Port of Los Angeles Nets Record $58 Million for Harbor Maintenance

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The U.S. Army Corps of Engineers has announced the Port of Los Angeles will receive an estimated 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.

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.

Revenue Disparities

A few ports, like Los Angeles and Long Beach, contributed significantly to the HMTF but recouped a mere 3% return due to their naturally deep harbors and lack of maintenance dredging needs.

Over time, HMTF revenues exceeded spending, leading to a multibillion-dollar surplus.

2024 Allocation Increase

The 2024 Fiscal Year saw a substantial increase in funding, with the Port of Los Angeles receiving approximately $58 million, a tenfold increase from the previous year’s $6 million, as part of reforms to address funding disparities.

Impact on Major Ports

Other major ports, such as Long Beach and New York and New Jersey, also benefit from the new rules, which aim to balance revenue generation with federal investment returns.

The HMTF’s overhaul aims to ensure fair distribution of funds, addressing long standing inequities in port funding across the United States.

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Source: Port of Los Angeles