SJM 8017

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

As of January 21, 2016

Brief Description: Requesting Congress to reform the harbor maintenance tax.

Sponsors: Senators Roach, Dammeier, O'Ban and Warnick.

Brief History:

Committee Activity: Trade & Economic Development: 1/27/16.


Staff: Jeff Olsen (786-7428)

Background: The Harbor Maintenance Tax (HMT) was created by Congress in the Water Resource Act of 1986 to support the cost of harbor maintenance activities at maritime ports. The HMT is imposed at a rate of 0.125 percent of the value of cargo shipped or cruise tickets sold. Revenues from the HMT are deposited into the Harbor Maintenance Trust Fund, which provides funding primarily to the U.S. Army Corps of Engineers for dredging channels, maintaining jetties, operating locks, and other harbor maintenance activities.

U.S. bound goods shipped through a Canadian or Mexican port that arrive in the U.S. via truck or rail are not subject to the HMT. A 2012 report by the Federal Maritime Commission (FMC) studied the movement of containerized cargo through Canadian and Mexican seaports to investigate the possible diversion of cargo away from U.S. west coast ports due to the HMT. The report estimated that up to 26.7 percent of container volume for U.S. west coast ports was at risk of being diverted to Canadian ports. The FMC report further found that up to half of the U.S. bound containers coming into Canada's west coast ports could revert to using U.S. west coast ports if U.S. importers were relieved from paying the HMT.

Summary of Bill: The joint memorial contains a series of findings, including:

The Legislature requests that Congress pass and the President sign legislation reforming the HMT. The reforms should ensure U.S. tax policy does not disadvantage U.S. ports and maritime cargo, and provide greater equity for HMT donor ports through expanded use of HMT revenues.

Appropriation: None.

Fiscal Note: Not requested.

Committee/Commission/Task Force Created: No.