PORT OF LOS ANGELES NETS RECORD $58 MILLION FOR HARBOR MAINTENANCE
U.S. Army Corps of Engineers Scales Up Annual Harbor Maintenance Trust Fund Distribution for Donor Ports
May 14, 2024 – The U.S. Army Corps of Engineers has announced the Port of Los Angeles will receive an estimated $58 million in federal funding this year for maintaining its harbor channels and repairing its wharves. The record amount reflects the federal government's commitment to fully implementing reforms to the Harbor Maintenance Trust Fund (HMTF) long sought by the Port.
“The San Pedro Bay ports move 40 percent of the nation’s container imports, transporting the goods that power our economy,” said California Sen. Alex Padilla. “I am glad to see the Army Corps heed my call to fund these crucial upgrades for the Port of Los Angeles that will bolster global supply chains and make long overdue repairs.”
“Addressing this disparity has taken years,” said Los Angeles Harbor Commission President Lucille Roybal-Allard. “We are grateful to all our supporters in the maritime community and Congress, and especially Rep. Grace Napolitano. Through her leadership on the House Transportation & Infrastructure Committee, Rep. Napolitano championed the cause of allocating these funds more equitably for critical harbor maintenance and repairs that ensure the safety and reliability of all U.S. ports.”
“We started this fight in 2011 with my amendment in the Transportation Committee to provide relief to donor ports, such as Los Angeles and Long Beach,” said Rep. Napolitano. “It has been a long time coming working with other ports around the country, the Army Corps of Engineers, and several Presidential Administrations to finally pass the donor port amendment into law as a part of the Water Resources Development Act of 2020.
“It took further work by the great leadership of the ports of Los Angeles and Long Beach, and my colleagues in Congress to implement the donor port provision and provide this fairness in funding to Southern California,” Napolitano added. “I want to thank the Biden Administration, Assistant Secretary of the Army for Civil Works Michael Connor, and OMB Director Shalanda Young for their efforts on creating this new federal infrastructure program that will provide annual donor port funding to our region.”
“The U.S. Army Corps of Engineers’ announcement is a major win for the economic vitality and sustainability of the Port of Los Angeles and the Southern California region,” said Rep. Nanette Barragán, whose Congressional district includes the port. “After decades of imbalanced HMTF allocations, where West Coast ports received 11 times less funding than East Coast and Gulf ports, our local ports are finally set to get a more equitable share than they have previously received. This federal funding will address critical infrastructure needs, including wharf repairs, seismic safety upgrades, environmental remediation, and other essential harbor maintenance projects to improve the safety and efficiency of operations at the Port of Los Angeles.”
"We’re so appreciative to all of our Congressional advocates – past and present – and we’ll immediately put this funding to good use," said Port of Los Angeles Executive Director Gene Seroka. "We have important harbor infrastructure projects in the pipeline and this funding will go a long way to accelerating these repairs and ensuring the Port of Los Angeles’ infrastructure remains world class."
For more than a decade, the maritime industry has worked closely with federal lawmakers to craft an equitable compromise to address the imbalance and authorize eligibility for new, “expanded use” projects, including seismic upgrades, at donor ports, to ensure the built up balance of the HMTF was spent down, and that future spending would match the level of revenue collected each year. These efforts culminated in the passage of the Water Resources Development Act of 2020 and the CARES Act, both 2020 laws that enacted these reforms.
The Port of Los Angeles estimates the total need for navigation maintenance and repair projects at $6.7 billion. In addition to dredging, pending projects include seismic safety upgrades, wharf and fender repairs, pile replacements, sediment removal and remediation, and improvements to slips and channels.
The Harbor Maintenance Trust Fund is administered by the U.S. Army Corps of Engineers. Importers pay a 0.125% tax on the value of their cargo to fund maintenance projects on the nation's navigable waterways to ensure the safe flow of commerce. Enacted in 1986, the HMTF was initially limited in its use to maintenance dredging to maintain the authorized depth and width of federal navigation channels.
A handful of U.S. ports – most notably deep-water ports such as Los Angeles and Long Beach – contributed half of HMTF revenue, but recouped a mere 3% return due to their naturally deep harbors and lack of need for maintenance dredging projects. Over time, HMTF revenues outpaced spending and the fund built up a multibillion-dollar surplus.
The federal 2024 Fiscal Year allocation of approximately $58 million to the Port of Los Angeles is a nearly tenfold increase compared with $6 million it received in 2023 and marks the full implementation of these reforms. Previously longstanding inequities resulted in select U.S. ports generating half the revenue to the nation's Harbor Maintenance Trust Fund but seeing a negligible return in federal investment.
Other major U.S. ports benefiting from the new rules include the Port of Long Beach and the Port of New York and New Jersey.