The U.S. House of Representatives' passed by a unanimous vote its waterway funding bill, H.R. 7575, the Water Resources Development Act (WRDA) of 2020, which was welcomed by those in the agriculture sector in efforts to enhance U.S. agriculture’s competitiveness and update delipidated locks and dams.
Most locks and dams were built in the 1920s and 1930s and have far exceeded their 50-year design life span. The bill authorizes the construction of 34 new projects as well as the study and construction of locally driven projects that were developed in cooperation and consultation with the Army Corps of Engineers.
WRDA legislation provides authority for the U.S. Army Corps of Engineers to implement water resource development projects. Since 2014, Congress has successfully enacted three consecutive WRDA bills on a biennial basis. The House Transportation & Infrastructure Committee unanimously approved WRDA 2020 on July 15, and the Senate Environment & Public Works Committee passed its version of the legislation — dubbed the America’s Water Infrastructure Act of 2020 (S. 3591) — in May.
The House bill adjusts the cost share for construction and major rehabilitation of inland waterway projects from a 50/50 split to 65% from the general fund of the U.S. Department of Treasury and 35% from the Inland Waterways Trust Fund (IWTF). The bill also authorizes the deposit of additional funds into the Harbor Maintenance Trust Fund (HMTF) for dredging and port modernization projects.
“Moving from 50% funded by the government to 65% funded by the government will enable new locks and dams to become a reality much sooner,” said Illinois Corn Growers Assn. president Bill Leigh, a Minonk, Ill., farmer.
The trust fund consists of revenues generated by barge fuel taxes assessed against commercial users of the inland waterways. The IWTF is funded through a 29 cents/gal. tax on barge fuel, bringing in $121.2 million in revenue in 2019. According to the Inland Waterways Users Board Organization, the reliance on the Administration’s consistently low IWTF annual revenue estimates have led to under-investment in modernization of the inland waterway system.
“It is well known that the majority of the nation’s locks and dams have outlived their 50-year design life, and changing the cost share is one prudent way to address this problem and bring U.S. waterways infrastructure into the 21st century more quickly,” said National Grain and Feed Assn. (NGFA) vice president of legislative affairs and public policy Bobby Frederick.
The Senate’s legislation includes the same change in the cost-share amount and also contains a beneficial provision that would make the cost-share change permanent instead of expiring in fiscal 2027, as the House bill stipulates.
Harbor Maintenance Trust Fund
H.R. 7575 would allow access to the existing balance of funds within the HMTF. Currently, more than $9 billion has been collected and deposited in the fund but has gone unspent for its intended purpose.
Megan Nelson, economic analyst for the American Farm Bureau Federation, explained that HMTF funds were partially unlocked earlier this year in the Coronavirus Aid, Relief & Economic Security (CARES) Act, but annual expenditures from the fund were capped at the amount of the previous year’s HMTF revenue. “The provision in the CARES Act will not allow for Congress to retroactively spend from the fund’s current $9.3 billion balance, however, and applies only to ‘annual receipts and interests,’ meaning it will ensure that all future HMTF revenues are used for the purpose of dredging. WRDA 2020 would expand on this by allowing access to additional funds from the existing HMTF balance,” Nelson wrote in a recent Market Intel report. “The inability to access and fully utilize those dollars on port dredging has stalled American agriculture’s comparative transportation advantage and contributed to lost export opportunities, to the detriment of U.S. economic growth.”
According to a report from the U.S. Department of Agriculture’s Agricultural Marketing Service, “Importance of Inland Waterways to U.S. Agriculture,” overall barge traffic has grown, and outdated and failing infrastructure has given rise to more frequent delays, amounting to more than $44 million in additional costs per year.
“Allowing full use of the [HMTF] for its intended purpose would correct the fiscal disservice to those that pay the 0.125% ad valorem tax based upon the value of cargo imports and would help restore the United States’ comparative transportation advantage,” Frederick said.
The bipartisan vote in the House on July 29 brings Congress one step closer to achieving new WRDA legislation in 2020, Frederick said, adding, “NGFA will continue to work with both the House and Senate in an effort to ensure these policy wins for inland waterways and ports are reflected in the final agreement. An efficient waterborne transportation system is crucial for growing the American economy and job creation and is vitally important to U.S. agricultural exports and their positive contribution to the U.S. balance of trade.”
Agricultural Retailers Assn. president and chief executive officer Daren Coppock commended the House for focusing its efforts on water infrastructure projects with the passage of the legislation.
“The U.S. inland waterways system provides the lowest-cost, most fuel-efficient and environmentally friendly way to transport products. Our nation’s lock and dam systems remain in urgent need of additional funding for essential maintenance and modernization,” Coppock said in a statement.