Commercial Maritime Industry

Updated Information on Federal Assessments Gao ID: T-RCED-00-36 November 3, 1999

This testimony discusses federal assessments, user fees, taxes, and other charges levied on the commercial maritime industry. The information presented is drawn from an earlier GAO report. (See GAO/RCED-99-260, Sept. 1999.) One of the assessments is the Harbor Maintenance Tax, whose revenues fund virtually all maintenance dredging of U.S. ports. GAO provides information on (1) the federal agencies that levied assessments in fiscal year 1998 compared with fiscal year 1991, the number of assessments levied, and the amounts that they collected; (2) who pays the assessments and in which funds they were deposited in fiscal years 1991 through 1998; and (3) new federal assessments that have been recently proposed. GAO also discusses the status of the Harbor Maintenance Trust Fund and its projected annual balances.

GAO noted that: (1) 11 different federal agencies levy 124 different assessments on the commercial maritime industry; (2) these assessments include fees such as customs duties, ship registry fees, commercial fishing fees, and inspection charges; (3) in FY 1998, these assessments totalled nearly $22 billion compared to over $18 billion in FY 1991; (4) the Customs Service collected by far the largest portion--almost $21 billion; (5) shippers pay the largest portion of the assessments, more than $20 billion of the total $22 billion; (6) vessel owners and operators paid about $1 billion, and various other parties paid the rest; (7) from FY 1991 through FY 1998, the amounts paid by shippers increased by 17 percent, while the amounts paid by owners and operators increased by 46 percent; (8) most of the money collected is not earmarked for specific purposes; (9) about $20 billion of the total revenues generated in FY 1998 was deposited directly into the General Fund of the U.S. Treasury; (10) another $995 million was used to reimburse agencies or private service providers for the services they provided; (11) the remaining $762 million was deposited into three federal trust funds to be appropriated in future years to agencies for designated services; (12) two federal assessments have been proposed; (13) the administration is proposing a Harbor Services User fee as a replacement for the existing Harbor Maintenance Tax; (14) unlike the Harbor Maintenance Tax, which is paid by the shippers, foreign trade zone users, or operators of the vessel, only vessel operators would pay the proposed fee; (15) another proposal by the National Oceanic and Atmospheric Administration would establish a fee for granting permits for fishing in federally managed fisheries; (16) at the end of FY 1998, the Harbor Maintenance Trust Fund had a balance of $1.3 billion; and (17) the balance is projected by the U.S. Army Corps of Engineers to increase to $2.5 billion in FY 2004.

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