Phase III COVID-19 legislation partially unlocks Harbor Maintenance Trust Fund for dredging projects

Key Takeaways

On March 27, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136), which provides $2 trillion towards coronavirus relief efforts. The massive rescue package — the biggest in U.S. history — provides hundreds of billions of dollars in loans and grants to major industries and small businesses, direct cash payments to taxpayers and significantly expands unemployment benefits. Most importantly, it provides additional resources that counties can use towards response efforts. NACo released a full analysis on CARES that can be found here.

Included in the legislation is a provision authorizing the U.S. Army Corps of Engineers (Corps) to fully utilize annual receipts from the Harbor Maintenance Trust Fund (HMTF) by exempting the fund’s annual revenues from discretionary spending caps established under the Budget Control Act (P.L. 112-25). The HMTF is funded by revenues from an excise tax levied against importers and domestic shippers using ports and harbors in coastal and Great Lakes areas. Even though the HMTF has a large surplus, only a portion of its total is appropriated by Congress every year for operations and maintenance of the nation’s harbors, with some portions of its funds often transferred by lawmakers to other accounts to cover costs for projects and programs unrelated to ports and to balance the federal budget. The H.R. 748 provision will allow more of the fund’s revenues to be utilized by the Corps for port projects; however, the language still does not appear to unlock the trust fund entirely, allowing only for the expenditure the HMTF’s yearly revenues. This would make available roughly $1.6 billion annually in additional federal funding for ports.

The provision is a win for counties who have long supported unlocking the HMTF and using the entirety of its funds – estimated at roughly $9.6 billion dollars in September 2019 – to be used exclusively on harbor maintenance projects. These projects include both dredging and other port-related projects for deep draft ports who do not require dredging. As Congress works to develop the next Water Resources Development Act (WRDA) authorization, NACo will continue to advocate for a full unlock of the HMTF and for its revenues to be used on dredging and harbor maintenance projects.

View NACo’s 2020 WRDA legislative priorities here.