oversight

Commercial Maritime Industry: Updated Information on Federal Assessments

Published by the Government Accountability Office on 1999-09-16.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United States General Accounting Office

GAO               Report to the Chairman, and Ranking
                  Democratic Member, Committee on
                  Transportation and Infrastructure,
                  House of Representatives

September 1999
                  COMMERCIAL
                  MARITIME INDUSTRY
                  Updated Information
                  on Federal
                  Assessments




GAO/RCED-99-260
          United States
GAO       General Accounting Office
          Washington, D.C. 20548

          Resources, Community, and
          Economic Development Division

          B-282489

          September 16, 1999

          The Honorable Bud Shuster
          Chairman
          The Honorable James L. Oberstar
          Ranking Democratic Member
          Committee on Transportation and Infrastructure
          House of Representatives

          One of the means by which the federal government generates revenue to
          support America’s maritime infrastructure is to enable federal agencies to
          levy assessments—user fees, taxes, and other charges— upon the
          commercial maritime industry. We define the commercial maritime
          industry to include vessel owners, operators, importers, and exporters that
          move commodities by vessels engaged in domestic and international
          commerce. Currently, there are 124 assessments imposed on the
          commercial maritime industry. One of the assessments is the Harbor
          Maintenance Tax. In March 1998, the U.S. Supreme Court ruled that the
          export-related portion of the Harbor Maintenance Tax—the fee that funds
          virtually all maintenance dredging of U.S. ports—violated the
          constitutional provision on taxes imposed on exports. The import-related
          portion of this fee is also being challenged by the European Union. The
          administration has proposed an alternative funding mechanism to replace
          this fee called the Harbor Services User Fee—a cost-based user fee that
          would be assessed on commercial vessel operators. This proposed
          alternative has been controversial, especially with the commercial
          maritime industry, which contends that it is already burdened with heavy
          fees and taxes.

          To help the Congress as it considers a possible replacement for the Harbor
          Maintenance Tax, you asked us to provide a comprehensive summary of
          the assessments currently levied on the commercial maritime industry. As
          agreed with your offices, we are updating information from our evaluation
          of federal assessments levied on the commercial maritime industry that we
          completed in 1993,1 which included information on the assessments levied
          in fiscal years 1989 through 1991 and an estimate for fiscal year 1992. More
          specifically, we are providing the following information in this report:

      •   Which federal agencies currently levy assessments on the commercial
          maritime industry, how much did they collect in fiscal years 1996 through


          1
            Maritime Industry: Federal Assessments Levied on Commercial Vessels (GAO/RCED-93-65FS, Mar. 5,
          1993.)



          Page 1                          GAO/RCED-99-260 Federal Assessments on Maritime Industry
                       B-282489




                       1998, what are the estimated collections for fiscal 1999, and how much
                       was collected in fiscal 1998 compared with fiscal 1991?
                   •   How many assessments are levied by federal agencies, who pays for them,
                       where are they deposited, and how do these assessments compare with
                       those levied in fiscal year 1992?
                   •   How many new federal assessments have been formally proposed and are
                       under consideration?

                       In addition, we are providing information on the current status of the
                       Harbor Maintenance Trust Fund and the projected annual balances of the
                       fund.

                       Detailed updated information on current and proposed assessments levied
                       on the commercial maritime industry by federal agencies are reported at
                       http://www.gao.gov/RCED-99-260. This information includes the name and
                       description of the assessment, the payor, and collection amounts.


                       Eleven different federal agencies currently levy assessments on the
Results in Brief       commercial maritime industry. In fiscal year 1998, the agencies collected
                       almost $22 billion. The Customs Service collected by far the largest
                       portion—almost $21 billion. The 10 other agencies each collected an
                       average of $90 million in fiscal year 1998.2 Total collections have increased
                       from $18.2 billion in fiscal year 1991 to $21.8, $21.9, and $21.9 billion in
                       fiscal 1996, 1997, and 1998, respectively, though the amounts for some
                       individual assessments increased or decreased.

                       In all, federal agencies levy 124 different assessments, ranging from
                       various fees such as customs duties, ship registry fees, commercial fishing
                       fees, and inspection charges. Since fiscal year 1992, 50 assessments have
                       been added, and 45 have been deleted. In fiscal year 1998, shippers
                       (importers and exporters) paid about $20 billion of the total, vessel
                       owners and operators paid about $1 billion, and various other parties paid
                       the rest.3 From fiscal year 1991 through fiscal 1998, the amounts paid by
                       shippers increased by 17 percent, or about $2.9 billion; during the same


                       2
                        The 10 agencies are the Animal, Plant, and Health Inspection Service, Department of Agriculture;
                       Centers for Disease Control and Prevention, Department of Health and Human Services; Coast Guard,
                       Department of Transportation; Federal Communications Commission; Federal Maritime Commission;
                       Grain Inspection and Packers Stockyards Administration, Department of Agriculture; Internal Revenue
                       Service, Department of the Treasury; Maritime Administration, Department of Transportation;
                       National Marine Fisheries Association, and National Oceanic and Atmospheric Administration,
                       Department of Commerce; and the Panama Canal Commission.
                       3
                        “Other parties” includes such individuals as borrowers, brokers, and individual passengers.



                       Page 2                            GAO/RCED-99-260 Federal Assessments on Maritime Industry
             B-282489




             period, the amounts paid by owners and operators increased by 46
             percent, or about $309 million. About $20 billion of the total revenues
             generated in fiscal 1998 was not earmarked for specific purposes and was
             deposited in the General Fund of the U.S. Treasury. Another $995 million
             was credited to agency accounts as reimbursement for the services they
             provided (issuing permits, conducting inspections, physical services, and
             other related activities). The remaining $762 million was deposited into
             three trust funds4 to be appropriated in future years to agencies for
             designated services.

             Two new assessments are currently being proposed. The proposed Harbor
             Services User Fee legislation, the largest of the two, is being proposed by
             the administration as a replacement for the existing Harbor Maintenance
             Tax. The administration believes that the replacement fee, estimated to
             generate $980 million annually, is needed to fund federal channel and
             harbor projects. Unlike the Harbor Maintenance Tax, which is paid by
             either the shippers, foreign trade zone users, or operators of the vessel, the
             proposed fee would be paid only by vessel operators. The remaining
             proposed assessment is being proposed by the National Oceanic and
             Atmospheric Administration.

             Data provided by the U.S. Army Corps of Engineers show that at projected
             future revenue and expenditure levels, the surplus in the Harbor
             Maintenance Trust Fund will continue to grow well into the next decade.
             At the end of fiscal year 1998, there was a $1.3 billion surplus in the Harbor
             Maintenance Trust Fund. The surplus is projected to increase to
             $2.5 billion in fiscal year 2004. The U.S. Army Corps of Engineers’
             projections assume that the import portion of the fee will remain intact.


             A successful and efficient maritime infrastructure and industry is an
Background   important asset to the United States. America has long depended on
             importing as well as exporting manufactured goods, agricultural products,
             and other commodities; access to world markets is important to America
             and its economy. The maritime infrastructure is also important to
             America’s national security; it is responsible for supporting America’s
             military services during national emergencies by transporting personnel
             and supplies.

             4
              The three assessments that generate revenue deposited in trust funds are the Inland Waterways Fuel
             Tax, which funds inland waterway projects of the U.S. Army Corps of Engineers; the Leaking
             Underground Storage Tank Tax, used to carry out leaking underground storage tank cleanup activities
             by the Environmental Protection Agency; and the Harbor Maintenance Tax collected by the Customs
             Service, which funds the U.S. Army Corps of Engineers’ and the St. Lawrence Seaway Development
             Corporation’s operation and maintenance costs.



             Page 3                           GAO/RCED-99-260 Federal Assessments on Maritime Industry
B-282489




One of the means by which the federal government generates revenue to
support America’s maritime infrastructure is to enable federal agencies to
levy assessments on the commercial maritime industry. Assessments
levied can be, but are not always, specific to the commercial maritime
industry and range from duties on cargoes, fees for various services
provided, and permits for specific types of fishing. Payments made by
maritime users are usually deposited into the General Fund of the U.S.
Treasury or directly or indirectly reimburse a federal agency for services
provided.

One of the assessments levied is the Harbor Maintenance Tax. The Harbor
Maintenance Tax was established in 1986 by the Water Resources
Development Act. The assessment, which is specific to the commercial
maritime industry, is imposed on passenger and nonpassenger vessels,
domestic and international commerce, and U.S.- and foreign-flagged
vessels. The fee is levied and collected by the Customs Service. The fee is
paid by either the shipper, foreign trade zone user, or operator of the
vessel. Collections from this assessment are deposited directly into the
Harbor Maintenance Trust Fund and are used by the U.S. Army Corps of
Engineers to maintain and operate U.S. ports. Prior to 1998, the fee was
imposed on all cargo (i.e., imports and exports). Currently, the fee applies
to domestic and imported cargo because on March 31, 1998, the U.S.
Supreme Court ruled that the export portion of the fee was
unconstitutional.5 Since this ruling, the fee has not been assessed on
export cargo. The remaining fee assessed on imported goods is also being
challenged. A claim has been made by the European Union that the fee
violates the General Agreement on Tariffs and Trade. Although the United
States is currently engaged in consultations under the World Trade
Organization Agreement regarding this claim, a dispute resolution panel
has—so far—not been requested by any of the claimants. When this
dispute will be resolved is uncertain. The administration, however,
submitted a proposal in May of 1998 to replace the Harbor Maintenance
Tax with a Harbor Services User Fee. Table 1 summarizes the revenues
from the Harbor Maintenance Tax for fiscal years 1997 through 1999.




5
  In United States v. United States Shoe Corporation, 523 U.S. 360 (1998), the Supreme Court ruled that
the Harbor Maintenance Tax, as it was applied to exports, violated the U.S. Constitution’s export
clause. The Export Clause, Art. I, sec. 9, cl. 5, provides that no tax or duty can be assessed on articles
exported from any state. The Supreme Court found that the Harbor Maintenance Tax did not correlate
with the services used by the exporter and therefore the Harbor Maintenance Tax did not qualify as a
permissible user fee.



Page 4                             GAO/RCED-99-260 Federal Assessments on Maritime Industry
                                        B-282489




Table 1: Harbor Maintenance Tax
Revenues by Type in Fiscal Years 1997   Dollars in thousands
and 1998 and Expected Revenues in       Revenue type                                          1997                1998               1999b
Fiscal 1999
                                        Imports                                          $434,037            $458,193             $490,000
                                        Exports                                            214,017              90,682                      0
                                                 a
                                        Total                                            $648,054            $548,875             $490,000
                                        a
                                         These totals only include revenues from imports and exports from the Harbor Maintenance Tax.
                                        These totals do not include all revenue sources for the Harbor Maintenance Trust Fund, such as
                                        revenue from other sources as well as interest generated, and therefore cannot be substituted for
                                        “total” revenues for the Harbor Maintenance Trust Fund.
                                        b
                                            These figures are estimates.

                                        Source: U.S. Army Corps of Engineers.




                                        Eleven federal agencies collected nearly $22 billion in assessments on the
Federal Assessments                     commercial maritime industry in fiscal year 1998. The Customs Service
on the Commercial                       collected 96 percent of the total amount. Table 2 shows these 11 agencies
Maritime Industry                       in addition to 2 other agencies that no longer collect assessments, and
                                        their collections for the 3-year period we examined (fiscal years 1996-98),
Totaled Nearly $22                      together with a comparison of the amount they collected in fiscal year
Billion in Fiscal Year                  1991—the last year included in our previous report—and the amount they
                                        expect to collect in fiscal 1999. Overall, the collections for fiscal year 1998
1998                                    were about $3.7 billion above the fiscal 1991 levels and were relatively
                                        constant for the 3 year period we examined. Table 2 also shows a
                                        substantial change in collections by some agencies. For example,
                                        collections by the Coast Guard and the Animal and Plant Health Inspection
                                        Service rose almost sevenfold and fivefold, respectively, from fiscal year
                                        1991 to fiscal 1998, while collections by the Internal Revenue Service and
                                        the Federal Communications Commission fell by 61 and 63 percent,
                                        respectively, during the same period. These changes occurred for various
                                        reasons, such as the addition or deletion of assessments or substantive
                                        changes made to the assessments levied.




                                        Page 5                             GAO/RCED-99-260 Federal Assessments on Maritime Industry
                                         B-282489




Table 2: Amounts of Assessments Collected by Federal Agency in Fiscal Year 1991 Compared With Fiscal Years 1996
Through 1999
Dollars in thousands
Federal agency                           1991a              1996                1997               1998                 1999b
Animal, Plant, and Health               $5,368           $23,448             $26,743            $31,681               $32,000
Inspection Service; U.S.
Department of Agriculture
Centers for Disease Control                N/Ac             1,123              1,074               1,180                1,300
and Prevention; Department of
Health and Human Servicesc
Coast Guard; Department of               1,884            17,304              14,891             14,866                14,972
Transportation
Customs Service; Department         17,358,534d        20,908,243         21,098,517         20,990,854           19,887,083
of the Treasury
Federal Communication                    5,906              3,782              1,792               2,159                1,380
Commission
Federal Maritime Commission                 51              1,041              1,086               2,431                  620
Grain Inspection, Packers, and             672               725               1,173               1,159                1,175
Stockyards Administration;
U.S. Department of Agriculture
Internal Revenue Service;              348,996           142,980             140,587            135,582               138,543
Department of the Treasury
Interstate Commerce                          8e              N/Ae                N/Ae               N/Ae                  N/Ae
Commissione
Maritime Administration;                15,687            11,032              13,718             27,047               100,814
Department of Transportation
National Marine Fisheries                4,423            40,744              19,596             12,994                 9,234
Association; National Oceanic
and Atmospheric
Administration; Department of
Commerce
Panama Canal Commission                466,228           600,248             611,200            675,711               702,766
Saint Lawrence Seaway                        0               N/A                 N/A                N/A                   N/A
Development Corporation;
Department of Transportationf
Total                              $18,207,757       $21,751,030         $21,930,377        $21,895,664          $20,889,887

                                                                                                     (Table notes on next page)




                                         Page 6                     GAO/RCED-99-260 Federal Assessments on Maritime Industry
                       B-282489




                       Legend

                       N/A = not applicable

                       Note: Figures are nominal and have not been adjusted for inflation.
                       a
                           Information in fiscal year 1991 column is drawn from our 1993 report.
                       b
                           These figures are estimates.
                       c
                        Agency levied an assessment in fiscal year 1991; however, the assessment was not included in
                       our 1993 report.
                       d
                        This amount differs from the figure presented in our 1993 report by almost $6 billion. While
                       conducting our current research, the Customs Service submitted corrected numbers for fiscal
                       year 1991.
                       e
                        Agency no longer exists; however, many of its responsibilities have been transferred to the
                       Surface Transportation Board and the Federal Highway Administration. None of the assessments
                       levied by the Interstate Commerce Commission included in the 1993 report are currently levied by
                       any federal agency.
                       f
                       The agency did not levy any assessments from fiscal years 1996 through 1999.

                       Source: Data were provided by these agencies and were drawn from our 1993 report.




                       Federal agencies currently levy 124 assessments, up slightly from the 119
Number of              levied in fiscal year 1992.6 While these overall numbers are similar, the
Assessments Have       intervening years saw considerable change in the specific assessments.
Changed, but Who       More specifically, since fiscal year 1992, 50 new assessments were levied,
                       45 assessments were deleted, and 44 were substantively changed.7
Pays and How           Appendix I shows the extent to which assessments changed within each
Collections Are Used   agency and appendix II lists all assessments that have been deleted.
                       Although the specific assessments levied on the commercial maritime
Remain Generally the   industry are different from those levied in fiscal year 1992, the distribution
Same                   of who pays the assessments and what specific funds receive the
                       collections from the assessments remain—with some exceptions—much
                       the same as we reported in 1993. The following sections discuss these
                       patterns in more detail.


                       6
                        We found that 2 assessments that should have been included in the previous report were not included;
                       therefore, the total number of assessments levied in fiscal year 1992 was 119—not 117.
                       7
                        Of the 50 new assessments levied since our previous report, 12 have since been deleted. In addition,
                       seven assessments levied in fiscal year 1992 have since been consolidated into three, and two were
                       divided into six. Finally, to determine the number of assessments that had changed, the following
                       definition for “change” was used. Any change to the following components of an assessment
                       determined “change:” (1) definition of the assessment; (2) payor of the assessment; (3) commerce,
                       flag, or vessel type(s) that the assessment is levied upon; (4) exemption(s) to the assessment; and
                       (5) formula or frequency of the assessment. If the name of the assessment changed or if the statutory
                       citation underwent technical changes, this is not considered a “change.”



                       Page 7                              GAO/RCED-99-260 Federal Assessments on Maritime Industry
                             B-282489




Shippers Pay the Largest     Although vessel owners and operators pay the majority of the 124
Portion of the Assessments   individual assessments, the total payments for these assessments are small
                             relative to the total payments made by shippers. Vessel owners or
                             operators are exclusively responsible for 85 of the 124 assessments.8 By
                             contrast, importers and exporters who ship their goods on vessels have
                             exclusive responsibility for only four assessments. The revenues collected,
                             however, from these four assessments totaled more than $20 billion in
                             fiscal year 1998. (See fig. 1.) Customs duties—which are not specific to
                             just the commercial maritime industry—accounted for nearly the entire
                             amount.




                             8
                              For almost half of the assessments, various individuals can be responsible for paying the assessment;
                             in other words, who pays the assessment is not specifically determined. The data, however, have been
                             organized into three “payor” categories. The first grouping is “importer, exporter, or other.” In this
                             categorization, “other” is defined as broker, foreign trade zone user, or operator. The second
                             grouping is “operator, owner, or other.” In this categorization, “other” is defined as charterer,
                             mortgagee, NVOCC (non-vessel-operating common carrier), marine terminal operator, other interested
                             party, representative of the foreign fishing nation, or filing agent. The third grouping is strictly
                             “other.” In this last grouping, “other” is defined as borrower, broker, individual passenger,
                             requesting entity, or lien claimant.



                             Page 8                            GAO/RCED-99-260 Federal Assessments on Maritime Industry
                                    B-282489




Figure 1: Collections From All
Identified Federal Assessments by
                                                                                                                    Importer, exporter
Payor in Fiscal Year 1998
                                                                                                                    or other
                                                                                                                    95% ($20.7 billion)
                                                                                                                    (Other= broker,
                                                                                                                    foreign trade zone
                                                                                                                    user, or operator)

                                                                                                                    Other
                                                                                                                    1% ($237.1 million)
                                                                                                                    (Other=borrower,
                                                                                                                    broker, individual
                                                                                                                    passenger,
                                                                                                                    requesting entity, or
                                                                                                                    lien claimant)

                                                                                                                    Operator, owner,
                                                                                                                    or other
                                                                                                                    4% ($981.5 million)
                                                                                                                    (Other= charterer,
                                                                                                                    mortagagee, NVOCC,
                                                                                                                    marine terminal
                                                                                                                    operator, other
                                                                                                                    interested party,
                                                                                                                    representative of the
                                                                                                                    foreign fishing nation,
                                                                                                                    or filling agent)


                                    Legend

                                    NVOCC = non-vessel-operating common carrier

                                    Source: Compiled from data submitted by the 11 federal agencies.




                                    If the analysis is narrowed to the $2.8 billion that is generated from
                                    assessments other than Customs duties, the picture changes somewhat.
                                    Shippers were responsible for paying about $1.5 billion, while vessel
                                    owners and operators were responsible for about $1 billion. Payments
                                    made by “others,”9 while still a relatively small portion of the total,
                                    increased from almost $1.3 million in fiscal year 1991 to almost
                                    $200 million in fiscal 1996 and increased by about $43 million from fiscal
                                    years 1996 through 1998.




                                    9
                                     “Others” in this instance includes borrowers, brokers, and individual passengers.



                                    Page 9                            GAO/RCED-99-260 Federal Assessments on Maritime Industry
                                          B-282489




Most Money Collected Is                   As shown in table 3, most assessments (i.e., 74)—and the vast majority of
Not Earmarked for                         the amounts collected (i.e., over $20 billion) —are deposited in the U.S.
Specific Uses                             Treasury’s General Fund and are appropriated for the general support of
                                          federal activities. Another 46 assessments generate about $995 million to
                                          reimburse agencies or private service providers for expenses incurred in
                                          providing a service. Services range from physical services, such as tug
                                          service through the Panama Canal, to administrative services, such as the
                                          Customs Service’s processing of documents for vessels desiring entry into
                                          the United States directly from a foreign port. Three other assessments
                                          generate $762 million for trust funds, and one assessment generates
                                          revenues for a revolving fund.10


Table 3: Total Collections Summarized by the Type of Fund That Received the Collections and Their Use for Fiscal Year
1991 and Fiscal Years 1996 Through 1999
Dollars in thousands
Fund type and use                             1991                 1996                    1997                    1998                      1999a
The General Fund of the U.S.        $16,977,864           $20,093,867             $20,186,277              $20,137,622             $19,063,970
Treasury (use: unspecified)
Agency specific, general or             512,916                853,970                 890,254                  995,381               1,106,886
special accounts, or private
service provider (use:
reimbursement for services
provided)
Trust funds (use: specified in          716,977                802,393                 853,446                  762,336                 718,231
law)
Revolving fund (use: maritime                   0                   800                     400                      325                      800
war risk insurance)
Total                               $18,207,757           $21,751,030             $21,930,377              $21,895,664             $20,889,887
                                          Note: Figures are nominal and have not been adjusted for inflation.
                                          a
                                           Estimates.

                                          Source: Data were provided by these agencies and were drawn from our 1993 report.



                                          To provide an additional perspective on the uses for which the collected
                                          funds from assessments are applied, we analyzed the type of service or
                                          activity for which each assessment was directed. We used the four
                                          categories developed for our 1993 report: administrative processing and
                                          associated services (e.g., processing documentation or issuing permits),
                                          physical services (e.g., inspections and tug service), taxes, and
                                          miscellaneous services and Customs duties. As table 4 shows, the amounts

                                          10
                                           The War Risk Revolving Fund is specifically used for enabling vessels to continue to trade in a
                                          national emergency.



                                          Page 10                           GAO/RCED-99-260 Federal Assessments on Maritime Industry
                                         B-282489




                                         collected in fiscal year 1996 for administrative processing and associated
                                         services and for physical services were considerably above fiscal 1991
                                         levels; from fiscal 1996 through fiscal 1998, the collections for these two
                                         activities continued to rise. The amounts collected in fiscal year 1996 for
                                         taxes were about half of what they had been in fiscal 1991 but remained
                                         constant from fiscal 1996 through fiscal 1998. The amounts in the final
                                         category—miscellaneous services and Customs duties—increased from
                                         fiscal year 1991, reflecting increased collections from Customs duties.


Table 4: Assessment Collection Amounts Summarized by Taxes, Duties, or Type of Service Provided for Fiscal Year 1991
and Fiscal Years 1996 Through 1999
Dollars in thousands
Tax, duty, or type of service
provided                                     1991                1996                    1997                     1998            1999a
Administrative processing and         $520,287              $821,637                $883,716                   $959,144        $972,031
associated services
Physical services                      480,687                829,251                856,298                    941,835         980,325
Taxes                                  405,497                206,443                205,468                    202,764         206,532
Miscellaneous services and          16,801,286            19,893,699              19,984,895             19,791,921           18,730,999
Customs duties on
commodities entering the
United States
Total                              $18,207,757           $21,751,029            $21,930,377             $21,895,664          $20,889,887
                                         Note: Figures are nominal and have not been adjusted for inflation.
                                         a
                                          Estimates.

                                         Source: Data were provided by these agencies and were drawn from our 1993 report.




                                         Two federal assessments on the commercial maritime industry have been
Two New Federal                          proposed. The administration submitted a proposal in May of 1998 for the
Assessments Have                         President’s Fiscal Year 2000 budget to replace the Harbor Maintenance
Been Proposed                            Tax with a Harbor Services User Fee. The administration believes that an
                                         alternative funding mechanism is needed to replace the Harbor
                                         Maintenance Tax and the Harbor Maintenance Trust Fund for maintaining
                                         federal channel and harbor projects. The administration characterizes the
                                         proposed Harbor Services User Fee as a “cost-based user fee” that would
                                         be assessed on commercial vessel operators on the basis of the type,
                                         capacity, movement, and operational characteristics of the vessel.
                                         Collections would be deposited in a Harbor Services Fund.




                                         Page 11                          GAO/RCED-99-260 Federal Assessments on Maritime Industry
                       B-282489




                       In the President’s Fiscal Year 2000 budget, the implementation of this new
                       fee is estimated to raise, on average, $980 million annually through fiscal
                       2004. If enacted, the proposal is expected to reduce general fund
                       appropriations to the U.S. Army Corps of Engineers for “Construction
                       General” by $258 million and “Operation and Maintenance, General” by
                       $693 million in fiscal year 2000. The balances currently in the Harbor
                       Maintenance Trust Fund would be transferred to the Harbor Services
                       Fund. The Harbor Services Fund also will provide the Saint Lawrence
                       Seaway Development Corporation with $12 million in fiscal year 2000. In
                       addition, funds formally transferred from the Harbor Maintenance Trust
                       Fund to the Customs Service for the administrative expenses of fee
                       collection will be derived from the Harbor Services Fund instead.

                       The National Oceanic and Atmospheric Administration has proposed the
                       other assessment, the Central Registry for Limited Access Permits Fee,
                       which has been introduced in the Federal Register. The agency’s general
                       fund account for expenses incurred in providing a service would receive
                       any revenues.


                       With the recent Supreme Court ruling that the export portion of the
Status and Projected   Harbor Maintenance Tax is unconstitutional, concern has been expressed
Annual Balances of     that funds supplied only from a fee on imports would be insufficient for
the Harbor             the maintenance and operations of U.S. ports. However, if the import
                       portion of the fee remains intact, and if revenue projections from the U.S.
Maintenance Trust      Army Corps of Engineers prove to be correct, the balance in the Harbor
Fund                   Maintenance Trust Fund should be sufficient to sustain these operations.
                       As table 5 shows, figures prepared by Corps staff place the fiscal year 1998
                       surplus in the trust fund at $1.3 billion. And, from fiscal years 1999 through
                       fiscal 2004, projected revenues from import fees are expected to rise to
                       about $920 million, while projected expenditures are expected to rise to
                       about $750 million. If these projections prove correct, the resulting fund
                       balance will be about $2.5 billion in fiscal year 2004.




                       Page 12                   GAO/RCED-99-260 Federal Assessments on Maritime Industry
                                  B-282489




Table 5: Summary of Harbor
Maintenance Tax Revenues, Total   Dollars in thousands
Funds Available, Outlays, and                                                                       Outlays from
Surpluses                                                                                             the Harbor
                                                                                 Total funds        Maintenance               Surplus/
                                  Fiscal year               Net revenuea           available         Trust Fund               (Deficit)
                                  1989                           $183,149b          $192,864b            $180,552b             $12,312b
                                  1990                            197,623b            209,935b            179,681b              30,254b
                                                                             b                 b                     b
                                  1991                            395,501             425,755             352,960               72,795b
                                  1992                            531,062b            603,571b            482,944b             120,627b
                                                                             b                 b                     b
                                  1993                            650,722             771,653             468,376              303,277b
                                  1994                            646,191b            949,468b            497,376b             452,362b
                                                                             b                 b                     b
                                  1995                            700,891           1,152,276             531,082              621,194b
                                  1996                            739,137b          1,360,331b            494,834b             865,497b
                                                                             c                  c                    c
                                  1997                            789,167           1,655,230             549,502            1,105,728c
                                  1998                            687,870c          1,800,111c            511,093c           1,289,018c
                                                                             c                  c                   c,d
                                  1999                            655,000           1,944,000               19,700           1,924,300c
                                  2000e                           701,000c          2,625,000c            635,000c           1,990,000c
                                       e                                     c                  c                    c
                                  2001                            748,000           2,738,000             643,000            2,095,000c
                                  2002e                           801,000c          2,896,000c            678,000c           2,218,000c
                                       e                                     c                  c                    c
                                  2003                            860,000           3,078,000             714,000            2,364,000c
                                  2004e                           920,000c          3,284,000c            750,000c           2,534,000c
                                  Notes: In 1998 the U.S. Supreme Court ruled the export portion of the Harbor Maintenance Tax to
                                  be unconstitutional. Therefore, from fiscal year 1998 on, the figures reflect revenues from imports
                                  and other categories only.

                                  Figures are nominal and have not been adjusted for inflation.
                                  a
                                   Revenues include revenues collected from the Harbor Maintenance Tax, other revenue sources,
                                  and interest generated.
                                  b
                                   Source: Annual Report to Congress on the Status of the Harbor Maintenance Trust Fund for FY
                                  1997.
                                  c
                                   Source: U.S. Army Corps of Engineers (figures are actual for fiscal years 1997 and 1998 and are
                                  estimates for fiscal years 1999 through 2004).
                                  d
                                   The Fiscal Year 1999 Energy and Water Development Appropriations Act does not provide for
                                  the U.S. Army Corps of Engineers’ eligible operation and maintenance costs to be reimbursed
                                  from the Harbor Maintenance Trust Fund. Subsequent years assume that the U.S. Army Corps of
                                  Engineers’ operation and maintenance costs will be recovered from the Harbor Maintenance
                                  Trust Fund.
                                  e
                                  All figures for this year are estimates.




                                  Page 13                            GAO/RCED-99-260 Federal Assessments on Maritime Industry
                  B-282489




                  We validated the data in our report on current and proposed assessments
Agency Comments   with officials from the 11 federal agencies currently levying the
                  assessments and the U.S. Army Corps of Engineers. The officials generally
                  agreed with the facts presented in this report. We made several technical
                  changes to the report, as appropriate. A detailed description of our scope
                  and methodology appears in appendix III.


                  As arranged with your offices, unless you publicly announce its contents
                  earlier, we plan no further distribution of this report until 10 days after the
                  date of this letter. At that time, we will send copies of the report to the
                  Honorable Rodney E. Slater, Secretary of Transportation; Admiral James
                  M. Loy, Commandant of the Coast Guard; the Honorable Clyde J. Hart, Jr.,
                  Administrator, Maritime Administration; the Honorable Albert S. Jacquez,
                  Administrator, Saint Lawrence Seaway Development Corporation; the
                  Honorable John A. Mills, Secretary, Panama Canal Commission; the
                  Honorable William E. Kennard, Chairman, Federal Communications
                  Commission; the Honorable William S. Cohen, Secretary of Defense;
                  Robert M. Walker, Acting Secretary of the Army; the Honorable Harold J.
                  Creel, Jr., Chairman, Federal Maritime Commission; the Honorable
                  William M. Daley, Secretary of Commerce; the Honorable Lawrence H.
                  Summers, Secretary of the Treasury; Samuel Banks, Acting Commissioner
                  of Customs; the Honorable Charles O. Rossotti, Commissioner of Internal
                  Revenue; the Honorable Daniel R. Glickman, Secretary of Agriculture; the
                  Honorable Donna E. Shalala, Secretary of Health and Human Services;
                  Claire V. Broome, Acting Director, Centers for Disease Control and
                  Prevention; and the Honorable Jacob J. Lew, Director, Office of
                  Management and Budget. Copies will be made available to others upon
                  request.

                  If you or your staff have any questions about this report, please contact me
                  at (202) 512-2834. Appendix IV lists key contacts and contributors to this
                  report.

                  Sincerely yours,




                  John H. Anderson, Jr.
                  Director, Transportation Issues
                  Page 14                   GAO/RCED-99-260 Federal Assessments on Maritime Industry
Page 15   GAO/RCED-99-260 Federal Assessments on Maritime Industry
Contents



Letter                                                                                             1


Appendix I                                                                                        18

Highlighted Changes
Regarding the
Number of Federal
Assessments Levied
on Commercial
Maritime Industry by
Agency, Fiscal Year
1992 Versus Fiscal
1999
Appendix II                                                                                       20

Deleted Assessments,
Fiscal Years 1992-99
Appendix III                                                                                      22

Objectives, Scope,
and Methodology
Appendix IV                                                                                       24

GAO Contacts and
Staff
Acknowledgments
Tables                 Table 1: Harbor Maintenance Tax Revenues by Type in Fiscal                  5
                        Years 1997 and 1998 and Expected Revenues in Fiscal 1999
                       Table 2: Amounts of Assessments Collected by Federal Agency                 6
                        in Fiscal Year 1991 Compared With Fiscal Years 1996 Through
                        1999




                       Page 16               GAO/RCED-99-260 Federal Assessments on Maritime Industry
         Contents




         Table 3: Total Collections Summarized by the Type of Fund That               10
          Received the Collections and Their Use for Fiscal Year 1991 and
          Fiscal Years 1996 Through 1999
         Table 4: Assessment Collection Amounts Summarized by Taxes,                  11
          Duties, or Type of Service Provided for Fiscal Year 1991 and
          Fiscal Years 1996 Through 1999
         Table 5: Summary of Harbor Maintenance Tax Revenues, Total                   13
          Funds Available, Outlays, and Surpluses
         Table II.1: Assessments That Existed in Fiscal Year 1992 and                 20
          That Have Been Deleted
         Table II.2: Assessments That Were Implemented After Fiscal                   21
          Year 1992 but Have Since Been Deleted


Figure   Figure 1: Collections From All Identified Federal Assessments by              9
           Payor in Fiscal Year 1998




         Abbreviations

         APHIS      Animal, Plant, and Health Inspection Service
         ATFI       Automated Tariff Filing Information
         DOT        Department of Transportation
         CDC        Centers for Disease Control and Prevention
         COFR       Certificate of Financial Responsibility
         FCC        Federal Communication Commission
         FMC        Federal Maritime Commission
         GIPSA      Grain Inspection, Packers, and Stockyards Administration
         GAO        General Accounting Office
         GATT       General Agreement on Tariffs and Trade
         HHS        Department of Health and Human Services
         ICC        Interstate Commerce Commission
         IRS        Internal Revenue Service
         LUST       Leaking Underground Storage Tank
         MARAD      Maritime Administration
         NMFS       National Marine Fisheries Service
         NOAA       National Oceanic and Atmospheric Administration
         NVOCC      Non-Vessel-Operating Common Carrier
         PCC        Panama Canal Commission
         SLSDC      Saint Lawrence Seaway Development Corporation
         STB        Surface Transportation Board
         USPHS      U.S. Public Health Service


         Page 17                 GAO/RCED-99-260 Federal Assessments on Maritime Industry
Appendix I

Highlighted Changes Regarding the Number
of Federal Assessments Levied on
Commercial Maritime Industry by Agency,
Fiscal Year 1992 Versus Fiscal 1999
                                            Number of assessments deleted    Assessments that remained,
                                            and imposed from 1992 through      number of assessments
                             1992                       1999                         changed                        1999
Agency                              Total             New         Deleted      No Change            Change                 Total
Animal, Plant, and Health
Inspection Service; U.S.
Department of Agriculture              3                 0              0                0                3                   3
Centers for Disease
Control and Prevention;
Department of Health and
Human Services                         1a                0              0                0                0                   1
Coast Guard; Department
of Transportation                     11a              19b              5c               2                3                  25
Customs Service;
Department of the Treasury            14                 0              1d               9                4                  13
Federal Communication
Commission                             7                 2              1                0                6                   8
Federal Maritime
Commission                            13               27e             18f               0                7                  22
Grain Inspection, Packers,
and Stockyards
Administration; U.S.
Department of Agriculture              1                 0              0                0                1                   1
Internal Revenue Service;
Department of the Treasury             5                 0              2                2                1                   3
Interstate Commerce
Commissiong                           18                 0             18                0                0                   0
Maritime Administration;
Department of
Transportation                        10                 1              3                3                4                   8
National Marine Fisheries
Service; National Oceanic
and Atmospheric
Administration;
Department of Commerce                18               10h              5i               0               13                  23
Panama Canal
Commission                            17                 0              0               15                2                  17
Saint Lawrence Seaway
Development Corporation;
Department of
Transportationj                        1                 0              1                0                0                   0

                                                                                                      (Table notes on next page)




                                            Page 18                  GAO/RCED-99-260 Federal Assessments on Maritime Industry
Appendix I
Highlighted Changes Regarding the Number
of Federal Assessments Levied on
Commercial Maritime Industry by Agency,
Fiscal Year 1992 Versus Fiscal 1999




a
 One assessment was not included in previous report. Changes cannot be detected, since
assessment was not included in previous report.
b
 Sixteen new assessments, 1 new assessment resulting from consolidation, 2 new assessments
resulting from dividing.
c
 One assessment deleted, three assessments deleted because of consolidation, and one
assessment deleted because of dividing.
d
    Assessment consolidated into existing assessment.
e
 Twenty-two new assessments, 4 new assessments resulting from dividing, and 1 new
assessment resulting from consolidation.
f
 Fifteen assessments deleted, 2 assessments deleted resulting from consolidation, and 1
assessment deleted because of dividing.
g
    Agency no longer exists.
h
    Nine new assessments and one new assessment resulting from consolidation.
I
    Three assessments deleted and two assessments deleted because of consolidation.
j
    Agency no longer levies assessment.




Page 19                            GAO/RCED-99-260 Federal Assessments on Maritime Industry
Appendix II

Deleted Assessments, Fiscal Years 1992-99



Table II.1: Assessments That Existed in Fiscal Year 1992 and That Have Been Deleted
Levied by                                                  Assessment
Coast Guard; Department of Transportation                Change of documented vessel name application fee
Customs Service; Department of the Treasury              Tariff for foreign vessel repairs to U.S. vessels
Federal Communications Commission                        Temporary waiver of a radio inspection application fee
Federal Maritime Commission                              ATFI certification of batch filing capability fee
                                                         ATFI user manual fee
                                                         ATFI user registration fee
Internal Revenue Service; Department of the Treasury     Tax on Petroleum: Hazardous substance superfund tax
                                                         Tax on Petroleum: Oil spill liability tax
Interstate Commerce Commission                           Approval of a transfer of operating or exemption authority application fee
                                                         Approval of a water carrier rate association agreement application fee
                                                         Approval of an amendment to a water carrier rate association agreement
                                                         application fee
                                                         Approval of the purchase, lease, consolidation, merger, or acquisition of
                                                         control of a water carrier or carriers application fee
                                                         Authority to establish a released value rate application fee
                                                         Interstate Commerce Commission: Special docket application fee
                                                         Interstate Commerce Commission: Special permission application fee
                                                         Informal opinion about a rate application filing fee
                                                         Joint petition to substitute an applicant in a pending operating rights
                                                         proceeding filing fee
                                                         Notice or petition to discontinue ferry service filing fee
                                                         Petition for declaratory order filing fee
                                                         Petition to interpret or clarify an operating authority filing fee
                                                         Request for minor modifications of an operating authority filing fee
                                                         Request for water carrier name change filing fee
                                                         Tariff filing fee
                                                         Temporary authority to operate a water carrier application fee
                                                         Water carrier operating or exemption authority application fee
                                                         Water carrier temporary authority application fee
Maritime Administration; Department of Transportation    Approval as trustee application fee
                                                         Sale of subsidized vessels application fee
                                                         Trustee’s supplemental certification fee
                                                                                                                              (continued)




                                              Page 20                    GAO/RCED-99-260 Federal Assessments on Maritime Industry
                                             Appendix II
                                             Deleted Assessments, Fiscal Years 1992-99




Levied by                                                      Assessment
National Marine Fisheries Services, National Oceanic and       Allowable octocoral permit application fee
Atmospheric Administration; Department of Commerce
                                                               Fishing vessel and gear damage compensation fund application fee
                                                               Fishing vessel and gear damage compensation fund approval fee
Saint Lawrence Seaway Development Corporation;                 St. Lawrence Seaway tariff of tolls
Department of Transportation

                                             Legend

                                             ATFI = Automated Tariff Filing Information



Table II.2: Assessments That Were
Implemented After Fiscal Year 1992           Levied by                                         Assessment
but Have Since Been Deleted                  Federal Maritime Commission                       ATFI Guide A: Fundamental guide and
                                                                                               systems handbook–package A
                                                                                               ATFI Guide B: Tariff retrieval
                                                                                               guide–package B
                                                                                               ATFI Guide C: Tariff filing guide–package
                                                                                               C
                                                                                               ATFI Guide D: Tariff filing guides–package
                                                                                               D (includes A, B, and C)
                                                                                               Conditions unfavorable to shipping in the
                                                                                               U.S./Japan trade
                                                                                               Daily subscriber data updates (on-tape) fee
                                                                                               Daily subscriber data updates (on-line) fee
                                                                                               Filing essential terms
                                                                                               Miscellaneous tapes fee
                                                                                               Regulated persons index
                                                                                               Tariff filing fee
                                                                                               Tariff retrieval fee
                                             Legend

                                             ATFI = Automated Tariff Filing and Information System




                                             Page 21                          GAO/RCED-99-260 Federal Assessments on Maritime Industry
Appendix III

Objectives, Scope, and Methodology


               We determined which federal agencies levy assessments on the
               commercial maritime industry by interviewing officials from the Office of
               Management and Budget, Congressional Budget Office, Congressional
               Research Service, U.S. Army Corps of Engineers, and various industry
               representatives. On the basis of this determination, we contacted 11
               federal agencies to update the information in our 1993 report, which
               covered fiscal years 1989-91 and estimates for fiscal 1992. We provided
               each of these agencies with a copy of our 1993 report and asked them to
               provide information on the (1) assessments that are no longer in effect,
               (2) assessments with no changes, (3) changes to the information on the
               assessments included in our 1993 report, (4) new assessments, and
               (5) proposed assessments. We also asked for updated information on
               collection amounts for fiscal years 1996-98 and an estimate for fiscal 1999.
               We verified the accuracy of the rules and legislation of each assessment;
               however, we did not verify the accuracy of the rest of the information
               provided by agencies. Other federal agencies, such as the U.S. Army Corps
               of Engineers, were contacted to provide supplemental information
               regarding federal assessments levied on the commercial maritime
               industry.

               For a federal agency and its assessments to be included in this report, the
               federal agency must currently levy at least one assessment that is specific
               to the commercial maritime industry. We considered an assessment to be
               specific to the commercial maritime industry if the assessment is levied
               only on vessels and not on other modes of transportation. Once these
               agencies were identified, we collected information on all the assessments
               levied by that agency whether specific to the commercial maritime
               industry or not. We excluded assessments levied on recreational vessels
               and assessments levied by other countries, state and local municipalities,
               and port authorities. We also excluded indirect assessments, such as fines,
               penalties, and insurance premiums. Finally, we excluded incidental fees,
               such as photocopying.

               To obtain information on the Harbor Maintenance Trust Fund, we
               gathered historical, current, and forecasted information regarding the
               Harbor Maintenance Tax and the Harbor Maintenance Trust Fund. For
               historical information, we used data provided in the report entitled Annual
               Report to Congress on the Status of the Harbor Maintenance Trust Fund
               for FY 1997. For current and forecasted information, we spoke with
               officials from the U.S. Army Corps of Engineers and used information
               from the Budget of the United States Government, FY 2000 regarding user
               fees. The U.S. Army Corps of Engineers also provided us with estimates of



               Page 22                  GAO/RCED-99-260 Federal Assessments on Maritime Industry
Appendix III
Objectives, Scope, and Methodology




forecasted revenues regarding the Harbor Maintenance Tax and the
Harbor Maintenance Trust Fund, from fiscal year 1999 through fiscal 2004.




Page 23                      GAO/RCED-99-260 Federal Assessments on Maritime Industry
Appendix IV

GAO Contacts and Staff Acknowledgments


                  John H. Anderson, Jr. (202) 512-2834
GAO Contacts      Randall B. Williamson (206) 287-4860


                  In addition to those named above, Anne A. Cangi, Steven R. Gazda, David
Acknowledgments   K. Hooper, and Stanley G. Stenerson made key contributions to this report.




(348162)          Page 24                 GAO/RCED-99-260 Federal Assessments on Maritime Industry
Ordering Information

The first copy of each GAO report and testimony is free.
Additional copies are $2 each. Orders should be sent to the
following address, accompanied by a check or money order
made out to the Superintendent of Documents, when
necessary. VISA and MasterCard credit cards are accepted, also.
Orders for 100 or more copies to be mailed to a single address
are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office
P.O. Box 37050
Washington, DC 20013

or visit:

Room 1100
700 4th St. NW (corner of 4th and G Sts. NW)
U.S. General Accounting Office
Washington, DC

Orders may also be placed by calling (202) 512-6000
or by using fax number (202) 512-6061, or TDD (202) 512-2537.

Each day, GAO issues a list of newly available reports and
testimony. To receive facsimile copies of the daily list or any
list from the past 30 days, please call (202) 512-6000 using a
touchtone phone. A recorded menu will provide information on
how to obtain these lists.

For information on how to access GAO reports on the INTERNET,
send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov




PRINTED ON    RECYCLED PAPER
United States                       Bulk Rate
General Accounting Office      Postage & Fees Paid
Washington, D.C. 20548-0001           GAO
                                 Permit No. G100
Official Business
Penalty for Private Use $300

Address Correction Requested