Governor’s Advisory Commission on Coastal Protection, Restoration and Conservation August 20, 2009

Sean M. Duffy, Sr. President and CEO 3939 N. Causeway Boulevard, Suite 102 Metairie, LA 70002

Harbor Maintenance Trust Fund What is the Harbor Maintenance Trust Fund?  The Harbor Maintenance Trust Fund was authorized in the Water Resources Development Act of 1986, P.L , as a tax on channel users to pay for operations and maintenance costs on commercial waterways.  It is an ad valorem tax equal to.125% on the declared value of imported commercial and domestic cargo and on passenger vessel tickets.  This tax is collected by Customs on behalf of the Corps of Engineers.  Last year this tax generated $1.6 billion, yet only $766 million was used for its intended purpose. The remaining $834 million was deposited into the General Treasury to offset the deficit.

Harbor Maintenance Trust Fund  The tax collections are accounted for in an HMTF “account,” and a certain amount of funds are transferred to the Corps’ budget every year (typically around $700 to $800 million) no matter how much tax is collected. The HMTF currently has a “balance” of over $5 billion, and collections range from $1.3 to $1.7 billion per year. The GAO estimates that without any change, the surplus will reach $8 billion by  Monies collected under the Harbor Maintenance Tax should be used for its intended purpose--maintenance and dredging of our nation’s ports and harbors.  The Corps’ budget has remained stagnant, yet dredging costs continue to increase.

Comparative Dredging Costs (Increases From FY 2005 to FY 2008) FY 2005:FY 2008: Contract #5-04 Opened: 12/7/04Contract #1-08 Opened: 2/12/08 GE $1,768,415GE $3,558,860 Manson $1,874,425Manson $3,075,800 Weeks $2,523,415GLD&D $3,936,300 GLD&D $2,965,928Weeks $4,042,410 Contract #6-04 Opened: 12/13/04Contract #3-08 Opened: 3/12/08 GE $2,152,796GE $3,672,105 Manson $2,187,125Weeks $4,157,350 Weeks $2,662,132GLD&D $4,189,180 GLD&D $2,975,000 Contract #3-05 Opened: 1/6/05Contract #5-08 Opened: 3/25/08 GE $2,218,332GE $3,927,408 Bean $2,550,250GLD&D $4,789,220 Weeks $2,853,515 GLD&D $3,025,182

Realize America’s Maritime Promise Harbor Maintenance Trust Fund Fairness Coalition

The Reality

RAMP Members Added with the Assistance of GSMA  *AMERICA’S ENERGY COAST  Associated Branch Pilots of the Port of New Orleans (Bar Pilots)  Associated Federal Pilots and Docking Masters of Louisiana  Association of Ship Brokers and Agents (ASBA)  Calcasieu River Waterway Harbor Safety Committee  Crescent River Port Pilots Association  Gulf Intracoastal Canal Association  International Freight Forwarders and Customs Brokers Association of New Orleans (IFFCBANO)  Lake Charles Harbor and Terminal District  Lake Charles Pilots  *LAKE PONTCHARTRAIN BASIN FOUNDATION  Lower Mississippi River Waterways Safety Advisory Committee (LMRWSAC)  Maritime Exchange for the Delaware River and Bay  Maritime Navigation Safety Association  Mobile Bar Pilots Association  National Association of Maritime Organizations  National Customs Brokers and Forwarders Association of America  New Orleans Board of Trade  New Orleans-Baton Rouge Steamship Pilots Association (NOBRA)  NSA Agencies, Inc.  Port of Morgan City  Port of New Orleans  Port of South Louisiana  Propeller Club of New Orleans  State of Louisiana  US Steel Corp  West Gulf Maritime Association  World Trade Center of New Orleans

Louisiana Specific Issues “The HMTF is primarily dedicated to maintenance dredging of navigation channels, but other projects that can be funded by this Trust Fund include: maintenance of jetties and breakwaters; the Federal share of constructing Dredged Material Placement Facilities (DMPF), as required by Federal harbor and channel O&M; operation and maintenance of DMPFs and projects for the mitigation of impacts on Federal navigation projects on nearby shores; dredging of contaminated sediments in, or those affecting, Federal navigation harbors and channels; and projects for the beneficial use of dredged material.” As provided by Jim Walker, Chief of Navigation, U.S. Army Corps of Engineers

Beneficial Use of Dredge Material  For years the Corps and the maritime industry have had to argue against restoration via beneficial use of dredged material because dedicated funding was not available for the substantial additional costs. Through pursuing the full use of the HMTF, significant additional funds can be dedicated. The beneficial use of dredge material offers a chance to recycle the earth flowing down the “Economic Superhighway” that is the Mississippi River.  The full use of the HMTF will add about $800 million nationally to the Corps’ annual budget. There should be sufficient funding to assist with beneficial use and other restoration type projects.

Other Louisiana Restoration Efforts  Over the last few years, because there was not significant funding to dredge and maintain fully authorized dimensions, the Crossings on the Lower Mississippi River have been maintained at half width for the summer months. This year the NOBRA Pilots were forced to enact transit restrictions because of this reduced width.  South Pass remains a federally authorized channel with the established dimensions of 30’ by 450’. Based on the reduced need of the Channel, the Corps revised the depth to be maintained to 17’. However, the controlling depth is presently 6’ at Mile 13 because this Channel has not been maintained due to the lack of allocations from the HMTF for the Corps to dredge this Channel. If this Channel was maintained, the beneficial use of material could represent significant marsh creation. The pattern of under funding our nation’s waterways continues to force the Corps to decide which projects are more important and represents the greatest return on the investment.  Over the past few years, hopper dredge pumpout in Southwest Pass has been discussed. Because of a subcommittee I established, and because of the recent work with various state and federal agencies, a workable plan exists. However, the hold up has been securing additional funds for extra costs associated with slower pumpout times and the need for additional equipment and labor. If full allocation becomes the status quo, this, too, would qualify for use of the HMTF.

What RAMP Has Done  Gathered coalition members – more than 100 organizations – and the list continues to grow  Successfully garnered the support of the American Association of Port Authorities (AAPA)  Prepared information papers and submitted “Dear Colleague” letters to the U.S. Senate and House of Representatives  Met with House and Senate members and staff on Capitol Hill  Testified before T&I Subcommittee

RAMP’S Goal To establish a legislative firewall around the Harbor Maintenance Trust Fund and insure it is used for its intended purpose—the operation and maintenance of Federal ports and harbors.