Debate begins on Senate WRDA bill; Manager's Amendment includes updated language regarding HMTF & IWTF

Yesterday, S. 601, the Senate version of the Water Resources Development Act (WRDA), headed to the Senate floor for debate.  Negotiations on the policy only bill will now begin, with amendments being offered by Senators in an effort to modify the bill as it moves forward.  A Manager's Amendment  was also released, with noticeable updates to language regarding the Harbor Maintenance Trust Fund (HMTF) and the Inland Waterways Trust Fund (IWTF). While we continue to analyze the bill, we wanted to provide our initial read on these key policy issues:

Title VII - Inland Waterways, includes:

• A modification of the threshold for cost-sharing major rehabilitation projects on the inland systems of the U.S. from $8M to $20M. 
• Project delivery improvements for inland construction and major rehabilitation projects. These include modifications to the way projects are managed and developed, establishment of at least one USACE center of expertise, and guidelines for the Inland Waterways Users Board (IWUB).
• Development of a methodology for classifying major rehab projects.  The ASA must submit to Congress a 20-year inland capital investment plan which must be spread over all geographic areas of the inland waterways system. In doing so, the Secretary must take into consideration the IWUB's April 2010 plan which lays out the User Board's priority construction and major rehab projects across the nation.  
• A Sense of Congress that current IWTF revenues are insufficient and must be addressed.  The bill also notes that "users of the inland waterways system are supportive of an increase in the existing revenue sources" to expedite critical projects.   There continues to be no proposal in the bill to increase the diesel tax or switch to a different fee system. There is, however, language directing the Comptroller General to evaluate the efficiency of current fuel tax collection methods, and provide a report on alternative collection options no later than two years after the bill is passed.
• Modifications to the cost-share for the Olmsted Lock and Dam project.  The bill would also requires GAO to undertake a study of the Olmsted Lock and Dam project outlining why the project has greatly exceeded costs and the timeline originally put forth by the Corps.

Title VIII in the bill, The Harbor Maintenance Trust Fund Act of 2013, includes:  

• A watered down guarantee.  The Point of Order provisions guaranteeing full spending of HMTF receipts were removed in the latest version of the bill.  The Manager's Amendment includes the caveat that full spending of HMTF would not have to be enforced if doing so would result in a loss of funding from other parts of the Corps budget.
• Phased in full spending of HMTF collections.  Beginning with $1B in FY2014 HMTF expenditures, the bill authorizes adding $100M each Fiscal Year thereafter until full spending of receipts is achieved in FY2020.  In FY2020 and beyond, the bill authorizes that all HMT collected must be provided to the Corps. 
• Using FY2012 HMTF spending levels ($868M) as a baseline for these additional funds.  Any amount over FY2012 levels would be subject to certain prioritization rules, including expanded uses and rebates for donor states and ports. Great Lakes navigation projects would receive 20% of these additional funds and "high use" deep draft ports would receive 80%.  Once "high use" deep draft ports are fully maintained, the Corps could use these additional funds at ports that light load and ports that have not been maintained in the last five years but have had significant infrastructure investments made by state and local entities. 
• Exceptions to the prioritization rule, including for hazardous navigation conditions and the impact of natural disasters, including storms and drought. 
• A new provision to address cargo diversion.  The bill would allow a rebate for donor ports and ports that contribute to energy production.  The amount authorized for this purpose would be $50M plus 10% of the additional HMTF allocations over FY2012 levels.  This would be subject to appropriations, and only provided to those ports where more than 2M containers are moved each year and at least $15M of HMT is collected annually, and who have received less than 25% back in the previous five years. Ports who receive the rebate would provide the funds directly back to shippers or use the monies for berth dredging, dredging of contaminated sediment or environmental remediation related to maritime industries.   
• Language regarding full federal funding for maintenance of harbors up to 50 feet and federal funding for berth dredging of projects in states that contribute more than 2.5 percent of HMTF receipts yet receive less than 50% of what their state contributes. Priority would still be given to projects that have historically received the lowest amounts of funding. The updated bill includes a maximum amount for this expanded use - either 40% of the excess funds or 20% of the total O&M budget - whichever is less. 

It should be noted that language regarding one of PNWA's other key priority issues, Section 214, has not been altered and that permanence for the authority remains in the bill.  Section 214 is the funding authority that allows the Corps to accept funds from non-Federal public entities, like ports, to hire additional regulatory staff to expedite the permitting process. It was originally authorized in WRDA 2000 and has been subject to a number of short term extensions, the last of which is scheduled to sunset on December 31, 2016. We will be advocating for Section 214 permanence as the Senate bill moves forward, and for inclusion of similar language in the House bill as it is developed.

PNWA continues to review the Manager's Amendment and will be tracking negotiations within the Senate as debate continues this week.  We will be providing additional information as it is available, however please don't hesitate to contact PNWA staff if you have any questions.