[Senate Hearing 113-578]
[From the U.S. Government Publishing Office]
S. Hrg. 113-578
HARBOR MAINTENANCE TRUST FUND AND THE NEED TO INVEST IN THE NATION'S
PORTS
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HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
JANUARY 31, 2013
__________
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana DAVID VITTER, Louisiana
THOMAS R. CARPER, Delaware JAMES M. INHOFE, Oklahoma
FRANK R. LAUTENBERG, New Jersey JOHN BARRASSO, Wyoming
BENJAMIN L. CARDIN, Maryland JEFF SESSIONS, Alabama
BERNARD SANDERS, Vermont MIKE CRAPO, Idaho
SHELDON WHITEHOUSE, Rhode Island ROGER WICKER, Mississippi
TOM UDALL, New Mexico JOHN BOOZMAN, Arkansas
JEFF MERKLEY, Oregon DEB FISCHER, Nebraska
KIRSTEN GILLIBRAND, New York
Bettina Poirier, Majority Staff Director
Zak Baig, Republican Staff Director
C O N T E N T S
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Page
JANUARY 31, 2013
OPENING STATEMENTS
Boxer, Hon. Barbara, U.S. Senator from the State of California... 1
Vitter, David, U.S. Senator from the State of Louisiana.......... 2
Udall, Hon. Tom, U.S. Senator from the State of Mew Mexico....... 4
Crapo, Hon. Mike, U.S. Senator from the State of Idaho........... 6
Merkley, Hon. Jeff., U.S. Senator from the State of Oregon....... 7
Boozman, Hon. John, U.S. Senator from the State of Arizona....... 8
Barrasso. Hon. John, U.S. Senator from the State of Wyoming...... 31
Sessions, Hon. Jeff., U.S. Senator from the State of Alabama..... 33
Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland 79
Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode
Island......................................................... 82
Lautenberg, Hon. Frank, U.S. Senator from the State of New
Jersey, prepared statement..................................... 88
Wicker, Hon. Roger F., U.S. Senator from the State of
Mississippi, prepared statement................................ 89
WITNESSES
Darcy, Hon. Joe-Ellen, Assistant Secretary of the Army, Civil
Works.......................................................... 9
Prepared statement........................................... 12
Responses to additional questions from:
Senator Boxer............................................ 18
Senator Lautenberg....................................... 19
Senator Cardin........................................... 20
Senator Vitter........................................... 21
Senator Wicker........................................... 23
Christensen, Michael R., PE, Deputy Executive Director of
Development, Port of Los Angeles; Chair, California Marine
Affairs and Navigation Conference.............................. 34
Prepared statement........................................... 37
Response to an additional question from Senator Boxer........ 40
Lyons, James K., director and CEO, Alabama State Port Authority.. 43
Prepared statement........................................... 45
Responses to additional questions from:
Senator Boxer............................................ 52
Senator Wicker........................................... 52
Lorino, Mike, president, Associated Branch Pilots................ 55
Prepared statement........................................... 58
Responses to additional questions from:
Senator Boxer............................................ 66
Senator Wicker........................................... 68
Cairns, Andrew, H., P.E., PMP, board member, American Society of
Civil Engineers' Coasts, Oceans, Ports and Rivers Institute;
Port & Marine-Northeast Lead, AECOM............................ 70
Prepared statement........................................... 72
Response to an additional question from Senator Boxer........ 77
HARBOR MAINTENANCE TRUST FUND AND THE NEED TO INVEST IN THE NATION'S
PORTS
THURSDAY JANUARY 31, 2013
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The committee met, pursuant to notice, at 10:03 a.m. in
room 406, Dirksen Senate Office Building, Hon. Barbara Boxer
(chairman of the committee) presiding.
Present: Senators Boxer, Vitter, Cardin, Whitehouse, Udall,
Merkley, Barrasso, Sessions, Crapo and Boozman.
OPENING STATEMENT OF HON. BARBARA BOXER,
U.S. SENATOR FROM THE STATE OF CALIFORNIA
Senator Boxer. The meeting will come to order. I first want
to welcome the Committee's new Ranking Member, Senator David
Vitter. We are so pleased to be working together now. For many
years, Senator Vitter has been a leader in calling for
investments in our Nation's ports. He is a pragmatist. When it
comes to infrastructure, we have a very good partnership. I am
excited about the opportunity to work with him and other
members of this Committee on this and many other water
infrastructure issues.
Today's hearing will examine the role of the Harbor
Maintenance Trust Fund in supporting commerce at our Nation's
ports. The Harbor Maintenance Trust Fund is the primary source
of Federal investment to maintain America's ports. The Trust
Fund is financed through a fee on the value of cargo imported
through coastal and Great Lakes ports.
According to the American Society of Civil Engineers, if
funding continues at current levels, by 2040 the United States
will face a shortfall of nearly $28 billion to meet the
dredging needs of the Nation's ports. As we will hear from our
witnesses today, this funding gap can have significant economic
consequences.
Increasing investment in ports and reforming the Harbor
Maintenance Trust Fund will be critical components of the next
Water Resources Development Act, known as WRDA. Senator Vitter
and I have already begun working together on this vital
legislation, which supports water resources infrastructure
nationwide.
WRDA authorizes the projects and programs of the U.S. Army
Corps of Engineers and provides many benefits to the American
people, including expanding and maintaining navigation routes
for commerce.
In the coming weeks, we intend to move forward with the
bipartisan Water Resources Development Act. Senator Vitter and
I look forward to working with our colleagues on both sides of
the aisle to advance a bill. We are optimistic that we can
repeat last year's success on MAP-21.
I want to thank the staff of Senator Mitch McConnell, who
actually proactively came to us and said that they really
wanted to help us with this bill. I was very pleased about
that.
As we will hear from our witnesses today, adequate
investment can boost the economy and create jobs. U.S. ports
and waterways, many of which are maintained by the Corps, move
2.3 billion tons of goods in Fiscal Year 2011. In my home State
of California, our ports are some of the busiest in the entire
world.
Continued maintenance of port facilities is critical for
the commerce and jobs that rely on these hubs, and that is why
we must increase investment from the Harbor Maintenance Trust
Fund. Currently, the Trust Fund collects more revenues than are
annually spent for maintaining our ports. In fact, the Fiscal
Year 2013 budget, the Obama administration estimated that the
Trust Fund would receive $1.8 billion, but the Corps budget
request was only $848 million. This leaves a growing surplus at
a time when many of the Nation's ports are not maintained to
their authorized depths and widths.
This is something that has gone on with every
administration. They do not spend the funds in the Trust Fund
the way they are meant to be spent. Significant challenges
remain in working to ensure the revenues collected in the
Harbor Maintenance Trust Fund are fully expended, including
identification of necessary offsets, and I look forward to
collaborating with all of my colleagues as we look for creative
solutions to this challenging issue.
In addition, we must also look at ways to ensure that ports
which collect the most Harbor Maintenance Trust Fund revenues
receive an equitable share of Federal investment. Currently,
some of these ports receive only a fraction of the funds that
they pay into the Trust Fund. That is unfair. I propose a
provision for the next WRDA that would increase equity for
ports nationwide. The provision would allow certain ports to
use harbor maintenance funds for limited additional uses after
other traditional operation and maintenance needs are met. This
would be an important step forward in ensuring our Nation's
most essential ports receive an equitable share of harbor
maintenance revenues and it just gives a little flexibility to
the program.
I am so grateful to my colleagues on both sides of the
aisle for their interest in this issue and I look forward to
hearing from them today.
I want to say, Senator Vitter, as my Ranking Member, you
have been a driving force behind this hearing and this issue,
and it is with that that I call on you for the first time as
ranking.
OPENING STATEMENT OF HON. DAVID VITTER,
U.S. SENATOR FROM THE STATE OF LOUISIANA
Senator Vitter. Thank you, Madam Chair. I am very excited
to be here. I am very excited to be Ranking Member, and I am
very excited about our partnership on infrastructure issues.
The first thing out of the gate with regard to that is,
first of all, this hearing, which is so important. I requested
that we focus on this issue because it is so vital, including
in the context of a new WRDA, and I appreciate your organizing
this hearing; and then in terms of legislative work, a new
proactive, reform-minded, bipartisan WRDA bill, which we are
already well into working on, and I am very excited about the
prospects for that, again, as you said, following the model of
good solid bipartisan work on MAP-21. So that is our goal and
that is why we are here today.
I certainly want to underscore your comments about how our
Nation's ports and waterways are grossly underfunded for
routine operation and maintenance, and one big reason is the
misallocation of Harbor Maintenance Trust Fund revenues. It is
a pretty simple story. Revenue into the Harbor Maintenance
Trust Fund has increased steadily over the past decade, minus a
one-time decrease in Fiscal Year 2009. The Fund currently
collects about $1.8 billion a year in revenue. However, even
though all of that money clearly, under law, is supposed to be
used only for designated purposes with regard to harbor
maintenance, even though that is clearly true, the
Administration only spends roughly half that amount for harbor
maintenance.
What does that mean? Well, some people say that means we
have an unspent balance of $8 billion. It really doesn't mean
that; it is really worse than that, because that money isn't
sitting anywhere. There is no pile of cash; that money is gone.
What it really means is that the other money is stolen and
spent on other completely unrelated purposes, directly contrary
to the statute setting up the Harbor Maintenance Trust Fund and
the revenue to go into it.
Meanwhile, what is going on with our infrastructure? You
know, if all of our needs were being met, if we were fully
dredging our crucial waterways and harbors, that might be
understandable. But, of course, that is not the case. According
to a recent analysis from the Corps itself, fully authorized
channel dimensions are available less than an average of 35
percent of the time at the 59 highest use, harbors and
waterways, and those are the harbors and waterways that
basically get the best treatment. So there that fully
authorized dimension and depth is available only 35 percent of
the time.
Of course, I care about that because the national economy,
but also because Louisiana has five of the top 15 busiest ports
in the Nation, with four of those located on the lower
Mississippi River; and the lower Mississippi River, which is at
vital as anything to our commerce, our waterborne commerce, is
traditionally underfunded in terms of this as well.
I want to thank all of our panelists and witnesses today,
including my invitee, Mike Lorino, President of the Associated
Branch Pilots. He will testify before this Committee about the
negative effects of these draft restrictions which followed
directly from this under-dredging and under-funding,
restrictions which restrict commerce, restrictions which
increase cost on commerce. For instance, every time a vessel's
draft is decreased by one foot on the lower Mississippi because
of under-maintained waterways, this costs shippers about $1
million against the value of their cargo. So that is a tax on
shippers; that is a tax on commerce, and it slows down the
economy and holds us back from job creation and economic
growth.
So this is a problem we absolutely have to fix, and it is a
problem both Senator Boxer and I are very, very focused on in
the WRDA that we are working on.
One final thought. A lot of folks correctly say that we
need even more resources to fully account for, maintain,
dredge, operate all of this waterborne commerce and
infrastructure. I agree, and I want to be a leader in that
effort and fully supportive of that effort. But, of course,
industry, the folks we would ask to pay those extra resources,
are not going to consider doing that if half of it is stolen
for unrelated purposes; and that is what is going on now.
So we need to fix that problem if we expect any more
resources to be put into the bucket. That is a simple and
obvious request from the folks who are paying the bill, so
their commerce and their freight can be transported in these
harbors and along these waterways.
Thanks to all of our witnesses, and I look forward to a
great discussion.
Senator Boxer. Thank you so much, Senator.
At this point I would ask unanimous consent to place into
the record a statement by Senator Gillibrand, who is over at
the Armed Services Committee. Without objection, I will do
that.
[The prepared statement of Senator Gillibrand was not
received at time of print.]
Senator Boxer. Also place into the record a statement from
Senator Levin, who has written the Harbor Maintenance Act, a
bill to require funds deposited into the Harbor Maintenance
Trust Fund be fully expended for operation and maintenance at
our Nation's ports. Without objection, we will do that.
[The prepared statement of Senator Levin was not received
at time of print.]
Senator Boxer. I am pleased to call on Senator Udall.
OPENING STATEMENT OF HON. TOM UDALL,
U.S. SENATOR FROM THE STATE OF NEW MEXICO
Senator Udall. Thank you.
Good morning and welcome, Madam Secretary. I want to
express my appreciation to you for being here and to Senators
Boxer and Vitter for holding this hearing on WRDA. Assistant
Secretary Darcy, I am sorry I won't be able to stay for the
entire hearing, but I wanted to take this opportunity to
highlight three issues that are of importance to New Mexico.
Now, these aren't harbor issues, as you can imagine, but they
are the closest thing New Mexico has to harbors, as we had a
million-year-old ancient sea which covered much of New Mexico,
but that is obviously gone.
I think we will see you again soon when we convene another
hearing on general WRDA issues, so I hope to discuss these
issues further at that time.
The issues I wanted to raise are the potential for flooding
in our major city, Albuquerque, NM; my continued support for
the Rio Grande Environmental Management Program; and, three, my
concern over the current status of the project in the Rio
Grande Floodway, the San Acacia to Bosque Del Apache. The city
of Albuquerque is our major metropolitan hub in New Mexico. I
am particularly concerned about the effects flash flooding can
have on our levee system that protects the city.
The levees clearly need upgrading, and I am hoping that I
can work with you through the EPW Committee and through my
additional role on Appropriations Committee to address this
issue this year.
Next, I want to reiterate my strong support for the Rio
Grande Environmental Management Program. I appreciate Chairman
Boxer including this provision in the current WRDA draft again,
but I am disappointed that it has not been funded. I would like
to urge the Corps to include this program in future budgets to
help with planning and conservation projects that will help
balance the complex tradeoffs between flood control,
agriculture, and habitat. The Rio Grande Basin is experiencing
a severe drought that is harming farmers and endangered
species, so this program is sorely needed.
Additionally, I hope the Corps can work with the Bureau of
Reclamation and the International Boundary and Water Commission
about ways to better manage the Rio Grande infrastructure in
times of drought. We can't make it rain or snow, but we should
take every measure available to ensure that our available water
stretches as far as possible.
Finally, I understand that there is a disagreement between
the Corps and the Fish and Wildlife Service about how much
mitigation is needed for the San Acacia levee project. I want
to take this opportunity to urge both organizations to do their
best together toward a resolution on this so that the funding
we have in place for it is not diverted elsewhere.
There are obviously other projects in New Mexico that are
of great importance to me, but, since time is limited, I wanted
to take a minute to highlight those three. Again, I thank you,
Madam Secretary. I look forward to working with you on these
issues, and appreciate very much Chairman Boxer and Ranking
Member Vitter for this first hearing on WRDA. Thank you.
Senator Boxer. Thank you so much.
Without objection, I will place into the record Senator
Inhofe's statement for this hearing. He is also over at the
Armed Services.
[The prepared statement of Senator Inhofe follows:]
Thank you, Chairman Boxer and Ranking Member Vitter, for holding
this hearing and allowing committee members to receive testimony on the
Harbor Maintenance Trust Fund. I also would like to thank Assistant
Secretary Darcy for testifying before us this morning, as well as the
four gentlemen who will be joining us during the second panel--this
committee greatly appreciates you and relies on your expertise, so
thank you very much for being here.
I would like to also take a moment to thank the chairman, Senator
Boxer, and our new ranking member, Senator Vitter, for all the work
they and their staffs have done thus far on the next Water Resources
Development Act. I look forward to working with both of you as we build
upon our past successes and continue to work toward preserving and
enhancing the infrastructure of this great Nation.
Certainly the most immediate challenge this committee faces is the
authorization of water resources development legislation. As I've said
time and time again, we as a Congress must pass authorization bills on
a regular schedule so as to preserve the proper authorization-then-
appropriations process. It has been 6 years now since we passed the
last Water Resources Development Act, despite the best efforts of this
committee--and that, in my judgment, is too long.
Our harbors and inland waterways are vital to the economic health
of our country. In my home State of Oklahoma, over 90 percent of the
grain that is shipped on barges eventually finds its way to New Orleans
to be exported. If the harbor in New Orleans is not properly
maintained, shipping from Oklahoma will suffer. And vice versa--for
harbors to gain the economic benefit of shipping from places like
Oklahoma, our inland waterways must also be properly maintained. As
everyone here knows, only about half of the annual revenue in the
Harbor Maintenance Trust Fund is spent as intended--on critical
maintenance dredging. But because of the current structure of budgetary
allocations, we simply cannot afford to allow funding for our inland
waterways and ports to be redirected--it, too, needs a source of stable
revenue. The only reasonable solution is increased funding for the
system as a whole.
The Inland Waterways Trust Fund helps fund the 18 locks and dams on
the McClellan-Kerr Arkansas River Navigation System, but it is woefully
underfunded. In 2012, over 2.7 million tons of cargo shipped from the
Port of Catoosa, with over 12 million tons being shipped on MKARNS, but
the system could function much more efficiently and productively if it
was deepened from its current 9-foot depth to the authorized 12 feet,
and if hours of service on the locks are not further reduced. This must
be a priority.
I have said my entire career that I take fiscal responsibility very
seriously. However, I believe the Federal Government has a
responsibility to invest in national defense and infrastructure. In
2011 the President cut the Corps of Engineers' budget by $600 million
and by $300 million again in 2012. Our nation's system of inland
waterways, highways, and coastal ports are our pathway to trade and
economic prosperity, and we cannot continue this downward trajectory.
Again, I thank the witnesses and look forward to their testimony.
Senator Boxer. So now it is my pleasure to turn to Senator
Crapo.
Senator Crapo.
OPENING STATEMENT OF HON. MIKE CRAPO,
U.S. SENATOR FROM THE STATE OF IDAHO
Senator Crapo. Thank you very much, Madam Chairman and
Ranking Member Vitter. A lot of us appreciate your holding this
important hearing to focus on the Harbor Maintenance Trust
Fund.
Of interest, Idaho does actually have a seaport, contrary
to New Mexico. Idaho actually is home to the furthest inland
seaport on the West Coast. This port, the Port of Lewiston, is
located at the confluence of the Snake and Clearwater Rivers in
the city of Lewiston. For farmers and other businesses in the
west, the Port of Lewiston provides a critical link through the
Snake and Columbia Rivers to the Port of Portland and
ultimately to the Pacific Ocean.
However, the Port of Lewiston, like other ports, faces
considerable challenges with meeting shipping needs. Despite a
large surplus in the Harbor Maintenance Trust Fund, which has
already been discussed, harbors across the United States are
presently under-maintained. Again, the statistics that have
already been presented show that the U.S. Army Corps of
Engineers estimates that the full channel dimensions of the
Nation's busiest 59 ports are available less than 35 percent of
the time.
We too, in Idaho, are very interested and concerned with
the management of the Harbor Maintenance Trust Fund. We have
seen, just as an example from Idaho, that the draft
restrictions in 2011 and 2012, due to the Corps' inability to
maintain the deep draft portion of the Columbia River, have
been significant impacts on our economy. For every inch of
draft that is lost due to the silted-in channel, vessels are
unable to load 358,000 pounds of wheat. This is just one
example of how important it is that we properly utilize the
funds in the Harbor Maintenance Trust Fund.
Second, Idaho is also very interested in the Inland
Waterways Trust Fund concerns. There are eight locks between
the Pacific Ocean and the Port of Lewiston, and we need to have
the adequate support for the maintenance of these locks and the
facilities to allow for the traffic to reach the port and to
return back to the Pacific Ocean.
So we are interested, Madam Chairman and Ranking Member
Vitter, not only in the Harbor Maintenance Trust Fund, but also
in reforming and making more effective the Inland Waterways
Trust Fund that would enable us to have truly effective access
to and support of this critical waterway for our economy in the
Northwest.
Each day the condition of our water infrastructure results
in significant losses and damages from broken water and sewer
mains, sewage overflows and other symptoms of water
infrastructure that is reaching the end of its useful life; and
with these challenges and the others I have already mentioned
in mind, as this Committee is well aware, a national investment
in water infrastructure projects would create jobs, repair
crumbling infrastructure, and provide significant protection
for public health and the environment. A strong focus on
improving the financing structure of our Nation's water
infrastructure is greatly needed.
Again, thank you again for holding this hearing, Senator
Boxer and Senator Vitter, and I look forward to the testimony
we have in today's witnesses.
Senator Boxer. Thank you so much.
Senator.
OPENING STATEMENT OF HON. JEFF MERKLEY,
U.S. SENATOR FROM THE STATE OF OREGON
Senator Merkley. Thank you, Madam Chairman, and thank you,
Madam Secretary, for coming. I think you are hearing the
general story of the significant challenges in maintaining
levees and jetties and harbor dredging and locks, and how
frustrating it is that we have funds tat are raised
specifically for maintenance, and in this case harbor
maintenance, and they are not being spent in that fashion.
Now, Oregon is a coastal State, so I go to town after town
after town where industry depends upon the success of those
harbors and the maintenance of the jetties; and not only is it
important to commerce moving back and forth, it is important to
our fishing vessels, it is important to our recreational
coastal industry, and it imposes not just an issue of commerce,
but an issue of safety, because when the dredging is not
maintained and the jetties are not maintained, you can have
very dangerous entries from the ocean.
So how can I possibly justify that we have funds that have
been raised for a specific purpose, commerce is at stake,
safety is at stake, and we are not spending it in this fashion?
I can't justify it. I want to see this policy changed. I so
much applaud the Chair and Ranking Member for bringing this
bill forward and I, like my colleague from New Mexico,
apologize because I have a conflict to attend to, but I
certainly look forward to your comments. I will be following up
and hope that we can get to the point that we are spending
these funds in the appropriate place. Thank you.
Senator Boxer. Thank you so much.
Senator Boozman, welcome.
OPENING STATEMENT OF HON. JOHN BOOZMAN,
U.S. SENATOR FROM THE STATE OF ARIZONA
Senator Boozman. Thank you, Madam Chair and Ranking Member
Vitter, for having this very important hearing today. I am glad
that we are moving forward toward what I believe will be a
strong, bipartisan Water Resources Development Act early in the
113th Congress, and I think that you are probably excited about
that, also, and there will be tremendous input from you.
I am also glad that the improvements to the harbor
maintenance may be part of this process. Every American
benefits from the harbor maintenance. Well-maintained water
infrastructure harbors and inland waterways are critical to our
farmers, job creators, exporters, manufacturers, and consumers.
One of our witnesses highlights the tremendous advantage
American farmers enjoy over foreign competitors when the
Mississippi River's fully authorized dimensions. Water
infrastructure does not get the attention of our other
transportation modes, but is an indispensible part of our
transportation system.
I believe in the principle that the Harbor Maintenance
Trust Fund should be fully used, but I also agree with our
witnesses who emphasize that the Trust Fund should be used to
boost funding for the Corps of Engineers. I am concerned that
our budget process, specifically limited allocations for energy
and water, could result in cuts to other Corps priorities if we
don't do this properly.
In short, as one witness's prepared remarks State, this
should be additive. Another witness's prepared remarks State
that the appropriations should not be taken from other Corps of
Engineers programs due to the potential increased funding from
the Harbor Maintenance Trust Fund.
Another concern I have is how we move forward on equitable
return of HMT dollars. Arkansas is an inland State, but we have
significant water infrastructure. Our State, as many other
States like it, receives just a tiny portion of the Trust Fund
dollars, but these funds are critical.
While I understand the importance of equitable return, we
need to ensure that Arkansas's infrastructure and similar
States, that that infrastructure is maintained. Expanding the
potential uses of Trust Fund dollars may be a balanced
approach, but we must avoid an inflexible framework, such as a
rigid formula, which would abandon infrastructure States like
Arkansas.
Again, thank you all very much for having the hearing. I
appreciate your leadership. I also appreciate the witnesses
being here and looking forward to their testimony; look forward
to the conversation.
This Committee, again, has a history of being very friendly
to the Secretary, and trying to be supportive, and the rest of
the witnesses. Regardless of what happens today, remember it
could be worse; you could be Senator Hagel over there right now
in the midst of his hearing. Thank you.
Senator Boxer. That was an unexpected truth.
[Laughter.]
Senator Boxer. An unexpected truth.
We want to welcome you, Jo-Ellen Darcy, Assistant Secretary
of the Army for Civil Works. I just want to thank you. This is
a very contentious issue. This is not a new issue. We have had
people sitting right there on the same issue, where members
here were upset, but this is a circumstance that I think needs
to be faced. People are paying into a fund and guess what? They
are not getting what they are supposed to get from it. It is
not right. It would be as if we paid into the Highway Trust
Fund and the money was used for something completely different.
It is not right.
So I know you are in kind of the hot seat on it. We want to
welcome you. We thank you for your service and what you are
doing to help us every day in our States. Please proceed.
STATEMENT OF HON. JO-ELLEN DARCY, ASSISTANT SECRETARY OF THE
ARMY, CIVIL WORKS
Ms. Darcy. Thank you. Thank you, Chairman Boxer, Ranking
Member Vitter, and distinguished members of this Committee. I
want to thank you for the opportunity to testify on the Harbor
Maintenance Trust Fund and the importance of investment in the
Nation's ports.
The Army Corps of Engineers provides support for safe,
reliable, highly cost-effective and environmentally sustainable
waterborne transportation systems, investing over $1.7 billion
annually, more than one-third of the total budget of the Civil
Works program, to study, construct, replace, rehabilitate,
operate, and maintain commercial navigation infrastructure
across this Country.
The Nation's ports handle over 2 billion tons of commerce
annually, including over 70 percent of the imported oil and
more than 48 percent of goods purchased by American consumers.
The Administration understands that our ports are an
important part of the Nation's infrastructure and has formed an
Interagency Task Force on Ports to develop a strategy for
investment in our ports and related infrastructure. Maintaining
these ports and making targeted investments in their
improvement can lower shipping costs for U.S. exports and
imports.
The work of the task force will reflect a strategic, multi-
modal view of the Nation's investment priorities for the
infrastructure that supports the movement of freight through
our ports, including the protections for life, safety, and
property during transport, as well as protections for affected
communities and for sustaining our ecosystem.
The Harbor Maintenance Tax and the Harbor Maintenance Trust
Fund were established by the Water Resources Development Act of
1986. The harbor maintenance tax is an ad valorem fee on the
value of commercial cargo loaded or unloaded on vessels using
federally maintained harbors. An amount equivalent to the
revenue collected is deposited in the Harbor Maintenance Trust
Fund and is then available to finance certain costs, subject to
the congressional appropriations process.
For the Civil Works Program, the Harbor Maintenance Trust
Fund is authorized to be used to finance up to 100 percent of
the Corps' eligible operation and maintenance expenditures for
commercial navigation at all Federal coastal and inland harbors
within the United States. Expenditures from the Harbor
Maintenance Trust Fund are also authorized to be used to
recover the Federal share of construction costs for dredged
material placement facilities, including beneficial uses
associated with the operation and maintenance of Federal
commercial navigation projects. The Harbor Maintenance Trust
Fund is also authorized to be used to finance operation and
maintenance costs of the U.S. portion of the St. Lawrence
Seaway.
Harbor Maintenance Tax receipts in Fiscal Year 2012 were
$1.54 billion, and the interest earned was $47.3 million. The
balance in the Harbor Maintenance Trust Fund at the end of
Fiscal Year 2012 was $6.95 billion.
An increasing portion of Civil Works funding in recent
years has been devoted to harbor maintenance. The President's
2013 budget request for the Corps included $848 million for the
Harbor Maintenance Trust Fund to support the maintenance of
coastal harbors and their channels and related works, the most
ever requested by any president. This is a significant increase
over the level in the Fiscal Year 2012 budget, which was $758
million; this all at a time when many programs governmentwide
are being reduced in order to put the Nation on a sustainable
fiscal path.
Our investments in coastal port maintenance are directed
primarily at providing operational capabilities and
efficiencies. To make the best use of these funds, the Corps
evaluates and establishes priorities using objective criteria.
These criteria include transportation cost savings, risk
reduction, and improved reliability, all relative to the cost.
Consequently, maintenance work generally is focused more on the
most heavily used commercial channels, those with 10 million
tons of cargo a year or more, which together carry about 90
percent of the total commercial cargo by tonnage traveling
through our coastal ports.
The amount proposed in the Fiscal Year 2013 budget is an
appropriate level, considering the other responsibilities of
the Corps for inland navigation, flood risk management, aquatic
ecosystem restoration, hydropower, and other Civil Works
Program areas. The Corps is working to develop better
analytical tools to help determine whether additional spending
in this area is warranted based on the economic and safety
return.
Dredging costs continue to rise due to increases in the
cost of fuel, steel, labor, and changes in methods of disposal
of dredge material. We recognize that this presents challenges
in maintaining commercial navigation projects. The pending
improvements to the Panama Canal will increase the draft of
vessels transiting the Canal to 50 feet.
On our Atlantic Coast we now have two 50-foot deep ports
capable of receiving these ships, Norfolk and Baltimore. The
Corps expects to complete the dredging work for deepening the
Port of New York-New Jersey to 50 feet in fiscal year 2015. The
Corps is also working with the Port of Miami, which is
financing a project, to deepen the Federal channel to 50 feet.
On the West Coast, the Ports of L.A., Long Beach, Oakland,
Seattle, and Tacoma all have channel depths of 50 feet or
greater.
In addition to the ongoing work, the Corps is also working
with seven ports on the Atlantic and Gulf Coasts to evaluate
proposals to deepen or widen those channels.
Madam Chairman and members of the Committee, I look forward
to answering any questions you have, and also to work with you
on this difficult issue as you prepare for the WRDA bill. Thank
you.
[The prepared statement of Ms. Darcy follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Boxer. Thank you very much for that. You know, you
stay away from the bigger notion, bigger issue here, which is
is it right to collect fees and then not spend them on this
purpose that they are supposed to be used for, and I don't
blame you for staying away from that because, in essence, you
don't really have control over that; the Administration does
and prior administrations did, and we do, and we intend to fix
it to the greatest extent that we can.
Now, the Corps has estimated that the Nation's 59 busiest
ports have access to their full channel dimensions only 35
percent of the time. These ports are critical for commerce and
international trade. Restrictions on commerce as a result of
inadequate port maintenance can have significant consequences.
In fact, a recent report by the American Society of Civil
Engineers, which we will hear about on our second panel,
indicates that failure to adequately maintain our ports could
result in a variety of economic impacts.
Do you agree that failure to invest in port maintenance
could have economic consequences that we must seek to avoid?
Ms. Darcy. Senator, I do believe it could have
consequences; however, I do see that we are investing in our
ports. As I noted, the President has asked for more money for
the Harbor Maintenance Trust Fund than ever before. He has also
established the Interagency Task Force working with the
Department of Management and Budget, as well as Transportation,
to look at evaluating what resources are needed for
transportation, and we are hoping that, in looking at
transportation in the future, in addition to the three Rs,
which are always rail, road, and runways, it can now be the
four Rs and we can include rivers in that.
I think we need to look at the infrastructure all together,
we need to expand the way we have traditionally looked at it as
just mostly asphalt and make sure that we include the river
systems that need to be reliable for our economy.
Senator Boxer. Well, I do appreciate the President moving
in the right direction, but I still note he is still not
spending all that came into the Fund, and I still note that 59
busiest ports have access to their full channel dimensions only
35 percent of the time, and I just think that is as clear as
anything; it just shows that we are not doing enough. But yes,
the President is definitely moving in the right direction, but
he still isn't using all the funds that come into the Trust
Fund.
When Congress created the Harbor Maintenance Trust Fund, it
sought to recoup the cost necessary to operate and maintain
U.S. ports and waterways, but, as we have said, much less is
spent on operations and maintenance than is collected, and, as
you point out, it is in the billions.
Do you believe it is important to increase the amount
expended from the Harbor Maintenance Trust Fund so that we can
better maintain the Nation's ports?
Ms. Darcy. Senator, I believe the amount that is in the
President's request for the Harbor Maintenance Trust Fund is
appropriate at this time, given all of the other fiscal
constraints that we are faced with within not only the Corps,
but across the Country.
Senator Boxer. Well, I hear you doing what you should do,
which is defending the President's budget. I appreciate you are
in that situation, but, again, this, to me, isn't about this
President. This President is doing more than any other
president, there is no doubt, but we are in a bad situation
here because we are the leading economy in the world and yet,
still, we have problems at our ports. I can tell you, at our
ports back home, just out of Los Angeles-Long Beach, about 40
percent of the imports; and you just can't afford to have
problems at the ports.
Let me just go here. You said you would work with us, which
I really appreciate, even though, perhaps, the Administration
doesn't like what we have come out with on this particular
issue. Would you be available for technical assistance? Because
we may need to call on you for that.
Ms. Darcy. Absolutely, Senator.
Senator Boxer. Good.
Ms. Darcy. It would be the first time in my career that I
had not worked on a WRDA bill.
Senator Boxer. I know. Well, we can't let that happen. We
have to use all your experience here. But I think the bottom
line is we are moving in the right direction, but we are
certainly not there because we are still not spending the
revenues that come in. Nobody has looked at the backlog and how
we can possibly offset those billions, but Senator Vitter and
I, and the rest of our colleagues, are very strong on this, so
it is going to be a central piece of our WRDA bill.
Senator Vitter.
Senator Vitter. Thank you, Madam Chair, and thank you,
Madam Secretary, for your service. This is something you can
tell, I hope, we are communicating that we care passionately
about and it is thoroughly bipartisan.
Madam Secretary, in your testimony you noted the authorized
uses of this money. It was first set up in WRDA in 1986,
Section 210. It was amended a little bit in WRDA 90, Section
316, and you listed the uses. Are there any other authorized
uses?
Ms. Darcy. There is a certain percentage, about $30 million
a year, maybe a little more, that goes to, the St. Lawrence
Seaway, and then there is a portion I think it is about $3
million to $5 million annually that goes to the Treasury and
the Customs Service for the administrative costs of the
program.
Senator Vitter. Right. I was thinking of that too. But
given that entire list, are there any other authorized uses?
Ms. Darcy. No, sir.
Senator Vitter. In fact, isn't that money spent on plenty
of other things every year that are not those authorized uses?
Ms. Darcy. Senator, the receipts go directly into the
Harbor Maintenance Trust Fund through the Treasury and then the
Bureau of Public Debt, which manages 18 different trust funds
across the Government, then is the dispenser of those funds
when our agency says we have been appropriated this much money
and that is what comes out of the Fund.
Senator Vitter. Doesn't the other money come out of the
Fund for other unauthorized uses, unrelated uses?
Ms. Darcy. The balance of the funds are invested and
accumulate interest, and it is up to the Bureau of Public Debt
as to how those funds then are used.
Senator Vitter. Well, if there is this balance of $6.95
billion, what vault can I go to and look at it? That is what I
am asking. Because it doesn't exist. So where can I look at
that balance of almost $7 billion?
Ms. Darcy. Again, those are the Federal investments in
securities, for the most part, I understand, and then the
interest that accrues on that is what gets you to that balance.
Senator Vitter. Well, again, this is a big fiction, and I
think the first important part of this conversation is to get
beyond the fiction. It is the same fiction as the Social
Security Trust Fund, because when you go and look at that
balance, basically this is what you find, IOU $6.95 billion. It
is gone, it is spent for unrelated purposes, and that is wrong
when it is authorized for specific uses under the law.
Now, you mentioned this administrative task force looking
at water infrastructure, looking at all of this big picture. Is
that task force going to come up with a solution that ensures
that all of this Trust Fund money is spent regularly for its
intended uses?
Ms. Darcy. We will be looking at the uses of the Harbor
Maintenance Trust Fund and how that can help to ensure that the
future of the navigation system is adequate. I can't tell you,
at this point, what it is we are going to say or do, but it is
something that we will definitely be considering.
Senator Vitter. Well, what you have done previously in that
regard is to just want to tremendously expand the uses. Now,
there may be some room for that, but if you just expand the
uses to all sorts of other things, you don't solve this
problem, the same thing happens. That is what is happening now.
So let me just repeat the question. Is the task force focused
on our central question today, which is ensuring that all of
the revenue into the Trust Fund is spent for authorized uses
under statute?
Ms. Darcy. It is one of the issues that will be focused on,
Senator. We will also be looking at the uses for the other
trust funds, including the Inland Waterway Trust Fund. This is
a navigation system; it is not just a port system, it is an
inland waterway system as well, that we must maintain given the
other competing uses, as well as what the other agencies,
including OMB and the Department of Transportation, and
Commerce, can bring to the table as we look at it as a system.
Senator Vitter. Let me ask a related question that I
mentioned in my opening statement. A lot of folks, including
me, think it is going to take more resources to fully maintain
this vital infrastructure that is important for the economy. Do
you think it is reasonable to expect the folks affected, like
industry, to pay more into anything when it is being diverted,
in this case, to unrelated uses?
Ms. Darcy. I don't think that we would expect people to pay
more. I understand, that since the total balance is not being
spent in the intended use, that there would be a concern by
those paying the tax that there be some way to get the return
on what it is they are paying for.
Senator Vitter. I will close with this. I am out of time. I
think you all have already proposed they are paying more in
some instances, like, for instance, lockage fees, just one
instance. I am just pointing out I think it is a commonsense
nonstarter to even have that discussion if half of the Harbor
Maintenance Trust Fund is being diverted for unrelated
purposes. Thank you very much.
Senator Boxer. Thank you, Senator.
What we are going to do is Senator Boozman will ask his
questions and then we will go to Senators Barrasso and Sessions
to use their 5 minutes for either an opening statement,
questions, or both.
Senator Boozman.
Senator Boozman. Thank you, Madam Chair.
Again, thanks for being here, and we do appreciate your
office. You have always been very open as we have approached
you with different difficulties relating to all of this and,
like I say, we appreciate that. You were a big help with the
recent crisis on the Mississippi River, which is kind of an
ongoing thing with the dredging and stuff, making it such that
we were able to get our farm products out. Again, you can't
always help us, but you always do listen, and we do appreciate
that.
As Senator Boxer mentioned, in your data and in a recent
CRS report, it keeps coming up the busiest 59 ports are
available less than 35 percent of the time as far as their full
channel width and depth; and then the CRS report goes on to
point out that that makes it such that the vessels are less
efficient, they can't carry as much, there is essentially more
prone to accident and things like that. So that is a serious
problem; I think we all agree with that.
In your testimony you mention while the Corps could spend
more on harbor maintenance and related work, the amount
proposed in the 2000 budget for this purpose, which is financed
from the HMTF is an appropriate level, and then you go on
considering the other challenges that you face.
I guess, for me, it is hard to reconcile that. If only 35
percent is operational on a given day, and yet to come back and
say that you are happy with the funding that you are getting.
Ms. Darcy. I think I said appropriate, not happy. But in
looking at the overall budget for the Corps of Engineers, we
have to manage for all of the missions within the Corps, we
operate under a cap, and we know that if you increase one
mission, there must be a decrease somewhere else within the
program.
As I said in my statement, over one-third of our budget,
$1.7 billion, is spent on navigation, and that additional money
that does not come out of the Harbor Maintenance Trust Fund is
spent on other studies or construction, because the Harbor
Maintenance Trust Fund does not fund construction.
Senator Boozman. So you mention the cap, which is a
concern, and you also mention that we are going to be
increasing the money spent from the Harbor Maintenance Trust
Fund. So where is that coming from, is that new money or is
that money that you are essentially shuffling around, so that
something else under the cap is going to suffer?
Ms. Darcy. The 2013 budget request which includes $848
million is $90 million more than Fiscal Year 2012. Within our
program we had to make a decision as to how to balance
preograms, because we are still under the $4.7 billion program.
We did put more money on activities reimbursed from the Harbor
Maintenance Trust Fund, so some of the other programs like some
of our other operation and maintenance activities were reduced.
Although operation and maintenance has also increased in our
overall budget over the last couple of years. We would have to
take decreases in some other programs, including some of our
CAP programs, which are our small project programs. Again, the
overall program has to be balanced across all the business
lines within our budget.
Senator Boozman. So I guess that is really the real
problem. It doesn't matter how much we put into the Harbor
Maintenance Trust Fund; the reality is it really wouldn't be
any additional new money.
Ms. Darcy. No. But also within the budget process, when the
appropriations committees get their 302(b) allocations, there
is a cap in there, and there is Army Corps of Engineers within
that 302(b), there is the Nuclear Program, there is the Energy
Program. So the balance within that allocation would have to
either be increased in order to accommodate increases across
all the programs.
Senator Boozman. Right. OK. Thank you very much.
Senator Boxer. Thank you.
Senator Barrasso, welcome.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM THE STATE OF WYOMING
Senator Barrasso. Thank you, Madam Chairman.
We agree in a bipartisan way that our Nation's harbors and
ports are vital to the economic growth of the entire Country.
The majority of our Nation's ports are along the coasts and the
Great Lakes, the Gulf of Mexico, but the products that our
Country exports come from all 50 States and, in the case of the
west, many are exported from river ports. I think it is vital
that the Country maintain all ports for the benefit of the
people whose jobs depend on these exports and the communities
where they live.
So American exports really are one of the backbones of our
economy, and it doesn't matter which sector of the economy,
whether it is high-tech manufacturing, whether it is the
aerospace industry, automobile production, pharmaceuticals,
ranches, farms, mineral extraction. All of these sectors
require modern, fully functioning ports and growing ports to
export our products.
Now, the White House has stated that it is putting a
priority on maintaining and improving ports, streamlining the
barriers to port projects. In July of last year, the President
established the White House Task Force on Ports. The mission
calls for ``improved coordination and streamlined review of
investments in port-related infrastructures.' Last July, on the
19th, the White House announced that five major ports in the
eastern United States would receive help in making ``the
permitting and review process for infrastructure projects more
effective and efficient, saving time while driving better
outcomes for local communities.' Those ports include, as you
know, Jacksonville, Savannah, New York, New Jersey, and the
Port of Charleston.
Madam Chairman, I believe that all American ports,
especially in the west, need a quicker, more efficient review
process for building and expanding their operations as well.
So the questions that I have are do you agree with the
President's initiative with regard to the need for expanding
port projects across the Country?
Ms. Darcy. Yes, Senator.
Senator Barrasso. In his State of the Union Address, going
back even to 2010, President Obama announced the National
Export Initiative, stating, ``We will double our exports over
the next 5 years, an increase that will support 2 million jobs
in America.'
How close do you think we are to achieving that goal?
Ms. Darcy. I think we will achieve the goal by 2015. I
think the fact that this budget reflects an increase in the
Harbor Maintenance Trust Fund, as well as other investments in
navigation, will help to prove that not only within the Army
Corps of Engineers, but across the Government, including the
Department of Transportation.
Senator Barrasso. Yesterday, the Commerce Department
reported that the U.S. economy had actually shrank, which would
defy the expectations. CNBC reported that the economy shrank
from October through December for the first time since the
recession ended, and they had a number of different reasons
that they listed, one of which was fewer exports. So I don't
know if you are aware of the report, but do you believe we need
to increase the export of all American goods by mobilizing and
modernizing our Nation's ports in an expeditious and fiscally
responsible manner to help address this falling exports?
Ms. Darcy. I think that we do, and I think that we will be
able to meet the goal by 2015.
Senator Barrasso. Finally, you said in your written
testimony the White House created this Task Force on Ports in
July of last year. According to the White House announcement,
the Task Force, they said, will develop a strategy to inform
future investment decisions and identify opportunities for
improved coordination and streamlined review of investments and
port-related infrastructures.
Now, your agency is one of the 10 Federal agencies involved
in this project. Can you give us an update as to the progress
of the Task Force?
Ms. Darcy. Yes, Senator. Actually, I think we have a
meeting next week, but I have to check. What we have done is
establish the principles of what it is we want to move forward
on, and part of what we have already done, is working with the
other Federal agencies, looking across programs as to where we
are making our investments.
For example, the Corps of Engineers, as you know, operates
and maintains and dredges ports and harbors, and the Department
of Transportation has what is called the TIGER Grant Program,
where they make investments on the land side at different ports
around the Country. Working with the Department of
Transportation, we have looked at where we have our ports
deepening and where it would make sense for an investment to be
made on the land side, so that we are not working at cross
purposes with the Federal investment in that port on the land
side.
Senator Barrasso. Well, thank you. I think all of us look
forward to seeing the Task Force recommendation in a timely
manner.
Thank you, Madam Chairman.
Senator Boxer. Thank you very much.
Senator Sessions, welcome.
OPENING STATEMENT OF HON. JEFF SESSIONS,
U.S. SENATOR FROM THE STATE OF ALABAMA
Senator Sessions. Madam Chairman, involved as I know
Senator Inhofe is now with the Armed Services hearing on the
confirmation of former Senator Hagel, and I am sorry to have
missed earlier. Thank you for having this hearing, Madam
Chairman. I congratulate you particularly because looking at
the amount of money spent under the energy and water
appropriations, harbor maintenance is about 1 percent. So it is
an important 1 percent, and I am glad that you found time to
have a hearing on it. It is not as much money as has been
coming in.
We have a chart, I think, as you just pointed out, has been
mentioned before, but this indicates in blue how much of the
funds that are coming in are actually spent on harbor
maintenance and how much finances the rest of the Government,
and our smart staff found that that surplus would make a huge
difference for harbors and ports, but only funds for the
Government for 3 hours, in terms of what it would contribute to
the overall spending.
So thank you for your presence here, and I think we will be
looking at how to deal with some of the issues. I am skeptical
about proposals that give the Corps more authority and Congress
less control over water resources, and I am skeptical about
creating new programs when we are having a hard time funding
the ones we have, and I do think we have to confront this issue
of our ports and how we get there.
I know the Chairman and Ranking Member understand that one
of my problems is fixing this surplus or using more of it has
budget consequences that we can't ignore, and that makes it
harder than we would like it to be. The President has submitted
spending the money in that fashion and Congress has gone along
with that, so if we change it, it won't be as easy as a lot of
people might think, but I think we need to work in that
direction.
So I guess I won't ask any questions now, Madam Chairman.
Thank you for giving me the opportunity to be here.
I guess I would just ask Secretary Darcy would this
surplus, if it allowed to be utilized by you and for harbor
maintenance, make a substantial improvement in our ability to
meet the needs of harbor maintenance?
Ms. Darcy. It would.
Senator Sessions. That is an easy question. Thank you.
Thank you, Madam Chair.
Senator Boxer. Well, that is the point of this hearing. We
thank you for your honest answer, and your very good question
and your brilliant staff's chart.
Now, we thank you very much, and we will work closely with
you, as we have in the past, on this whole harbor maintenance
issue, because it will, Senator Sessions and Senator Boozman, a
big part of our WRDA bill. So we really want to reform this
situation so we don't put somebody like Jo-Ellen Darcy in a
tough situation, and the future Jo-Ellen Darcys, because this
is an issue that both Republican and Democratic presidents have
handled the same way; they have never spent on the harbor
maintenance what comes into the Fund. So we thank you very
much.
We will ask our second panel to come up and, as they do, I
will be introducing Michael Christensen and Senator Vitter will
be introducing Mike Lorino, Senator Sessions will be
introducing Mr. Lyons, and I will introduce Mr. Cairns. Is that
right? OK.
So please step forward. This is an excellent panel we have
coming forward because they work with these issues and these
policies every single day.
So, Mr. Christensen, I will introduce you. You are the
Deputy Executive Director of Development and No. 2 ranked
executive at the Port of Los Angeles. That is a big job. You
are responsible for oversight of the planning, the permitting,
the design, and construction of all port infrastructure.
Mr. Christensen is a transportation engineer with over 35
years of experience in the planning, design, and construction
of a wide variety of port, rail, and highway programs. Mr.
Christensen also serves as Chair of the California Marine
Affairs and Navigation Conference, and he is a member of the
California Association of Port Authorities.
Well, welcome to you, and I am sure you can't wait to get
back home after witnessing some of the winds out there. Please
do begin your testimony.
STATEMENT OF MICHAEL R. CHRISTENSEN, PE, DEPUTY EXECUTIVE
DIRECTOR OF DEVELOPMENT, PORT OF LOS ANGELES; CHAIR, CALIFORNIA
MARINE AFFAIRS AND NAVIGATION CONFERENCE
Mr. Christensen. Thank you very much, Chairman Boxer,
Ranking Member Vitter, and Senators for this opportunity to
testify on behalf of the Port of Los Angeles, the California
Association of Port Authorities, and the California Marine
Affairs and Navigation Conference. I am Michael Christensen
and, as was mentioned, I am the Deputy Executive Director at
the Port of Los Angeles responsible for all of the capital
improvements and infrastructure at the Nation's largest
container port.
The Port of Los Angeles, in conjunction with our neighbor,
the Port of Long Beach, handles over 40 percent of all the
containerized goods that come into the United States, worth
approximately $311 billion. This cargo supports about 900,000
regional jobs, nearly $40 billion in annual wages and tax
revenues, and nationally the goods that come through the port
complex of Southern California support also about 3.5 million
jobs throughout the United States.
We are not tax supported; instead, our revenues are all
derived from fees and from other shipping service revenue.
Now, I am testifying today on behalf of a number of
organization. One is the California Association of Port
Authorities, which is comprised of the State's 11 publically
owned commercial ports. It is dedicated to maintaining vigorous
and vital port industry throughout the State of California.
I also serve right now as Chair of the California Marine
Affairs and Navigation Conference, which is also a consortium
of California harbors and ports, both large and small, along
with marine interest groups dedicated to optimizing
California's maritime benefits by supporting the maintenance
and improvement of California's harbors, ports, and navigation
projects.
We very much appreciate the purpose of this hearing on HMT.
It is a critical source of funding, as has been mentioned a
number of times, for the ports and harbors not only within our
State, but also within the entire Country in order to keep us
globally competitive. With the sense of Congress in support of
full use of the HMT that was included in MAP-21 and the changes
contemplated in this draft of the WRDA, we are encouraged that
are being taken to improve HMT.
The maintenance that is funded by HMT supports a well-
functioning navigation system that includes the ports and
harbors that accommodate a wide variety of commodities:
containers, bulk goods, agriculture products, automobiles,
fisheries, and also serve these facilities of service critical
harbors of refuge. The system not only supports jobs in
operation and maintenance, but facilitates trade that supports
jobs throughout the supply chain throughout the United States,
reduces the transportation costs for American businesses, and
ultimately keeps the prices lower for American consumers.
For this reason, the California ports support the
following: No. 1, full utilization of HMT revenues for
operations and maintenance purposes; No. 2, the prioritization
of HMT funds for use on traditional O&M purposes, including
maintenance of Federal navigation channels, disposal sites,
selected in-water projects such as breakwaters and jetties, and
studies; No. 3, more equitable return of HMT funds to the
systems of ports of California; and, No. 4, a cost-share
formula for maintenance that reflects the current cargo fleet.
First, we believe HMT should be fully used for O&M
purposes. Appropriations from the HMTF have lagged behind
receipts for several years, leaving a surplus and deferring
maintenance on our Nation's system of ports and harbors.
Achievement of full use of the HMT should be additive in
nature. That is, in a given fiscal year, the guarantee of full
utilization should not be achieved by taking funds from other
U.S. Army Corps priorities.
We commend you for including the full utilization and the
additive aspects in this draft of the WRDA. We support a more
equitable allocution framework within WRDA. Even if HMT funds
are fully utilized for O&M, we believe efforts should be made
to increase the funding return to systems that contribute large
amounts to the Harbor Maintenance Trust Fund.
One of the reasons we believe in this approach is because
the users, not the ports, pay into the harbor maintenance tax.
The users of the California port systems, for example, have
reasonable expectation that the money they pay would be
returned to the systems that they use.
Now, based on these facts, we believe that an equitable
return should be part of an HMT reform effort and, in fact, the
American Association of Port Authorities has come out with an
equity principle that I am sure they will be sharing with you.
Senator Boxer. I am going to ask you to sum up, if you can.
Mr. Christensen. In conclusion, I would like to again thank
you again, Chairman Boxer and Ranking Member Vitter, for
prioritizing the WRDA authorization and allowing me the
opportunity to provide testimony on behalf of the California
Ports and Harbors. I would like to reiterate our support for
full utilization of HMT for its intended purpose, an equitable
return in updating the cost-share formulas. As you continue to
work on the reforms for HMT, the California ports would like to
offer our continued assistance and support. Please refer to my
written testimony for some of the other information, and I am
available for questions.
[The prepared statement of Mr. Christensen follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Boxer. Thank you so much, Mr. Christensen.
Due to his schedule, Senator Sessions, we are going to ask
you to introduce your witness, Mr. Lyons, who will then
testify, and then we will move to Mr. Lorino, introduced by
Senator Vitter.
Senator Sessions. Thank you. Appreciate that very much.
Mr. James K. Lyons, we call Jimmy, has served as Director
and CEO of the Alabama State Docks since 1999. He is a senior
port director, one of them around the Country. A native of
Mobile. He spent four decades in the maritime industry. The
port has done exceedingly well, Jimmy. Congratulations on your
leadership. We have seen hundreds of millions of dollars in
capital improvements.
Those investments are paying off. Steel shipments were up
in 2012 26 percent; containers were up 31 percent; export coal
shipments increased substantially. So the port is doing well.
It also is unusual in the sense that we export a lot more out
of the Mobile Port than most ports as a percentage of the
cargo, and that reduces, in some way, the money that comes in,
but it is really great for job creation and that sort of thing.
So he is involved in many activities, including being on
the Board of Directors of the Federal Reserve Bank in
Birmingham and married to Beth Marietta Lyons, an attorney and
prominent Mobilian herself.
Thank you, Madam Chairman.
Senator Boxer. Thank you so much.
Mr. Lyons, I won't call you by your first name, although I
am extremely tempted to. Mr. Lyons, we really do welcome you,
and the floor is yours.
STATEMENT OF JAMES K. LYONS, DIRECTOR & CEO, ALABAMA STATE PORT
AUTHORITY
Mr. Lyons. Thank you, Madam Chairman, Ranking Member
Vitter, and distinguished members of the Committee. Thank you
for this opportunity to discuss the Harbor Maintenance Trust
Fund.
I am going to try to bring a little bit of local
perspective to some of the facts and figures that I have here
in my written statement. These facts and figures have been
quoted several times here today, but I will try to bring a
little bit of local perspective and just sort of bringing it
down into the micro aspect.
Mobile is amongst the 90 percent of the Nation's top 50
ports in foreign trade commerce that require regular
maintenance dredging. In total, dredged ports move nearly 93
percent of all waterborne commerce by weight annually.
The 35 percent availability is a very real figure,
something that we can attest to from Mobile, and in talking to
my fellow port directors in other ports, I believe this is a
very real number. As an example, between 2006, after we
finished the dredging cycle that included supplemental funding
that came as a result of Hurricane Katrina, and 2011, Mobile
had only half of our authorized width in much of our 30-mile-
long channel. These conditions caused numerous groundings,
forced restrictions in vessel traffic, and, in short, cost the
shippers using our port a great deal of time and money.
The budget versus the appropriation in Mobile is, again,
very real, just as it is. We saw the figures in the chart that
Senator Sessions put up. Mobile's 2012 budget was $22.6
million, but we really need $28 million to fully maintain our
authorized width and depth. So enough money is not being
appropriated in the Mobile harbor project, and the same applies
to many of our other projects that require dredging.
These poorly maintained harbors increase the cost for all
port users, reduce U.S. global competitiveness, and exacerbate
the maintenance dredging backlog, all of which adversely impact
the U.S. tax base and the job market.
Aside from dredging backlogs and funding shortfalls, we are
deeply concerned with how the Nation's ports will be expanded,
funded, and maintained in the current fiscal climate.
As Congress considers requests for use of the Trust Fund to
resolve the dredging conundrum, we ask Congress to consider the
long-term relevance and economic impact of ports within the
context of re-examining the base of all major Federal spending
and tax programs.
There is legitimate need for port investment to serve
larger vessels transiting most trade lanes. Any Federal project
investments will ultimately draw on the trust as deepened and
widened channels are brought online. We recognize the link
between fee collections and expenditures is complicated.
Increased maintenance spending on harbors will impact the
Federal deficit unless spending in other areas is decreased or
other collections are increased.
We also understand guaranteed funding for dredging, and the
budget protects dredging obligations from competing interests
with revenue sources of type. We are also mindful that any
guarantee limits congressional discretion to make tradeoffs in
spending priorities. Our fiscal realities necessitate policies
that discourage zero balance or expanded uses of the Trust
Fund.
The Committee has been very supportive of dredging in large
and small ports, and we applaud the Committee's work in MAP-21.
Congressional intent notwithstanding, there is still no
provision to dedicate Trust revenues to fully maintain our
ports.
Regardless of how increased allocation for port maintenance
dredging is addressed absent offsets otherwise, solutions are
likely to increase the Federal deficit.
The Port Authority supports fiscally responsible priorities
in the use of the Trust Fund and encourages Congress to mandate
full maintenance funding of existing Federal projects first and
foremost. We also request Congress resist expanded use of the
Trust to guarantee a reliable maintenance funding source for
future growth.
The State Port Authority thanks the Committee for its
leadership in recognizing the nexus between water resources and
economic prosperity. Thank you for this opportunity, and I
would be glad to address any questions.
[The prepared statement of Mr. Lyons follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Sessions. Madam Chair.
Senator Boxer. Yes, go right ahead.
Senator Sessions. Thank you for that.
One point I would like to make that is important, I think,
to all our ports, Jimmy, and that is the ports themselves are
supported locally, too, by State funding and bond issues and
that kind of thing. We are not asking the Federal Government to
do all of this work. Can you give us an indication of how much
the State has helped you maintain your operation?
Mr. Lyons. Our State really does not provide--they have
provided us with some capital funding. In my tenure, in the
last 14 years, they have provided some capital funding that
enabled us to serve as a basis for a large capital program, a
10-year program that we did. That was $100 million out of $700
million. But as far as operations, debt service, etcetera, we
are a self-sustaining entity. We are an enterprise agency; we
strive to make money so that we can generate capital to
continue to reinvest in our facilities and pay our share of the
Federal project.
Senator Sessions. That is a bond issue that you pay back?
Mr. Lyons. It is.
Senator Boxer. Thank you.
Senator Sessions. Thank you.
Senator Boxer. So am I right to assume that this funding
for O&M is very important to you, because the State doesn't do
that?
Mr. Lyons. Yes, it is critical. The State has not stepped
in on any of the O&M or any of the expansion projects that we
have done over the last 14 years; it has been all Port
Authority.
Senator Boxer. I think that is an important point because,
Senator, this is really a classic case of private-public
partnership. But we do have this important role, and you will
be happy to know, before you came in, I am sure you know this,
that we are working very closely with your staff and all of us
to make sure that these funds are spent for their purpose, the
purpose for which they are being collected, and it is critical
because right now the funds are, frankly, going to make it look
like we have a stockpile of $6 billion somewhere, which, as
Senator Vitter points out, is illusory.
So what we are going to do now is turn to Senator Vitter to
introduce his witness, Mr. Lorino, and then we are going to go
to Mr. Cairns. After that we will turn to Senator Cardin and
Senator Cardin will have the opportunity, after the last
witness, to make his opening statement and then ask whatever
questions.
OK.
Senator Vitter. Thank you, Madam Chair.
I want to welcome Captain Mike Lorino. Captain Lorino is a
lifelong resident of Louisiana, living along the Mississippi
River for almost 40 years of his life. He was first elected to
the oldest pilot association on the entire river in August
1972, and after a 5-year apprenticeship he was fully
commissioned as a bar pilot in 1978. Then he served on the
board of that bar pilot's association, then as vice president,
and today he serves as president of that important association.
For those of you who aren't familiar with what a pilot, a
river pilot, not an airline pilot, is, they safely guide those
huge ships entering the mouth of, in this case, the Mississippi
River to ports and avoid accidents, any one of which could
cause a multibillion dollar industry to come to a dead stop and
maybe be an environmental disaster. So he is a true expert.
He proved his expertise a couple years ago, in June 2011,
June 9th. A big ship, the Ratna Puja, ran aground in the lower
Mississippi, just above Cubits Gap. The way I found out about
it at 6:30 in the morning is Mike Lorino called me and said the
entire lower Mississippi is shut down right down.
Authorized depth is 45 feet. That depth at the time was,
maximum, 42 feet; and it ran aground, shut the whole river
down. What is even more interesting is the way the Corps found
out about it. General Peabody, who is in charge of dredging,
was when I called him at 6:32 in the morning. I had been
arguing with General Peabody to properly dredge the lower
Mississippi for a week right at that time. He had resisted.
Needless to say, the dredges arrived that afternoon, finally.
But that is what we need to avoid, shutting down something
like the entire lower Mississippi. By the way, it could have
been much worse because the cargo on the Ratna Puja was black
oil. Thank God we didn't have a big spill.
Thank you, Mike, for being here.
STATEMENT OF MIKE LORINO, PRESIDENT,
ASSOCIATED BRANCH PILOTS
Mr. Lorino. Thank you, Chairman Boxer and Ranking Member
Vitter and distinguished members of the Committee.
Chairman, I was honored to be here last year at this, but I
can say this, listening to the conversations thus far this
morning, I can see this process has grown legs and is moving
forward, and I need to commend you and also the Ranking Member
and members of this Committee for doing that. It is
unbelievable how much can be done in 1 year when you put your
mind to it, as we do, too.
But the Harbor Maintenance Trust Fund is not a Louisiana
issue, it is a Nation issue. It is an ad valorem tax for
dredging jetties, breakwaters, and it is being abused. Seven
million dollars is just being moved somewhere else.
A little bit about the Mississippi. The Mississippi River
touches 31 States and two Canadian provinces. We have five
deepwater ports, the largest complex in the world. Not in the
United States; in the world. Last year, my association that I
represent, we did 12,000 ships in the Mississippi River. There
was 40,000 movements of vessels from the mouth of the river to
Baton Rouge, 40,000 in 1 year. It is unbelievable. Thirty
percent of the Nation's oil, 60 percent of the Nation's grain
is shipped out of the Mississippi River system.
If we would shut down the Mississippi River, and that has
happened a few times, it is $295 million a day for the Country,
and grows exponentially after the fourth day. A hundred percent
of the channel helps us maintain cost effectiveness in the
world market, $0.13 per bushel saving over highways or rail
when dimensions are 100 percent.
Narrow channels hinder our ability to compete globally.
What happens there, a ship will come in to load cargo and he
can't get it all on that ship. So one would think, well, we
will send it to the West Coast. That works for 1 year. After
that we cannot compete with Brazil and Argentina. Now our
prices are gone. Our farmers in the heartland lose that
business. It is not acceptable when we have this money coming
in.
A closed Mississippi River system would dramatically affect
gas prices, grain prices, all exports and imports. After our
Hurricane Katrina, gas prices went up overnight because we had
the refineries on the river. We couldn't get fuel oil out; we
couldn't get aviation oil out. It is unbelievable. We need
this.
Someone mentioned about environmental. That is gigantic. We
had an oil spill down there with BP. We have tankers coming in
the Mississippi River system with 600,000 barrels of oil on one
ship. If that ship runs ground and puts a hole, we have another
BP in the Mississippi River system. But the travesty for that
is very simple: that ship is paying. It is importing here,
paying that tax, and here he could run aground and have another
problem after he is paying money to come into the United
States. That is unacceptable, ladies and gentlemen.
Current draft at the present time is 45 by 700 feet.
Channel width is crucial. Last year we were down to 100 feet
from 750. We had to have one-way traffic.
Now, I must say something. The Corps of Engineers does a
great job when they have equipment and money, Chairman. I just
wanted to make sure I said that for the record.
The cost for the Mississippi River for the last 5 years, we
have been underfunded by approximately $50 million a year.
Fifty million a year. You know what I have to look for, and it
is a shame in our great Country? I have to look for a
catastrophe to put a supplemental on there to get funding. That
is not the way it should be. That is not the way it should be.
Safety. Safety is a huge, huge factor. Chairman, you had an
incident out there in California a few years ago. You know what
happens when oil is dropped in the water: everybody is
concerned; especially a pilot, especially the owners. We can't
have that. It happens sometimes with human error. It happens
sometimes with mechanical. But it is not acceptable to have it
happen when we have money coming in to keep our channels and
ports open to project dimensions.
The Administration said they would like to double exports.
How can we double exports when I can't load what we have today?
It is impossible. I am just a pilot.
Solutions? We need the legislation that the Chairman and
Ranking Member and this Committee are talking about. We need
the point of order to be used. I know why the point of order,
nobody wants it, because then you can challenge it and stop it.
We need to have it like they have it in the Aviation Fund, so
we can have this money directed for what it needs to be used
for. This is a problem that can be fixed with no new taxes. The
money is being collected.
Solution? Yes, ma'am, I am finished. Solutions? We need 100
percent.
I thank you once again, Chairman Boxer, for this
invitation, Ranking Member and distinguished members, and I
would be happy to answer any questions.
[The prepared statement of Mr. Lorino follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Boxer. Well, Mr. Lorino, let me thank you for that
excellent testimony, beautiful testimony. You make the point.
If our roads, well, you didn't say roads, I am saying if our
roads and our waterways are clogged, we can't double exports.
We can barely keep up with what we have got. Your State and my
State particularly understand this, other States as well.
I am going to call on Senator Vitter just to bid his
farewell, because he is going off to give a--I mean to question
Senator----
[Laughter.]
Senator Vitter. Well, I want to particularly thank Mike for
his very concrete, persuasive testimony. I just want to
underscore two things about what he said and then make a final
comment about what we are working on.
First of all, I want to underscore, because maybe not
everybody heard it, lower Mississippi River, biggest waterway
in the Country, one of the biggest in the world, reduced in
some cases to one-way traffic. That is like having the biggest
interState in the Country and people around there get up 1 day
and there is an announcement, oh, I-10 is one-way today for the
foreseeable future. If you want to go east, you better go from
midnight to noon; if you want to go west, plan on noon to
midnight. Crazy. Crazy.
Second, funding for the lower Mississippi, this is the last
5 years Mike talked about, average funding in the normal
process, under $60 million. The average total funding after the
supplementals we need to manufacturer, over $130 million. That
is not the full need because that even involves restricted
width and depth.
My final statement is we are hard at work and making a lot
of progress on a fully bipartisan WRDA. We are going to come
out with that relatively soon and it absolutely is going to
address this crucial challenge. I thank all of you and all the
Committee members, particularly the Chair, for that work.
Senator Boxer. Thank you so much, Senator Vitter.
Mr. Whitehouse. Madam Chairman?
Senator Boxer. Let me just tell you what I plan to do, and
then I will call on you. I was going to have our last witness,
because we interrupted our witnesses, our last witness, then I
was going to go to Senator Cardin, Senator Whitehouse for your
opening statement and questions. Did you have a particular
response?
Mr. Whitehouse. I had hoped to respond before the Ranking
Member left, but he has now left.
Senator Boxer. Oh.
Mr. Whitehouse. So I will make my point during my opening
statement time.
Senator Boxer. That would be wonderful. I am sorry. I know
he is rushing off to question.
So we will move on to Mr. Cairns is a professional engineer
with over 25 years of engineering and management experience,
with the last 20 working exclusively in the port and maritime
engineering field. Mr. Cairns presently serves as the Northeast
Regional Manager for the ports and marine groups within AECOM.
He is the past chairman of the American Society of Civil
Engineers Committee on Port and Harbor Engineering. He is
presently a member of the Board of Coasts, Oceans, Ports and
Rivers Institute of the ASCE. So he understands these issues
from a very broad perspective.
We look forward to your testimony.
STATEMENT OF ANDREW H. CAIRNS, PE, PMP, BOARD MEMBER, AMERICAN
SOCIETY OF CIVIL ENGINEERS' COASTS, OCEANS, PORTS AND RIVERS
INSTITUTE; PORTS & MARINE--NORTHEAST LEAD, AECOM
Mr. Cairns. Thank you, Madam Chairwoman. Senator Vitter and
members of the Committee, it is an honor for me to appear on
behalf of the American Society of Civil Engineers to discuss
the importance of the Harbor Maintenance Trust Fund and to our
Nation's overall economic health.
The United States has approximately 300 commercial ports,
12,000 miles of inland and intercoastal waterways, and 240 lock
chambers which carry more than 70 percent of the U.S. imports.
However, in order for this system to remain competitive, U.S.
marine ports and inland waterways will require investment in
the coming decades beyond the $14 billion currently expected to
be spent.
According to the ASCE's Failure to Act Economic Study,
aging infrastructure for marine ports and inland waterways
threatens more than 1 million U.S. jobs. Additionally, between
now and 2020, investment needs in the marine ports and inland
waterways sector will total $30 billion nationwide.
With planned expenditures only expected to be about $14
billion, a total Federal investment gap of nearly $16 billion
remains.
Meanwhile, the costs attributed to delays in the Nation's
inland waterways system were $33 billion in 2010, the cost is
expected to increase to nearly $49 billion by 2020.
Unfortunately, even with the ever-growing price tag, these
costs do not address the landside connections or ``inside-the-
fence'' infrastructure that is the responsibility of the port
authorities. Therefore, the Nation will either need to pay for
much needed investments in our ports and harbors now, or will
pay more severely in lost labor, exports, and GDP down the
road.
Historically, the Nation's marine ports and inland
waterways have been the critical link that make international
commerce possible. However, with the scheduled expansion of the
Panama Canal by 2015, the average size of container ships will
increase significantly, while many U.S. ports still require
significant harbor and channel dredging to handle these larger
ships.
If the Nation makes an additional investment of $15.8
billion between now and 2020, the United States can eliminate
this drag on our economic growth. However, if the Country does
not make the needed investments, transporting goods will become
costlier, prices will rise, and the United States will become
less competitive in the global market.
Therefore, the key solution to ensuring that the Nation's
ports remain competitive is restoring trust back into the
Harbor Maintenance Trust Fund.
In 1986 Congress enacted the Harbor Maintenance Tax to
recover operation and maintenance costs at U.S. coastal and
Great Lakes harbors. The tax is based on the value of goods
that are being shipped and then placed into a trust fund that
is used for maintenance dredging of Federal navigational
channels. However, dredging the Nation's ports and harbors has
suffered from years of under-investment.
The Corps of Engineers estimates, as we have heard many
times today, that the dimensions of the Nation's 59 busiest
ports are available less than 35 percent of the time. This
creates an environment where vessels must carry less cargo or
adapt to increasing delays.
In Fiscal Year 2013, the Obama administration requested
$839 million to be appropriated from the Harbor Maintenance
Trust Fund. This amount equals only 50 percent of the total
estimated revenues in the Trust Fund, and nowhere near the
estimated needs, which, according to the Army Corps of
Engineers, is between $1.3 billion and $1.6 billion annually.
This troubling trend toward reduced investments has led to
ever-greater balances in the Trust Fund, with the unexpended
balance growing to more than $6 billion by September 2013,
according to the Office of Management and Budget. Therefore,
the Committee should include a provision in the Water Resources
Development Act requiring the total of all appropriations from
the Harbor Maintenance Trust Fund be equal to all revenues
received by the Trust Fund that same year.
While ASCE understands that this is a complex issue, the
long-term viability of our Nation's ports requires action to be
taken to ensure revenues in the Harbor Maintenance Trust Fund
are expended for their intended purpose.
ASCE supported language that would do just that in the WRDA
draft that this Committee discussed last fall. ASCE has also
supported bipartisan legislation from the last Congress that
would tie Harbor Maintenance Trust Fund expenditures to
revenues.
In the 112th Congress, Senator Levin's Harbor Maintenance
Act received 37 cosponsors from both sides of the aisle. While
the companion legislation in the House, the Realize America's
Maritime Promise, or RAMP, Act, received 196 cosponsors.
Congressman Boustany reintroduced the RAMP Act last week,
and the bill has already seen 48 Members of Congress sign on.
In conclusion, ASCE applauds the Environment and Public
Works Committee for working to fix the funding for shortfalls
out of the Harbor Maintenance Trust Fund and looks forward to
working with the Committee on a WRDA bill this year. ASCE also
looks forward to sharing with this Committee the inland
waterways and ports grades in our 2013 Report Card, scheduled
to be released on March 19.
Thank you, Senator Boxer. This concludes my testimony, and
I would be pleased to answer any of your questions.
[The prepared statement of Mr. Cairns follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Boxer. Well, thank you all very much.
So here is the way we are going to go. We are going to give
10 minutes each to Senators Cardin and Whitehouse and Boozman.
So go ahead.
OPENING STATEMENT OF HON. BENJAMIN L. CARDIN,
U.S. SENATOR FROM THE STATE OF MARYLAND
Senator Cardin. Thank you, Senator Boxer. I don't intend to
use the 10 minutes, but first let me apologize for not being
here for this entire hearing, because this is a critically
important subject matter and hearing. But, as you know, the
conflicts are I had to chair a Senator Foreign Relations
briefing. The urgency here is clear.
Mr. Lorino, put me down with your enthusiasm as to the
urgency of this matter, I am totally with you. I am going to
ask my full statement be put in the record.
Senator Boxer. No objection.
Senator Cardin. Madam Chair, I will have questions for the
record for Ms. Darcy as it relates to specific projects in
Maryland.
The economic impact of the work that we are doing here is
clear: this is jobs, jobs. It is making America competitive.
The globalization of commerce. We have to be competitive. We
have set up a mechanism in which to be competitive and we are
not using that mechanism; the funds are sitting there.
I applaud the Chairman, I applaud the Ranking Member. We
work together; this is not a partisan issue. Working together
on an extremely important bill, the Water Reauthorization Act.
We have to get it done. We have to get this to where it needs
to be done.
As we have already stated, the top ports in our Country
handle 90 percent of the commerce and they are only dredged to
their authorized depth and width 35 percent of the time. The
impact here is incredible.
I can talk about the Port of Baltimore. Since 2005, the
costs in the Port of Baltimore has gone up 55 percent to
maintain our port to the competitive depth and width. The
funding during that period of time has been flat. Well, you can
just do the simple arithmetic here, Madam Chairman. We are not
going to be as competitive as we need to be.
The equity issue here. From 2004 to 2010, the Harbor
Maintenance Trust Fund generated revenue through the Port of
Baltimore at $227 million. We received $157 million. Where is
the fairness here? The moneys are there. The Harbor Maintenance
Trust Fund was created to produce the revenues needed to do the
work, and now we are not using those revenues. We have to do a
better job.
What is the impact? Well, vessels are loaded at a lower
level; less efficiency, less competitiveness, and we lose jobs
in the United States as a result of not doing what the law
intended to be done. So there is a sense of urgency here.
The Port of Baltimore is ranked ninth among U.S. commercial
ports in terms of total value of goods moved through the port.
In July 2012, the Port of Baltimore handled a record 853,000
tons of general cargo. This cargo would not have reached the
port if it were not for the projects financed through the
Harbor Maintenance Trust Fund.
In preparation for the opening of the expanded Panama
Canal, the Army Corps, the Maryland Port Administration, and
the regional freight logistics companies have been working fast
to make the Port of Baltimore the East Coast premier
international shipping destination. Between the newly
operational super post-Panamax cranes at Seagirt, the planned
intermodal transfer facilities in Baltimore City, and the
deepening of the Federal channel, the Port of Baltimore is open
for business.
But let me make it clear. We need the projects to maintain
the dredging capacities for this to work. My predecessor,
Senator Sarbanes, originally got authorization for Poplar
Island. I mention it frequently here. It is a dredge site. It
also is an environmental treasure, Madam Chair. We did both. We
have a dredge site plus a restoration of our barrier islands
that were disappearing in the Chesapeake Bay.
Well, we need to make sure that the Poplar Island expansion
is adequately authorized, and I am working for the Corps, and I
will have a question for Ms. Darcy, that we have to make sure
that that is, and I thank you, Chairman and Ranking Member, for
working with us on the WRDA bill to make sure that that is
handled. That is an important site for dredge material and
environmental restoration.
We have a Hart Miller Island issue that we are working
between the State and the Army Corps. We have Pearce Creek,
which is another site for dredge material that we have to work
through. On the environmental front we have the Conowingo Dam.
I mention that because there is incredible environmental risk
to sediment being contained by the Conowingo Dam. We have had a
couple studies. We have to get a game plan to deal with that.
So, Madam Chair, I just want to underscore the importance
of the work that you are doing, that the Ranking Member is
doing. There is an urgency here. It is very much competition
and it is very much the investments that we make paying off for
our Country. As I said, I applaud the witnesses that are before
us for being here, for your working with us, for your somewhat
understanding of the political process that we have to go
through here. But this should be one in which we reach out
together and do what is right for our Country.
I will have some questions for the record for Ms. Darcy,
and I thank again the Chairman for her courtesy.
[The prepared statement of Senator Cardin follows:]
Statement of Hon. Benjamin L. Cardin, U.S. Senator
from the State of Maryland
Madame Chairman, I appreciate you holding this hearing today to
discuss the importance of America's ports and the work the Corps does
to maintain the economic viability of our ports. I also want to
congratulate Senator Vitter on becoming our new Ranking Member. I
appreciate and share his interest in reauthorizing the Water Resources
Development Act and I am grateful that the two of you are not wasting
any time in getting back to work on the 2013 WRDA bill.
I am hopeful that our committee will build on the bi-partisan
success we had in passing MAP-21 in the last Congress.
The high quality jobs associated with maintaining and building our
infrastructure makes reauthorizing WRDA all the more important. The
Harbor Maintenance Trust Fund, and the Army Corps projects it supports,
keep our shipping channels open and maintain America's leadership in
today's global economy.
The 2007 WRDA received overwhelming bi-partisan support from this
committee. The projects that bill supported provided critical
employment opportunities at a time when were beginning to face
uncertain economic times. Now, we've come back from the brink of
economic catastrophe and reauthorizing WRDA this year will help keep
our economy on the right course.
impacts of wrda to national economy
WRDA projects are critically important for to the U.S. economy. For
example, according to the Research and Innovative Technology
Administration, today 1 in every 11 shipping containers engaged in
global trade is either bound for or originates from a U.S. port.
However, the Corps of Engineers estimates that our top-priority
harbors, those that handle about 90 percent of the commercial traffic,
are only dredged to their authorized depths and widths about 35 percent
of the time.
Costs have risen more than 55 percent for the Baltimore District
and 40 percent for the Philadelphia District since 2005, while funding
levels have remained essentially flat. As a result the Baltimore
District is performing about 20 percent less dredging each year, the
Philadelphia District about 50 percent less.
In the Philadelphia District, some dredging funding is also
diverted to address other needs, such as bridge maintenance.
The Port of Baltimore has been affected by underfunding for
maintenance dredging. Over the period 2004-2010, Harbor Maintenance
Trust Fund taxes generated by imported cargo at the Port of Baltimore
totaled approximately $227.7 million. Yet during this period, only
$154.7 million of dredging was completed in the channels leading to the
Port.
Each year approximately 4-5 million cubic yards of material must be
removed from the Port of Baltimore's channels to maintain the
authorized depth and width. Given the highly competitive nature of
maritime commerce, it is important that Port of Baltimore channels be
maintained at their authorized depth and width on a year-round basis
and that adequate dredged material placement capacity is available in
order to retain and enhance the advantages of the Port of Baltimore.
This results in ships having to light-load, which increases the
cost of shipping and, in turn, increase the cost of goods at the cash
register. These days many Americans are watching very carefully what
they spend at the store and any change in the cost of goods has a
direct impact on their consumer decisions.
Moreover, well maintained harbors decrease costs for American
companies who are shipping goods abroad, thereby giving American
producers an advantage in the global marketplace. It is therefore
imperative that we ensure that the resources are in place to maintain
the shipping infrastructure that our nation relies on.
benefits of wrda to maryland's economy
Every year the Army of Corps Engineers, in partnership with the
Maryland Port Authority, works to maintain Maryland's vital navigation
channels by clearing tons of eroded sediment from the Federal
navigation channels leading in and out of the Port of Baltimore.
Keeping our port open and the channels dredged is essential not just
for Maryland, but for the Nation.
The Port of Baltimore is ranked ninth among all U.S. commercial
ports, in terms of total value of goods moved through the port. In July
2012, the Port of Baltimore handled a record 853,818 tons of general
cargo. This cargo would not have reached the port if not for Harbor
Maintenance Trust Fund projects.
In preparation for the opening of the expanded Panama Canal, The
Army Corps, the Maryland Port Authority and our regional freight
logistics companies have been working fast to make the Port of
Baltimore the East Coast's premiere international shipping destination.
Between the newly operational Super-Post Panamax Cranes at Seagirt, the
planned Intermodal transfer Facility in Baltimore City and the deepened
Federal channel: The Port of Baltimore is open for business.
All of the cargo that comes through the Port would not be possible
without the dredging projects that are supported by revenues paid into
the Harbor Maintenance Trust Fund.
The extensive work that is done to maintain Maryland's shipping
channels generates a great deal of dredge material that needs to be
disposed of in a safe and responsible manner. The Corps and the State
have worked successfully over the years to redevelop the barrier
islands that have historically been present in the Chesapeake Bay using
dredge material from the Harbor. As the constructed islands reach their
designed capacity the State and the Corps need work to close these
facilities and move on to the next disposal site.
I was recently informed that the Baltimore Corps District is
working to revise its Dredge Material Management Plan (DMMP) to reflect
the closure of Hart-Miller Island (HMI). The new Cox Creek facility
will replace HMI as the disposal site for dredge material in the DMMP
for Baltimore dredging projects. I am pleased that the discussions I
facilitated between the Baltimore Corps District and the State are
resulting in revisions to the DMMP in that reflect a mutually agreeable
fee structure and location for where dredge material will be disposed
of in the future. I will continue to follow the development of this
process and will be in contact with the Assistant Secretary as the
revised DMMP makes its way to her for approval.
I'd be remiss if I didn't also take this opportunity to mention the
important work the Corps is doing in Maryland, and throughout the Bay
region, to provide critical environmental restoration of natural
resources. The Corps' shoreline protection, sediment management, and
oyster and habitat restoration programs are integral to Chesapeake Bay
restoration efforts. And since oysters represent more than just a
source of income for Maryland's watermen--they are natural biological
filters continually cleaning up the Bay ? WRDA's habitat restoration is
leading to long-term solutions for water quality in the Bay.
It has been more than 5 years since Congress passed the last WRDA
legislation. It is essential to our Nation's infrastructure, economy,
and environment that we work together to craft a strong, effective
bill. I look forward to working with my colleagues on the latest
reauthorization of WRDA. Thank You.
Senator Boxer. Well, we thank you for your passion, because
this is really serious business, and we are lucky to have the
Committee that we have.
Senator Whitehouse.
OPENING STATEMENT OF HON. SHELDON WHITEHOUSE,
U.S. SENATOR FROM THE STATE OF RHODE ISLAND
Senator Whitehouse. Thank you, Madam Chair, and thank you
for holding this very important hearing. I just want to say
that I come at this issue with a particular history and a
particular context, and particularly when I hear Mr. Lorino and
his wonderful voice and the message that he brings from the
Mississippi and the Gulf Coast about the urgency of their
problems, and that is that not too long ago in Congress we
passed a piece of legislation that conferred an enormous
multibillion dollar benefit along the Gulf Coast, and we did so
as the result of an agreement that was reached that the bulk of
the benefit was going to flow to the Gulf Coast, but that there
would be a small portion that would accrue to the benefit of
all coastal and Great Lakes States.
After the agreement that allowed that to go forward was
reached, the part that went to the benefit of all coastal and
Great Lakes States was stripped out. An agreement was made and
an agreement was broken. I am inclined to, and I want to,
support enhanced traffic on the Mississippi River. I want to
support the protection and growth of the port in Louisiana and,
frankly, in Los Angeles and Alaska, and everywhere else. But
the past bargain has to be honored for me to be very
enthusiastic about going forward with further benefit that goes
to the Gulf and to the Mississippi, and I just want to make
that point.
Senator Boxer. I understand how you feel. I certainly
shared that disappointment. All I can say is we need to move
forward on a WRDA bill, and I would like to work with you
because you have a couple small ports there. Maybe there is a
way to help you through this WRDA bill.
Bettina, I would like to work with Senator Whitehouse and
the ways that we can work with his State, because there is no
question we need this WRDA bill for the good of the Country.
Senator Whitehouse. But it is also, if I might say, Madam
Chairman, it is a matter of the good of the Senate. If
agreements are that easily broken after they are made, then the
sinews of the Senate begin to come apart, and I think it is
fair for Senators who have been on the receiving end of a
broken agreement to insist on the honoring of an agreement that
I believe, thought, everybody had entered into in good faith.
Senator Boxer. Right. There is a lot of reasons for this;
some of them come from the House, et cetera. But the point is,
in my view, if you listen to John Kerry yesterday, which you
did, he made an unbelievable speech, and I hope all colleagues
would read it. We have to treat each other better. Yours is an
example of not treating each other the way we should. However,
there is always tomorrow and a chance to recoup and come
together and move forward, and I pledge to you that I will try
to do that in the WRDA bill.
We are going to have a WRDA bill, and let's make sure that
everybody is enthusiastic about it, including the small States
and the States with inner harbors and the rest. We need this
for the good of our Country, and we are going to always have
these problems if we don't come together and keep our bargains.
So as somebody who always has kept her bargains, as far as
I can remember, I would love to work with you on this WRDA bill
in a way that gives you some redress. It is not going to make
up all the ground, but I hope you would work with me on that.
Would you do that?
Senator Whitehouse. We will, of course, work with you.
Senator Boxer. Good.
Senator Whitehouse. I appreciate the support that you were
able to give to our efforts in the previous effort that has
turned into a broken agreement.
Senator Boxer. Well, we are going to make another effort.
There may be a way we can do something for the smaller ports
here that really gives them an opportunity, because when you
listen to Senator Whitehouse talk about his State, his State is
in jeopardy right now, we know that, because of what is
happening with the rising sea levels. He just needs to have
some attention paid. In the last WRDA bill he was knew, I
remember it. We really didn't do what we should do.
By the way, just saying to colleagues who are here, we had
a really hard time drafting this bill because there are no more
earmarks, and we have to take care of our States. So the way we
did it here is to make sure that any project that had a
complete Corps report which was sent down from the Corps would
get funded without naming any projects or getting into all
that. This could be very well the last WRDA bill that we can
figure out how to do without naming projects; after this one it
is going to get increasingly more difficult.
But I think we figured out a way to walk the walk on here
without the earmarks and get it done right, and I look forward
to working with you, Senator Whitehouse, to make sure that this
bill reflects the priorities of your State. That is all I can
say. I can't undo what was done, but I can move forward and
make sure that we try to look at your priorities and answer
them in this bill.
Senator.
Senator Boozman. Thank you, Madam Chair. I think we all
agree, the panel, the Committee, the audience, whatever, that
we need to, I would like to say, protect the integrity of the
Trust Fund, but we need to establish some integrity, almost,
before we protect it and go forward, much like the Highway
Trust Fund and the Aviation Trust Fund and things like that. So
that is pretty easy. It is difficult to get done, but we can at
least reach agreement.
The more difficult thing is, and we really have a varied
panel with our ports and our engineer, is, once you have the
trust fund, how do you divvy it up, realizing that it is a
system-wide whatever? Los Angeles is remarkable in the sense
that you have all this high-value stuff coming in there. You
are creating about, I think, over 13 percent of the revenue
that comes in, and because of the nature of your port you need
more than what you are getting, but you are not getting very
much of that 13 percent out. Some of our other ports, again,
through no fault of their own, are in situations where there is
a lot more silting; there is just a lot more need for dredging
and things, and that is the difference in the East Coast and
the South. It is just the way it is.
So I guess what I would like to know from you all, that is
not, and then the other thing that we have is the protection
of, as Senator Crapo mentioned, again, my ports that lead into
the Mississippi River that ultimately come out and create some
of this traffic, how do you do all that? I guess what I would
like to know from you all is what are your thoughts on that,
how we can address the problem of, once we get the Trust Fund
dollars that we like, or even dealing with what we have, what
are your thoughts on equalizing the funding mechanism? We will
start with California, the port that is funding a large part of
it.
Mr. Christensen. Thank you for your question, Senator. I
believe that the biggest hurdle is getting the full use for
intended purposes. That is the biggest hurdle that we can see.
As Captain Lorino mentioned, and Mr. Lyons, the Corps of
Engineers, from our perspective, does a pretty good job once
they are funded, once they get the money they need for things.
They have a system for racking and stacking and prioritizing.
In our State they do a pretty good job; they just don't have
enough money to cover the priorities that have already been
established. So, from my perspective, if the HMT could be spent
fully for its intended purpose, the major part of the problem
would be dealt with.
Senator Boozman. OK.
Mr. Lorino. Senator, thank you for the question. As I
mentioned when I started my testimony, this is not a Louisiana
issue, this is a Nation issue. I just wanted to make sure that
was there. But how do you do it? It is going to be tough, but
you hit the nail on the head. Every port is not the same; every
port is unique to itself. The Mississippi River, the area where
we pilot, where my association pilots, shows up every year. I
can look at you right now and say we will spend $83 million
next year, at least. The only question is is it going to be
more than that.
So do you look at it on what the value that your port is
bringing in or exporting? Do you tie it into jobs? Do you tie
it into the amount that you have to spend over a 10-or 12-year
period? I don't have those answers right off the top of my
head, but I do know one thing, and I have been told this by the
Corps: that if we can receive the full authorization from the
Harbor Maintenance Trust Fund, it should take care of all of
our ports, no matter where they are, for their projects. That
is the way it should be, because every port is importing cargo
that is paying that money. I really believe the answer to it
would be get all the money and then figure it out on an
economic basis or a condition basis, one of those two.
So that is the best I can say on that, sir.
Senator Boozman. Mr. Lyons real quick, and then Mr. Cairns.
Mr. Lyons. Senator, one thing I have learned about being
around ports for about 40 years is that they have one thing in
common, and that is that they are all different. They are
different in the types of cargos that they handle; some high-
value, some low-value. Some ports handle a lot of electronics;
some ports handle a lot of low-value manufacturing raw
materials. Some ports need a great deal of dredging; some ports
need none.
The Harbor Maintenance Tax, in my view, is a tax that is
paid by the consumers of these goods that are imported into our
Country, whether they are a person who buys a TV in Arkansas or
Alabama, or a company that is buying wood fiber from Brazil and
using it to manufacture something else. They are who are paying
this tax. So that tax is paid by all the taxpayers. The tax,
like all of our taxes, should be allocated to where they are
needed. I think our biggest concern really needs to be that we,
first of all, direct all of the money to take care of all of
the dredging needs that we have throughout this Country. I
agree with you that the inland waterways, which is a separate
issue from the Harbor Maintenance Tax, is a big, big issue. We
have it in Alabama, as you do in Arkansas.
So I think the big issue is to, first and foremost, get the
tax allocated out to take care of all of the dredging needs,
whether in Louisiana or whatever State or whatever port.
Second, if there is something left over, then we can talk about
that.
Senator Boozman. Very quickly, Mr. Cairns.
Mr. Cairns. Sure, Senator Boozman.
ASCE agrees with you that it is really trying to get the
intended funds used for what their purpose is, so if the harbor
maintenance funds are there, they should be used and spread
about to the projects that have those needs. As far as the
equity, really, ASCE doesn't have a position on which ports and
how that should be.
Senator Boozman. You are a wise man.
Thank you very much.
Senator Boxer. Thank you, Senator.
So I have just a few questions.
Mr. Christensen, you laid out four recommendations in your
testimony: first, full use of the Harbor Maintenance Trust
Fund; second, equity for ports that contribute the most; third,
allowing the Highway Maintenance Trust Fund to fully
maintenance up to 50 feet; and, fourth, prioritization of
traditional maintenance dredging.
I am asking you, because these are so important to
California, that moves 40 percent of the cargo through, the
imports, could you elaborate on why these recommendations would
be beneficial for ports around the Country?
Mr. Christensen. Yes, Senator. Before I start, Senator, let
me reiterate my thanks to you and the Ranking Member and the
Committee for doing this. This is such a great thing to be
talking about.
As I mentioned, full utilization gets us mostly where we
need to be, and I think, as we have heard from some of the
other members of the panel, that is the big issue; get it spent
for its intended purpose. So that is our No. 1 ask.
The No. 2, about prioritization of funds for their
traditional purposes, we agree that that needs to be in the
water. This needs to be spent on things that have a direct----
Senator Boxer. You think that is important for all the
ports, not just our port? That is the point I am making.
Mr. Christensen. Absolutely. This is, I think, as Captain
Lorino had mentioned, it is a nationwide issue, it is a
nationwide problem. It is a California-wide problem. In
California, our ports operate as a system, and while you have
three larger container ports, you also have quite a number of
other ports that are working to support their niche functions.
The ports, by their very nature, are entrepreneurial; they
operate as a business.
The free market system has, in essence, brought these ports
in California to their own specialty; they each do something
very well. We feel we do containers very well. There are other
ports that do bulk shipments very well. They all have to be
maintained to keep this system operating. If they don't, if one
of the wheels comes off on one of those other ones, it affects
everyone, because those other uses get piled on.
Senator Boxer. We call our ports a river highway.
Mr. Christensen. We do.
Senator Boxer. Which I think was Ray LaHood's idea, looking
at all the ports together as a highway.
Mr. Christensen. That is right. In fact, we have a
demonstration project in California, as you are well aware,
Senator, in the Port of Stockton.
Senator Boxer. Yes.
Mr. Christensen. But even the Port of Stockton is suffering
because of lack of maintenance funding. They have shoaling that
means that iron ore ships loaded in Stockton cannot leave full,
they have to leave light-loaded; they go to Oakland and then
they get topped off. That is extremely inefficient.
Senator Boxer. Well, let me thank you for your very clear
testimony on those four things, because I do think they apply
across the board here. As we look at extreme weather we see
more problems with dredging, too, because there is more silt
coming down and more problems. So this is absolutely essential.
Mr. Lorino, my final questions are for you, and then I will
turn it over to Senator Whitehouse, should he have some
followup questions.
I just thought your testimony was so good because I know
what you have gone through in Katrina; I was there and I
understand the unique challenges in some way because the beauty
of that State is all around, and in the middle of all that you
have all this heavy industry and all this port activity. The
balance of that is so important is so important. If there is a
problem, everything is hurt.
So I wanted to ask you about beneficial uses of dredge
material. In your testimony you raised the possibility that
increased spending from the Harbor Maintenance Trust Fund could
create additional opportunities for beneficial use of dredge
materials, such as wetlands restoration, and it was mentioned
by Senator Cardin. Could you elaborate on some of the
beneficial uses of dredge material that might be realized if we
increased investment in dredging navigation channels?
Mr. Lorino. Chairman Boxer, yes, ma'am. First of all, I did
meet you down there during that time, and I just wanted to say
thank you very much. It was very nice for you to come down and
do that, along with other Members of Congress.
But beneficial use in the State of Louisiana is a very
tough issue, and it is only tough because of one thing: money.
As I discussed a few minutes ago, we have $83 million to spend,
and that is picking up sediment that comes down every year. The
State would love us to use that for beneficial use. We would
love to use that for beneficial use. But we are barely keeping
our channel open. To use it for beneficial use, we have to
transport it further. That would take time. There is not enough
dredges to do that at the present time. So we have this
conflict that is going back and forth.
What I would like to see, if we could, and we are looking
at a 50-foot channel also on the Mississippi River. Someone
mentioned on the East Coast about the port study to get the 50
feet. They left out the bulk port, and that is very important.
The Mississippi River is a bulk port. But if we could dredge,
we could use a cutterhead dredge and build the coast down in
Plaquemines Parish that was devastated by Katrina.
But we need the money and it has to be a combination
between our State and the Federal Government; it can't just be
the Federal Government, it has to be the State also. We work on
that a lot, but it is a very difficult issue to tackle when we
can barely keep our head above water to keep the channel open
the way we are doing it now, if I am making any sense.
Senator Boxer. You do. You do. I mean, it all comes down to
the resources. It just seems so unfair to me when people pay
into a fund and then the fund is not used for that purpose. I
just feel it is, in a way, defrauding people. It is not right,
and that is why we are going to hope to move in a very
bipartisan way to change that.
I would ask Senator Whitehouse if he has some closing
questions.
Senator Whitehouse. I have time for questions, but I have
no time for answers, so what I would like to do is to ask the
questions for the record and ask you to get back to me, if I
could, and it is for the port operators who are here.
Senator Boxer. Well, why don't you ask your questions.
Senator Whitehouse. Two questions. The first is, in your
particular port, what are you seeing, looking forward, that
would affect you as the result of bigger storms, rising seas,
and other effects of climate change, and how are you responding
to those threats? That is question one.
Question two is the American Port Operators Association is
a strong and staunch supporter of a process that goes by the
rather unhelpful name of Marine Spatial Planning. Are you
engaged in that in your areas? Is it beneficial, and how?
AMr. Lorino, you may very well have views on that. You are
invited to join, if you would like to. Any witness who cares to
add something to that is welcome to add.
But I have a noon meeting that I have to be on time for and
I apologize. But I want to again thank the Chairman for this
hearing and for bringing us together around this very important
issue.
Senator Boxer. I thank you, Senator, so much. We really do
look forward to working together, and I hope on a pretty fast
track. There is a lot that the Senate is going to be doing, and
we want to sort of maybe get it started in a very positive
direction.
All of you have been so articulate, every one of you, and I
couldn't imagine a better panel for what we are trying to
accomplish here.
We stand adjourned. We thank you and we look forward to
working with you. We are asking you to help us get this WRDA
bill. We will call you when we feel we are running into some
waves. Thank you very much.
[Whereupon, at 11:57 a.m. the committee was adjourned.]
[Additional statements submitted for the record follow.]
Statement of Hon. Frank R. Lautenberg, U.S. Senator
from the State of New Jersey
Madam Chairman,
The Water Resources Development Act is about strengthening our
water infrastructure, and nowhere have we seen a clearer reminder of
the need to improve our water infrastructure than in my State of New
Jersey.
Since Superstorm Sandy hit our shores, we have seen the
catastrophic damage that can be caused when infrastructure is
unprepared for the force of an extreme weather event.
The storm sounded the alarm that the Federal Government must invest
in infrastructure to recover from the storm and build it stronger so we
are prepared for the next storm.
That's why the Sandy supplemental appropriations law I helped write
contains funding to rebuild and expand Army Corps beach projects and
other infrastructure projects critical to protecting communities.
But let's be clear: our changing climate means severe storms will
become more and more common, and that means a new WRDA bill must make
it permanent policy to build these infrastructure projects stronger
than before.
During Sandy, we also saw the limits of our outdated water
infrastructure when two (2) water treatment facilities were damaged,
with one (1) plant leaking millions of gallons of sewage into Newark
Bay as a result.
So we must include smart financing programs in the WRDA bill, to
ensure our clean water infrastructure is modern and effective.
Sandy also damaged the Port of New York and New Jersey, which is
the largest port on the East Coast and serves more than one-third (1/3)
of the country. More than two-hundred seventy thousand (270,000) jobs
depend on this port.
But the majority of the port's terminals were shut down for more
than a week because of power outages, structural damage, and hazards in
the water that could impair ships.
We learned from Superstorm Sandy that the effects of extreme
weather events on our ports can be devastating to the economy.
Madam Chairman, the Harbor Maintenance Trust Fund is critical to
maintaining and repairing our ports. We need to ensure the strength of
this fund, but we must do so in a responsible way that does not
compromise the Army Corps' flood control projects.
I look forward to working with Chairman Boxer and our new Ranking
Member, Senator Vitter, on a new WRDA bill that can take the important
next steps to modernize our infrastructure, strengthen our ports, and
protect our communities.
______
Statement of Hon. Roger F. Wicker, U.S. Senator
from the State of Mississippi
I want to thank the Chairman and Ranking Member for holding this
hearing on a matter that is vital to America's economic prosperity and
important to my State of Mississippi.
Our ports are gateways to global commerce, fuel economic
development, and support millions of American jobs. Failing to make the
proper investments at this critical time would have a serious impact on
jobs and economic growth. The expansion of the Panama Canal has
generated new interest in U.S. ports along the Gulf Coast and Eastern
Seaboard.
By 2015, the Canal will have the capacity to accommodate
significantly larger cargo ships. As global trade increases, we must be
ready to take full advantage of growing import and export
opportunities. According to a June report by the Army Corps of
Engineers' Institute for Water Resources, the expansion of the Panama
Canal could provide significant opportunities for our Gulf and South
Atlantic ports to become more competitive. Geographically, ports in
these regions are positioned to be the most impacted by the expansion.
U.S. ports need to be ready for post-Panamax vessels, which will play a
major role in facilitating greater global trade. These vessels are
expected to make up an estimated 62 percent of all container ship
capacity by 2030. The boost in maritime commerce means States like
Mississippi will be able to capitalize on international trade
opportunities that would benefit the entire country.
Because shipping is less expensive than other types of transport,
reliable port capabilities help keep our country's trade market
competitive. Yet, there are challenges. Despite opportunities for
maritime commerce, our Nation's ports face numerous hurdles. America's
59 busiest ports are maintained at authorized widths and depths only 35
percent of the time. The Corps estimates a backlog of $2.2 billion in
current harbor maintenance projects.
Although the Harbor Maintenance Trust Fund collects sufficient
revenue each year--and has a surplus of nearly $7 billion--these funds
are not utilized for their intended purpose. Mississippi's State port
at Gulfport has been dredged to its authorized depth of 36 feet only
once since recovering from the destruction of Hurricane Katrina. Today,
some areas of the channel are as shallow as 32 feet. This restricts
Gulfport's throughput capacity and its associated economic benefits.
I would like to know Assistant Secretary Darcy's views on this
issue and what the Corps is doing to address dredging needs--
particularly when lack of maintenance dredging makes a port less
competitive in securing future maintenance dredging. For Mississippi's
State port, this has become a vicious cycle that must be addressed. I
am also curious to know why the Corps' funding needs for dredging and
other activities are not accurately reflected in the Administration's
budget from year to year.
Again, I thank the Committee for holding this important hearing.
[all]