Texas Ports Association
Texas Ports Gateways to the World
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Port of Houston -
Port of Corpus Christi -
Port of Victoria -
Port of Beaumont -
Port of Brownsville -
Port of Freeport -
Port of Orange -
Port of Palacios -
Calhoun Port Authority -
Port Arthur -
Port Isabel -
Port of Port Mansfield -
Port of Galveston -
Port of Texas City
Legislation
2011 Legislative Agenda
As the 2011 legislative session nears, we will list the Texas Ports Association legislative agenda here, as well as information on federal and state issues relevant to us.
Federal Legislation
Harbor Maintenance Trust Fund
Background
In 1986, Congress created the Harbor Maintenance Trust Fund (HMTF) to pay a portion of channel maintenance dredging. Originally, general funds from the U.S. Treasury were used to cover the government’s share of the expense of maintaining and deepening the ports. The revenue for the HMTF was generated by assessing a .04 percent fee (“Harbor Maintenance Tax” HMT) on the value of the cargo moving through the nation’s deep draft ports. At the same time, local cost-sharing was instated for funding of new construction projects (widening and deepening) projects.
The HMT was originally intended to cover only 40 percent of port maintenance costs. However, in 1990 the HMT more than tripled by Congress to its current rate, equal to 0.125 percent of the value of the commercial cargo. This increase was to recover 100 percent of maintenance dredging expenses. The HMT was created as an ad valorem tax in an attempt to minimize its impacts on U.S. exports. In March 1998, the U.S. Supreme Court ruled that the HMT was unconstitutional as applied to exports. This court decision did not result in a major drop in HMT revenues as expected and by 2001 the HMT revenues were once again exceeding their pre-1998 levels.
The Challenges
Allocations from the trust fund are through the Army Corps of Engineers (Corp’s ) budget, but these monies are not automatically spent on dredging projects. Spending from this account must be considered through the regular federal budget cycle which includes funding levels proposed though the President’s Budget and ultimately Congressional appropriations.
As a result of policy decisions and competing federal priorities, the amount taken in by the federal government through the HMT far outweighs what is actually spent on projects it was designed to fund. For example, in Fiscal Year 2007, the HMT collected $1.4 billion, but the federal government only spent $700 million on dredging projects. As a result of this problem since the early 1990’s, it is estimated that the HMTF has built up authorized, unappropriated balances over $4.7 billion.
Solution
The Texas Ports Association encourages Congress to enact legislation to ensure that all future monies collected from the operations of the country’s ports through the HMT is used solely for its intended purpose.
State Legislation
The 82nd Regular Session of the Texas Legislature convenes Jan. 11, 2011 at noon. For other important dates and information, see the Texas Legislature website.