1. DATE: December 18, 2014
TO: Port Commission
FROM: Sean Eagan, Government Affairs Director
CC: Judi Doremus, Management Team, External Affairs Team, Tim Lovain
SUBJECT: Federal Issues Update
A. ACTION REQUESTED
This memo is intended to brief the Commission on the latest developments with issues
being tracked on the federal level as well as recap the year’s achievements. No action is
requested of the Commission at this time.
If you have questions, comments or concerns, please call me at 253-428-8663.
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2. Federal Issues Update
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B. PORT PRIORITIES
1. Harbor Maintenance Tax
I. Goal: Reform the Harbor Maintenance Tax (HMT) to ensure United States
tax policy does not disadvantage United States ports and maritime cargo, and
to provide greater equity for harbor maintenance tax donor ports through
expanded use of the harbor maintenance revenues
II. Result: Partially complete. For the first time in the history of the HMT,
Congress acknowledged the impacts of the tax on donor ports when it
passed the Water Resources Reform and Development Act (WRRDA). The
measure included two provisions potentially beneficial to the Port of Tacoma.
Section 2012 allows for Harbor Maintenance Trust Fund (HMTF) dollars to be
used by a broad group of donor ports for maintenance dredging in berths and
the upland disposal costs of contaminated sediments associated with a
maintenance dredge. Section 2106 also authorizes Congress to appropriate
up to $25 million for six donor ports to be used for shipper rebates.
III. Latest developments: Because WRRDA was passed so late in the
appropriations process, Congress declined to include Section 2106 funding in
its final omnibus spending bill approved this week. Obtaining an appropriation
for fiscal year 2016 will be a high priority for Government Affairs in 2015.
In the meantime, Government Affairs is working with AAPA and other donor
ports to develop a consensus recommendation on how Section 2106 funds
should be administered. Central to the debate is whether the $25 million
should be divided equally between the six donor ports (as proposed by
Seattle and Tacoma) or divided according to each port’s share of the total
HMT generate by all donor ports (as favored by the Port of Los Angeles).
The Government Affairs staff has also met with the Seattle District staff of the
U.S. Army Corps of Engineers to discuss a maintenance dredge for the
Hylebos Waterway under Section 2102 of WRRDA. The President had
originally included funds for the waterway in his 2014 budget proposal, but
the Corps scrapped the project when sediment contamination was
discovered. Government Affairs will pursue project funding in the upcoming
year.
2. Pier 4
I. Goal: Obtain a TIGER grant for the Pier 4 Terminal Upgrade project.
II. Result: Did not achieve goal. USDOT announced that the Port of Tacoma’s
Pier 4 Modernization project would not receive a TIGER grant this year. The
Port of Seattle, however, was awarded $20 million grant for its Terminal 46
modernization project.
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3. Federal Issues Update
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III. Latest developments: USDOT officials participated in a conference call with
port staff to review the Pier 4 grant application. They voiced three main
concerns:
1. The size of the Port’s request;
2. Uncertainty around the cleanup risks (this should be resolved with
approval of an agreed order between the Port and EPA); and
3. Uncertainty around partner funding (a finalized concession agreement
with a private developer should resolve this).
In the meantime, Congress agreed to appropriate $500 million for TIGER in
fiscal year 2015, a 17 percent cut from this year. Planning grants would not
be allowed as they were in 2014. Port staff is already discussing its
application strategy for 2015.
3. Surface transportation reauthorization
I. Goal: Reauthorization of MAP-21, with an eye towards strengthening freight
funding provisions.
II. Result: Incomplete. Congress failed to reauthorize MAP-21, the nation’s
surface transportation law. Instead, they approved a ten month extension of
the bill as well as additional transfers from the general fund to prop up the
financially ailing Highway Trust Fund.
The Government Affairs team continues to work with other stakeholders—
most notably AAPA, Pacific Northwest Waterways Association and the
Coalition for America’s Gateways and Trade Corridors—to push for a
dedicated freight fund in the next authorization. We continue to hear support
for this notion from Congressional offices. The Government Affairs team also
is working with Washington’s delegation about ideas of how to ensure the
state’s projects compete well nationally should a freight fund be established.
4. WRDA-214
I. Goal: Permanent authorization of Section 214 of the Water Resources
Development Act, allowing the US Army Corps of Engineers to accept funds
contributed by non-Federal public entities to expedite the processing of
permits.
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4. Federal Issues Update
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II. Result: Achieved goal. After 15 years of lobbying by the Port, PNWA and
AAPA, Congress included language in this year’s WRRDA bill making
Section 214 permanent. As a reminder, this provision was first proposed by
the Port of Tacoma as part of the APM Terminal expansion project.
C. OTHER PRIORITIES
1. West Coast labor contract: The ports of Tacoma and Seattle last month sent a joint
letter to the President requesting federal mediation in the West Coast labor contract
negotiations between PMA and ILWU. The Government Affairs team has shared this
request with the Congressional delegation and asked that they make similar
requests. Congressmembers Dave Reichert, Doc Hastings, Cathy McMorris-Rodgers
and Jaime Herrera-Beutler joined with three other Members of Congress in a letter to
the President requesting his intervention. The state’s Democrats have declined to do
so to date, but six of the eight have written to the PMA and ILWU encouraging them
to resolve their differences.
2. Port security grants: As noted above, Congress passed an omnibus spending bill
for fiscal year 2015 this week. This measure is an amalgamation of twelve individual
spending bills that Congress normally would pass. Congress did not, however, pass
the 13th
bill which funds the Department of Homeland Security (DHS). Congress
instead passed a continuing resolution for funding the Department until February 27,
2015. This freezes spending and existing programs at current levels, providing time
for Congress to weigh in on the President’s executive order on immigration. As such,
a final decision on port security grants, included in the DHS spending bill, will be put
off until early next year.
3. Ballast water: In the closing days of session, Congress passed a Coast Guard
Reauthorization bill. Lawmakers unfortunately declined to include language in the bill
establishing nationally uniform ballast water standard. Without the preemption, states
are allowed to create their own ballast water rules. For example, the Washington
State Department of Natural Resources has floated a proposal to impose ship fees
to pay for what is arguably a redundant ballast water inspection program. Members
of the maritime community are hopeful that the ballast water provision will fare better
in the next Congress.
4. Diesel Emission Reduction Act (DERA): The fiscal year 2015 omnibus spending
bill provided $30 million for DERA grants, a 50 percent increase over 2014. The Port
earlier this year successfully secured $600,000 to assist Tacoma Rail in retrofitting
one of its locomotives to reduce emissions.
5. Terrorism Risk Insurance Act (TRIA): Before adjourning for the year, Congress
declined to reauthorize TRIA, scheduled expire at the end of the month. TRIA
provides a federal back-stop for terrorism risk insurance. Many are concerned that
without that federal backstop, reinsurance companies will refuse to do business with
insurance companies that offer terrorism risk insurance. Both the ports of Tacoma
and Seattle carry terrorism risk insurance and called on the state’s Congressional
delegation to support the legislation. The Government Affairs team will revisit this
issue in the early months of 2015.
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D. NEXT STEPS
The Port of Tacoma Government Affairs Department will provide the Commission with a
state and federal legislative preview for 2015 during the January 8 Commission meeting.
Commissioners will have several opportunities to engage with Members of Congress in
Washington, DC, in the first half of 2015. These include:
1. March 1-5—Pacific Northwest Waterways Association Mission to Washington
2. April 20-21—American Association of Port Authorities Spring Meeting
3. April 21-23—Coalition for America’s Gateways and Trade Corridors Annual Meeting
4. May 11-13—Washington Council on International Trade DC Fly-in
5. May TBD—Tacoma Pierce County Chamber of Commerce Washington-to-
Washington
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D. NEXT STEPS
The Port of Tacoma Government Affairs Department will provide the Commission with a
state and federal legislative preview for 2015 during the January 8 Commission meeting.
Commissioners will have several opportunities to engage with Members of Congress in
Washington, DC, in the first half of 2015. These include:
1. March 1-5—Pacific Northwest Waterways Association Mission to Washington
2. April 20-21—American Association of Port Authorities Spring Meeting
3. April 21-23—Coalition for America’s Gateways and Trade Corridors Annual Meeting
4. May 11-13—Washington Council on International Trade DC Fly-in
5. May TBD—Tacoma Pierce County Chamber of Commerce Washington-to-
Washington
Port of Tacoma – Government Affairs