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…
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.
