[Congressional Record (Bound Edition), Volume 155 (2009), Part 1]
[Extensions of Remarks]
[Page 1430]
[From the U.S. Government Publishing Office, www.gpo.gov]




   THE INTRODUCTION OF THE SHORT SEA SHIPPING ACT OF 2009 (H.R. 528)

                                 ______
                                 

                          HON. JOHN M. McHUGH

                              of new york

                    in the house of representatives

                       Thursday, January 22, 2009

  Mr. McHUGH. Madam Speaker, on January 14, 2009, I introduced H.R. 
528, the Short Sea Shipping Act of 2009. This measure would provide the 
tax incentive necessary to increase the transportation of freight via 
coastal and inland waterways, which would have significant 
environmental and economic benefits.
  Specifically, the Short Sea Shipping Act of 2009 would exempt from 
the Harbor Maintenance Tax, HMT, nonbulk commercial cargo that is 
loaded at a port in the United States mainland and unloaded at another 
port in the United States mainland after transport solely by coastal or 
river route or unloaded at a port in Canada located in the Great Lakes/
St. Lawrence Seaway System.
  Likewise, the bill's exemption would apply to nonbulk commercial 
cargo that is loaded at a port in Canada located in the Great Lakes 
Seaway System and unloaded at a port in the United States mainland. Of 
note, the bill defines the Great Lakes Seaway System as the waterway 
between Duluth, Minnesota, and Nova Scotia and encompasses the five 
Great Lakes, their connecting channels, and the St. Lawrence River. In 
fact, this is the primary difference between my bill and legislation 
(H.R. 981) that I cosponsored in the 110th Congress. This change was 
made necessary by the progress made in the development of the proposed 
Melford International Terminal in Nova Scotia, which is projected to 
handle nearly 1.5 million 20 foot equivalent units, TEUs, annually by 
2015.
  The HMT is a levy that is imposed on the value of cargo that is 
imported to a port within the United States or that is transported 
between U.S. ports. The tax, which is assessed at a rate of 0.125 
percent of the cargo value, including passengers, is assessed only once 
on cargo that is transported between one U.S. port and another, either 
at the point of departure or arrival but not both. However, cargo that 
is carried from a foreign port may be taxed twice, upon arrival at the 
initial U.S. port and again if transported to another U.S. port aboard 
a different vessel. Cargo that is transported along the inland 
waterways is subject to the Inland Waterways Fuel Tax instead of the 
HMT, but the Great Lakes are not considered part of the inland 
waterways system.
  For too long, the imposition of the HMT has served as a barrier to 
the development of a robust United States short sea shipping industry. 
In fact, former Secretary of Transportation Mary E. Peters has stated 
that ``the HMT is the most significant impediment under current law to 
the initiation of such services to Great Lakes ports'' because the 
``avoidance of the HMT is a main motivation for shipping cargo from 
Canada to the United States by trucks instead of water.''
  By providing this exemption to the HMT, Congress can give cargo 
shippers an incentive to move cargo via marine. The increased viability 
of such a water transportation option would subsequently combat current 
highway congestion, a burgeoning problem facing our Nation's 
transportation infrastructure. The shift of cargo transportation from 
common domestic cargo routes to underutilized coastal and inland 
waterways would also improve the flow of commerce and reduce air 
pollution generated by ground transportation.
  Additionally, by providing such an incentive to the enhancement of 
the short sea shipping industry, Congress has the opportunity to spur 
significant economic activity. Ships would have to be built and crews 
would have to be hired. In New York's 23rd Congressional District 
alone, which I am privileged to represent, illustrating just one 
example, the Port of Oswego would realize a significant expansion of 
traffic, resulting in millions of dollars in economic impact and the 
creation of dozens of jobs.
  Madam Speaker, by enacting H.R. 528, the 111th Congress can eliminate 
roadblocks and promote the utilization of an efficient, economical, and 
sustainable means of cargo transportation, while addressing the growing 
need for reliable transportation alternatives and additional capacity. 
Accordingly, I ask my colleagues to work with me to enact this 
important measure.

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