The National Grain and Feed Association (NGFA) commended Congress for enacting legislation that will increase the user fee assessed on barge diesel fuel to help finance much-needed improvements to the nation's outdated and deteriorating locks on the inland waterways system.
The 9-cent-per gallon increase in the barge diesel fuel user fee was included in the tax-extender legislation (H.R. 5771) approved by the Senate on Dec. 16 by a 76-16 vote. The increase, which takes effect April 1, 2015, is expected to generate approximately $40 million in additional revenues annually that will be deposited into the Inland Waterways Trust Fund for the benefit of priority navigation project construction and major rehabilitation.
The House on Dec. 3 had passed, by a 404-17 vote, the "Achieving a Better Life Experience (ABLE)" Act that included the 9-cent increase to the user fee. The legislation subsequently was folded into the tax-extender bill and approved by the House and Senate. The bill now goes to President Obama, who has indicated he will sign it into law.
The legislation increases the barge diesel user fee assessed on barge and tow-boat operators from the current 20 cents per gallon to 29 cents per gallon. Funds generated by the user fee are deposited into an Inland Waterways Trust Fund, and are matched dollar-for-dollar with tax revenues to finance inland waterway navigation projects. The Senate legislation was spearheaded by Sens. Bob Casey, D-Pa., Lamar Alexander, R-Tenn., Tom Harkin, D-Iowa, Amy Klobuchar, D-Minn., and Al Franken, D-Minn.
"The increase is supported strongly by both barge carriers and their customers - including the agricultural shippers that consist of our members - to provide the financial wherewithal to make the necessary improvements to our nation's waterways infrastructure," said NGFA President Randy Gordon. "America's inland waterways infrastructure is in desperate need of renovation and modernization, and this much-needed increase in the user fee is absolutely essential to the future global competitiveness and economic growth of U.S. agriculture and other industries, and job creation they represent. Congress is to be commended for taking this action so work at long last can begin!"
Congress earlier this year enacted the Water Resources, Reform and Development Act (H.R. 3080) - signed into law by President Obama on June 10 - which provided a process for authorizing certain inland waterway navigation projects, and reformed and streamlined the process used by the U.S. Army Corps of Engineers to approve such projects. But the legislation did not include an increase in the inland waterways user fee that is essential to actually fund lock-and-dam and port-improvement projects. Industry estimates are that the 9-cent-per-gallon increase in the barge diesel user fee will generate up to an additional $80 million per year when combined with the federal matching funds.
Typically, about 60 percent of U.S. grains and oilseed exports transit the Upper Mississippi-Illinois River system to the Louisiana Gulf each year to be shipped overseas. U.S. farmers also depend heavily on the Mississippi River System for northbound movements of crop inputs, such as fertilizer. Barges also represent a key transportation mode for commodities shipped through Pacific Northwest ports.
Most of the inland waterway locks and dams were built in the 1930s with a projected 50-year life span. Of the nation's 241 locks, 57 percent now are 50 years are older, while 26 percent exceed 70 years of age.