New Bill Would More Than Triple HMT, Expand Coverage

According to a section-by-section analysis, press release, etc. from Representative Richardson and the bill text, highlights of H.R. 2355 include (partial list):

More Than Triple the Current HMT

H.R. 2355 would more than triple the Harbor Maintenance Tax (HMT)² on any port use³ to .4375% (from .125%) of the value of commercial cargo involved.

Expanded Coverage of the HMT

H.R. 2355 would also impose a HMT of .3125% of the value of commercial cargo entering the customs territory of the U.S. other than by port use following foreign port use⁴.

(The section-by-section analysis states that by assessing the HMT on indirect cargo coming into the U.S. over land after foreign port use, cargo diversion would not increase.)

Mexico, Canada exemption. According to H.R. 2355, the HMT on commercial cargo entering the customs territory of the U.S. other than by port use following foreign port use would not be imposed on any good, commodity, or product which originated in Canada or Mexico.

HMT Could be Reduced in Certain Situations, Etc.

The bill would also:

Authority to reduce HMT in certain situations. The Transportation Secretary would have the authority to reduce by 10% the HMT in instances when a local or state fee for infrastructure enhancement has been imposed. Further, the Treasury Secretary would have the ability to eliminate the federal match requirement to encourage regionally and nationally significant projects of interest.

Liability for HMT payment. The HMT imposed would be paid by the importer at the time of unloading at a seaport or in case of cargo entering the U.S. following foreign port use, at the time the commercial cargo enters the customs territory of the U.S.

Effective date. The amendments to the HMT would apply to port use and commercial cargo entering the U.S. on or after on the 90th day after the date of the enactment of the MOVEMENT Act.

National Goods Movement Improvement Fund and Program

H.R. 2355 would create a "National Goods Movement Improvement Fund" which would contain funds appropriated or credited to the fund. 71.34% of the taxes collected under the increased, expanded HMT would go to the National Goods Movement Improvement Fund.

H.R. 2355 would give the Transportation Secretary authority to carry out a National Goods Movement Improvement Program, which would fund infrastructure projects that would improve the movement of goods, mitigate environmental damage caused by the movement of goods, and enhance the security of transported goods.

Beginning October 1st of every fiscal year, the Transportation Secretary would give out funds collected the previous year, in the form of grants to the ports where the HMT was collected. The grants would be given out to State Departments of Transportation based on the amount of money that was collected in that state the previous year. The grants would only be available to eligible projects approved by the Transportation Secretary.

Funds distributed to the ports would have to be spent on projects in the following way: 90% to eligible goods movement improvement projects, 7% to eligible environmental projects, and 3% to eligible homeland security projects.

Report to Congress. The Transportation Secretary would be required to report back to Congress beginning no later then December 31, 2011, and annually thereafter. The report would have to include information on projects submitted, projects approved for funding, and the results of the program.

Program would sunset in 2019. The Transportation Secretary would have the authority to make grants under this program until October 1, 2019.

¹Co-sponsors of H.R. 2355 are Representatives Brown (D), Conyers (D), Cummings (D), Hastings (D), Kilpatrick (D), Lee (D), McDermott (D), Meek (D), Rohrabacher (R), Scott (D), and Tauscher (D).

²Also referred to as the Harbor Maintenance Fee (HMF).

³26 USC 4461 defines port use as the loading of commercial cargo on, or the unloading of commercial cargo from, a commercial vessel at a port.

⁴H.R. 2355 defines foreign port use as the unloading of commercial cargo from a commercial vessel at a channel or harbor (or component thereof) in Mexico or Canada, which (a) is not an inland waterway, and (b) is open to public navigation.

Representative Richardson's press release (dated 05/12/09) available at http://richardson.house.gov/list/press/ca37_richardson/pr_090512_movement_act.shtml

H.R. 2355 available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h2355ih.txt.pdf.

Section-by-section summary of H.R. 2355 available by emailing documents@brokerpower.com.