you and serve as a
resource for further discussions regarding water transport. Again,
thank you for this opportunity, I look forward to your questions.
Mrs. Napolitano. Thank you, Mr. Ross.
And now I turn it over to Mr. Westerman.
Mr. Westerman [presiding]. Thank you, Madam Chair, who
gracefully offered to let me introduce a friend and a
constituent and a tireless advocate for inland waterways,
Phyllis Harden from Pine Bluff Sand and Gravel, who is their
director of legislative and special projects and also is the
vice chair of the Pine Bluff-Jefferson County Port Authority,
and she serves on the board of directors for the Dredging
Contractors of America as well as the National Waterways
Conference.
Ms. Harden, you are recognized for 5 minutes.
Ms. Harden. Thank you, Ranking Member Westerman. And thank
you, Chairwoman Napolitano and Chairman DeFazio and other
members of the subcommittee. It is an honor and a privilege to
testify before you today.
My testimony will focus on the importance of the inland
waterways transportation system, the McClellan-Kerr Arkansas
River Navigation System, and reform that could benefit inland
waterways infrastructure.
The Pine Bluff Sand and Gravel Company is a fourth-
generation family-owned business that has been in operation for
over 100 years. We are headquartered in Pine Bluff, Arkansas,
and have operations in Louisiana, Kentucky, Tennessee, and
Alabama. We specialize in crushed stone and riprap delivered by
barge on the Mississippi River and its tributaries, marine
construction and transportation, commercial sand dredging,
ready-mix concrete, and hot mix asphalt. The McClellan-Kerr
Arkansas River Navigation System, or MKARNS, is a 445-mile, 9-
foot navigation system channel consisting of 18 locks and dams
that begins at the confluence of the White and Mississippi
Rivers and ends at Tulsa, Oklahoma. Construction of this system
began in 1957 and completed in 1971, which, sadly, by today's
standards, make these locks some of the newer locks on the
Nation's inland waterways.
Pine Bluff Sand and Gravel supports three separate
priorities on the MKARNS: First, in the America's Water
Infrastructure Act of 2018, this committee was instrumental in
authorizing the construction of a navigation improvement
project at Three Rivers, which is at the confluence of the
Arkansas, White, and Mississippi Rivers in southeast Arkansas.
Basically, the White and Arkansas Rivers come closer and closer
together after each high water event. If an uncontrolled
channel develops, navigation on the MKARNS would be lost for an
extended amount of time.
Our second priority is funding to address a critical
backlog maintenance on the MKARNS. While the MKARNS is one of
the newer systems, its rapidly aging system is worsened by
long-deferred maintenance, which is becoming more acute with
each passing year. Critical work is defined as there being a
greater chance, greater than 50 percent chance of failure
within 5 years. Years of neglect have led to a situation where
the MKARNS is facing a critical backlog of approximately $240
million. The highest priorities are Tainter gate replacements,
110-foot stop logs, and center post receivers.
Our third priority and what has been long sought
modification to the MKARNS is the proposed deepening of the
current 9-foot navigation channel to 12 feet. Congress
authorized the construction of this project in 2003, provided
funds for it in 2004, and the Corps of Engineers constructed
several project features, but since that time, no additional
funds have been provided for the Corps to continue the project.
This project would allow 40 percent more tonnage in each barge
and result in shipper savings of $43.1 million annually.
My description of the MKARNS as an important navigation
asset with aging infrastructure, underfunded projects, and
deferred critical maintenance would also apply to other
waterways. Fortunately, this committee promoted and carried out
changes in the Water Resources Reform and Development Act of
2014 that have accelerated project delivery on the inland
waterway system. Most significantly, a cost share of 85 percent
general revenues and 15 percent Inland Waterways Trust Funds at
Olmsted Lock and Dam has accelerated the project delivery and
operability of the new lock. And that is just one example of
how efficient project funding can lead to accelerated and
significant economic benefits for the Nation.
Now that Olmsted is almost complete, the trust fund is
likely to go back to operating at a 50/50 cost share split for
construction projects. If this happens, the current portfolio
of 15 projects awaiting construction could take almost 40 years
to complete. Two of our priorities are on that list.
WRDA 2016, the cost formula for deepening coastal ports was
changed from the 50/50 to a 75/25 split. And changing the cost
share in the same manner for the inland waterways construction
projects has a potential of completing these projects in 20
years instead of the current 40 years. I would like to ask the
committee in their upcoming legislation that they would modify
that cost share to be a permanent 75/25 split so that we can
get these projects accelerated quickly instead of the length of
time it has been.
And then I realize I am almost out of time, and I want to
quickly tell you our story. Pine Bluff Sand and Gravel in 1998
joined the effort to realize a 12-foot channel on the MKARNS.
After 13 years, we reluctantly had to move our primary source
of rock from River Mountain Quarry on the Arkansas River to a
more competitive location. In 2010, we purchased the Cumberland
River Quarry on the Cumberland River above Paducah near Salem,
Kentucky.
Therefore, our quarry on the Arkansas River is now
operating at a much smaller scale and numerous employees were
laid off. Sadly, this could have been one of the largest
quarries in the region. However, the additional cost of the
shallow channel was simply too much for us to continue
subsidizing. Our cost and bidding are extremely sensitive to
competition, and we have lost jobs by a penny or a nickel per
ton. We could not afford the cost of doing nothing.
Thank you for the opportunity to provide our perspective to
this committee today, and I look forward to any questions or
comments.
[Ms. Harden's prepared statement follows:]
Prepared Statement of Phyllis Harden, Executive Assistant, Pine Bluff
Sand and Gravel Co., Pine Bluff, Arkansas
Chairwoman Napolitano, Ranking Member Westerman, and Members of the
Subcommittee, thank you for the opportunity to testify today on the
topic of ``The Cost of Doing Nothing: Why Full Utilization of the
Harbor Maintenance Trust Fund and Investment in our Nation's Waterways
Matter.'' My testimony will focus on the importance of the inland
waterways transportation system, the McClellan-Kerr Arkansas River
Navigation System, and potential reforms that could benefit inland
waterways infrastructure.
The Pine Bluff Sand and Gravel Company is a fourth-generation
family-owned business that has been in operation for over 100 years. We
are headquartered in Pine Bluff, Arkansas, and have operations in
Louisiana, Kentucky, Tennessee, and Alabama. We specialize in crushed
stone and riprap delivered by barge on the Mississippi River and its
tributaries, marine construction and transportation, commercial sand
dredging, and ready-mix concrete and hot mix asphalt. We directly
employ around 500 people and generate business that supports many more.
I also currently serve as the Vice-Chair of The Pine Bluff-Jefferson
County Port Authority and serve on the Board of Directors for Dredging
Contractors of America and the National Waterways Conference.
Pine Bluff Sand and Gravel has been in business for over a century
in part because of opportunities the nation's inland waterway
transportation system provides. When transporting bulk commodities,
such as aggregates, the inland waterways presents the most economical
and environmentally friendly form of transportation. In fact, for every
single barge of aggregates we ship, this equals 70 trucks that are not
on the road. In 2017, there were more than 550 million tons transported
on the inland waterways system valued at $220 billion. Of that tonnage,
almost 80 million tons were aggregates, which is 14% of the total
tonnage moved on the system.
Many people do not realize the importance of the inland waterways
system because they are not stuck in traffic with barges, or regularly
held up by barges at railroad crossings. But what most people don't
realize is that if you are near a navigable waterway, there is good
chance that the aggregates used to build key parts of your community
were most likely transported via water at some point. In fact, this
last year, Nashville, Tennessee's boom in building required four
million tons of concrete shipped via the waterway, which equates to
160,000 18-wheeler trucks.
mcclellan-kerr arkansas river navigation system (mkarns)
The McClellan-Kerr Arkansas River Navigation System, or MKARNS, is
a 445-mile, 9-foot navigation channel that consists of 18 locks and
dams that begins at the confluence of the White and Mississippi rivers
and ends near Tulsa, Oklahoma. Construction of this system began in
1957 and was completed in 1971, which, by today's standards, sadly,
make these locks some of the newer ones on the nation's inland
waterways. Prior to the construction of these locks and dams, this
system was not navigable year around, and in fact it was not uncommon
to see a nearly dry river bed that one could wade across. There are
five major public port facilities, and 62 private ports and terminals
that support the movement of the major commodities that are shipped on
the MKARNS. These commodities include coal, petroleum products,
fertilizers, grain, sand and gravel, and iron and steel-products. The
MKARNS was upgraded to a high-use waterway system in 2018 based on a
five-year average of 3.33 billion ton-miles transported.
Pine Bluff Sand and Gravel supports three separate and co-equal
priorities on the MKARNS.
First, this Committee was instrumental in authorizing the Chief's
Report in America's Water Infrastructure Act of 2018 for navigation
improvement at Three Rivers Project, where the White and Arkansas River
meet the Mississippi River. The structures currently in place are
rapidly deteriorating, and should any of these components fail, the
MKARNS would not be a functioning commercial waterway for an extended
amount of time. Additionally, like most of the nation's inland
waterways system, the authorized project at Three Rivers will provide
significant environmental benefits, allowing previously disconnected
waterbodies to return to a more natural open water ecosystem.
Our second co-equal priority is funding for the critical
maintenance backlog on the MKARNS. While I mentioned earlier in my
testimony that MKARNS is one of the newer systems, it is a rapidly
aging system exacerbated by long-deferred maintenance. As this system
was completed nearly 50 years ago, the maintenance needs of the MKARNS
are becoming more acute with each passing year. Defined as a component
which has a 50% probability of failure within the next five years,
critical maintenance on the MKARNS has long been deferred, and years of
neglect has led to a situation where the MKARNS is facing a critical
maintenance backlog of approximately $240 million.
Our third co-equal priority, and one that has been a long-sought
modification to the MKARNS, is the proposed deepening of the current 9-
foot channel to 12-feet of depth. Congress authorized the construction
of this project in 2003, and provided funds for the project in 2004. At
that time, the Corps of Engineers constructed several project features,
and yet since that time, no additional funds have been provided to the
Corps to continue the project. We would encourage Federal authorities
to resume the project since greater depths will allow an additional 40%
per barge to be transported compared to the current channel. This
deepening project would also result in a shipper savings of $43.1
million annually.
modernizing the inland waterways transportation system
My description of the MKARNS as an important navigation asset with
aging infrastructure, under-funded projects, and deferred critical
maintenance, also applies to other waterways in our country.
Fortunately, some steps have been taken to begin to improve important
infrastructure features of America's transportation network, but more
attention is needed.
In 2015, the inland waterways industry, including Pine Bluff Sand
and Gravel, successfully advocated for a 45% increase to the diesel
fuel tax deposited into the Inland Waterways Trust Fund (IWTF), which
is currently the highest federal fuel tax being paid by any mode of
surface transportation. There are numerous beneficiaries of the
nation's inland waterways system such as: recreational users, municipal
water supply, hydropower, industrial processes and cooling water, flood
damage reduction, national security, and other national and regional
economic development opportunities. Only the commercial towboat
operators pay the tax that is dedicated to support the inland
waterways.
This Committee promoted and carried out changes in the Water
Resources Reform and Development Act of 2014 that has significantly
accelerated project delivery on the inland waterways system. Besides
the 45% increase to the diesel fuel tax, a cost-share change at Olmsted
Locks and Dam allowed for the Trust Fund to operate over the last six
years at about a 25% IWTF/75% general fund split. This cost-share
change has also accelerated the operability of Olmsted, allowing for
$600 million in annual national economic benefits to be accrued four
years ahead of schedule. Olmsted is just one example of how efficient
project funding can lead to accelerated and significant economic
benefits for the nation. Now that Olmsted is complete, the IWTF is most
likely going to return to operating at a 50% IWTF/50% general fund
formula for construction projects. If this happens, the current
portfolio of at least 15 projects awaiting construction could take
almost 40 years to complete. The MKARNS' critical Three Rivers project
is one of these projects. Therefore, I am asking the Committee to
consider modifying the cost-share for inland waterways construction
projects to 25% IWTF/75% general revenue in any potential
infrastructure legislation that is moving this Congress.
Freight moved by the inland waterways is the least expensive, most
fuel efficient, environmentally friendly mode of transportation. When
it is allowed to work efficiently, the economic and environmental
benefits to the nation are significant. Improving the funding formula
for new and on-going projects and addressing deferred maintenance
backlog will pay multiple benefits to the nation in the form of lower
transportation costs, more jobs, and less congestion.
Thank you for the opportunity to provide Pine Bluff Sand and
Gravel's perspective to the Committee today. I look forward to any
questions or comments you may have.
Mr. Westerman. Thank you for your testimony.
The Chair now recognizes Mr. Peter Stephaich. He is
chairman of Campbell Transportation Company, on behalf of the
Waterways Council, Inc. from Houston, Pennsylvania. You are
recognized for 5 minutes.
Mr. Stephaich. Thank you very much. Chairman DeFazio,
Chairwoman Napolitano, Ranking Member Westerman, and members of
the subcommittee, thank you for the opportunity to testify
before you today. My testimony will focus on the importance of
the inland waterways transportation system and the Inland
Waterways Trust Fund.
I currently serve as chairman and CEO of Campbell
Transportation Company, headquartered near Pittsburgh,
Pennsylvania. I am also the chairman of Waterways Council.
Waterways, WCI, is the national public policy organization that
advocates for a modern and well-maintained system of waterways
and ports.
Our inland waterway transportation system consists of
12,000 miles of commercially active inland waterways, on which
nearly 600 million tons of products move annually, representing
a value of over $220 billion. About 400 commercial operators
currently pay a 29-cent-per-gallon diesel fuel tax that is
deposited into the Inland Waterway Trust Fund.
Users of the system successfully advocated in support of
raising our tax by 45 percent in 2015, from 20 cents to 29
cents per gallon. This tax currently generates about $115
million a year and pays for up to half the cost of new lock and
dam construction, major rehabilitation, and channel deepening.
Since the enactment of the Water Resources Development Act
of 1986 through 2014, the Inland Waterways Trust Fund supported
construction completion of over 29 modernization projects.
Currently, the trust fund is supporting construction of five
lock and dam modernization projects.
I would like to thank this committee for passing important
policy changes contained in the Water Resources Reform and
Development Act of 2014, particularly the cost share policy
revision for Olmsted Locks and Dam, along with the 45-percent
increase in the inland waterway diesel fuel tax, allowed for
the trust fund to be leveraged from less than $200 million per
year to a $400-million-a-year annual program.
That cost share change from 50 percent trust fund and 50
percent general fund, to 15 percent from the trust fund and 85
percent from the general fund has accelerated the completion of
the Olmsted project while saving the taxpayers money. Let me
explain. The accelerated and steady funding for Olmsted Locks
and Dam allowed the Corps to dedicate the project last August
in 2018, 4 years ahead of schedule and at a completion cost
$330 million below what the Corps had projected. Not only did
the cost share change help Olmsted, but it also allowed
construction to proceed on three other priority navigation
projects: Lower Monongahela, Kentucky lock, and Chickamauga
lock. This cost share change also allowed for the initiation of
the major rehab project on LaGrange lock on the Illinois
waterway.
Unfortunately, our inland waterway system continues to
deteriorate. Currently, there are more than 15 other authorized
high-priority inland projects awaiting construction. With
Olmsted's completion and no additional policy changes and
improvements, only about $230 million a year will be available
for inland waterway project modernization. That is the $115
million in trust fund revenues times two at 50 percent. At this
funding level, many of these projects won't start construction
during the next 20 years, greatly increasing the probability of
catastrophic failure somewhere in the system and causing the
system to further deteriorate.
In the Water Resources Development Act of 2016, Congress
changed the cost share model for funding construction of deep
draft ports from 45 to 50 feet from 50 percent non-Federal
sponsor and 50 percent Federal Government to a 25-percent non-
Federal sponsor and a 75-percent general funds in order to
accomplish this important work. By doing the same thing with
the Inland Waterways Trust Fund, adjusting the cost share to 25
percent trust fund and 75 percent general funds, the inland
navigation capital program can remain operating around the
$400-million-per-year level that has been achieved since the
cost share change at Olmsted. This recommended 25/75 cost share
will allow the Corps to accelerate the construction program and
provide funding visibility going forward, which will greatly
improve the efficiency of the Corps program.
As you move forward with infrastructure legislation, I
encourage you to consider this proposal to adjust the cost
share for construction of inland waterways projects.
That concludes my oral statement, and I will be happy to
answer any questions. Thank you.
[Mr. Stephaich's prepared statement follows:]
Prepared Statement of Peter H. Stephaich, Chairman and CEO, Campbell
Transportation Company, Inc., Houston, Pennsylvania, on behalf of
Waterways Council, Inc.
Chairwoman Napolitano, Ranking Member Westerman, and Members of the
Subcommittee, thank you for the opportunity to testify before you today
on the topic of ``The Cost of Doing Nothing: Why Full Utilization of
the Harbor Maintenance Trust Fund and Investment in our Nation's
Waterways Matter.'' My testimony will focus on the importance of the
inland waterways transportation system, and suggest a recommended
policy improvement to advance modernization of the Nation's critically
important inland navigation infrastructure.
I currently serve as Chairman and CEO of Campbell Transportation
Company, Inc. Campbell Transportation Company is headquartered in
Houston, Pennsylvania, and operates approximately 50 towboats, over
1100 barges, four shipyards/repair facilities, and fabrication shops at
two locations on the Ohio River and two on the Monongahela River. I am
also the Chairman of the Board of Directors of Waterways Council, Inc.
(WCI). WCI is the national public policy organization that advocates
for a modern and well-maintained system of inland waterways and ports.
WCI's diverse members include waterways carriers, shippers,
agricultural interests, port authorities, energy providers,
construction contractors, organized labor unions, conservation
organizations, and waterways advocacy groups from all regions of the
country.
anchored in the constitution
From this country's earliest days, even before our United States
Constitution was adopted, the inland waterways system was recognized as
a priceless natural asset and a matter of fundamental federal
responsibility and stewardship. The authors of our Constitution
anchored the federal government's preeminent role in regulating
navigation, both inland and coastal, in Article 1, Section 3's commerce
clause; in Article 1, Section 9's prohibition of preference among ports
clause, and elsewhere in that seminal document.
One of the early actions by Congress was to enact legislation to
provide for federal maintenance of new Nation's navigational aids.
Since then, Congress has exercised its role in regulating and setting
policy for the Nation's waterways through various legislation over the
years. In the previous century, periodic ``Rivers and Harbors Acts'' or
``Flood Control Acts,'' which predominated in the first half of the
century, were replaced more recently by ``Water Resources Development
Acts.'' By whatever title, Congress has consistently provided direction
to the Executive Branch on how to properly use and protect our
waterways for the benefit of the entire country.
one system that supports many
Because of our natural geographic bounty, as well as the foresight
and enlightened investment decisions made by generations who preceded
us, our Nation is blessed today with the world's preeminent inland
waterway transportation system. That system is composed of
approximately 12,000 miles of commercially active, navigable inland and
intracoastal waterways. Of this total, nearly 11,000 miles comprise the
``fuel-taxed portion'' of the system, on which commercial operators pay
a diesel fuel tax that is deposited into the dedicated Inland Waterway
Trust Fund. (IWTF). This tax pays for up to half of the cost of new
construction and major rehabilitation of the fuel-taxed waterways'
infrastructure, principally, locks and dams, but also including the
initial deepening of its channels. Users like Campbell Transportation
Company successfully advocated in support of raising that tax by 45% in
2015 to its current level of 29-cents-per-gallon, which is the highest
federal fuel tax currently being paid by a transportation mode.
Nationwide, according to the U.S. Army Corps of Engineers, the
fuel-taxed waterways include 207 lock chambers at 171 sites on 27
statutorily-designated inland rivers and intracoastal waterways system
segments. The locks and accompanying dams allow users of all types--
commercial, recreational, and governmental to stair-step their way
across the system while being assured that the depths those users
require will be available as needed.
Beyond enabling waterborne transportation, the inland waterways
system aids in flood control, enables a stable water supply for nearby
communities and industries, provides hydroelectric power, offers
recreation such as fishing and water sports, provides regional economic
development opportunities, increases property value, and enhances
national security capabilities. Unlike commercial users, none of these
other beneficiaries of the inland waterways system pay a fee to support
modernization of the system.
While America's inland waterways system is the best in the world,
it is not without challenges. Our international competitors have major
efforts underway to enhance their own systems. More than half of the
portion of our waterways system that is operated by the Army Corps of
Engineers is now more than 50 years old. Some system segments,
particularly older portions located on the Upper Mississippi, Illinois
and Tennessee Rivers, are utilizing outdated 600-foot-locks that are
unable to accommodate today's standard 1,200-foot long, 15-barge tows,
without engaging in the inefficient and potentially dangerous procedure
of uncoupling the tow into two sections in order to pass through the
lock in two trips instead of one. These locks and dams require constant
attention and financial support, both in terms of modernization funding
to improve the system's efficiency in order to facilitate the Nation's
economic well-being and standard of living, as well as of operations
and maintenance funding to keep them reliably available to users
throughout the year.
infrastructure investment is needed to keep america competitive
Since 1987, when IWTF revenues were first allocated to individual
projects following enactment of the Water Resources and Development Act
of 1986, through 2014, the Inland Waterways Trust Fund supported
construction completion of 29 modernization projects. Additionally, the
trust Fund is currently supporting construction of five other lock and
dam modernization projects, thanks to the policy changes made in 2014.
I would like to thank this Committee for passing the important policy
changes contained in the Water Resources Reform and Development Act of
2014, particularly, the cost-share policy revision for Olmsted Locks
and Dam, which, along with the 45% increase in the inland waterway
diesel fuel tax that Congress enacted in 2014, allowed for the IWTF to
be leveraged from a less than $200 million dollar annual program to a
$400 million dollar annual program. That policy change from 50% Inland
Waterways Trust Fund and 50% General Fund, to 15% from the Inland
Waterways Trust Fund and 85% from the General Fund has led to
significant progress. For example, the Olmsted Locks and Dam was
dedicated and became operable in August 2018, four years ahead of the
Corps' projected operation date and cost an estimated completion cost
more than $330 million below what the Corps projected in the project's
Post Authorization Change Report. Not only did the cost-share change
help Olmsted, but it also allowed (1) construction to proceed on three
other priority navigation projects (Lower Monongahela 2,3,4, Kentucky
Lock, and Chickamauga Lock, the latter two of which previously had
project construction suspended due to a lack of funding), and (2)
initiation of the a major rehabilitation on LaGrange Lock on the
Illinois waterway.
With Olmsted soon to be in the rearview mirror, and the Lower
Monongahela project expected to be funded to completion this fiscal
year in the FY 2020 appropriations bill, it is time to start looking
toward the next round of inland waterways modernization investments.
Currently, the inland waterways system has a portfolio of more than 15
other authorized high priority inland projects awaiting construction.
With Olmsted's completion and no additional policy improvements, only
about $230 million a year will be available for inland waterways
project modernization. At this funding level many of these projects
will not even begin construction in the next 20 years, an unacceptable
situation.
In the Water Resources Development Act of 2016, Congress changed
the cost-share model for funding construction of deep draft ports with
depths of 45 to 50 feet from 50% non-federal sponsor and 50% federal
government, to 25% non-federal sponsor and 75% federal government in
order to improve efficiency of this important work. By doing the same
thing with the Inland Waterways Trust Fund--adjusting the cost-share to
25% taken from the industry derived Trust Fund and 75% from general
funds--the inland navigation capital program can remain operating at or
above the $400 million level that for the most part has been achieved
since the cost-share change at Olmsted, and will accelerate project
delivery on the portfolio of critical inland waterways projects.
As you move forward with infrastructure legislation, I encourage
you to consider this proposal to adjust the cost-share for construction
of inland waterways infrastructure projects. This important change will
help maintain but advance our Nation's competitiveness and keep America
leading at the top. That concludes my testimony, Madam Chair. Thank you
for giving me the opportunity to be here today and I will be happy to
respond to any questions you or the other members have the Committee
have.
Mr. Westerman. I thank the gentleman for his testimony.
The chairwoman designated me to introduce the witnesses,
and I sure don't want to go against the chairwoman, so I am
going to next recognize Ms. Kirsten Wallace from the Upper
Mississippi River Basin Association.
Ms. Wallace, you are recognized for 5 minutes.
Ms. Wallace. Great. Thank you, Chair Napolitano, Ranking
Member Westerman, Chair DeFazio, and members of the
subcommittee. I appreciate today's opportunity to underscore
the value of investing in both the economic vitality and
ecological integrity of our Nation's rivers.
The Upper Mississippi River Basin Association was formed in
1981 by the Governors of Illinois, Iowa, Minnesota, Missouri,
and Wisconsin to facilitate dialogue and cooperative action and
to serve as an advocate of the State's collective interests.
UMRBA works closely with the U.S. Army Corps of Engineers and
other Federal agencies to achieve a shared commitment to
integrated and multipurpose management of the Upper Mississippi
River's economic and ecological uses.
On the Upper Mississippi River, we have proven that
navigation traffic as well as other economic uses can be fully
supported within a healthy river ecosystem. Our Nation's rivers
can serve simultaneously as economic engines and ecological
treasures. We can have both, and we are better for it.
In order for our Nation to fully realize the potential of
our rivers, we must value and integrate management of their
many purposes and uses. The Upper Mississippi River is a
multibillion-dollar economic engine and a treasured ecosystem,
abundant with fish and wildlife, generating revenues in excess
of $600 billion annually and supporting over 1.86 million jobs
in manufacturing, agriculture, tourism, recreation, navigation
and energy sectors.
At the same time, the river provides an irreplaceable water
supply source for citizens and industries throughout the
Midwest. The system of locks and dams provides for the movement
of low-cost goods that are essential to a strong national
economy: gravel, fertilizers, and agriculture outputs, salt and
energy products. And at the same time, the Upper Mississippi
River supports a $55 billion tourism and recreation industry
that is built upon the serenity and adventure of the river's
landscape and abundant opportunities for fishing and hunting.
The UMRBA, Upper Mississippi River Basin Association, along
with navigation industry, conservation interests, and local and
Federal partners, made a very conscious decision to seek
collaboration, shared solutions, rather than remain hamstrung
and steadfast in conflict.
There is a long history of conflict between economic and
ecological interests on the Upper Mississippi River, with the
most contentious time occurring in the 1970s following
enactment of new laws that gave environmental interests legal
standing, in particular the National Environmental Policy Act
and Clean Water Act, and when the American economy was
experiencing severe inflation and the value of inland waterways
as a transportation system was magnified.
Conflicts raged over navigation use and environmental
resources on the river. Can they coexist? How much navigation
traffic is too much? Ultimately, this conflict turned into
litigation when a second lock chamber was proposed at Lock and
Dam 26 in the mid-1970s, with the primary argument that the
Corps did not evaluate the systemwide impacts of the second
lock to the ecosystem.
The Federal Court halted Lock and Dam 26 replacement.
Congress claimed it had too little information to take action
and tasked UMRBA's predecessor, then-Federal-State Upper
Mississippi River Basin Commission, with resolving those
contentious questions and making recommendations for how best
to manage the river, balancing the demands of these competing
interests. Congress said no action could be taken to increase
navigation until a plan was finalized and Congress had approved
it. Ultimately, the conclusion reached was that balanced
management is achievable and is in our Nation's interest.
In 1986, Congress authorized a second chamber at Lock and
Dam 26, along with a systemwide ecosystem restoration and
scientific monitoring program, known today as the Upper
Mississippi River Restoration Program, and the declaration that
the Upper Mississippi River is both a nationally significant
navigation system and a nationally significant ecosystem.
Shortly after, the navigation industry began considering
modernization needs on the Upper Mississippi River at a larger
scale, and then UMRBA and Federal partners, navigation
industry, environmental interests took that same approach to
collaboration and agreed to the Navigation and Ecosystem
Sustainability Program, NESP, which is a comprehensive and
integrated plan for meeting current and future shipping
demands, stimulating economic growth, and improving the health
and resilience of the river ecosystem.
NESP's feasibility study was completed in 2004. Congress
authorized it in 2007. It enjoys consensus among diverse
stakeholders and bipartisan and bicameral support among
Congress as well as a steadfast commitment by the Governors of
the Upper Mississippi River Basin States. Reaching this
commitment to integrated multipurpose management was incredibly
challenging but has paid tremendous dividends. We moved the
region from conflict to collaboration. In doing so, we moved it
from the gridlock of litigation to a whole new world of
opportunity.
There is far greater power in standing for something and
not against it. NESP forges allegiances, allies who can give
Congress a solution, a hard-fought consensus, not a problem
that needs to be fixed, not a choice Congress has to make
between competing interests. NESP gives us solutions and a
concrete path to work for: guidewall extensions and mooring
cells, lock modernization at the most congested sites on the
Upper Mississippi, and islands, backwater complexes, forests
that are essential for a diverse and complex array of fish and
wildlife species.
We appreciate the committee's support of NESP and the Upper
Mississippi River as a nationally significant resource. Thank
you.
[Ms. Wallace's prepared statement follows:]
Prepared Statement of Kirsten Wallace, Executive Director, Upper
Mississippi River Basin Association, St. Paul, Minnesota
Chair Napolitano, Ranking Member Westerman, and members of the
Subcommittee, I appreciate today's opportunity to underscore the value
of investing in both the economic vitality and ecological integrity of
our nation's rivers. The Upper Mississippi River Basin Association
(UMRBA) was formed in 1981 by the Governors of Illinois, Iowa,
Minnesota, Missouri, and Wisconsin to facilitate dialogue and
cooperative action and to serve as an advocate of the states'
collective interests. UMRBA works closely with the U.S. Army Corps of
Engineers and other federal agencies to achieve a shared commitment to
integrated, multi-purpose management of the Upper Mississippi River's
economic and ecological uses.
On the Upper Mississippi River, we have proven that navigation
traffic as well as other economic uses can be fully supported within
healthy riverine ecosystems. Our nation's rivers can serve
simultaneously as economic engines and ecological treasurers. We can
have both, and we are better for it. In order for our nation to fully
realize the potential of our rivers, we must value and integrate
management of their many purposes and uses. The river is both a multi-
billion dollar economic engine and a treasured ecosystem abundant with
fish and wildlife--generating revenues in excess of $600 billion
annually and supporting over 1.86 million jobs in manufacturing,
agriculture, tourism, recreation, navigation, and energy sectors. At
the same time, the river also provides an irreplaceable water supply
source for citizens and industries throughout the Midwest. The system
of locks and dams provides for the movement of low-cost goods that are
essential to a strong national economy: gravel, fertilizers and
agricultural commodities, salt, and energy products. At the same time,
the Upper Mississippi supports a $55 billion tourism and recreation
industry built upon the serenity and adventure of the river's landscape
and abundant opportunities for fishing and hunting.
UMRBA, along with navigation industry, conservation interests, and
local and federal partners, made a very conscious decision to seek
collaboration--shared solutions--rather than remain hamstrung and
steadfast in conflict. There is a long history of conflict between
economic and ecological interests on the Upper Mississippi River. But
the most contentious time occurred in the 1970s, following enactment of
new laws that gave environmental interests legal standing (i.e.,
National Environmental Policy Act, Clean Water Act) and when the
American economy was experiencing severe inflation and the value of the
inland waterways as a transportation system was magnified. Conflicts
raged over navigation use and environmental resources on the river. Can
they co-exist? How much navigation traffic is too much? Ultimately, the
conflict turned into litigation when a second lock chamber was proposed
at L&D 26 in the mid-1970s, with the primary argument that the Corps
did not evaluate the system-wide impacts of the second lock to the
ecosystem.
The court halted L&D 26 replacement. Congress claimed that it had
too little information to take action and tasked the then-federal-state
Upper Mississippi River Basin Commission with resolving those
contentious questions and making recommendation for how to best manage
the river, balancing the demands of competing interests. Congress said
no action could be taken to increase navigation until a plan was
finalized and Congress had approved it.
Ultimately, the conclusion was that balanced management is
achievable and is in our nation's interest. In 1986, Congress
authorized the second chamber at L&D 26 along with a system-wide
ecosystem restoration and scientific monitoring program, known today as
the Upper Mississippi River Restoration program, and the declaration
that the Upper Mississippi River is both a nationally significant
navigation system and a nationally significant ecosystem.
Shortly after, navigation industry began considering modernization
needs on the Upper Mississippi River at a larger scale. UMRBA joined
with federal partners, navigation industry, and environmental interests
to take the same approach of collaboration and agreed to the Navigation
and Ecosystem Sustainability Program (NESP)--a comprehensive and
integrated plan for meeting current and future shipping demands,
stimulating economic growth, and improving the health and resilience of
the river ecosystem. NESP's feasibility study was completed in 2004 and
Congress authorized it in 2007. NESP enjoys consensus among diverse
stakeholders and bipartisan and bicameral support among Congress as
well as steadfast commitment by the Governors of the five Upper
Mississippi River basin states.
Reaching the commitment to integrated, multi-purpose management was
incredibly challenging, but it has paid tremendous dividends. We moved
the region from conflict to collaboration, and in doing so, we moved it
from the gridlock of litigation to a whole new world of opportunity.
There is far greater power in standing for something, not against it.
NESP forges allegiances--allies who can give Congress a solution, a
hard-fought consensus; not a problem that needs to be fixed; not a
choice Congress has to make between competing interests. NESP gives us
solutions, and a concrete path to work for. Guidewall extensions and
mooring cells, lock modernization at the most congested sites on the
Upper Miss, and islands, backwater complexes, and forests that are
essential for a diverse and complex array of fish and wildlife species.
We appreciate this Committee's support of NESP and the Upper
Mississippi River as a nationally significant resource.
Mrs. Napolitano [presiding]. Thank you for your testimony
to all the witnesses, and we will now have the questions. Use
the timer, a total of 5 minutes for each question. I will begin
the questioning with Mr. DeFazio.
Mr. DeFazio. Thanks, Madam Chair.
To Commissioner Goche and Ms. Brady, from what you know, in
representing your ports, but also your association with other
small ports, is the 10-percent set-aside meeting all of the
needs of small and emerging ports? Is it adequate?
Ms. Brady. Congressman, if I had that magic ball to know,
depending on the year, as to how many of the ports were going
to get hit by various storms, I could say absolutely.
It is a relative thing. Some years in Montauk, we have had
it dredged 6 times within 10 years because we just get whacked
with storm after storm in 1 year. And then we go a couple more
years and we are better off. So I don't know how I could
possibly answer that with complete clarity, but----
Mr. DeFazio. OK. Commissioner.
Mr. Goche. Thank you for the question, Congressman DeFazio.
And so far, from what I have seen, the answer would have to be
no. Not only do we need maintenance dredging virtually every
year in our area, but we also have a huge backlog of deferred
maintenance on our jetties. The only way I can see us digging
out of that deferred maintenance hole is by using the $9
billion or $10 billion that is on the books from previous
years.
The Port of Coos Bay, for example, the north jetty has lost
about 380 feet over the last 30 years in length. So it is at a
critical point where we have to replace at least 150 feet
before we can get back to some semblance of safety.
Mr. DeFazio. So I appreciate the testimony of Executive
Director Seroka, and on behalf of the AAPA. I will say that I
have some concerns with that proposal. And I have had numerous
conversations with L.A., Long Beach, and other ports, Seattle
and others. And my position is: Help us get the money, all the
money, annually that comes in, spend it, and a plan to in a
prudent way spend down the money that Congress has previously
diverted, and then we will come up with a fair distribution.
I recognize the contribution of the major ports and the
needs of the major ports. I also am sensitive to, you know, all
the many other ports are dependent upon this, some of whom
really don't have any capabilities or very little capabilities
of raising revenue.
So I guess that is not really a question. Well, let's just
say, is there anybody on the panel who disagrees that we should
spend all of the collected taxes on an annual basis, we should
appropriate the total amount on an annual basis because there
are needs out there? Anybody disagree with that? OK, good.
Anybody disagree with the fact that since we did collect
this ultimately from the American consumers, the ad valorem
tax, and it has an intended purpose, that we should also have a
plan to spend down the nearly $10 billion balance in the
theoretical trust fund which is somewhere in the Treasury
maybe, but we just make up money anyway, so what is the
difference? But that we should spend that down in a programmed
way to meet deferred maintenance and needs in both large ports
and small ports. Anybody disagree with that? OK, great. Well,
let's do it then. Thank you.
Thank you, Madam Chair.
Mrs. Napolitano. Thank you, Mr. DeFazio.
The Chair now recognizes Mr. Westerman.
Mr. Westerman. Thank you, Madam Chair.
Ms. Harden, while the MKARNS is located in Oklahoma and
Arkansas, what other States benefit from the inland waterway?
Ms. Harden. The MKARNS, sir, is a 12-State region:
Arkansas, Oklahoma, Kansas, Texas, Colorado, Missouri,
Nebraska, Minnesota, South Dakota, North Dakota, Montana, and
Idaho.
Mr. Westerman. So what are the types of specific
commodities that come from those States that otherwise would
have a very difficult time reaching global markets?
Ms. Harden. Well, as you had mentioned in your opening
statement, sand and gravel, soybeans, chemical fertilizer,
wheat, steel coils, petroleum. Nearly half of the tonnage
reported at Oklahoma ports originate or terminate in Kansas.
Farmers, energy companies, manufacturers, they wouldn't be able
to compete in an increasingly global marketplace without the
inland waterways such as the MKARNS. Their profits depend on
the transportation cost, their savings that are attributable to
the navigation.
Some examples, asphalt moves from gulf refineries to
blending plants along the river for delivery to departments of
transportation in many of the 12 States that the MKARNS serves.
Oilfield tubulars from domestic mills are processed at
finishing plants along the river and delivered to oil and gas
developments in many of the 12 States and as far away as
Alaska. The same goes for rebar and wire rod coils. Crude oil
that is produced in several of these States and as far away as
North Dakota find its way to the gulf coast refineries by
barge, a growing amount which is for export.
So the Nation's waterways give producers and manufacturers
reach to acquire raw materials and distribute finished goods in
a competitive marketplace.
Mr. Westerman. As we often say, the river is kind of out of
sight and out of mind of the general public, but it has a huge
economic impact to that 12-State region.
You also talked about a critical maintenance backlog in the
navigation improvement project at Three Rivers. If there were a
failure due to inadequate maintenance or a failure of the
existing navigation components at Three Rivers, what do you
think this would mean to the national economy?
Ms. Harden. Well, our quarry on the MKARNS is the closest
major deposit of rock to New Orleans and the gulf coast, and
this was very important during the devastating hurricanes of
Katrina and Rita. Also, our quarry is the low-cost producer of
the sandstone, and sandstone has antiskid properties that are
required in Louisiana asphalt markets. So, you know, if this
chain of supply is broken, I mean, it is going to affect
highway departments and our highways.
Agriculture products, grain and fertilizer, they move, as I
said, for most of the 12 States that the MKARNS serves, and I
guess the same examples that I gave in the previous question. I
mean, that would, you know, affect it globally.
Mr. Westerman. And for the record, for Mr. Graves, the
State of Louisiana depends heavily on products coming out of
Arkansas down the MKARNS system.
Ms. Harden. Absolutely.
Mr. Westerman. Mr. Stephaich, I come from an engineering
background in the private sector. And when I found out how the
Corps gets their projects funded, where it is like a yearly
funding amount, it just seems to make no sense at all.
Could you talk maybe a little bit to how projects could be
done more efficiently, lower cost, and in a quicker timeframe
if we would fund projects on a project-to-project basis rather
than a yearly funding basis?
Mr. Stephaich. Well, the annual funding system really
doesn't make any sense for these long-term projects. As I
mentioned in my oral remarks, the Olmsted case is an example
where the project was accelerated and came in below what the
Corps thought it would because they had steady money and steady
funding.
It is extremely difficult for a major construction job to
plan for this 1 year at a time, from hiring the contractors to
actually executing the project. There is tremendous mob/demob
cost. The contractors bid that in in their cost. It just
doesn't make any sense. It is completely inefficient.
I don't know what the percentage of reduction would be, but
it is significant for the Corps if they had steady funding for
these projects.
Mr. Westerman. I couldn't agree more.
And I am out of time so, Madam Chair, I yield back.
Mrs. Napolitano. Thank you, Mr. Westerman.
I am asking unanimous consent that the written testimony of
American Association of Port Authorities by Mr. Kurt Nagle,
president and CEO, be made part of today's hearing record.
Without objection, so ordered.
[The information is on pages 51-52.]
Mrs. Napolitano. We will move on, and I think I will take
the next set of questions for Mr. Gene Seroka.
Mr. Seroka, what specific policies would you like to see
Congress implement to address your inequity concerns with the
HMT?
In your testimony, you mentioned 50 percent of the revenue
comes from donor ports and the percentage of the revenue should
be allocated towards--what percent should be allocated to the
donor ports?
Do you believe the minimum allocation to donor ports should
be effective immediately or in the future?
Would there be a trigger for this implementation for donor
ports, and what would the trigger be, and what extended uses
are you advocating for and why?
Long question.
Mr. Seroka. The trigger would be full spend, full
utilization of the incoming revenues. So we get that, and then
we have an opportunity to look at the fair and balanced
allocation.
And our idea, which is aligned with the American
Association of Port Authorities, is that we ensure that the six
geographies, the dredge ports, the emerging harbors, are all
treated with the capability to receive as much money or more
money in the future than they do today.
Our look at what we should receive, the 50 versus 2 percent
in the return, as outlined in our framework, we believe the
donor ports should receive between 8 and 10 percent. And that
is a real good program to allow us to get after these other
uses that we mentioned.
If you can imagine, Chairwoman Napolitano, in your mind's
eye, as the ship is coming in, most of the discussion around
this topic is to make sure that our channels are as deep as
necessary to manage the ships in whatever port authority we
represent.
What we are looking at in Los Angeles and Long Beach is
that we need to cater to those large ships alongside the wharf.
So we need to make sure that that water is deep enough, that
the wharfs are strong enough to manage the heavier equipment
that moves that larger amount of cargo across.
Mrs. Napolitano. Thank you very much.
The next question would be to Mr. Goche, Mr. Seroka, and
Ms. Brady. Understanding that each of your ports have unique
needs, outside of those, do you support the full utilization of
HMT? Yes or no.
Mr. Goche. Yes, I do.
Mr. Seroka. Yes.
Ms. Brady. Absolutely, yes.
Mrs. Napolitano. Thank you. That is very much what we
expect.
Does the entire United States benefit from all of the--when
the ports that are most efficiently upgraded and in capacity?
Mr. Seroka, would full utilization of HMT help like the
Port of L.A.? Would it help them?
Mr. Seroka. Pardon me?
Mrs. Napolitano. Would full utilization of HMT help ports
like the Port of L.A., and how?
Mr. Seroka. Absolutely. As I mentioned, we have $260
million worth of projects that we have identified to cater to
these larger ships, which are trending in the industry and of
utmost importance in Los Angeles. And therefore, that ability
would be a really smart move for us as a Nation and our
competitiveness in the future.
Mrs. Napolitano. Thank you, sir.
I think we will have to recess. We have 11 minutes left to
go vote. We will recess for 45 minutes, and we will be back to
continue the line of questioning.
[Recess.]
Mrs. Napolitano. The Water Resources and Environment
Subcommittee will reconvene. I think we have enough members
here to get going.
And I will recognize Mr. Graves.
Mr. Graves of Louisiana. Thank you very much, Madam Chair.
I appreciate the opportunity to be here.
And I want to thank you all for your testimony today. As a
Representative from the gulf coast and home is the State of
Louisiana, where we have 5 of the top 15 ports and, of course,
large port facilities in Miami, and Houston, and Mobile, and
Gulfport and all sorts of other places. I appreciate the gulf
coast representation here today. That was another joke, folks.
Come on.
Mr. Seroka, I want to ask you a question. You talk about
the HMT being fully utilized. And I do want to shout out to
Chairman DeFazio and Chairwoman Napolitano and Ranking Member
Graves, and Westerman. I do fully support the full dedication
of the Harbor Maintenance Trust Fund. And Chairman DeFazio and
I have been working on this for a few years and sent letters,
sponsored legislation, and I think this needs to happen.
You know, a quick question for all of you. I will come back
to your question in just a second, but a quick question for all
of you. In your individual associations, businesses, ports that
you represent, if you took in money for one purpose and then
you decided to take it and use it for something else, or you
collected revenue under the auspices of some fee or tax or
membership and you did something else with it, would you get in
trouble for that?
Mr. Ross. Yes.
Mr. Seroka. Yes.
Mr. Graves of Louisiana. I think in the private sector,
they call that embezzling, and here we call it budgeting. And I
just think it is ridiculous, and so fully, fully committed.
But Mr. Seroka, I do want to ask, you mention that there
are certain types of improvements that are not eligible
expenses under HMT right now. If we do have a full commitment
of the HMT and the additional dollars, and whether it is the
paper balance that Chairman DeFazio talked about earlier or it
is even the annual full commitment of funds, what are some of
those? What would that look like to you?
Mr. Seroka. Representative Graves, good to see you again. I
mentioned that earlier in a question. If you could imagine in
your mind's eye the ship coming down the main channel. That is
what this work does primarily through the HMT.
With the larger container ships coming into our port, I
want to do work that gets closer to the wharves. Because when
that ship comes in, it has got to park. It has got to be
worked, needs the necessary depth of water to be able to reside
there. That is the type of work that we would like to do.
Mr. Graves of Louisiana. OK. So you are talking dollars----
Mr. Seroka. In water usage nearer to the docks than the
main channel way.
Mr. Graves of Louisiana. OK. Is this berths?
Mr. Seroka. Yes.
Mr. Graves of Louisiana. OK. I just want to make sure I
understand. Thank you.
Mr. Seroka. Thank you.
Mr. Graves of Louisiana. Mr. Ross, there were discussions
earlier about increasing competition from other countries, I
think Argentina, Brazil, and others. Can you give us kind of a
state of play and what you are seeing, in terms of percentages
or any other type of metric, in terms of what those countries
are doing now. Are they investing in their water
infrastructure? What is the state of the industry and just kind
of global competition right now?
Mr. Ross. Yes, certainly. I couldn't give you a metric per
se, but the investments have gone on in Brazil in their
infrastructure, which were much needed in their country. They
are certainly spending a lot of dollars there and are becoming
far more competitive in the long term.
We generally see a 30- to 50-cent advantage over Argentina
and Brazil exports. And so, you know, I talked about 31\1/2\-
cent cost to farmers that could be perceived into these issues.
And, you know, if that continues to be--maintenance is
deferred, or excuse me, or just not done and the locks and dams
are not improved, that 31\1/2\ cents pretty much eats up that
entire advantage that we have. So those are key dollars, key
numbers that we need to look at when it comes to advantages in
trade.
Mr. Graves of Louisiana. Ms. Harden, you have been working
in the industry for a few years, I think 30 to 40 years of
experience. I think you started when you were 5, if I remember
right. What kind of evolution in the industry have you seen
over that period of time, in terms of reliability of channels,
just trends in the industry; and what are some of your
concerns, just looking back historically versus where we are
right now?
Ms. Harden. Good to see you, Congressman Graves.
Mr. Graves of Louisiana. Good to see you as well.
Ms. Harden. Yes, I did start at 5.
I guess the trend that we have seen more than anything that
affects us, I kind of go back to our story that I told. We are
not seeing the funding. And I realize we have gotten a lot of
emergency supplementals that are coming out, and we are hoping
that these will be applied properly.
But to be competitive like we do in our business, you have
got to have, you know, a channel. Granted, our competition--we
are sealed bid. Our competition's on the Mississippi River, and
they are authorized to 12 feet, although they are not
maintained, and we hear that a lot. They are only maintained to
9. But they have a de facto 12-foot channel, and that is our
competition.
And we, you know, unfortunately, had to dramatically reduce
our presence on the Arkansas because of that. So, I mean, I
guess we have seen a lack of upkeep in the critical backlog of
maintenance is just increasing dramatically every year on the
MKARNS. And this is not just our system. There are other
systems too. So, it is really, what I have seen has been
disappointing.
And to encourage, you know, people to--the jobs. And we
want to be a low-cost producer, but not through low wages. We
want it through low-cost transportation cost.
Mr. Graves of Louisiana. Thank you.
And, Madam Chair, I just want to ask that the record
reflect that 8 minutes later the gentleman from Arkansas showed
up, which is approximately what we saw for the LSU/Arkansas
game. Thank you.
Ms. Mucarsel-Powell [presiding]. Thank you, Mr. Graves. Mr.
Graves is full of jokes this morning.
I would like to now recognize myself for 5 minutes.
Thank you very much for coming this morning for such an
important hearing. I think that we are all in agreement that we
must allocate the resources needed for harbor maintenance as
they were intended.
So I am going to shift just a little bit from that
conversation and tell you a little bit about the area that I
represent. I represent Florida's 26th Congressional District.
It includes Miami, parts of Miami and all of the Florida Keys.
And I don't think it is a secret that I feel very passionately
about the coral reefs, and it is the only living coral reef in
the U.S. continental United States along our coast. It is the
third largest barrier reef in the world. So I feel very
passionately about protecting the reefs.
And, unfortunately, the coral right off the coast of
Florida is dying, and it is dying because of climate change,
ocean acidification. It is dissolving the coral right before
our eyes. And it is also dying from a bacterial infection that
scientists right now are not able to get a hold on that. It is
incumbent upon all of us to do what we can to protect the coral
that is still alive today. And I think that that means also
being environmentally cautious with any large projects that we
conduct on our waterways, our ports.
So I was alarmed to learn that when Port Miami was dredged,
a project that ended in 2015, an area of the reef the size of
200 football fields was buried in dredging sediment. This was
much more than was predicted by the Army Corps and the entities
who were involved with the project. It is also my understanding
that there will be other ports in Florida that will soon be
undergoing the same process, and so we may be putting more
corals at risk.
So this question is for Mr. Seroka. I know that you may not
be able to speak on the specifics of the issues affecting the
Florida coast, but I am hoping that you can comment on the
importance generally of environmental compliance.
You are from California. California is usually good
environmental stewards and very good on these issues. So I am
hoping that you or anybody else on the panel can provide
suggestions on how we can responsibly dredge our very important
harbors to adequately address heavy ship traffic without
unnecessarily harming our precious ecosystems.
And just having said that, I am in full support of
continued dredging as well, because we need that, especially in
the Port of Miami. It is just we need to find a balance of
doing what we need to do for our harbors, for our ports, but at
the same time being environmentally conscientious.
Mr. Seroka. Representative Powell, you just struck the
cord, and that is the balance between the environmental
stewardship and what we do on our commercial and construction
activities. The Ports of Los Angeles and Long Beach date back
to the year 2006 with their clean air action plans, devised
originally to help reduce specific air quality requirements
that we had made commitments on to our community. And we flash
forward, we delivered on those commitments some 6 years ahead
of our promissory timeframe.
In an area specifically around truck and traffic
activities, Congressman Lowenthal led an effort in the early
part of that decade to work on distributing trucks in a better
way to reduce idling, congestion on our freeways, and avoid
times where children are going to school day and afternoons.
Specifically, to answer your question around dredging, we
have numerous regulations in the State of California. We also
follow the Federal regulations around water species and
anything else that we see that is necessary on the dredging
concept.
So having that in mind, being able to be a responsible
party from the port's vision of capital investment,
improvement, and construction activity is always first on our
minds when we are discussing projects like this, whether it be
maintaining our minus 53-foot depth or what I have described to
the other Members as limited expanded uses.
Ms. Mucarsel-Powell. OK, thank you. And, Mr. Stephaich,
correct?
Mr. Stephaich. Correct.
Ms. Mucarsel-Powell. In your testimony, you mentioned the
important role of inland waterways, the role that they play in
flood control. Can you please just elaborate a little bit on
that?
Mr. Stephaich. Yes. Obviously, the inland waterway system
and the locks and dams help control the flow of the water. Up
in our part of the world, in Pittsburgh, we have a significant
drop, geographic drop, with a lot of locks and dams. And I know
that the Army Corps uses a system of reservoirs, including our
locks and dams, to control the flow, slow it down and let water
out, as necessary. So----
Ms. Mucarsel-Powell. OK. Thank you very much. And if I had
more time, I would continue to comment, but I don't want to
violate my own rules.
So I will now recognize Gentleman Palmer.
Mr. Palmer. Thank you, Madam Chairwoman.
I want to get back to the harbor issues and some of the
issues that we have had over the years with the need to deepen
harbors. Obviously, I think the demand for shipping is growing,
particularly in the energy sector. It is going to require
bigger ships.
And one of the things that I had looked at over the last
few years is the time it takes from the time you recognize you
need to implement a project to the time you can actually begin
the project, because of the permitting. One example is the Port
of Corpus Christi, which I think maybe about 60 percent of our
petroleum products leave that port. I think it was back in the
eighties or nineties, somewhere in that range, that they wanted
to deepen the harbor by 4 feet. It would have been about a $188
million project at that point. They finally implemented I think
four phases. The cost went up to $327 million, the cost of the
delays. I think we are now talking about $480 million.
Mr. Goche, Mr. Seroka, what has been your experience where
you have had to make improvements to your ports, in terms of
the permitting and the delays and the runup of cost, if you
have had any?
Mr. Goche. Thank you, Congressman Palmer. We have, by
scale, much smaller projects than Mr. Seroka has, but I believe
the process is quite similar. And permitting for any new
project, any new activity in the water is pretty burdensome. In
Oregon and in the Portland district of the Army Corps of
Engineers, we have been working on a streamlining process
whereby permits are more inclusive and expansive and last
longer, have a longer shelf life, so to speak. So yes, it is a
burdensome process, and the hope is that we can relieve some of
that burden.
Mr. Seroka. I concur, but we have been pretty fortunate.
Our relationship with the Corps has been tremendous. Most of
the time that is spent around permitting happens at the State
level with the California Environmental Quality Act. And that
is work that continues, but the Permit Streamlining Act in the
State of California has assisted.
Mr. Palmer. Part of what brought this to mind was that
Panama was able to take only 7 years from conception to
completion on the Panama Canal expansion, while it would take
the United States twice as long, sometimes three times as long
to do projects.
And for us to be in a competitive environment, particularly
with markets that you guys deal with and the Far East, it
becomes pretty important. It is important to us in Alabama,
with the Port of Mobile. With the expansions in Panama, Mobile
has now become a major port for shipping to China and to Asia.
And we are trying to get our harbor deepened.
Mr. Seroka. And your emphasis is exactly right. I will
share, though, that Panama's cost overruns and time overruns
are epic in the shipping world today. And, in fact, the canal
cannot handle the larger ships in the trade, as were forecasted
some 20 years ago during the construction of that project. But
it brings to light the competitiveness that our Nation needs to
pursue and gain hold of once again. I appreciate your comments.
Mr. Palmer. You know, what I try to get across to people
when we are dealing with infrastructure--and I am now doing
this at home--is that if you are going to spend money on
infrastructure projects, whether it is a harbor or, you know,
an interstate highway, build what you need 25 years from now,
not what you need now. You will wind up spending less money and
have a better product if you will just plan ahead.
So that is what I am hoping that we will be able to do when
this committee gets around to an infrastructure bill is that we
look 25 years down the road and not what we need right now,
because with the way things are changing, by the time we get a
project completed, it is obsolete.
I appreciate your question, appreciate you being here
today. And, with that, Madam Chairwoman, I yield back.
Ms. Mucarsel-Powell. Thank you very much. I now yield 5
minutes to Representative Lowenthal.
Mr. Lowenthal. Thank you.
My question is for Mr. Seroka. First, I want to thank you
for representing and sharing with us the perspective of what is
taking place in the San Pedro Bay in the Port of L.A., but also
your partner, the Port of Long Beach.
You know, I am very honored to represent the Port of Long
Beach. At one time, I represented in the State legislature both
ports. So I am very familiar with the port complex, which
really, as you pointed out, handles 40 percent of the Nation's
imports that come into the country, and about 30 percent of the
Nation's exports come through this.
And while the ports are doing very well on a number of
metrics, you know, they are setting records in cargo volume.
They are investing in infrastructure, as you pointed out, to
handle the bigger ships, they still face significant
challenges, in terms of congestion and also in terms of
international competition.
So I think what you have advocated for I totally support.
And I was very glad to hear Mr. Graves, my colleague from
Louisiana, talk about some of the specific projects. And as you
are advocating for more equitable allocation of the resources
of the harbor maintenance tax revenues, they are going to help
our ports make the investment that they need to grow. And you
have already indicated the kind of flexibility that you would
like to see, in terms of meeting the growing demands and to
being able to compete.
Can you go into a little bit about how this will impact
congestion? Is there a relationship between using the harbor
maintenance tax in a more flexible way and really dealing with
the facts of congestion and also international competition?
Those are the two issues I would like you to respond to.
Mr. Seroka. Yes. Thank you for your question, Congressman
Lowenthal. On the area of congestion, it has been a topic for
our port over a number of years. And there are three ways to
approach eliminating congestion: One is through a concept that
we use called supply chain optimization, bringing all parties
together with the natural convening powers that we have to work
on better ways to move the cargo more fluidly and remove those
intermediate bottlenecks that have plagued us for some time.
Second is digitization, and a project that we have embarked
upon creating what we are now terming as the port optimizer,
one that can aggregate disparate sources of data, give us a
deeper line of sight as to the cargo coming our way so we can
better plan our human capital and our assets.
And then thirdly is the physical infrastructure, our
ability to bring these ships in on time and work in a Windows-
based system, meaning that you have an appointment when your
ship comes in. You are to arrive at 8 a.m. on Monday and you
are to leave at 8 a.m. on Thursday.
By keeping the integrity of those ship windows is largely a
function of being able to bring the ships into an area that can
accommodate the size of that vessel and work the vessel as
succinctly as possible, meaning having those four to five
wharves and that deep water.
So the limited expanded use that I have referenced here on
several occasions is just for that purpose. And all three
activities that we are pursuing, Congressman, are interrelated.
We want to do better and smarter work; we want to bring
information technology into the port environment, not just in
Los Angeles but nationwide; and having the physical
capabilities both landside as well as in the water to carry out
the first two.
Mr. Lowenthal. Thank you. I just want to follow up a little
bit on that. For you to kind of explain, I think you have
already said it, but I think it is really important, that by
giving you this limited expansion of flexibility, how is this
going--and we are asking the rest of the Nation kind of and
other ports to support this.
The question is, how is this going to affect manufacturers
and also customers throughout the Nation? Is this just good
for, you know, the larger ports, or what is the impact on the
rest of the Nation by giving the little bit of extra
flexibility?
Mr. Seroka. All right. Two parts to that answer. Number
one, under our recommendation, the ports geographically, by
designation or by size, will receive the same if not more money
under our recommendation to this subcommittee and the broader
committee.
Secondly, what it does for our mutual customers is, A, it
gives them certainty that when you order goods and it comes
through our port complex, whoever that may be, you will have
certainty that it will arrive upon a schedule that you have
designed with your service provider. And secondly in that vein,
what it does for those customers is it delivers value. The
folks that come through Los Angeles, as an example, pay more
than $200 million a year in harbor maintenance tax, yet they
don't see necessarily the dividends returned in further
investment in that infrastructure, in this case in the water
infrastructure, that they desire. So it is about delivering
value back to them as well.
Mr. Lowenthal. Thank you, and I yield back.
Ms. Mucarsel-Powell. Thank you. I now recognize Mr. Woodall
for 5 minutes.
Mr. Woodall. Thank you, Madam Chair.
Thinking about your experience in the industry, we have
went through the last decade where we passed two WRDA bills in
10 years. We have gone through this decade where we have passed
a WRDA bill every 2 years.
It makes me feel good as a member of the committee to see
the regularity and the productivity, but I want to know from a
user's and a manager's perspective, has the regularity of the
WRDA bill process made a difference to you all, as participants
in the system?
Mr. Seroka. In a word, yes.
Mr. Woodall. Los Angeles says yes.
Mr. Goche. I agree.
Mr. Woodall. You have seen that difference. Have the corn
growers seen that difference, Mr. Ross? Does it translate to
that level?
Mr. Ross. Yes, certainly. I think there has been a lot of
improvement in general with that system and having those bills
pass much quicker. I was here a long time ago. It was the first
time I came to DC to lobby on behalf of a WRDA bill, and that
was, again, the first one, and it took quite a while to get
that one passed. So I appreciate you guys doing the job and
moving these faster.
Mr. Woodall. Well, getting into good habits makes a
difference. It makes a difference in running your business, and
it makes a difference in legislating too. That is one of those
habits that was hard to get into, Madam Chair, as you well
know, getting back into a regular WRDA bill structure. And I
hope it is something we will be able to maintain.
Let's go back to 1990, and we had a similar conversation
with the Highway Trust Fund. And I remember Bill Shuster
sitting in this room pounding on the table, saying, we are
going to spend every penny from that Highway Trust Fund,
because the users paid it and they deserve that back.
I argued then and I would argue now that is not what a
trust fund is. A trust fund is so that you have money there
when those rainy days come, because inevitably those rainy days
come. If all I am doing is collecting the money from you today
and giving it back to you tomorrow, I am just a money
processor. I am not creating a trust fund of any kind. I am
just redistributing it across the system.
I know each one of you has needs today, and certainly the
lack of spend rate is something that we can all agree on. But
as we start talking about approaching a 100-percent spend rate,
does anybody share the concerns that I share, that a rainy day
is in the future and we actually need a trust fund for when
something happens and we need to be able to pump money out in a
hurry? Anybody share my concerns? If you don't share my
concerns, I don't want you to tell me I am wrong. I want to
know if anybody thinks I am right.
Mr. Stephaich. I would argue that the rainy day is today
for us. I mean, we are in a critical situation where we are
facing potential catastrophic failures with our infrastructure.
So I would argue that the rainy day is today. Thank you for the
question.
Mr. Woodall. Easy to make that case today. Then that is
right, we have not been doing enough historically. I watch the
pendulum swing in this town, and we unquestionably need to
swing it more in terms of getting money out the door. I just
worry. I wonder whether or not there is a point where we swing
it too far and we are not planning for tomorrow. Ms. Brady.
Ms. Brady. I think, listening to the folks to my left
regarding the locks, it is definitely a separate situation. So
what they say is very valid.
For us, in 2018, we have had three dredges in three of our
ports so we are good at this very second. However, you know,
one really good storm or one really good winter where we just
get pounded and pounded, we do need to have the ability to
access those emergency funds and not just make a mad scramble
and hope and pray that everything works out.
Mr. Woodall. And the best part of my job is smart people
come in to make me smarter. I am more of a surface guy than a
water guy. And what I know in Metro Atlanta, if I try to build
a sidewalk with county funds, I can get it done in a couple of
months. If I try to build that same sidewalk with Federal
funds, it could be a 3\1/2\-year project if everything goes my
way.
I can't do these massive dredgings with local funds in
their entirety, so, of course, we are going to knock on the
Federal door. Are there occasions where you are not knocking on
the Federal door, you are simply using local funds and we see
that same thing in water infrastructure that I see in surface
infrastructure, that I can spend money rapidly if I just left
it with Los Angeles instead of taking it from Los Angeles and
giving it back a year later?
Mr. Seroka. And that is what we do every day. In a strong
year, we are committing about $1 million a day to ongoing
maintenance repairs and progress to manage these ships. At our
port, which is dissimilar from some, we have 27 terminals and
270 berths. What we see ourselves doing today is moving the
right size ship to the proper terminal, based on its size. And
that is not a sequence that really promotes fluidity.
So, while I understand that a variable in the equation must
be the rainy day concept, there are immediate issues today. And
I assure you that the Port of Los Angeles will have a long-term
plan to help you craft what tomorrow will bring.
Mr. Woodall. When you are dedicating those local funds, are
you doing it in a cost share, or for those projects it is all
local funds all the time today?
Mr. Seroka. Mostly, sir, it is the money that we earn from
our customers, direct revenue that is being invested back into
our port.
Mr. Woodall. Ms. Brady.
Ms. Brady. Our situation is--country mouse here--very
different. We have, I believe, an 80/20 cost share. We don't
have a dredge. Our town doesn't own one. It is too expensive.
The costs of having to--apparently, they last only about 2
years. The county has a dredge, but you can't dredge the inlet,
because it is not a county waterway. So if we did not have a
mechanism with that cost share, our town, we couldn't afford it
without having that help.
Mr. Woodall. Thank you very much.
Madam Chair, you have been very indulgent. Thank you.
Mrs. Napolitano [presiding]. Thanks. The Chair recognizes
Mrs. Fletcher.
Mrs. Fletcher. Thank you, Chairwoman Napolitano.
And I would like to thank you and Ranking Member Westerman
for holding this important hearing today, and the witnesses for
taking the time to testify.
Ports are the economic drivers of our Nation, and we
certainly know that in my home in Houston. The Port of Houston
just released new economic impact numbers reflecting the
economic activity, jobs, and tax revenue provided by the more
than 200 private and public facilities that comprise the Port
of Houston.
In 2018, the Port of Houston generated $801 billion in U.S.
economic value, sustained $3.2 million in jobs throughout the
Nation, and provided $38 billion in local, State, and Federal
tax revenue.
The Port of Houston is the largest exporting region in the
U.S. It is the largest U.S. oil exporting port, and it is home
to the largest petrochemical manufacturing complex in the
Nation. The port has been called irreplaceable, because there
are no alternatives to the pipeline, refining, and
manufacturing facilities that exist along the Houston ship
channel. It is a national asset, and it is critical that it is
adequately maintained, to ensure the safe and efficient
movement of commerce for the benefit of the country.
Each year, the Port of Houston generates $75 to $100
million in Federal harbor maintenance trust revenue, yet it
needs about $50 to $60 million to adequately maintain the
Houston ship channel at its authorized depth and width. Its O&M
dredging allocations in recent years have been $40 million or
below.
It is my understanding that the Port of Houston has
calculated that the direct economic impact of the loss of 1
foot of draft on the Houston ship channel is $281 million. So I
have a question for anyone on the panel who wants to answer
whether they have performed similar calculations in their ports
and have similar information about that impact?
Mr. Goche. Yes, Congresswoman. In recent years, we did an
economic study. We had a third party do an economic study of
our little port of Bandon. And that study resulted in the
finding that our access to the sea that costs about $450,000 a
year returns an economic output of between $52 and $62 million
annually. That, in turn, results in revenue to the Treasury,
tax revenue, Federal tax revenue to the Treasury of just under
$5 million. So about a 10-to-1 ratio of return on investment.
So even though the scale is quite different, I think that that
shows that small ports are a great investment for the Federal
Government on those Federal projects.
And I would like to also point out that that $450,000 just
addresses the Federal channel, you know, the responsibility of
the Federal Government for their project. We also have other
silt-in situations that we have to address on a regular basis
that has to come from the local economy.
Mrs. Fletcher. Thank you, Mr. Goche.
Mr. Seroka. From our perspective in Los Angeles, we
anticipate the cargo volume will double over the next 15 years.
So my work, whether it be on our so-called 2050 plan or some of
the recommendations I have given to the subcommittee here today
are all with a line of sight on that area.
And in very similar fashion, Roger Guenther, who runs your
port, is a good friend of mine, and we talk a lot about these
economic KPIs and where our drivers or levers can be. So I am
glad that you and Roger are keeping good tabs on what this
means. Thank you.
Mrs. Fletcher. Thank you. And with the few seconds I have
left, maybe you can address this or anyone on the panel. How
can we modernize the HMT so that ports like Houston that
contribute more than they receive are maintained to their
authorized depth?
Mr. Seroka. That was the second point that I made in the
recommendations to the subcommittee of a fair allocation, where
no one is left behind. There is linkage to the full spend
concept that we have and even using banked moneys if that is
appropriate, and making sure that folks can grow their pot,
whether they be emerging harbors, geographies, or other
classifications of port outside donor.
Mrs. Fletcher. Thank you so much, and I yield back my time.
Mr. Malinowski [presiding]. The Chair recognizes Mr.
Huffman.
Mr. Huffman. Thank you, Mr. Chair.
The topic of today's hearing is to discuss the role of the
U.S. Army Corps of Engineers in the maintenance of our Nation's
harbors, and I have heard categories for these harbors such as
high use, moderate, and emerging.
I have to say this euphemism of emerging is insulting,
given that communities I represent feel like their ports and
waterways are neglected and abandoned. Petaluma River is one
that has been particularly neglected and abandoned. I represent
this area, and it was once dredged every 3 to 4 years to
maintain channel depth. It has not been dredged since 2003, and
that was a partial dredging. There are portions that have not
been dredged since 1998.
So perhaps in the next WRDA, we should just end the charade
and come up with a new category for ports that the Army Corps
has simply forgotten about or left behind. And I could come up
with more colorful terminology if you talk to my constituents,
I assure you. The system is not working and it is, in fact,
insulting to communities that play by the rules and still lose
every year every single time.
Now, there are other Members who have served longer than I
have, certainly, on this committee, but this is year 7 for me,
and I am already sick and tired of this annual cycle of begging
OMB and the Corps during the development of the President's
budget request, then to turn around from disappointment to
pleading for support through the work plan, and in the end when
no assistance is provided by the Corps being reassured there is
always next year. This is a con game.
And I would like to ask unanimous consent to enter into the
record letters that I have written going all the way back to
2014, 2015, 2016, 2017, 2018, and January of 2019, where we are
begging and pleading with the Corps to address these issues.
This spans two different administrations. It showcases years of
failed responses by the Army Corps of Engineers. So, Mr. Chair,
I would like to enter into the record six of these letters that
I have written on this subject.
Mr. Malinowski. Without objection.
[The information is on pages 53-64.]
Mr. Huffman. Thank you. And I would invite the committee to
come out to the Petaluma River and hold a hearing on how we are
failing small communities, because the witnesses before us
today, and I very much appreciate the testimony, but from what
I can tell, most of you folks are doing pretty well by the
status quo. Ms. Brady, I have been out to your community.
Ms. Brady. Riverhead. Still another hour and a half away.
Close enough, right.
Mr. Huffman. Near, nearby. And I appreciate, you have made
the point very well how important commercial fishing is to your
region. Believe me, as chair of the Water, Oceans, and Wildlife
Subcommittee of the Committee on Natural Resources, I
understand that. And I want to see your community taken care
of. But in your testimony, you mention maintenance dredges in
Montauk in 2008, 2012, 2018, and relatively consistent dredges
elsewhere in the area.
I am representing a community that hasn't been dredged--
again, just a partial dredge in 2003--in over 20 years since
the entire channel was dredged. I am sure you can imagine what
that kind of lack of attention by the Army Corps of Engineers
can do to a community.
So if we want to talk about a hearing to showcase the cost
of doing nothing, let's come to Petaluma or let's go to the San
Rafael Canal, another part of my district where we have seen
similar neglect and abandonment by the Corps of Engineers. I am
happy to work with my colleagues and any of you here on ways to
fully utilize the Harbor Maintenance Trust Fund, but I want to
make sure as we go forward that we are also taking care of
these neglected and abandoned communities and not simply
redirecting more funds to communities that have been relatively
well-maintained by the status quo.
I have a little bit of time left. If any of you have
anything you would like to say to the people of Petaluma and
other communities I am sure around this country where shallow
draft dredge projects have simply been abandoned and forgotten,
I will leave the balance of that time to you.
Ms. Brady. Congressman, it is nice to see you again. That
is ridiculous that your constituents should have to go through
that. There is no one should have that. I know specifically for
Montauk, if there had been a change in the language of what is
considered a lesser harbor and a greater harbor, we would have
immediately been able to been dredged to a 16-foot depth, in
which case we would not have necessarily needed all the
maintenance dredging and the emergency dredging.
We had an emergency dredge that was basically like a whaler
and two straws. It created more damage than it helped. We have
dealt with the Army Corps in the past. I know they will ask
for, you know, the questions at 14 foot, at 15 foot, at 16
foot. If we hit bottom, it is a bad day and it doesn't matter.
It just depends as to how deep it could be.
I think--and I am saying this just on the fly--if we had
had the depth at the level that we could have used and that the
community had told the Army Corps at that time, we might not
have required as many of those maintenance dredgings. And so
that is to be had. But no, what your people have gone through,
that is ridiculous. Thank you.
Mr. Huffman. Thank you, Mr. Chair.
Mr. Malinowski. Thank you. The Chair recognizes myself for
5 minutes. And I will start by saying that in my weeks' long
career in the United States Congress, I have not attended a
hearing with as straightforward a subject and conclusion as
this one. Obviously, the Harbor Maintenance Trust Fund should
be spent on harbor maintenance, and I am glad that there is
broad consensus on that.
Let me ask you about rainy days, if I may. I represent New
Jersey. And, as you well know, Hurricane Sandy caused
tremendous damage to ports in New Jersey and New York,
including to fuel oil, chemical facilities in port areas,
extreme flooding at inland facilities and in transit tunnels
used by thousands of New Jersey and New York residents every
day.
So my question to anybody who might want to take it is,
what has been done and what is being done to prepare our ports
for the next big storm, and what have been the lessons learned
from past extreme weather events related to port resiliency?
Who would like to take that?
Mr. Goche. I will take a stab at that. So we have big
storms. On the east coast here, they call them hurricanes. We
just call them another day at the beach. And the deferred
maintenance in our port on the jetty has gone on so long that
each day at the beach turns into more damage to our jetties.
So it is hard to talk about preparing for the future when
we have such a backlog of deferred maintenance. As a commercial
fisherman, maintenance is a big deal. If I don't take care of
my boat, my boat doesn't take care of me, I don't get home to
my family.
And I see the ports that I travel--and I go into ports all
up and down the west coast, and I see each one of these, with
the exception of the big ports that tend to get most of the
attention and the money, all of the smaller ports, even our
biggest port outside of the Columbia River in the State of
Oregon, which is Coos Bay Harbor, like I said earlier, has lost
380 feet of length over the last 30 years. And we desperately
need to bring that back at least halfway to where it was so
that we can keep everything moving, all the moving parts that
need to keep moving.
So I don't know if I addressed your question, but it is
important to me to look at maintenance, the deferred
maintenance first before we try to look into the future.
Mr. Malinowski. Understood. Thank you.
Does anyone else want to chime in?
Mr. Seroka. Yes. Our preparation is around three main
areas: Seismic preparation, number one, based on our geography
and close proximity to fault lines; number two is sea level
rise, something that we have watched and we are required by the
State of California to report on and report contingency
planning; and then thirdly, stormwater capture and what we do
with the shifting land mass.
In our geography, we are not as susceptible to the types of
storms in your home State, but nonetheless, those three areas
are primary focus today in addition to the maintenance and the
2050 plan to which I referred earlier.
Mr. Malinowski. And how are you taking sea level rise into
account? That was actually going to be my next question.
Mr. Seroka. Taking into account, number one, looking at the
speed at which the water is rising; two, our infrastructure,
where it sits in comparison to those out and downline
projections; and then thirdly, whatever we can do to mitigate
potential impacts.
And, fortunately, because of the people who came before us
and the design scientists and engineers, we appear to be in
good shape as far as that infrastructure placement, but we
cannot take that for granted.
Mr. Malinowski. Got it. Thank you. Any final comments on
either of those questions or anything else, because I think we
are about to wrap up?
All right. Seeing none, I think we have come to the end of
the hearing.
So I want to thank all of the witnesses for your
contributions today. I want to ask unanimous consent that the
record of today's hearing remain open until such time as our
witnesses have provided answers to any questions that may be
submitted to them in writing, and unanimous consent that the
record remain open for 15 days for any additional comments and
information submitted by Members or witnesses to be included in
the record of today's hearing.
Without objection, so ordered.
Let me thank the witnesses again. If no other Members have
anything to add, the committee stands adjourned.
[Whereupon, at 12:27 p.m., the subcommittee was adjourned.]
Submissions for the Record
----------
Statement of Kurt J. Nagle, President and CEO, American Association of
Port Authorities, Submitted for the Record by Hon. Napolitano
Fixing our nation's infrastructure is one of the highest priorities
for Congress, the Administration and the American people. We commend
Chairman DeFazio for his leadership on this issue. Ports are a critical
part of our U.S. economy. America's seaport activity accounts for 26
percent of the economy, supports nearly 31 million U.S. jobs and
provides $378 billion in annual federal, state and local tax revenues.
Our nation depends on seaports to support our standard of living in
every category of economic activity including U.S. manufacturing,
agriculture and overseas deployment of the U.S. military. In addition,
the amount of freight moved in the U.S. is projected to grow 15 percent
by 2045, and America's trade volume is expected to quadruple after
2030.
Landside and waterside investments are critical to building
America's 21st century seaport infrastructure. The American Association
of Port Authorities (AAPA) has highlighted $66 billion in federal need
over the next decade for port-related infrastructure. About half of
that need, $33.8 billion, is for waterside investments. $27.6 billion
is needed to maintain our deep-draft navigation channels, paid for by
releasing the $9.5 billion balance in the Harbor Maintenance Trust Fund
(HMTF) and approximately $1.8 billion in annual Harbor Maintenance Tax
(HMT) revenues. There is also a great need to modernize or deepen deep-
draft navigation channels to serve the current size of vessels using
our ports. AAPA calls for an investment of $6.2 billion, of which $3.1
billion is the federal share of the 15 current Congressionally
authorized construction channel improvements approved by this
Committee. Another $3.1 billion is the federal share of projects
undergoing feasibility studies. We appreciate this Committee's
commitment to passing water resources legislation on a two-year
schedule and hope this can continue in the future.
Another critical part of fixing our nation's seaport infrastructure
relates to passing a long-term funding solution for port maintenance.
As noted above, the majority of the federal waterside needs relate to
maintaining our nation's ports. The HMT is paid by shippers to ensure
our nation's ports are well maintained. Unfortunately, while the 2014
Water Resources Reform and Development Act (WRRDA) and the 2016 Water
Infrastructure Improvements for the National Act (WIIN) put us on a
path to full use, Congress is still short of fully using current HMT
revenues, and there is no plan to spend down the $9.5 billion balance
in the HMTF. We appreciate that the FY 2019 Corps of Engineers
appropriations provided the Corps of Engineers 91 percent of HMT
revenues. This is up from 50 percent when WRRDA 2014 was passed.
However, it is unclear if Congress can continue to increase funding
from the HMTF without a funding solution that provides a mechanism to
allow for the spending of prior year collections of the HMT.
Now is the time to provide a long-term funding solution for port
maintenance. One that makes full use of the HMT more permanent. It is
also important to address the underlying problems with the HMT. This
includes addressing tax fairness and cargo diversion problems. To aid
you in building a stronger system, AAPA has developed a comprehensive
proposal that is based on four pillars to fix the system:
Full use of HMT revenues;
A funds distribution framework that makes permanent and
expands donor and energy transfer port funding, as well as expands the
allowable in-water use of these funds;
Minimum regional funding assurances based on historic
funding; and
Emerging harbors funding that updates the provisions in
WRRDA 2014 and WIIN 2016 to guarantee no less than 10 percent to these
harbors.
This proposal is based on years of discussion within the
Association. The goal was to bring together ports that wanted a
sustainable way to ensure full use of future HMT revenues with ports
who wanted a more equitable funding structure. What resulted is a
funding structure that provides benefits for all ports.
This is a U.S. port industry proposal to fix a broken system. It is
a comprehensive proposal that allows 100 percent of taxes collected
from shippers to be provided to our nation's seaport infrastructure and
support our international competitiveness. It is a long-term solution
that fixes an unequal system and addresses the health and well-being of
our seaport water highways that are critical to competitively exporting
U.S. goods and delivering raw material components and consumer products
to Americans. HMT collections to restore and maintain U.S. water
highways complement the $155 billion in port related capital
investments planned by local public ports and their private sector
partners to assure safe and efficient freight movement.
To give you a bit of perspective on how this proposal was
developed, the U.S. members of the AAPA debated the usage and fairness
of the HMT for years. In early 2013, our members agreed to Water
Resources Guiding Principles including reforms to the HMT. We were
happy to see that many of these principles were reflected in the final
WRRDA 2014 and WIIN 2016.
Discussions about HMT reform, however, continued in our Association
for the next five years, as the principles did not include specific
recommendations on how to achieve the principles. In January 2018, AAPA
leadership adopted a policy agreement that was developed by the broad
membership. It was based on the original principles, and also
incorporated provisions from WRRDA and WIIN related to funding being
received by emerging ports and energy transfer ports. In crafting this
agreement, AAPA was careful to balance the interests of our entire
membership. Interests from each port stakeholder group were at the
table and included in the AAPA agreement: maintenance ports, regional
ports, smaller ports, donor ports and energy transfer ports. What
emerged from those negotiations was a partnership to advocate together
for a broad reform package that would incorporate all the pillars noted
above. By joining forces on a joint proposal developed by those
responsible for ensuring the continued success of our nation's marine
infrastructure, AAPA members remain hopeful that they can secure
Congressional support to fix the most glaring problems with the HMT.
This AAPA agreement includes a funds distribution framework that
continues to make traditional maintenance the highest priority. At the
first stage, the agreement provides 90 percent for maintenance and 10
percent for donor and energy transfer ports. Within the donor and
energy transfer ports allocation, 80 percent would be distributed to
donors and 20 percent to energy transfer ports. The rationale for this
ratio is that large donor ports do not require much maintenance, while
all energy transfer ports use HMT for traditional maintenance. For
example, large donor ports account for 50 percent of HMT revenues, but
receive less than two percent in return.
During the AAPA debate, there was considerable discussion about
when donors should get more funds. While maintenance was a priority,
the group agreed to increase the donor funding now in order to increase
support for full use of the HMT and provide these ports with
flexibility at the port level to ensure their ongoing competitiveness
by building on provisions first established in WRRDA 2014.
We appreciate the staunch support of full use of the HMT by
Chairman DeFazio and other members of the Committee, and we are
thankful that Senator Shelby, Chairman of the Senate Appropriations
Committee, has found a mechanism to encourage full use outside of the
budget caps. AAPA is supportive of this mechanism and urges it to be
broadened to include all the pillars of the AAPA agreement. We believe
this broader, comprehensive legislative solution is not only possible,
but creates the best chance to achieve full use in this Congress, and
we urge you to give strong consideration to the AAPA framework. As I
noted above, this framework balances the needs of all ports.
I have attached a summary of the full AAPA agreement for your
review. AAPA looks forward to working with both the House and the
Senate in crafting a solution that fully reforms the HMT.
attachment
[The attachment entitled, ``A Long-Term Funding Solution for Port
Maintenance: Good for Ports, Good for the Nation'' is retained in
committee files and is available at http://aapa.files.cms-plus.com/
PDFs/HMT_onesheet_NOCHART_v2.pdf (page 1) and http://aapa.files.cms-
plus.com/PDFs/HMT_onesheet_CHART_v2_
1524673810492_2.pdf (page 2).]
Six Letters from 2014-2019 from Hon. Jared Huffman, a Representative in
Congress from the State of California, et al., Submitted for the Record
by Hon. Huffman
December 3, 2014.
The Honorable Shaun Donovan
Director, Office of Management and Budget
The Honorable Jo-Ellen Darcy
Assistant Secretary for Civil Works
Dear Director Donovan and Assistant Secretary Darcy,
We write to reiterate our strong support of funding for several
items related to the important work done by the U.S. Army Corps of
Engineers (USACE) in Sonoma County, California. We request support for
the several aspects of the Russian River Biological Opinion (BO) as
well as Coyote Valley Dam and Petaluma River dredging in any work plan
the Congress directs to be prepared by the U.S. Army Corps of Engineers
(USACE) for FY '15, and in the President's FY '16 budget request.
Russian River Biological Opinion Projects
The Russian River BO issued in September 2008 by the National
Marine Fisheries Service identified 23 actions that must be taken to
protect three threatened or endangered salmonid species; coho salmon,
steelhead, and Chinook salmon. The BO was issued because of the impact
on these fish populations from the construction and operation of two
USACE facilities: Warm Springs Dam on Lake Sonoma, and Coyote Valley
Dam on Lake Mendocino. These facilities are operated by the USACE for
flood control to protect communities along the Russian River.
Additionally, the Sonoma County Water Agency utilizes these facilities
for water supply purposes for 600,000 people and the valuable local
agriculture industry. With the ongoing historic drought in California
the importance of these USACE facilities is higher than ever before.
We request that from the Section 1135 Continuing Authorities
Program, you include $300,000 in the FY '15 work plan and $4.45 million
in the FY '16 budget for work at Dry Creek for study completion
($450,000) and construction ($4 million) as needed to help complete the
required three miles of habitat enhancement required by the BO by 2018.
For the Dry Creek (Warm Springs) Feasibility Study, we request that
a sufficient amount be added to the FY '15 work plan so that $500,000
is provided, and request that the President's budget for FY '16 include
an additional $725,000 for this project. These amounts are essential to
appropriately advance this study that is directed at the completion of
the required six miles of habitat enhancement that, pursuant to the BO,
must be completed by the year 2020. Taken together these projects will
move forward in demonstrating the ability to balance flood control and
water supply needs with a sustainable ecosystem for threatened or
endangered salmonid species.
We also urge that $1.89 million be added in the FY '15 work plan to
the President's budget request for Operation and Maintenance at Dry
Creek (Warm Springs) Lake and Channel, as needed for the monitoring of
fish released from the hatchery; for coho hatchery facility water
treatment and filtration to prevent fish disease; and for egg
incubation equipment--all as required by the BO. This amount includes
$400,000 that is independently necessary for critical maintenance
including waste water treatment, pump repair, and water control gate
maintenance. Finally, in this regard, $6 million needs to be included
in the FY '16 budget request for BO efforts and routine critical O&M.
Coyote Valley Dam
For the Coyote Valley Dam, we urge that $30,000 be funded from the
budget of the Section 1135 Continuing Authorities Program for the
feasibility study that is evaluating the effect of winter flood release
timing on river water quality. And, at Coyote Valley, we ask that
$450,000 be added in the FY '15 work plan above the President's O&M
budget request for the monitoring of fish released from the hatchery,
and for minimum critical maintenance including service gate and
emergency gate maintenance. In addition, we request that $3.8 million
be included in the FY '16 budget request for BO efforts and routine
critical maintenance.
Petaluma River Dredging
In addition to the important work done by the USACE in these flood
control, water supply, and ecosystem restoration projects, we are
concerned that dredging maintenance for the continued commercial use of
Petaluma River last occurred in 2003 and is long overdue. Funding is
needed both for dredging and flood control work. Because of the delay
in regular maintenance the cost of dredging could be significantly
higher than past years. We support moving forward with the initial
planning for this long-overdue dredging of the river.
Thank you for your consideration of this request which we
understand to be consistent with the optimal funding levels the Corps
has expressed for these projects.
Sincerely,
Jared Huffman
Member of Congress
Mike Thompson
Member of Congress
__________
October 27, 2015.
The Honorable Shaun Donovan
Director, Office of Management and Budget
The Honorable Jo-Ellen Darcy
Assistant Secretary for Civil Works
Dear Director Donovan and Assistant Secretary Darcy:
As you continue your preparation of an FY 2016 work plan and FY
2017 budget for the U.S. Army Corps of Engineers (USACE), I wanted to
call your attention to several important projects across California's
North Coast and the counties in California's Second Congressional
District.
Harbor Dredging
Adequate funding for the USACE is necessary to modernize our
nation's ports and harbors and better support the over 13 million jobs
in the marine transportation industry. Inadequate funding results in
insufficient dredging, increasing the chance of collisions and causing
higher costs for consumers. In my district, the dredging maintenance
for the continued commercial use of Petaluma River last occurred in
2003 and is long overdue. Funding is needed both for dredging and flood
control work. Because of the delay in regular maintenance the cost of
dredging could be significantly higher than in past years. I urge you
to move forward with the initial planning for this long-overdue
dredging of the river.
Additionally, the Corps has provided much needed dredging services
in the past in the San Rafael Canal, but over the years the silt
buildup has significantly impaired the depth during low tide. The last
dredging in 2011 covered only a portion of the canal, and a full
dredging has not occurred since 2002.
In Humboldt Bay regular and timely dredging is critical for
commerce, especially with new investments by companies in products that
require deep-draft vessels for shipping, like wood chips and logs.
Since Humboldt Bay is also a harbor of refuge--the only deep-water port
between San Francisco and Coos Bay--its operation is also vital to
marine safety. Consistent maintenance dredging is needed to keep the
harbor entrance safe for transit for commercial and recreational
vessels. I also ask for your continued engagement in supporting
dredging and addressing the disposal and use of dredged materials in
Noyo Harbor.
Russian River Biological Opinion Projects
I strongly support the ongoing efforts in Sonoma County to
implement the Reasonable and Prudent Alternatives of the Russian River
Biological Opinion (BO) which, as issued in September 2008 by the
National Marine Fisheries Service, establishes a series of benchmarked
dates. The failure to achieve the BO's tasks by the specified dates
could trigger requirements to construct substantially more expensive,
and more controversial, projects.
The Russian River BO identified 23 actions that must be taken to
protect three threatened or endangered salmonid species: coho salmon,
steelhead, and Chinook salmon. If work is to be completed on time, a
significant investment will be required in FY 2017. It appears likely
that about $9.2 million in construction funding from the Section 1135
Continuing Authorities Program will be required through FY 2017. I
understand that there may be backlogged funding available for this
program, and I ask that the President's FY 2017 budget request for the
1135 program contains sufficient funds to complete the three miles of
habitat enhancement required by the BO by 2018.
For the Dry Creek (Warm Springs) Feasibility Study, I request that
$425,000 be included in the President's FY 2017 budget. This will allow
the Army Corps to make progress on the required six miles of habitat
enhancement that must be completed by the year 2020. Taken together,
these projects will demonstrate the ability to balance flood control
and water supply needs with a sustainable ecosystem.
Additionally, I urge that any FY 2016 work plans prepared by the
Corps include an additional $1.25 million for Operation and Maintenance
at Dry Creek (Warm Springs) Lake and Channel for coho hatchery facility
water treatment and filtration to prevent fish disease, and for egg
incubation equipment.
I urge, as well, that $6.411 million be included in the President's
FY 2017 O&M budget request for Dry Creek (Warm Springs) Lake and $4
million at Coyote Valley Dam as important components for this connected
watershed. Beyond O&M, I urge the Corps to consider studying the
benefits of raising Coyote Dam.
Bodega Bay
Bodega Bay, a critical harbor of refuge, is located about 60 miles
north of San Francisco, and is home to a Coast Guard search-and-rescue
station which performed about 250 rescue missions in 2013. It is also
home to a substantial commercial fishing fleet of about 300 vessels
(500 in-season), as well as an economically significant sport fishing
industry (about 600 vessels in-season) and recreational craft. In 2012,
nearly 25% of the total Chinook salmon landings in California, and over
10% of Dungeness crab California landings, came through Bodega Bay.
The Corps O&M schedule provides for periodic inspection and repair
of three breakwaters and maintenance dredging of the federal channel,
including three turning basins, on an 11-year cycle to a depth of 12
feet Mean Lower Low Water. Recent sounding surveys indicate that
shoaling is occurring and that dredging is required now. The last
dredging episode was in 2004.
Although $500,000 was included in the Corps' FY 2014 work plan, the
plan for sediment quality sampling and testing has only recently
commenced. With groundings occurring particularly among transient
vessels, and high tide exit and entry generally required, it is now
essential that funding be budgeted sufficient to conduct the necessary
dredging.
While $6.6 million is needed to conduct the dredging as soon as
possible, it is critical that $1 million be provided as part of the FY
2016 work plan, and that any balance up to $6.6 million be included in
the President's FY 2017 budget request to Congress.
Corte Madera Creek Flood Control Project
Continued support for the Corte Madera Creek Flood Control project
is crucial for both the FY 2016 work plan and the FY 2017 budget. The
project received $400,000 in the FY 2015 work plan and the Project
Design Team is working toward meeting the first project milestone. In
order to remain close to the milestones set out by the San Francisco
District Engineer in his August 13, 2015, letter to the Marin County
Director of Public Works, $500,000 needs to be included for this
project in any FY 2016 Army Corps work plan, and I ask that an
additional $600,000 be included in the President's FY 2017 budget
request.
The Corte Madera Creek Flood Control project is critical to the
broader Ross Valley Flood Protection and Watershed program, a region-
wide, four municipality, multiple community effort to address chronic
flooding in the Ross Valley. A suite of creek improvement measures have
been identified to reduce and contain 100-year flows within the main
stem of Corte Madera Creek. Residents have agreed to tax themselves $44
million over 20 years to fund this program. The federal Corte Madera
Creek project is at the downstream end of all proposed measures and
must be completed for all present and future efforts of the local
community to achieve a level of flood protection that will contain a
100-year flood event.
The requested funds will complete a feasibility study for the final
phase of the Corte Madera project, which includes a final unit and
potential modifications to previous phases, to allow the project to
function at a level agreed upon by all stakeholders.
In conjunction with the other measures to be undertaken and for
which residents have agreed to tax themselves, the Corte Madera Creek
Flood Control project will substantially improve flood control and play
a key role in preventing the level of loss seen in our 2005-2006 winter
storms. These storms resulted in approximately $100 million in damage,
affecting over 240 homes, 75 retail and commercial structures, two
elementary schools, the College of Marin campus, two post offices, the
Ross Town Hall, and police and firehouses in the Towns of Ross, San
Anselmo, and Fairfax.
Redwood Creek
Last year, I wrote to discuss the importance of a USACE flood
control along Redwood Creek, built after the 1964 flood to protect the
town of Orick. These levies, while important for local flood control,
do not convey enough sediment to prevent a buildup of materials.
Furthermore, they were not designed to ensure that local fish species,
including federally protected species, were not harmed. Despite tens of
millions of dollars in restoration work done by the federal government
upstream, the National Marine Fisheries Service has issued a draft
jeopardy opinion on the project, which may further reduce the county's
ability to remove gravel from the project area.
Humboldt County is currently working with stakeholders and
landowners to redesign the project to allow for improvement in all of
these problem areas. USACE will need to at least be a permitting
agency, and may need to be the action agency for this new project. I
urge inclusion of the associated costs of leading on this project in
the USACE's budget.
Thank you for your consideration of these requests, and I look
forward to continuing to work with you in the future.
Sincerely,
Jared Huffman
Member of Congress
__________
October 7, 2016.
The Honorable Shaun Donovan
Director, Office of Management and Budget
The Honorable Jo-Ellen Darcy
Assistant Secretary for Civil Works, Army Corps of Engineers
Dear Director Donovan and Secretary Darcy,
I write to call to your attention several important projects across
California's North Coast and the counties in California's Second
Congressional Districts. These projects are of utmost importance as you
work on your preparation of a Fiscal Year 2017 work plan and the budget
proposal for the U.S. Army Corps of Engineers (USACE) for Fiscal Year
2018.
Critical Dredging of Petaluma River
Adequate funding for the USACE is necessary to modernize our
nation's ports and harbors and better support the over 13 million jobs
in the marine transportation industry. Inadequate funding results in
insufficient dredging, increasing the chance of collisions and causing
higher costs for consumers. In my district, the dredging maintenance
for the continued commercial use of Petaluma River last occurred in
2003 and is long overdue. Funding is needed both for dredging and flood
control work. Because of the delay in regular maintenance the cost of
dredging could be significantly higher than in past years.
I am pleased that local stakeholders along the Petaluma River and
San Rafael Canal are working with the San Francisco District to
identity the possibility of an innovative new approach that would
formulate a public private partnership (P3/P4) to reduce dredging costs
and bring long overdue dredging to the river. While still in its early
phases, collectively this could be a win-win for all participants. In
order to support continued collaboration between the Corps and local
stakeholders for this P3/P4 proposal, I request inclusion in the FY
2017 work plan of a $200,000 line. However, as ongoing conversations on
a possible P3/P4 proposal continue, I urge you to not neglect the
unnecessary backlog of dredging.
Coyote Valley Dam
As you know, Section 7001 of the WRRDA 2014 requires an annual
submission to Congress of a report that identifies potential new or
modified authorizations of authorized projects or studies. The 2016
report to Congress listed the request by the Sonoma County Water Agency
of a modification to the authorized project at Coyote Valley Dam,
specifically raising the existing dam by 36 feet. This would increase
total storage capacity at the reservoir to 199,000 acre feet from an
existing 122,500 acre feet. This would not only have water supply and
storage benefits, but would address ecosystem restoration benefits
based on the 2008 National Marine Fisheries Service Jeopardy Biological
Opinion for the Russian River watershed, as additionally discussed
below for other projects. Based on the 2016 report, both the House
Transportation & Infrastructure Committee and the Senate Environment &
Public Works Committee included authorization for project modifications
in their Water Resources Development Acts. While Congress has yet to
finalize a bill, I look forward to working with the Corps on this vital
issue and urge full funding of the necessary actions by the Corps
following final passage of a bill.
Dredging at Bodega Bay
Bodega Bay is home to a substantial commercial fishing fleet of
about 300 vessels (500 in-season), as well as an economically
significant sport fishing industry (about 600 vessels in-season) and
recreational craft. In 2012, nearly 25% of the total Chinook salmon
landings in California, and over 10% of Dungeness crab California
landings, came through Bodega Bay. While California's Dungeness crab
landings have been harmed by a temporary fishery closure this year, the
harbor also serves as a critical harbor of refuge and is home to a
Coast Guard search-and-rescue station which performed about 250 rescue
missions in 2013.
The Corps O&M schedule for Bodega Bay provides for periodic
inspection and repair of three breakwaters and maintenance dredging of
the federal channel, including three turning basins, on an 11-year
cycle to a depth of 12 feet Mean Lower Low Water. The last dredging
episode was in 2004.
I appreciate that $750,000 was included in the FY 2016 work plan to
complete all environmental work and plans and specifications as
required for dredging of the entire federal channel, and $4.285 million
was in the FY 2017 budget request, an amount deemed sufficient to
dredge the entrance channel. For the Corps to conduct dredging of only
the entrance channel in the coming year, and then demobilize the
equipment only to remobilize the dredge at some later date when
additional funding becomes available to dredge the remainder of the
harbor, would add dramatically to the project's cost at that time and
so unnecessarily waste valuable federal resources.
To best utilize scarce federal resources, I strongly urge that
$2.815 million be provided in either the FY 2017 work plan or FY 2018
budget request, sufficient to dredge the entire Bodega Bay federal
channel.
Dredging of Additional Harbors
In Humboldt Bay regular and timely dredging is critical for
commerce, especially with new investments by companies in products that
require deep-draft vessels for shipping, like wood chips and logs.
Since Humboldt Bay is also a harbor of refuge--the only deep-water port
between San Francisco and Coos Bay--its operation is also vital to
marine safety. Consistent maintenance dredging is needed to keep the
harbor entrance safe for transit for commercial and recreational
vessels. I also ask for your continued engagement in supporting
dredging and addressing the disposal and use of dredged materials in
Noyo Harbor.
Additionally, the Corps has provided much needed dredging services
in the past in the San Rafael Canal, but over the years the silt
buildup has significantly impaired the depth during low tide. The last
dredging in 2011 covered only a portion of the canal, and a full
dredging has not occurred since 2002.
Russian River Biological Opinion Projects
I continue to offer my strong support for the funding of a critical
project in Sonoma County relating to the Russian River Biological
Opinion (BO). As promulgated in 2008, the BO calls for the completion
of work on Reasonable and Prudent Alternatives by benchmarked dates and
the Corps and its local partners continue to make progress in meeting
those goals. The failure to achieve these tasks could trigger
requirements to construct substantially more expensive, and more
controversial, projects.
The Russian River BO issued in September 2008 by the National
Marine Fisheries Service identified 23 actions that must be taken to
protect three threatened or endangered salmonid species; coho salmon,
steelhead, and Chinook salmon. The BO was issued because of the impact
on these fish populations caused by the construction and operation of
two USACE facilities: Warm Springs Dam on Lake Sonoma, and Coyote
Valley Dam on Lake Mendocino.
If work is to be completed by the milestones contained in the BO
significant investments will be required in FY 2017 and 2018. With work
on the feasibility study continuing with funding made available from
the Section 1135 Continuing Authorities Program, it appears likely that
about $3.26 million in construction funding from the 1135 Program will
be required in FY 2017, and an additional $300,000 will be needed in FY
2018. I understand that there may be backlogged funding available for
this program, and therefore urge that such funds be made available to
accommodate the completion of the required three miles of habitat
enhancement required by the BO by 2018.
For the Dry Creek (Warm Springs) Feasibility Study, I request that
$60,000 be included in the FY 2017 work plan as needed to complete this
study that is directed at completing the required six miles of habitat
enhancement which must be achieved by 2020 under the benchmarks of the
BO. Taken together, these projects will move forward in demonstrating
the ability to balance flood control and water supply needs with a
sustainable ecosystem for threatened and endangered fish species.
Additionally, I urge that at such time as the Corps may be required
to prepare a work plan for FY 2017 with such additional funds as the
Congress provides; $1.25 million be added to amounts included in the
President's February request for Operation and Maintenance funding for
additional work at Dry Creek (Warm Springs) Lake and Channel as needed
for coho hatchery facility water treatment and filtration to prevent
fish disease, and for egg incubation equipment, also as required by the
BO. An additional $300,000 should be included in the FY 2018 budget
request to complete funding related to the egg incubation equipment.
Flood Protection and Watershed Protection in Marin County
The Corte Madera Creek Flood Control Project received $400,000 in
the FY 2015 work plan and $520,000 in the FY 2016 work plan and the
Project Design Team is working toward meeting the second project
milestone. In order to meet or remain close to the milestones set out
by the San Francisco District Engineer in his letter to the Marin
County Director of Public Works on August 13, 2015, $580,000 for the
study and $150,000 for Independent External Peer Review (a total of
$730,000 in the GI budget) needs to be included for this project in any
Army Corps work plan that Congress directs to be prepared for FY 2017.
Three of four phases of the Corte Madera project have been
constructed, and the requested funds will complete a feasibility study
for the final phase of the project that includes Unit 4 and potential
modifications to previous phases (Units 1, 2 and 3). While 75% of the
project has been constructed, it is less than 25% effective. This final
phase will allow the project to function at a level agreed upon by all
stakeholders.
The Corte Madera Creek Flood Control project is critical to the
broader Ross Valley Flood Protection and Watershed program, a region-
wide, four municipality, multiple community effort to address chronic
flooding in the Ross Valley. A suite of creek improvement measures has
been identified to reduce and contain 100-year flows within the main
stem of Corte Madera Creek. Notably, residents have agreed to tax
themselves $44 million over 20 years to fund this program. The federal
Corte Madera Creek project is at the downstream end of all proposed
measures and must be completed for all present and future efforts of
the local community to achieve a level of flood protection that will
contain a 100-year flood event.
In conjunction with the other measures to be undertaken and for
which residents have agreed to tax themselves, the Corte Madera Creek
Flood Control project will substantially improve flood control and play
a key role in preventing the level of loss seen in our 2005-2006 winter
storms. These storms resulted in approximately $100 million in damage,
affecting over 240 homes, 75 retail and commercial structures, two
elementary schools, the College of Marin campus, two post offices, the
Ross Town Hall, and police and firehouses in the Towns of Ross, San
Anselmo, and Fairfax.
On September 13, 2013, the Project Design Team that included
representatives from the USACE, Marin County Flood Control and Water
Conservation District, the Marin County Board of Supervisors, and my
office conducted a SMART planning charrette. The outcome of the
charrette was a determination of continued federal and local interest
in the project, requiring completion of the study within three years
for $3 million or less.
Additionally, and also of very great significance, Marin County
Parks has written to the San Francisco District of the Corps wishing to
initiate the McInnis Marsh Restoration Project pursuant to Section 206
of the Water Resources Development Act of 1996, the Continuing
Authorities Program for Aquatic Ecosystem Restoration.
McInnis Marsh is a 180 acre diked wetland located in San Rafael,
CA, east of McInnis Park between Miller and Gallinas Creeks.
Historically, these creeks were hydrologically connected through a
system of distributary channels at McInnis Marsh. This connectivity was
lost in the early 1900's as levees were constructed to make the marsh
suitable for agricultural use before the County purchased the land and
built a park. In order to protect existing park and wastewater
treatment facilities from flooding and enhance habitat for the federal
and state listed species, Marin County parks, in partnership with the
Las Gallinas Valley Sanitary District and the Marin County Flood
Control and Water Conservation District, proposes the restoration of
the intertidal marsh and estuarine habitat. It is my understanding that
initiating this project will require $300,000 in funding from the FY
2017 work plan, and an additional $300,000 in the FY 2018 budget.
Again, the Corte Madera Creek Flood Control project and McInnis
Marsh Restoration, will be of tremendous benefit to the people and
County of Marin. As such, I urge that $580,000 for the study and
$150,000 for Independent External Peer Review be included in the FY
2017 work plan, for Corte Madera Creek to assure that it is completed
as outlined in the District Engineer's letter of August 13, 2015.
Additionally, $300,000 is needed under the Section 206 Continuing
Authorities Program for Aquatic Ecosystem Restoration, to initiate an
important project for the restoration of McInnis Marsh.
Redwood Creek
Along the North Coast, Humboldt County is continuing to work with
stakeholders and landowners along Redwood Creek for the improvement of
the USACE flood control project. Built after the 1964 flood to protect
the town of Orick, these levies, while important for local flood
control, do not convey enough sediment to prevent a buildup of
materials. Furthermore, they were not designed to ensure that local
fish species, including federally protected species, were not harmed.
Despite tens of millions of dollars in restoration work done by the
federal government upstream, the National Marine Fisheries Service has
issued a draft jeopardy opinion on the project, which may further
reduce the county's ability to remove gravel from the project area.
USACE will need to at least be a permitting agency, and may need to be
the action agency for this new project. I urge inclusion of the
associated costs of leading on this project in the USACE's budget.
Thank you for your consideration of these requests, and I look
forward to continuing to work with you in the future.
Sincerely,
Jared Huffman
Member of Congress
__________
October 13, 2017.
Mr. Douglas W. Lamont
Acting Assistant Secretary of the Army (Civil Works)
Honorable Mick Mulvaney
Director, Office of Management and Budget
Dear Director Mulvaney and Acting Assistant Secretary Lamont,
As you continue your preparation of an FY '18 budget, and
anticipate enactment of appropriations legislation that would call for
the allocation of funds through an FY '17 work plan, I wanted to remind
of you of several important projects across California's North Coast.
HARBOR DREDGING
In my district, the dredging maintenance for the continued
commercial use of Petaluma River last occurred in 2003 and is long
overdue. Funding is desperately needed both for dredging and flood
control work. Because of the delay in regular maintenance the cost of
dredging could be significantly higher than in past years.
In Humboldt Bay regular and timely dredging is critical for
commerce, especially with new investments by companies in products that
require deep-draft vessels for shipping. like wood chips and logs.
Since Humboldt Bay is also a harbor of refuge--the only deep-water port
between San Francisco and Coos Bay--its operation is also vital to
marine safety. Consistent maintenance dredging is needed to keep the
harbor entrance safe for transit for commercial and recreational
vessels. I also ask for your continued engagement in supporting
dredging and addressing the disposal and use of dredged materials in
Noyo Harbor.
RUSSIAN RIVER BIOLOGICAL OPINION
The Russian River Biological Opinion (BO) issued in September 2008
by the National Marine Fisheries Service identified 23 actions that
must be taken to protect three threatened or endangered salmonid
species; coho salmon, steelhead, and Chinook salmon. The BO was issued
because of the impact on these fish populations caused by the
construction and operation of two USACE facilities: Warm Springs Dam on
Lake Sonoma, and Coyote Valley Dam on Lake Mendocino. The failure to
achieve these tasks by the specified dates could trigger requirements
to construct, in lieu thereof, substantially more expensive, and more
controversial, projects.
If work is to be completed by the milestones contained in the BO,
significant investments will be required in FY '17 and '18. While work
on a feasibility study pursuant to the Section 1135 Continuing
Authorities Program is ongoing, it appears likely that about $100,000
from the 1135 Program will be required in FY '17, and that $4.5 million
will then be needed in FY '18 for construction of the project. I
understand that there may be backlogged funding available for this
program, and would urge that such funds be made available to
accommodate the completion of the required three miles of habitat
enhancement required by the BO in 2018.
For the Dry Creek (Warm Springs) Feasibility Study, I request that
$170,000 be included in the FY '18 General Investigations budget, as
needed to complete the ongoing study that is directed at completing the
required six miles of habitat enhancement. Taken together, these
projects will move forward in demonstrating the ability to balance
flood control and water supply needs with a sustainable ecosystem for
threatened or endangered species.
Additionally, I urge that at such time as the Corps may be required
to prepare a work plan for FY '17 with such additional funds as the
Congress provides; $900,000 be added to amounts included in the pending
appropriations bills for Operation and Maintenance funding for
additional work at Dry Creek (Warm Springs) Lake and Channel as needed
for water treatment and filtration improvements to the coho hatchery as
needed to prevent fish disease, as required by the BO.
DAM SAFETY
In addition to the work associated with the Russian River BO, I
write to request attention to the dams themselves at Warm Springs Dam
at Lake Sonoma, and Coyote Valley Dam at Lake Mendocino. While the
responsible stewardship of these facilities has not been questioned,
recent events at Oroville Dam has certainly, and reasonably, led
parties to reexamine the safety of dams around the country, and I am
certainly no less concerned about the safety of these two facilities.
A catastrophic failure at either dam would be devastating to the
communities downstream in loss of life and property damage. I am told
that, based on the 2000 Census, up to 84,854 people could be impacted
from a failure at Warm Springs, with an estimated loss of life of up to
100 people. Potential damage to industrial and residential structures
and their contents, infrastructure and agriculture, could total $13
billion, with the cost of repairs to the dam estimated at $219 million.
With regard to a breach at Coyote Valley Dam, economic losses could
occur more than 50 miles downstream in more than ten cities and towns.
This could include thousands of homes, livestock, farmland, and
portions of Cloverdale, Geyserville, Healdsburg, Hopland, Santa Rosa,
and Windsor. Infrastructure damage could include Highway 101, Ukiah
Airport, a major rail line, schools, factories, a fire station and a
sewage treatment facility--in addition to numerous roads and utility
networks.
While I understand that the likelihood of a breach or catastrophic
failure at either dam is extremely remote, the potential consequences
of such an occurrence is of obvious concern and must lead me to insist
that all responsible precautions are taken to assure that such an event
never occurs.
As such, I would ask that the President's Operation and Management
budget request for FY '18 include at least $660,000 for a spillway
geotechnical exploration study and tower bridge repairs at Coyote
Valley Dam, and that $564,000 be included for a spillway erodibility
study, reservoir sediment survey, and water control manual update at
Warm Springs Dam.
BODEGA BAY
Bodega Bay, a critical harbor of refuge, is located about 60 miles
north of San Francisco, and is home to a Coast Guard search-and-rescue
station which performed about 250 rescue missions in 2013.
It is home, as well, to a substantial commercial fishing fleet of
about 300 vessels (500 in-season), as well as an economically
significant sport fishing industry (about 600 vessels in-season) and
recreational craft. In 2012, nearly 25% of the total Chinook salmon
landings in California, and over 10% of Dungeness crab California
landings, came through Bodega Bay. Notably, because of domoic acid
poisoning, the Dungeness crab fishery was closed for virtually the
entire season last year, devastating the local industry and those who
depend on it for their livelihoods. The Department of Commerce is
currently considering whether a commercial fishery failure has occurred
and whether Disaster Assistance will be available.
The Corps O&M schedule for Bodega Bay provides for periodic
inspection and repair of three breakwaters and maintenance dredging of
the federal channel, including three turning basins, on an 11-year
cycle to a depth of 12 feet Mean Lower Low Water. Recent sounding
surveys indicate that shoaling is occurring and that dredging is
required now. The last dredging episode was in 2004.
I appreciate that $750,000 was included in the FY '16 work plan to
complete all environmental work and plans and specifications as
required for dredging of the entire (federal) channel, and $4.285
million in the FY '17 budget, which is deemed to be sufficient to
dredge the entrance channel. For the Corps to conduct dredging of only
the entrance channel in the coming months, and then demobilize the
equipment only to remobilize the dredge at some later date when
additional funding becomes available to dredge the remainder of the
harbor would add dramatically to the project's cost at that time and so
unnecessarily waste valuable federal resources.
With groundings occurring, particularly among transient vessels,
and high tide exit and entry generally required; it is now essential
that funding be budgeted sufficient to dredge the remainder of the
federal channel.
To best utilize scarce federal resources, and to prevent future
difficulties for our devastated fishing industry, I would strongly urge
that $4 million be provided in either the FY '17 work plan or FY '18
budget request, sufficient to dredge the entire Bodega Bay federal
channel.
CORTE MADERA CREEK FLOOD CONTROL PROJECT
The Corte Madera Creek Flood Control Project received $400,000 in
the FY '15 work plan and $520,000 in the FY '16 work plan and the
Project Design Team is working toward meeting its second project
milestone. In order to meet or remain close to the milestones set out
by the San Francisco District Engineer, an additional $1,080,000 is
required in the General Investigations (GI) budget to provide funding
for a review of the final array of alternatives, an Alternatives
Formulation Briefing, and completion of the Final EIR/EIS
documentation. This total amount includes $880,000 for study costs and
$200,000 for independent review. Of this, $400,000 needs to be included
in any Army Corps work plan that Congress directs to be prepared for FY
'17 and $680,000 in the Administration's FY '18 budget request.
Three of four phases of the Corte Madera project have been
constructed, and the requested funds will complete a feasibility study
for the final phase of the project that includes Unit 4 and potential
modifications to previous phases (Units 1, 2 and 3). While 75% of the
project has been constructed, it is less than 25% effective without
Unit 4. This final phase will allow the project to function at a level
agreed upon by all stakeholders.
The Corte Madera Creek Flood Control project is critical to the
broader Ross Valley Flood Protection and Watershed program, a region-
wide, four-municipality, multiple community effort to address chronic
flooding in the Ross Valley. A suite of creek improvement measures has
been identified to reduce and contain 100-year flows within the main
stem of Corte Madera Creek. Notably, residents have agreed to tax
themselves $44 million over 20 years to fund this program. The federal
Corte Madera Creek project is at the downstream end of all proposed
measures and must be completed for all present and future efforts of
the local community to achieve a level of flood protection that will
contain a 100-year flood event.
In conjunction with the other measures to be undertaken and for
which residents have agreed to tax themselves, the Corte Madera Creek
Flood Control project will substantially improve flood control and play
a key role in preventing the level of loss seen in our 2005-2006 winter
storms. These storms resulted in approximately $100 million in damage,
affecting over 240 homes, 75 retail and commercial structures, two
elementary schools, the College of Marin campus, two post offices, the
Ross Town Hall, and police and firehouses in the Towns of Ross, San
Anselmo, and Fairfax.
On September 13, 2013, the Project Design Team that included
representatives from the USACE, Marin County Flood Control and Water
Conservation District, the Marin County Board of Supervisors, and my
office conducted a SMART planning charrette. The outcome of the
charrette was a determination of continued federal and local interest
in the project.
Again, the Corte Madera Creek Flood Control project will be of
tremendous benefit to the people and County of Marin. As such, I urge
that $400,000 for the study be included in the FY 17 Work Plan and an
additional $680,000 be included in the FY 18 budget request.
REDWOOD CREEK
Along the North Coast, Humboldt County is continuing to work with
stakeholders and landowners along Redwood Creek for the improvement of
the USACE flood control project. Built after the 1964 flood to protect
the town of Orick, these levies, while important for local flood
control, do not convey enough sediment to prevent a buildup of
materials. Furthermore, they were not designed to ensure that local
fish species, including federally protected species, were not harmed.
Despite tens of millions of dollars in restoration work done by the
federal government upstream, the National Marine Fisheries Service has
issued a draft jeopardy opinion on the project, which may further
reduce the county's ability to remove gravel from the project area.
USACE will need to at least be a permitting agency, and may need to be
the action agency for this new project. I urge inclusion of the
associated costs of leading on this project in the USACE's budget.
Sincerely,
Jared Huffman
Member of Congress
__________
October 19, 2018.
The Honorable R.D. James
Assistant Secretary of the Army for Civil Works
Dear Assistant Secretary James:
With the on-time enactment of the FY 2019 Energy and Water
Development Appropriations bill, Congress has fulfilled its
responsibilities for funding a portion of our federal government. As
such, the US Army Corps of Engineers received $6.84 billion for its
Civil Works Program. This is good news for the many vital projects
carried out by the Corps, and I write to request your personal
attention to two projects where the money appropriated by Congress can
provide critical support for the communities I represent. As you
complete a work plan with the funds provided by Congress, and knowing
that you are developing a budget for FY 2020 and will also consider
reprogramming requests in the months ahead, please remember the
importance of dredging the Petaluma River and the San Rafael Channel.
The Corps is responsible for both navigation and flood plain
protection maintenance dredging of the Petaluma River's federal channel
to a depth of eight feet and widths varying from 100 feet to 300 feet.
Prior to 2003, the channel was dredged every three to four years to
maintain channel depth. It has not been dredged since 2003, and the
across-the-flats section was last dredged in 1998. Shoaling in the
Upper Petaluma River is already impacting commercial traffic as barging
companies curtail operations and the capacities of barges. Barge
companies that have modified their capacity to transport products will
either have to relocate or cease operations as conditions worsen. The
lack of dredging has also negatively impacted recreational boating
traffic vital to downtown commercial establishments, as well as
impacting the Sheriff's office, whose boat at the Marina cannot be used
at low tide.
The Preliminary Assessment completed by the Corps in 2015
recognized the continued economic viability of the project and
identified significant regional economic impacts if the maintenance
dredging was left unfunded. Among the many negative impacts will be
worsening traffic on adjacent roads, as a single 4,000-ton barge
carries freight equivalent to that of 160 25-ton trailer trucks.
Highway 101, which serves in part as an alternate route, already
experiences some of the worst traffic congestion in the entire San
Francisco Bay Area. The addition of such freight traffic would add to
this congestion along with associated safety and air quality impacts.
The FY 2017 work plan included $600,000 for engineering and design
of the project. I urge that $500,000 be made available in the FY 2019
work plan for engineering and environmental compliance, with additional
funding provided in the FY 2020 budget as needed to conduct the
necessary maintenance dredging.
Similarly, the San Rafael Canal is a vital waterway for navigation
and storm water drainage, and an important economic engine in the City
of San Rafael and County of Marin. The lack of dredging is becoming a
public safety issue as the San Rafael Police and Fire Department has
taken over emergency services and search and rescue operations in the
Channel for the Coast Guard and needs immediate and open access. The
Police and Fire Department water search and rescue operations are based
in the Channel and access and capacity for bay patrols, rescues, and
other public safety activity is absolutely critical. The lack of
dredging is interfering with the City's ability to effectively respond
in the event of an emergency. Further, it poses an elevated flood risk
to the 12,000 residents in the low-lying area FEMA flood zone area
which rely on 12 City-operated stormwater pump stations which empty
directly into the Channel.
More than 800 homes and 100 businesses and commercial properties
are located directly along the San Rafael Canal, where approximately
1,500 commercial and recreational vessels are berthed--generating
significant sales and property tax revenues. In fact, the San Rafael
Chamber of Commerce has cited that two-thirds of San Rafael's total
sales tax revenues are generated in East San Rafael, the area directly
adjacent to and impacted by the Channel. Unfortunately, a a consequence
of the failure to address the storm-driven sediment and dredge the
Channel, incidents of boaters becoming stuck in sediment have become
increasingly common, and marina operators have indicated a difficulty
in renting berths because of the limited access. The siltation
situation and resulting low depth of the Channel has become so grave
that some marine maintenance businesses are relocating their operations
outside of San Rafael due to the limitations on vessels entering and
leaving the Channel; and those businesses that remain can only intake
vessels from customers at high tide.
The last full dredging of the San Rafael Channel was in 2002. Last
year, as a result of the Presidentially-declared flood disasters in
2017, sediment from the hillsides deposited directly into the Channel.
The San Rafael Creek federal channel was authorized by the Rivers and
Harbors Act of 1919 and was completed in 1928. Since 1930, the Corps
has dredged the Canal on thirteen separate occasions. In recognition of
this historic work of the Corps in the Channel, S.Rept. 115-258,
accompanying the Energy and Water Development Appropriations bill for
2019 includes language that ``urges the Corps to prioritize dredging of
the San Rafael Canal.''
For the thousands of businesses and residents who rely on the safe
navigability and drainage functions of the San Rafael Canal, and depend
on the waterway for fire protection, emergency access, and evacuation,
I urge that the FY 2019 work plan provide $10.5 million as needed for
the environmental analysis, engineering, and dredging of the Canal.
Both the Petaluma River and the San Rafael Channel are in need of
immediate assistance, and it my hope that through the FY 2019 work
plan, as well as through opportunities afforded by reprogramming of
funds, the Corps will continue to serve as a federal partner for the
communities I represent. Thank you for your continued work. I
appreciate your attention to this request.
Sincerely,
Jared Huffman
Member of Congress
__________
January 30, 2019.
The Honorable Mick Mulvaney
Director, United States Office of Management & Budget
R.D. James
Assistant Secretary of the Army for Civil Works
Dear Director Mulvaney and Assistant Secretary James:
As you continue to formulate the U.S. Army Corps of Engineers'
budget for Fiscal Year (FY) 2020, we urge you to fully consider several
vital dredging projects in our Congressional districts.
Chief among these are dredging of the Suisun Bay Channel, the
Larkspur Ferry channel, the Petaluma River, the San Rafael Channel, and
the San Pablo Bay-Mare Island Strait-Pinole Shoal shipping channel.
These waterways are essential to commuters and commercial enterprise in
our districts, underpinning thousands of jobs, and each is in need of
either immediate or near-term dredging.
With respect to both Suisun Bay and the San Pablo Bay-Mare Island-
Pinole Shoal shipping channel, previously allocated dredging funds have
proven insufficient to ensuring safe passage of crude oil tankers,
cargo ships, and military and other commercial vessels. The situation
is dire enough that oil tanker groundings have already occurred in
Suisun Bay, while the Corps ceased annual dredging of the Pinole
Shoal--authorized to be dredged to a depth of 35 feet--nearly 20 years
ago. Similarly, the Corps last dredged the Mare Island strait in 1996.
With regard to the maintenance of the Petaluma River, the Corps'
own Preliminary Assessment--completed in 2015--recognized the continued
economic feasibility of the project, and identified significant
economic consequences if the dredging was left unfunded. However, while
the Corps is responsible for navigation and flood plain protection
dredging, no dredging has occurred since 2003. Shoaling in the Upper
Petaluma River is already impacting commercial traffic as barging
companies curtail both capacity and operations. Worsening conditions
will eventually force barge operators to cease business, devastating
commercial enterprises along the river.
The San Rafael channel is a vital waterway for navigation and storm
water drainage, and an important economic engine in the City of San
Rafael and County of Marin. The channel, last fully dredged in 2002,
naturally fills with sediment from bay tidal action and upland erosion
and runoff. Incidents of boaters becoming stuck in sediment have become
increasingly common, leading marina operators to experience growing
difficulty in renting berths because of limited access dependent on
tides.
Lastly, the Larkspur Ferry channel is traversed by some 1.6 million
people per year, nearly 90 percent of whom are daily commuters. The San
Francisco Ferry Terminal, the destination or origin for the ferry, is
within walking distance of 300,000 jobs and has intermodal connections
to numerous regional transit systems, including Bay Area Rapid Transit
(BART).
This reliable service will be jeopardized without proper
maintenance of the ferry channel, as authorized by language included in
the 2007 Water Resources Development Act. We are told that additional
maintenance dredging of the Larkspur Channel will be needed by no later
than 2021, dredging which is critical not only to hundreds of thousands
of commuters but also to the small commercial and recreational fleets
which utilize the Channel.
Each of these dredging projects is essential to both the daily
lives of our constituents and the regional economy. Multiple
industries, supporting tens of thousands of jobs, rely on dependable
access to regional waterways for both shipping and commuting. As such,
we urge you to fully consider these projects in formulating your FY
2020 budget request.
Please do not hesitate to contact our offices if we may be of
assistance.
Sincerely,
Mike Thompson
Member of Congress
Jerry McNerney
Member of Congress
Mark DeSaulnier
Member of Congress
Jared Huffman
Member of Congress
Doris Matsui
Member of Congress
Statement of the American Society of Civil Engineers, Submitted for the
Record by Hon. Napolitano
introduction
The American Society of Civil Engineers (ASCE) appreciates the
opportunity to submit our position on the importance of long-term,
strategic investment in our nation's ports infrastructure. ASCE also
thanks the U.S. House of Representatives Transportation and
Infrastructure Subcommittee on Water Resources and Environment for
holding a hearing on this critical issue. ASCE is eager to work with
the Subcommittee in the 116th Congress to ensure both full
appropriation of Harbor Maintenance Trust Fund (HMTF) revenues and that
the funds be utilized for its designated purpose.
asce's ``2017 infrastructure report card'' and 2016 economic study,
``failure to act: closing the infrastructure investment gap for
america's economic future''
Infrastructure is the foundation that connects the nation's
businesses, communities, and people, serves as the backbone to the U.S.
economy, and is vital to the nation's public health and welfare. Every
four years, ASCE publishes the Infrastructure Report Card, which grades
the nation's 16 major infrastructure categories using a simple A to F
school report card format. The Report Card examines the current
infrastructure needs and conditions, assigning grades and making
recommendations to raise them.
ASCE's 2017 Infrastructure Report Card rated the overall condition
of the nation's infrastructure a cumulative grade of ``D+'' across
sixteen categories, with an investment gap of $2 trillion. The Report
Card gave our nation's ports infrastructure category a grade of ``C+.''
Additionally, ASCE's 2016 economic study, Failure to Act: Closing
the Infrastructure Investment Gap for America's Economic Future, found
that our nation's deteriorating infrastructure and growing investment
deficit has a cascading effect on our nation's economy, impacting
business productivity, gross domestic product (GDP), employment,
personal income, and international competitiveness; in fact, our
failure to act by 2025 carries an enormous economic cost to the tune of
nearly $4 trillion in lost GDP, which will result in a loss of 2.5
million jobs in 2025.
The economic consequences of our nation's infrastructure
deficiencies also extend to families' disposable incomes, with each
household in the U.S. losing $3,400 each year through 2025; if left
unaddressed, the loss will grow to an average of $5,100 annually from
2026 to 2040. It is possible to close the infrastructure investment gap
and avoid the economic consequences caused by this deficit, but it will
require sustained and robust investment.
ports and the harbor maintenance trust fund
Our nation's 926 ports support over 23.1 million jobs, provide
$321.1 billion in tax revenue to federal state, and local governments,
and are responsible for $4.6 trillion in economic activity, or roughly
26 percent of the nation's economy--making them essential to U.S.
competitiveness. Our ports serve as the gateway through which 99
percent of America's overseas trade passes, and the top 10 U.S. ports
accounted for 78 percent of U.S. foreign waterborne trade in 2015.
However, the investment gap for inland waterways systems and ports is
expected to be $1.5 billion by 2025.
In a 2015 survey \1\ of ports, a third indicated that congestion
over the past ten years resulted in a 25 percent decrease in port
productivity. Few of our nation's ports can accommodate the large ships
that pass through the Panama Canal, so to remain competitive in the
global market and to accommodate these larger vessels, ports have been
investing in their facilities and plan to spend over $154 billion from
2016 to 2020 on expansion, modernization, and repair. Ports, however,
are contending with larger container ships and do not always have
adequate access to the user-fee funded Harbor Maintenance Trust Fund
(HMTF), which would help these facilities prepare for larger vessels.
---------------------------------------------------------------------------
\1\ American Association of Port Authorities, 2015 Port Surface
Freight Infrastructure Survey, April 2015
---------------------------------------------------------------------------
Enacted in the Water Resources Development Act of 1986, the Harbor
Maintenance Tax (HMT) is a fee (0.125 percent of the value of cargo)
collected from users of our nation's maritime transportation system
that is then used by the U.S. Army Corps of Engineers (USACE) to dredge
harbors. Despite the significant dredging needs at the majority of U.S.
ports, the fund's revenues have frequently not been appropriated for
its designated purposed, instead being used for federal deficit
offsets. ASCE strongly supported the provision in the Water Resources
Reform and Development Act (WRRDA) of 2014 that created a phased-in
approach to reach full use of HMT revenues by FY2025 and that set
incremental spending targets each year until full use.
The HMTF's balance currently sits at over $9 billion. Once fully
funded, it will take five years of complete HMTF appropriations to
dredge and restore channel depths and widths. ASCE urges the
Subcommittee to continue implementing the WRRDA 2014 agreement by
increasing expenditures accordingly and ensuring that HMT revenues are
used only for its intended purpose.
conclusion
ASCE believes Congress must prioritize the investment needs of our
ports infrastructure to protect our nation's economy and millions of
jobs, and to ensure we remain internationally competitive. ASCE thanks
the Subcommittee for holding this hearing and bringing attention to
this critical matter. We look forward to working with you to find
investment solutions to our nation's ports infrastructure.
Statement of the Association of Equipment Manufacturers, Submitted for
the Record by Hon. Napolitano
Dear Chairwoman Napolitano and Ranking Member Westerman:
The Association of Equipment Manufacturers (AEM) appreciates the
opportunity to submit a statement for the record on today's hearing on
``The Cost of Doing Nothing: Why Full Utilization of the Harbor
Maintenance Trust Fund and Investment in Our Nation's Waterways
Matter.'' AEM represents more than 1,000 equipment manufacturers in the
construction, agriculture, forestry, and mining sectors who employ
nearly 1.3 million individuals in the U.S. and contribute nearly $159
billion to the country's GDP.
Infrastructure matters to AEM members who not only use it to move
product to market, but who also make the equipment that builds it and
rely upon it to keep the economic sectors it is connected to strong.
For example, the health of the equipment manufacturing industry is
directly impacted by the health of the U.S. agriculture economy and the
many factors that influence it, factors that include the inland
waterways and ports that move commodities from farm to market. Our
crumbling U.S. infrastructure threatens to undermine not only the
important role the equipment manufacturing industry plays in the U.S.
economy, but also to destabilize a key economic sector that our
members' products help sustain, the agricultural sector.
Our nation's waterways and port infrastructure play a significant
role in connecting goods and agricultural commodities with consumers
domestically and globally. They represent one of the most cost-
effective, fuel-efficient, and safe modes of freight transport
domestically. U.S. farmers and ranchers depend heavily on water
infrastructure to deliver the food and fiber they produce to the world.
In fact, more than 70 percent of U.S. agricultural exports, valued at
nearly $130 billion, are conveyed by water.
However, this critical transportation network is severely outdated,
in need of repair and prone to delays and inefficiencies that put the
health of the U.S. agriculture sector at risk. For example, many of the
locks and dams within the inland waterway system are obsolete and have
long exceeded the period of use for which they were designed. U.S.
harbors coast to coast are unable to accommodate the largest freight
vessels leading to delayed shipments, increased costs, and diminished
capacity to export products abroad. Patchwork repairs required over the
past decade have led to a 700 percent increase in unplanned stoppages.
The cost of doing nothing when it comes to repairing and modernizing
our nation's harbors and waterways is high.
In order to reclaim the U.S. infrastructure advantage that we once
enjoyed, we need to ensure that the proper resources are being invested
to not only meet a state of good repair but also build new
infrastructure for the 21st century. This means that funds should be
applied consistently to the projects for which they were raised. In the
case of the Harbor Maintenance Trust Fund (HMTF), we have seen the
consequences of failing to apply funds for their designated purpose.
The HMTF is meant to be used for dredging harbors and channels to
maintain navigability and increase ship size capacity in a Post-Panamax
era. Despite growing dredging needs at U.S. harbors, Congress has often
diverted the HMTF to offset budget deficits allowing dredging projects
to pile up and the U.S. to fall further behind in waterborne freight
capacity. AEM supports past proposals from Chairman Peter DeFazio to
ensure that funds meant for the HMTF remain designated and available
for harbor maintenance projects--and those projects only. Further, AEM
supports prioritizing funding for the current backlog of 25 critical
inland waterways projects and maintaining water resource bills on a
two-year cycle. Taking these steps will provide much needed certainty
and predictability to the agricultural sector and by extension, the
equipment manufacturing industry.
Our nation's harbors and inland waterways are vital to the success
of the equipment manufacturing industry, the agricultural sector, and
all sectors of the U.S. economy. We urge Congress to provide the funds
necessary to maintain and upgrade crucial infrastructure projects and
prevent future efforts to divert those funds to other government
spending areas. Practical and pragmatic efforts will help ensure that
we reclaim the infrastructure advantage we once had. AEM commends the
Subcommittee on Water Resources and Environment for holding this
important hearing and stands ready to work with the Subcommittee and
full Committee to craft a comprehensive legislative package that
addresses the needs of our harbors and waterways, and all of our
nation's transportation and infrastructure assets.
Letter from Captain John W. Murray, Port Director and CEO, Canaveral
Port Authority, Submitted for the Record by Hon. Napolitano
April 16, 2019.
Hon. Grace Napolitano
Chair
House Water Resources and Environment Subcommittee, U.S. House of
Representatives
Hon. Bruce Westerman
Ranking Member
House Water Resources and Environment Subcommittee, U.S. House of
Representatives
Re: House Transportation and Infrastructure Water Resources and
Environment Subcommittee Hearing: ``The Cost of Doing Nothing: Why Full
Utilization of the Harbor Maintenance Trust Fund and Investment in Our
Nation's Waterways Matter''--April 10, 2019
Dear Chairwoman Napolitano and Ranking Member Westerman,
We join with ports and related maritime stakeholders across the
country in thanking you for holding a hearing in your Subcommittee last
week to address the importance of ports and waterways to this country.
As you pointed out at the hearing, ports are an important engine for
economic growth throughout the United States. We facilitate trade,
provide hundreds of thousands of jobs, and generate very positive
economic activity for our regions.
Here in Florida, Port Canaveral is world class gateway for the
cruise, tourism and commercial shipping industries. We are the homeport
for some of the world's top cruise lines and are the second busiest
cruise port in the world with more than 4.5 million passenger movements
annually. Our economic impact exceeds $2.2 billion each year for the
Space Coast and Central Florida region.
As one of the most active ports in the country, we rely heavily on
the harbor maintenance and dredging services provided by the United
States Army Corps of Engineers (Corps). We could not provide our high
degree of service to cruise lines and commercial shipping companies
without the ongoing cooperation and assistance of the Corps. As was
highlighted at your hearing, the Corps receives funding for its harbor
maintenance and dredging activities through the Harbor Maintenance Tax
(HMT).
As you know, the HMT and the Harbor Maintenance Trust Fund (HMTF)
were first created in 1986 to fund ``the eligible operations and
maintenance costs assigned to commercial navigation of all harbors and
inland harbors within the United States.'' (WRDA 1986; P .L. 99-662).
The HMT is assessed against the value of imports arriving at United
States ports with federally-maintained harbors and the revenue
generated from the HMT is then deposited into the HMTF. Congress
subsequently appropriates funds from the HMTF on an annual basis for
maintenance dredging, dredged material disposal areas, jetties and
breakwaters. It is important to underscore that since its inception,
the HMTF has been used for these harbor maintenance purposes, not for
landside infrastructure or other port-related activities.
With this background in mind, we noted with interest that Eugene
Seroka, Executive Director of the Port of Los Angeles, testified at
last week's hearing that ``we have industry unanimity on the subject of
the Harbor Maintenance Trust [Fund] and how to allocate to the so-
called donor ports like Los Angeles''. We believe Mr. Seroka's
reference is to a proposal put forward by the American Association of
Port Authorities (AAPA) to reform the HMTF and allow HMTF revenues
under certain circumstances to be allocated to ports for landside
infrastructure.
We want to correct the record to make it clear that Port Canaveral
does not support the AAPA proposal and any amendment to the HMTF that
would deviate from its long-stated objective of providing funds for
channel maintenance and harbor management. I hasten to add that we are
fully supportive of efforts to require that all of the HMTF revenues be
spent on their intended purpose (ie, harbor maintenance and dredging),
but we are not supportive of expanding the currently authorized uses of
those funds in the manner that AAPA proposes.
We commend you for your focus on the needs of the ports and
waterways of this country. We look forward to working with you on this
and other initiatives of your Subcommittee.
Sincerely yours,
Captain John W. Murray
Port Director and CEO
CANAVERAL PORT AUTHORITY
Letter from Nicole Vasilaros, Senior Vice President of Government
Relations and Legal Affairs, National Marine Manufacturers Association,
Submitted for the Record by Hon. DeFazio
Wednesday, April 10, 2019.
Hon. Peter DeFazio
Chair
Committee on Transportation and Infrastructure, U.S. House of
Representatives
Hon. Sam Graves
Ranking Member
Committee on Transportation and Infrastructure, U.S. House of
Representatives
Hon. Grace Napolitano
Chair
Subcommittee on Water and Environment, U.S. House of Representatives
Hon. Bruce Westerman
Ranking Member
Subcommittee on Water and Environment, U.S. House of Representatives
Dear Chair DeFazio, Ranking Member Graves, Chair Napolitano, and
Ranking Member Westerman:
On behalf of the National Marine Manufacturers Association (NMMA) I
thank you for convening ``The Cost of Doing Nothing: Why Full
Utilization of the Harbor Maintenance Trust Fund and Investment in our
Nation's Waterways Matter'' hearing. NMMA agrees that expedited
investments in our nation's ports, harbors, and waterways are critical
to supporting the continued economic growth of the commercial and
recreational maritime industries.
By way of background, NMMA is the leading recreational marine trade
association in North America, representing nearly 1,300 boat, marine
engine, and accessory manufacturers. Recreational boating is a
significant contributor to the U.S. economy, generating $170.3 billion
in annual economic impact that supports more than 35,000 businesses and
691,000 jobs. Additionally, the outdoor recreation economy as a whole--
which is driven by boating and fishing and includes RVing, guided
tours, and motorcycling and ATVing--accounts for 2.2% of U.S. GDP, $734
billion in gross economic output, and 4.5 million jobs. In terms of
GDP, outdoor recreation is larger than mining, utilities, and chemical
products manufacturing.
Outdoor recreation is a substantial and rapidly increasing part of
the U.S. economy. For our industry--and the entire U.S. economy--to
continue to grow, it is essential that port maintenance and dredging
projects are sufficiently funded to create jobs in coastal and inland
waterway communities, improve access for water-based recreational
activities, and make conditions safer for the recreational boating and
angling communities.
The Harbor Maintenance Trust Fund (HMTF) was created to ensure that
our nation's harbors would always be properly dredged and fully
operational, yet much of the fund's annually collected revenue doesn't
make its way back to where it was originally intended and is
desperately needed. In fact, the U.S. Army Corps of Engineers (Corps)
estimates that full channels at the nation's 59 busiest ports are
available less than 35 percent of the time. The result of insufficient
funding for maintenance and dredging projects is deterioration of our
nation's ports, harbors, and waterways that support thousands of jobs
and commercial and recreational economic development nationwide.
There are sufficient funds in the HMTF to meet the maintenance
dredging needs of all federally-authorized ports. Full utilization of
the fund would provide the necessary funding to enable the Corps to
dredge all federal commercial harbors to their constructed widths and
depths. Improperly dredged channels exacerbates user conflict in our
busy ports and harbors, impacting safety and important access for
recreational boaters as well.
NMMA also encourages the committee to consider reforming the Corps'
dredging project prioritization process to accurately account for the
economic benefits of investing in projects that facilitate recreational
use. Under the current process, the Corps give priority to coastal
harbors and inland waterways with the most commercial traffic and also
provides priority for maintenance of channels at small ports that
support significant commercial fishing, subsistence, or public
transportation benefits.
This flawed system fails to properly account for lower tonnage
harbor needs and the value created by access for recreational
activities--effectively putting boaters and the recreational boating
industry's $170.3 billion annual economic activity at a disadvantage.
Low tonnage, recreational based ports are critical access points for
marinas and coastal communities where businesses depend on marine
recreation-based economic activity. Additionally, without sufficient
dredging in these areas, some recreational boaters are forced to use
high traffic commercial channels, which can lead to potential user
conflicts and safety concerns.
The prioritization process should be amended to ensure that a
percentage of existing available funds be allocated for three different
categories: High-Tonnage, Low-Tonnage and Commercial or Recreational
ports. In addition, increases in social, cultural, and environmental
benefits should be considered in the allocation of the three funding
categories where appropriate.
We also recommend that the committee direct the Corps to study
alternative and recyclable solutions for disposal of dredged materials,
thereby forgoing the continued traditional landfill disposal of dredged
material and deliver multiple economic and environmental benefits to
local economies. Due to the naturally occurring process of
sedimentation, overtime rivers, lakes, harbors, and bays can become
filled with debris, sand, mud, silt, and other materials that reduce
waterway depths making them difficult to navigate--posing environmental
and safety hazards. Proper dredging of these sediment materials plays a
critical role in maintaining clean and healthy waterways for local
ecosystems and providing access to the recreational boating and angling
communities. The Corps estimates that hundreds of millions of cubic
yards of dredged materials need to be excavated each year to keep the
nation's waterways open for commercial and recreational use. Exploring
options to increase the use of alternative and recyclable solutions
will facilitate new opportunities to more efficiently and sustainably
deliver economic, environmental, and societal benefits through the
disposal of dredged materials.
The Federal government has a responsibility to maintain the
nation's ports, harbors, and waterways. Applying the full balance of
the HMTF to harbor maintenance projects will ensure the fees collected
in the fund are not diverted from critical dredging projects but used
to deliver an economic boost to the U.S. commercial and recreational
boating industries that depend on well maintained waterways. NMMA
appreciates your consideration and stands ready to assist you and the
committee through this important endeavor.
Sincerely,
Nicole Vasilaros
Senior Vice President of
Government Relations and
Legal Affairs
National Marine
Manufacturers
Association
Appendix
----------
Questions from Hon. Grace F. Napolitano for Eugene D. Seroka, Executive
Director, Port of Los Angeles, San Pedro, California
Question 1. Mr. Seroka, what expanded uses of harbor maintenance
are you advocating for specific to the Port of Los Angeles? Can you
give specific examples of projects that the Port would be interested in
carrying out with expanded use authorities that are not currently
eligible today? Can you further explain why you need expanded uses?
Answer. At the April 10, 2019, House Transportation and
Infrastructure Subcommittee on Water Resources and Environment Hearing
you posed an important question on potential expanded uses that the
Port of Los Angeles would like to see made eligible as Harbor
Maintenance Trust Fund (HMTF) expenditures by donor ports. Currently,
the Port of Los Angeles has over $250 million in basic harbor
maintenance needs that while vital, are not eligible under current
authorities. Consequently, expending additional funds without expanding
the uses for these funds, neglects key in-water infrastructure needs of
major ports like Los Angeles.
Our seven container terminal wharfs need repairs to cracked and
spalled concrete, corrosion damage in piles, wharf decks, beams, and
soffits (Attachment A). These are essential for safe and efficient
loading and unloading of containers and to support the needs of modern
ships. None of these repairs are eligible under existing expenditure
authorities, despite being fundamental maintenance needs.
Four of our seven Marine Oil Terminal Engineering and Maintenance
Standards (MOTEMS) wharfs are currently programmed for upgrades to
comply with state seismic safety standards. This includes the
reinforcement of moorings, piles, berthing and loading platform
improvements. These crucial safety upgrades are not eligible for HMT
revenue expenditures under the current authorization.
Capital berth dredging and navigation improvements, such as
widening of our West Basin turning basin, should also be made eligible.
These improvements are needed to receive larger ships and maintain our
competitive status in global shipping. Our current configuration is not
optimal for receiving and servicing increasingly large ships.
Expanding the uses of HMTF funds for donor ports must be linked to
any increases in funding to address the basic maintenance needs of the
nation's largest ports in order to achieve the revenue stream's
objectives. Linking expenditures and programmatic reforms are essential
for achieving optimal and effective maintenance of the nation's ports
and harbors.
Thank you for your leadership on this important issue. Please feel
free to contact me for any other questions on HMTF reform or harbor
maintenance issues.
attachment a: illustrations of cracked and spalled concrete and
corrosion damage that are not eligible for hmt revenue expenditures
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Questions from Hon. Angie Craig for Kevin Ross, First Vice President,
National Corn Growers Association, Minden, Iowa
For years, American farmers have expressed concerns about the true
potential of South America's rivaling agricultural production and
export market--but they were comforted with knowledge that U.S.
transportation and distribution systems were far superior to keep our
goods competitive. But that may no longer be the case. As Mr. Ross
stated, and I quote
``Continued low commodity prices and consecutive years of declining
farm income, coupled with recent trade disruptions, and the aging
infrastructure systems of locks and dams are taking a toll on
farmers.''
Especially after the massive shockwave retaliatory tariffs have imposed
on our farmers, South American agriculture is even more affordable and
. . . accessible. There have been extensive infrastructure investments
all over the continent to facilitate getting their exports to port
quicker. Before long, our decaying locks and ports will overcome the
strategic geography of our inland waterways. We must keep up with
global investment.
Question 1. Mr. Ross, can you elaborate how U.S. farmers are
feeling the pressure of infrastructure investments being made abroad
meanwhile faltering here in the United States? Especially with stocks
of commodities held in grain bins and ports across the US, how can
increased investment make us more competitive in the context of
retaliatory tariffs?
Answer. For years, the American farmer's ability to quickly and
efficiently ship their product to the marketplace via our
transportation and infrastructure system has made U.S. agricultural
exports highly competitive on a global scale. Brazil, a leading global
competitor to the U.S. in corn exports, has a lower cost of corn
production due to a lower land and labor cost than the U.S. It is the
higher transportation costs in South America that make exports more
expensive for grain importers compared to U.S. corn. Brazil moves most
of its corn from truck to ports, and transportation costs account for
approximately 36% of those export costs.\1\ Transportation costs are
only 16% for U.S. corn exports and American farmers can capture more of
their crop's price than Brazilian competitors because we have options
to move our corn exports by inland waterways, rail and trucks.
---------------------------------------------------------------------------
\1\ https://www.ers.usda.gov/webdocs/publications/44087/59672_eib-
154_errata.pdf?v=0
Corn and Soybean Production Costs and Export Competitiveness in
Argentina, Brazil, and the United States, EIB-154 Economic Research
Service/USDA
---------------------------------------------------------------------------
As I stated in my written testimony, 54 percent of corn exports in
the United States are transported by barge and the inland waterway
system is a vital artery of transportation for getting product out to
the marketplace. However, 78 percent of locks and dams already exceed
their design lifespan and are in need of repairs. The lock and dam
system on the Mississippi, Ohio, and Illinois Rivers was built in the
1930s for a 50-year-life-span and a significantly lesser amount of
barge traffic. This system is well past its useful life and delays are
common and costly. Similarly, with many rural bridges and roads in need
of major repairs it's delaying the efficient transportation of our
products. The saying ``time is money'' holds true in farm country as
well. Problems within the U.S. transportation system are compounded at
the farm gate.
The new Brazilian government is promising to prioritize inland
infrastructure upgrades and new ports are already in development.
Modernized transportation infrastructure would help Brazil close the
gap with the U.S. corn in competitiveness. Brazil is working to erode
U.S. market share in countries with which we have ongoing trade
disputes. For example, when the future of the North American Free Trade
Agreement (NAFTA) was threatened, Brazilian industry courted Mexican
corn importers seeking to supply a greater share of corn to Mexico, the
United States' top corn export market. Other commodities that have been
subjected to large retaliatory tariffs have experienced stark examples
of lost market share to South American competitors. The prospect of
losing our long-held edge in infrastructure could not come at a worst
time. This is an avoidable consequence if we act now.
Investing in our locks and dams to ensure an efficient
transportation and infrastructure system is a major priority to the
National Corn Growers Association. We must maintain and invest in the
future of our infrastructure system, amplifying our advantage instead
of continuing to watch its slow and painful erosion.
Question from Hon. Angie Craig for Kirsten Wallace, Executive Director,
Upper Mississippi River Basin Association, St. Paul, Minnesota
My district features two Army Corps of Engineers locks along the
Mississippi River that are integral to the trade flowing up and down
stream. My district also features environmental treasures that share
their home with the commerce taking along the riverbed and shores. Both
need support, protection, and investment.
Ms. Wallace, as you said,
``The Navigation and Ecosystem Sustainability Program is a
comprehensive and integrated plan for meeting the current and future
shipping demands, stimulating economic growth, and improving the health
and resilience of the river ecosystem.''
Question 1. Unfortunately NESP has been suspended since June 2011
due to lack of funding by Congress. I intend to change this now that
I'm here. Ms. Wallace, can you tell me about the history of success of
the program, and how reinstatement of funding would make a difference
to my district and the surrounding high-priority areas for improvement?
Answer. Thank you for your question and your strong support for the
Upper Mississippi River and the Navigation and Ecosystem Sustainability
Program (NESP), in particular. NESP includes the construction of a
second 1,200-foot chamber at the system's seven most congested locks
(Locks 20-25 on the Upper Mississippi and La Grange and Peoria Locks on
the Illinois River), small-scale navigation efficiency improvements,
and a suite of ecosystem restoration projects to increase the quality
and abundance of fish and wildlife habitat. These planned investments
in the navigation and ecosystem will have long lasting economic
benefits to Minnesota and to Minnesota's Second District.
We understand that ongoing reluctance from the Administration to
fund NESP is largely a consequence of uncertainty surrounding 50-year
traffic forecasts. However, numerous economic indicators clearly
suggest that the river is of national importance and is a backbone
transportation mode for large and small economic sectors, including
agriculture, mineral extraction, and manufacturing. Land-based
transportation modes are operating at or over capacity creating costly
shipping delays and making the river increasingly attractive to
suppliers and manufacturers. Shippers, ports, and terminals are working
collaboratively with suppliers to reestablish container shipping on the
Mississippi River, including at the St. Paul Port. In addition,
shippers successfully raised their fiscal contributions to lock
infrastructure investment through the Inland Waterway Trust Fund. The
U.S. Department of Transportation is forecasting substantial growth in
commercial transportation demand on inland waterways and the Upper
Mississippi River System in particular. Businesses throughout the
Midwest suggest that the long term reliability of the aged, single-
point-of-failure infrastructure is dampening the utilization of the
Upper Mississippi River System, but addressing these impediments
(through NESP and operation and maintenance) will stimulate use of the
river and alleviate congestion on land-based modes.
With regard to transportation impacts, the second, 1,200-foot
navigation chamber at all five locks on the Mississippi River will
increase the river's reliability by adding redundancy with two lock
chambers and reduce costs for shippers and consumers by increasing
efficiency of lock transit times. According to the U.S. Department of
Commerce in 2013, Minnesota shipped via the Mississippi River over
fifty percent of its agricultural exports.
Minnesota also ships on the Mississippi River sand and gravel,
cement, coal, petroleum, steel, and salt that are essential for
economic growth and quality of life. In Minnesota's Second
Congressional District, the maritime industry generates over $200
million annually in economic impact and over $43 million in worker
income, according to the American Maritime Industry.
NESP will also improve conditions for fish and wildlife through the
construction of fish passage, modified dam operations to restore
natural river level variability, backwater and island habitat, side
channel reconnections, among other projects. Collectively, these
restoration activities will help ensure thousands of species of birds,
fish and other wildlife continue to thrive in their natural habitats in
and along the Mississippi River. UMRR projects protect wetlands and
lakes from fluctuating water levels and high sedimentation, recreate
islands to provide refuge and food for many species of fish and
wildlife, and restore natural diversity of water velocities and depths
to improve fish habitat. Projects help protect against threats from
invasive species, including Asian carp, that outcompete native fish and
wildlife for food sources and limited habitat. Still more projects
restore forest health and diversity.
Investing in the river's ecosystem strengthens the nation's
economy--habitat restoration enhances important ecological services and
uses, such as improved water quality benefiting municipalities,
manufacturers, and renewable energy sources. Habitat quickly becomes
available post-construction of these ecosystem restoration projects.
Wetland vegetation provides waterfowl habitat in just a few years. Fish
populations increase from new winter habitat in less than five years
with newly established populations in under 10 years. This results in
new opportunities for fishing and hunting and other recreation that
have substantial local and regional economic benefits. Additionally,
these projects draw in STEM-related education opportunities from
kindergarten to college.
NESP includes a suite of ecosystem restoration projects in
Minnesota's Second Congressional District, which are available in maps.
Within the District, state and federal habitat practitioners have
concluded that there has been significant degradation in the quality
and availability of habitat resulting from high water, sedimentation.
Restoration in the District will restore the mosaic of wetlands,
braided channels, and forests. As evidenced by constructed habitat
projects through the Upper Mississippi River Restoration program, these
areas create jobs directly and indirectly and draw in tourists and
recreationists.
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