Resolution: Harbor Maintenance Tax and Trust Fund
Adopted on May 16, 2001

Whereas, a U.S. Harbor Maintenance Tax (HMT) and Harbor Maintenance Trust Fund were implemented in 1987 to cover a portion of Army Corps of Engineers' operations and maintenance costs; and

Whereas, the HMT is based on the value of cargo shipped to or from U.S. ports; and

Whereas, the HMT reversed more than 200 years of federal policy of funding all deep draft navigation costs including harbor maintenance from general revenues; and

Whereas, in 1990, the HMT was more than tripled which has resulted in a continuing annual surplus in the Harbor Maintenance Trust Fund; and

Whereas, on March 31, 1998 the U.S. Supreme Court ruled the HMT was unconstitutional as it applies to exports and the European Union has challenged the tax as a free trade impediment; and

Whereas, proposals for a new tax, fee or funding mechanism to replace the HMT have been advanced including a 1998 proposal for a Harbor Services User Fee that would establish a new method of revenue collection entailing a vessel fee based on "a volumetric measurement of a ship's space available for cargo and passengers," a mechanism detrimental to shipments of low value cargo in the Great Lakes; and

Whereas, the HMT has diverted cargo from U.S. ports in international border areas and, in the Great Lakes region, it represents an additional burden for that waterborne commerce which pays Canadian St. Lawrence Seaway tolls; and

Whereas, the HMT discourages coastwise trade as an alternative to more polluting, energy intensive and less safe land transportation, and

Whereas, a 1999 General Accounting Office study found that the U.S. maritime industry accounts for many billions of dollars paid to the General Fund of the U.S. Treasury including $20 billion in customs duties (1998);

Therefore Be It Resolved, that the Great Lakes Commission advocates elimination of the Harbor Maintenance Tax and the Harbor Maintenance Trust Fund and reiterates its rejection of the Harbor Services User Fee; and

Be It Further Resolved, that federal operations and maintenance responsibilities for the deep draft commercial navigation system should be fully federally funded.

Unanimously adopted by the eight member states of the Great Lakes Commission at the 2001 Semiannual Meeting in Ann Arbor, Mich., May 16, 2001.