NOR'WESTER NEWSLETTER ISSUE #339

masthead

July 30, 2009

In This Issue:
Senate approves FY2010 energy & water appropriations bill
Administration's lockage fee proposal would increase barge taxes eight-fold
Senate approves FY2010 energy & water appropriations bill

Yesterday, the Senate approved their FY2010 energy & water spending bill by a vote of 85-9.  The bill included $5.4 billion for the Corps of Engineers, $27.4 billion for the Department of Energy and nearly $1.2 billion for the Bureau of Reclamation.

Congress must now reconcile several funding differences between the Senate and House bills.  While in negotiations, they will need to specifically address differences on funding for new Corps projects.  As reported in PNWA Nor'wester #335, #336 and #338, the House and Senate bills includes project increases for a number of PNWA member projects.  PNWA will now advocate for the highest possible funding numbers for these projects as the two chambers work to resolve the differences in their bills.  It is expected that discussions between the two chambers will run smoothly, and a conferenced bill be released relatively quickly and sent to President Obama to be signed into law.  PNWA members are hopeful the Corps of Engineers, Department of Energy, and Bureau of Reclamation will be provided FY2010 funding prior to the start of the new fiscal year on October 1st.

Notable in the Senate's floor consideration of the bill was a proposed amendment from Sen. John McCain that would have stripped all earmarks from the bill.  This amendment was defeated 27-72, and was accompanied by several responses from Senators who explained the need for Congress to have the authority to earmark and provide specific project funding.  PNWA strongly supports the ability of Congress to earmark.

PNWA strongly supports increased funding for the Corps, and encourages conferees to accept the House level of $5.5 billion.  For more information on PNWA's funding priorities for FY2010, visit our website www.pnwa.net.

PNWA staff contact: Kristin Meira

Administration's lockage fee proposal would increase barge taxes eight-fold
 
The Obama Administration recently released details of its proposed lockage fee to the House of Representatives.  The proposal by the Administration is an effort to adequately fund the Inland Waterways Trust Fund (IWTF).  The IWTF is designed to pay for 50% of construction and major rehab costs on the nation's inland waterways, and is financed through a 20 cents/gallon diesel tax on those waterways.  Currently, the IWTF contains less money than is needed to fund infrastructure needs on the inland systems of the US, and collections are expected to be below need for the foreseeable future.
 
This Administration's proposed lockage fees are quite similar to what was put forth by the Bush Administration.  The fee would be imposed only on commercial barges, whether full or empty, using locks operated by the U.S. Army Corps of Engineers.  Each barge would be taxed for every lock it passes.   The proposed lockage fee would be phased in beginning January 1, 2010, at a rate of $45 per barge for locks of the length found on the Columbia Snake River System (CSRS).  For a four-barge tow that transits all eight locks on the CSRS, a payment of $2,880 would be required, plus the existing diesel tax of 20 cents/gallon.
 
The proposal would then double the fee on January 1, 2012, to $90 per barge per lock.  This would bring the cost of transiting our system by a 4-barge tow, one-way, to $5,760.  In addition, a diesel tax of 10 cents per gallon would still be in effect, and would not be phased out until 2014.
 
The average amount of diesel tax that is currently paid for a one-way transit from Portland to Lewiston is $684.
 
Furthermore, the Secretary of the Army would be permitted to make periodic adjustments to the fee beginning in 2014, based on the total net assets in the IWTF.  The proposal would also allow the Secretary to institute congestion fees at crowded locks, and would expand lock fees to currently non-taxed waterways. 
 
PNWA strongly opposes the Administration's proposed fee, and does not support a shift from the diesel tax to lockage fees.  The Bush Administration's lockage fee proposal met with swift rejection on Capitol Hill, and it is expected that the same fate will meet this very similar proposal from the Obama Administration.
 
Following are just a few of the reasons we oppose lockage fees:
 
Implementing the new lockage fees will hurt the nation's economy.  Barges move more cargo per mile with less horsepower.  The Administration's proposed fee would increase the cost of barging, making American products and farm goods less competitive in international markets.  This would result in fewer exports and an increase in the trade deficit.
 
Lockage fees could hurt our environment.  Increasing the cost of barging may result in a shift of cargo from barge to other, less fuel efficient and more polluting modes of transportation.    Each year, barging on the Columbia and Snake Rivers keeps 700,000 trucks off the highways that run through the Columbia River Gorge.
 
Lockage fees are counter to the Administration's climate change policies.  The Administration should be encouraging barging, rather than increasing its cost. The shift to other modes will increase fossil fuel consumption and air emissions at a time when our nation is seeking to reduce our dependence on foreign oil, decrease air pollution and address climate change.
 
Lockage fees will hurt America's farmers.  An average 4-barge tow on our system traveling between Portland, OR/Vancouver, WA and Lewiston, ID currently pays about $684 in diesel taxes, one-way.  Under the Administration's lockage fee proposal, a 4-barge tow transiting the same route would incur a fee of $5,760, each way, in 2012, plus 10 cents/gallon in diesel tax.  This would increase the cost of wheat exported out of the Columbia River System and reduce international sales.
 
Inland navigation must be viewed as a complete system.  The IWTF collects money for the rehabilitation and construction of our inland waterway systems, and is not solely focused on locks.  By switching from a diesel tax to a lockage fee, a larger burden is placed on shippers and companies who use locks.  The existing diesel tax is the most equitable way to continue investing in that system.
 
New fees should not be assessed until there is consistency in navigation trust funds.  Over $4.7B in Harbor Maintenance Tax revenue has been collected but not spent, while operation and maintenance needs at coastal harbors and deep draft ports have been underfunded.  A few years ago the Bush Administration tried to expand the use of the IWTF beyond that authorized by Congress.  While underfunding needed construction and rehab projects, they sought to use a perceived surplus in the IWTF to pay for operations & maintenance.  Affected industries and stakeholders resist new or increased fees because they have lost faith that the government will honor its commitment to spend these fees for their intended purposes.
 
The PNWA membership, however, does recognize that the IWTF is dwindling.  Thus, we support a national dialogue to determine equitable stakeholder funding levels to maintain the viability of the fund.  Our members look forward to working with the Administration, Congress and industry to identify reasonable and appropriate funding sources to rebuild the Fund. 
 
PNWA urges Congress to reject this new fee, and to continue to actively invest in our nation's waterway infrastructure.
 
PNWA staff contact: 
Kristin Meira