    [House Hearing, 116 Congress]
    [From the U.S. Government Publishing Office]

         THE COST OF DOING NOTHING: WHY FULL UTILIZATION OF THE HARBOR
     MAINTENANCE TRUST FUND AND INVESTMENT IN OUR NATION'S WATERWAYS MATTER

    =======================================================================

                                    (116-12)

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                        WATER RESOURCES AND ENVIRONMENT

                                     OF THE

                                  COMMITTEE ON
                       TRANSPORTATION AND INFRASTRUCTURE
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 APRIL 10, 2019

                                   __________

                           Printed for the use of the
                 Committee on Transportation and Infrastructure

     [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

         Available online at: https://www.govinfo.gov/committee/house-
         transportation?path=/browsecommittee/chamber/house/committee/
                                 transportation

                                   __________

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    --------------------------------------------------------------------------------------
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                 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                         PETER A. FAZIO, Oregon, Chair

    ELEANOR HOLMES NORTON,               SAM GRAVES, Missouri
      District of Columbia               DON YOUNG, Alaska
    EDDIE BERNICE JOHNSON, Texas         ERIC A. ``RICK'' CRAWFORD,
    ELIJAH E. CUMMINGS, Maryland         Arkansas
    RICK LARSEN, Washington              BOB GIBBS, Ohio
    GRACE F. NAPOLITANO, California      DANIEL WEBSTER, Florida
    DANIEL LIPINSKI, Illinois            THOMAS MASSIE, Kentucky
    STEVE COHEN, Tennessee               MARK MEADOWS, North Carolina
    ALBIO SIRES, New Jersey              SCOTT PERRY, Pennsylvania
    JOHN GARAMENDI, California           RODNEY DAVIS, Illinois
    HENRY C. ``HANK'' JOHNSON, Jr.,      ROB WOODALL, Georgia
    Georgia                              JOHN KATKO, New York
    ANDRE CARSON, Indiana                BRIAN BABIN, Texas
    DINA TITUS, Nevada                   GARRET GRAVES, Louisiana
    SEAN PATRICK MALONEY, New York       DAVID ROUZER, North Carolina
    JARED HUFFMAN, California            MIKE BOST, Illinois
    JULIA BROWNLEY, California           RANDY K. WEBER, Texas
    FREDERICA S. WILSON, Florida         DOUG MALFA, California
    DONALD M. PAYNE, Jr., New Jersey     BRUCE WESTERMAN, Arkansas
    ALAN S. LOWENTHAL, California        LLOYD SMUCKER, Pennsylvania
    MARK SAULNIER, California            PAUL MITCHELL, Michigan
    STACEY E. PLASKETT, Virgin Islands   BRIAN J. MAST, Florida
    STEPHEN F. LYNCH, Massachusetts      MIKE GALLAGHER, Wisconsin
    SALUD O. CARBAJAL, California, Vice  GARY J. PALMER, Alabama
    Chair                                BRIAN K. FITZPATRICK, Pennsylvania
    ANTHONY G. BROWN, Maryland           JENNIFFER GONZALEZ-COLON,
    ADRIANO ESPAILLAT, New York            Puerto Rico
    TOM MALINOWSKI, New Jersey           TROY BALDERSON, Ohio
    GREG STANTON, Arizona                ROSS SPANO, Florida
    DEBBIE MUCARSEL-POWELL, Florida      PETE STAUBER, Minnesota
    LIZZIE FLETCHER, Texas               CAROL D. MILLER, West Virginia
    COLIN Z. ALLRED, Texas               GREG PENCE, Indiana
    SHARICE DAVIDS, Kansas
    ABBY FINKENAUER, Iowa
    JESUS G. ``CHUY'' GARCIA, Illinois
    ANTONIO DELGADO, New York
    CHRIS PAPPAS, New Hampshire
    ANGIE CRAIG, Minnesota
    HARLEY ROUDA, California

                                      (ii)

                Subcommittee on Water Resources and Environment

                     GRACE F. NAPOLITANO, California, Chair

    DEBBIE MUCARSEL-POWELL, Florida,     BRUCE WESTERMAN, Arkansas
    Vice Chair                           DANIEL WEBSTER, Florida
    EDDIE BERNICE JOHNSON, Texas         THOMAS MASSIE, Kentucky
    JOHN GARAMENDI, California           ROB WOODALL, Georgia
    JARED HUFFMAN, California            BRIAN BABIN, Texas
    ALAN S. LOWENTHAL, California        GARRET GRAVES, Louisiana
    SALUD O. CARBAJAL, California        DAVID ROUZER, North Carolina
    ADRIANO ESPAILLAT, New York          MIKE BOST, Illinois
    LIZZIE FLETCHER, Texas               RANDY K. WEBER, Sr., Texas
    ABBY FINKENAUER, Iowa                DOUG LaMALFA, California
    ANTONIO DELGADO, New York            BRIAN J. MAST, Florida
    CHRIS PAPPAS, New Hampshire          GARY J. PALMER, Alabama
    ANGIE CRAIG, Minnesota               JENNIFFER GONZALEZ-COLON,
    HARLEY ROUDA, California               Puerto Rico
    FREDERICA S. WILSON, Florida         SAM GRAVES, Missouri (Ex Officio)
    STEPHEN F. LYNCH, Massachusetts
    TOM MALINOWSKI, New Jersey
    PETER A. DeFAZIO, Oregon (Ex
    Officio)

                                     (iii)

                                    CONTENTS

                                                                       Page

    Summary of Subject Matter........................................   vii

                       STATEMENTS OF MEMBERS OF CONGRESS

    Hon. Grace F. Napolitano, a Representative in Congress from the
      State of California, and Chair, Subcommittee on Water Resources
      and Environment:

        Opening statement............................................     1
        Prepared statement...........................................     2
    Hon. Bruce Westerman, a Representative in Congress from the State
      of Arkansas, and Ranking Member, Subcommittee on Water
      Resources and Environment:

        Opening statement............................................     3
        Prepared statement...........................................     4
    Hon. Peter A. DeFazio, a Representative in Congress from the
      State of Oregon, and Chair, Committee on Transportation and
      Infrastructure:

        Opening statement............................................     5
        Prepared statement...........................................     5

                                   WITNESSES

    Rick Goche, Commissioner, Port of Bandon, Bandon, Oregon:

        Oral statement...............................................     7
        Prepared statement...........................................     9
    Eugene D. Seroka, Executive Director, Port of Los Angeles, San
      Pedro, California:

        Oral statement...............................................    12
        Prepared statement...........................................    14
    Bonnie Brady, Executive Director, Long Island Commercial Fishing
      Association, Montauk, New York:

        Oral statement...............................................    16
        Prepared statement...........................................    18
    Kevin Ross, First Vice President, National Corn Growers
      Association, Minden, Iowa:

        Oral statement...............................................    19
        Prepared statement...........................................    21
    Phyllis Harden, Executive Assistant, Pine Bluff Sand and Gravel
      Co., Pine Bluff, Arkansas:

        Oral statement...............................................    22
        Prepared statement...........................................    24
    Peter H. Stephaich, Chairman and CEO, Campbell Transportation
      Company, Inc., Houston, Pennsylvania, on behalf of Waterways
      Council, Inc.:

        Oral statement...............................................    26
        Prepared statement...........................................    27
    Kirsten Wallace, Executive Director, Upper Mississippi River
      Basin Association, St. Paul, Minnesota:

        Oral statement...............................................    29
        Prepared statement...........................................    31

                           SUBMISSIONS FOR THE RECORD

    Statement of Kurt J. Nagle, President and CEO, American
      Association of Port Authorities, Submitted for the Record by
      Hon. Napolitano................................................    51
    Six Letters from 2014-2019 from Hon. Jared Huffman, a
      Representative in Congress from the State of California, et
      al., Submitted for the Record by Hon. Huffman..................    53
    Statement of the American Society of Civil Engineers, Submitted
      for the Record by Hon. Napolitano..............................    64
    Statement of the Association of Equipment Manufacturers,
      Submitted for the Record by Hon. Napolitano....................    65
    Letter from Captain John W. Murray, Port Director and CEO,
      Canaveral Port Authority, Submitted for the Record by Hon.
      Napolitano.....................................................    66
    Letter from Nicole Vasilaros, Senior Vice President of Government
      Relations and Legal Affairs, National Marine Manufacturers
      Association, Submitted for the Record by Hon. DeFazio..........    68

                                    APPENDIX

    Questions from Hon. Grace F. Napolitano for Eugene D. Seroka,
      Executive Director, Port of Los Angeles, San Pedro, California.    71
    Questions from Hon. Angie Craig for Kevin Ross, First Vice
      President, National Corn Growers Association, Minden, Iowa.....    73
    Question from Hon. Angie Craig for Kirsten Wallace, Executive
      Director, Upper Mississippi River Basin Association, St. Paul,
      Minnesota......................................................    74
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                 April 8, 2019

        SUMMARY OF SUBJECT MATTER

        TO:       Members, Subcommittee on Water Resources and
    Environment
        FROM:   Staff, Subcommittee on Water Resources and
    Environment
        RE:       Subcommittee Hearing on ``The Cost of Doing
    Nothing: Why Full Utilization of the Harbor Maintenance Trust
    Fund and Investment in our Nation's Waterways Matter''

                                    PURPOSE

        The Subcommittee on Water Resources and Environment will
    meet on Wednesday, April 10, 2019, at 9:30 a.m. in HVC 210,
    Capitol Visitor Center, to receive testimony related to ``The
    Cost of Doing Nothing: Why Full Utilization of the Harbor
    Maintenance Trust Fund and Investment in our Nation's Waterways
    Matter.''
        The purpose of this hearing is to examine the key role that
    ports, harbors, and inland waterways play in our communities
    and their economies. The hearing will also discuss the
    importance of full utilization of the Harbor Maintenance Trust
    Fund (HMTF) for its authorized purposes--namely, the
    maintenance dredging of authorized commercial coastal and
    inland harbors. The Subcommittee will hear from representatives
    from large and small ports, inland shippers and tow operators,
    as well as businesses that rely on our coastal ports and inland
    harbors.

                                   BACKGROUND

    THE ROLE OF HARBORS AND HARBOR MAINTENANCE NEEDS

        According to the Congressional Research Service \1\,
    oceangoing vessels carry more merchandise trade (measured in
    tons) to and from the United States than all other modes
    combined (air, trucks, rail, and pipeline). This accounts for
    80 percent of the total merchandise trade volume for the
    country. The dependence of trade on ports and shipping channels
    makes the operation and maintenance of these facilities crucial
    to the U.S. economy.
    ---------------------------------------------------------------------------
        \1\ https://www.crs.gov/Reports/
    R43222?source=search&guid=dc51bbd2aa55499184e5ad610aa4
    e590&index=0.
    ---------------------------------------------------------------------------
        Congress provided authority to the U.S. Army Corps of
    Engineers (Corps) for the maintenance of the Nation's roughly
    1,067 harbors and shipping channels. These ports are
    categorized as high use, moderate, and emerging, and defined by
    statute \2\ based on how much tonnage each port handles.
    ---------------------------------------------------------------------------
        \2\ 33 U.S.C. 2238.
    ---------------------------------------------------------------------------
        According to the Corps, navigation channels at our Nation's
    59 ``high use'' ports are at their authorized depths less than
    35 percent of the time. A ``high use'' port is a port that
    handles more than 10 million tons of freight per year. The
    conditions of midsize or ``moderate'' harbors (ports that
    handle between one million and 10 million tons of cargo) and
    ``emerging'' harbors (ports that handle one million tons or
    less of cargo annually) are far worse. The dredging needs of
    our ports will only continue to grow unless more resources are
    devoted to maintenance dredging needs. The opening of the
    expanded Panama Canal in June 2016 has already increased demand
    for larger container ships to call on east and gulf coast
    ports.
        In 2016, the Corps estimated the total cost to dredge and
    maintain authorized widths and depths of all Federal navigation
    projects is $20.5 billion over the next decade. This estimate
    includes:
          $11.5 billion--to achieve authorized dimensions
    in the next 5 years ($2.3 billion annually); and
          $9.0 billion--to maintain authorized dimensions
    for an additional 5 years ($1.8 billion annually).
        Moreover, total navigation needs are likely higher. The
    Corps' $20.5 billion estimate includes additional expenses
    related to navigation (e.g., construction of dredged material
    placement facilities). However, this estimate does not likely
    include all necessary jetty and breakwater work or other needs
    identified by ports to maintain and expand harbor use
    nationwide.

    THE HARBOR MAINTENANCE TAX AND TRUST FUND

        In 1986, Congress enacted the Harbor Maintenance Tax (HMT)
    to recover the operation and maintenance dredging costs for
    commercial ports from maritime shippers. The HMT is directly
    levied on importers and domestic shippers using coastal or
    inland ports as a 0.125 percent ad valorem tax on the value of
    imported cargo (e.g., $1.25 per $1,000 value) \3\ and is
    typically passed along to U.S. taxpayers on the purchase of
    imported goods or services. These revenues are deposited into
    HMTF within the U.S. Treasury from which Congress currently
    appropriates funds to the Corps for harbor maintenance
    dredging.
    ---------------------------------------------------------------------------
        \3\ The HMT initially applied to both imported and exported goods;
    however, in 1998, the U.S. Supreme Court unanimously held that
    imposition of the tax on exported goods was a violation of the U.S.
    Constitution.
    ---------------------------------------------------------------------------
        As noted in Table 1, the HMTF has collected far more
    revenues from shippers than Congress has appropriated to the
    Corps to maintain our Nation's harbors. Approximately $10
    billion in already collected revenues sits unused for its
    intended purpose in the U.S. Treasury. As a result, while
    shippers continue to pay into the HMTF for promised maintenance
    activities, the Federal Government has not carried out many of
    them.

     Table 1: Collections to and Appropriations from Harbor Maintenance Trust Fund (in billions)-- FY 2015-2020 \4\
    ----------------------------------------------------------------------------------------------------------------
                                                FY 2015     FY 2016     FY 2017     FY 2018     FY 2019     FY 2020
    ----------------------------------------------------------------------------------------------------------------
    HMT Collections \5\                            $1.51       $1.38       $1.47       $1.65       $1.78       $1.91
    ----------------------------------------------------------------------------------------------------------------
    HMT Appropriations \6\                         $1.05       $1.16       $1.23       $1.34       $1.49          --
    ----------------------------------------------------------------------------------------------------------------
    Est. Balance in the HMTF                       $8.68       $8.78       $9.10       $9.33       $9.50          --
    ----------------------------------------------------------------------------------------------------------------

        The funds sitting unused in the HMTF would be sufficient to
    meet the maintenance dredging needs of all federally authorized
    ports. The Water Resources Reform and Development Act of 2014
    (WRRDA14) (P.L. 113-121) created discretionary appropriations
    targets for expenditures from the Trust Fund, increasing each
    year, so that by fiscal year 2025 and beyond, 100 percent of
    the funds collected for harbor maintenance purposes go towards
    required operation and maintenance activities. In recent fiscal
    years, appropriations from the Trust Fund have exceeded the
    discretionary targets outlined in WRRDA14; however, Congress
    has not yet achieved the goal of full-utilization of Trust Fund
    collections.
    ---------------------------------------------------------------------------
        \4\ Levels obtained from Budget Message of the President,
    Appendixes (fiscal years 2015-2020).
        \5\ HMT Collections reflects the 0.125% HMT and the HMTF's earnings
    on investments.
        \6\ HMT Appropriations reflects the amounts appropriated for the
    operations and maintenance costs of U.S. commercial navigation harbors
    and the amounts appropriated for the operations and maintenance costs
    of the Saint Lawrence Seaway that are operated and maintained by the
    Saint Lawrence Seaway Corporation. The number does not include any HMT
    appropriations for activities on Mississippi Rivers and Tributaries
    projects or construction related activities currently eligible from the
    HMT (e.g. construction of dredged material disposal facilities that are
    necessary for the operation and maintenance of any harbor or inland
    harbor.
    ---------------------------------------------------------------------------
        The Committee, on a bipartisan basis, has twice approved
    legislation \7\ to fully utilize HMT collections for the
    intended purpose of maintenance dredging; yet this provision
    has yet to be enacted into law. Enactment of such a provision
    honors our Nation's long-term commitment to U.S. shippers and
    taxpayers for harbor maintenance dredging, maintains and
    improves the competitiveness of U.S. businesses and industry,
    and creates and sustains thousands of additional construction
    jobs and jobs dependent on a vibrant and efficient marine
    transportation system.
    ---------------------------------------------------------------------------
        \7\ Section 108 of H.R. 5303 [https://www.congress.gov/114/bills/
    hr5303/BILLS-114hr5303rds.pdf], the Water Resources Development Act of
    2016 (RH), and Section 102 of H.R. 8 [https://www.congress.gov/115/
    bills/hr8/BILLS-115hr8rh.pdf], the Water Resources Development Act of
    2018 (RH).
    ---------------------------------------------------------------------------

    THE PRESIDENT'S FISCAL YEAR 2020 BUDGET REQUEST FOR HARBOR MAINTENANCE

        The President's Budget request for Fiscal Year 2020
    proposed to transfer $965 million from the Trust Fund to the
    Corps for commercial navigation operation and maintenance
    activities. This level is significantly less than the target
    appropriations for fiscal year 2020 outlined in WRRDA 2014, as
    amended. For fiscal year 2020, the target HMTF appropriation
    would be $1.5 billion--the greater of 80 percent of the total
    level of harbor maintenance taxes collected in fiscal year 2019
    (est. $1.782 billion) or 103 percent of the fiscal year 2019
    appropriations from the Trust Fund ($1.4 billion), as provided
    in the Energy and Water Development and Related Agencies
    Appropriations bill, 2019 (Pub. L. 115-244).
        The President's Budget request proposes to spend a total of
    $889.95 million of the total proposed to be transferred from
    the HMTF on project specific navigation operation and
    maintenance activities at commercial ports and harbors.
    According to the Corps, 70.2 percent of these funds would be
    used for high-use commercial harbors, 18.2 percent for
    moderate-use commercial harbors, and 11.1 percent for low-use
    (emerging) commercial harbors.

    THE INLAND WATERWAY SYSTEM

        Inland waterways are a significant component of the
    Nation's marine transportation system. These waterways carry
    approximately one-sixth of the national volume of intercity
    cargo on 25,000 miles of navigable waters throughout the United
    States. Of these waters, approximately 12,000 miles make up the
    commercially active inland and intracoastal waterways which are
    federally managed by the Corps.

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

     Figure 1: U.S. Inland Waterways (Source: U.S. Army Corps of Engineers)

        The federally managed Inland Waterway System (IWS) is
    comprised of 237 lock chambers at 191 sites, and is responsible
    for ports and waterways in 41 States. The IWS handles
    approximately half of all inland waterway freight (and one-
    twelfth of all national freight). The Corps plans, develops,
    operates, and maintains the infrastructure of these commercial
    waterways (e.g. navigation channels, harbors, and locks and
    dams), and also maintains and regulates the channel depths
    through dredging and water management.
        The primary mechanism for moving commodities on the IWS is
    with barges. Barges are well suited for the movement of large
    quantities of bulk commodities and raw materials at relatively
    low cost. The IWS handles about 630 million tons of cargo
    annually, or about 17 percent of all intercity freight by
    volume. The principle commodities transported include coal
    (28%), petroleum (20%), grain exports (11%) and stone, sand,
    gravel (13%).\8\
    ---------------------------------------------------------------------------
        \8\ https://www.mvp.usace.army.mil/Portals/57/docs/Navigation/
    InlandWaterways-Value.pdf.
    ---------------------------------------------------------------------------
        Beyond enabling commercial transportation, the inland
    waterways system may aid in flood control, provide a stable
    water supply for nearby communities and industries, at some
    locations generate hydropower, offer water recreation, provide
    for regional economic development opportunities, and enhance
    national security capabilities.

    INLAND WATERWAYS TRUST FUND_FINANCING

        The IWS is facing significant challenges due to aging
    infrastructure. Over half of the IWS structures are more than
    50 years old, and nearly 40 percent are more than 70 years old.
    Many of these projects are approaching the end of their design
    lives and are in need of modernization or major rehabilitation.
    To help solve this problem Congress created the Inland
    Waterways Trust Fund (IWTF).
        The IWTF was authorized by two separate acts of Congress.
    The original authorization was contained in the Inland
    Waterways Revenue Act of 1978 (P.L. 95-502) (the 1978 Revenue
    Act). Under the 1978 Revenue Act, the U.S. Congress created the
    IWTF within the U.S. Treasury for the purpose of supporting the
    construction and rehabilitation of structures for navigation on
    the inland and coastal waterways of the United States. Congress
    funded the IWTF with a tax on fuel used in commercial
    transportation on inland waterways and statutorily defined 26
    specific segments of the inland and intracoastal waterways as
    being subject to the tax and to be eligible for construction
    and rehabilitation expenditures from the IWTF.
        The second piece of enabling legislation was the Water
    Resources Development Act of 1986 (P.L. 99-662) (WRRDA 1986).
    This legislation reset the IWTF by a graduated increase in the
    inland waterways commercial fuel tax rates, that was
    statutorily capped at the current $0.20 per gallon tax; \9\
    added the Tennessee-Tombigbee Waterway to the list of fuel-
    taxed inland and intracoastal waterways (now totaling 27
    segments); implemented the current funding and cost-share
    allocations; and authorized the construction of eight new
    inland waterways system modernization projects. Previously
    authorized projects and uncompleted projects were allowed to
    continue at 100 percent Federal funding without drawing from
    the IWTF.
    ---------------------------------------------------------------------------
        \9\ The initial $0.20 per gallon diesel tax was increased to $0.29
    per gallon by Pub. L. 113-295, Division B, Title II, Section 205(a).
    However, unlike the ad valorem tax on imports that funds the Harbor
    Maintenance Trust Fund, the fuel tax that funds the Inland Waterways
    Trust Fund is not adjusted to reflect increases in inflation.
    ---------------------------------------------------------------------------
        The same legislation in the 1970s and 1980s created user
    cost-sharing requirements for a subset of the inland waterway
    costs. Current cost sharing requirements include:
          Operation and Maintenance--100 percent to be paid
    from the General Revenue fund; and
          New Construction--50 percent to be paid from the
    IWTF and 50 percent from the General Revenue fund.
        States on the gulf coast and throughout the Midwest and
    Ohio Valley are especially dependent upon the IWS and account
    for the majority of the collected fuel tax revenues. Only one
    Inland Waterways System segment, the Lower Mississippi,
    actually covers the cost of their annual Operation and
    Maintenance expenditures with collected fuel tax revenues. The
    Lower Mississippi has the largest amount of tonnage moved on
    the waterway. The remainder of the IWS segments all have
    operation and maintenance costs that far exceed the amount of
    revenue that they generate through fuel taxes. The fuel-taxed
    IWS includes 207 lock chambers, located at 171 sites, on 27
    inland rivers and intracoastal waterways system segments.\10\
    ---------------------------------------------------------------------------
        \10\ IMTS Capital Investment Strategy Team. 2010. Inland Marine
    Transportation Systems (IMTS) Capital Projects Business Model. Final
    Report.
    ---------------------------------------------------------------------------
        As noted in Table 2, appropriations from the IWTF have
    nearly matched estimated annual revenues into the IWTF since
    the increase in diesel tax in 2015. Additionally, as annual
    revenues deposited into the IWTF continue to increase, the
    Corps has begun to complete longstanding IWTF-supported
    projects, including Olmsted Locks and Dam on the Ohio River,
    and LaGrange Lock and Dam on the Illinois River.

      Table 2: Collections to and Appropriations from Inland Waterways Trust Fund (in millions)-- FY 2015-2020 \11\
    ----------------------------------------------------------------------------------------------------------------
                                          FY 2015      FY 2016      FY 2017      FY 2018      FY 2019      FY 2020
    ----------------------------------------------------------------------------------------------------------------
    IWTF Collections                          $97.9       $111.1       $114.4       $116.8       $116.0       $106.0
    ----------------------------------------------------------------------------------------------------------------
    IWTF Appropriations                       $68.5       $108.0       $108.4       $112.0       $110.7           --
    ----------------------------------------------------------------------------------------------------------------
    Est. Balance in the IWTF                  $54.2        $57.4        $63.4        $40.4        $33.3           --
    ----------------------------------------------------------------------------------------------------------------

    PRESIDENT'S FY2020 IWTF REQUEST
    ---------------------------------------------------------------------------

        \11\ Levels obtained from Inland Waterways Users Board Annual
    Reports and Budget Message of the President, Appendixes (fiscal years
    2015-2020).
    ---------------------------------------------------------------------------
        The President's Budget request documents that $106 million
    will be collected into the IWTF from the existing $0.29 per
    gallon diesel fuel tax in the coming fiscal year, but the
    budget request utilizes only $55.5 million for inland projects
    in FY 2020. The budget request could have an adverse impact on
    the scheduling and completion of projects on the inland
    waterways, which are typically funded 50 percent from the Trust
    Fund and 50 percent from general revenues.
        If the President's Budget request was fully implemented, at
    the end of FY 2020, the IWTF would carry a balance of $354
    million; yet only $55.5 million would be expended from the
    Trust Fund for construction activities on the inland waterways
    system.

                                   WITNESSES

          Mr. Rick Goche, Commissioner, Port of Bandon,
    Bandon, Oregon
          Mr. Eugene Seroka, Executive Director, Port of
    Los Angeles, San Pedro, California
          Ms. Bonnie Brady, Executive Director, Long Island
    Commercial Fishing Association, Montauk, New York
          Mr. Kevin Ross, First Vice President, The
    National Corn Growers Association, Minden, Iowa
          Ms. Phyllis Harden, Legislative and Special
    Projects, Pine Bluff Sand and Gravel Co., Pine Bluff, Arkansas
          Mr. Peter H. Stephaich, Chairman, Campbell
    Transportation Company, Houston, Pennsylvania, on behalf of the
    Waterways Council Inc.
          Ms. Kirsten Wallace, Executive Director, Upper
    Mississippi River Basin Association, St. Paul, Minnesota

         THE COST OF DOING NOTHING: WHY FULL UTILIZATION OF THE HARBOR
     MAINTENANCE TRUST FUND AND INVESTMENT IN OUR NATION'S WATERWAYS MATTER

                                  ----------

                           WEDNESDAY, APRIL 10, 2019

                      House of Representatives,
       Subcommittee on Water Resources and Environment,
                Committee on Transportation and Infrastructure,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 9:30 a.m., in
    room HVC-210, Capitol Visitor Center, Hon. Grace F. Napolitano
    (Chair of the subcommittee) presiding.
        Mrs. Napolitano. Good morning, everybody. I am calling this
    hearing to order this morning. Today's hearing focuses on the
    significant role of our Nation's harbors, our ports, our inland
    waterways play for the Nation and the importance of maintaining
    an investment in the infrastructure.
        There is no question about the value of the ports and
    harbors to our country and our economy. Oceangoing vessels
    carry more merchandise to trade by tonnage than any other modes
    of transportation combined. The case for Federal investment is
    simple: We must use what we collect to maintain our ports to
    ensure and maintain America's global competitiveness.
        My region is home to the largest ports in the Nation, the
    Port of Los Angeles and the Port of Long Beach. These two ports
    handle over 40 percent of the exports and imports into the
    United States. Los Angeles and Long Beach have invested
    billions of their own money to upgrade their infrastructure for
    the benefit of the entire Nation so that goods can get to
    market across the country on time.
        But like other ports in the U.S., the success of the Ports
    of Los Angeles and Long Beach are only as strong as their
    partnership with the Federal Government in maintaining our
    infrastructure. The shippers at the Ports of Los Angeles and
    Long Beach pay over $260 million annually in harbor maintenance
    taxes but receive only $10 million back in harbor maintenance.
        As of a few years ago, my ports were receiving nearly
    nothing back until, working together with then-Ranking Member
    DeFazio, we were successful in enacting language in WRRDA 2014
    that required the Army Corps of Engineers to allocate at least
    10 percent of harbor maintenance funds to all donor ports for
    expanded uses, or funds to continue to use their ports. This
    language also recognizes the importance of emerging and Great
    Lakes harbors and provided a designated set-aside for them as
    well.
        There already has been a lot of interest this Congress by
    the House and the Senate in resolving full utilization of the
    Harbor Maintenance Trust Fund. Full utilization should be
    supported across the board, as it benefits everyone. This
    Congress must also address inequities in the Harbor Maintenance
    Trust Fund. It is not fair for harbors like mine to be paying
    so much in tax and receive so little.
        I look forward to working with all of my colleagues, my
    ranking member, as we find common ground to address continuing
    needs of all our ports and harbors. If past success is
    prologue, I look forward to working with the now-Chair DeFazio
    in finding a solution for all.
        Today's hearing will also focus on the importance of the
    inland waterways system to our Nation's heartland. They face
    challenges and an aging infrastructure system. I look forward
    to hearing from witnesses today on the value of the inland
    waterways to our economy. Thank you for all the witnesses for
    being here today. We will be having votes soon, so we tried to
    be on time and get everybody heard. Thank you especially to
    Executive Director Gene Seroka from the Port of Los Angeles for
    joining us, and I look forward to his testimony.
        At this time, I am pleased to yield to my colleague Mr.
    Ranking Member Westerman for any thoughts he may have.
        [Mrs. Napolitano's prepared statement follows:]

      Prepared Statement of Hon. Grace F. Napolitano, a Representative in
    Congress from the State of California, and Chair, Subcommittee on Water
                           Resources and Environment
        There is no question about the value of ports and harbors to our
    country and our economy. Oceangoing vessels carry more merchandise to
    trade by tonnage than all other modes combined. The case for Federal
    investment is simple: we must use what we collect to maintain our ports
    to ensure and maintain America's global competitiveness.
        My region is home to the largest ports in the nation, the Port of
    Los Angeles and the Port of Long Beach. These ports handle over 40
    percent of the exports and imports into the United States. Los Angeles
    and Long Beach have invested billions of dollars of their own money to
    upgrade their infrastructure for the benefit of the entire nation so
    that goods can get to market across the country on time. But like other
    ports across the U.S., the success of the Ports of Los Angeles and Long
    Beach are only as strong as their partnership with the Federal
    government in maintaining our infrastructure.
        The shippers at the Ports of Los Angeles and Long Beach pay over
    $260 million annually in Harbor Maintenance Taxes but they receive only
    $10 million back in harbor maintenance. As of a few years ago, my ports
    were receiving nearly nothing back, until working together with then
    Ranking Member DeFazio, we were successful in enacting language in
    WRRDA 2014 that required the Army Corps of Engineers to allocate at
    least 10 percent of Harbor Maintenance Funds to all donor ports for
    expanded uses, or funds to continue to use their ports. This language
    also recognized the important role of emerging and Great Lakes harbors,
    and provided a designated set-aside for them as well
        There has already been a lot of interest this Congress by the House
    and the Senate in resolving full utilization of the Harbor Maintenance
    Trust Fund. Full utilization should be supported across the board--as
    it benefits everyone. This Congress must also address inequities in the
    harbor maintenance trust fund. It is not fair for harbors like mine to
    be paying so much in the tax and receiving so little. I look forward to
    working with all of my colleagues as we find common ground to address
    the continuing needs of all our ports and harbors. If past success is
    prologue, I look forward to working with Now-Chair DeFazio in finding a
    solution for all.
        Today's hearing will also focus on the importance of the Inland
    Waterways System to our nation's heartland. They face challenges with
    an aging infrastructure system. I look forward to hearing from our
    witnesses today on the value of the inland waterway to our country.
        Thank you witnesses for being here today. Thank you especially to
    Executive Director Gene Seroka, with the Port of Los Angeles, for
    joining us.
        I look forward to everyone's testimony.

        Mr. Westerman. Thank you, Chairwoman Napolitano. It is an
    exciting time to be working on this issue together. I had the
    great honor of visiting your State and visiting the Port of
    Long Beach in Representative Lowenthal's district and to see
    that amazing facility out there with the Port of Los Angeles.
        And it is good to have such a diverse panel here so that we
    can gain perspectives on different issues that are facing
    ports, harbors, and inland waterways as well as stakeholder and
    other users' issues.
        I especially want to thank Phyllis Harden for her
    participation here today. She is a constituent of mine who was
    recently inducted into the Arkansas River Hall of Fame.
        The needs of our ports, harbors, and inland waterways are
    substantial, and they continue to grow. Oceangoing vessels
    carry more merchandise trade to and from the United States than
    all other modes of transportation combined. My home State of
    Arkansas is third in the Nation in the number of inland
    waterway miles, one of only 24 States in the United States to
    have the unique resource of inland waterways.
        Major products that move along the Arkansas waterways
    include grain, steel, fertilizers, petroleum and petroleum
    products, aggregates, paper and wood products, among others.
    This means there is a very good chance that everything from the
    bread your sandwich is made with to the components of your car
    were carried at some point on a waterway. Yet, more often than
    not, our ports and inland waterways are not maintained to their
    fully authorized widths and depths, severely jeopardizing our
    way of life, competitiveness, American jobs, and the
    communities that depend on them.
        In order to address the maintenance of our ports, Congress
    enacted the harbor maintenance tax for the purpose of covering
    dredging costs. The tax is directly levied on importers and
    domestic shippers using coastal or inland ports and deposited
    into a trust fund within the Treasury.
        However, for too long, more tax revenue has been collected
    annually than Congress has appropriated. And because of this
    fact, a balance has been accruing that currently stands at
    approximately $10 billion. That is enough to address our
    currently authorized maintenance needs if spent down.
        That Congress has allowed this to persist as our needs only
    continue to grow represents a problem in dire need of a
    solution. This committee has twice in recent years passed
    measures that would dedicate the taxes to their intended
    purposes, and I look forward to continue working to solve this
    problem.
        It is not just our ports that are in need but also the
    structures that support the inland waterway system, which
    require maintenance, repairs, and upgrades. Over half of the
    inland waterway structures are more than 50 years old, and
    nearly 40 percent are more than 70 years old. Many of these
    projects have reached or are approaching the end of their
    design lives.
        The Upper Mississippi alone, from St. Louis to the
    headwaters in Minnesota's Lake Itasca, generates almost $600
    billion in annual economic activity and is used to transport 60
    percent of all grain products in America. And we are the
    world's number-one grain producer. As the amount of goods
    traveling on the inland system is expected to increase by more
    than 20 percent by 2050, we must continue to invest in this
    vital system. The risk of failure is too great. It is critical
    that, as we work to address our infrastructure challenges in
    this Congress, that our ports, harbors, and inland waterways
    are not left behind.
        I again look forward to hearing the witnesses' perspectives
    and solutions to address our Nation's infrastructure needs, and
    I yield back the balance of my time.
        [Mr. Westerman's prepared statement follows:]

        Prepared Statement of Hon. Bruce Westerman, a Representative in
     Congress from the State of Arkansas, and Ranking Member, Subcommittee
                       on Water Resources and Environment
        I'm happy we have such a diverse panel so that we can gain their
    perspectives on the issues facing ports, harbors, and inland waterways,
    as well as their stakeholders and users. I especially want to thank Ms.
    Phyllis Harden for her participation here today. She is a constituent
    of mine who was recently inducted into the Arkansas River Hall of Fame.
        The needs of our ports, harbors, and inland waterways are
    substantial, and they continue to grow.
        Oceangoing vessels carry more merchandise trade to and from the
    United States than all other modes of transportation combined. My home
    state of Arkansas is third in the Nation in the number of inland
    waterway miles--one of only 24 states in the United States to have the
    unique resource of inland waterways. Major products that move on
    Arkansas waterways include grains, steel, fertilizers, petroleum and
    petroleum products, aggregates, paper, and wood products, among others.
    This means there is a very good chance that everything from the bread
    for your sandwiches to the components of your car were carried at some
    point on a waterway.
        Yet more often than not, our ports and inland waterways are not
    maintained to their fully authorized widths and depths, severely
    jeopardizing our way of life, competitiveness, American jobs, and the
    communities that depend on them.
        In order to address the maintenance of our ports, Congress enacted
    the Harbor Maintenance Tax (HMT) for the purpose of covering dredging
    costs. The tax is directly levied on importers and domestic shippers
    using coastal or inland ports, and deposited into a trust fund within
    the Treasury.
        However, for too long more tax revenue has been collected annually
    than Congress has appropriated. And because of this fact, a balance has
    been accruing that currently stands at approximately 10 billion
    dollars--enough to address our currently authorized maintenance needs
    if spent down. That Congress has allowed this to persist, as our needs
    only continue to grow, represents a problem in dire need of a solution.
        This Committee has twice, in recent years, passed measures that
    would dedicate the taxes to their intended purposes--and I look forward
    to continue working to solve this problem.
        But it is not just our ports that are in need, but also the
    structures that support the inland waterways system which require
    maintenance, repair, and upgrade. Over half of the inland waterways
    structures are more than 50 years old, and nearly 40 percent are more
    than 70 years old. Many of these projects are approaching the end of
    their design lives.
        The upper Mississippi alone, from St. Louis to the headwaters in
    Minnesota's Lake Itasca, generates almost $600 billion in annual
    economic activity and is used to transport 60 percent of all grain
    products in America, the world's number-one grain producer.
        As the amount of goods traveling on the inland system is expected
    to increase by more than 20 percent by 2050, we must continue to invest
    in this vital system--the risk of failure is too great.
        It is critical that as we work to address our infrastructure
    challenges this Congress, our ports, harbors, and inland waterways are
    not left behind. I look forward to hearing the witnesses' perspectives
    and solutions to address our water resources infrastructure needs.

        Mrs. Napolitano. Thank you. I now recognize the chair of
    the full committee, Mr. DeFazio.
        Mr. DeFazio. Thank you, Madam Chair. The good news is that
    we do have a revenue source to maintain our harbors, a law
    enacted during the Reagan administration with a Democratic
    Congress. The bad news is that Congress, on a bipartisan basis,
    has frequently underspent the collected taxes, meaning we are
    taxing the American people for a specific purpose where we have
    great needs, and yet that money is being essentially stolen by
    the Congress and stuck into a theoretical trust fund for
    theoretical deficit offset. It is absurd.
        And, you know, 4 years ago, when I first offered an
    amendment in this committee to a WRDA bill, Water Resources
    Development Act bill, the chairman, Bill Shuster, was shocked
    when it was adopted unanimously by the committee. He didn't
    realize that, you know, this would be such a bipartisan issue.
    Twice I have gotten that provision into WRDA bills, and twice
    Paul Ryan personally removed it in the Rules Committee or had
    it removed in the Rules Committee. Paul is now retired. I hope
    he is enjoying it, and I hope for better treatment by the Rules
    Committee this year when we move similar legislation.
        As was mentioned previously, our 59 busiest ports have
    about 35 percent of their available authorized depths on a
    daily basis. And for smaller harbors, which we will hear from
    today, it is absolutely the lifeblood. If we didn't have the
    small and emerging ports money, many of these communities would
    be absolutely devastated. So I will soon reintroduce that bill,
    and it will be part of the infrastructure initiatives that this
    committee will undertake this year.
        We are still having trouble with the White House, not quite
    as bad as last year. Last year, they came up with a solution on
    underspending the tax. They said, well, let's just cut the tax.
    Maybe some of my conversations penetrated at least a little bit
    with people downtown. So, this year, they are not proposing to
    reduce the tax, but they are proposing to underspend the
    revenues by almost $1 billion. And I am determined, and I am
    certain this committee will be determined to see that that
    doesn't happen.
        With that, Madam Chair, I would yield back the balance of
    my time.
        [Mr. DeFazio's prepared statement follows:]

       Prepared Statement of Hon. Peter A. DeFazio, a Representative in
          Congress from the State of Oregon, and Chair, Committee on
                       Transportation and Infrastructure
        Thank you, Madam Chairwoman, for holding this important hearing on
    the need to invest in our Nation's ports and inland waterways.
        The Corps has a long history of success in addressing the Nation's
    water resources needs--from ensuring safe and reliable navigation along
    our coasts and inland systems, to providing critical flood protection
    for our communities, to restoring some of our Nation's environmental
    treasures. However, today's hearing is an opportunity to highlight one
    of the more frustrating and inefficient aspects of the Federal
    government--how we fund the maintenance of our commercial harbors.
        As we all know, Congress worked with the Reagan Administration to
    create a mechanism to recover the operation and maintenance dredging
    costs for commercial ports from maritime shippers--called the Harbor
    Maintenance Tax. This fee, directly levied on importers and domestic
    shippers using coastal and inland ports, was meant to provide the Corps
    of Engineers with sufficient annual revenues to keep our ports in a
    good state of repair, and sustain our local, regional, and national
    economies that rely on the movement of goods and services through our
    commercial ports.
        The good news is that we are currently collecting sufficient
    revenues to adequately maintain our commercial harbors--of all sizes--
    as well as critical infrastructure, such as breakwaters and jetties,
    associated with these commercial ports.
        The bad news is that we refuse to spend this money--or more
    accurately, we collect this money, but then use these funds to offset
    other expenditures in the Federal government while the needs of our
    commercial ports continue to grow.
        Look at the state of our Nation's ports and harbors. The U.S. Army
    Corps of Engineers estimates that the full channels of the Nation's 59
    busiest ports are available less than 35 percent of the time. For
    smaller commercial harbors, such as Coos Bay or Port Orford, typically
    their dredging situations can be far worse.
        The American Society of Civil Engineers estimates that our Nation's
    ports and harbors will need an additional investment of $15.8 billion
    between now and 2020 to meet the demands of larger and heavier ships
    that will use the Panama Canal. This increased investment would protect
    $270 billion in U.S. exports, $697 billion in GDP and 738,000 jobs
    annually.
        Today, because the Harbor Maintenance Trust Fund collects more
    revenues from shippers than Congress appropriates to maintain our
    harbors, approximately $9.5 billion in already collected tax revenues
    sits idle in the Harbor Maintenance Trust Fund.
        If the rate of tax collections and expenditures continue on their
    current trend, CBO estimates that the balance of the Harbor Maintenance
    Trust Fund will reach more than $14 billion within a decade.
        To be clear, concern about the misuse of Harbor Maintenance taxes
    is not a partisan issue. Widely supported actions taken by this
    Committee in 2014 to enact Trust Fund appropriations targets have been
    integral to increasing the level of appropriations maintenance dredging
    over the last 5 years.
        However, discretionary appropriations targets are not enough to get
    us to full-utilization of the Trust Fund. That is why, on a bipartisan
    basis, this Committee has, twice, adopted language to provide the
    Secretary with full access to the revenues in the Trust Fund for
    maintenance dredging purposes--in essence, ensuring that all the
    existing revenues in the Trust Fund are utilized for their intended
    purposes--the maintenance of our commercial harbors.
        Unfortunately, this language has not been enacted into law.
        Instead, the President continues to go in the opposite direction
    and proposes, in his fiscal year 2020 budget request, to underfund
    investment in our Nation's infrastructure--virtually guaranteeing that
    the Federal government will do little to ensure the commercial
    viability of our harbors and ports, and adversely impact the economic
    benefits that these critical linkages to trade and local jobs provide.
        It is time we use our legislative authority to correct how Congress
    funds the operation and maintenance of our commercial harbors--and
    ensure these funds are used for their intended purposes.
        I will again introduce legislation to fully utilize Trust Fund
    proceeds for their intended purposes--and ensure that the approximately
    $34 billion in harbor maintenance taxes available over the next decade
    are spent to maintain our harbors and ports. My bill honors our long-
    term commitment to U.S. shippers and taxpayers, maintains and improves
    the competitiveness of U.S. businesses and industry, and sustains
    thousands of construction jobs and jobs dependent on a vibrant and
    efficient marine transportation system.
        I urge your continued support for this legislation which would
    virtually ensure Congress uses already-collected funding to maintain
    our Nation's ports and harbors.

        Mrs. Napolitano. Thank you, Mr. DeFazio.
        Let me start by asking unanimous consent that the chair be
    authorized to declare a recess during today's hearing.
        Without objection, so ordered.
        Now we will proceed to hear from our witnesses who will
    testify today, and thank you very much, all of you, for being
    hero. We have Mr. Rick Goche, commissioner, Port of Bandon,
    Oregon; Mr. Gene Seroka, executive director, Port of Los
    Angeles; Ms. Bonnie Brady, executive director, Long Island
    Commercial Fishing Association, New York, welcome; Mr. Kevin
    Ross, first vice president of the National Corn Growers
    Association from Minden, Iowa; Ms. Phyllis Harden, executive
    assistant, Pine Bluff Sand and Gravel Company, Arkansas; Mr.
    Peter H. Stephaich, chairman, Campbell Transportation Company,
    Pennsylvania, on behalf of the Waterways Council, Incorporated;
    and Ms. Kirsten Wallace, executive director, Upper Mississippi
    River Basin Association from St. Paul, Minnesota.
        Without objection, your prepared statements will be entered
    into the record, and all witnesses are limited to 5 minutes.
        Commissioner Goche, you may proceed.

    TESTIMONY OF RICK GOCHE, COMMISSIONER, PORT OF BANDON, BANDON,
       OREGON; EUGENE D. SEROKA, EXECUTIVE DIRECTOR, PORT OF LOS
        ANGELES, SAN PEDRO, CALIFORNIA; BONNIE BRADY, EXECUTIVE
    DIRECTOR, LONG ISLAND COMMERCIAL FISHING ASSOCIATION, MONTAUK,
       NEW YORK; KEVIN ROSS, FIRST VICE PRESIDENT, NATIONAL CORN
     GROWERS ASSOCIATION, MINDEN, IOWA; PHYLLIS HARDEN, EXECUTIVE
        ASSISTANT, PINE BLUFF SAND AND GRAVEL CO., PINE BLUFF,
       ARKANSAS; PETER H. STEPHAICH, CHAIRMAN AND CEO, CAMPBELL
    TRANSPORTATION COMPANY, INC., HOUSTON, PENNSYLVANIA, ON BEHALF
      OF WATERWAYS COUNCIL, INC.; AND KIRSTEN WALLACE, EXECUTIVE
    DIRECTOR, UPPER MISSISSIPPI RIVER BASIN ASSOCIATION, ST. PAUL,
                               MINNESOTA

        Mr. Goche. Thank you and good morning, Chairwoman
    Napolitano.
        Mrs. Napolitano. Can you turn your mic on?
        Mr. Goche. Is that good now?
        Mrs. Napolitano. That is better.
        Mr. Goche. Good morning, Chairwoman Napolitano, Ranking
    Member Westerman, and members of the subcommittee. Thank you
    for the opportunity to talk about the importance of fully
    utilizing harbor maintenance tax revenue to ensure the Army
    Corps of Engineers is able to maintain navigation channels and
    jetties at small ports in the Pacific Northwest and around the
    country.
        I am here from Bandon, Oregon, which has a population of
    3,112. I am commissioner at the Port of Bandon, and I am a
    small business owner. I have been a commercial fisherman for
    most of my life. Now I primarily fish for tuna. Our region's
    tuna fleet includes about 600 boats that fish off of Oregon and
    Washington.
        My brother and I pack our boat with supplies for 2 weeks at
    a time and spend most of that time between 100 and 200 miles
    offshore. Because our boats are only capable of about 7 knots
    in heavy weather and because we are so far offshore, if unsafe
    weather is forecast, we go into whatever port is closest. If
    the weather is really bad, our only safe course is downwind to
    whatever port is on that trajectory.
        This is where the term ``safe harbor'' comes from. When
    weather is bad, any harbor, large or small, is safer than being
    at sea. From a fisherman's perspective, every port, large and
    small, is important. Whether we can use a particular port for
    safe harbor has everything to do with the condition of the bar
    in the Pacific Northwest.
        The phrase ``crossing a bar'' may not be familiar to
    everyone here, but for the people in the Pacific Northwest that
    take boats out into the ocean, understanding this term is a
    matter of life and death. The bar is the term used where a hump
    is formed where sediment builds up as the downstream river
    water comes up against the ocean swells.
        During ebb tides, river and tidal flows combine to create a
    stronger current than comes up against the incoming ocean
    swell. If the swell is large and the bar is shallow, the energy
    of the swell is tipped over, resulting in a breaker. Breakers
    are dramatically higher and steeper than the swell, and the
    life-threatening danger comes when a boat is attempting to
    cross the bar and encounters a sneaker wave that is larger than
    expected. The wave builds and steepens, and the boat goes out
    of control as it essentially turns into a surfboard, goes
    broadside and rolls over. This dangerous condition is referred
    to as a breaking bar.
        And it wasn't until I came to DC the first time advocating
    for dredging of the bars of our small ports that I realized
    breaking bars is a phenomenon mostly unique to the Pacific
    Northwest. Until that realization, I couldn't understand how
    budget after budget could zero out small port dredging when so
    many lives were at stake.
        Now, there are a couple of ways to minimize the threat of a
    breaking bar. One way is for the Army Corps of Engineers to
    build jetties that steer the current a few degrees off of the
    dominant swell direction. This was done on every bar in the
    Pacific Northwest many decades ago, but today most of those
    jetties are in dire need of repair and are getting less and
    less effective. Another way to minimize the deadliness of a
    breaking bar is to regularly dredge out the sediment hump that
    builds up every year from the torrential rains that
    characterize the Pacific Northwest coast.
        Now, there is one thing that both of these remedies have in
    common, and that is funding. The Portland district of the Army
    Corps of Engineers does a good job of maintaining our jetties
    and dredging our navigation channels, given the resources
    Congress provides. But when sufficient funding for these
    activities are not available, as is often the case for small
    ports, the bar shallows and breaks and lives are lost.
        As a commercial fisherman, safety is paramount, but for
    thousands of others on land, their economic livelihood also is
    tied to the maintenance of navigation channels and jetties. In
    Oregon, there are 15 communities with small ports. Nearly all
    of these are located in rural areas. In every one of those
    communities, the port is the equivalent of their anchor
    business.
        The Port of Bandon recently commissioned a study of the
    impact of our port on the local economy. It found that $52
    million of economic benefit is generated annually as a result
    of the dredging that gives us access to the sea, and nearly $5
    million in Federal tax payments are returned to the Treasury.
    So let me highlight this. It costs about $500 a year to dredge
    the bar----
        Mr. DeFazio. Not $500. You mean $500,000--you said $500.
        Mr. Goche. I am sorry. Excuse me. Wow. OK. Yes, thank you,
    Congressman. $500,000 to dredge the channel. And in return, the
    Treasury receives $5 million. So a 10-to-1 return on
    investment, which I imagine everybody would like to see in
    theirs.
        Operation and maintenance of our Nation's navigation
    infrastructure is a Federal responsibility, yet small ports
    around the country have to fight like heck for funding that
    will allow the Army Corps of Engineers to do its job. It is a
    real shame, but it wouldn't have to be this way if the HMT
    funds were fully utilized.
        Due to the leadership of this committee, we have seen a
    substantial increase in the amount of harbor maintenance tax
    revenue that is dedicated to dredging and jetty maintenance,
    but a lot of this money is still being used to fund other
    Government programs or to balance the Federal budget. This is
    why I appreciate your continuing efforts to get to full
    utilization of the Harbor Maintenance Trust Fund. I also
    appreciate the opportunity to talk about what funding means to
    me, my community, and for rural communities around the country.
        Mrs. Napolitano. All right, sir.
        Mr. Goche. So what I am really here to ask----
        Mrs. Napolitano. You are over you time limit.
        Mr. Goche. I am sorry.
        [Mr. Goche's prepared statement follows:]

    Prepared Statement of Rick Goche, Commissioner, Port of Bandon, Bandon,
                                     Oregon
        Good morning, Chairwoman Napolitano, Ranking Member Westerman and
    members of the Subcommittee. Thank you for the opportunity to talk
    about the importance of fully utilizing Harbor Maintenance Tax revenue
    to ensure the Army Corps of Engineers is able to maintain navigation
    channels and jetties at small ports in the Pacific Northwest, and
    around the country.
        I'm here from Bandon, Oregon, which has a population of 3,112. I
    have been a commercial fisherman for most of my life. I'm a small
    business owner. And I'm a port commissioner for the Port of Bandon. I
    should be home preparing my boat for its annual maintenance but I have
    something I need to talk with you about.
        I've been involved in the seafood business from research to retail
    for most of the past 50 years. As a commercial fisherman I've crossed
    every bar from San Francisco to Canada at one time or another. Now I
    fish primarily for tuna off of Oregon and Washington. Our region's tuna
    fleet includes about 600 boats.
        My brother and I pack our boat with supplies for two weeks at a
    time and spend most of that time between 100 and 200 miles off shore.
    Because our boats are only capable of about 7 knots in heavy weather,
    and because we are so far offshore, if unsafe weather is forecasted, we
    must go into whatever harbor is closest. If the forecast is wrong, we
    can be in a situation where our only course is downwind to whatever
    port is on that trajectory. This is where the term ``safe harbor''
    comes from. When weather is bad, any harbor, big or small, is safer
    than being at sea.
        So from a fisherman's perspective EVERY port, large and small, is
    important. Whether we can use a particular port for safe harbor has
    everything to do with the condition of the bar.
        The term ``bar'' may not be familiar to everyone here, but for
    people in the Pacific Northwest that take boats out into the ocean,
    understanding of this term is a matter of life or death. Bar is the
    term used for the point where the harbor entrance, in my region
    normally near the mouth of a river, forms a ``hump'' where sediment
    builds up as the downstream river water comes up against the ocean
    waves. During ebb tides, river and tidal flows combine to create a
    stronger current that comes up against the incoming ocean swell. If the
    swell is large and the bar is shallow, the energy of the swell is
    tipped-over resulting in a ``breaker''. Breakers are dramatically
    steeper than the swell and the life threatening danger is when a boat
    is attempting to come into the entrance, and the boat encounters a
    ``sneaker'' wave that is larger than expected--the wave steepens, and
    the boat goes out of control as it essentially turns into a surfboard,
    goes broadside and rolls over. This dangerous condition is referred to
    as a ``breaking bar''.
        It wasn't until I came to D.C. the first time advocating for
    dredging of the bars of our small ports that I realized breaking bars
    are a phenomenon mostly unique to the Pacific Northwest. Until that
    realization dawned, I couldn't understand how budget-after-budget could
    zero out small port dredging when so many lives are at stake.
        There are a couple of ways to minimize the threat of a breaking
    bar. One way is for the Army Corp of Engineers to build jetties that
    steer the current a few degrees off the dominant swell direction. This
    was done on every bar in the Pacific Northwest many, many decades ago,
    but today, most of those jetties are in dire need of repair and are
    getting less and less effective. Another way to minimize the deadliness
    of a breaking bar is to regularly dredge out the sediment that builds
    up every year from the torrential rains that characterize the Pacific
    Northwest coast.
        There is one thing that both of these have in common, and that is
    funding. The Portland District of the Army Corp of Engineers does a
    fantastic job maintaining our jetties and dredging our navigation
    channels given the resources made available to them by Congress. But
    when sufficient funding for these activities is not available, as is
    often the case for small ports, the bar shallows, and breaks, and
    inevitably, lives are lost.
        For me, safety is paramount. But for thousands of others on the
    Oregon coast and around the country, their economic livelihood is tied
    to the maintenance of navigation channels and jetties.
        Oregon's ports and harbors rank amongst our state's most valuable
    assets and are critical to maintaining and creating jobs across our
    great state. In Oregon there are 15 communities with small ports with
    ocean access. Nearly all of these ports are located in rural
    communities. In every one of those communities the port is the
    equivalent of their anchor business. These small ports provide an
    important employment base and are often primary drivers of local
    prosperity. They are hubs for international trade, recreation, and
    commercial fishing.
        The Port of Bandon is a case study for this. Our port attracts
    approximately 300 vessels per year, and has gained a strong tourism
    presence through sport-fishing and recreational crabbing. Tourists
    enjoy a full range of recreational activities including full marina
    facilities, crab docking, a scenic river walk and nature pathway,
    amphitheater and a new boardwalk. The Bandon Marina includes a public
    boat ramp and 90 moorage slips that are typically occupied, especially
    in the summer months. In addition to the Bandon Marina, crab dock and
    boat launch, the Port of Bandon owns several real estate holdings that
    provide lease space for businesses. A Coast Guard motor lifeboat is
    based in the Port marina during summer months.
        The Port of Bandon, along with approximately 54 port-related
    businesses, employs an estimated 484 workers. This includes a charter
    service, a bait shop, two fish markets, two marine insurance
    businesses, as well as numerous restaurants and hotels. We contracted a
    study in 2014 of the impact of our port on the local economy. It found
    that $62 million ($35.1 million direct and $27 million indirect/
    induced) of economic benefit is generated annually by our port as the
    result of the funding that allows the Army Corps of Engineers to
    maintain our navigation channels and jetties. This output results in
    nearly $5 million in federal tax payments returned to the treasury due
    to our access to the sea.
        Operation and Maintenance of our nation's navigation infrastructure
    is a Federal responsibility. Yet small ports around the country have to
    fight like heck for funding that will allow the Army Corps of Engineers
    to do its job. The real shame is that it doesn't have to be this way.
        Due to the leadership of this committee, we have seen a substantial
    increase in the amount of harbor maintenance tax revenue that is
    dedicated to dredging and jetty maintenance. But a lot of this money is
    still being used to fund other government programs or to balance the
    federal budget. This is why I appreciate your continuing efforts to get
    to full utilization of the harbor maintenance trust fund.
        Thank you, again, for the opportunity to talk about what funding
    means to me, my community, and to rural communities around the country.
    I have included additional documentation to support my testimony,
    including an illustration of the breaking bar that I described, and a
    chart that provides additional detail about the dangers of breaking
    bars in the Pacific Northwest.
        I know it may not make sense to you but if everything you have is
    wrapped up in your boat, and your boat feeds your family, you go
    fishing. Even when everything is optimal some of us don't make it home.
    I'm here asking you to give us the best chance you can, so we can make
    it in, and home, to our families.

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mrs. Napolitano. Thank you very much. I am sorry, sir.
        Mr. Seroka, you are on. You are next.
        Mr. Seroka. Good morning, Chairman DeFazio, Chairwoman
    Napolitano, Ranking Member Westerman, our California delegation
    and members of the committee.
        My name is Gene Seroka. I am the executive director at the
    Port of Los Angeles and dually I hold the position of vice
    president of the California Association of Port Authorities.
        The Port of Los Angeles is the largest container port in
    the United States, moving more than 9\1/2\ million container
    units per year and accounting for more than $300 billion in
    goods movement through our port complex.
        We support about 150,000 jobs in Los Angeles and more than
    1.6 million in the country. Our gateway is the traditional move
    for cargo imported and exported to this Nation through Asia and
    the Pacific Rim. About half of the cargo that comes through our
    port complex goes direct to consumers. The other half, in
    component form, goes to the manufacturing stream here in the
    United States. All combined, we reach each and every
    congressional district in the United States. This truly is a
    conversation of national significance when it comes to the Port
    of Los Angeles.
        The goods moved in industry underpins what we are doing as
    an economy. Seventy percent of consumer spend goes directly to
    our top line of GDP, and the ports industry supports 31 million
    jobs nationwide and approximately 26 percent of our country's
    GDP. We are looking for a consistent and sustainable stream of
    funding for our ports and harbors across the country, and the
    harbor maintenance trust is a great place to start as we have a
    broader conversation about infrastructure in our Nation.
        We are grateful to this committee and Congress for the work
    that has been done in water resources in 2014 and 2016, which
    greatly moved us forward in the conversation and realization of
    full spend.
        Today I ask for three areas of consideration: first, full
    utilization of the harbor maintenance tax; second, a fair and
    equitable allocation of those funds; and, thirdly, limited but
    expanded use of these capabilities through the funds. I will
    take you through each one very quickly.
        On full utilization, this can get us to a place of
    continued investment not only by our country but by others who
    will see trade increase and continued opportunity for
    investment in our ports and harbors. On fair and equitable
    allocation, for the first time in memory--and I have been in
    this industry more than 30 years--we have industry unanimity on
    this subject of the harbor maintenance trust and how to
    allocate between so-called donor ports like Los Angeles that
    bring in the majority of this revenue, dredge ports that
    require this money to continue to combat silting, and other
    areas to make sure their channels are deep, and the energy
    transport ports, which are so important to our Nation's
    economy.
        Overall, the donor ports today, the top six, bring in about
    60 percent or nearly half of all the revenue on the HMT side,
    yet, in return, we receive about 2 percent of those proceeds to
    work at our individual and local locations.
        With respect to limited expansion, because we are not a
    port that is continuing to work on the sedimentation effects on
    our main channel or making sure that we have a certain depth on
    a regular basis, we have other needs. Larger ships and the
    advent of that change in our industry requires us to do
    additional work in water alongside wharves, to fortify those
    areas and make sure they are strong to handle those larger
    ships. Looking at those limited possibilities for expansion
    would greatly drive our competitiveness and that of our Nation.
    We have approximately $260 million in projects along those
    lines that are coming up quite swiftly in order to manage the
    changes in the industry.
        We also have a responsibility to maintain and improve our
    seismic requirements in southern California. That also has an
    application in this discussion.
        I encourage the committee to look at the framework that has
    been put forward by the American Association of Port
    Authorities. And, as mentioned, our industry is on the cusp of
    not only agreeing on how to move forward, but also recommending
    how we could put a framework together in concert with this
    committee and Congress at large.
        This hearing is timely. And the work that you are doing to
    support our industry is greatly appreciated. We are also happy
    to answer any questions you may have at the conclusion of the
    testimony. Thank you for your time today.
        [Mr. Seroka's prepared statement follows:]

    Prepared Statement of Eugene D. Seroka, Executive Director, Port of Los
                         Angeles, San Pedro, California
        Good Morning Chairman DeFazio, Chairwoman Napolitano, Ranking
    Member Westerman, and Members of the Committee.
        Thank you for this opportunity to testify before you this morning.
    My name is Eugene D. Seroka and I serve as the Executive Director of
    the Port of Los Angeles. The Port of Los Angeles is our nation's
    largest and busiest container port. In 2018, we handled 9.5 million
    twenty-foot equivalent units--or TEUs, the standard measure of
    container cargo. This cargo generated over $200 billion in economic
    impact for our country, supports about 148,000 jobs in Los Angeles, and
    nearly 1.6 million jobs nationwide.
        Combined with our neighboring port, the Port of Long Beach, we
    comprise the San Pedro Bay Port Complex, which handles over 40 percent
    of the nation's containerized imports and 30 percent of all
    containerized exports. One in nine jobs in Southern California is
    connected to the Port Complex, and 2.8 million jobs nationwide. We
    anticipate doubling the quantity of containers traveling through our
    gates in the next 15 years.
        We are the gateway for imports from and exports to Asia and the
    Pacific Rim. Half of the cargo arriving at our berths are consumer
    products, and the other half are goods that are incorporated in
    domestic manufacturing. There is not a single Congressional district
    that is not touched by an import or export handled through the San
    Pedro Bay. This morning, I'm confident everyone in this room used a
    good that crossed the wharves of the Port of Los Angeles before
    arriving here today.
        The goods movement industry underpins our economy and supports our
    standard of living. We know that this Committee is keenly aware of the
    need to invest in and sustain the freight infrastructure that makes our
    work possible. A reliable, sustainable source of funding to support the
    competitiveness of our ports and harbors is essential and we are
    grateful to the Committee for recognizing the fundamental importance
    and gravity of this issue.
        The Harbor Maintenance Tax (HMT) is one such source funding. It is
    a unique and important revenue source that can keep our nation's ports
    and harbors operating at their maximum potential. Shippers pay the tax
    with the expectation that it will be used to keep our ports in optimal
    condition. But, over its history, HMT has been underutilized, leading
    to a backlog of operations and maintenance projects and the
    accumulation of a large balance in the Harbor Maintenance Trust Fund
    (HMTF). In addition to the many ports and harbors that need these funds
    for traditional dredging, there are ``donor ports'' where a large
    proportion of HMT revenues are collected, yet a small amount of HMT
    funding is returned. The Port of Los Angeles is an HMT donor port.
        We are thankful for the Committee's leadership role in the Water
    Resources Reform and Development Act (WRRDA) of 2014 and the Water
    Infrastructure Improvements for the Nation Act (WIIN) of 2016. Both
    pieces of legislation made significant progress towards fully
    utilization of HMT revenues and recognizing the needs of HMT donor
    ports. We ask that you build upon this progress and consider full
    utilization of HMT as part of a comprehensive package of closely
    interrelated reforms.
        We believe the building blocks of comprehensive HMT reform should
    include:
        1.  Guaranteed full utilization of HMT revenues;
        2.  A fair allocation of funding for all the nation's ports and
    harbors, including HMT donor ports; and
        3.  Expanded project eligibility for donors.
        First, comprehensive HMT reform must be built upon full utilization
    of HMT revenues. Full utilization means increased funding and
    accessibility for all types of ports and across all geographical
    regions. Since the enactment of WRRDA 2014, HMT expenditures have
    adhered closely to the target expenditures outlined in that bill. For
    that, we are grateful. In FY19, Congress appropriated 91% of HMTF
    receipts, totaling $1.54 billion. Full spend would result in an
    additional $80 million this year for the nation's ports and harbors.
    More importantly, guaranteed full use of HMT revenues is needed to
    create a virtuous circle wherein investment in port infrastructure
    supports additional growth in trade volumes which, in turn, supports
    more investment in our ports and harbors.
        Second, a fair and equitable allocation framework ensures every
    port region of the country--including traditional dredge ports,
    emerging harbors, and donor ports alike--receive a fair share of HMT
    funding each year. As a donor port, we believe this is both a
    fundamental issue of fairness and critical to the long term health of
    the HMTF. To the issue of fairness, historically, cargo into the Port
    of Los Angeles generates over $200 million in HMT revenue, but we
    received only $3 million in HMT spending.
          In 2017, which is the last year this information was
    available, HMT revenue generated at the Port of Los Angeles was $225
    million. This represents 17.3% of the nation's HMT revenues.
          In contrast, the Port of Los Angeles received $5.46
    million from the $50 million appropriated for the Donor and Energy
    Transfer Port Program funding (under WRRDA Section 2106).
        With respect to the health of the HMTF, the six donor ports as
    defined in WRRDA 2014 account for 50% of all HMT revenue, but receive
    less than two percent in return. It's important that HMT funding be
    used to support these high net contributors to the HMTF, especially as
    these ports face increasing competition from international ports. Cargo
    diversion from donor ports to international ports could undermine the
    long-term growth in the HMTF.
        Third, donor ports need a limited expansion in the types of
    projects eligible for HMT. At the Port of Los Angeles, part of what
    makes us donors to the HMTF is that our federal channel does not
    experience the sedimentation that other ports do. We have in-water
    infrastructure needs that are not currently HMT-eligible expenditures.
        To provide context, the infrastructure at the Port of Los Angeles
    is at a scale that reflects our role as the nation's premier trade
    gateway:
          7,500 acres (4,300 acres of land and 3,200 acres of
    water)
          43 miles of waterfront
          Minus 53, main channel water depth
          27 terminals and 270 berths
          15 marinas with 3,736 recreational vessel slips and dry
    docks
          91 ship-to-shore container gantry cranes
        However, we face an ever changing maritime shipping industry and
    evolving infrastructure demands. We were honored in December 2015 to
    receive the first 18,000 TEU ship to visit an American port; earlier
    this year, we received the first 20,000 TEU ship. In addition to
    capital berth dredging necessitated by the advent of these larger
    container ships, we have nearly $260 million in container terminal
    wharf maintenance for in-water structures, such as decks, beams,
    mooring bitts and piles. Additionally, we need support to fortify and
    maintain seismic compliance of in-water structures. These expanded uses
    of funds will assist donor ports in applying funds towards projects
    that provide our customers world-class infrastructure and keep us
    competitive against international competition.
        Full use, fair and equitable allocation, and expanded uses for
    donor ports. We view these as the critical and interconnected parts of
    comprehensive HMT reform. To this end, I recommend the Committee start
    with the HMT spending framework developed by the American Association
    of Port Authorities (AAPA). Moving forward, I understand this Committee
    and Congress as a whole will develop its own HMT spending plan. As a
    starting point for those discussions, I would encourage you to look at
    the AAPA framework to help inform those deliberations as you move
    forward. That framework represents a balanced consensus forged between
    a wide variety of ports--both by type and geography--and is built upon
    the key reform elements I have described.
        The last thing I would like to underscore is the need to create a
    strong link between any full use solution and an allocation plan that
    addresses the port community's needs and concerns. Throughout our
    ongoing HMT discussions within the industry, two things have become
    clear: 1) broad-based port community support for full utilization of
    the HMT exists, especially if it's tied to an equitable spending
    framework; and, 2) an agreement on a spending framework is eminently
    reachable.
        Chairman DeFazio, Chairwoman Napolitano, Ranking Member Westerman
    and Members, thank you for holding this very timely hearing. We are
    truly poised at a moment in time when comprehensive HMT reform is
    within reach and I appreciate this opportunity to address you. I thank
    you for your leadership in addressing this crucial freight
    infrastructure issue and stand ready to support and work with you.
        Thank you for your time today. I am happy to answer any questions
    you have.

        Mrs. Napolitano. Thank you, Mr. Seroka.
        And, Ms. Brady, you are now recognized.
        Ms. Brady. Thank you. Chairman DeFazio, Chairwoman
    Napolitano, Ranking Member Westerman, and members of the
    subcommittee, my name is Bonnie Brady. I am here again today
    representing the Long Island Commercial Fishing Association as
    its executive director. Our membership represents commercial
    fisherman from 11 different gear groups at 14 ports throughout
    Long Island. It is an honor to be called back again to speak to
    your committee about what I hope will finally be the full
    utilization of the Harbor Maintenance Trust Fund.
        For those of you on the subcommittee that may remember my
    face, I first spoke to you back in 2011 as a guest of my then-
    Congressman Timothy Bishop, who represented the First District
    of the State of New York, when H.R. 104, the Realize America's
    Maritime Promise Act, otherwise known as the RAMP Act, was on
    the congressional front burner. I would like to thank all of
    you and your staff for the opportunity to present my comments
    to you today.
        Commercial fishing on Long Island is responsible for 99
    percent of New York's land and seafood catch. In 2017, that
    translated to over 24 million pounds of seafood, worth just
    under $48 million at the dock. That year-round commercial
    fishing income powers the economic engines of hundreds of Long
    Island businesses, approximately over $200 million, when adding
    the industry standard economic multiplier.
        Montauk, our State's largest port and within the First
    District, was the 55th largest commercial fishing port in the
    Nation in 2017, based on poundage. We landed 10.1 million
    pounds of seafood worth $14 million at the dock, to the boats
    themselves, what is termed ex-vessel value. As a way to
    describe that in relation to Montauk itself, a town of 3,100
    people, that is equal to 322 pounds of fish caught for every
    man, woman, and child.
        Montauk brings in millions of year-round dollars, which
    then make their way to our local mom-and-pop shops, whether it
    is via the captain and/or crew of a fishing boat, the ice
    supplier, welder or gear shop, seafood market, grocery store or
    restaurant. These people and their small businesses are the
    very fabric which makes up all of our coastal fishing port
    communities of Long Island.
        Our coastal waterways and ports are our version of your
    Metro and beltway here in DC. And without properly maintained
    dredging, hundreds of local businesses and families could be
    negatively impacted yearly on Long Island. We have had a series
    of maintenance dredges. Montauk in 2008, 2012 and 2018;
    Shinnecock in 2004, 2010, and 2017; and Moriches in 2013. Plus,
    emergency dredges took place in Moriches this past year and in
    Montauk in 2011 and Shinnecock in 2014. But that doesn't really
    paint the true picture of the needs of our fishing ports, the
    need for consistent methodical maintenance dredging that the
    Harbor Maintenance Trust Fund was, I believe, set up to do.
        Time and time again, the maintenance dredging that we have
    received, though greatly appreciated, did not do the job
    necessary because it was not on a consistent 3-year cycle.
    While I don't have a crystal ball into the future to see what
    nor'easters Mother Nature is ready to serve us, I do know the
    consequences of not being able to get in or out of port as a
    commercial fisherman on Long Island due to a shoaled-in port.
        As a commercial fisherman, you lose income when your inlet
    isn't dredged deep enough. Say you have a boat that draws, for
    example, 12 feet, meaning its depth under the waterline, but
    the inlet, because of shoaling, is only 10 feet deep. What that
    means is your boat must wait to leave on higher tide or you
    risk running aground, which equals more lost income via a trip
    to the shipyard.
        As a commercial fisherman, you lose income, because having
    to leave on a high tide because of shoaling of your port means
    sometimes you lose a day getting to your fishing grounds.
    Because if you can't get out of the inlet on time, on fishing
    time, to steam where you know the fishing has been red hot of
    late, by the time you do leave, you get to the grounds late and
    the fish are on the move again.
        As a commercial fisherman, you lose income when you can't
    land your catch because you cannot get into your inlet until
    the tide is high again to package your fish to send into New
    York City. If you miss the truck and the market doesn't take
    place the following day or until after the weekend, you could
    risk spoil of part or possibly your whole catch. And while I am
    very grateful that, as far as Long Island goes, we have not
    lost any fishermen due to a boat going aground in shoaling
    waters in our ports that I can recall in recent memory, we have
    in the past come far too close. All of these issues are
    unacceptable sequelae due to inadequate maintenance dredging,
    which the Harbor Maintenance Trust Fund was set up to protect
    against.
        Having to wait 6 or 7 years for maintenance dredging or
    scramble for emergency dredging funding is just not the way to
    support the people and ports that harvest and feed this Nation
    and beyond. And it does nothing to guarantee our safety and the
    safety of the thousands of commercial fishermen that do this
    job day in and day out through the U.S.
        Thank you all sincerely for holding this hearing today
    focusing on fully utilizing the fund as it was intended. Doing
    nothing, in my opinion, at best, creates a panacea of economic
    losses for commercial fishermen and their port towns. In its
    very worst, it could cost commercial fishermen their lives.
    Thank you for allowing me to express these views today, and I
    look forward to any questions from you or any members of the
    subcommittee.
        [Ms. Brady's prepared statement follows:]

      Prepared Statement of Bonnie Brady, Executive Director, Long Island
               Commercial Fishing Association, Montauk, New York
        Mr. Chairman and members of the subcommittee, my name is Bonnie
    Brady. I am here again today representing the Long Island Commercial
    Fishing Association as its executive director. Our membership
    represents commercial fishermen from 11 different gear groups at 14
    ports throughout Long Island. It is an honor to be called back again to
    speak to your subcommittee about what I hope will finally be the full
    utilization of the Harbor Maintenance Trust Fund.
        For those of you on the subcommittee that may remember my face, I
    first spoke to you back in 2011 as a guest of my then Congressman
    Timothy Bishop, who represented the First District of the State of New
    York, when HR 104, the Realize America's Maritime Promise act otherwise
    known as the RAMP act, was on the Congressional front burner. I would
    like to thank all of you, and your staff, for the opportunity to
    present my comments to you today.
        Commercial fishing on Long Island is responsible for 99 percent of
    New York's landed seafood catch. In 2017, that translated to over 24
    million pounds of seafood worth just under $48 million dollars at the
    dock. That year-round commercial fishing income powers the economic
    engines of hundreds of Long Island businesses, approximately over $200
    million dollars when adding the industry-standard economic multiplier.
        Montauk, our state's largest port, and within the First District,
    was the 55th largest commercial fishing port in the nation in 2017
    based on poundage. We landed 10.1 million pounds of seafood, worth
    $14.8 million dollars at the dock, to the boats themselves, what is
    termed ex-vessel value. As a way to describe that in relation to the
    Montauk itself, a town of 3100 people, that's equal to 322 pounds of
    fish caught for every man, woman and child.
        Montauk brings in millions of year-round dollars, which then make
    their way to our local mom and pop shops, whether it is via the captain
    and/or crew of a fishing boat, the ice supplier, welder or gear shop,
    seafood market, grocery store, or restaurant, these people and their
    small businesses are the very fabric which makes up all of our coastal
    fishing port communities of Long Island. Our coastal waterways and
    ports are our version of your Metro and Beltway here in DC, and without
    properly maintained dredging, hundreds of local businesses and families
    could be negatively impacted yearly on Long Island.
        We have had a series of maintenance dredges, Montauk in 2008, 2012,
    and 2018, Shinnecock in 2004, 2010, and 2017, and Moriches in 2013.
    Plus emergency dredges took place in Moriches this past year, and in
    Montauk in 2011 and Shinnecock in 2014. But that doesn't really paint
    the true picture of the needs of our fishing ports; the need for
    consistent, methodical maintenance dredging that the Harbor Maintenance
    Trust Fund was, I believe, set up to do.
        Time and time again, the maintenance dredging that we have
    received, though greatly appreciated, did not do the job necessary
    because it was not on consistent three-year-cycles.
        While I don't have a crystal ball into the future to see what Nor-
    Easters Mother Nature is ready to serve us, I do know the consequences
    of not being able to get in or out of port as a commercial fisherman on
    Long Island due to a shoaled in port.
        As a commercial fisherman, you lose income when your inlet isn't
    dredged deep enough. Say you have a boat that draws, for example, 12
    feet (meaning its depth under the water line) but the inlet, because of
    shoaling, is only ten feet deep. What that means is your boat must wait
    to leave on higher tide or you risk running aground, which equals more
    lost income via a trip to the shipyard.
        As a commercial fisherman, you lose income because having to leave
    on a high tide because of shoaling of your port means sometimes you
    lose a day getting to your fishing grounds, because if you can't get
    out of the inlet on time, on fishing time, to steam to where you know
    the fishing has been red-hot of late, by the time you do leave, you get
    to the grounds late and the fish are on the move again.
        As a commercial fisherman, you lose income when you can't land your
    catch, because you cannot get into your inlet until the tide is high
    again to pack your fish to send into New York City. If you miss the
    truck and the market doesn't take place the following day, or until
    after the weekend, you could risk spoil of part, or possibly your whole
    catch.
        And while I am very grateful that as far as Long Island goes, we
    have not lost any fishermen due to a boat going aground in shoaling
    waters in our ports that I can recall in recent memory, we have in the
    past come far too close. All of these issues are unacceptable sequelae
    due to inadequate maintenance dredging, which the Harbor Maintenance
    Trust Fund was set up to protect against.
        Having to wait six or seven years for maintenance dredging, or
    scramble for emergency dredging funding is just not the way to support
    the people and ports that harvest and feed this nation and beyond. And
    it does nothing to guarantee our safety and the safety of the thousands
    of commercial fishermen that do this job day in and day out throughout
    the US.
        Thank you all sincerely for holding this hearing today focusing on
    fully utilizing the Fund as it was intended. Doing nothing, in my
    opinion, at best creates a panacea of economic losses for commercial
    fishermen and their port towns, and at its very worst, it could cost
    commercial fishermen their lives.
        Thank you for allowing me to express these views today, and I look
    forward to any questions from you or any other members of the
    subcommittee.

        Mrs. Napolitano. Thank you, Ms. Brady.
        And I now recognize Mr. Ross.
        Mr. Ross. Thank you, Chairwoman Napolitano and Ranking
    Member Westerman, and Chairman DeFazio. I appreciate the
    opportunity to testify today on behalf of the National Corn
    Growers Association. NCGA represents nearly 40,000 dues-paying
    corn farmers and the interests of more than 300,000 farmers who
    contribute through the corn checkoff programs in their States.
        My name is Kevin Ross. I am a sixth-generation farmer from
    Iowa, where my wife, Sara, and I grow corn, soybeans, and
    alfalfa as well raise cattle. I am also first vice president of
    NCGA. My farm sits about 20 miles east of the Missouri River
    near Council Bluffs, the heart of the recent floods.
        America's corn farmers need reliable means of moving our
    crops to customers, whether it is to livestock feedyards, grain
    elevators, ethanol plants, or to river ports for export.
    Farmers use many modes of transportation, with the inland
    waterway system being a vital artery for our products and
    especially for farmers in the Midwest.
        With 12,000 miles of commercially navigable channels and
    more than 240 lock sites, inland waterways allow our Nation's
    corn growers to move their product to and from 38 States,
    including Arkansas, Illinois, Iowa, Minnesota, Missouri, Ohio,
    Tennessee and Wisconsin as well as internationally through the
    Mississippi, Missouri, Illinois and Ohio Rivers. There are six
    States represented on the committee that do not have any
    accessible coastline of the ocean or gulf. The Mississippi
    River System is the coastline of the Midwest and helps gain
    access to those outer coastal markets.
        Given that more than half of corn exports are transported
    via the inland waterway system, continuing to invest in this
    system is critically important to our competitiveness and
    livelihoods. Much of the physical infrastructure is aging and
    in need of improvements. For example, commercial navigation
    locks typically have a design life of 50 years, and yet, by the
    end of 2020, 78 percent of the U.S. locks will have outlived
    that designated lifespan. While volumes of grain, ethanol, and
    byproduct exports increase, the efficiency of the locks
    decrease. Barge tows must be split in two because lock chambers
    aren't large enough to accommodate them. Efficiency lags cost
    money, which flows down to the farmer in the form of lower
    prices for our corn.
        By one estimate, America's transportation deficiencies will
    cost U.S. agriculture $1.3 billion in exports because our
    current infrastructure system increases the cost of the
    production process and makes access to markets more expensive.
        Continued low commodity prices and consecutive years of
    declining farm income coupled with recent trade disruptions and
    the aging infrastructure system of locks and dams are taking a
    toll on farmers. The United States is the world's largest
    exporter of corn, shipping more than 2 billion bushels overseas
    last year, but we face tough competition from other countries,
    such as Brazil and Argentina. The majority of corn exports are
    shipped through the inland waterway system, with 54 percent of
    them being transported by barge, according to a recent USDA Ag
    Marketing Service report. Transportation efficiencies and costs
    are a major variable that keeps our farmers competitive in
    overseas markets.
        Investing in lock and dam upgrades and their operation and
    maintenance, to ensure an efficient inland waterway system, is
    a major NCGA infrastructure priority. NCGA has identified 25
    locks and dams that are in need of upgrade and repairs. And we
    urge special attention to the Navigation and Ecosystem
    Sustainability Program, otherwise known as NESP. The 2007 WRDA
    bill first authorized NESP as a long-term program of navigation
    improvements and ecological restoration for the Mississippi
    River System. The NESP program allows the U.S. Army Corps of
    Engineers to increase capacity at seven key locations, while
    investing in ecosystem improvements along the river systems.
    The Upper Mississippi is generally where most grain export
    originates.
        Modernizing these seven locks will increase the efficiency
    of the inland waterways transportation system, which means that
    the cost of transportation will decrease and keep farmers like
    myself competitive in foreign markets. We realize the
    infrastructure upgrades we seek have a cost. Established
    public-private partnerships in our waterways have previously
    been a success story.
        A strong partnership between the Army Corps of Engineers
    and commercial operators through the Inland Waterways Trust
    Fund allow commercial users of the inland waterway system to
    contribute substantial revenues for rehabilitation and
    modernization of the system. The revenues are generated through
    tax collected as a levy on fuel used in commercial
    transportation on the inland waterways at 29 cents per gallon.
    These revenues are placed in the Inland Waterways Trust Fund
    and matched with public funds for capital improvements on
    infrastructure. This partnership is what helps make the inland
    waterway system such an efficient and viable way to transport
    our product to market.
        While there is success in other toll-based partnerships in
    transportation programs, there is significant difference in the
    waterway system. Unlike the highway program, where users have a
    choice to use a tolled or untolled facility, waterway users
    will be faced with no choice.
        Production agriculture will be negatively impacted, as
    family farmers upstream will be double-tolled once the
    fertilizer they are using comes upstream and then crops they
    are exporting move downstream. Studies show that cost could be
    up to 31.5 cents per bushel of corn. That is an extra cost that
    farmers cannot bear.
        On behalf of the National Corn Growers Association, I am
    grateful for the subcommittee's support for farmers and the
    other users of the inland waterway system. We appreciate the
    opportunity to provide input in today's discussion and stand
    ready to work with you and serve as a resource for further
    discussions regarding water transport. Again, thank you for the
    opportunity, and I look forward to your questions.
        [Mr. Ross's prepared statement follows:]

     Prepared Statement of Kevin Ross, First Vice President, National Corn
                       Growers Association, Minden, Iowa
        Thank you, Chairwoman Napolitano and Ranking Member Westerman. I
    appreciate the opportunity to testify today on behalf of the National
    Corn Growers Association (NCGA). NCGA represents nearly 40,000 dues-
    paying corn farmers and the interests of more than 300,000 farmers who
    contribute through corn checkoff programs in their states.
        My name is Kevin Ross. I am a sixth-generation Iowa farmer, where
    my wife Sara and I grow corn, soybeans and alfalfa, as well as raise
    cattle. I am also the First Vice President of NCGA. My farm sits about
    20 miles east of the Missouri River.
        America's corn farmers need reliable means of moving our crops to
    customers, whether it's to livestock feed yards, grain elevators, the
    ethanol plant, or ports for export. Farmers use many modes of
    transportation, with the inland waterway system being a vital artery of
    transportation for our products, especially for farmers in the Midwest.
        With 12,000 miles of commercially navigable channels and more than
    240 lock sites, inland waterways allow our nation's corn growers to
    move their product to and from 38 states including Alabama, Illinois,
    Iowa, Minnesota, Missouri, Ohio, Tennessee, and Wisconsin as well as
    internationally through the Mississippi, Missouri, Illinois, and Ohio
    Rivers. Moving our product through the inland waterways system allows
    us to transport our product in a way that is beneficial to both the
    economy and the environment.
        Given that more than half of corn exports are transported via the
    inland waterways system, continuing to invest in this system is
    critically important to our competitiveness and livelihoods. Much of
    the physical infrastructure is aging and in need of improvements. For
    example, commercial navigation locks typically have a design life of 50
    years, yet by the end of 2020, 78 percent of U.S. locks will have
    outlived that designated lifespan. While volumes of grain, ethanol, and
    by-product exports increase, the efficiency of the locks decrease.
    Barge tows must split into two because the lock chambers aren't large
    enough to accommodate them. Efficiency lags cost money, which flows
    down to the farmer in the form of lower prices for our corn.
        By one estimate, America's transportation deficiencies will cost
    U.S. agriculture $1.3 billion in exports because our current
    infrastructure system increases the cost of the production process and
    makes access to markets more expensive.
        Continued low commodity prices and consecutive years of declining
    farm income, coupled with recent trade disruptions and the aging
    infrastructure system of locks and dams are taking a toll on farmers.
    The United States is the world's largest exporter of corn, shipping
    more than 2 billion bushels overseas last year, but we face tough
    competition from Brazil and Argentina. The majority of corn exports are
    shipped through the inland waterway system with 54 percent of corn
    exports being transported by barge, according to a recent USDA
    Agricultural Marketing Service report. Transportation efficiencies and
    costs are a major variable keeping our farmers competitive in overseas
    markets. Every market counts and we need to be able to compete.
        Investing in lock and dam upgrades their operation and maintenance
    to ensuring an efficient inland waterway system is a major NCGA
    infrastructure priority. NCGA has identified 25 locks and dams that are
    in need of upgrades and repairs. We urge special attention to the
    Navigation and Ecosystem Sustainability Program (NESP). The 2007 WRDA
    bill first authorized NESP as a long-term program of navigation
    improvements and ecological restoration for the Mississippi River
    System. NESP allows the U.S. Army Corps of Engineers to increase
    capacity at seven key locations, while also investing in ecosystem
    improvements along the river systems. The Upper Mississippi River is
    generally where most grain export originates. Modernizing these seven
    locks will increase the efficiency of the inland waterways
    transportation system, which means that the cost of transportation will
    decrease, and keep farmers like myself competitive in foreign markets.
    This program promotes collaboration between agriculture, trade,
    organized labor and conservation groups to work together to build new
    locks and dams on the Illinois and Mississippi Rivers, supporting the
    more than half-million jobs that depend on the inland waterways.
        We realize the infrastructure upgrades we seek have a cost.
    Established public private partnerships in our waterways have been a
    success story.
        A strong partnership between the Army Corps of Engineers and
    commercial operators through the Inland Waterway Trust Fund, allow
    commercial users of the inland waterway system to contribute
    substantial revenues for rehabilitation and modernization of the
    system. The revenues are generated through a tax collected as a levy on
    fuel used in commercial transportation on the inland waterways at $.29
    cents-per-gallon. These revenues are placed in the Inland Waterways
    Trust Fund and matched with public funds for capital improvements on
    infrastructure. This partnership is what helps make the inland waterway
    system such an efficient and viable way to transport our product to
    market. While there is success in other toll-based partnerships in
    transportation programs, there is a significant difference in the
    waterways system. Unlike the highway program, where users have the
    choice to use a tolled or un-tolled facility, waterway users would be
    faced with no choice. The result would be moving product by other
    modes. Production agriculture would be negatively impacted as family
    farmers living upstream would be tolled doubled, once for the
    fertilizer that they use comes upstream, and then transporting export
    crops to market on the waterways. Studies have shown that farmers could
    potentially have to pay approximately $31.5 cents per-bushel in toll
    fees, which would force the transportation of grain onto other modes
    leaving less transportation options for the family farmer, compounding
    our current road and railway system. We must maintain and invest in the
    future of our waterway system, amplifying our advantage instead of
    continuing to watch its slow erosion.
        On behalf of the National Corn Growers Association, I am grateful
    for this subcommittee's support for farmers and the other users of the
    inland waterway system. We appreciate the opportunity to provide input
    into today's discussion and stand ready to work with you and serve as a
    resource for further discussions regarding water transport. Again,
    thank you for this opportunity, I look forward to your questions.

        Mrs. Napolitano. Thank you, Mr. Ross.
        And now I turn it over to Mr. Westerman.
        Mr. Westerman [presiding]. Thank you, Madam Chair, who
    gracefully offered to let me introduce a friend and a
    constituent and a tireless advocate for inland waterways,
    Phyllis Harden from Pine Bluff Sand and Gravel, who is their
    director of legislative and special projects and also is the
    vice chair of the Pine Bluff-Jefferson County Port Authority,
    and she serves on the board of directors for the Dredging
    Contractors of America as well as the National Waterways
    Conference.
        Ms. Harden, you are recognized for 5 minutes.
        Ms. Harden. Thank you, Ranking Member Westerman. And thank
    you, Chairwoman Napolitano and Chairman DeFazio and other
    members of the subcommittee. It is an honor and a privilege to
    testify before you today.
        My testimony will focus on the importance of the inland
    waterways transportation system, the McClellan-Kerr Arkansas
    River Navigation System, and reform that could benefit inland
    waterways infrastructure.
        The Pine Bluff Sand and Gravel Company is a fourth-
    generation family-owned business that has been in operation for
    over 100 years. We are headquartered in Pine Bluff, Arkansas,
    and have operations in Louisiana, Kentucky, Tennessee, and
    Alabama. We specialize in crushed stone and riprap delivered by
    barge on the Mississippi River and its tributaries, marine
    construction and transportation, commercial sand dredging,
    ready-mix concrete, and hot mix asphalt. The McClellan-Kerr
    Arkansas River Navigation System, or MKARNS, is a 445-mile, 9-
    foot navigation system channel consisting of 18 locks and dams
    that begins at the confluence of the White and Mississippi
    Rivers and ends at Tulsa, Oklahoma. Construction of this system
    began in 1957 and completed in 1971, which, sadly, by today's
    standards, make these locks some of the newer locks on the
    Nation's inland waterways.
        Pine Bluff Sand and Gravel supports three separate
    priorities on the MKARNS: First, in the America's Water
    Infrastructure Act of 2018, this committee was instrumental in
    authorizing the construction of a navigation improvement
    project at Three Rivers, which is at the confluence of the
    Arkansas, White, and Mississippi Rivers in southeast Arkansas.
    Basically, the White and Arkansas Rivers come closer and closer
    together after each high water event. If an uncontrolled
    channel develops, navigation on the MKARNS would be lost for an
    extended amount of time.
        Our second priority is funding to address a critical
    backlog maintenance on the MKARNS. While the MKARNS is one of
    the newer systems, its rapidly aging system is worsened by
    long-deferred maintenance, which is becoming more acute with
    each passing year. Critical work is defined as there being a
    greater chance, greater than 50 percent chance of failure
    within 5 years. Years of neglect have led to a situation where
    the MKARNS is facing a critical backlog of approximately $240
    million. The highest priorities are Tainter gate replacements,
    110-foot stop logs, and center post receivers.
        Our third priority and what has been long sought
    modification to the MKARNS is the proposed deepening of the
    current 9-foot navigation channel to 12 feet. Congress
    authorized the construction of this project in 2003, provided
    funds for it in 2004, and the Corps of Engineers constructed
    several project features, but since that time, no additional
    funds have been provided for the Corps to continue the project.
    This project would allow 40 percent more tonnage in each barge
    and result in shipper savings of $43.1 million annually.
        My description of the MKARNS as an important navigation
    asset with aging infrastructure, underfunded projects, and
    deferred critical maintenance would also apply to other
    waterways. Fortunately, this committee promoted and carried out
    changes in the Water Resources Reform and Development Act of
    2014 that have accelerated project delivery on the inland
    waterway system. Most significantly, a cost share of 85 percent
    general revenues and 15 percent Inland Waterways Trust Funds at
    Olmsted Lock and Dam has accelerated the project delivery and
    operability of the new lock. And that is just one example of
    how efficient project funding can lead to accelerated and
    significant economic benefits for the Nation.
        Now that Olmsted is almost complete, the trust fund is
    likely to go back to operating at a 50/50 cost share split for
    construction projects. If this happens, the current portfolio
    of 15 projects awaiting construction could take almost 40 years
    to complete. Two of our priorities are on that list.
        WRDA 2016, the cost formula for deepening coastal ports was
    changed from the 50/50 to a 75/25 split. And changing the cost
    share in the same manner for the inland waterways construction
    projects has a potential of completing these projects in 20
    years instead of the current 40 years. I would like to ask the
    committee in their upcoming legislation that they would modify
    that cost share to be a permanent 75/25 split so that we can
    get these projects accelerated quickly instead of the length of
    time it has been.
        And then I realize I am almost out of time, and I want to
    quickly tell you our story. Pine Bluff Sand and Gravel in 1998
    joined the effort to realize a 12-foot channel on the MKARNS.
    After 13 years, we reluctantly had to move our primary source
    of rock from River Mountain Quarry on the Arkansas River to a
    more competitive location. In 2010, we purchased the Cumberland
    River Quarry on the Cumberland River above Paducah near Salem,
    Kentucky.
        Therefore, our quarry on the Arkansas River is now
    operating at a much smaller scale and numerous employees were
    laid off. Sadly, this could have been one of the largest
    quarries in the region. However, the additional cost of the
    shallow channel was simply too much for us to continue
    subsidizing. Our cost and bidding are extremely sensitive to
    competition, and we have lost jobs by a penny or a nickel per
    ton. We could not afford the cost of doing nothing.
        Thank you for the opportunity to provide our perspective to
    this committee today, and I look forward to any questions or
    comments.
        [Ms. Harden's prepared statement follows:]

     Prepared Statement of Phyllis Harden, Executive Assistant, Pine Bluff
                   Sand and Gravel Co., Pine Bluff, Arkansas
        Chairwoman Napolitano, Ranking Member Westerman, and Members of the
    Subcommittee, thank you for the opportunity to testify today on the
    topic of ``The Cost of Doing Nothing: Why Full Utilization of the
    Harbor Maintenance Trust Fund and Investment in our Nation's Waterways
    Matter.'' My testimony will focus on the importance of the inland
    waterways transportation system, the McClellan-Kerr Arkansas River
    Navigation System, and potential reforms that could benefit inland
    waterways infrastructure.
        The Pine Bluff Sand and Gravel Company is a fourth-generation
    family-owned business that has been in operation for over 100 years. We
    are headquartered in Pine Bluff, Arkansas, and have operations in
    Louisiana, Kentucky, Tennessee, and Alabama. We specialize in crushed
    stone and riprap delivered by barge on the Mississippi River and its
    tributaries, marine construction and transportation, commercial sand
    dredging, and ready-mix concrete and hot mix asphalt. We directly
    employ around 500 people and generate business that supports many more.
    I also currently serve as the Vice-Chair of The Pine Bluff-Jefferson
    County Port Authority and serve on the Board of Directors for Dredging
    Contractors of America and the National Waterways Conference.
        Pine Bluff Sand and Gravel has been in business for over a century
    in part because of opportunities the nation's inland waterway
    transportation system provides. When transporting bulk commodities,
    such as aggregates, the inland waterways presents the most economical
    and environmentally friendly form of transportation. In fact, for every
    single barge of aggregates we ship, this equals 70 trucks that are not
    on the road. In 2017, there were more than 550 million tons transported
    on the inland waterways system valued at $220 billion. Of that tonnage,
    almost 80 million tons were aggregates, which is 14% of the total
    tonnage moved on the system.
        Many people do not realize the importance of the inland waterways
    system because they are not stuck in traffic with barges, or regularly
    held up by barges at railroad crossings. But what most people don't
    realize is that if you are near a navigable waterway, there is good
    chance that the aggregates used to build key parts of your community
    were most likely transported via water at some point. In fact, this
    last year, Nashville, Tennessee's boom in building required four
    million tons of concrete shipped via the waterway, which equates to
    160,000 18-wheeler trucks.
            mcclellan-kerr arkansas river navigation system (mkarns)
        The McClellan-Kerr Arkansas River Navigation System, or MKARNS, is
    a 445-mile, 9-foot navigation channel that consists of 18 locks and
    dams that begins at the confluence of the White and Mississippi rivers
    and ends near Tulsa, Oklahoma. Construction of this system began in
    1957 and was completed in 1971, which, by today's standards, sadly,
    make these locks some of the newer ones on the nation's inland
    waterways. Prior to the construction of these locks and dams, this
    system was not navigable year around, and in fact it was not uncommon
    to see a nearly dry river bed that one could wade across. There are
    five major public port facilities, and 62 private ports and terminals
    that support the movement of the major commodities that are shipped on
    the MKARNS. These commodities include coal, petroleum products,
    fertilizers, grain, sand and gravel, and iron and steel-products. The
    MKARNS was upgraded to a high-use waterway system in 2018 based on a
    five-year average of 3.33 billion ton-miles transported.
        Pine Bluff Sand and Gravel supports three separate and co-equal
    priorities on the MKARNS.
        First, this Committee was instrumental in authorizing the Chief's
    Report in America's Water Infrastructure Act of 2018 for navigation
    improvement at Three Rivers Project, where the White and Arkansas River
    meet the Mississippi River. The structures currently in place are
    rapidly deteriorating, and should any of these components fail, the
    MKARNS would not be a functioning commercial waterway for an extended
    amount of time. Additionally, like most of the nation's inland
    waterways system, the authorized project at Three Rivers will provide
    significant environmental benefits, allowing previously disconnected
    waterbodies to return to a more natural open water ecosystem.
        Our second co-equal priority is funding for the critical
    maintenance backlog on the MKARNS. While I mentioned earlier in my
    testimony that MKARNS is one of the newer systems, it is a rapidly
    aging system exacerbated by long-deferred maintenance. As this system
    was completed nearly 50 years ago, the maintenance needs of the MKARNS
    are becoming more acute with each passing year. Defined as a component
    which has a 50% probability of failure within the next five years,
    critical maintenance on the MKARNS has long been deferred, and years of
    neglect has led to a situation where the MKARNS is facing a critical
    maintenance backlog of approximately $240 million.
        Our third co-equal priority, and one that has been a long-sought
    modification to the MKARNS, is the proposed deepening of the current 9-
    foot channel to 12-feet of depth. Congress authorized the construction
    of this project in 2003, and provided funds for the project in 2004. At
    that time, the Corps of Engineers constructed several project features,
    and yet since that time, no additional funds have been provided to the
    Corps to continue the project. We would encourage Federal authorities
    to resume the project since greater depths will allow an additional 40%
    per barge to be transported compared to the current channel. This
    deepening project would also result in a shipper savings of $43.1
    million annually.
             modernizing the inland waterways transportation system
        My description of the MKARNS as an important navigation asset with
    aging infrastructure, under-funded projects, and deferred critical
    maintenance, also applies to other waterways in our country.
    Fortunately, some steps have been taken to begin to improve important
    infrastructure features of America's transportation network, but more
    attention is needed.
        In 2015, the inland waterways industry, including Pine Bluff Sand
    and Gravel, successfully advocated for a 45% increase to the diesel
    fuel tax deposited into the Inland Waterways Trust Fund (IWTF), which
    is currently the highest federal fuel tax being paid by any mode of
    surface transportation. There are numerous beneficiaries of the
    nation's inland waterways system such as: recreational users, municipal
    water supply, hydropower, industrial processes and cooling water, flood
    damage reduction, national security, and other national and regional
    economic development opportunities. Only the commercial towboat
    operators pay the tax that is dedicated to support the inland
    waterways.
        This Committee promoted and carried out changes in the Water
    Resources Reform and Development Act of 2014 that has significantly
    accelerated project delivery on the inland waterways system. Besides
    the 45% increase to the diesel fuel tax, a cost-share change at Olmsted
    Locks and Dam allowed for the Trust Fund to operate over the last six
    years at about a 25% IWTF/75% general fund split. This cost-share
    change has also accelerated the operability of Olmsted, allowing for
    $600 million in annual national economic benefits to be accrued four
    years ahead of schedule. Olmsted is just one example of how efficient
    project funding can lead to accelerated and significant economic
    benefits for the nation. Now that Olmsted is complete, the IWTF is most
    likely going to return to operating at a 50% IWTF/50% general fund
    formula for construction projects. If this happens, the current
    portfolio of at least 15 projects awaiting construction could take
    almost 40 years to complete. The MKARNS' critical Three Rivers project
    is one of these projects. Therefore, I am asking the Committee to
    consider modifying the cost-share for inland waterways construction
    projects to 25% IWTF/75% general revenue in any potential
    infrastructure legislation that is moving this Congress.
        Freight moved by the inland waterways is the least expensive, most
    fuel efficient, environmentally friendly mode of transportation. When
    it is allowed to work efficiently, the economic and environmental
    benefits to the nation are significant. Improving the funding formula
    for new and on-going projects and addressing deferred maintenance
    backlog will pay multiple benefits to the nation in the form of lower
    transportation costs, more jobs, and less congestion.
        Thank you for the opportunity to provide Pine Bluff Sand and
    Gravel's perspective to the Committee today. I look forward to any
    questions or comments you may have.

        Mr. Westerman. Thank you for your testimony.
        The Chair now recognizes Mr. Peter Stephaich. He is
    chairman of Campbell Transportation Company, on behalf of the
    Waterways Council, Inc. from Houston, Pennsylvania. You are
    recognized for 5 minutes.
        Mr. Stephaich. Thank you very much. Chairman DeFazio,
    Chairwoman Napolitano, Ranking Member Westerman, and members of
    the subcommittee, thank you for the opportunity to testify
    before you today. My testimony will focus on the importance of
    the inland waterways transportation system and the Inland
    Waterways Trust Fund.
        I currently serve as chairman and CEO of Campbell
    Transportation Company, headquartered near Pittsburgh,
    Pennsylvania. I am also the chairman of Waterways Council.
    Waterways, WCI, is the national public policy organization that
    advocates for a modern and well-maintained system of waterways
    and ports.
        Our inland waterway transportation system consists of
    12,000 miles of commercially active inland waterways, on which
    nearly 600 million tons of products move annually, representing
    a value of over $220 billion. About 400 commercial operators
    currently pay a 29-cent-per-gallon diesel fuel tax that is
    deposited into the Inland Waterway Trust Fund.
        Users of the system successfully advocated in support of
    raising our tax by 45 percent in 2015, from 20 cents to 29
    cents per gallon. This tax currently generates about $115
    million a year and pays for up to half the cost of new lock and
    dam construction, major rehabilitation, and channel deepening.
        Since the enactment of the Water Resources Development Act
    of 1986 through 2014, the Inland Waterways Trust Fund supported
    construction completion of over 29 modernization projects.
    Currently, the trust fund is supporting construction of five
    lock and dam modernization projects.
        I would like to thank this committee for passing important
    policy changes contained in the Water Resources Reform and
    Development Act of 2014, particularly the cost share policy
    revision for Olmsted Locks and Dam, along with the 45-percent
    increase in the inland waterway diesel fuel tax, allowed for
    the trust fund to be leveraged from less than $200 million per
    year to a $400-million-a-year annual program.
        That cost share change from 50 percent trust fund and 50
    percent general fund, to 15 percent from the trust fund and 85
    percent from the general fund has accelerated the completion of
    the Olmsted project while saving the taxpayers money. Let me
    explain. The accelerated and steady funding for Olmsted Locks
    and Dam allowed the Corps to dedicate the project last August
    in 2018, 4 years ahead of schedule and at a completion cost
    $330 million below what the Corps had projected. Not only did
    the cost share change help Olmsted, but it also allowed
    construction to proceed on three other priority navigation
    projects: Lower Monongahela, Kentucky lock, and Chickamauga
    lock. This cost share change also allowed for the initiation of
    the major rehab project on LaGrange lock on the Illinois
    waterway.
        Unfortunately, our inland waterway system continues to
    deteriorate. Currently, there are more than 15 other authorized
    high-priority inland projects awaiting construction. With
    Olmsted's completion and no additional policy changes and
    improvements, only about $230 million a year will be available
    for inland waterway project modernization. That is the $115
    million in trust fund revenues times two at 50 percent. At this
    funding level, many of these projects won't start construction
    during the next 20 years, greatly increasing the probability of
    catastrophic failure somewhere in the system and causing the
    system to further deteriorate.
        In the Water Resources Development Act of 2016, Congress
    changed the cost share model for funding construction of deep
    draft ports from 45 to 50 feet from 50 percent non-Federal
    sponsor and 50 percent Federal Government to a 25-percent non-
    Federal sponsor and a 75-percent general funds in order to
    accomplish this important work. By doing the same thing with
    the Inland Waterways Trust Fund, adjusting the cost share to 25
    percent trust fund and 75 percent general funds, the inland
    navigation capital program can remain operating around the
    $400-million-per-year level that has been achieved since the
    cost share change at Olmsted. This recommended 25/75 cost share
    will allow the Corps to accelerate the construction program and
    provide funding visibility going forward, which will greatly
    improve the efficiency of the Corps program.
        As you move forward with infrastructure legislation, I
    encourage you to consider this proposal to adjust the cost
    share for construction of inland waterways projects.
        That concludes my oral statement, and I will be happy to
    answer any questions. Thank you.
        [Mr. Stephaich's prepared statement follows:]

     Prepared Statement of Peter H. Stephaich, Chairman and CEO, Campbell
       Transportation Company, Inc., Houston, Pennsylvania, on behalf of
                            Waterways Council, Inc.
        Chairwoman Napolitano, Ranking Member Westerman, and Members of the
    Subcommittee, thank you for the opportunity to testify before you today
    on the topic of ``The Cost of Doing Nothing: Why Full Utilization of
    the Harbor Maintenance Trust Fund and Investment in our Nation's
    Waterways Matter.'' My testimony will focus on the importance of the
    inland waterways transportation system, and suggest a recommended
    policy improvement to advance modernization of the Nation's critically
    important inland navigation infrastructure.
        I currently serve as Chairman and CEO of Campbell Transportation
    Company, Inc. Campbell Transportation Company is headquartered in
    Houston, Pennsylvania, and operates approximately 50 towboats, over
    1100 barges, four shipyards/repair facilities, and fabrication shops at
    two locations on the Ohio River and two on the Monongahela River. I am
    also the Chairman of the Board of Directors of Waterways Council, Inc.
    (WCI). WCI is the national public policy organization that advocates
    for a modern and well-maintained system of inland waterways and ports.
    WCI's diverse members include waterways carriers, shippers,
    agricultural interests, port authorities, energy providers,
    construction contractors, organized labor unions, conservation
    organizations, and waterways advocacy groups from all regions of the
    country.
                          anchored in the constitution
        From this country's earliest days, even before our United States
    Constitution was adopted, the inland waterways system was recognized as
    a priceless natural asset and a matter of fundamental federal
    responsibility and stewardship. The authors of our Constitution
    anchored the federal government's preeminent role in regulating
    navigation, both inland and coastal, in Article 1, Section 3's commerce
    clause; in Article 1, Section 9's prohibition of preference among ports
    clause, and elsewhere in that seminal document.
        One of the early actions by Congress was to enact legislation to
    provide for federal maintenance of new Nation's navigational aids.
    Since then, Congress has exercised its role in regulating and setting
    policy for the Nation's waterways through various legislation over the
    years. In the previous century, periodic ``Rivers and Harbors Acts'' or
    ``Flood Control Acts,'' which predominated in the first half of the
    century, were replaced more recently by ``Water Resources Development
    Acts.'' By whatever title, Congress has consistently provided direction
    to the Executive Branch on how to properly use and protect our
    waterways for the benefit of the entire country.
                         one system that supports many
        Because of our natural geographic bounty, as well as the foresight
    and enlightened investment decisions made by generations who preceded
    us, our Nation is blessed today with the world's preeminent inland
    waterway transportation system. That system is composed of
    approximately 12,000 miles of commercially active, navigable inland and
    intracoastal waterways. Of this total, nearly 11,000 miles comprise the
    ``fuel-taxed portion'' of the system, on which commercial operators pay
    a diesel fuel tax that is deposited into the dedicated Inland Waterway
    Trust Fund. (IWTF). This tax pays for up to half of the cost of new
    construction and major rehabilitation of the fuel-taxed waterways'
    infrastructure, principally, locks and dams, but also including the
    initial deepening of its channels. Users like Campbell Transportation
    Company successfully advocated in support of raising that tax by 45% in
    2015 to its current level of 29-cents-per-gallon, which is the highest
    federal fuel tax currently being paid by a transportation mode.
        Nationwide, according to the U.S. Army Corps of Engineers, the
    fuel-taxed waterways include 207 lock chambers at 171 sites on 27
    statutorily-designated inland rivers and intracoastal waterways system
    segments. The locks and accompanying dams allow users of all types--
    commercial, recreational, and governmental to stair-step their way
    across the system while being assured that the depths those users
    require will be available as needed.
        Beyond enabling waterborne transportation, the inland waterways
    system aids in flood control, enables a stable water supply for nearby
    communities and industries, provides hydroelectric power, offers
    recreation such as fishing and water sports, provides regional economic
    development opportunities, increases property value, and enhances
    national security capabilities. Unlike commercial users, none of these
    other beneficiaries of the inland waterways system pay a fee to support
    modernization of the system.
        While America's inland waterways system is the best in the world,
    it is not without challenges. Our international competitors have major
    efforts underway to enhance their own systems. More than half of the
    portion of our waterways system that is operated by the Army Corps of
    Engineers is now more than 50 years old. Some system segments,
    particularly older portions located on the Upper Mississippi, Illinois
    and Tennessee Rivers, are utilizing outdated 600-foot-locks that are
    unable to accommodate today's standard 1,200-foot long, 15-barge tows,
    without engaging in the inefficient and potentially dangerous procedure
    of uncoupling the tow into two sections in order to pass through the
    lock in two trips instead of one. These locks and dams require constant
    attention and financial support, both in terms of modernization funding
    to improve the system's efficiency in order to facilitate the Nation's
    economic well-being and standard of living, as well as of operations
    and maintenance funding to keep them reliably available to users
    throughout the year.
        infrastructure investment is needed to keep america competitive
        Since 1987, when IWTF revenues were first allocated to individual
    projects following enactment of the Water Resources and Development Act
    of 1986, through 2014, the Inland Waterways Trust Fund supported
    construction completion of 29 modernization projects. Additionally, the
    trust Fund is currently supporting construction of five other lock and
    dam modernization projects, thanks to the policy changes made in 2014.
    I would like to thank this Committee for passing the important policy
    changes contained in the Water Resources Reform and Development Act of
    2014, particularly, the cost-share policy revision for Olmsted Locks
    and Dam, which, along with the 45% increase in the inland waterway
    diesel fuel tax that Congress enacted in 2014, allowed for the IWTF to
    be leveraged from a less than $200 million dollar annual program to a
    $400 million dollar annual program. That policy change from 50% Inland
    Waterways Trust Fund and 50% General Fund, to 15% from the Inland
    Waterways Trust Fund and 85% from the General Fund has led to
    significant progress. For example, the Olmsted Locks and Dam was
    dedicated and became operable in August 2018, four years ahead of the
    Corps' projected operation date and cost an estimated completion cost
    more than $330 million below what the Corps projected in the project's
    Post Authorization Change Report. Not only did the cost-share change
    help Olmsted, but it also allowed (1) construction to proceed on three
    other priority navigation projects (Lower Monongahela 2,3,4, Kentucky
    Lock, and Chickamauga Lock, the latter two of which previously had
    project construction suspended due to a lack of funding), and (2)
    initiation of the a major rehabilitation on LaGrange Lock on the
    Illinois waterway.
        With Olmsted soon to be in the rearview mirror, and the Lower
    Monongahela project expected to be funded to completion this fiscal
    year in the FY 2020 appropriations bill, it is time to start looking
    toward the next round of inland waterways modernization investments.
    Currently, the inland waterways system has a portfolio of more than 15
    other authorized high priority inland projects awaiting construction.
    With Olmsted's completion and no additional policy improvements, only
    about $230 million a year will be available for inland waterways
    project modernization. At this funding level many of these projects
    will not even begin construction in the next 20 years, an unacceptable
    situation.
        In the Water Resources Development Act of 2016, Congress changed
    the cost-share model for funding construction of deep draft ports with
    depths of 45 to 50 feet from 50% non-federal sponsor and 50% federal
    government, to 25% non-federal sponsor and 75% federal government in
    order to improve efficiency of this important work. By doing the same
    thing with the Inland Waterways Trust Fund--adjusting the cost-share to
    25% taken from the industry derived Trust Fund and 75% from general
    funds--the inland navigation capital program can remain operating at or
    above the $400 million level that for the most part has been achieved
    since the cost-share change at Olmsted, and will accelerate project
    delivery on the portfolio of critical inland waterways projects.
        As you move forward with infrastructure legislation, I encourage
    you to consider this proposal to adjust the cost-share for construction
    of inland waterways infrastructure projects. This important change will
    help maintain but advance our Nation's competitiveness and keep America
    leading at the top. That concludes my testimony, Madam Chair. Thank you
    for giving me the opportunity to be here today and I will be happy to
    respond to any questions you or the other members have the Committee
    have.

        Mr. Westerman. I thank the gentleman for his testimony.
        The chairwoman designated me to introduce the witnesses,
    and I sure don't want to go against the chairwoman, so I am
    going to next recognize Ms. Kirsten Wallace from the Upper
    Mississippi River Basin Association.
        Ms. Wallace, you are recognized for 5 minutes.
        Ms. Wallace. Great. Thank you, Chair Napolitano, Ranking
    Member Westerman, Chair DeFazio, and members of the
    subcommittee. I appreciate today's opportunity to underscore
    the value of investing in both the economic vitality and
    ecological integrity of our Nation's rivers.
        The Upper Mississippi River Basin Association was formed in
    1981 by the Governors of Illinois, Iowa, Minnesota, Missouri,
    and Wisconsin to facilitate dialogue and cooperative action and
    to serve as an advocate of the State's collective interests.
    UMRBA works closely with the U.S. Army Corps of Engineers and
    other Federal agencies to achieve a shared commitment to
    integrated and multipurpose management of the Upper Mississippi
    River's economic and ecological uses.
        On the Upper Mississippi River, we have proven that
    navigation traffic as well as other economic uses can be fully
    supported within a healthy river ecosystem. Our Nation's rivers
    can serve simultaneously as economic engines and ecological
    treasures. We can have both, and we are better for it.
        In order for our Nation to fully realize the potential of
    our rivers, we must value and integrate management of their
    many purposes and uses. The Upper Mississippi River is a
    multibillion-dollar economic engine and a treasured ecosystem,
    abundant with fish and wildlife, generating revenues in excess
    of $600 billion annually and supporting over 1.86 million jobs
    in manufacturing, agriculture, tourism, recreation, navigation
    and energy sectors.
        At the same time, the river provides an irreplaceable water
    supply source for citizens and industries throughout the
    Midwest. The system of locks and dams provides for the movement
    of low-cost goods that are essential to a strong national
    economy: gravel, fertilizers, and agriculture outputs, salt and
    energy products. And at the same time, the Upper Mississippi
    River supports a $55 billion tourism and recreation industry
    that is built upon the serenity and adventure of the river's
    landscape and abundant opportunities for fishing and hunting.
        The UMRBA, Upper Mississippi River Basin Association, along
    with navigation industry, conservation interests, and local and
    Federal partners, made a very conscious decision to seek
    collaboration, shared solutions, rather than remain hamstrung
    and steadfast in conflict.
        There is a long history of conflict between economic and
    ecological interests on the Upper Mississippi River, with the
    most contentious time occurring in the 1970s following
    enactment of new laws that gave environmental interests legal
    standing, in particular the National Environmental Policy Act
    and Clean Water Act, and when the American economy was
    experiencing severe inflation and the value of inland waterways
    as a transportation system was magnified.
        Conflicts raged over navigation use and environmental
    resources on the river. Can they coexist? How much navigation
    traffic is too much? Ultimately, this conflict turned into
    litigation when a second lock chamber was proposed at Lock and
    Dam 26 in the mid-1970s, with the primary argument that the
    Corps did not evaluate the systemwide impacts of the second
    lock to the ecosystem.
        The Federal Court halted Lock and Dam 26 replacement.
    Congress claimed it had too little information to take action
    and tasked UMRBA's predecessor, then-Federal-State Upper
    Mississippi River Basin Commission, with resolving those
    contentious questions and making recommendations for how best
    to manage the river, balancing the demands of these competing
    interests. Congress said no action could be taken to increase
    navigation until a plan was finalized and Congress had approved
    it. Ultimately, the conclusion reached was that balanced
    management is achievable and is in our Nation's interest.
        In 1986, Congress authorized a second chamber at Lock and
    Dam 26, along with a systemwide ecosystem restoration and
    scientific monitoring program, known today as the Upper
    Mississippi River Restoration Program, and the declaration that
    the Upper Mississippi River is both a nationally significant
    navigation system and a nationally significant ecosystem.
        Shortly after, the navigation industry began considering
    modernization needs on the Upper Mississippi River at a larger
    scale, and then UMRBA and Federal partners, navigation
    industry, environmental interests took that same approach to
    collaboration and agreed to the Navigation and Ecosystem
    Sustainability Program, NESP, which is a comprehensive and
    integrated plan for meeting current and future shipping
    demands, stimulating economic growth, and improving the health
    and resilience of the river ecosystem.
        NESP's feasibility study was completed in 2004. Congress
    authorized it in 2007. It enjoys consensus among diverse
    stakeholders and bipartisan and bicameral support among
    Congress as well as a steadfast commitment by the Governors of
    the Upper Mississippi River Basin States. Reaching this
    commitment to integrated multipurpose management was incredibly
    challenging but has paid tremendous dividends. We moved the
    region from conflict to collaboration. In doing so, we moved it
    from the gridlock of litigation to a whole new world of
    opportunity.
        There is far greater power in standing for something and
    not against it. NESP forges allegiances, allies who can give
    Congress a solution, a hard-fought consensus, not a problem
    that needs to be fixed, not a choice Congress has to make
    between competing interests. NESP gives us solutions and a
    concrete path to work for: guidewall extensions and mooring
    cells, lock modernization at the most congested sites on the
    Upper Mississippi, and islands, backwater complexes, forests
    that are essential for a diverse and complex array of fish and
    wildlife species.
        We appreciate the committee's support of NESP and the Upper
    Mississippi River as a nationally significant resource. Thank
    you.
        [Ms. Wallace's prepared statement follows:]

       Prepared Statement of Kirsten Wallace, Executive Director, Upper
            Mississippi River Basin Association, St. Paul, Minnesota
        Chair Napolitano, Ranking Member Westerman, and members of the
    Subcommittee, I appreciate today's opportunity to underscore the value
    of investing in both the economic vitality and ecological integrity of
    our nation's rivers. The Upper Mississippi River Basin Association
    (UMRBA) was formed in 1981 by the Governors of Illinois, Iowa,
    Minnesota, Missouri, and Wisconsin to facilitate dialogue and
    cooperative action and to serve as an advocate of the states'
    collective interests. UMRBA works closely with the U.S. Army Corps of
    Engineers and other federal agencies to achieve a shared commitment to
    integrated, multi-purpose management of the Upper Mississippi River's
    economic and ecological uses.
        On the Upper Mississippi River, we have proven that navigation
    traffic as well as other economic uses can be fully supported within
    healthy riverine ecosystems. Our nation's rivers can serve
    simultaneously as economic engines and ecological treasurers. We can
    have both, and we are better for it. In order for our nation to fully
    realize the potential of our rivers, we must value and integrate
    management of their many purposes and uses. The river is both a multi-
    billion dollar economic engine and a treasured ecosystem abundant with
    fish and wildlife--generating revenues in excess of $600 billion
    annually and supporting over 1.86 million jobs in manufacturing,
    agriculture, tourism, recreation, navigation, and energy sectors. At
    the same time, the river also provides an irreplaceable water supply
    source for citizens and industries throughout the Midwest. The system
    of locks and dams provides for the movement of low-cost goods that are
    essential to a strong national economy: gravel, fertilizers and
    agricultural commodities, salt, and energy products. At the same time,
    the Upper Mississippi supports a $55 billion tourism and recreation
    industry built upon the serenity and adventure of the river's landscape
    and abundant opportunities for fishing and hunting.
        UMRBA, along with navigation industry, conservation interests, and
    local and federal partners, made a very conscious decision to seek
    collaboration--shared solutions--rather than remain hamstrung and
    steadfast in conflict. There is a long history of conflict between
    economic and ecological interests on the Upper Mississippi River. But
    the most contentious time occurred in the 1970s, following enactment of
    new laws that gave environmental interests legal standing (i.e.,
    National Environmental Policy Act, Clean Water Act) and when the
    American economy was experiencing severe inflation and the value of the
    inland waterways as a transportation system was magnified. Conflicts
    raged over navigation use and environmental resources on the river. Can
    they co-exist? How much navigation traffic is too much? Ultimately, the
    conflict turned into litigation when a second lock chamber was proposed
    at L&D 26 in the mid-1970s, with the primary argument that the Corps
    did not evaluate the system-wide impacts of the second lock to the
    ecosystem.
        The court halted L&D 26 replacement. Congress claimed that it had
    too little information to take action and tasked the then-federal-state
    Upper Mississippi River Basin Commission with resolving those
    contentious questions and making recommendation for how to best manage
    the river, balancing the demands of competing interests. Congress said
    no action could be taken to increase navigation until a plan was
    finalized and Congress had approved it.
        Ultimately, the conclusion was that balanced management is
    achievable and is in our nation's interest. In 1986, Congress
    authorized the second chamber at L&D 26 along with a system-wide
    ecosystem restoration and scientific monitoring program, known today as
    the Upper Mississippi River Restoration program, and the declaration
    that the Upper Mississippi River is both a nationally significant
    navigation system and a nationally significant ecosystem.
        Shortly after, navigation industry began considering modernization
    needs on the Upper Mississippi River at a larger scale. UMRBA joined
    with federal partners, navigation industry, and environmental interests
    to take the same approach of collaboration and agreed to the Navigation
    and Ecosystem Sustainability Program (NESP)--a comprehensive and
    integrated plan for meeting current and future shipping demands,
    stimulating economic growth, and improving the health and resilience of
    the river ecosystem. NESP's feasibility study was completed in 2004 and
    Congress authorized it in 2007. NESP enjoys consensus among diverse
    stakeholders and bipartisan and bicameral support among Congress as
    well as steadfast commitment by the Governors of the five Upper
    Mississippi River basin states.
        Reaching the commitment to integrated, multi-purpose management was
    incredibly challenging, but it has paid tremendous dividends. We moved
    the region from conflict to collaboration, and in doing so, we moved it
    from the gridlock of litigation to a whole new world of opportunity.
    There is far greater power in standing for something, not against it.
    NESP forges allegiances--allies who can give Congress a solution, a
    hard-fought consensus; not a problem that needs to be fixed; not a
    choice Congress has to make between competing interests. NESP gives us
    solutions, and a concrete path to work for. Guidewall extensions and
    mooring cells, lock modernization at the most congested sites on the
    Upper Miss, and islands, backwater complexes, and forests that are
    essential for a diverse and complex array of fish and wildlife species.
        We appreciate this Committee's support of NESP and the Upper
    Mississippi River as a nationally significant resource.

        Mrs. Napolitano [presiding]. Thank you for your testimony
    to all the witnesses, and we will now have the questions. Use
    the timer, a total of 5 minutes for each question. I will begin
    the questioning with Mr. DeFazio.
        Mr. DeFazio. Thanks, Madam Chair.
        To Commissioner Goche and Ms. Brady, from what you know, in
    representing your ports, but also your association with other
    small ports, is the 10-percent set-aside meeting all of the
    needs of small and emerging ports? Is it adequate?
        Ms. Brady. Congressman, if I had that magic ball to know,
    depending on the year, as to how many of the ports were going
    to get hit by various storms, I could say absolutely.
        It is a relative thing. Some years in Montauk, we have had
    it dredged 6 times within 10 years because we just get whacked
    with storm after storm in 1 year. And then we go a couple more
    years and we are better off. So I don't know how I could
    possibly answer that with complete clarity, but----
        Mr. DeFazio. OK. Commissioner.
        Mr. Goche. Thank you for the question, Congressman DeFazio.
    And so far, from what I have seen, the answer would have to be
    no. Not only do we need maintenance dredging virtually every
    year in our area, but we also have a huge backlog of deferred
    maintenance on our jetties. The only way I can see us digging
    out of that deferred maintenance hole is by using the $9
    billion or $10 billion that is on the books from previous
    years.
        The Port of Coos Bay, for example, the north jetty has lost
    about 380 feet over the last 30 years in length. So it is at a
    critical point where we have to replace at least 150 feet
    before we can get back to some semblance of safety.
        Mr. DeFazio. So I appreciate the testimony of Executive
    Director Seroka, and on behalf of the AAPA. I will say that I
    have some concerns with that proposal. And I have had numerous
    conversations with L.A., Long Beach, and other ports, Seattle
    and others. And my position is: Help us get the money, all the
    money, annually that comes in, spend it, and a plan to in a
    prudent way spend down the money that Congress has previously
    diverted, and then we will come up with a fair distribution.
        I recognize the contribution of the major ports and the
    needs of the major ports. I also am sensitive to, you know, all
    the many other ports are dependent upon this, some of whom
    really don't have any capabilities or very little capabilities
    of raising revenue.
        So I guess that is not really a question. Well, let's just
    say, is there anybody on the panel who disagrees that we should
    spend all of the collected taxes on an annual basis, we should
    appropriate the total amount on an annual basis because there
    are needs out there? Anybody disagree with that? OK, good.
        Anybody disagree with the fact that since we did collect
    this ultimately from the American consumers, the ad valorem
    tax, and it has an intended purpose, that we should also have a
    plan to spend down the nearly $10 billion balance in the
    theoretical trust fund which is somewhere in the Treasury
    maybe, but we just make up money anyway, so what is the
    difference? But that we should spend that down in a programmed
    way to meet deferred maintenance and needs in both large ports
    and small ports. Anybody disagree with that? OK, great. Well,
    let's do it then. Thank you.
        Thank you, Madam Chair.
        Mrs. Napolitano. Thank you, Mr. DeFazio.
        The Chair now recognizes Mr. Westerman.
        Mr. Westerman. Thank you, Madam Chair.
        Ms. Harden, while the MKARNS is located in Oklahoma and
    Arkansas, what other States benefit from the inland waterway?
        Ms. Harden. The MKARNS, sir, is a 12-State region:
    Arkansas, Oklahoma, Kansas, Texas, Colorado, Missouri,
    Nebraska, Minnesota, South Dakota, North Dakota, Montana, and
    Idaho.
        Mr. Westerman. So what are the types of specific
    commodities that come from those States that otherwise would
    have a very difficult time reaching global markets?
        Ms. Harden. Well, as you had mentioned in your opening
    statement, sand and gravel, soybeans, chemical fertilizer,
    wheat, steel coils, petroleum. Nearly half of the tonnage
    reported at Oklahoma ports originate or terminate in Kansas.
    Farmers, energy companies, manufacturers, they wouldn't be able
    to compete in an increasingly global marketplace without the
    inland waterways such as the MKARNS. Their profits depend on
    the transportation cost, their savings that are attributable to
    the navigation.
        Some examples, asphalt moves from gulf refineries to
    blending plants along the river for delivery to departments of
    transportation in many of the 12 States that the MKARNS serves.
    Oilfield tubulars from domestic mills are processed at
    finishing plants along the river and delivered to oil and gas
    developments in many of the 12 States and as far away as
    Alaska. The same goes for rebar and wire rod coils. Crude oil
    that is produced in several of these States and as far away as
    North Dakota find its way to the gulf coast refineries by
    barge, a growing amount which is for export.
        So the Nation's waterways give producers and manufacturers
    reach to acquire raw materials and distribute finished goods in
    a competitive marketplace.
        Mr. Westerman. As we often say, the river is kind of out of
    sight and out of mind of the general public, but it has a huge
    economic impact to that 12-State region.
        You also talked about a critical maintenance backlog in the
    navigation improvement project at Three Rivers. If there were a
    failure due to inadequate maintenance or a failure of the
    existing navigation components at Three Rivers, what do you
    think this would mean to the national economy?
        Ms. Harden. Well, our quarry on the MKARNS is the closest
    major deposit of rock to New Orleans and the gulf coast, and
    this was very important during the devastating hurricanes of
    Katrina and Rita. Also, our quarry is the low-cost producer of
    the sandstone, and sandstone has antiskid properties that are
    required in Louisiana asphalt markets. So, you know, if this
    chain of supply is broken, I mean, it is going to affect
    highway departments and our highways.
        Agriculture products, grain and fertilizer, they move, as I
    said, for most of the 12 States that the MKARNS serves, and I
    guess the same examples that I gave in the previous question. I
    mean, that would, you know, affect it globally.
        Mr. Westerman. And for the record, for Mr. Graves, the
    State of Louisiana depends heavily on products coming out of
    Arkansas down the MKARNS system.
        Ms. Harden. Absolutely.
        Mr. Westerman. Mr. Stephaich, I come from an engineering
    background in the private sector. And when I found out how the
    Corps gets their projects funded, where it is like a yearly
    funding amount, it just seems to make no sense at all.
        Could you talk maybe a little bit to how projects could be
    done more efficiently, lower cost, and in a quicker timeframe
    if we would fund projects on a project-to-project basis rather
    than a yearly funding basis?
        Mr. Stephaich. Well, the annual funding system really
    doesn't make any sense for these long-term projects. As I
    mentioned in my oral remarks, the Olmsted case is an example
    where the project was accelerated and came in below what the
    Corps thought it would because they had steady money and steady
    funding.
        It is extremely difficult for a major construction job to
    plan for this 1 year at a time, from hiring the contractors to
    actually executing the project. There is tremendous mob/demob
    cost. The contractors bid that in in their cost. It just
    doesn't make any sense. It is completely inefficient.
        I don't know what the percentage of reduction would be, but
    it is significant for the Corps if they had steady funding for
    these projects.
        Mr. Westerman. I couldn't agree more.
        And I am out of time so, Madam Chair, I yield back.
        Mrs. Napolitano. Thank you, Mr. Westerman.
        I am asking unanimous consent that the written testimony of
    American Association of Port Authorities by Mr. Kurt Nagle,
    president and CEO, be made part of today's hearing record.
        Without objection, so ordered.
        [The information is on pages 51-52.]
        Mrs. Napolitano. We will move on, and I think I will take
    the next set of questions for Mr. Gene Seroka.
        Mr. Seroka, what specific policies would you like to see
    Congress implement to address your inequity concerns with the
    HMT?
        In your testimony, you mentioned 50 percent of the revenue
    comes from donor ports and the percentage of the revenue should
    be allocated towards--what percent should be allocated to the
    donor ports?
        Do you believe the minimum allocation to donor ports should
    be effective immediately or in the future?
        Would there be a trigger for this implementation for donor
    ports, and what would the trigger be, and what extended uses
    are you advocating for and why?
        Long question.
        Mr. Seroka. The trigger would be full spend, full
    utilization of the incoming revenues. So we get that, and then
    we have an opportunity to look at the fair and balanced
    allocation.
        And our idea, which is aligned with the American
    Association of Port Authorities, is that we ensure that the six
    geographies, the dredge ports, the emerging harbors, are all
    treated with the capability to receive as much money or more
    money in the future than they do today.
        Our look at what we should receive, the 50 versus 2 percent
    in the return, as outlined in our framework, we believe the
    donor ports should receive between 8 and 10 percent. And that
    is a real good program to allow us to get after these other
    uses that we mentioned.
        If you can imagine, Chairwoman Napolitano, in your mind's
    eye, as the ship is coming in, most of the discussion around
    this topic is to make sure that our channels are as deep as
    necessary to manage the ships in whatever port authority we
    represent.
        What we are looking at in Los Angeles and Long Beach is
    that we need to cater to those large ships alongside the wharf.
    So we need to make sure that that water is deep enough, that
    the wharfs are strong enough to manage the heavier equipment
    that moves that larger amount of cargo across.
        Mrs. Napolitano. Thank you very much.
        The next question would be to Mr. Goche, Mr. Seroka, and
    Ms. Brady. Understanding that each of your ports have unique
    needs, outside of those, do you support the full utilization of
    HMT? Yes or no.
        Mr. Goche. Yes, I do.
        Mr. Seroka. Yes.
        Ms. Brady. Absolutely, yes.
        Mrs. Napolitano. Thank you. That is very much what we
    expect.
        Does the entire United States benefit from all of the--when
    the ports that are most efficiently upgraded and in capacity?
        Mr. Seroka, would full utilization of HMT help like the
    Port of L.A.? Would it help them?
        Mr. Seroka. Pardon me?
        Mrs. Napolitano. Would full utilization of HMT help ports
    like the Port of L.A., and how?
        Mr. Seroka. Absolutely. As I mentioned, we have $260
    million worth of projects that we have identified to cater to
    these larger ships, which are trending in the industry and of
    utmost importance in Los Angeles. And therefore, that ability
    would be a really smart move for us as a Nation and our
    competitiveness in the future.
        Mrs. Napolitano. Thank you, sir.
        I think we will have to recess. We have 11 minutes left to
    go vote. We will recess for 45 minutes, and we will be back to
    continue the line of questioning.
        [Recess.]
        Mrs. Napolitano. The Water Resources and Environment
    Subcommittee will reconvene. I think we have enough members
    here to get going.
        And I will recognize Mr. Graves.
        Mr. Graves of Louisiana. Thank you very much, Madam Chair.
    I appreciate the opportunity to be here.
        And I want to thank you all for your testimony today. As a
    Representative from the gulf coast and home is the State of
    Louisiana, where we have 5 of the top 15 ports and, of course,
    large port facilities in Miami, and Houston, and Mobile, and
    Gulfport and all sorts of other places. I appreciate the gulf
    coast representation here today. That was another joke, folks.
    Come on.
        Mr. Seroka, I want to ask you a question. You talk about
    the HMT being fully utilized. And I do want to shout out to
    Chairman DeFazio and Chairwoman Napolitano and Ranking Member
    Graves, and Westerman. I do fully support the full dedication
    of the Harbor Maintenance Trust Fund. And Chairman DeFazio and
    I have been working on this for a few years and sent letters,
    sponsored legislation, and I think this needs to happen.
        You know, a quick question for all of you. I will come back
    to your question in just a second, but a quick question for all
    of you. In your individual associations, businesses, ports that
    you represent, if you took in money for one purpose and then
    you decided to take it and use it for something else, or you
    collected revenue under the auspices of some fee or tax or
    membership and you did something else with it, would you get in
    trouble for that?
        Mr. Ross. Yes.
        Mr. Seroka. Yes.
        Mr. Graves of Louisiana. I think in the private sector,
    they call that embezzling, and here we call it budgeting. And I
    just think it is ridiculous, and so fully, fully committed.
        But Mr. Seroka, I do want to ask, you mention that there
    are certain types of improvements that are not eligible
    expenses under HMT right now. If we do have a full commitment
    of the HMT and the additional dollars, and whether it is the
    paper balance that Chairman DeFazio talked about earlier or it
    is even the annual full commitment of funds, what are some of
    those? What would that look like to you?
        Mr. Seroka. Representative Graves, good to see you again. I
    mentioned that earlier in a question. If you could imagine in
    your mind's eye the ship coming down the main channel. That is
    what this work does primarily through the HMT.
        With the larger container ships coming into our port, I
    want to do work that gets closer to the wharves. Because when
    that ship comes in, it has got to park. It has got to be
    worked, needs the necessary depth of water to be able to reside
    there. That is the type of work that we would like to do.
        Mr. Graves of Louisiana. OK. So you are talking dollars----
        Mr. Seroka. In water usage nearer to the docks than the
    main channel way.
        Mr. Graves of Louisiana. OK. Is this berths?
        Mr. Seroka. Yes.
        Mr. Graves of Louisiana. OK. I just want to make sure I
    understand. Thank you.
        Mr. Seroka. Thank you.
        Mr. Graves of Louisiana. Mr. Ross, there were discussions
    earlier about increasing competition from other countries, I
    think Argentina, Brazil, and others. Can you give us kind of a
    state of play and what you are seeing, in terms of percentages
    or any other type of metric, in terms of what those countries
    are doing now. Are they investing in their water
    infrastructure? What is the state of the industry and just kind
    of global competition right now?
        Mr. Ross. Yes, certainly. I couldn't give you a metric per
    se, but the investments have gone on in Brazil in their
    infrastructure, which were much needed in their country. They
    are certainly spending a lot of dollars there and are becoming
    far more competitive in the long term.
        We generally see a 30- to 50-cent advantage over Argentina
    and Brazil exports. And so, you know, I talked about 31\1/2\-
    cent cost to farmers that could be perceived into these issues.
    And, you know, if that continues to be--maintenance is
    deferred, or excuse me, or just not done and the locks and dams
    are not improved, that 31\1/2\ cents pretty much eats up that
    entire advantage that we have. So those are key dollars, key
    numbers that we need to look at when it comes to advantages in
    trade.
        Mr. Graves of Louisiana. Ms. Harden, you have been working
    in the industry for a few years, I think 30 to 40 years of
    experience. I think you started when you were 5, if I remember
    right. What kind of evolution in the industry have you seen
    over that period of time, in terms of reliability of channels,
    just trends in the industry; and what are some of your
    concerns, just looking back historically versus where we are
    right now?
        Ms. Harden. Good to see you, Congressman Graves.
        Mr. Graves of Louisiana. Good to see you as well.
        Ms. Harden. Yes, I did start at 5.
        I guess the trend that we have seen more than anything that
    affects us, I kind of go back to our story that I told. We are
    not seeing the funding. And I realize we have gotten a lot of
    emergency supplementals that are coming out, and we are hoping
    that these will be applied properly.
        But to be competitive like we do in our business, you have
    got to have, you know, a channel. Granted, our competition--we
    are sealed bid. Our competition's on the Mississippi River, and
    they are authorized to 12 feet, although they are not
    maintained, and we hear that a lot. They are only maintained to
    9. But they have a de facto 12-foot channel, and that is our
    competition.
        And we, you know, unfortunately, had to dramatically reduce
    our presence on the Arkansas because of that. So, I mean, I
    guess we have seen a lack of upkeep in the critical backlog of
    maintenance is just increasing dramatically every year on the
    MKARNS. And this is not just our system. There are other
    systems too. So, it is really, what I have seen has been
    disappointing.
        And to encourage, you know, people to--the jobs. And we
    want to be a low-cost producer, but not through low wages. We
    want it through low-cost transportation cost.
        Mr. Graves of Louisiana. Thank you.
        And, Madam Chair, I just want to ask that the record
    reflect that 8 minutes later the gentleman from Arkansas showed
    up, which is approximately what we saw for the LSU/Arkansas
    game. Thank you.
        Ms. Mucarsel-Powell [presiding]. Thank you, Mr. Graves. Mr.
    Graves is full of jokes this morning.
        I would like to now recognize myself for 5 minutes.
        Thank you very much for coming this morning for such an
    important hearing. I think that we are all in agreement that we
    must allocate the resources needed for harbor maintenance as
    they were intended.
        So I am going to shift just a little bit from that
    conversation and tell you a little bit about the area that I
    represent. I represent Florida's 26th Congressional District.
    It includes Miami, parts of Miami and all of the Florida Keys.
    And I don't think it is a secret that I feel very passionately
    about the coral reefs, and it is the only living coral reef in
    the U.S. continental United States along our coast. It is the
    third largest barrier reef in the world. So I feel very
    passionately about protecting the reefs.
        And, unfortunately, the coral right off the coast of
    Florida is dying, and it is dying because of climate change,
    ocean acidification. It is dissolving the coral right before
    our eyes. And it is also dying from a bacterial infection that
    scientists right now are not able to get a hold on that. It is
    incumbent upon all of us to do what we can to protect the coral
    that is still alive today. And I think that that means also
    being environmentally cautious with any large projects that we
    conduct on our waterways, our ports.
        So I was alarmed to learn that when Port Miami was dredged,
    a project that ended in 2015, an area of the reef the size of
    200 football fields was buried in dredging sediment. This was
    much more than was predicted by the Army Corps and the entities
    who were involved with the project. It is also my understanding
    that there will be other ports in Florida that will soon be
    undergoing the same process, and so we may be putting more
    corals at risk.
        So this question is for Mr. Seroka. I know that you may not
    be able to speak on the specifics of the issues affecting the
    Florida coast, but I am hoping that you can comment on the
    importance generally of environmental compliance.
        You are from California. California is usually good
    environmental stewards and very good on these issues. So I am
    hoping that you or anybody else on the panel can provide
    suggestions on how we can responsibly dredge our very important
    harbors to adequately address heavy ship traffic without
    unnecessarily harming our precious ecosystems.
        And just having said that, I am in full support of
    continued dredging as well, because we need that, especially in
    the Port of Miami. It is just we need to find a balance of
    doing what we need to do for our harbors, for our ports, but at
    the same time being environmentally conscientious.
        Mr. Seroka. Representative Powell, you just struck the
    cord, and that is the balance between the environmental
    stewardship and what we do on our commercial and construction
    activities. The Ports of Los Angeles and Long Beach date back
    to the year 2006 with their clean air action plans, devised
    originally to help reduce specific air quality requirements
    that we had made commitments on to our community. And we flash
    forward, we delivered on those commitments some 6 years ahead
    of our promissory timeframe.
        In an area specifically around truck and traffic
    activities, Congressman Lowenthal led an effort in the early
    part of that decade to work on distributing trucks in a better
    way to reduce idling, congestion on our freeways, and avoid
    times where children are going to school day and afternoons.
        Specifically, to answer your question around dredging, we
    have numerous regulations in the State of California. We also
    follow the Federal regulations around water species and
    anything else that we see that is necessary on the dredging
    concept.
        So having that in mind, being able to be a responsible
    party from the port's vision of capital investment,
    improvement, and construction activity is always first on our
    minds when we are discussing projects like this, whether it be
    maintaining our minus 53-foot depth or what I have described to
    the other Members as limited expanded uses.
        Ms. Mucarsel-Powell. OK, thank you. And, Mr. Stephaich,
    correct?
        Mr. Stephaich. Correct.
        Ms. Mucarsel-Powell. In your testimony, you mentioned the
    important role of inland waterways, the role that they play in
    flood control. Can you please just elaborate a little bit on
    that?
        Mr. Stephaich. Yes. Obviously, the inland waterway system
    and the locks and dams help control the flow of the water. Up
    in our part of the world, in Pittsburgh, we have a significant
    drop, geographic drop, with a lot of locks and dams. And I know
    that the Army Corps uses a system of reservoirs, including our
    locks and dams, to control the flow, slow it down and let water
    out, as necessary. So----
        Ms. Mucarsel-Powell. OK. Thank you very much. And if I had
    more time, I would continue to comment, but I don't want to
    violate my own rules.
        So I will now recognize Gentleman Palmer.
        Mr. Palmer. Thank you, Madam Chairwoman.
        I want to get back to the harbor issues and some of the
    issues that we have had over the years with the need to deepen
    harbors. Obviously, I think the demand for shipping is growing,
    particularly in the energy sector. It is going to require
    bigger ships.
        And one of the things that I had looked at over the last
    few years is the time it takes from the time you recognize you
    need to implement a project to the time you can actually begin
    the project, because of the permitting. One example is the Port
    of Corpus Christi, which I think maybe about 60 percent of our
    petroleum products leave that port. I think it was back in the
    eighties or nineties, somewhere in that range, that they wanted
    to deepen the harbor by 4 feet. It would have been about a $188
    million project at that point. They finally implemented I think
    four phases. The cost went up to $327 million, the cost of the
    delays. I think we are now talking about $480 million.
        Mr. Goche, Mr. Seroka, what has been your experience where
    you have had to make improvements to your ports, in terms of
    the permitting and the delays and the runup of cost, if you
    have had any?
        Mr. Goche. Thank you, Congressman Palmer. We have, by
    scale, much smaller projects than Mr. Seroka has, but I believe
    the process is quite similar. And permitting for any new
    project, any new activity in the water is pretty burdensome. In
    Oregon and in the Portland district of the Army Corps of
    Engineers, we have been working on a streamlining process
    whereby permits are more inclusive and expansive and last
    longer, have a longer shelf life, so to speak. So yes, it is a
    burdensome process, and the hope is that we can relieve some of
    that burden.
        Mr. Seroka. I concur, but we have been pretty fortunate.
    Our relationship with the Corps has been tremendous. Most of
    the time that is spent around permitting happens at the State
    level with the California Environmental Quality Act. And that
    is work that continues, but the Permit Streamlining Act in the
    State of California has assisted.
        Mr. Palmer. Part of what brought this to mind was that
    Panama was able to take only 7 years from conception to
    completion on the Panama Canal expansion, while it would take
    the United States twice as long, sometimes three times as long
    to do projects.
        And for us to be in a competitive environment, particularly
    with markets that you guys deal with and the Far East, it
    becomes pretty important. It is important to us in Alabama,
    with the Port of Mobile. With the expansions in Panama, Mobile
    has now become a major port for shipping to China and to Asia.
    And we are trying to get our harbor deepened.
        Mr. Seroka. And your emphasis is exactly right. I will
    share, though, that Panama's cost overruns and time overruns
    are epic in the shipping world today. And, in fact, the canal
    cannot handle the larger ships in the trade, as were forecasted
    some 20 years ago during the construction of that project. But
    it brings to light the competitiveness that our Nation needs to
    pursue and gain hold of once again. I appreciate your comments.
        Mr. Palmer. You know, what I try to get across to people
    when we are dealing with infrastructure--and I am now doing
    this at home--is that if you are going to spend money on
    infrastructure projects, whether it is a harbor or, you know,
    an interstate highway, build what you need 25 years from now,
    not what you need now. You will wind up spending less money and
    have a better product if you will just plan ahead.
        So that is what I am hoping that we will be able to do when
    this committee gets around to an infrastructure bill is that we
    look 25 years down the road and not what we need right now,
    because with the way things are changing, by the time we get a
    project completed, it is obsolete.
        I appreciate your question, appreciate you being here
    today. And, with that, Madam Chairwoman, I yield back.
        Ms. Mucarsel-Powell. Thank you very much. I now yield 5
    minutes to Representative Lowenthal.
        Mr. Lowenthal. Thank you.
        My question is for Mr. Seroka. First, I want to thank you
    for representing and sharing with us the perspective of what is
    taking place in the San Pedro Bay in the Port of L.A., but also
    your partner, the Port of Long Beach.
        You know, I am very honored to represent the Port of Long
    Beach. At one time, I represented in the State legislature both
    ports. So I am very familiar with the port complex, which
    really, as you pointed out, handles 40 percent of the Nation's
    imports that come into the country, and about 30 percent of the
    Nation's exports come through this.
        And while the ports are doing very well on a number of
    metrics, you know, they are setting records in cargo volume.
    They are investing in infrastructure, as you pointed out, to
    handle the bigger ships, they still face significant
    challenges, in terms of congestion and also in terms of
    international competition.
        So I think what you have advocated for I totally support.
    And I was very glad to hear Mr. Graves, my colleague from
    Louisiana, talk about some of the specific projects. And as you
    are advocating for more equitable allocation of the resources
    of the harbor maintenance tax revenues, they are going to help
    our ports make the investment that they need to grow. And you
    have already indicated the kind of flexibility that you would
    like to see, in terms of meeting the growing demands and to
    being able to compete.
        Can you go into a little bit about how this will impact
    congestion? Is there a relationship between using the harbor
    maintenance tax in a more flexible way and really dealing with
    the facts of congestion and also international competition?
    Those are the two issues I would like you to respond to.
        Mr. Seroka. Yes. Thank you for your question, Congressman
    Lowenthal. On the area of congestion, it has been a topic for
    our port over a number of years. And there are three ways to
    approach eliminating congestion: One is through a concept that
    we use called supply chain optimization, bringing all parties
    together with the natural convening powers that we have to work
    on better ways to move the cargo more fluidly and remove those
    intermediate bottlenecks that have plagued us for some time.
        Second is digitization, and a project that we have embarked
    upon creating what we are now terming as the port optimizer,
    one that can aggregate disparate sources of data, give us a
    deeper line of sight as to the cargo coming our way so we can
    better plan our human capital and our assets.
        And then thirdly is the physical infrastructure, our
    ability to bring these ships in on time and work in a Windows-
    based system, meaning that you have an appointment when your
    ship comes in. You are to arrive at 8 a.m. on Monday and you
    are to leave at 8 a.m. on Thursday.
        By keeping the integrity of those ship windows is largely a
    function of being able to bring the ships into an area that can
    accommodate the size of that vessel and work the vessel as
    succinctly as possible, meaning having those four to five
    wharves and that deep water.
        So the limited expanded use that I have referenced here on
    several occasions is just for that purpose. And all three
    activities that we are pursuing, Congressman, are interrelated.
    We want to do better and smarter work; we want to bring
    information technology into the port environment, not just in
    Los Angeles but nationwide; and having the physical
    capabilities both landside as well as in the water to carry out
    the first two.
        Mr. Lowenthal. Thank you. I just want to follow up a little
    bit on that. For you to kind of explain, I think you have
    already said it, but I think it is really important, that by
    giving you this limited expansion of flexibility, how is this
    going--and we are asking the rest of the Nation kind of and
    other ports to support this.
        The question is, how is this going to affect manufacturers
    and also customers throughout the Nation? Is this just good
    for, you know, the larger ports, or what is the impact on the
    rest of the Nation by giving the little bit of extra
    flexibility?
        Mr. Seroka. All right. Two parts to that answer. Number
    one, under our recommendation, the ports geographically, by
    designation or by size, will receive the same if not more money
    under our recommendation to this subcommittee and the broader
    committee.
        Secondly, what it does for our mutual customers is, A, it
    gives them certainty that when you order goods and it comes
    through our port complex, whoever that may be, you will have
    certainty that it will arrive upon a schedule that you have
    designed with your service provider. And secondly in that vein,
    what it does for those customers is it delivers value. The
    folks that come through Los Angeles, as an example, pay more
    than $200 million a year in harbor maintenance tax, yet they
    don't see necessarily the dividends returned in further
    investment in that infrastructure, in this case in the water
    infrastructure, that they desire. So it is about delivering
    value back to them as well.
        Mr. Lowenthal. Thank you, and I yield back.
        Ms. Mucarsel-Powell. Thank you. I now recognize Mr. Woodall
    for 5 minutes.
        Mr. Woodall. Thank you, Madam Chair.
        Thinking about your experience in the industry, we have
    went through the last decade where we passed two WRDA bills in
    10 years. We have gone through this decade where we have passed
    a WRDA bill every 2 years.
        It makes me feel good as a member of the committee to see
    the regularity and the productivity, but I want to know from a
    user's and a manager's perspective, has the regularity of the
    WRDA bill process made a difference to you all, as participants
    in the system?
        Mr. Seroka. In a word, yes.
        Mr. Woodall. Los Angeles says yes.
        Mr. Goche. I agree.
        Mr. Woodall. You have seen that difference. Have the corn
    growers seen that difference, Mr. Ross? Does it translate to
    that level?
        Mr. Ross. Yes, certainly. I think there has been a lot of
    improvement in general with that system and having those bills
    pass much quicker. I was here a long time ago. It was the first
    time I came to DC to lobby on behalf of a WRDA bill, and that
    was, again, the first one, and it took quite a while to get
    that one passed. So I appreciate you guys doing the job and
    moving these faster.
        Mr. Woodall. Well, getting into good habits makes a
    difference. It makes a difference in running your business, and
    it makes a difference in legislating too. That is one of those
    habits that was hard to get into, Madam Chair, as you well
    know, getting back into a regular WRDA bill structure. And I
    hope it is something we will be able to maintain.
        Let's go back to 1990, and we had a similar conversation
    with the Highway Trust Fund. And I remember Bill Shuster
    sitting in this room pounding on the table, saying, we are
    going to spend every penny from that Highway Trust Fund,
    because the users paid it and they deserve that back.
        I argued then and I would argue now that is not what a
    trust fund is. A trust fund is so that you have money there
    when those rainy days come, because inevitably those rainy days
    come. If all I am doing is collecting the money from you today
    and giving it back to you tomorrow, I am just a money
    processor. I am not creating a trust fund of any kind. I am
    just redistributing it across the system.
        I know each one of you has needs today, and certainly the
    lack of spend rate is something that we can all agree on. But
    as we start talking about approaching a 100-percent spend rate,
    does anybody share the concerns that I share, that a rainy day
    is in the future and we actually need a trust fund for when
    something happens and we need to be able to pump money out in a
    hurry? Anybody share my concerns? If you don't share my
    concerns, I don't want you to tell me I am wrong. I want to
    know if anybody thinks I am right.
        Mr. Stephaich. I would argue that the rainy day is today
    for us. I mean, we are in a critical situation where we are
    facing potential catastrophic failures with our infrastructure.
    So I would argue that the rainy day is today. Thank you for the
    question.
        Mr. Woodall. Easy to make that case today. Then that is
    right, we have not been doing enough historically. I watch the
    pendulum swing in this town, and we unquestionably need to
    swing it more in terms of getting money out the door. I just
    worry. I wonder whether or not there is a point where we swing
    it too far and we are not planning for tomorrow. Ms. Brady.
        Ms. Brady. I think, listening to the folks to my left
    regarding the locks, it is definitely a separate situation. So
    what they say is very valid.
        For us, in 2018, we have had three dredges in three of our
    ports so we are good at this very second. However, you know,
    one really good storm or one really good winter where we just
    get pounded and pounded, we do need to have the ability to
    access those emergency funds and not just make a mad scramble
    and hope and pray that everything works out.
        Mr. Woodall. And the best part of my job is smart people
    come in to make me smarter. I am more of a surface guy than a
    water guy. And what I know in Metro Atlanta, if I try to build
    a sidewalk with county funds, I can get it done in a couple of
    months. If I try to build that same sidewalk with Federal
    funds, it could be a 3\1/2\-year project if everything goes my
    way.
        I can't do these massive dredgings with local funds in
    their entirety, so, of course, we are going to knock on the
    Federal door. Are there occasions where you are not knocking on
    the Federal door, you are simply using local funds and we see
    that same thing in water infrastructure that I see in surface
    infrastructure, that I can spend money rapidly if I just left
    it with Los Angeles instead of taking it from Los Angeles and
    giving it back a year later?
        Mr. Seroka. And that is what we do every day. In a strong
    year, we are committing about $1 million a day to ongoing
    maintenance repairs and progress to manage these ships. At our
    port, which is dissimilar from some, we have 27 terminals and
    270 berths. What we see ourselves doing today is moving the
    right size ship to the proper terminal, based on its size. And
    that is not a sequence that really promotes fluidity.
        So, while I understand that a variable in the equation must
    be the rainy day concept, there are immediate issues today. And
    I assure you that the Port of Los Angeles will have a long-term
    plan to help you craft what tomorrow will bring.
        Mr. Woodall. When you are dedicating those local funds, are
    you doing it in a cost share, or for those projects it is all
    local funds all the time today?
        Mr. Seroka. Mostly, sir, it is the money that we earn from
    our customers, direct revenue that is being invested back into
    our port.
        Mr. Woodall. Ms. Brady.
        Ms. Brady. Our situation is--country mouse here--very
    different. We have, I believe, an 80/20 cost share. We don't
    have a dredge. Our town doesn't own one. It is too expensive.
    The costs of having to--apparently, they last only about 2
    years. The county has a dredge, but you can't dredge the inlet,
    because it is not a county waterway. So if we did not have a
    mechanism with that cost share, our town, we couldn't afford it
    without having that help.
        Mr. Woodall. Thank you very much.
        Madam Chair, you have been very indulgent. Thank you.
        Mrs. Napolitano [presiding]. Thanks. The Chair recognizes
    Mrs. Fletcher.
        Mrs. Fletcher. Thank you, Chairwoman Napolitano.
        And I would like to thank you and Ranking Member Westerman
    for holding this important hearing today, and the witnesses for
    taking the time to testify.
        Ports are the economic drivers of our Nation, and we
    certainly know that in my home in Houston. The Port of Houston
    just released new economic impact numbers reflecting the
    economic activity, jobs, and tax revenue provided by the more
    than 200 private and public facilities that comprise the Port
    of Houston.
        In 2018, the Port of Houston generated $801 billion in U.S.
    economic value, sustained $3.2 million in jobs throughout the
    Nation, and provided $38 billion in local, State, and Federal
    tax revenue.
        The Port of Houston is the largest exporting region in the
    U.S. It is the largest U.S. oil exporting port, and it is home
    to the largest petrochemical manufacturing complex in the
    Nation. The port has been called irreplaceable, because there
    are no alternatives to the pipeline, refining, and
    manufacturing facilities that exist along the Houston ship
    channel. It is a national asset, and it is critical that it is
    adequately maintained, to ensure the safe and efficient
    movement of commerce for the benefit of the country.
        Each year, the Port of Houston generates $75 to $100
    million in Federal harbor maintenance trust revenue, yet it
    needs about $50 to $60 million to adequately maintain the
    Houston ship channel at its authorized depth and width. Its O&M
    dredging allocations in recent years have been $40 million or
    below.
        It is my understanding that the Port of Houston has
    calculated that the direct economic impact of the loss of 1
    foot of draft on the Houston ship channel is $281 million. So I
    have a question for anyone on the panel who wants to answer
    whether they have performed similar calculations in their ports
    and have similar information about that impact?
        Mr. Goche. Yes, Congresswoman. In recent years, we did an
    economic study. We had a third party do an economic study of
    our little port of Bandon. And that study resulted in the
    finding that our access to the sea that costs about $450,000 a
    year returns an economic output of between $52 and $62 million
    annually. That, in turn, results in revenue to the Treasury,
    tax revenue, Federal tax revenue to the Treasury of just under
    $5 million. So about a 10-to-1 ratio of return on investment.
    So even though the scale is quite different, I think that that
    shows that small ports are a great investment for the Federal
    Government on those Federal projects.
        And I would like to also point out that that $450,000 just
    addresses the Federal channel, you know, the responsibility of
    the Federal Government for their project. We also have other
    silt-in situations that we have to address on a regular basis
    that has to come from the local economy.
        Mrs. Fletcher. Thank you, Mr. Goche.
        Mr. Seroka. From our perspective in Los Angeles, we
    anticipate the cargo volume will double over the next 15 years.
    So my work, whether it be on our so-called 2050 plan or some of
    the recommendations I have given to the subcommittee here today
    are all with a line of sight on that area.
        And in very similar fashion, Roger Guenther, who runs your
    port, is a good friend of mine, and we talk a lot about these
    economic KPIs and where our drivers or levers can be. So I am
    glad that you and Roger are keeping good tabs on what this
    means. Thank you.
        Mrs. Fletcher. Thank you. And with the few seconds I have
    left, maybe you can address this or anyone on the panel. How
    can we modernize the HMT so that ports like Houston that
    contribute more than they receive are maintained to their
    authorized depth?
        Mr. Seroka. That was the second point that I made in the
    recommendations to the subcommittee of a fair allocation, where
    no one is left behind. There is linkage to the full spend
    concept that we have and even using banked moneys if that is
    appropriate, and making sure that folks can grow their pot,
    whether they be emerging harbors, geographies, or other
    classifications of port outside donor.
        Mrs. Fletcher. Thank you so much, and I yield back my time.
        Mr. Malinowski [presiding]. The Chair recognizes Mr.
    Huffman.
        Mr. Huffman. Thank you, Mr. Chair.
        The topic of today's hearing is to discuss the role of the
    U.S. Army Corps of Engineers in the maintenance of our Nation's
    harbors, and I have heard categories for these harbors such as
    high use, moderate, and emerging.
        I have to say this euphemism of emerging is insulting,
    given that communities I represent feel like their ports and
    waterways are neglected and abandoned. Petaluma River is one
    that has been particularly neglected and abandoned. I represent
    this area, and it was once dredged every 3 to 4 years to
    maintain channel depth. It has not been dredged since 2003, and
    that was a partial dredging. There are portions that have not
    been dredged since 1998.
        So perhaps in the next WRDA, we should just end the charade
    and come up with a new category for ports that the Army Corps
    has simply forgotten about or left behind. And I could come up
    with more colorful terminology if you talk to my constituents,
    I assure you. The system is not working and it is, in fact,
    insulting to communities that play by the rules and still lose
    every year every single time.
        Now, there are other Members who have served longer than I
    have, certainly, on this committee, but this is year 7 for me,
    and I am already sick and tired of this annual cycle of begging
    OMB and the Corps during the development of the President's
    budget request, then to turn around from disappointment to
    pleading for support through the work plan, and in the end when
    no assistance is provided by the Corps being reassured there is
    always next year. This is a con game.
        And I would like to ask unanimous consent to enter into the
    record letters that I have written going all the way back to
    2014, 2015, 2016, 2017, 2018, and January of 2019, where we are
    begging and pleading with the Corps to address these issues.
    This spans two different administrations. It showcases years of
    failed responses by the Army Corps of Engineers. So, Mr. Chair,
    I would like to enter into the record six of these letters that
    I have written on this subject.
        Mr. Malinowski. Without objection.
        [The information is on pages 53-64.]
        Mr. Huffman. Thank you. And I would invite the committee to
    come out to the Petaluma River and hold a hearing on how we are
    failing small communities, because the witnesses before us
    today, and I very much appreciate the testimony, but from what
    I can tell, most of you folks are doing pretty well by the
    status quo. Ms. Brady, I have been out to your community.
        Ms. Brady. Riverhead. Still another hour and a half away.
    Close enough, right.
        Mr. Huffman. Near, nearby. And I appreciate, you have made
    the point very well how important commercial fishing is to your
    region. Believe me, as chair of the Water, Oceans, and Wildlife
    Subcommittee of the Committee on Natural Resources, I
    understand that. And I want to see your community taken care
    of. But in your testimony, you mention maintenance dredges in
    Montauk in 2008, 2012, 2018, and relatively consistent dredges
    elsewhere in the area.
        I am representing a community that hasn't been dredged--
    again, just a partial dredge in 2003--in over 20 years since
    the entire channel was dredged. I am sure you can imagine what
    that kind of lack of attention by the Army Corps of Engineers
    can do to a community.
        So if we want to talk about a hearing to showcase the cost
    of doing nothing, let's come to Petaluma or let's go to the San
    Rafael Canal, another part of my district where we have seen
    similar neglect and abandonment by the Corps of Engineers. I am
    happy to work with my colleagues and any of you here on ways to
    fully utilize the Harbor Maintenance Trust Fund, but I want to
    make sure as we go forward that we are also taking care of
    these neglected and abandoned communities and not simply
    redirecting more funds to communities that have been relatively
    well-maintained by the status quo.
        I have a little bit of time left. If any of you have
    anything you would like to say to the people of Petaluma and
    other communities I am sure around this country where shallow
    draft dredge projects have simply been abandoned and forgotten,
    I will leave the balance of that time to you.
        Ms. Brady. Congressman, it is nice to see you again. That
    is ridiculous that your constituents should have to go through
    that. There is no one should have that. I know specifically for
    Montauk, if there had been a change in the language of what is
    considered a lesser harbor and a greater harbor, we would have
    immediately been able to been dredged to a 16-foot depth, in
    which case we would not have necessarily needed all the
    maintenance dredging and the emergency dredging.
        We had an emergency dredge that was basically like a whaler
    and two straws. It created more damage than it helped. We have
    dealt with the Army Corps in the past. I know they will ask
    for, you know, the questions at 14 foot, at 15 foot, at 16
    foot. If we hit bottom, it is a bad day and it doesn't matter.
    It just depends as to how deep it could be.
        I think--and I am saying this just on the fly--if we had
    had the depth at the level that we could have used and that the
    community had told the Army Corps at that time, we might not
    have required as many of those maintenance dredgings. And so
    that is to be had. But no, what your people have gone through,
    that is ridiculous. Thank you.
        Mr. Huffman. Thank you, Mr. Chair.
        Mr. Malinowski. Thank you. The Chair recognizes myself for
    5 minutes. And I will start by saying that in my weeks' long
    career in the United States Congress, I have not attended a
    hearing with as straightforward a subject and conclusion as
    this one. Obviously, the Harbor Maintenance Trust Fund should
    be spent on harbor maintenance, and I am glad that there is
    broad consensus on that.
        Let me ask you about rainy days, if I may. I represent New
    Jersey. And, as you well know, Hurricane Sandy caused
    tremendous damage to ports in New Jersey and New York,
    including to fuel oil, chemical facilities in port areas,
    extreme flooding at inland facilities and in transit tunnels
    used by thousands of New Jersey and New York residents every
    day.
        So my question to anybody who might want to take it is,
    what has been done and what is being done to prepare our ports
    for the next big storm, and what have been the lessons learned
    from past extreme weather events related to port resiliency?
    Who would like to take that?
        Mr. Goche. I will take a stab at that. So we have big
    storms. On the east coast here, they call them hurricanes. We
    just call them another day at the beach. And the deferred
    maintenance in our port on the jetty has gone on so long that
    each day at the beach turns into more damage to our jetties.
        So it is hard to talk about preparing for the future when
    we have such a backlog of deferred maintenance. As a commercial
    fisherman, maintenance is a big deal. If I don't take care of
    my boat, my boat doesn't take care of me, I don't get home to
    my family.
        And I see the ports that I travel--and I go into ports all
    up and down the west coast, and I see each one of these, with
    the exception of the big ports that tend to get most of the
    attention and the money, all of the smaller ports, even our
    biggest port outside of the Columbia River in the State of
    Oregon, which is Coos Bay Harbor, like I said earlier, has lost
    380 feet of length over the last 30 years. And we desperately
    need to bring that back at least halfway to where it was so
    that we can keep everything moving, all the moving parts that
    need to keep moving.
        So I don't know if I addressed your question, but it is
    important to me to look at maintenance, the deferred
    maintenance first before we try to look into the future.
        Mr. Malinowski. Understood. Thank you.
        Does anyone else want to chime in?
        Mr. Seroka. Yes. Our preparation is around three main
    areas: Seismic preparation, number one, based on our geography
    and close proximity to fault lines; number two is sea level
    rise, something that we have watched and we are required by the
    State of California to report on and report contingency
    planning; and then thirdly, stormwater capture and what we do
    with the shifting land mass.
        In our geography, we are not as susceptible to the types of
    storms in your home State, but nonetheless, those three areas
    are primary focus today in addition to the maintenance and the
    2050 plan to which I referred earlier.
        Mr. Malinowski. And how are you taking sea level rise into
    account? That was actually going to be my next question.
        Mr. Seroka. Taking into account, number one, looking at the
    speed at which the water is rising; two, our infrastructure,
    where it sits in comparison to those out and downline
    projections; and then thirdly, whatever we can do to mitigate
    potential impacts.
        And, fortunately, because of the people who came before us
    and the design scientists and engineers, we appear to be in
    good shape as far as that infrastructure placement, but we
    cannot take that for granted.
        Mr. Malinowski. Got it. Thank you. Any final comments on
    either of those questions or anything else, because I think we
    are about to wrap up?
        All right. Seeing none, I think we have come to the end of
    the hearing.
        So I want to thank all of the witnesses for your
    contributions today. I want to ask unanimous consent that the
    record of today's hearing remain open until such time as our
    witnesses have provided answers to any questions that may be
    submitted to them in writing, and unanimous consent that the
    record remain open for 15 days for any additional comments and
    information submitted by Members or witnesses to be included in
    the record of today's hearing.
        Without objection, so ordered.
        Let me thank the witnesses again. If no other Members have
    anything to add, the committee stands adjourned.
        [Whereupon, at 12:27 p.m., the subcommittee was adjourned.]

                           Submissions for the Record

                                  ----------

    Statement of Kurt J. Nagle, President and CEO, American Association of
         Port Authorities, Submitted for the Record by Hon. Napolitano
        Fixing our nation's infrastructure is one of the highest priorities
    for Congress, the Administration and the American people. We commend
    Chairman DeFazio for his leadership on this issue. Ports are a critical
    part of our U.S. economy. America's seaport activity accounts for 26
    percent of the economy, supports nearly 31 million U.S. jobs and
    provides $378 billion in annual federal, state and local tax revenues.
    Our nation depends on seaports to support our standard of living in
    every category of economic activity including U.S. manufacturing,
    agriculture and overseas deployment of the U.S. military. In addition,
    the amount of freight moved in the U.S. is projected to grow 15 percent
    by 2045, and America's trade volume is expected to quadruple after
    2030.
        Landside and waterside investments are critical to building
    America's 21st century seaport infrastructure. The American Association
    of Port Authorities (AAPA) has highlighted $66 billion in federal need
    over the next decade for port-related infrastructure. About half of
    that need, $33.8 billion, is for waterside investments. $27.6 billion
    is needed to maintain our deep-draft navigation channels, paid for by
    releasing the $9.5 billion balance in the Harbor Maintenance Trust Fund
    (HMTF) and approximately $1.8 billion in annual Harbor Maintenance Tax
    (HMT) revenues. There is also a great need to modernize or deepen deep-
    draft navigation channels to serve the current size of vessels using
    our ports. AAPA calls for an investment of $6.2 billion, of which $3.1
    billion is the federal share of the 15 current Congressionally
    authorized construction channel improvements approved by this
    Committee. Another $3.1 billion is the federal share of projects
    undergoing feasibility studies. We appreciate this Committee's
    commitment to passing water resources legislation on a two-year
    schedule and hope this can continue in the future.
        Another critical part of fixing our nation's seaport infrastructure
    relates to passing a long-term funding solution for port maintenance.
    As noted above, the majority of the federal waterside needs relate to
    maintaining our nation's ports. The HMT is paid by shippers to ensure
    our nation's ports are well maintained. Unfortunately, while the 2014
    Water Resources Reform and Development Act (WRRDA) and the 2016 Water
    Infrastructure Improvements for the National Act (WIIN) put us on a
    path to full use, Congress is still short of fully using current HMT
    revenues, and there is no plan to spend down the $9.5 billion balance
    in the HMTF. We appreciate that the FY 2019 Corps of Engineers
    appropriations provided the Corps of Engineers 91 percent of HMT
    revenues. This is up from 50 percent when WRRDA 2014 was passed.
    However, it is unclear if Congress can continue to increase funding
    from the HMTF without a funding solution that provides a mechanism to
    allow for the spending of prior year collections of the HMT.
        Now is the time to provide a long-term funding solution for port
    maintenance. One that makes full use of the HMT more permanent. It is
    also important to address the underlying problems with the HMT. This
    includes addressing tax fairness and cargo diversion problems. To aid
    you in building a stronger system, AAPA has developed a comprehensive
    proposal that is based on four pillars to fix the system:
          Full use of HMT revenues;
          A funds distribution framework that makes permanent and
    expands donor and energy transfer port funding, as well as expands the
    allowable in-water use of these funds;
          Minimum regional funding assurances based on historic
    funding; and
          Emerging harbors funding that updates the provisions in
    WRRDA 2014 and WIIN 2016 to guarantee no less than 10 percent to these
    harbors.
        This proposal is based on years of discussion within the
    Association. The goal was to bring together ports that wanted a
    sustainable way to ensure full use of future HMT revenues with ports
    who wanted a more equitable funding structure. What resulted is a
    funding structure that provides benefits for all ports.
        This is a U.S. port industry proposal to fix a broken system. It is
    a comprehensive proposal that allows 100 percent of taxes collected
    from shippers to be provided to our nation's seaport infrastructure and
    support our international competitiveness. It is a long-term solution
    that fixes an unequal system and addresses the health and well-being of
    our seaport water highways that are critical to competitively exporting
    U.S. goods and delivering raw material components and consumer products
    to Americans. HMT collections to restore and maintain U.S. water
    highways complement the $155 billion in port related capital
    investments planned by local public ports and their private sector
    partners to assure safe and efficient freight movement.
        To give you a bit of perspective on how this proposal was
    developed, the U.S. members of the AAPA debated the usage and fairness
    of the HMT for years. In early 2013, our members agreed to Water
    Resources Guiding Principles including reforms to the HMT. We were
    happy to see that many of these principles were reflected in the final
    WRRDA 2014 and WIIN 2016.
        Discussions about HMT reform, however, continued in our Association
    for the next five years, as the principles did not include specific
    recommendations on how to achieve the principles. In January 2018, AAPA
    leadership adopted a policy agreement that was developed by the broad
    membership. It was based on the original principles, and also
    incorporated provisions from WRRDA and WIIN related to funding being
    received by emerging ports and energy transfer ports. In crafting this
    agreement, AAPA was careful to balance the interests of our entire
    membership. Interests from each port stakeholder group were at the
    table and included in the AAPA agreement: maintenance ports, regional
    ports, smaller ports, donor ports and energy transfer ports. What
    emerged from those negotiations was a partnership to advocate together
    for a broad reform package that would incorporate all the pillars noted
    above. By joining forces on a joint proposal developed by those
    responsible for ensuring the continued success of our nation's marine
    infrastructure, AAPA members remain hopeful that they can secure
    Congressional support to fix the most glaring problems with the HMT.
        This AAPA agreement includes a funds distribution framework that
    continues to make traditional maintenance the highest priority. At the
    first stage, the agreement provides 90 percent for maintenance and 10
    percent for donor and energy transfer ports. Within the donor and
    energy transfer ports allocation, 80 percent would be distributed to
    donors and 20 percent to energy transfer ports. The rationale for this
    ratio is that large donor ports do not require much maintenance, while
    all energy transfer ports use HMT for traditional maintenance. For
    example, large donor ports account for 50 percent of HMT revenues, but
    receive less than two percent in return.
        During the AAPA debate, there was considerable discussion about
    when donors should get more funds. While maintenance was a priority,
    the group agreed to increase the donor funding now in order to increase
    support for full use of the HMT and provide these ports with
    flexibility at the port level to ensure their ongoing competitiveness
    by building on provisions first established in WRRDA 2014.
        We appreciate the staunch support of full use of the HMT by
    Chairman DeFazio and other members of the Committee, and we are
    thankful that Senator Shelby, Chairman of the Senate Appropriations
    Committee, has found a mechanism to encourage full use outside of the
    budget caps. AAPA is supportive of this mechanism and urges it to be
    broadened to include all the pillars of the AAPA agreement. We believe
    this broader, comprehensive legislative solution is not only possible,
    but creates the best chance to achieve full use in this Congress, and
    we urge you to give strong consideration to the AAPA framework. As I
    noted above, this framework balances the needs of all ports.
        I have attached a summary of the full AAPA agreement for your
    review. AAPA looks forward to working with both the House and the
    Senate in crafting a solution that fully reforms the HMT.
                                   attachment
        [The attachment entitled, ``A Long-Term Funding Solution for Port
    Maintenance: Good for Ports, Good for the Nation'' is retained in
    committee files and is available at http://aapa.files.cms-plus.com/
    PDFs/HMT_onesheet_NOCHART_v2.pdf (page 1) and http://aapa.files.cms-
    plus.com/PDFs/HMT_onesheet_CHART_v2_
    1524673810492_2.pdf (page 2).]

    Six Letters from 2014-2019 from Hon. Jared Huffman, a Representative in
    Congress from the State of California, et al., Submitted for the Record
                                by Hon. Huffman
                                                      December 3, 2014.
    The Honorable Shaun Donovan
    Director, Office of Management and Budget
    The Honorable Jo-Ellen Darcy
    Assistant Secretary for Civil Works
        Dear Director Donovan and Assistant Secretary Darcy,
        We write to reiterate our strong support of funding for several
    items related to the important work done by the U.S. Army Corps of
    Engineers (USACE) in Sonoma County, California. We request support for
    the several aspects of the Russian River Biological Opinion (BO) as
    well as Coyote Valley Dam and Petaluma River dredging in any work plan
    the Congress directs to be prepared by the U.S. Army Corps of Engineers
    (USACE) for FY '15, and in the President's FY '16 budget request.
    Russian River Biological Opinion Projects
        The Russian River BO issued in September 2008 by the National
    Marine Fisheries Service identified 23 actions that must be taken to
    protect three threatened or endangered salmonid species; coho salmon,
    steelhead, and Chinook salmon. The BO was issued because of the impact
    on these fish populations from the construction and operation of two
    USACE facilities: Warm Springs Dam on Lake Sonoma, and Coyote Valley
    Dam on Lake Mendocino. These facilities are operated by the USACE for
    flood control to protect communities along the Russian River.
    Additionally, the Sonoma County Water Agency utilizes these facilities
    for water supply purposes for 600,000 people and the valuable local
    agriculture industry. With the ongoing historic drought in California
    the importance of these USACE facilities is higher than ever before.
        We request that from the Section 1135 Continuing Authorities
    Program, you include $300,000 in the FY '15 work plan and $4.45 million
    in the FY '16 budget for work at Dry Creek for study completion
    ($450,000) and construction ($4 million) as needed to help complete the
    required three miles of habitat enhancement required by the BO by 2018.
        For the Dry Creek (Warm Springs) Feasibility Study, we request that
    a sufficient amount be added to the FY '15 work plan so that $500,000
    is provided, and request that the President's budget for FY '16 include
    an additional $725,000 for this project. These amounts are essential to
    appropriately advance this study that is directed at the completion of
    the required six miles of habitat enhancement that, pursuant to the BO,
    must be completed by the year 2020. Taken together these projects will
    move forward in demonstrating the ability to balance flood control and
    water supply needs with a sustainable ecosystem for threatened or
    endangered salmonid species.
        We also urge that $1.89 million be added in the FY '15 work plan to
    the President's budget request for Operation and Maintenance at Dry
    Creek (Warm Springs) Lake and Channel, as needed for the monitoring of
    fish released from the hatchery; for coho hatchery facility water
    treatment and filtration to prevent fish disease; and for egg
    incubation equipment--all as required by the BO. This amount includes
    $400,000 that is independently necessary for critical maintenance
    including waste water treatment, pump repair, and water control gate
    maintenance. Finally, in this regard, $6 million needs to be included
    in the FY '16 budget request for BO efforts and routine critical O&M.
    Coyote Valley Dam
        For the Coyote Valley Dam, we urge that $30,000 be funded from the
    budget of the Section 1135 Continuing Authorities Program for the
    feasibility study that is evaluating the effect of winter flood release
    timing on river water quality. And, at Coyote Valley, we ask that
    $450,000 be added in the FY '15 work plan above the President's O&M
    budget request for the monitoring of fish released from the hatchery,
    and for minimum critical maintenance including service gate and
    emergency gate maintenance. In addition, we request that $3.8 million
    be included in the FY '16 budget request for BO efforts and routine
    critical maintenance.
    Petaluma River Dredging
        In addition to the important work done by the USACE in these flood
    control, water supply, and ecosystem restoration projects, we are
    concerned that dredging maintenance for the continued commercial use of
    Petaluma River last occurred in 2003 and is long overdue. Funding is
    needed both for dredging and flood control work. Because of the delay
    in regular maintenance the cost of dredging could be significantly
    higher than past years. We support moving forward with the initial
    planning for this long-overdue dredging of the river.
        Thank you for your consideration of this request which we
    understand to be consistent with the optimal funding levels the Corps
    has expressed for these projects.
            Sincerely,
                                       Jared Huffman
                                               Member of Congress
                                       Mike Thompson
                                               Member of Congress

                                   __________

                                                      October 27, 2015.
    The Honorable Shaun Donovan
    Director, Office of Management and Budget
    The Honorable Jo-Ellen Darcy
    Assistant Secretary for Civil Works
        Dear Director Donovan and Assistant Secretary Darcy:
        As you continue your preparation of an FY 2016 work plan and FY
    2017 budget for the U.S. Army Corps of Engineers (USACE), I wanted to
    call your attention to several important projects across California's
    North Coast and the counties in California's Second Congressional
    District.
    Harbor Dredging
        Adequate funding for the USACE is necessary to modernize our
    nation's ports and harbors and better support the over 13 million jobs
    in the marine transportation industry. Inadequate funding results in
    insufficient dredging, increasing the chance of collisions and causing
    higher costs for consumers. In my district, the dredging maintenance
    for the continued commercial use of Petaluma River last occurred in
    2003 and is long overdue. Funding is needed both for dredging and flood
    control work. Because of the delay in regular maintenance the cost of
    dredging could be significantly higher than in past years. I urge you
    to move forward with the initial planning for this long-overdue
    dredging of the river.
        Additionally, the Corps has provided much needed dredging services
    in the past in the San Rafael Canal, but over the years the silt
    buildup has significantly impaired the depth during low tide. The last
    dredging in 2011 covered only a portion of the canal, and a full
    dredging has not occurred since 2002.
        In Humboldt Bay regular and timely dredging is critical for
    commerce, especially with new investments by companies in products that
    require deep-draft vessels for shipping, like wood chips and logs.
    Since Humboldt Bay is also a harbor of refuge--the only deep-water port
    between San Francisco and Coos Bay--its operation is also vital to
    marine safety. Consistent maintenance dredging is needed to keep the
    harbor entrance safe for transit for commercial and recreational
    vessels. I also ask for your continued engagement in supporting
    dredging and addressing the disposal and use of dredged materials in
    Noyo Harbor.
    Russian River Biological Opinion Projects
        I strongly support the ongoing efforts in Sonoma County to
    implement the Reasonable and Prudent Alternatives of the Russian River
    Biological Opinion (BO) which, as issued in September 2008 by the
    National Marine Fisheries Service, establishes a series of benchmarked
    dates. The failure to achieve the BO's tasks by the specified dates
    could trigger requirements to construct substantially more expensive,
    and more controversial, projects.
        The Russian River BO identified 23 actions that must be taken to
    protect three threatened or endangered salmonid species: coho salmon,
    steelhead, and Chinook salmon. If work is to be completed on time, a
    significant investment will be required in FY 2017. It appears likely
    that about $9.2 million in construction funding from the Section 1135
    Continuing Authorities Program will be required through FY 2017. I
    understand that there may be backlogged funding available for this
    program, and I ask that the President's FY 2017 budget request for the
    1135 program contains sufficient funds to complete the three miles of
    habitat enhancement required by the BO by 2018.
        For the Dry Creek (Warm Springs) Feasibility Study, I request that
    $425,000 be included in the President's FY 2017 budget. This will allow
    the Army Corps to make progress on the required six miles of habitat
    enhancement that must be completed by the year 2020. Taken together,
    these projects will demonstrate the ability to balance flood control
    and water supply needs with a sustainable ecosystem.
        Additionally, I urge that any FY 2016 work plans prepared by the
    Corps include an additional $1.25 million for Operation and Maintenance
    at Dry Creek (Warm Springs) Lake and Channel for coho hatchery facility
    water treatment and filtration to prevent fish disease, and for egg
    incubation equipment.
        I urge, as well, that $6.411 million be included in the President's
    FY 2017 O&M budget request for Dry Creek (Warm Springs) Lake and $4
    million at Coyote Valley Dam as important components for this connected
    watershed. Beyond O&M, I urge the Corps to consider studying the
    benefits of raising Coyote Dam.
    Bodega Bay
        Bodega Bay, a critical harbor of refuge, is located about 60 miles
    north of San Francisco, and is home to a Coast Guard search-and-rescue
    station which performed about 250 rescue missions in 2013. It is also
    home to a substantial commercial fishing fleet of about 300 vessels
    (500 in-season), as well as an economically significant sport fishing
    industry (about 600 vessels in-season) and recreational craft. In 2012,
    nearly 25% of the total Chinook salmon landings in California, and over
    10% of Dungeness crab California landings, came through Bodega Bay.
        The Corps O&M schedule provides for periodic inspection and repair
    of three breakwaters and maintenance dredging of the federal channel,
    including three turning basins, on an 11-year cycle to a depth of 12
    feet Mean Lower Low Water. Recent sounding surveys indicate that
    shoaling is occurring and that dredging is required now. The last
    dredging episode was in 2004.
        Although $500,000 was included in the Corps' FY 2014 work plan, the
    plan for sediment quality sampling and testing has only recently
    commenced. With groundings occurring particularly among transient
    vessels, and high tide exit and entry generally required, it is now
    essential that funding be budgeted sufficient to conduct the necessary
    dredging.
        While $6.6 million is needed to conduct the dredging as soon as
    possible, it is critical that $1 million be provided as part of the FY
    2016 work plan, and that any balance up to $6.6 million be included in
    the President's FY 2017 budget request to Congress.
    Corte Madera Creek Flood Control Project
        Continued support for the Corte Madera Creek Flood Control project
    is crucial for both the FY 2016 work plan and the FY 2017 budget. The
    project received $400,000 in the FY 2015 work plan and the Project
    Design Team is working toward meeting the first project milestone. In
    order to remain close to the milestones set out by the San Francisco
    District Engineer in his August 13, 2015, letter to the Marin County
    Director of Public Works, $500,000 needs to be included for this
    project in any FY 2016 Army Corps work plan, and I ask that an
    additional $600,000 be included in the President's FY 2017 budget
    request.
        The Corte Madera Creek Flood Control project is critical to the
    broader Ross Valley Flood Protection and Watershed program, a region-
    wide, four municipality, multiple community effort to address chronic
    flooding in the Ross Valley. A suite of creek improvement measures have
    been identified to reduce and contain 100-year flows within the main
    stem of Corte Madera Creek. Residents have agreed to tax themselves $44
    million over 20 years to fund this program. The federal Corte Madera
    Creek project is at the downstream end of all proposed measures and
    must be completed for all present and future efforts of the local
    community to achieve a level of flood protection that will contain a
    100-year flood event.
        The requested funds will complete a feasibility study for the final
    phase of the Corte Madera project, which includes a final unit and
    potential modifications to previous phases, to allow the project to
    function at a level agreed upon by all stakeholders.
        In conjunction with the other measures to be undertaken and for
    which residents have agreed to tax themselves, the Corte Madera Creek
    Flood Control project will substantially improve flood control and play
    a key role in preventing the level of loss seen in our 2005-2006 winter
    storms. These storms resulted in approximately $100 million in damage,
    affecting over 240 homes, 75 retail and commercial structures, two
    elementary schools, the College of Marin campus, two post offices, the
    Ross Town Hall, and police and firehouses in the Towns of Ross, San
    Anselmo, and Fairfax.
    Redwood Creek
        Last year, I wrote to discuss the importance of a USACE flood
    control along Redwood Creek, built after the 1964 flood to protect the
    town of Orick. These levies, while important for local flood control,
    do not convey enough sediment to prevent a buildup of materials.
    Furthermore, they were not designed to ensure that local fish species,
    including federally protected species, were not harmed. Despite tens of
    millions of dollars in restoration work done by the federal government
    upstream, the National Marine Fisheries Service has issued a draft
    jeopardy opinion on the project, which may further reduce the county's
    ability to remove gravel from the project area.
        Humboldt County is currently working with stakeholders and
    landowners to redesign the project to allow for improvement in all of
    these problem areas. USACE will need to at least be a permitting
    agency, and may need to be the action agency for this new project. I
    urge inclusion of the associated costs of leading on this project in
    the USACE's budget.
        Thank you for your consideration of these requests, and I look
    forward to continuing to work with you in the future.
            Sincerely,
                                       Jared Huffman
                                               Member of Congress

                                   __________

                                                       October 7, 2016.
    The Honorable Shaun Donovan
    Director, Office of Management and Budget
    The Honorable Jo-Ellen Darcy
    Assistant Secretary for Civil Works, Army Corps of Engineers
        Dear Director Donovan and Secretary Darcy,
        I write to call to your attention several important projects across
    California's North Coast and the counties in California's Second
    Congressional Districts. These projects are of utmost importance as you
    work on your preparation of a Fiscal Year 2017 work plan and the budget
    proposal for the U.S. Army Corps of Engineers (USACE) for Fiscal Year
    2018.
    Critical Dredging of Petaluma River
        Adequate funding for the USACE is necessary to modernize our
    nation's ports and harbors and better support the over 13 million jobs
    in the marine transportation industry. Inadequate funding results in
    insufficient dredging, increasing the chance of collisions and causing
    higher costs for consumers. In my district, the dredging maintenance
    for the continued commercial use of Petaluma River last occurred in
    2003 and is long overdue. Funding is needed both for dredging and flood
    control work. Because of the delay in regular maintenance the cost of
    dredging could be significantly higher than in past years.
        I am pleased that local stakeholders along the Petaluma River and
    San Rafael Canal are working with the San Francisco District to
    identity the possibility of an innovative new approach that would
    formulate a public private partnership (P3/P4) to reduce dredging costs
    and bring long overdue dredging to the river. While still in its early
    phases, collectively this could be a win-win for all participants. In
    order to support continued collaboration between the Corps and local
    stakeholders for this P3/P4 proposal, I request inclusion in the FY
    2017 work plan of a $200,000 line. However, as ongoing conversations on
    a possible P3/P4 proposal continue, I urge you to not neglect the
    unnecessary backlog of dredging.
    Coyote Valley Dam
        As you know, Section 7001 of the WRRDA 2014 requires an annual
    submission to Congress of a report that identifies potential new or
    modified authorizations of authorized projects or studies. The 2016
    report to Congress listed the request by the Sonoma County Water Agency
    of a modification to the authorized project at Coyote Valley Dam,
    specifically raising the existing dam by 36 feet. This would increase
    total storage capacity at the reservoir to 199,000 acre feet from an
    existing 122,500 acre feet. This would not only have water supply and
    storage benefits, but would address ecosystem restoration benefits
    based on the 2008 National Marine Fisheries Service Jeopardy Biological
    Opinion for the Russian River watershed, as additionally discussed
    below for other projects. Based on the 2016 report, both the House
    Transportation & Infrastructure Committee and the Senate Environment &
    Public Works Committee included authorization for project modifications
    in their Water Resources Development Acts. While Congress has yet to
    finalize a bill, I look forward to working with the Corps on this vital
    issue and urge full funding of the necessary actions by the Corps
    following final passage of a bill.
    Dredging at Bodega Bay
        Bodega Bay is home to a substantial commercial fishing fleet of
    about 300 vessels (500 in-season), as well as an economically
    significant sport fishing industry (about 600 vessels in-season) and
    recreational craft. In 2012, nearly 25% of the total Chinook salmon
    landings in California, and over 10% of Dungeness crab California
    landings, came through Bodega Bay. While California's Dungeness crab
    landings have been harmed by a temporary fishery closure this year, the
    harbor also serves as a critical harbor of refuge and is home to a
    Coast Guard search-and-rescue station which performed about 250 rescue
    missions in 2013.
        The Corps O&M schedule for Bodega Bay provides for periodic
    inspection and repair of three breakwaters and maintenance dredging of
    the federal channel, including three turning basins, on an 11-year
    cycle to a depth of 12 feet Mean Lower Low Water. The last dredging
    episode was in 2004.
        I appreciate that $750,000 was included in the FY 2016 work plan to
    complete all environmental work and plans and specifications as
    required for dredging of the entire federal channel, and $4.285 million
    was in the FY 2017 budget request, an amount deemed sufficient to
    dredge the entrance channel. For the Corps to conduct dredging of only
    the entrance channel in the coming year, and then demobilize the
    equipment only to remobilize the dredge at some later date when
    additional funding becomes available to dredge the remainder of the
    harbor, would add dramatically to the project's cost at that time and
    so unnecessarily waste valuable federal resources.
        To best utilize scarce federal resources, I strongly urge that
    $2.815 million be provided in either the FY 2017 work plan or FY 2018
    budget request, sufficient to dredge the entire Bodega Bay federal
    channel.
    Dredging of Additional Harbors
        In Humboldt Bay regular and timely dredging is critical for
    commerce, especially with new investments by companies in products that
    require deep-draft vessels for shipping, like wood chips and logs.
    Since Humboldt Bay is also a harbor of refuge--the only deep-water port
    between San Francisco and Coos Bay--its operation is also vital to
    marine safety. Consistent maintenance dredging is needed to keep the
    harbor entrance safe for transit for commercial and recreational
    vessels. I also ask for your continued engagement in supporting
    dredging and addressing the disposal and use of dredged materials in
    Noyo Harbor.
        Additionally, the Corps has provided much needed dredging services
    in the past in the San Rafael Canal, but over the years the silt
    buildup has significantly impaired the depth during low tide. The last
    dredging in 2011 covered only a portion of the canal, and a full
    dredging has not occurred since 2002.
    Russian River Biological Opinion Projects
        I continue to offer my strong support for the funding of a critical
    project in Sonoma County relating to the Russian River Biological
    Opinion (BO). As promulgated in 2008, the BO calls for the completion
    of work on Reasonable and Prudent Alternatives by benchmarked dates and
    the Corps and its local partners continue to make progress in meeting
    those goals. The failure to achieve these tasks could trigger
    requirements to construct substantially more expensive, and more
    controversial, projects.
        The Russian River BO issued in September 2008 by the National
    Marine Fisheries Service identified 23 actions that must be taken to
    protect three threatened or endangered salmonid species; coho salmon,
    steelhead, and Chinook salmon. The BO was issued because of the impact
    on these fish populations caused by the construction and operation of
    two USACE facilities: Warm Springs Dam on Lake Sonoma, and Coyote
    Valley Dam on Lake Mendocino.
        If work is to be completed by the milestones contained in the BO
    significant investments will be required in FY 2017 and 2018. With work
    on the feasibility study continuing with funding made available from
    the Section 1135 Continuing Authorities Program, it appears likely that
    about $3.26 million in construction funding from the 1135 Program will
    be required in FY 2017, and an additional $300,000 will be needed in FY
    2018. I understand that there may be backlogged funding available for
    this program, and therefore urge that such funds be made available to
    accommodate the completion of the required three miles of habitat
    enhancement required by the BO by 2018.
        For the Dry Creek (Warm Springs) Feasibility Study, I request that
    $60,000 be included in the FY 2017 work plan as needed to complete this
    study that is directed at completing the required six miles of habitat
    enhancement which must be achieved by 2020 under the benchmarks of the
    BO. Taken together, these projects will move forward in demonstrating
    the ability to balance flood control and water supply needs with a
    sustainable ecosystem for threatened and endangered fish species.
        Additionally, I urge that at such time as the Corps may be required
    to prepare a work plan for FY 2017 with such additional funds as the
    Congress provides; $1.25 million be added to amounts included in the
    President's February request for Operation and Maintenance funding for
    additional work at Dry Creek (Warm Springs) Lake and Channel as needed
    for coho hatchery facility water treatment and filtration to prevent
    fish disease, and for egg incubation equipment, also as required by the
    BO. An additional $300,000 should be included in the FY 2018 budget
    request to complete funding related to the egg incubation equipment.
    Flood Protection and Watershed Protection in Marin County
        The Corte Madera Creek Flood Control Project received $400,000 in
    the FY 2015 work plan and $520,000 in the FY 2016 work plan and the
    Project Design Team is working toward meeting the second project
    milestone. In order to meet or remain close to the milestones set out
    by the San Francisco District Engineer in his letter to the Marin
    County Director of Public Works on August 13, 2015, $580,000 for the
    study and $150,000 for Independent External Peer Review (a total of
    $730,000 in the GI budget) needs to be included for this project in any
    Army Corps work plan that Congress directs to be prepared for FY 2017.
        Three of four phases of the Corte Madera project have been
    constructed, and the requested funds will complete a feasibility study
    for the final phase of the project that includes Unit 4 and potential
    modifications to previous phases (Units 1, 2 and 3). While 75% of the
    project has been constructed, it is less than 25% effective. This final
    phase will allow the project to function at a level agreed upon by all
    stakeholders.
        The Corte Madera Creek Flood Control project is critical to the
    broader Ross Valley Flood Protection and Watershed program, a region-
    wide, four municipality, multiple community effort to address chronic
    flooding in the Ross Valley. A suite of creek improvement measures has
    been identified to reduce and contain 100-year flows within the main
    stem of Corte Madera Creek. Notably, residents have agreed to tax
    themselves $44 million over 20 years to fund this program. The federal
    Corte Madera Creek project is at the downstream end of all proposed
    measures and must be completed for all present and future efforts of
    the local community to achieve a level of flood protection that will
    contain a 100-year flood event.
        In conjunction with the other measures to be undertaken and for
    which residents have agreed to tax themselves, the Corte Madera Creek
    Flood Control project will substantially improve flood control and play
    a key role in preventing the level of loss seen in our 2005-2006 winter
    storms. These storms resulted in approximately $100 million in damage,
    affecting over 240 homes, 75 retail and commercial structures, two
    elementary schools, the College of Marin campus, two post offices, the
    Ross Town Hall, and police and firehouses in the Towns of Ross, San
    Anselmo, and Fairfax.
        On September 13, 2013, the Project Design Team that included
    representatives from the USACE, Marin County Flood Control and Water
    Conservation District, the Marin County Board of Supervisors, and my
    office conducted a SMART planning charrette. The outcome of the
    charrette was a determination of continued federal and local interest
    in the project, requiring completion of the study within three years
    for $3 million or less.
        Additionally, and also of very great significance, Marin County
    Parks has written to the San Francisco District of the Corps wishing to
    initiate the McInnis Marsh Restoration Project pursuant to Section 206
    of the Water Resources Development Act of 1996, the Continuing
    Authorities Program for Aquatic Ecosystem Restoration.
        McInnis Marsh is a 180 acre diked wetland located in San Rafael,
    CA, east of McInnis Park between Miller and Gallinas Creeks.
    Historically, these creeks were hydrologically connected through a
    system of distributary channels at McInnis Marsh. This connectivity was
    lost in the early 1900's as levees were constructed to make the marsh
    suitable for agricultural use before the County purchased the land and
    built a park. In order to protect existing park and wastewater
    treatment facilities from flooding and enhance habitat for the federal
    and state listed species, Marin County parks, in partnership with the
    Las Gallinas Valley Sanitary District and the Marin County Flood
    Control and Water Conservation District, proposes the restoration of
    the intertidal marsh and estuarine habitat. It is my understanding that
    initiating this project will require $300,000 in funding from the FY
    2017 work plan, and an additional $300,000 in the FY 2018 budget.
        Again, the Corte Madera Creek Flood Control project and McInnis
    Marsh Restoration, will be of tremendous benefit to the people and
    County of Marin. As such, I urge that $580,000 for the study and
    $150,000 for Independent External Peer Review be included in the FY
    2017 work plan, for Corte Madera Creek to assure that it is completed
    as outlined in the District Engineer's letter of August 13, 2015.
    Additionally, $300,000 is needed under the Section 206 Continuing
    Authorities Program for Aquatic Ecosystem Restoration, to initiate an
    important project for the restoration of McInnis Marsh.
    Redwood Creek
        Along the North Coast, Humboldt County is continuing to work with
    stakeholders and landowners along Redwood Creek for the improvement of
    the USACE flood control project. Built after the 1964 flood to protect
    the town of Orick, these levies, while important for local flood
    control, do not convey enough sediment to prevent a buildup of
    materials. Furthermore, they were not designed to ensure that local
    fish species, including federally protected species, were not harmed.
    Despite tens of millions of dollars in restoration work done by the
    federal government upstream, the National Marine Fisheries Service has
    issued a draft jeopardy opinion on the project, which may further
    reduce the county's ability to remove gravel from the project area.
    USACE will need to at least be a permitting agency, and may need to be
    the action agency for this new project. I urge inclusion of the
    associated costs of leading on this project in the USACE's budget.
        Thank you for your consideration of these requests, and I look
    forward to continuing to work with you in the future.
            Sincerely,
                                       Jared Huffman
                                               Member of Congress

                                   __________

                                                      October 13, 2017.
    Mr. Douglas W. Lamont
    Acting Assistant Secretary of the Army (Civil Works)
    Honorable Mick Mulvaney
    Director, Office of Management and Budget
        Dear Director Mulvaney and Acting Assistant Secretary Lamont,
        As you continue your preparation of an FY '18 budget, and
    anticipate enactment of appropriations legislation that would call for
    the allocation of funds through an FY '17 work plan, I wanted to remind
    of you of several important projects across California's North Coast.
    HARBOR DREDGING
        In my district, the dredging maintenance for the continued
    commercial use of Petaluma River last occurred in 2003 and is long
    overdue. Funding is desperately needed both for dredging and flood
    control work. Because of the delay in regular maintenance the cost of
    dredging could be significantly higher than in past years.
        In Humboldt Bay regular and timely dredging is critical for
    commerce, especially with new investments by companies in products that
    require deep-draft vessels for shipping. like wood chips and logs.
    Since Humboldt Bay is also a harbor of refuge--the only deep-water port
    between San Francisco and Coos Bay--its operation is also vital to
    marine safety. Consistent maintenance dredging is needed to keep the
    harbor entrance safe for transit for commercial and recreational
    vessels. I also ask for your continued engagement in supporting
    dredging and addressing the disposal and use of dredged materials in
    Noyo Harbor.
    RUSSIAN RIVER BIOLOGICAL OPINION
        The Russian River Biological Opinion (BO) issued in September 2008
    by the National Marine Fisheries Service identified 23 actions that
    must be taken to protect three threatened or endangered salmonid
    species; coho salmon, steelhead, and Chinook salmon. The BO was issued
    because of the impact on these fish populations caused by the
    construction and operation of two USACE facilities: Warm Springs Dam on
    Lake Sonoma, and Coyote Valley Dam on Lake Mendocino. The failure to
    achieve these tasks by the specified dates could trigger requirements
    to construct, in lieu thereof, substantially more expensive, and more
    controversial, projects.
        If work is to be completed by the milestones contained in the BO,
    significant investments will be required in FY '17 and '18. While work
    on a feasibility study pursuant to the Section 1135 Continuing
    Authorities Program is ongoing, it appears likely that about $100,000
    from the 1135 Program will be required in FY '17, and that $4.5 million
    will then be needed in FY '18 for construction of the project. I
    understand that there may be backlogged funding available for this
    program, and would urge that such funds be made available to
    accommodate the completion of the required three miles of habitat
    enhancement required by the BO in 2018.
        For the Dry Creek (Warm Springs) Feasibility Study, I request that
    $170,000 be included in the FY '18 General Investigations budget, as
    needed to complete the ongoing study that is directed at completing the
    required six miles of habitat enhancement. Taken together, these
    projects will move forward in demonstrating the ability to balance
    flood control and water supply needs with a sustainable ecosystem for
    threatened or endangered species.
        Additionally, I urge that at such time as the Corps may be required
    to prepare a work plan for FY '17 with such additional funds as the
    Congress provides; $900,000 be added to amounts included in the pending
    appropriations bills for Operation and Maintenance funding for
    additional work at Dry Creek (Warm Springs) Lake and Channel as needed
    for water treatment and filtration improvements to the coho hatchery as
    needed to prevent fish disease, as required by the BO.
    DAM SAFETY
        In addition to the work associated with the Russian River BO, I
    write to request attention to the dams themselves at Warm Springs Dam
    at Lake Sonoma, and Coyote Valley Dam at Lake Mendocino. While the
    responsible stewardship of these facilities has not been questioned,
    recent events at Oroville Dam has certainly, and reasonably, led
    parties to reexamine the safety of dams around the country, and I am
    certainly no less concerned about the safety of these two facilities.
        A catastrophic failure at either dam would be devastating to the
    communities downstream in loss of life and property damage. I am told
    that, based on the 2000 Census, up to 84,854 people could be impacted
    from a failure at Warm Springs, with an estimated loss of life of up to
    100 people. Potential damage to industrial and residential structures
    and their contents, infrastructure and agriculture, could total $13
    billion, with the cost of repairs to the dam estimated at $219 million.
        With regard to a breach at Coyote Valley Dam, economic losses could
    occur more than 50 miles downstream in more than ten cities and towns.
    This could include thousands of homes, livestock, farmland, and
    portions of Cloverdale, Geyserville, Healdsburg, Hopland, Santa Rosa,
    and Windsor. Infrastructure damage could include Highway 101, Ukiah
    Airport, a major rail line, schools, factories, a fire station and a
    sewage treatment facility--in addition to numerous roads and utility
    networks.
        While I understand that the likelihood of a breach or catastrophic
    failure at either dam is extremely remote, the potential consequences
    of such an occurrence is of obvious concern and must lead me to insist
    that all responsible precautions are taken to assure that such an event
    never occurs.
        As such, I would ask that the President's Operation and Management
    budget request for FY '18 include at least $660,000 for a spillway
    geotechnical exploration study and tower bridge repairs at Coyote
    Valley Dam, and that $564,000 be included for a spillway erodibility
    study, reservoir sediment survey, and water control manual update at
    Warm Springs Dam.
    BODEGA BAY
        Bodega Bay, a critical harbor of refuge, is located about 60 miles
    north of San Francisco, and is home to a Coast Guard search-and-rescue
    station which performed about 250 rescue missions in 2013.
        It is home, as well, to a substantial commercial fishing fleet of
    about 300 vessels (500 in-season), as well as an economically
    significant sport fishing industry (about 600 vessels in-season) and
    recreational craft. In 2012, nearly 25% of the total Chinook salmon
    landings in California, and over 10% of Dungeness crab California
    landings, came through Bodega Bay. Notably, because of domoic acid
    poisoning, the Dungeness crab fishery was closed for virtually the
    entire season last year, devastating the local industry and those who
    depend on it for their livelihoods. The Department of Commerce is
    currently considering whether a commercial fishery failure has occurred
    and whether Disaster Assistance will be available.
        The Corps O&M schedule for Bodega Bay provides for periodic
    inspection and repair of three breakwaters and maintenance dredging of
    the federal channel, including three turning basins, on an 11-year
    cycle to a depth of 12 feet Mean Lower Low Water. Recent sounding
    surveys indicate that shoaling is occurring and that dredging is
    required now. The last dredging episode was in 2004.
        I appreciate that $750,000 was included in the FY '16 work plan to
    complete all environmental work and plans and specifications as
    required for dredging of the entire (federal) channel, and $4.285
    million in the FY '17 budget, which is deemed to be sufficient to
    dredge the entrance channel. For the Corps to conduct dredging of only
    the entrance channel in the coming months, and then demobilize the
    equipment only to remobilize the dredge at some later date when
    additional funding becomes available to dredge the remainder of the
    harbor would add dramatically to the project's cost at that time and so
    unnecessarily waste valuable federal resources.
        With groundings occurring, particularly among transient vessels,
    and high tide exit and entry generally required; it is now essential
    that funding be budgeted sufficient to dredge the remainder of the
    federal channel.
        To best utilize scarce federal resources, and to prevent future
    difficulties for our devastated fishing industry, I would strongly urge
    that $4 million be provided in either the FY '17 work plan or FY '18
    budget request, sufficient to dredge the entire Bodega Bay federal
    channel.
    CORTE MADERA CREEK FLOOD CONTROL PROJECT
        The Corte Madera Creek Flood Control Project received $400,000 in
    the FY '15 work plan and $520,000 in the FY '16 work plan and the
    Project Design Team is working toward meeting its second project
    milestone. In order to meet or remain close to the milestones set out
    by the San Francisco District Engineer, an additional $1,080,000 is
    required in the General Investigations (GI) budget to provide funding
    for a review of the final array of alternatives, an Alternatives
    Formulation Briefing, and completion of the Final EIR/EIS
    documentation. This total amount includes $880,000 for study costs and
    $200,000 for independent review. Of this, $400,000 needs to be included
    in any Army Corps work plan that Congress directs to be prepared for FY
    '17 and $680,000 in the Administration's FY '18 budget request.
        Three of four phases of the Corte Madera project have been
    constructed, and the requested funds will complete a feasibility study
    for the final phase of the project that includes Unit 4 and potential
    modifications to previous phases (Units 1, 2 and 3). While 75% of the
    project has been constructed, it is less than 25% effective without
    Unit 4. This final phase will allow the project to function at a level
    agreed upon by all stakeholders.
        The Corte Madera Creek Flood Control project is critical to the
    broader Ross Valley Flood Protection and Watershed program, a region-
    wide, four-municipality, multiple community effort to address chronic
    flooding in the Ross Valley. A suite of creek improvement measures has
    been identified to reduce and contain 100-year flows within the main
    stem of Corte Madera Creek. Notably, residents have agreed to tax
    themselves $44 million over 20 years to fund this program. The federal
    Corte Madera Creek project is at the downstream end of all proposed
    measures and must be completed for all present and future efforts of
    the local community to achieve a level of flood protection that will
    contain a 100-year flood event.
        In conjunction with the other measures to be undertaken and for
    which residents have agreed to tax themselves, the Corte Madera Creek
    Flood Control project will substantially improve flood control and play
    a key role in preventing the level of loss seen in our 2005-2006 winter
    storms. These storms resulted in approximately $100 million in damage,
    affecting over 240 homes, 75 retail and commercial structures, two
    elementary schools, the College of Marin campus, two post offices, the
    Ross Town Hall, and police and firehouses in the Towns of Ross, San
    Anselmo, and Fairfax.
        On September 13, 2013, the Project Design Team that included
    representatives from the USACE, Marin County Flood Control and Water
    Conservation District, the Marin County Board of Supervisors, and my
    office conducted a SMART planning charrette. The outcome of the
    charrette was a determination of continued federal and local interest
    in the project.
        Again, the Corte Madera Creek Flood Control project will be of
    tremendous benefit to the people and County of Marin. As such, I urge
    that $400,000 for the study be included in the FY 17 Work Plan and an
    additional $680,000 be included in the FY 18 budget request.
    REDWOOD CREEK
        Along the North Coast, Humboldt County is continuing to work with
    stakeholders and landowners along Redwood Creek for the improvement of
    the USACE flood control project. Built after the 1964 flood to protect
    the town of Orick, these levies, while important for local flood
    control, do not convey enough sediment to prevent a buildup of
    materials. Furthermore, they were not designed to ensure that local
    fish species, including federally protected species, were not harmed.
    Despite tens of millions of dollars in restoration work done by the
    federal government upstream, the National Marine Fisheries Service has
    issued a draft jeopardy opinion on the project, which may further
    reduce the county's ability to remove gravel from the project area.
    USACE will need to at least be a permitting agency, and may need to be
    the action agency for this new project. I urge inclusion of the
    associated costs of leading on this project in the USACE's budget.
            Sincerely,
                                       Jared Huffman
                                               Member of Congress

                                   __________

                                                      October 19, 2018.
    The Honorable R.D. James
    Assistant Secretary of the Army for Civil Works
        Dear Assistant Secretary James:
        With the on-time enactment of the FY 2019 Energy and Water
    Development Appropriations bill, Congress has fulfilled its
    responsibilities for funding a portion of our federal government. As
    such, the US Army Corps of Engineers received $6.84 billion for its
    Civil Works Program. This is good news for the many vital projects
    carried out by the Corps, and I write to request your personal
    attention to two projects where the money appropriated by Congress can
    provide critical support for the communities I represent. As you
    complete a work plan with the funds provided by Congress, and knowing
    that you are developing a budget for FY 2020 and will also consider
    reprogramming requests in the months ahead, please remember the
    importance of dredging the Petaluma River and the San Rafael Channel.
        The Corps is responsible for both navigation and flood plain
    protection maintenance dredging of the Petaluma River's federal channel
    to a depth of eight feet and widths varying from 100 feet to 300 feet.
    Prior to 2003, the channel was dredged every three to four years to
    maintain channel depth. It has not been dredged since 2003, and the
    across-the-flats section was last dredged in 1998. Shoaling in the
    Upper Petaluma River is already impacting commercial traffic as barging
    companies curtail operations and the capacities of barges. Barge
    companies that have modified their capacity to transport products will
    either have to relocate or cease operations as conditions worsen. The
    lack of dredging has also negatively impacted recreational boating
    traffic vital to downtown commercial establishments, as well as
    impacting the Sheriff's office, whose boat at the Marina cannot be used
    at low tide.
        The Preliminary Assessment completed by the Corps in 2015
    recognized the continued economic viability of the project and
    identified significant regional economic impacts if the maintenance
    dredging was left unfunded. Among the many negative impacts will be
    worsening traffic on adjacent roads, as a single 4,000-ton barge
    carries freight equivalent to that of 160 25-ton trailer trucks.
    Highway 101, which serves in part as an alternate route, already
    experiences some of the worst traffic congestion in the entire San
    Francisco Bay Area. The addition of such freight traffic would add to
    this congestion along with associated safety and air quality impacts.
        The FY 2017 work plan included $600,000 for engineering and design
    of the project. I urge that $500,000 be made available in the FY 2019
    work plan for engineering and environmental compliance, with additional
    funding provided in the FY 2020 budget as needed to conduct the
    necessary maintenance dredging.
        Similarly, the San Rafael Canal is a vital waterway for navigation
    and storm water drainage, and an important economic engine in the City
    of San Rafael and County of Marin. The lack of dredging is becoming a
    public safety issue as the San Rafael Police and Fire Department has
    taken over emergency services and search and rescue operations in the
    Channel for the Coast Guard and needs immediate and open access. The
    Police and Fire Department water search and rescue operations are based
    in the Channel and access and capacity for bay patrols, rescues, and
    other public safety activity is absolutely critical. The lack of
    dredging is interfering with the City's ability to effectively respond
    in the event of an emergency. Further, it poses an elevated flood risk
    to the 12,000 residents in the low-lying area FEMA flood zone area
    which rely on 12 City-operated stormwater pump stations which empty
    directly into the Channel.
        More than 800 homes and 100 businesses and commercial properties
    are located directly along the San Rafael Canal, where approximately
    1,500 commercial and recreational vessels are berthed--generating
    significant sales and property tax revenues. In fact, the San Rafael
    Chamber of Commerce has cited that two-thirds of San Rafael's total
    sales tax revenues are generated in East San Rafael, the area directly
    adjacent to and impacted by the Channel. Unfortunately, a a consequence
    of the failure to address the storm-driven sediment and dredge the
    Channel, incidents of boaters becoming stuck in sediment have become
    increasingly common, and marina operators have indicated a difficulty
    in renting berths because of the limited access. The siltation
    situation and resulting low depth of the Channel has become so grave
    that some marine maintenance businesses are relocating their operations
    outside of San Rafael due to the limitations on vessels entering and
    leaving the Channel; and those businesses that remain can only intake
    vessels from customers at high tide.
        The last full dredging of the San Rafael Channel was in 2002. Last
    year, as a result of the Presidentially-declared flood disasters in
    2017, sediment from the hillsides deposited directly into the Channel.
    The San Rafael Creek federal channel was authorized by the Rivers and
    Harbors Act of 1919 and was completed in 1928. Since 1930, the Corps
    has dredged the Canal on thirteen separate occasions. In recognition of
    this historic work of the Corps in the Channel, S.Rept. 115-258,
    accompanying the Energy and Water Development Appropriations bill for
    2019 includes language that ``urges the Corps to prioritize dredging of
    the San Rafael Canal.''
        For the thousands of businesses and residents who rely on the safe
    navigability and drainage functions of the San Rafael Canal, and depend
    on the waterway for fire protection, emergency access, and evacuation,
    I urge that the FY 2019 work plan provide $10.5 million as needed for
    the environmental analysis, engineering, and dredging of the Canal.
        Both the Petaluma River and the San Rafael Channel are in need of
    immediate assistance, and it my hope that through the FY 2019 work
    plan, as well as through opportunities afforded by reprogramming of
    funds, the Corps will continue to serve as a federal partner for the
    communities I represent. Thank you for your continued work. I
    appreciate your attention to this request.
            Sincerely,
                                       Jared Huffman
                                               Member of Congress

                                   __________

                                                      January 30, 2019.
    The Honorable Mick Mulvaney
    Director, United States Office of Management & Budget
    R.D. James
    Assistant Secretary of the Army for Civil Works
        Dear Director Mulvaney and Assistant Secretary James:
        As you continue to formulate the U.S. Army Corps of Engineers'
    budget for Fiscal Year (FY) 2020, we urge you to fully consider several
    vital dredging projects in our Congressional districts.
        Chief among these are dredging of the Suisun Bay Channel, the
    Larkspur Ferry channel, the Petaluma River, the San Rafael Channel, and
    the San Pablo Bay-Mare Island Strait-Pinole Shoal shipping channel.
    These waterways are essential to commuters and commercial enterprise in
    our districts, underpinning thousands of jobs, and each is in need of
    either immediate or near-term dredging.
        With respect to both Suisun Bay and the San Pablo Bay-Mare Island-
    Pinole Shoal shipping channel, previously allocated dredging funds have
    proven insufficient to ensuring safe passage of crude oil tankers,
    cargo ships, and military and other commercial vessels. The situation
    is dire enough that oil tanker groundings have already occurred in
    Suisun Bay, while the Corps ceased annual dredging of the Pinole
    Shoal--authorized to be dredged to a depth of 35 feet--nearly 20 years
    ago. Similarly, the Corps last dredged the Mare Island strait in 1996.
        With regard to the maintenance of the Petaluma River, the Corps'
    own Preliminary Assessment--completed in 2015--recognized the continued
    economic feasibility of the project, and identified significant
    economic consequences if the dredging was left unfunded. However, while
    the Corps is responsible for navigation and flood plain protection
    dredging, no dredging has occurred since 2003. Shoaling in the Upper
    Petaluma River is already impacting commercial traffic as barging
    companies curtail both capacity and operations. Worsening conditions
    will eventually force barge operators to cease business, devastating
    commercial enterprises along the river.
        The San Rafael channel is a vital waterway for navigation and storm
    water drainage, and an important economic engine in the City of San
    Rafael and County of Marin. The channel, last fully dredged in 2002,
    naturally fills with sediment from bay tidal action and upland erosion
    and runoff. Incidents of boaters becoming stuck in sediment have become
    increasingly common, leading marina operators to experience growing
    difficulty in renting berths because of limited access dependent on
    tides.
        Lastly, the Larkspur Ferry channel is traversed by some 1.6 million
    people per year, nearly 90 percent of whom are daily commuters. The San
    Francisco Ferry Terminal, the destination or origin for the ferry, is
    within walking distance of 300,000 jobs and has intermodal connections
    to numerous regional transit systems, including Bay Area Rapid Transit
    (BART).
        This reliable service will be jeopardized without proper
    maintenance of the ferry channel, as authorized by language included in
    the 2007 Water Resources Development Act. We are told that additional
    maintenance dredging of the Larkspur Channel will be needed by no later
    than 2021, dredging which is critical not only to hundreds of thousands
    of commuters but also to the small commercial and recreational fleets
    which utilize the Channel.
        Each of these dredging projects is essential to both the daily
    lives of our constituents and the regional economy. Multiple
    industries, supporting tens of thousands of jobs, rely on dependable
    access to regional waterways for both shipping and commuting. As such,
    we urge you to fully consider these projects in formulating your FY
    2020 budget request.
        Please do not hesitate to contact our offices if we may be of
    assistance.
            Sincerely,
                                       Mike Thompson
                                               Member of Congress
                                       Jerry McNerney
                                               Member of Congress
                                       Mark DeSaulnier
                                               Member of Congress
                                       Jared Huffman
                                               Member of Congress
                                       Doris Matsui
                                               Member of Congress

    Statement of the American Society of Civil Engineers, Submitted for the
                           Record by Hon. Napolitano
                                  introduction
        The American Society of Civil Engineers (ASCE) appreciates the
    opportunity to submit our position on the importance of long-term,
    strategic investment in our nation's ports infrastructure. ASCE also
    thanks the U.S. House of Representatives Transportation and
    Infrastructure Subcommittee on Water Resources and Environment for
    holding a hearing on this critical issue. ASCE is eager to work with
    the Subcommittee in the 116th Congress to ensure both full
    appropriation of Harbor Maintenance Trust Fund (HMTF) revenues and that
    the funds be utilized for its designated purpose.
      asce's ``2017 infrastructure report card'' and 2016 economic study,
        ``failure to act: closing the infrastructure investment gap for
                          america's economic future''
        Infrastructure is the foundation that connects the nation's
    businesses, communities, and people, serves as the backbone to the U.S.
    economy, and is vital to the nation's public health and welfare. Every
    four years, ASCE publishes the Infrastructure Report Card, which grades
    the nation's 16 major infrastructure categories using a simple A to F
    school report card format. The Report Card examines the current
    infrastructure needs and conditions, assigning grades and making
    recommendations to raise them.
        ASCE's 2017 Infrastructure Report Card rated the overall condition
    of the nation's infrastructure a cumulative grade of ``D+'' across
    sixteen categories, with an investment gap of $2 trillion. The Report
    Card gave our nation's ports infrastructure category a grade of ``C+.''
        Additionally, ASCE's 2016 economic study, Failure to Act: Closing
    the Infrastructure Investment Gap for America's Economic Future, found
    that our nation's deteriorating infrastructure and growing investment
    deficit has a cascading effect on our nation's economy, impacting
    business productivity, gross domestic product (GDP), employment,
    personal income, and international competitiveness; in fact, our
    failure to act by 2025 carries an enormous economic cost to the tune of
    nearly $4 trillion in lost GDP, which will result in a loss of 2.5
    million jobs in 2025.
        The economic consequences of our nation's infrastructure
    deficiencies also extend to families' disposable incomes, with each
    household in the U.S. losing $3,400 each year through 2025; if left
    unaddressed, the loss will grow to an average of $5,100 annually from
    2026 to 2040. It is possible to close the infrastructure investment gap
    and avoid the economic consequences caused by this deficit, but it will
    require sustained and robust investment.
                  ports and the harbor maintenance trust fund
        Our nation's 926 ports support over 23.1 million jobs, provide
    $321.1 billion in tax revenue to federal state, and local governments,
    and are responsible for $4.6 trillion in economic activity, or roughly
    26 percent of the nation's economy--making them essential to U.S.
    competitiveness. Our ports serve as the gateway through which 99
    percent of America's overseas trade passes, and the top 10 U.S. ports
    accounted for 78 percent of U.S. foreign waterborne trade in 2015.
    However, the investment gap for inland waterways systems and ports is
    expected to be $1.5 billion by 2025.
        In a 2015 survey \1\ of ports, a third indicated that congestion
    over the past ten years resulted in a 25 percent decrease in port
    productivity. Few of our nation's ports can accommodate the large ships
    that pass through the Panama Canal, so to remain competitive in the
    global market and to accommodate these larger vessels, ports have been
    investing in their facilities and plan to spend over $154 billion from
    2016 to 2020 on expansion, modernization, and repair. Ports, however,
    are contending with larger container ships and do not always have
    adequate access to the user-fee funded Harbor Maintenance Trust Fund
    (HMTF), which would help these facilities prepare for larger vessels.
    ---------------------------------------------------------------------------
        \1\ American Association of Port Authorities, 2015 Port Surface
    Freight Infrastructure Survey, April 2015
    ---------------------------------------------------------------------------
        Enacted in the Water Resources Development Act of 1986, the Harbor
    Maintenance Tax (HMT) is a fee (0.125 percent of the value of cargo)
    collected from users of our nation's maritime transportation system
    that is then used by the U.S. Army Corps of Engineers (USACE) to dredge
    harbors. Despite the significant dredging needs at the majority of U.S.
    ports, the fund's revenues have frequently not been appropriated for
    its designated purposed, instead being used for federal deficit
    offsets. ASCE strongly supported the provision in the Water Resources
    Reform and Development Act (WRRDA) of 2014 that created a phased-in
    approach to reach full use of HMT revenues by FY2025 and that set
    incremental spending targets each year until full use.
        The HMTF's balance currently sits at over $9 billion. Once fully
    funded, it will take five years of complete HMTF appropriations to
    dredge and restore channel depths and widths. ASCE urges the
    Subcommittee to continue implementing the WRRDA 2014 agreement by
    increasing expenditures accordingly and ensuring that HMT revenues are
    used only for its intended purpose.
                                   conclusion
        ASCE believes Congress must prioritize the investment needs of our
    ports infrastructure to protect our nation's economy and millions of
    jobs, and to ensure we remain internationally competitive. ASCE thanks
    the Subcommittee for holding this hearing and bringing attention to
    this critical matter. We look forward to working with you to find
    investment solutions to our nation's ports infrastructure.

    Statement of the Association of Equipment Manufacturers, Submitted for
                         the Record by Hon. Napolitano
        Dear Chairwoman Napolitano and Ranking Member Westerman:
        The Association of Equipment Manufacturers (AEM) appreciates the
    opportunity to submit a statement for the record on today's hearing on
    ``The Cost of Doing Nothing: Why Full Utilization of the Harbor
    Maintenance Trust Fund and Investment in Our Nation's Waterways
    Matter.'' AEM represents more than 1,000 equipment manufacturers in the
    construction, agriculture, forestry, and mining sectors who employ
    nearly 1.3 million individuals in the U.S. and contribute nearly $159
    billion to the country's GDP.
        Infrastructure matters to AEM members who not only use it to move
    product to market, but who also make the equipment that builds it and
    rely upon it to keep the economic sectors it is connected to strong.
    For example, the health of the equipment manufacturing industry is
    directly impacted by the health of the U.S. agriculture economy and the
    many factors that influence it, factors that include the inland
    waterways and ports that move commodities from farm to market. Our
    crumbling U.S. infrastructure threatens to undermine not only the
    important role the equipment manufacturing industry plays in the U.S.
    economy, but also to destabilize a key economic sector that our
    members' products help sustain, the agricultural sector.
        Our nation's waterways and port infrastructure play a significant
    role in connecting goods and agricultural commodities with consumers
    domestically and globally. They represent one of the most cost-
    effective, fuel-efficient, and safe modes of freight transport
    domestically. U.S. farmers and ranchers depend heavily on water
    infrastructure to deliver the food and fiber they produce to the world.
    In fact, more than 70 percent of U.S. agricultural exports, valued at
    nearly $130 billion, are conveyed by water.
        However, this critical transportation network is severely outdated,
    in need of repair and prone to delays and inefficiencies that put the
    health of the U.S. agriculture sector at risk. For example, many of the
    locks and dams within the inland waterway system are obsolete and have
    long exceeded the period of use for which they were designed. U.S.
    harbors coast to coast are unable to accommodate the largest freight
    vessels leading to delayed shipments, increased costs, and diminished
    capacity to export products abroad. Patchwork repairs required over the
    past decade have led to a 700 percent increase in unplanned stoppages.
    The cost of doing nothing when it comes to repairing and modernizing
    our nation's harbors and waterways is high.
        In order to reclaim the U.S. infrastructure advantage that we once
    enjoyed, we need to ensure that the proper resources are being invested
    to not only meet a state of good repair but also build new
    infrastructure for the 21st century. This means that funds should be
    applied consistently to the projects for which they were raised. In the
    case of the Harbor Maintenance Trust Fund (HMTF), we have seen the
    consequences of failing to apply funds for their designated purpose.
    The HMTF is meant to be used for dredging harbors and channels to
    maintain navigability and increase ship size capacity in a Post-Panamax
    era. Despite growing dredging needs at U.S. harbors, Congress has often
    diverted the HMTF to offset budget deficits allowing dredging projects
    to pile up and the U.S. to fall further behind in waterborne freight
    capacity. AEM supports past proposals from Chairman Peter DeFazio to
    ensure that funds meant for the HMTF remain designated and available
    for harbor maintenance projects--and those projects only. Further, AEM
    supports prioritizing funding for the current backlog of 25 critical
    inland waterways projects and maintaining water resource bills on a
    two-year cycle. Taking these steps will provide much needed certainty
    and predictability to the agricultural sector and by extension, the
    equipment manufacturing industry.
        Our nation's harbors and inland waterways are vital to the success
    of the equipment manufacturing industry, the agricultural sector, and
    all sectors of the U.S. economy. We urge Congress to provide the funds
    necessary to maintain and upgrade crucial infrastructure projects and
    prevent future efforts to divert those funds to other government
    spending areas. Practical and pragmatic efforts will help ensure that
    we reclaim the infrastructure advantage we once had. AEM commends the
    Subcommittee on Water Resources and Environment for holding this
    important hearing and stands ready to work with the Subcommittee and
    full Committee to craft a comprehensive legislative package that
    addresses the needs of our harbors and waterways, and all of our
    nation's transportation and infrastructure assets.

     Letter from Captain John W. Murray, Port Director and CEO, Canaveral
          Port Authority, Submitted for the Record by Hon. Napolitano
                                                        April 16, 2019.
    Hon. Grace Napolitano
    Chair
    House Water Resources and Environment Subcommittee, U.S. House of
            Representatives
    Hon. Bruce Westerman
    Ranking Member
    House Water Resources and Environment Subcommittee, U.S. House of
            Representatives

        Re: House Transportation and Infrastructure Water Resources and
    Environment Subcommittee Hearing: ``The Cost of Doing Nothing: Why Full
    Utilization of the Harbor Maintenance Trust Fund and Investment in Our
    Nation's Waterways Matter''--April 10, 2019

        Dear Chairwoman Napolitano and Ranking Member Westerman,
        We join with ports and related maritime stakeholders across the
    country in thanking you for holding a hearing in your Subcommittee last
    week to address the importance of ports and waterways to this country.
    As you pointed out at the hearing, ports are an important engine for
    economic growth throughout the United States. We facilitate trade,
    provide hundreds of thousands of jobs, and generate very positive
    economic activity for our regions.
        Here in Florida, Port Canaveral is world class gateway for the
    cruise, tourism and commercial shipping industries. We are the homeport
    for some of the world's top cruise lines and are the second busiest
    cruise port in the world with more than 4.5 million passenger movements
    annually. Our economic impact exceeds $2.2 billion each year for the
    Space Coast and Central Florida region.
        As one of the most active ports in the country, we rely heavily on
    the harbor maintenance and dredging services provided by the United
    States Army Corps of Engineers (Corps). We could not provide our high
    degree of service to cruise lines and commercial shipping companies
    without the ongoing cooperation and assistance of the Corps. As was
    highlighted at your hearing, the Corps receives funding for its harbor
    maintenance and dredging activities through the Harbor Maintenance Tax
    (HMT).
        As you know, the HMT and the Harbor Maintenance Trust Fund (HMTF)
    were first created in 1986 to fund ``the eligible operations and
    maintenance costs assigned to commercial navigation of all harbors and
    inland harbors within the United States.'' (WRDA 1986; P .L. 99-662).
    The HMT is assessed against the value of imports arriving at United
    States ports with federally-maintained harbors and the revenue
    generated from the HMT is then deposited into the HMTF. Congress
    subsequently appropriates funds from the HMTF on an annual basis for
    maintenance dredging, dredged material disposal areas, jetties and
    breakwaters. It is important to underscore that since its inception,
    the HMTF has been used for these harbor maintenance purposes, not for
    landside infrastructure or other port-related activities.
        With this background in mind, we noted with interest that Eugene
    Seroka, Executive Director of the Port of Los Angeles, testified at
    last week's hearing that ``we have industry unanimity on the subject of
    the Harbor Maintenance Trust [Fund] and how to allocate to the so-
    called donor ports like Los Angeles''. We believe Mr. Seroka's
    reference is to a proposal put forward by the American Association of
    Port Authorities (AAPA) to reform the HMTF and allow HMTF revenues
    under certain circumstances to be allocated to ports for landside
    infrastructure.
        We want to correct the record to make it clear that Port Canaveral
    does not support the AAPA proposal and any amendment to the HMTF that
    would deviate from its long-stated objective of providing funds for
    channel maintenance and harbor management. I hasten to add that we are
    fully supportive of efforts to require that all of the HMTF revenues be
    spent on their intended purpose (ie, harbor maintenance and dredging),
    but we are not supportive of expanding the currently authorized uses of
    those funds in the manner that AAPA proposes.
        We commend you for your focus on the needs of the ports and
    waterways of this country. We look forward to working with you on this
    and other initiatives of your Subcommittee.
            Sincerely yours,
                                       Captain John W. Murray
                                               Port Director and CEO
                                               CANAVERAL PORT AUTHORITY

       Letter from Nicole Vasilaros, Senior Vice President of Government
    Relations and Legal Affairs, National Marine Manufacturers Association,
                    Submitted for the Record by Hon. DeFazio
                                             Wednesday, April 10, 2019.
    Hon. Peter DeFazio
    Chair
    Committee on Transportation and Infrastructure, U.S. House of
            Representatives
    Hon. Sam Graves
    Ranking Member
    Committee on Transportation and Infrastructure, U.S. House of
            Representatives
    Hon. Grace Napolitano
    Chair
    Subcommittee on Water and Environment, U.S. House of Representatives
    Hon. Bruce Westerman
    Ranking Member
    Subcommittee on Water and Environment, U.S. House of Representatives
        Dear Chair DeFazio, Ranking Member Graves, Chair Napolitano, and
    Ranking Member Westerman:
        On behalf of the National Marine Manufacturers Association (NMMA) I
    thank you for convening ``The Cost of Doing Nothing: Why Full
    Utilization of the Harbor Maintenance Trust Fund and Investment in our
    Nation's Waterways Matter'' hearing. NMMA agrees that expedited
    investments in our nation's ports, harbors, and waterways are critical
    to supporting the continued economic growth of the commercial and
    recreational maritime industries.
        By way of background, NMMA is the leading recreational marine trade
    association in North America, representing nearly 1,300 boat, marine
    engine, and accessory manufacturers. Recreational boating is a
    significant contributor to the U.S. economy, generating $170.3 billion
    in annual economic impact that supports more than 35,000 businesses and
    691,000 jobs. Additionally, the outdoor recreation economy as a whole--
    which is driven by boating and fishing and includes RVing, guided
    tours, and motorcycling and ATVing--accounts for 2.2% of U.S. GDP, $734
    billion in gross economic output, and 4.5 million jobs. In terms of
    GDP, outdoor recreation is larger than mining, utilities, and chemical
    products manufacturing.
        Outdoor recreation is a substantial and rapidly increasing part of
    the U.S. economy. For our industry--and the entire U.S. economy--to
    continue to grow, it is essential that port maintenance and dredging
    projects are sufficiently funded to create jobs in coastal and inland
    waterway communities, improve access for water-based recreational
    activities, and make conditions safer for the recreational boating and
    angling communities.
        The Harbor Maintenance Trust Fund (HMTF) was created to ensure that
    our nation's harbors would always be properly dredged and fully
    operational, yet much of the fund's annually collected revenue doesn't
    make its way back to where it was originally intended and is
    desperately needed. In fact, the U.S. Army Corps of Engineers (Corps)
    estimates that full channels at the nation's 59 busiest ports are
    available less than 35 percent of the time. The result of insufficient
    funding for maintenance and dredging projects is deterioration of our
    nation's ports, harbors, and waterways that support thousands of jobs
    and commercial and recreational economic development nationwide.
        There are sufficient funds in the HMTF to meet the maintenance
    dredging needs of all federally-authorized ports. Full utilization of
    the fund would provide the necessary funding to enable the Corps to
    dredge all federal commercial harbors to their constructed widths and
    depths. Improperly dredged channels exacerbates user conflict in our
    busy ports and harbors, impacting safety and important access for
    recreational boaters as well.
        NMMA also encourages the committee to consider reforming the Corps'
    dredging project prioritization process to accurately account for the
    economic benefits of investing in projects that facilitate recreational
    use. Under the current process, the Corps give priority to coastal
    harbors and inland waterways with the most commercial traffic and also
    provides priority for maintenance of channels at small ports that
    support significant commercial fishing, subsistence, or public
    transportation benefits.
        This flawed system fails to properly account for lower tonnage
    harbor needs and the value created by access for recreational
    activities--effectively putting boaters and the recreational boating
    industry's $170.3 billion annual economic activity at a disadvantage.
    Low tonnage, recreational based ports are critical access points for
    marinas and coastal communities where businesses depend on marine
    recreation-based economic activity. Additionally, without sufficient
    dredging in these areas, some recreational boaters are forced to use
    high traffic commercial channels, which can lead to potential user
    conflicts and safety concerns.
        The prioritization process should be amended to ensure that a
    percentage of existing available funds be allocated for three different
    categories: High-Tonnage, Low-Tonnage and Commercial or Recreational
    ports. In addition, increases in social, cultural, and environmental
    benefits should be considered in the allocation of the three funding
    categories where appropriate.
        We also recommend that the committee direct the Corps to study
    alternative and recyclable solutions for disposal of dredged materials,
    thereby forgoing the continued traditional landfill disposal of dredged
    material and deliver multiple economic and environmental benefits to
    local economies. Due to the naturally occurring process of
    sedimentation, overtime rivers, lakes, harbors, and bays can become
    filled with debris, sand, mud, silt, and other materials that reduce
    waterway depths making them difficult to navigate--posing environmental
    and safety hazards. Proper dredging of these sediment materials plays a
    critical role in maintaining clean and healthy waterways for local
    ecosystems and providing access to the recreational boating and angling
    communities. The Corps estimates that hundreds of millions of cubic
    yards of dredged materials need to be excavated each year to keep the
    nation's waterways open for commercial and recreational use. Exploring
    options to increase the use of alternative and recyclable solutions
    will facilitate new opportunities to more efficiently and sustainably
    deliver economic, environmental, and societal benefits through the
    disposal of dredged materials.
        The Federal government has a responsibility to maintain the
    nation's ports, harbors, and waterways. Applying the full balance of
    the HMTF to harbor maintenance projects will ensure the fees collected
    in the fund are not diverted from critical dredging projects but used
    to deliver an economic boost to the U.S. commercial and recreational
    boating industries that depend on well maintained waterways. NMMA
    appreciates your consideration and stands ready to assist you and the
    committee through this important endeavor.
            Sincerely,
                                       Nicole Vasilaros
                                               Senior Vice President of
                                                   Government Relations and
                                                   Legal Affairs
                                               National Marine
                                                   Manufacturers
                                                   Association

                                    Appendix

                                  ----------

    Questions from Hon. Grace F. Napolitano for Eugene D. Seroka, Executive
              Director, Port of Los Angeles, San Pedro, California

        Question 1. Mr. Seroka, what expanded uses of harbor maintenance
    are you advocating for specific to the Port of Los Angeles? Can you
    give specific examples of projects that the Port would be interested in
    carrying out with expanded use authorities that are not currently
    eligible today? Can you further explain why you need expanded uses?
        Answer. At the April 10, 2019, House Transportation and
    Infrastructure Subcommittee on Water Resources and Environment Hearing
    you posed an important question on potential expanded uses that the
    Port of Los Angeles would like to see made eligible as Harbor
    Maintenance Trust Fund (HMTF) expenditures by donor ports. Currently,
    the Port of Los Angeles has over $250 million in basic harbor
    maintenance needs that while vital, are not eligible under current
    authorities. Consequently, expending additional funds without expanding
    the uses for these funds, neglects key in-water infrastructure needs of
    major ports like Los Angeles.
        Our seven container terminal wharfs need repairs to cracked and
    spalled concrete, corrosion damage in piles, wharf decks, beams, and
    soffits (Attachment A). These are essential for safe and efficient
    loading and unloading of containers and to support the needs of modern
    ships. None of these repairs are eligible under existing expenditure
    authorities, despite being fundamental maintenance needs.
        Four of our seven Marine Oil Terminal Engineering and Maintenance
    Standards (MOTEMS) wharfs are currently programmed for upgrades to
    comply with state seismic safety standards. This includes the
    reinforcement of moorings, piles, berthing and loading platform
    improvements. These crucial safety upgrades are not eligible for HMT
    revenue expenditures under the current authorization.
        Capital berth dredging and navigation improvements, such as
    widening of our West Basin turning basin, should also be made eligible.
    These improvements are needed to receive larger ships and maintain our
    competitive status in global shipping. Our current configuration is not
    optimal for receiving and servicing increasingly large ships.
        Expanding the uses of HMTF funds for donor ports must be linked to
    any increases in funding to address the basic maintenance needs of the
    nation's largest ports in order to achieve the revenue stream's
    objectives. Linking expenditures and programmatic reforms are essential
    for achieving optimal and effective maintenance of the nation's ports
    and harbors.
        Thank you for your leadership on this important issue. Please feel
    free to contact me for any other questions on HMTF reform or harbor
    maintenance issues.
        attachment a: illustrations of cracked and spalled concrete and
      corrosion damage that are not eligible for hmt revenue expenditures
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

     Questions from Hon. Angie Craig for Kevin Ross, First Vice President,
                National Corn Growers Association, Minden, Iowa

    For years, American farmers have expressed concerns about the true
    potential of South America's rivaling agricultural production and
    export market--but they were comforted with knowledge that U.S.
    transportation and distribution systems were far superior to keep our
    goods competitive. But that may no longer be the case. As Mr. Ross
    stated, and I quote

    ``Continued low commodity prices and consecutive years of declining
    farm income, coupled with recent trade disruptions, and the aging
    infrastructure systems of locks and dams are taking a toll on
    farmers.''

    Especially after the massive shockwave retaliatory tariffs have imposed
    on our farmers, South American agriculture is even more affordable and
    . . . accessible. There have been extensive infrastructure investments
    all over the continent to facilitate getting their exports to port
    quicker. Before long, our decaying locks and ports will overcome the
    strategic geography of our inland waterways. We must keep up with
    global investment.
        Question 1. Mr. Ross, can you elaborate how U.S. farmers are
    feeling the pressure of infrastructure investments being made abroad
    meanwhile faltering here in the United States? Especially with stocks
    of commodities held in grain bins and ports across the US, how can
    increased investment make us more competitive in the context of
    retaliatory tariffs?
        Answer. For years, the American farmer's ability to quickly and
    efficiently ship their product to the marketplace via our
    transportation and infrastructure system has made U.S. agricultural
    exports highly competitive on a global scale. Brazil, a leading global
    competitor to the U.S. in corn exports, has a lower cost of corn
    production due to a lower land and labor cost than the U.S. It is the
    higher transportation costs in South America that make exports more
    expensive for grain importers compared to U.S. corn. Brazil moves most
    of its corn from truck to ports, and transportation costs account for
    approximately 36% of those export costs.\1\ Transportation costs are
    only 16% for U.S. corn exports and American farmers can capture more of
    their crop's price than Brazilian competitors because we have options
    to move our corn exports by inland waterways, rail and trucks.
    ---------------------------------------------------------------------------
        \1\ https://www.ers.usda.gov/webdocs/publications/44087/59672_eib-
    154_errata.pdf?v=0
    Corn and Soybean Production Costs and Export Competitiveness in
    Argentina, Brazil, and the United States, EIB-154 Economic Research
    Service/USDA
    ---------------------------------------------------------------------------
        As I stated in my written testimony, 54 percent of corn exports in
    the United States are transported by barge and the inland waterway
    system is a vital artery of transportation for getting product out to
    the marketplace. However, 78 percent of locks and dams already exceed
    their design lifespan and are in need of repairs. The lock and dam
    system on the Mississippi, Ohio, and Illinois Rivers was built in the
    1930s for a 50-year-life-span and a significantly lesser amount of
    barge traffic. This system is well past its useful life and delays are
    common and costly. Similarly, with many rural bridges and roads in need
    of major repairs it's delaying the efficient transportation of our
    products. The saying ``time is money'' holds true in farm country as
    well. Problems within the U.S. transportation system are compounded at
    the farm gate.
        The new Brazilian government is promising to prioritize inland
    infrastructure upgrades and new ports are already in development.
    Modernized transportation infrastructure would help Brazil close the
    gap with the U.S. corn in competitiveness. Brazil is working to erode
    U.S. market share in countries with which we have ongoing trade
    disputes. For example, when the future of the North American Free Trade
    Agreement (NAFTA) was threatened, Brazilian industry courted Mexican
    corn importers seeking to supply a greater share of corn to Mexico, the
    United States' top corn export market. Other commodities that have been
    subjected to large retaliatory tariffs have experienced stark examples
    of lost market share to South American competitors. The prospect of
    losing our long-held edge in infrastructure could not come at a worst
    time. This is an avoidable consequence if we act now.
        Investing in our locks and dams to ensure an efficient
    transportation and infrastructure system is a major priority to the
    National Corn Growers Association. We must maintain and invest in the
    future of our infrastructure system, amplifying our advantage instead
    of continuing to watch its slow and painful erosion.

    Question from Hon. Angie Craig for Kirsten Wallace, Executive Director,
         Upper Mississippi River Basin Association, St. Paul, Minnesota

    My district features two Army Corps of Engineers locks along the
    Mississippi River that are integral to the trade flowing up and down
    stream. My district also features environmental treasures that share
    their home with the commerce taking along the riverbed and shores. Both
    need support, protection, and investment.

    Ms. Wallace, as you said,

    ``The Navigation and Ecosystem Sustainability Program is a
    comprehensive and integrated plan for meeting the current and future
    shipping demands, stimulating economic growth, and improving the health
    and resilience of the river ecosystem.''
        Question 1. Unfortunately NESP has been suspended since June 2011
    due to lack of funding by Congress. I intend to change this now that
    I'm here. Ms. Wallace, can you tell me about the history of success of
    the program, and how reinstatement of funding would make a difference
    to my district and the surrounding high-priority areas for improvement?
        Answer. Thank you for your question and your strong support for the
    Upper Mississippi River and the Navigation and Ecosystem Sustainability
    Program (NESP), in particular. NESP includes the construction of a
    second 1,200-foot chamber at the system's seven most congested locks
    (Locks 20-25 on the Upper Mississippi and La Grange and Peoria Locks on
    the Illinois River), small-scale navigation efficiency improvements,
    and a suite of ecosystem restoration projects to increase the quality
    and abundance of fish and wildlife habitat. These planned investments
    in the navigation and ecosystem will have long lasting economic
    benefits to Minnesota and to Minnesota's Second District.
        We understand that ongoing reluctance from the Administration to
    fund NESP is largely a consequence of uncertainty surrounding 50-year
    traffic forecasts. However, numerous economic indicators clearly
    suggest that the river is of national importance and is a backbone
    transportation mode for large and small economic sectors, including
    agriculture, mineral extraction, and manufacturing. Land-based
    transportation modes are operating at or over capacity creating costly
    shipping delays and making the river increasingly attractive to
    suppliers and manufacturers. Shippers, ports, and terminals are working
    collaboratively with suppliers to reestablish container shipping on the
    Mississippi River, including at the St. Paul Port. In addition,
    shippers successfully raised their fiscal contributions to lock
    infrastructure investment through the Inland Waterway Trust Fund. The
    U.S. Department of Transportation is forecasting substantial growth in
    commercial transportation demand on inland waterways and the Upper
    Mississippi River System in particular. Businesses throughout the
    Midwest suggest that the long term reliability of the aged, single-
    point-of-failure infrastructure is dampening the utilization of the
    Upper Mississippi River System, but addressing these impediments
    (through NESP and operation and maintenance) will stimulate use of the
    river and alleviate congestion on land-based modes.
        With regard to transportation impacts, the second, 1,200-foot
    navigation chamber at all five locks on the Mississippi River will
    increase the river's reliability by adding redundancy with two lock
    chambers and reduce costs for shippers and consumers by increasing
    efficiency of lock transit times. According to the U.S. Department of
    Commerce in 2013, Minnesota shipped via the Mississippi River over
    fifty percent of its agricultural exports.
        Minnesota also ships on the Mississippi River sand and gravel,
    cement, coal, petroleum, steel, and salt that are essential for
    economic growth and quality of life. In Minnesota's Second
    Congressional District, the maritime industry generates over $200
    million annually in economic impact and over $43 million in worker
    income, according to the American Maritime Industry.
        NESP will also improve conditions for fish and wildlife through the
    construction of fish passage, modified dam operations to restore
    natural river level variability, backwater and island habitat, side
    channel reconnections, among other projects. Collectively, these
    restoration activities will help ensure thousands of species of birds,
    fish and other wildlife continue to thrive in their natural habitats in
    and along the Mississippi River. UMRR projects protect wetlands and
    lakes from fluctuating water levels and high sedimentation, recreate
    islands to provide refuge and food for many species of fish and
    wildlife, and restore natural diversity of water velocities and depths
    to improve fish habitat. Projects help protect against threats from
    invasive species, including Asian carp, that outcompete native fish and
    wildlife for food sources and limited habitat. Still more projects
    restore forest health and diversity.
        Investing in the river's ecosystem strengthens the nation's
    economy--habitat restoration enhances important ecological services and
    uses, such as improved water quality benefiting municipalities,
    manufacturers, and renewable energy sources. Habitat quickly becomes
    available post-construction of these ecosystem restoration projects.
    Wetland vegetation provides waterfowl habitat in just a few years. Fish
    populations increase from new winter habitat in less than five years
    with newly established populations in under 10 years. This results in
    new opportunities for fishing and hunting and other recreation that
    have substantial local and regional economic benefits. Additionally,
    these projects draw in STEM-related education opportunities from
    kindergarten to college.
        NESP includes a suite of ecosystem restoration projects in
    Minnesota's Second Congressional District, which are available in maps.
    Within the District, state and federal habitat practitioners have
    concluded that there has been significant degradation in the quality
    and availability of habitat resulting from high water, sedimentation.
    Restoration in the District will restore the mosaic of wetlands,
    braided channels, and forests. As evidenced by constructed habitat
    projects through the Upper Mississippi River Restoration program, these
    areas create jobs directly and indirectly and draw in tourists and
    recreationists.

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