BILL ANALYSIS �
SJR 15
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Date of Hearing: June 11, 2012
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SJR 15 (DeSaulnier) - As Amended: June 6, 2012
SENATE VOTE : 36-0
SUBJECT : Federal harbor maintenance tax revenues
SUMMARY : Urges the President and the Congress of the United
States to significantly increase federal funding from the Harbor
Maintenance Trust Fund surplus for navigational improvements and
continued operational and maintenance dredging. Specifically,
this bill :
1)Makes various declarations relative to goods movement through
the ports and port dredging.
2)Urges the President and the Congress to significantly increase
federal funding from the Harbor Maintenance Trust Fund (HMTF)
surplus for navigational improvements and continued
operational and maintenance dredging in those federal channels
that serve California's ports such that these expenditures
equal the amounts contributed.
3)Urges the President and the Congress to enact House Resolution
104 or Senate Bill 412 to end further contribution to the
surplus in the Harbor Maintenance Trust Fund and to recognize
the role played by California's ports.
EXISTING LAW : The Federal Water Resources Development Act of
1986, establishes the Harbor Maintenance Trust Fund with
revenues provided through the imposition of a 0.125% ad valorem
tax on cargo imported or domestically moved through federally-
maintained channels and harbors. Revenues are allocated to the
U.S. Army Corps of Engineers for port operations and channel and
harbor maintenance dredging.
FISCAL EFFECT : Unknown
COMMENTS : In 1986, Congress passed the Water Resources
Development Act, which instituted a tax on shipments for users
of federally-maintained channels and harbors. Approximately
$1.4 billion is annually deposited into the Harbor Maintenance
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Trust Fund that provides a source of revenue for funding all of
the maintenance and operations dredging necessary to keep these
navigational channels open. For many years, the federal
government has not spent all the funds in the account on harbor
maintenance and has allowed a large surplus to develop totaling
roughly $5.6 billion. Instead of spending this funding on
maintaining the nation's federal channels, this surplus balance
has been used, according to the sponsors of the bill, "to mask
federal deficits or fund programs unrelated to trade."
The author contends that "while California's public ports'
cargoes generate over 30% of the Harbor Maintenance Trust Fund
revenues, expenditures for projects in the state of California
from federal fiscal year 2005 to 2008 averaged only about 4% of
the total revenue collected. The nation's largest container
ports, Los Angeles and Long Beach, are still likely to receive
less than a penny in benefits per dollar generated, despite the
sizable contributions to that fund by port activities in the
state. With this underfunding, additional operations and
maintenance dredging needs continue to persist in harbors
throughout California and the ports' users have been left with
inadequately maintained channels while a surplus of more than $6
billion languishes in the federal trust fund."
According to the United States Corps of Engineers, almost 30% of
commercial vessel calls at US ports are constrained due to
inadequate channel depths. As a result, products are
transferred between vessels in order to "light load" cargo
ships, thereby decreasing their weight and depth, but at the
same time increasing costs and safety concerns. They indicate
that inadequate maintenance of channels due to the federal
government underfunding the program has a negative impact on
trade and the nation's economy.
Writing in support of this bill, numerous organizations note the
need to expend the monies in the federal fund for necessary
operational and maintenance dredging, as well as navigational
improvements. The California State Lands Commission, among the
supporters, indicates that California ports are faced with an
ongoing need to demonstrate ingenuity, increase cargo
throughput, and accommodate growth, particularly with the
expansion of the Panama Canal project, which will double its
capacity by 2014. It supports the use of funds to keep the
ports dredged to their authorized depths and widths, as intended
by the law.
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This bill is intended to send a message to Congress and the
President to increase spending of Harbor Maintenance Trust Fund
revenues when considering maintenance dredging requests for the
nation's harbors and channels. California is disproportionately
affected when funding from the trust fund is not adequately
appropriated to the states. The resolution also requests them
to pass two bills pending in Congress to authorize increased
federal funding for channel and port dredging purposes.
Related federal legislation : House Resolution 104 (Boustany)
and Senate Bill 412 (Levin), both pending in Congress, would
ensure that the annual revenue collected from the harbor
maintenance tax and deposited into the Harbor Maintenance Trust
Fund, as well as any interest accrued, be fully used for
maintaining the nation's ports and navigational channels.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Port Authorities (co-sponsor)
California Marine Affairs and Navigation Conference (co-sponsor)
International Longshore and Warehouse Union (co-sponsor)
Pacific Merchant Shipping Association (co-sponsor)
Bay Planning Coalition
California State Lands Commission
City of Oceanside - Department of Harbor and Beaches
Contra Costa County Board of Supervisors
Humboldt Bay Harbor, Recreation and Conservation District
Nisei Farmers League
San Francisco Bar Pilots Association
The California Trade Coalition
Opposition
None on file
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093
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