1 Water Resources Development Act (WRDA) Overview Why the Federal Government Must Invest in Seaport Related Infrastructure for AASHTO/ITTS Webinar Jim Walker Director of Navigation Policy and Legislation American Association of Port Authorities April 15, 2013 American Association of Port Authorities

2 American Association of Port Authorities Representing Seaports of the Western Hemisphere for 100 years! AAPA was established in 1912 Since that time AAPA has been providing a space for collaboration and exchange of best practices Fostering collaboration among members and allied groups. We do this through: Education and Training, PPM Networking and one on one interaction Legislative and Policy support Outreach

3 Briefing Goal Inform Stakeholders WRDA Background Role in National Freight Movement Current Situation AAPA Principles Status of Legislation Seek Your Support

4 Water Resources Development Act, WRDA Authorizes new projects for construction Policy changes Broad application Navigation Flood Protection – Inland Levees and Coastal Shore Protection Regulatory: Corps Dredge and Fill permits Earmark Free

5 Federal Role in Maritime Infrastructure LEGISLATIVE Authorization Senate: Energy and Public Works Transportation and Infrastructure House: Transportation and Infrastructure Water Resources and Environment EXECUTIVE Dept of Defense Corps of Engineers Homeland Security Coast Guard Dept of Commerce NOAA Others … CMTS Federal role based in Constitution – Article 1, Section 8 which states “the regulation of commerce with foreign nations and among the several states…”

6 US Navigation Assets Corps of Engineers INLAND NAVIGATION 27 Inland River Systems 207 lock 171 lock sites 12,000 miles of inland river channels COASTAL NAVIGATION 1067 Navigation Projects 19 lock chambers 13,000 miles of channels 929 navigation structures 844 bridges

7 Recreation areas 376 M Visitors/yr Generate $15 B in economic activity, 500,000 jobs 12,000 miles of Commercial Inland Waterways 400 miles of Shore protection Destination for 75% of U.S. Vacations 8,500 Miles of Levees 299 Deep Draft Harbors 12 Emergency Responses Stewardship of 11.7 Million Acres Public Lands Environmental Restoration 627 Shallow Draft Harbors 100,000 permits Most in 14 days 3% of Nation’s Electricity: $500 M + in power sales WRDA addresses more than Navigation

8 U.S. Ports: Vital to Trade and Our National Economy

9 Goal: Efficient 21st Century Freight Movement Barge Rail Truck

10 Ports and Exports Awareness Exports essential to US economy - 95% of consumers are outside US Awareness increasing Executive Order 13534, National Exports Initiative, March 2010 Congress requested Post-Panamax Report in 2012 ASCE ‘Failure to Act’ report 2012 White House Ports Council created 2012 State of the Union mentioned the need for modern ports, 2013 ASCE Infrastructure Report Card includes Ports, 2013 AAPA has encouraged members to work with their states on freight plans. Governors and Mayors are more engaged.

11 Current Status – Need for WRDA Channels being undermaintained President’s budget only funding 2 channel improvements Additional projects awaiting WRDA authorization or cost increase Feasibility studies, preparation for report to Congress for WRDA authorization, taking over 10 years to complete WRDA ‘86 needs to adjust to present shipping requirements

12 Photo is Post-Panamax 15,000 TEU Latest is Triple E Class, 18,000 TEU – exceeds new Panama Canal Locks. Both these classes have 50+ foot drafts.

13 US Harbors 45’ or Greater WEST COAST Seattle/Tacoma (>50’) Oakland (50’) LA/LB (>50’) San Diego (47’) GULF COAST Mobile New Orleans Houston/Galveston/Texas City Corpus Christi Freeport EAST COAST NY/NJ (50’ underway) Baltimore (50’) Hampton Roads (50’) Charleston Morehead City

14 AAPA Principles for WRDA/HMT 1.AAPA advocates for full use of HMT revenues 2.Funding from HMT revenues should be used for historical intended purposes 3.AAPA is supportive of providing more equity for HMT donors 4.US tax policy should not disadvantage US ports and maritime cargo 5.US must have a process to efficiently study and construct deep draft navigation projects 6.The cost-share formula for maintenance and deepening should be reflective of the current cargo fleet.

15 1. Harbor Maintenance Tax (HMT) Established in WRDA ’86 Funds Corps channel maintenance, St Lawrence Seaway and NOAA data collection Ad valorem tax, 0.125% of cargo HMT payments deposited into General Treasury – reimburses eligible expenditures $1.6 billion collected in FY12, $850 appropriated Corps estimates $1.9B/year for 5 years needed to restore channels to constructed depth and width Bottom line: Full use of HMT revenues needed

16 2. Historical Purposes All Federal channels are brought up to and maintained at their constructed depths and widths; Needs are met for disposal of maintenance dredged material and construction and maintenance of confined disposal facilities; Jetties and breakwaters are properly maintained; and Related studies and surveys are funded.

17 3. Donor Equity HMT tax collections vary across the hundreds of U. S. ports, based on the size of the port, whether they have predominantly import or export cargos, etc. Some ports are naturally deep and require minimal maintenance. The term ‘donor equity’ has evolved to address HMT spending across the range of U. S. ports, specifically where HMT collections exceed HMT expenditures. AAPA has not established a position on a specific donor equity plan.

18 4. Not Disadvantage US Ports No increase to Harbor Maintenance Tax rate Currently 0.125% of cargo value, collected on imports Concern for competitive rates at Canadian and Mexican ports

19 5. Improve Study and Construction Efficiency Reconnaissance -> Feasibility -> Rpt to Congress ->WRDA -> Construct Corps averaging 10 years to complete Feasibility Studies Schedule challenges Constrained funding Environmental issues Calculating economic benefits Corps proposes 3x3x3: 3 years and $3M to complete Feasibility Independent external peer review

20 6. Cost Share Adjustments DEEPENING Non-Federal sponsors pay a share of project cost based on deepening increment: 20’ or less: 10% up front 10% over time 20-45’ 25% up front 10% over time Greater than 45’ 50% up front 10% over time MAINTENANCE HMT eligible 100% Federal for projects up to and including 45’ deep Non-Federal sponsors pay a 50% cost share for projects greater than 45’ deep COST SHARE INCREMENTS ESTABLISHED IN WRDA ’86 Propose to change 45’ cost share to 55’

21 Senate WRDA Highlights Harbor Maintenance Tax Establishes a ‘Point of Order’ to appropriate prior ears revenues or get a 3/5’s majority to not do so. Streamline Corps Study and Construction Processes Establish deadlines for study completion and penalties for missing – Corps and environmental resource agencies Authorize new projects – 35 total, 5 Navigation, 3 more navigation reports possible this summer Cost share for maintenance changed from 45’ to 50’ Regulatory – makes permanent the authority to accept funds for dedicated permit evaluations

22 WRDA Status (15 Apr 2013) SENATE (S. 601) EPW Committee Passed the bill unanimously on 20 Mar 2013 Next: Senate Floor for debate and vote Scheduled for immediately after Gun Control HOUSE Roundtable discussions in March and April WR&E Subcommittee Hearing on 16 Apr

23 Why should farmers care about WRDA? Because our international competitiveness depends on it. Davenport to Shanghai Sioux Falls to Shanghai N. Mato Grosso to Shanghai Land: Truck$8.94 $ Land: Barge/Rail$31.85 (Barge)$50.31 (Rail)----- Ocean$55.46$29.25$31.67 Total Transport$96.25$88.50$ Farm Value$399.16$385.56$ Landed Cost$495.41$474.06$ Transport as % of Landed Cost 19.4%18.7%26.9% Costs of transporting soybeans: U.S. vs. Brazil (per metric ton; 4 th quarter, 2010)

24 Spread the word… More trading opportunities, larger vessels, population growth, trade growth – there is a clear and critical role for our ports Existing transportation programs do not adequately address goods movement! We must educate… A better public understanding of seaports and intermodal transportation = more support = more infrastructure investment, trade and local collaboration

25 Summary Goal is efficient freight movement for the 21 st century – all modes Keep US exports globally competitive Cost savings to US consumers Operating in an environmentally responsible manner WRDA is essential to this achieving this goal AAPA appreciates your support Learn more at Contact Jim Walker,