House passes barge user fee

Bill includes industry-supported 9-cent tax increase on diesel fuel barge companies to fund waterways improvements. By JACQUI FATKA

Congress passed its Water Resources and Development Act earlier this year, but was unable to secure an increase in tax on diesel fuel barge companies which is supported by users as a way to increase funding for waterways projects.

Wednesday the House of Representatives passed, by a vote of 404-17, H.R. 647, the “Achieving a Better Life Experience (ABLE) Act.” The ABLE act will allow people with disabilities to establish tax exempt savings accounts to cover the costs of housing, transportation, and other expenses related to their treatment. Attached to the ABLE Act was a provision to increase the Inland Waterways Tax which helps underwrite the costs of new lock and dam construction and major rehabilitation – from 20 cents to 29 cents per gallon.

Customers of the inland waterway system, including agricultural organizations and the barge industry, have promoted an increase in the Inland Waterway Tax for a number of years. If the Senate passes and President Obama signs the legislation, it will provide needed funding to help improve the nation’s increasingly dilapidated lock and dam inventory, a statement from the Soybean Transportation Coalition said.

“It truly is a reflection of the importance of the inland waterway system and the dire condition of our nation’s locks and dams that barge companies, and the customers who will ultimately absorb much of these costs, have promoted a tax increase that will be imposed on them,” STC executive director Mike Steenhoek said.

National Grain and Feed Assn. president Randy Gordon commended the House for approving the increase in the barge diesel user fee, and eagerly anticipates the Senate doing likewise when it considers the bill next early next week. “We’re sitting on a ticking time bomb, given that 57% of the nation’s locks have exceeded their projected 50-year lifespan. This legislation provides the crucial funding piece that will enable long-delayed waterways infrastructure projects to actually be initiated. Work can’t get underway soon enough.”

American Soybean Assn. president and Iowa farmer Ray Gaesser expressed ASA’s appreciation for the fee, which is supported by those in the waterways industry.

“The nine-cent increase in the per-gallon barge fuel fee is something that is supported not only by the nation’s soybean farmers, but also by the commercial barge and towing operators who pay it. We all support this as a way to dedicate funds to new waterways infrastructure construction and major rehabilitation of the inland waterways system through the Inland Waterways Trust Fund,” Gaesser said.

Brooke Appleton, director of public policy at the National Corn Growers Assn., added corn farmers rely on a reliable, efficient transportation infrastructure. “The increased user fee represents a much-needed investment in our nation’s waterways, ensuring farmers can get their crops to market,” she said.

The Inland Waterways Tax annually generates between $75-$85 million. These funds are matched from the federal treasury. As a result, the Inland Waterways Trust Fund generates approximately $150–$170 million each year. As mentioned, these funds are utilized for new construction and major rehabilitation of locks and dams.

Operations and maintenance are funded 100% by the federal government. Each one cent increase in the Inland Waterways Tax equates to $3 – $4 million of additional revenue each year. Therefore, the 9 cent increase will annually generate between $27 – $36 million of additional revenue.

The Inland Waterways Tax is assessed on 12,000 miles of waters that include most of the nation’s largest rivers: the Mississippi, Ohio, Illinois, the lower Missouri, and the Gulf and Atlantic Intracoastal waterways.

One barge can accommodate 52,500 – 57,000 bushels of soybeans. One 15 barge tow can accommodate 787,500 – 855,000 bushels of soybeans.

The Mississippi Gulf is the largest port region for soybean and corn exports. 58% of soybean and 67% of corn exports depart from the terminals located along the lower Mississippi River between Baton Rouge, Louisiana, and the Gulf of Mexico. Approximately 90% of the soybeans and corn loaded onto those ocean vessels arrive via barge along the inland waterway system.

Steenhoek said there’s a good chance the Senate will pass and the President will sign the legislation. “The overarching bill has very strong bi-partisan support,” he explained.

Currently, the Senate is expected to act on the measure early next week, perhaps as early as Dec. 9. A dozen agriculture producer, commodity and agribusiness organizations including the Farm Bureau, NCGA, NGFA and ASA sent a letter Dec. 4 urging the Senate to approve legislation that would increase the user fee.

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