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Brownwater News, January 2018

Jan 18, 2018 10:24 AM

Ports group pleased with new tax reform law

A spokesman for the American Association of Port Authorities, which has fought tax proposals that it deems would be harmful to its members, said the AAPA achieved "a successful outcome” with tax reform legislation passed by Congress in December and signed by President Trump.

Aaron Ellis, public affairs director for the AAPA, said the group’s efforts will result in maintaining the tax-free status of private activity bonds (PABs), which are critical for building port infrastructure. PABs are also key for maintaining the current tax status of foreign cruise ships’ American business, he said, and for maintaining existing tax credits to encourage wind energy development in the United States, which will result in a continuation of the movement of related components through ports.

While AAPA is pleased with its success, Ellis said it still "would have liked advance refunding for municipal bonds to continue tax-free in the final bill." He said the group also would have liked to see the full repeal of the alternative minimum tax — it was repealed for corporations, but not for individuals — since it “impacts the cost of private activity bonds.”

Kurt Nagle, president and CEO of AAPA, said ports would have had to pay about $19 million in extra debt-service costs for every $100 million borrowed had the PAB tax exemption been lost.

“These significantly increased costs would have harmed ports’ ability to make needed investments, and likely would have delayed or even killed some projects,” Nagle said.

AAPA also expressed appreciation to Senate leadership for dropping a provision in their version of the bill that would have placed a new tax on international cruise lines that call at U.S. ports.

FMC open to more comments on port practices

The Federal Maritime Commission (FMC) has announced that it is accepting written comments and statements until Jan. 26 concerning the petition for rulemaking filed by the Coalition for Fair Port Practices. Hearings on the petition were held Jan. 16-17.

In a notice announcing the public hearings, the commission said the petition arose from experiences of coalition members — importers, exporters, drayage providers, freight forwarders, custom brokers and third-party logistics providers — with port congestion that ultimately led to ocean carrier and terminal operator assessments of detention demurrage and per-diem charges.

In December 2016, the commission asked interested parties to submit views or arguments in reply to the petition. The FMC received 115 responses, including comments from members of Congress and trade and shipper associations.

“The many responses to the petition illustrate the complexity of issues surrounding ocean container shipping and marine terminal operations,” the commission said.

US ports eye $66 billion in infrastructure investments

William Friedman, president and CEO of the Port of Cleveland, testified Jan. 10 on America’s water infrastructure needs and challenges. Appearing before the Senate Environment and Public Works Committee, Friedman and other witnesses offered testimony designed to help Congress understand some of the critical infrastructure issues faced by America’s public ports.

Friedman also shared three key port recommendations for the next Water Resources Development Act (WRDA) bill. The recommendations from the American Association of Port Authorities (AAPA) would have future Harbor Maintenance Tax revenue go directly to the U.S. Army Corps of Engineers instead of into the General Fund; have Congress authorize navigation project improvements recommended in the Corps’ Chief of Engineers’ reports; and have more streamlining implemented in the Corps’ study process for navigation channel improvements.

Kurt Nagle, president and CEO of AAPA, said the association has worked with its member ports to identify $66 billion in federal port-related infrastructure investments over the next 10 years, both on the water and shoreside.

“Our testimony before the Senate EPW Committee is a way to draw further attention to the value that ports provide and to stress that efficient waterside and landside connections to ports must be a top priority in any broad federal infrastructure package that we’re optimistic will be advanced this year,” he said.

Shuster, head of House transportation panel, plans to retire

Rep. Bill Shuster, R-Pa., the powerful chairman of the House Transportation and Infrastructure Committee, has announced that he will not run for re-election. Shuster’s father, Bud, had held the House seat and also chaired the transportation panel prior to retiring in 2001.

As committee chairman, Shuster is expected to play a major role in drafting legislation to implement President Trump’s infrastructure plan. Shuster met in December with the president at the White House. The administration was expected to release a detailed set of infrastructure principles by mid-January.

“As we look to the legislative agenda this year and work with President Trump to upgrade our nation’s infrastructure and improve the lives of the American people, I know that Bill will continue to be an important leader,” said House Majority Leader Kevin McCarthy, R-Calif.

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