Funding and Managing The U.S. Inland Waterways System: What Policy Makers Need To Know: What Policy Makers Need To Know

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7/18/23, 11:10 PM 3 Federal Role in the Inland Waterways System | Funding and Managing the U.S. Inland Waterways System: What Policy Maker…
Funding and Managing the U.S. Inland Waterways System: What Po…
Funding and Managing the U.S. Inland Waterways System: What Policy
Makers Need to Know: What Policy Makers Need to Know (2015)
MyNAP members saveTRB Special Report 315: Funding and Managing the U.S.
Chapter: 3 Federal Role
10%inonline. Inland Waterways System: What Policy Makers Need to
the Inland Waterways System
Know explores the role and importance of the
Login or Register to federally funded inland waterways system, priorities
save! for future investment, its beneficiaries, and sources of
Visit NAP.edu/10766 to get more information about this book, to buy it in print, or to download it as a free PDF.
funding.
Download Free PDF In recent years, the inland waterways system has
transported six to seven percent of all domestic ton-
miles of cargo. The system is a small but important
3 component of the national freight system, particularly
for bulk commodities. The study committee finds that,
in order to ensure efficient use of limited navigation
resources, the most critical need for the inland
waterways system is a sustainable and well-executed
Federal Role in the Inland Waterways System
plan for maintaining system reliability and
performance. Reliability and performance will depend
The inland waterways infrastructure isonmanaged bypriority
placing higher the U.S. Army Corps
on investments in of
Engineers (USACE) and funded from the operations
USACE and maintenance
budget. The(O&M).
first Without
section a
funding strategy that prioritizes system preservation,
below describes USACE missions and activities,
maintenance a maymajor component
continue to be deferred,ofwhich
would resultinland
which is providing for commercially navigable in furtherwaterways.
deterioration and
Thein anext
less cost
effective and less reliable system.
section gives an overview of the authorization, planning, and budgeting
process for the inland waterways system The and
committee
howfinds that moreis
spending reliance on a “user-
prioritized.
pays” funding strategy for the commercial navigation
Recent trends in funding levels for thesystem
inland waterways
is feasible, system
would generate and
new whofor
revenues
pays for the system according to the cost-sharing
maintenance, andrules wouldspecified in cur-
promote economic
efficiency.
rent federal legislation are discussed. The greater involvement of the fed-
eral government in the inland waterways relativesuggests
The committee to other thatmodes is de-
an asset management
program focused on economic efficiency, fully
scribed. Considerations with regard toimplemented
the federal role in funding the in-
and linked to the budgeting process,
land waterways are explained, including reasons
would and mechanisms
help prioritize for as-
maintenance spending and
ascertain the funding levels required for reliable
sessing payments from those who benefit from the system. The final sec-
freight service.
tion summarizes findings and conclusions from the chapter.
View the TRB Special Report 315 webcast.
USACE Missions and Activities View the press release.
With the authorization of Congress, USACE, under its Civil Works

Program headed by the Assistant Secretary for Civil Works, plans, con-
structs, operates, and maintains a large water resources infrastructure
that includes locks and dams for inland navigation; maintenance of harbor
channel depths; dams, levees, and coastal barriers for flood risk manage-
https://nap.nationalacademies.org/read/21763/chapter/5#67 1/44
×
ment; hydropower generation facilities; and recreation. The primary

Funding
USACEandCivil
Managing the U.S.areas
Works mission Inland Waterways
are support ofSystem: What
navigation forPo…
freight
transportation and public safety; reduction of flood and storm damage;
and protection and restoration of aquatic ecosystems,
MyNAP members save TRB Special Report 315: Funding and Managing the U.S.
10% online. Inland Waterways System: What Policy Makers Need to
save!
such as the rebuilding of wetlands andfor thefuture investment, its beneficiaries, and sources of
performance of environmental
funding.
mitigation for USACE facilities. Hydropower generation is an important
Download Free
activity of USACE, although it hasPDF In recent years, the inland waterways system has
not been considered a primary mission.
Other USACE responsibilities include recreation, maintenance
miles of cargo. The system is a smallofbut water
important
supply infrastructure (municipal watercomponent of the national
and wastewater freight system,
facilitates), andparticularly
disaster relief and remediation beyondinflood disaster
order to reliefuse
ensure efficient (e.g., remedia-
of limited navigation
tion of formerly used nuclear sites). Some resources, the most criticalprojects
infrastructure need for the inland
are au-
thorized as multiple-use projects for navigation and other
plan for maintaining purposes
system reliability and (e.g.,
hydropower, municipal water supply, recreation), with the
performance. Reliability andcosts beingwillallo-
performance depend
on placing higher priority on investments in
cated among the various users, but most projects
operations are authorized
and maintenance for a sin-
(O&M). Without a
gle purpose. Navigation projects are authorized,
funding strategyandthatthe federal
prioritizes share
system of
preservation,
costs paid, with funds from the USACEmaintenance
navigation may continue to be deferred, which
budget. Hence, with the
would result in further deterioration and in a less cost
exception of a few multipurpose projects, USACE’s
effective and less navigation
reliable system. mission, its
costs, and its benefits are separable from USACE’s other missions.
The committee finds that more reliance on a “user-
Overview of the USACE Water Resources Authorization,
system Planning,
is feasible, would generate and for
new revenues
Budgeting Process maintenance, and would promote economic
efficiency.
CAPITAL PROJECTS: NEW CONSTRUCTION AND suggests

The committee MAJORthat an asset management
REHABILITATION program focused on economic efficiency, fully
implemented and linked to the budgeting process,
would help prioritize maintenance spending and
The inland waterways system is both part of athelarger
ascertain fundingnational freight
levels required for reliable
freight service.
transportation system and part of the nation’s watershed system (system
of rivers and canals). This dual role complicates
View the TRB decisions
Special Reportabout manage-
315 webcast.
ment and funding of the inland waterways. Whereas some federal agen-
View the press release.
cies have broad authorities, Congress authorizes each capital investment
for capacity expansion, facility replacement, or major rehabilitation of
USACE water infrastructure projects. A construction project generally
originates with a request to a congressional office from communities,
businesses or other organizations, and state and local governments for
federal assistance.1 Since 1974, the process for authorizing federal water
×
resources projects, including infrastructure for freight transportation, has

Funding
beenand Managingbill
the omnibus thetypically
U.S. Inland Waterways System: What Po…
________________
At this earlyMyNAP
stage,members save
1 TRB Special Report 315: Funding and Managing the U.S.
USACE typically engages in an advisory role to answer
Inland Waterways System: What Policy Makers Need to
10% online.
technical questions or to assess the levelKnowofexplores
interest in possible
the role projects
and importance of the
and the support
save!of nonfederal entities for
(state, tribal, county, or local agen-
future investment, its beneficiaries, and sources of
cies and governments) that may become sponsors.
funding.
component of the national freight system, particularly
called the Water Resources Development for bulk (WRDA).2The
Actcommodities. Onstudy
thecommittee
basis offinds
thisthat,
legislation, Congress authorizes individual capital
resources, projects
the most andfornumerous
critical need the inland
other USACE activities and provides policy direction in areas suchwell-executed
waterways system is a sustainable and as
project delivery, revenue generation, and cost-sharing
performance. Reliabilityrequirements.
and performance will depend
Benefit–cost analysis is the primary criterion used in selecting
on placing higher priority capital
on investments in ex-
operations and maintenance (O&M). Without a
penditures projects for funding. Projects that pass a minimum threshold
for determining that the benefit exceeds the costmay
maintenance are eligible
continue to befor congres-
deferred, which
sional authorization and funding. would result in further deterioration and in a less cost
Two types of congressional authorizations are required

The committee finds thatfor
morea reliance
construction
on a “user-
project—one for investigation and onesystem
for project implementation.3 First,
is feasible, would generate new revenues for
authority is provided for a feasibility study in which
maintenance, the local
and would USACE
promote dis-
economic
efficiency.
trict investigates engineering feasibility, formulates alternative plans, con-
ducts benefit–cost analysis, and assessesThe environmental impacts
committee suggests that an assetunder the
management
National Environmental Policy Act.4 The study results
implemented are
and linked conveyed
to the budgetingto
process,
Congress through a Chief of EngineerswouldReport (Chief’smaintenance
help prioritize Report) that con-
spending and
tains either a favorable or an unfavorable recommendation for each
freight service.
project. Study results also are submitted to the executive office of the
Office of Management and Budget (OMB), which applies its own fiscal,
benefit–cost, and other criteria to assess
Viewwhether projects warrant fund-
the press release.
ing according to executive branch objectives. Congress considers USACE
study results, recommendations of OMB, and other factors in choosing
projects to authorize. Thus, both the projects selected for initial study and
the project authorizations are at the discretion of Congress.5
×
After Congress authorizes a project, it becomes eligible to receive imple-

Funding and Managing
mentation the
funding in U.S. Inland
annual EnergyWaterways
and Water System:
Development Whatappropria-
Po…
tions acts. The appropriations process begins with the submission of the
annual President’s budget. To be included in the President’s budget, autho-
rized projectsMyNAP
must members
competesave
within the overall
TRB Special Report 315: Funding and Managing the U.S.
________________ Know explores the role and importance of the
2 The 2014 authorizing legislation is titled the Water Resources Reform
funding.
and Development Act (WRRDA).
3 If the geographic area was investigated
milesinofprevious studies,
cargo. The system thebut
is a small study
important
may be authorized by a resolution of either the House Transportation and
Infrastructure Committee or the Senate Environment
in order anduse
to ensure efficient Public Works
Committee. resources, the most critical need for the inland
4 According to WRRDA 2014, at any point during Reliability
performance. a feasibility study, the
Secretary of the Army may terminate the study when it is clear that a
project in the public interest is not possible
funding for technical,
strategy legal,
that prioritizes or preservation,
system finan-
cial reasons. maintenance may continue to be deferred, which
5 After a project is authorized, modifications beyond a certain cost and
scope require additional congressionalpays”
authorization.
funding strategy for the commercial navigation
system is feasible, would generate new revenues for
maintenance, and would promote economic
efficiency.
The committee suggests that an asset management

USACE program ceiling not only for initial
program funding but
focused on also for
economic continued
efficiency, fully
implemented and linked to the budgeting
annual funding throughout the project’s life cycle. Once Congress receives process,
the President’s budget request, it is “marked
ascertainup” by thelevels
the funding House andforSenate
required reliable
Appropriations Committees, where project funding levels are adjusted in
freight service.
response to congressional priorities. Even if an
View the TRB authorized project
Special Report 315 webcast.has re-
ceived initial construction funding, there is no assurance that it will re-
ceive sufficient appropriations each year to provide for an efficient con-
struction schedule. The actual funding for the project over its life cycle
may be much less suitable.
A previous National Research Council (NRC) report (2012) encouraged less

reliance on WRDA as the main vehicle for authorizing projects for USACE
×
infrastructure. The traditional focus on WRDA for authorizing large new

construction theinU.S.
projects InlandisWaterways
particular less relevant System: What Po…
to a system that is
mostly “built out” and for which the main concern is a sustainable source
of funding for ongoing operations and maintenance (O&M) and major
repairs. MyNAP members save TRB Special Report 315: Funding and Managing the U.S.
Although WRDA Know
for explores
freightthe role and importance of the
the
Logindrives capital
or Register to funding federally transportation on
funded inland waterways system, priorities
inland waterways,
save! it is largely disconnected
for futurefrom federal
investment, legislative
its beneficiaries, pro-
and sources of
funding.
cesses and efforts related to other freight modes. Similarly, the goal of the
USACE planning processDownloadis to determine
Free whether
PDF In recent a navigation
years, the inland waterways project
system hasis
eligible for funding, not to assess whether transported six to seven
the project percent
will of allmost
be the domesticef-ton-
ficient option for meeting national freight transportation
component needssystem,
of the national freight and particularly
eco-
nomic interests given the availability of forother modes. (The
bulk commodities. benefit–cost
The study committee finds that,
analyses required for the authorizationin order to ensure efficient use of limited navigation
of navigation projects must con-
sider other modes to a degree, as described waterwayslater
systemin isthis chapter.)
a sustainable andThe in-
well-executed
land waterways system is not unique inplan for regard;
this maintainingasystem reliability
national and sys-
freight
tem perspective on the efficiency of the onnation’s freight
placing higher prioritynetwork
on investmentsis gener-
in
ally lacking, and no mechanism exists for operations and maintenance
prioritizing spending (O&M). Without a
across
modes. maintenance may continue to be deferred, which
OPERATIONS AND MAINTENANCE effective and less reliable system.

O&M projects can be authorized underpays”
WRDA, funding but it has
strategy for not often been
the commercial navigation
used for this purpose (see NRC 2012, Table 2-2, for exceptions in WRDA for
system is feasible, would generate new revenues
2007). USACE headquarters sets priorities for O&M
efficiency.

investments as part of the budgeting process onfunding
ascertain the the basis
levels of information
required for reliable
freight service.
gathered from USACE districts and divisions. Eight USACE divisions coor-
dinate projects and budgets in 38 district
View offices across
the TRB Special the315
Report United
webcast.States.
Districts develop plans, priorities, and rankings for investigations, con-
struction, and O&M and submit them to USACE divisions. Divisions priori-
tize projects across their districts and provide divisionwide rankings of
projects to USACE headquarters. USACE headquarters considers division
priorities and rankings, administration budget priorities, and other factors
in ranking requests.6 The number of projects funded each year depends on
the annual budget appropriation by Congress.
×
The local assessment of assets and maintenance needs follows general

guidelines, but it hasthe
manyU.S.local
Inland Waterways
variations. System: What
For example, Po…may de-
districts
velop their own asset management systems for assessing and communi-
cating the condition of infrastructure and level of service being provided
for navigation and O&M
MyNAP membersand save
repair needs. According
TRB Special Report 315:toFunding
a pastandNRC report,
Managing the U.S.
with respect 10%
to water
online.resources funding, Inland Waterwaysthe
“neither System: What Policynor
Congress Makers
theNeed to
Login
administration or Register
provides clearto guiding principles and
federally funded concepts
inland waterwaysthat the
system, priorities
save!
USACE might use in prioritizing OMR for future investment,
[operations, its beneficiaries,and
maintenance, and sources
re- of
funding.
pair] needs and investments” (NRC 2012, 11). Full benefit–cost analysis is
Download Free
applied only to construction andPDF
not toIn O&M,
recent years, the inland waterways system has
7 which is appropriate given
the costs of conducting benefit–cost analysis relative
miles of cargo. to the
The system costbut
is a small ofimportant
O&M
component
projects. USACE is developing an approach of the national
to asset managementfreight system,
thatparticularly
could be applied systemwide to improve identification
in order anduse
to ensure efficient prioritization
resources, the
of maintenance and repair needs and spending mostChapter
(see critical need4).for the inland
DISTINCTIONS AMONG O&M, MAJOR performance.
REHABILITATION, Reliability andAND
performance will depend
CONSTRUCTION on placing higher priority on investments in
USACE separates projects labeled as “major rehabilitation” from its O&M
maintenance may continue to be deferred, which
budget. Major rehabilitation projects meet
would the
resultfollowing criteria and in a less cost
in further deterioration
________________
6 The USACE budget submitted as partsystem
of the President’s
is feasible, budgetnew
would generate request
revenuesis for
not commensurate with all local requests given the lack of available funds
efficiency.
and competing priorities within and across USACE programs (e.g., hy-
dropower, recreation). program focused on economic efficiency, fully
7As discussed in the next section and Chapter 4, rehabilitation
would help prioritize maintenance projects
spending and of
more than $20 million are classified arbitrarily as a capital cost.
freight service.
established in a series of Water Resources Development Acts from 1986 to

2014.8
Requires approval by the Secretary of the Army and construction is

funded out of the Construction General Civil Works appropriation for
×
USACE.
Includes the U.S.justified
economically Inland Waterways
structural work System: What Po… of a
for restoration
major project feature that extends the life of the feature significantly
or enhances operational efficiency.
RequiresMyNAP
a minimum
members of save
2 fiscal years to complete.
TRB Special Report 315: Funding and Managing the U.S.
Costs more
10% than Inland Waterways
online.$20 million in capital outlaysSystem: What Policy Makers
for reliability Need to
improve-
Login oror
ment projects Register
more to
than $2 million
federallyinfunded
capital outlays
inland waterwaysfor efficiency
system, priorities
save!
improvement projects. These thresholdsfor future investment,
are adjusted its beneficiaries,
annuallyand bysources
reg- of
funding.
ulation and are subject to negotiation.
Major rehabilitation projects are treated transported
as capitalsix toprojects
seven percentforofnew
all domestic
con-ton-
struction in the budgeting process instead of being
component considered
of the national an expense
freight system, particularly
of maintaining the system. The decision forto
bulkclassify major
commodities. rehabilitations
The study committee findsasthat,
9
a capital expenditure instead of as an O&M expense
resources, the mostiscritical
arbitrary.
need for the inland
Funding for the Inland Waterways Navigation Systemsystem reliability and
plan for maintaining
COST-SHARING RULES operations and maintenance (O&M). Without a
Before 1978, the inland navigation system was funded
maintenance almost
may continue to beentirely
deferred, which
through general revenues collected fromwould result in further
taxpayers. deterioration
Congress and in a less cost
transformed
funding for the inland waterways by passing two pieces of legislation: the
Inland Waterways Revenue Act of 1978 The andcommittee finds that
the Water more reliance on a “user-
Resources
Development Act of 1986, which created theisfunding
system framework
feasible, would followed
generate new revenues for
today. This legislation established a taxmaintenance,
on diesel andfuelwould
for promote economicves-
commercial
efficiency.
sels paid by the barge industry and an Inland
________________ program focused on economic efficiency, fully
8 The $8 million ceiling for O&M was set in WRDA 1986 (P.L. 99-662).
WRDA 1992 (P.L. 102-580) established afreight service. definition for “rehabilita-
statutory
tion” of inland waterways projects. WRRDAView the2014 (P.L. 113-121)
TRB Special Report 315increased
webcast. the
ceiling from $8 million to $20 million for rehabilitation projects that can
still be considered O&M. (With the escalation that accompanied the $8
million ceiling set in WRDA 1986, the ceiling for federal spending on reha-
bilitation projects was already at $16.5 million by 2014.)
9The Federal Highway Administration, for example, more clearly distin-

guishes between projects for maintenance and capital projects that signif-
×
icantly alter the function or expand the physical capacity of an asset.

Waterways Trust
MyNAP Fund (IWTF)
members to pay for
save TRBconstruction
Special Report 315:with
Fundingfuel tax rev-the U.S.
and Managing
enues. It also10% online. the nonfederalInland
increased
Waterways System: What Policy Makers Need to
cost-sharing requirements for in-
Login or Register to
land navigation construction projects.10 federally funded inland waterways system, priorities
funding.
The required cost share depends on whether the navigation project is clas-
Download
sified as a capital cost Free PDF
or as O&M. In recent years, the inland
For single-purpose waterways system
navigation projects has
and multiple-purpose projects assigned to ofthe
miles navigation
cargo. The system isbudget, the
a small but fed-
important
eral government pays 100 percent of O&M costs,
component 50national
of the percent of system,
freight capital particularly
costs (including capacity expansion, replacement, and major rehabilita-
tion), and 100 percent of rehabilitationresources,
costs up theto $20
most million
critical (costs
need for for a
the inland
waterways system is a sustainable
single repair or set of repairs that exceed this amount are considered ma- and well-executed
jor rehabilitation and a capital cost). The waivingReliability
performance. or adjustment of cost-
on placing higher priority on investments
sharing requirements for individual projects is infrequent and typically re- in
quires authorization by Congress. funding strategy that prioritizes system preservation,
would result
The federal share for commercial navigation in further
is paid viadeterioration and in a less cost
general revenues.
The commercial users’ share is paid for with a diesel fuel tax per gallon via
The committee
the IWTF; the tax is collected by the Internal finds that
Revenue more reliance
Service. The on a “user-
fuel tax
was initially set at $0.04 per gallon andsystem
is not indexed
is feasible, togenerate
would inflation. In 1986for
new revenues
legislation, the tax was set to rise to itsmaintenance,
current level of $0.20
and would promoteper gallon,
economic
efficiency.
where it has remained until 2014, when the 113th Congress approved an in-
crease in the barge fuel tax to $0.29 per Thegallon.
committee suggests that an asset management
In contrast to the cost share for navigation, the O&M costs for nonnaviga-
tion projects are paid for partly by sponsors.
ascertain The federal
the funding share
levels depends
required on
for reliable
freight service.
the type of water resource project (see Table 3-1). For many project types
(e.g., levees), the nonfederal sponsor is View
responsible forReport
the TRB Special O&M315once con-
webcast.
struction is complete. Furthermore, inland waterways feasibility studies to
determine the eligibility of a navigation project
________________
10
The IWTF does not apply to ports and harbors. A separate Harbor
Maintenance Trust Fund (HMTF) was established in 1986. The HMTF is
×
designated only for O&M of federally authorized channels for commercial

navigation the U.S.
in deep draft Inland
harbors andWaterways
shallow draft System: What that
waterways Po…are not
subject to the IWTF fuel tax (Frittelli 2013). The HMTF is based on a 0.125
percent ad valorem tax imposed on imports, domestic shipments, and
cruise line passenger tickets save
MyNAP members at designated ports
TRB Special (collected
Report byand
315: Funding U.S.
Managing the U.S.
Customs). Major
10% port Inland Waterways
construction traditionally
online. hasSystem:
beenWhat Policy Makers
financed with Need to
Login cash
existing reserves, or Register
from to
operations, government
federally funded inlandgrants, and
waterways loans.
system, priorities
save!
Often port districts are set up to operatefor future investment,
the port and its beneficiaries,
borrow from andcapital
sources of
funding.
markets, with bonds being paid off via user fees or property taxes. More
recently, ports haveDownload Free PDF joint
begun examining In recent years, thefinancing,
venture inland waterways system has
in which
their customers assume most of the debt milesassociated with isa acapital
of cargo. The system small butproject,
important
and third-party financing, in which an component
entity invests in project
of the national design
freight system, and
particularly
construction but may not operate the facility (see http://www.aapa-
ports.org). resources, the most critical need for the inland
TABLE 3-1 Standard Construction and O&M
fundingCost-Sharing Requirement
strategy that prioritizes for
system preservation,
USACE Projects would result in further deterioration and in a less cost
Maximum
The committee finds that
Federal more reliance on a “user-
Share
of Maximum
maintenance,Construction
and would promoteFederal Share
economic
Project Purpose efficiency. (%) of O&M (%)
Navigation The committee suggests that an asset management
Coastal ports— program focused on economic efficiency, fully
implemented and linked
<20-ft harbor 80a to the budgeting100process,
b
20- to 50-ft harbor 65alevels required for
ascertain the funding 100 b
reliable
>50-ft harbor freight service. a b
40 50
Inland waterways View the TRB Special c
100Report 100
315 webcast.
Flood and hurricane damage reduction View the press release.

Inland flood control 65 0
Coastal hurricane and storm damage 65 0
reduction except periodic beach
renourishment
Repair of damaged flood and coastal storm 50 0
projects
×
Locally constructed flood projects NA 80d

Federally the U.S.
constructed floodInland Waterways System:
and coastal NA What Po…
100d
projects
Aquatic ecosystem restoration 65 0
MultipurposeMyNAP
project components
members save TRB Special Report 315: Funding and Managing the U.S.
Hydroelectric10%
power
online. Inland Waterways 0 0 Need to
e What Policy Makers
System:
Municipal andLogin or Register
industrial to supply federally funded 0
water 0priorities
inland waterways system,
storage save! for future investment, its beneficiaries, and sources of
Agricultural water supply storage funding. f 0
65
Recreation at Corps facilitiesFree PDF In recent years, the
Download 50
inland waterways 0
system has
Aquatic invasive species control and transported six to seven
NA percent of all domestic ton-
30
prevention
Environmental infrastructure (typically 0finds that,
75g The study committee
for bulk commodities.
municipal water and wastewater in order to ensure efficient use of limited navigation
infrastructure) resources, the most critical need for the inland
NOTE: Information comes from 33 USCperformance.
§§2211–2215 unless
Reliability andotherwise speci-
fied in footnotes a through g. on placing higher priority on investments in
NA = not applicable. maintenance may continue to be deferred, which
a effective and sponsors
less reliable system.
These percentages reflect that the nonfederal pay 10, 25, or 30
percent during construction and an additional 10 finds
The committee percent over
that more a period
reliance on a “user-
not to exceed 30 years. pays” funding strategy for the commercial navigation
b Appropriations from the HMTF, which is funded by collections on com-
efficiency.
mercial cargo imports at federally maintained ports, are used for 100 per-
cent of these costs. program focused on economic efficiency, fully
c Appropriations from the IWTF, whichwould help prioritize maintenance spending and
is funded by a fuel tax on vessels
engaged in commercial transport on designated
freight service. waterways, are used for
50 percent of these costs. View the TRB Special Report 315 webcast.
d View the press

33 USC §701n. Repair assistance is restricted to release.
projects eligible for and
participating in the USACE Rehabilitation and Inspection Program and to
fixing damage caused by natural events.
e Capital costs initially are federally funded and are repaid by fees col-
lected from power customers.
×
f
For the 17 western states where reclamation law applies, irrigation costs
Funding andare
initially Managing theUSACE
funded by U.S. Inland Waterways
but repaid System:water
by nonfederal Whatusers.
Po…
gMost environmental infrastructure projects are authorized with a 75
percent federal costmembers
MyNAP share; a save
few have aTRB
65Special
percent
Report cost share.
315: Funding and Managing the U.S.
SOURCE: Carter and Know explores the role and importance of the
Login orStern 2014.
Register to federally funded inland waterways system, priorities
funding.
transported
for funding are entirely a federal expense; six to sevenfor
in contrast, percent of all domestic
deepwater navi-ton-
gation and nonnavigation projects, thecomponent
federal share for feasibility
of the national studies
is 50 percent.11
ROLE OF THE INLAND WATERWAYS USERS waterwaysBOARD
system is a sustainable and well-executed
performance.
WRDA 1986 established a federal advisory committee Reliability and performance
subject to the will depend
Federal Advisory Committees Act, the Inland
operations Waterways
and maintenance Users(O&M).Board
Without a
funding strategy that prioritizes
(IWUB), which represents shipping industry interests. IWUB was created system preservation,
to give commercial users the opportunity
wouldto inform
result priorities
in further deteriorationforand
projects
in a less cost
funded from the IWTF. WRDA 1986 specifies
effective that
and lessthe board
reliable consist of 11
system.
members representing shipping interests in the primary
The committee geographical
finds that more ar-
eas served by inland waterways, with consideration given
pays” funding strategy tocommercial
for the tonnagenavigation
shipped on the respective waterways. IWUB makes recommendations to
the Secretary of the Army and Congress with regard to IWTF investments.
efficiency.
The board is advisory only. Congress and the administration choose
whether to follow the board’s guidance.program focused on economic efficiency, fully
would help
WRRDA 2014 stipulates greater involvement of prioritize
IWUB in maintenance
project spending
develop- and
ment and oversight than in previous years. According to the 2014 WRRDA,
freight service.
IWUB is to provide advice and recommendations to the Secretary of the
Army and to Congress concerning construction and rehabilitation priori-
View the
ties and spending levels; feasibility reports press
for release. on the inland wa-
projects
terways system; increases in the authorized cost of project features and
components; and development of a long-term, 20-year capital investment
program. A representative of IWUB, appointed by the board’s chair, is to
serve as an adviser to project development teams for qualifying projects
and for studies or designs of commercial navigation features and compo-
×
nents for waterways and harbors. The President’s 2015 budget request in-
Funding and
cluded Managing
$860,000 the U.S.IWUB
to support Inlandactivity.
Waterways System: What
The Secretary is to Po…
communi-
cate with IWUB at least quarterly on the status of commercial navigation
________________
11 Before WRRDA 2014, a reconnaissance Knowstudy to the
explores assess the
role and need and
importance sup-
of the
port for a project
save! was produced at 100for percent federal expense for naviga-
future investment, its beneficiaries, and sources of
tion projects. WRRDA 2014 replaced thefunding.
reconnaissance study with a pre-
liminary study thatDownload
is combined
Free with
PDF the feasibility study as the first phase
In recent years, the inland waterways system has
of analysis. According to the Congressional Research
transported Service
six to seven percent(Carter andton-
of all domestic
miles of cargo. The system
Stern 2014), post-WRRDA 2014 cost sharing of the preliminary analysis is a small but important
portion of the first phase has not beenfor clarified. WRRDA
bulk commodities. The2014
study established
committee finds athat,
maximum federal cost of $3 million forinmost order tofeasibility
ensure efficient use of limited navigation
studies.
studies, designs, and construction. Theoperations and maintenance
board provides (O&M).relating
guidance Without a
only to capital investments, since current law specifies
maintenance that
may continue fuel
to be tax rev-
deferred, which
enues from the shipping industry are towould
be result
usedinfor
further deterioration
capital and in a less cost
expenditures
and not for O&M.
PATTERNS AND TRENDS IN FUNDINGpays”
FORfunding
THEstrategy
INLAND for the commercial navigation
WATERWAYS
SYSTEM maintenance, and would promote economic
efficiency.
The FY 2015 federal budget appropriated more than $1.8 billion for USACE
navigation projects,12 with about $834 program
millionfocused
of this
onamount provided
economic efficiency, fullyfor
inland waterways navigation.13 In recent years, the demand for O&M for
the inland waterways has increased with the aging
ascertain of infrastructure.
the funding As
freight service.
shown in Table 3-2, O&M has become a larger share of the
administration’s inland navigation budget request.
View the It now
TRB Special Reportaccounts
315 webcast.for
about three-fourths of the requested budget
View the (Table 3-2).14
press release.
In terms of constant dollars, funding for construction and O&M for lock
and dam facilities is at its lowest point in more than 20 years and is on a
downward trajectory (see Figures 3-1a and 3-1b).
×
The balance of the IWTF, which is used to pay 50 percent of construction

Funding
costs,and
hasManaging the fund
declined. The U.S. Inland
was at Waterways
its highest level,System: $413What
million,Po…in 2002
(see Figure 3-2). The balance fell sharply between 2005 and 2010 as expen-
ditures for inland waterways exceeded fuel tax collections and interest on
the trust fund balance.
MyNAP Reasons
members savefor theTRBdecline include
Special Report increased
315: Funding appropri-
and Managing the U.S.
ations, lower10% tax revenues than in Inland
fuelonline. Waterways
previous System:
years, Whatconstruction
large Policy Makers Need to
Login or Register
costs, and construction costtooverruns.federally funded inland waterways system, priorities
Capital projects are funded incrementally funding.
by Congress through the annual
budgeting and appropriations
Download Free process.
PDF InIncremental
recent years, thefederal funding,
inland waterways anhas
system in-
creasingly common procedure in which transported six to sevenof
only a portion percent of all domestic
the total budgetton-
for a project is appropriated, contributes to
________________ in order to ensure efficient use of limited navigation
12http://www.usace.army.mil/Portals/2/docs/civilworks/budget/strongpt/
13 In the past decade, USACE Civil Works
on placing higher priority(which
appropriations on investments in
include
both general revenues and sponsor support) have ranged
funding strategy from
that prioritizes $4.5preservation,
system billion
maintenance
to $5.5 billion to support the USACE primary may continue
mission areasto(navigation,
be deferred, which
flood control and prevention, ecosystem restoration)
effective andsystem.
and less reliable the other ser-
vices that USACE has authorities to provide (water supply; hydroelectric
power; water-based recreation; and design depths
pays” funding for the
strategy nation’s
for the ports,
commercial navigation
harbors, and associated channels). system is feasible, would generate new revenues for
14 efficiency.
Although the administration budget requests will differ from federal ap-
Theamounts
propriations, this table shows requested committee suggests
because thatthe
an asset
levelmanagement
of bud-
get detail for the inland waterways needed for this
implemented andreport (e.g.,
linked to the for inland
budgeting process,
would
navigation O&M) is not publicly available forhelp prioritizeappropriations.
federal maintenance spending and
However, federal appropriations for O&M and
freight construction for locks and
service.
dams are available, as shown in Figures 3-1a and 3-1b.
TABLE 3-2 Administration Budgets for USACE Inland Navigation, FY 2008–FY 2015
President’s Investigations Construction Regular MR&T O&M MR&T Total Inland O&M
Budget (FY) O&M Investigations Nav Budget as %
×
and of Total
Construction Inland Nav
Funding and
2015 5 Managing
180the U.S. Inland
612 Waterways
29 System:
8 What834Po… 77
2014 7 237 608 42 11 904 72
2013 8 201 529 28 14 780 71
2012 11 166 531 22 Special Report
13 315: Funding and
743Managing the 74 U.S.
MyNAP members save TRB
2011 10 176 550 28 Waterways
Inland 15System: What Policy
779 Makers Need 74 to
10% online.
2010 3 170 Know
32 explores the
15 role and importance of the 77
Login or Register to577 federally funded inland
796
waterways system, priorities
2009 3
save! 307 586 25 10 931 66
for future investment, its beneficiaries, and sources of
2008 7 406 604 25 10 1,052 60
funding.
Download
NOTE: Except for percentages, Free PDF
figures are dollar
In recentamounts in millions.
years, the inland MR&T
waterways system has =
Mississippi River and Tributaries flood control project,
miles of cargo. Thewhich
system iswas
a smallauthorized
but important
through the Flood Control Act of 1928. Navcomponent of the national freight system, particularly
= navigation.
SOURCE: USACE headquarters. resources, the most critical need for the inland

efficiency.

freight service.
×
funding.

efficiency.

FIGURE 3-1 USACE budget authority, FYascertain
1994–FY the 2015,
fundingfor (arequired
levels ) lock and dam
for reliable
freight
construction and (b) lock and dam O&M. FYservice.
2014 and FY 2015 data for both
construction and O&M are estimates from the
View the TRBPresident’s
Special Report FY 2015 budget
315 webcast.
for the Civil Works Program, USACE. Figure 3-1a includes appropriations
from the IWTF for construction not included in Figure 3-1b since the
IWTF is not to be used for O&M.
SOURCE: Adapted from Kruse et al. 2012.
×
funding.
FIGURE 3-2 Inland waterways financingontrends. Amounts
placing higher priorityare in nominal
on investments in
dollars and represent funding for construction only. Federal spending for
FY 2009 and FY 2010 reflects congressional stopgap
maintenance measures
may continue and supple-
to be deferred, which
would result
mental funding under the American Recovery in further
and deterioration and
Reinvestment Actinofa less cost
2009 (P.L. 111-5). [Federal spending includes total revenues disbursed by the
federal government to pay for commercial The committee finds that
navigation onmore
thereliance on a “user-
fuel-taxed
inland waterways system, including general
system isrevenues from
feasible, would taxpayers
generate andfor
new revenues
fuel tax revenues from carriers. The IWTFmaintenance, and would
(50 percent promote economic
contributed by
efficiency.
shippers and 50 percent contributed from general revenues) is dedicated
The committee
to capital costs and is not used to pay for O&M.] suggests that an asset management
SOURCE: Stern 2014 (USACE data adapted by the
ascertain the Congressional Research
funding levels required for reliable
Service). freight service.
project delivery delays and higher costs (NRC 2011; NRC 2012, 29, gives an-
other example on the Lower Monongahela River). Between 2005 and 2010,
Congress made a conscious effort to “spend down” the IWTF to accelerate
project completions and reduce the size of the backlog of authorized
projects.
×
CAPITAL PROJECTS BACKLOG

A substantial number of water resources projects that have been autho-
rized by Congress via WRDA remain unfunded through the appropriations
process. These projects are known as the backlog. WRRDA 2014 included
provisions to reduce the backlog and prevent backlogs
Inland Waterways System: inWhat
thePolicy
future;
Makers Need to
10% online.
Know explores the role and importance
15 of the
whether the provisions will achieve
Login or Register to this purpose is unclear. Congress
federally funded inland waterways system, priorities
considers thesave!
recommendations of USACE and
for future OMB, but
investment, the selection
its beneficiaries, of of
and sources
funding.
waterways projects for authorization has a long history of being driven
largely by political Download
and local Free PDF In
concerns (Ferejohn
recent years,1974). In recent
the inland waterwaysyears,
system has
congressionally directed spending has taken the form of providingdomestic
transported six to seven percent of all addi- ton-
tional funding for broad categories of ongoing
component activities
of the nationalnot included
freight in
system, particularly
the President’s budget. USACE is responsible for selecting The study
whichcommittee
of thesefinds that,
activities to undertake and for prioritizing them
resources, the on
mostthe basis
critical needof fordirections
the inland
and exclusions provided in the WRRDA. waterways system is a sustainable and well-executed
While concerns about the backlog haveonbeen expressed, its size is not a re-
placing higher priority on investments in
liable indicator of the funding needed for the inland
operations navigation
and maintenance system
(O&M). Without afor
at least three reasons. First, O&M spending is not reflected in the backlog.
With the aging of the system, maintenance has become
would result a higher and
in further deterioration priority.
in a less cost
Second, navigation projects make up only a portion of the backlog ($4.1 bil-
lion) (Carter and Stern 2011); most of the
Thebacklog
committee relates to waterways
finds that more in-
frastructure serving other purposes suchpays”as
funding
floodstrategy for the commercial navigation
control.
Third, not all of the projects in the navigation
efficiency. backlog are priorities. In
contrast to its practice for other modes, Congress authorizes and appro-
priates funds on a project-by-project basis. Benefit–cost
________________ would help prioritize maintenance spending and
freight service.
15The bill required the Secretary of the Army to identify a list of projects
Viewdeauthorization.
totaling $18 billion that would qualify for the TRB Special ReportHowever,
315 webcast.
Congress also authorized 34 new construction projects,

View the press release. which added
nearly $16 billion to the federal backlog. The number of authorized
projects is likely to grow through allowed forms of congressionally di-
rected spending.
×
Funding andisManaging
analysis the U.S. Inland
used to determine Waterways
whether System:
a construction What meets
projects Po… a
minimum threshold of eligibility for pursuing authorization and appropri-
ations and is generally suitable for this purpose,16 but the lack of a prioriti-
zation processMyNAP
basedmembers save assessment
on a formal TRB Special Report 315: Funding and Managing the U.S.
of system needs has resulted
in the authorization of more projects than can bethe
Know explores funded
role andwithin
importancethe of con-
the
straints of the budget. The current practice is for OMB to set a minimum
benefit–cost ratio that projects must meet to be included in the
funding.
President’s annual Download
budget request. 17
Free PDF While benefit–cost
In recent years, the inland analysis
waterwaysis usedhasin
system
determining whether a project meets atransported
minimum threshold
six to seven percent forof authoriza-
all domestic ton-
tion, there is no indication that projects are further ranked against each
other during the authorization processfor(GAO 2010). Because
bulk commodities. The studymore projects
committee finds that,
in order to ensure efficient use
are authorized than can be funded, priorities are sorted out in the budget- of limited navigation
ing and appropriations process, in which both system
waterways the executive branch
is a sustainable and
and well-executed
Congress participate. IWUB, as part of plan for maintaining
a capital projects system reliability and
business model,
has proposed projects that might serveonasplacing
a starting pointonfor
higher priority evaluating
investments in
the urgency of needed repairs throughoutoperations and maintenance
the system (Inland (O&M).
MarineWithout a
Transportation System Capital Investment Strategy
maintenance Team to2010).
may continue be deferred, which
For these reasons, a method for prioritizing
effective projects on the
and less reliable basis of the
system.
service needs of the system may be more useful than an attempt to esti-
mate and seek funding for the entire backlog. As strategy
pays” funding for O&M, for theacommercial
standardnavigation
process is needed for prioritizing spending for capital projects for con-
struction and major rehabilitation andefficiency.
to ascertain the level of funding re-
quired across the system to maintain reliable freight service.
(Prioritization is discussed in Chapter 4.)
freight service.
16However, USACE’s implementation of benefit–cost analysis has received
numerous critiques mainly related to the use of optimistic traffic
projections. View the press release.
17Although the benefit-to-cost ratio (BCR) must exceed 1.0, BCR thresholds
and other criteria used by the administration vary annually. In recent
years, more stringent and differentiated criteria have been used to select
projects for funding. For the FY 2015 budget, a BCR of 2.5 was required for
construction projects. See
×
http://planning.usace.army.mil/toolbox/webinars/14Apr22_budgetworkplan
Furthermore, annualthe U.S. Inland
changes in BCRWaterways
thresholdsSystem:
and the What use ofPo… other BCR
criteria have resulted in some projects qualifying for one year’s budget re-
quest but not qualifying in subsequent years. For example, instead of using
a traditional MyNAP
BCR metric for the
members saveFY 2007
TRBbudget request
Special Report for incomplete
315: Funding and Managing the U.S.
projects, OMB used
10% Inland Waterways System: What metric.
a remaining-benefit-to-remaining-cost
online. Policy Makers Need to
The
rationale wasLogin
thator
if Register
the costtoof a project has funded
federally increasedinland dramatically
waterways system,sincepriorities
save!
it was authorized, the updated cost may forhave
future become
investment,greater
its beneficiaries,
thanand thesources of
funding.
benefits. Different BCR cutoffs have been used for projects of different
Download
types in the past. For example,Freethe
PDF In recent years, theFY
administration’s inland
2010waterways
budget system
re-has
quest required ongoing navigation andmiles flood control
of cargo. projects
The system generally
is a small to
but important
have a BCR greater than 2.5; new projects needed
component tonational
of the have afreight
BCRsystem,
greater
particularly
than 3.2. in order to ensure efficient use of limited navigation
A number of temporary measures haveoperations
been taken in an attempt
and maintenance to stabi-
(O&M). Without a
lize the IWTF. Beginning in 2005, the Bush
fundingadministration andsystem
strategy that prioritizes Congress
preservation,
increased annual budget appropriations for IWTF-funded construction
projects. Congress also exempted the fund temporarily
effective and less reliablefrom
system. the usual
cost-sharing requirements, provided additional federal general revenues
(through the American Recovery and Reinvestment
pays” funding strategyActfor
ofthe
2009, which
commercial ac-
navigation
system is feasible, would generate
counted for the spike in federal spending for 2010 in Figure 3-2), and new revenues for
waived the IWTF cost-sharing requirements
efficiency.for specific projects.
The committee
Cost escalations and schedule delays have been ofsuggests that anconcern
particular asset management
for
one project, the Olmsted Locks and Dam on the and
implemented Ohio River
linked to theinbudgeting
Illinois.process,
As
part of WRRDA 2014, Congress altered would help prioritize maintenance
the construction cost share spending
for and
the
Olmsted project, which was contributing toservice.
freight the depletion of the IWTF, to
redress a perceived inequity to commercial users and help restore the
IWTF balance. The provision for Olmsted requires the federal government
to pay 85 percent of construction costsViewforthethe
press release. (instead of the
project
usual 50 percent). The act also specified changes in project planning and
delivery, with the intent of avoiding such cost overruns in the future.
FUEL TAX REVENUES AS USER CONTRIBUTION
×
Federal legislation specifies the waterways subject to the collection of fuel

tax revenues (Figurethe
3-3;U.S.
see Inland Waterways
Appendix A for a moreSystem: Whatdescription
detailed Po… of
fuel-taxed waterways). Fuel tax revenues totaled $85,754,000 in 2011, the
last year for which comparable data on both fuel tax revenues and expen-
ditures are available (Dager 2013).
MyNAP members save This TRB
amount was 315:
Special Report about 49 and
Funding percent
Managingofthe U.S.
the 2011 administration Inland Waterways
10% online. budget for construction System:
costs. TheWhat Policy Makers
budget Need to
for in-
Login
land navigation or Register
O&M in 2011towas morefederally
than $550
fundedmillion; however,
inland waterways fuel
system, priorities
save!
tax revenues are only for constructionfor andfuture
notinvestment,
O&M. its beneficiaries, and sources of
funding.
The increase in theDownload
barge fuel taxPDF
Free passed by the
In recent 113th
years, Congress
the inland waterwaysinsystem
2014has
is
consistent with the proposal of IWUB in transported six to projects
its capital seven percent of all domestic ton-
business
model report (Inland Marine Transportation
component System Capital
of the national Investment
Strategy Team 2010). The new rate of $0.29
for bulkper gallon The
commodities. is 45 percent
study committeeabove
finds that,
the current tax of $0.20 per gallon. [Asresources,
with the original tax of $0.20 per
the most critical need for the inland
gallon, the increased fuel tax would notwaterways
be indexed
system foris a sustainable and well-executed

efficiency.

freight service.
FIGURE 3-3 Map of inland waterways indicating where fuel taxes apply.
×
SOURCE: P.L. 95-502, October 21, 1978; P.L. 99-662, November 17, 1986.
inflation andMyNAP
would members
not include
savea capital
TRBrecovery
Special Reportmechanism
315: Funding andlinking
Managingfu-
the U.S.
ture taxes to 10% online.
expenditures (Stern 2014).Know
Anyexplores
action on these concerns
the role and importance of the
would require separate legislation and federally
falls under
fundedthe
inlandjurisdiction
waterways system,of the
priorities
House and Senate taxation committees.] Estimated revenue from the pro-
funding.
posed fuel tax increase is not sufficient to pay to maintain the system, and
Download
other sources of funding areFree PDF (see
required In recent years, the inland waterways system has
Chapter 5 for details). As ex-
plained, fuel tax revenues are dedicatedmiles only to capital
of cargo. spending
The system and
is a small but not
important
O&M, and the federal government must component
match of thetheuser
national freight system, particularly
contribution for
capital costs while paying all of the O&M costs.
in order Federal
to ensure funding
efficient for capital
use of limited navigation
projects therefore competes with federal resources,
fundsthefor most criticalAs
O&M. need for the inland
indicated in
the next section, for historical reasons,plan theforfederal cost
maintaining share
system andand
reliability general
revenue spending for the system as a proportion of totaland
performance. Reliability costs are greater
for the inland waterways system than for the other
operations freight transportation
and maintenance (O&M). Without a
modes. funding strategy that prioritizes system preservation,
Federal Involvement Compared with Other Transportation Modes
States and private enterprise led the initial building

The committee findsofthat
inland waterways
more reliance on a “user-
infrastructure and charged for use of the waterways. Federal involvement
in the inland waterways system began maintenance,
in the 18thand century, wheneconomic
would promote the scope
and scale of inland waterways projectsefficiency.
grew beyond what any private en-
tity or state could or would take on, especially
The committeewithout
suggeststhethatability to real-
an asset management
program focused
ize a monetary return on investment. Congress made on economic efficiency,invest-
these federal fully
ments to promote inland waterways commerce, whichmaintenance
would help prioritize was central to the
spending and
ascertain the funding levels
economic development of the United States. This history has led to a required for reliable
freight service.
unique federal role in the inland waterways system among all the freight
transportation modes. View the TRB Special Report 315 webcast.

Today, waterborne transportation is the only freight mode for which
Congress authorizes and appropriates funds (for construction and O&M)
on a project-by-project basis. Federal management and decision-making
responsibilities for freight transportation generally are fragmented across
jurisdictional lines in Congress, multiple federal agencies, and different si-
los of funding. Whereas USACE and the U.S. Coast Guard (part of the
×
Department of Homeland Security) manage the marine and inland water-

Funding
waysand Managing
systems, theDepartment
the U.S. U.S. Inland Waterways System: What Po…
of Transportation has responsibilities for highway, aviation, rail, and pipe-
line. Various congressional committeesfederally
are responsible for authorizations
funded inland waterways system, priorities
and appropriations for the different modes. Decisions about inland water-
funding.
ways investments, including ports, channels, and infrastructure, are made
largely at the federal level.18 However, transported
most decisionssix to sevenabout
percenthighway in- ton-
of all domestic
vestments are made at the state and metropolitan
miles of cargo. The levels.
system For ports,
is a small invest-
but important
ment decisions are made mainly by independent private entities and
sometimes by state or bi-state port authorities. As private
in order to ensure transport
efficient use in-
dustries, railroads and pipelines make their own decisions about
investments. plan for maintaining system reliability and
on placing
Public and private shares of funding also differhigher
across priority on investments
modes. Highways,in
aviation, ports (harbor and channel dredging and maintenance),
funding strategy and
that prioritizes system the
preservation,
inland waterways all receive federal aidmaintenance
for capital maycosts.
continueInto addition,
be deferred, the
which
inland waterways, harbors, and channels receive
effective federal
and less reliable general
system. revenues
support for O&M. Rail and pipeline, with which the inland waterways sys-
tem competes to some degree, are almost
pays” entirely private
funding strategy enterprises,
for the commercial navigation
system is feasible,19would
with minimal federal assistance for infrastructure. For generate new revenues
highways, the for
federal government pays a significant share for new construction, but
efficiency.
O&M is a state and local financial responsibility.
The federal government, through general revenues,
implemented paystomore
and linked for water
the budgeting process,
transportation as a percentage of totalwould
O&M help
andprioritize maintenance costs
construction spending and
com-
pared with federal contributions to highways and rail. For the inland wa-
freight service.
terways system, federal support is used to cover a large shortfall between
the fees paid by users and total system costs. In contrast, fees paid by the
users of highway and rail modes cover View the press
a much release.share of the capital
greater
and O&M costs of those transportation systems. General federal tax rev-
enues pay about 90 percent of total inland waterways system costs, in-
cluding the construction, operations, and maintenance of barge naviga-
tion infrastructure
________________
×
18
The federal government has other important roles related to regulating
and securing access the U.S. Inlandand
to petroleum Waterways
other fuelSystem:
suppliesWhat Po…
for transporta-
tion. It also sets environmental and safety standards for each mode
through regulation and provides for operation of the air traffic control
system and aids to navigation
MyNAP members save for portsTRBand waterways.
Special Highway,
Report 315: Funding aviation,
and rail transport both freight and passengers, which has consequences
Login or Register
for federal involvement to
in passenger safety
federallyregulation
funded inlandfor thosesystem,
waterways modes.priorities
19 funding.
Railroads did receive land grants from federal and state governments in
Download
the 19th century and Freein
assistance PDF
building networks
In recent through
years, the inland exercise
waterways of
system has
eminent domain. The Federal Energy Regulatory Commission can exercise
eminent domain for siting natural gas component
transmission lines. freight system, particularly
of the national
20 performance.
(TRB 2009). This compares with virtually Reliability
no federal and performance
general revenue will depend
support for rail system users and pipeline, and and
operations historically
maintenanceonly (O&M).about
Without25 a
funding strategy that prioritizes
percent federal support for highways, which are primarily derived from system preservation,
user fees (Federal Highway Administration, U.S. inDepartment
would result of and in a less cost
further deterioration
Transportation, Highway Statistics 2010 ).21 (See
effective andBox
less reliable
3-1 for system.
further discus-
sion of federal subsidies across freight The
transportation modes.)
committee finds that more reliance on a “user-
system is feasible,
Decisions About Federal Funding and Beneficiary would generate
Payments fornew
therevenues for
Commercial Inland Waterways Systemefficiency.
Theand
In a climate of constrained federal funds committee
withsuggests
O&M that an asset management
becoming a
greater part of the inland navigation budget,
implementeda pressing
and linked policy issue is
to the budgeting how
process,
to pay to preserve the inland waterways system
would for commercial
help prioritize naviga-
tion. The structures (locks and dams) built and maintained for freight
freight service.
transportation have resulted in beneficiaries beyond commercial naviga-
tion. It is reasonable and, from an economic perspective, potentially effi-
ciency enhancing to consider whether View
these beneficiaries
the press release. could help pay
for the system. Congress, in the 2014 WRRDA (Section 2004, Inland
Waterways Revenue Studies), called for a study of whether and how the
various beneficiaries of the waterways might be charged. The sections be-
low assess the available evidence on benefits of the inland waterways used
×
for freight transportation and the economic and practical considerations

in charging the U.S.received.
for the benefits Inland Waterways System: What Po…
AVAILABLE EVIDENCE ON BENEFICIARIES
MyNAP members
Commercial navigation is thesave
primary TRB Special Reportof315:
beneficiary theFunding
inlandand Managing
waterways the U.S.
system. This 10% online.
is recognized by USACE inKnowtheexplores
primary criterion
the role used ofinthe
and importance de-
termining investments for the system.federally funded inlandand
The framework waterways system, priorities
approach to
benefit–cost analysis that USACE uses funding.
in helping
Download Free PDF

________________ In recent years, the inland waterways system has
20 This figure is based on user fee revenues that equaled 10 percent of in-
land waterways capital (construction and for bulk commodities.
major The study committee
rehabilitation) and oper- finds that,
ating expenditures (O&M) in 2006: capital expenditures,
resources, the most critical$0.5
needbillion; oper-
for the inland
waterways
ating expenditures, $0.4 billion; user fee system$0.1
revenues, is a sustainable and well-executed
billion. Commercial
users are required by legislation to contribute
performance. only to capital
Reliability improve-
ment costs and are not required to pay for O&M expenditures. See TRB
2009 (99, Table 3-5). funding strategy that prioritizes system preservation,
21 In recent years, large general fund transfers
would resulthave been
in further made toandthe
deterioration in a less cost
Highway Trust Fund and the Aviation Trust Fund to maintain their sol-
vency. These transfers have resulted from a political
The committee findsstalemate thatonhas
that more reliance af-
a “user-
fected investments in highway, air, andsystem
waterways transportation since
the 1990s by preventing the raising of user taxes,and
maintenance, which
wouldin past economic
promote decades
efficiency.
had been increased regularly as needs arose.
freight service.
BOX 3-1
Federal Subsidies for the Various Freight Transportation Modes
Federal subsidies for the various freight modes are complicated and
contested among advocates for the modes, in part because of dis-
agreements about (a) direct subsidies that are funded by various public
sources and (b) indirect subsidies that result from costs imposed on
the public (externalities) that are not part of market transactions be-
×
tween shippers and carriers. No authoritative study has estimated ei-

Funding and
ther Managing
direct the U.S.
or indirect Inlandacross
subsidies Waterways System:
the various What
freight Po… al-
modes,
though a previous Transportation Research Board study (TRB 1996) de-
veloped and pilot-tested a methodology for estimating freight external
costs. MyNAP members save TRB Special Report 315: Funding and Managing the U.S.
Assessing direct subsidies Know explores the role
is more straightforward amongand importance
the modes of the
with whichsave!
water competes (rail, pipeline, and,
for future to a much
investment, lesser de-
its beneficiaries, and sources of
funding.
gree, trucking). Freight railroads are private entities that fund the vast
bulk of their operations
DownloadandFreecapital
PDF and maintenance
In recent years, the inland spending fromhas
waterways system
their own funds. Limited federal funds transported six to seven
are available forpercent
grade of separa-
all domestic ton-
tion projects (to separate traffic for safety
component andof mobility), a modest
the national freight system, fed-
particularly
eral loan guarantee program is available (principally
for bulk commodities. The forstudy
short lines),finds that,
committee
and state governments occasionally in order to ensure efficient use of limited navigation
provide public funding for such
purposes as raising bridges or tunnels for double-stack
waterways trainsand
system is a sustainable orwell-executed
to
improve rail access to state ports. Although system reliability
public funding and
is minimal
in proportion to the $20 billion to $25 on billion railroads
placing higher priority have invested
on investments in in
capital stock annually since 2007,a railroad modal competitors point
out that many railroad rights-of-waymaintenance
were initially giventoin
may continue bethe 19thwhich
deferred,
century by the federal government and would result into
states further deterioration
encourage and in a less cost
railroad
development. Because pipelines are entirely private, the evaluation of
The committee
subsidies is easier than for rail. Although finds that more
long-distance reliance on a “user-
truck–barge
competition is unlikely because of the much
system higher
is feasible, cost
would of truck
generate new revenues for
movements per ton-mile, there may maintenance, and would promote
be short segments in whicheconomic
truck
efficiency.
and barge would compete. The trucking assessment of competitive
subsidies is most complex because trucksThe committee suggests that
use highways an asset
that aremanagement
shared
with passengers. Although both freight and passenger
implemented operators
and linked to the budgetingpay
process,
fuel taxes and other user would help prioritize maintenance spending and
freight service.
________________
a
Association of American Railroads. Freight Railroad Expenditure on
Infrastructure and Equipment. https://www.aar.org/Pages/Private-
Rail-Investments-Power-America%27s-Economy.aspx. Accessed May
21, 2015.
×
fees, there is continued debate about whether the largest and heaviest
trucks pay their share of the costs of building and maintaining high-
ways (GAO MyNAP
2012). Moreover,
members save after decades of relying
TRB Special Report 315:almost exclusively
Funding and Managing the U.S.
on federal and online.user fees to fundInland
10% state Waterwaysand
interstate System: What Policyhigh-
intercity Makers Need to
ways, in theLogin
pastordecade
RegisterCongress
to has usedfunded
federally generalinlandfunds to supple-
save!revenues to the Highway
ment user fee Trust
for future Fund (HTF)
investment, for theand
its beneficiaries, fed-
sources of
funding.
eral share of highway capital spending (CBO 2014). (Improved fuel
Download
economy and political Free PDFto Inraising
opposition fuelthe
recent years, taxes
inlandhave resulted
waterways systeminhas
insufficient user fees into the HTF tomiles payoffor the federal share of high-
cargo. The system is a small but important
way capital improvements.) These general componentfund subsidies
of the to highway
users, of course, apply to both trucks and passengers, and, as noted,finds that,
for bulk commodities. The study committee
truck–barge competition is fairly limited.resources, the most critical need for the inland
Indirect subsidies lack definitive estimates in the form system
ofreliability
external and
costs imposed on the public, but GAOon(2011)
placingprovides a high-level
higher priority on investmentscom-in
operations and
parison of external costs of freight shipments bymaintenance
water, rail,(O&M).
and Without a
trucking. For air pollution in the form of particulates,
maintenance may continuefortoexample,
be deferred, which
GAO (2011) estimates that trucking external costs
would result aredeterioration
in further 6.7 times and higher
in a less cost
than those of rail and 10.2 times higher than those of water. While
such comparisons are useful for providing a sense
The committee findsof national
that scale,
they are only meaningful to the extent that one mode can substitute
for another in specific origin–destination (O-D)and
maintenance, markets. Moreover,
would promote economic
efficiency.
national comparisons mask the subcorridor impacts where locally
similar modal volume or intense activity by rail suggests
The committee or inland water
that an modes
asset management
produces greater impact or providesprogram
higherfocused on economic
benefits. As notedefficiency,
in fully
Chapter 2, there are markets where truck andprioritize
would help rail compete
maintenancehead-to-
spending and
head and markets where rail and water compete, but trucking isforin-
ascertain the funding levels required reliable
freight service.
volved in at least one segment of all freight moves and often two, and
there are markets where the rail andView the TRB
water Specialcomplement
modes Report 315 webcast.each
other. Whereas trucks can serve almost all press
View the O-Drelease.
pairs because of the
ubiquity of roads and highways, and railroads reach many O-D pairs as
well, barge transportation is limited by the availability of and access to
navigable rivers and coasts. Thus, estimates of direct and indirect sub-
×
sidies are meaningful in specific subcorridors for specific

commodities.
Congress determine when federal
Login or Register to spending is justified for new construc-
federally funded inland waterways system, priorities
save!
tion and major rehabilitation projects for
arefuture
based on theits1983
investment, Economic
beneficiaries, and of
and sources
funding.
Environmental Principles and Guidelines for Water and Related Land
Download
Resources Implementation Studies (known
Free PDF as the
In recent Principles
years, and system has
the inland waterways
Guidelines).22 The Principles and Guidelines prioritize the national net eco-
nomic development benefit defined in terms of commercial
component navigation
of the national freight and
23
operationalized as savings in shippers’ intransportation costs.
order to ensure efficient use of limited navigation
According to the most recent and wide-ranging
waterways system attempt to catalogue
and well-executed
estimate the benefits of the inland waterways system, benefits beyond
commercial navigation may include hydropower
on placing highergeneration, recreation,
priority on investments in
flood damage avoidance, municipal water operations
supply, andirrigation,
maintenance (O&M).
higher Without
prop- a
erty values for property owners, sewage assimilation,
maintenance mosquito
may continue control,
would result in further deterioration
lower consumer costs because the availability of barge shipping may result and in a less cost
in more competitive railroad pricing (referred to as water-compelled
The committee
rates), and environmental benefits associated withfinds that more
lower fuelreliance on a “user-
emissions of
barge compared with other modes (Bray et al.
system 2011). would
is feasible, The available
generate newevidence
revenues for
on nonnavigation benefits that may result maintenance,
locallyand is would promote economic
incomplete and incon-
efficiency.
clusive. Bray et al.’s list includes many possible local benefits and national
The committee
benefits. Some of the benefits may be viewed suggests thatfrom
as transfers an asset
onemanagement
part of
the economy to another. For example, implemented
in cases where and linkedlower
to therail ratesprocess,
budgeting may
exist because of barge competition, thewouldresulting savings
help prioritize in transportation
costs are classified by USACE as a transfer to shippers (and a loss to rail
freight service.
lines), not a net national economic benefit. (See Box 3-2 for further discus-
sion of the available research on the issue of water-compelled rates.)
________________
22 The Principles and Guidelines are available at

http://planning.usace.army.mil/toolbox/guidance.cfm?
Id=269&Option=Principles%20and%20Guidelines (accessed June 3, 2015).
The Principles and Guidelines remain in effect. They were issued by the
×
federal Water Resources Council, a body that no longer exists. In the

Funding
Waterand Managing
Resources the U.S. Inland
Development Waterways
Act of 2007, Congress System: What Po…
instructed the
Secretary of the Army to develop a new set of Principles and Guidelines
for USACE. However, these guidelines have long been under review and
are viewed asMyNAP
controversial.
membersThe save new guidance, if implemented,
TRB Special Report would the U.S.
315: Funding and Managing
have no effect10%
ononline. Inland Waterways
how the national economic System: What
development Policy Makers
benefit Need to
is cal-
Login or Register
culated for commercial to
navigation. federally funded inland waterways system, priorities
23 Shipper savings are measured as thefunding.
difference in costs between mov-
Download Free
ing a volume of a commodity PDFan origin
from In recent to a destination
years, the inland waterwaysby using
system has the
waterway for all or part of the movement transported six to seven
and moving thepercent
same of all domestic ton-
commod-
ity without using the waterway. Shipper savingsofmay
component also be
the national realized
freight if the
alternative results in a reduction in scheduled or unscheduledThe study committee
lock un-finds that,
availability for moving the commodity resources,
by usingthethe mostwaterway
critical need for
for theallinland
or
part of the movement. Estimation of the waterways system
benefits ofisreducing
a sustainableunscheduled
and well-executed
unavailability requires prediction of theperformance.
probability of the
Reliability andfacility
performancebeing will depend
unable to pass traffic, and the estimate is a function of a condition assess-
ment for the facility. USACE has well-developed procedures for making
such benefit and cost calculations (Engineer Regulation
maintenance may continue 1105-2-100).

BOX 3-2 maintenance, and would promote economic
efficiency.
The Issue of Water-Compelled Rates The committee suggests that an asset management
Analysts have built models to demonstrate howandwater-compelled
implemented linked to the budgetingrates
process,
wouldWilson
should play out in theory (Anderson and help prioritize
2008). maintenance spending and
Some theory
and empirical evidence indicate that freight
rail rates
service.are lower the closer the
water alternative is to the shipper (McMullen 1991; MacDonald 1987;
Burton and Wilson 2006; Harbor 2009; Burton 1993; Burton 1995).
However, McMullen (1991) and BurtonView the press
(1993) findrelease.
that intramodal com-
petition (presence of a second railroad) may also help explain the con-
strained rail rates. Furthermore, Burton and Wilson (2006) find that
for situations in which a segment of the rail network competes with
barge and then connects to a rail monopoly segment, the rail rates on
the segment with barge competition may be lower, but the rail rates
×
on the monopoly segment are often higher than comparable rail-only

monopoly segmentsthefor
U.S.
theInland
same Waterways
commodities. System:
Thus, the What Po… likely
shipper
receives no net benefit in these cases. The evidence also indicates that
shippers of bulk commodities need to be relatively close to navigable
rivers to benefit
MyNAPfrom water-compelled
members save rates.Report
TRB Special Harbor (2009)
315: Funding andfound
Managing the U.S.
that the further a shipment originates
10% online. Inland Waterways
from waterSystem: What Policy Makers
competition, the Need to
higher the Login or Register
rail rate. to
Corn shippers located
federally100 miles
funded inlandfrom a barge
save!
loading point pay 18.5 percent higherforrail future investment,
rates its beneficiaries,
than those located and50
sources of
funding.
miles from water. Soybean shippers located 100 miles from water pay
Download
rail rates 13.4 percent Freethan
higher PDF shipments
In recent years, the inland waterways
originating 50 miles system has
from a barge loading point. When shippers require
miles of cargo. movement
The system of their
is a small but important
commodities to the river by truck orcomponent
short-line railroad,
of the theysystem,
national freight mustparticularly
balance the cost of these movementsinand transfers with the benefit of
order to ensure efficient use of limited navigation
an all-rail movement. resources, the most critical need for the inland
According to economic principles, theplan for maintaining
most efficient system
wayreliability and
to allocate
resources would be for the price of the modehigher
on placing to be set according
priority on investmentstoin its
marginal cost and for the market to operations
decide the andshares
maintenance (O&M). Without
of freight to bea
carried by each mode (see Chapter 5 maintenance
for further maydiscussion).
continue to be However,
deferred, which
shippers of bulk commodities contend would
thatresult in furtherbarge
without deterioration and in a less cost
transporta-
tion there is insufficient competition for transportation of their com-
modities to ensure efficient resourceThe committee finds
allocation. that more reliance
Specifically, many on coal
a “user-
and agricultural shippers and receivers
systemassert thatwould
is feasible, theygenerate
are “captive”
new revenues for
to a single railroad that can exercisemaintenance,
market power in the
and would setting
promote of
economic
efficiency.
rates and that a water alternative is needed to protect them from mo-
nopoly rates. Congress has been sensitive to this
freight service.

argument. After deregulating the railroads in 1980, Congress directed
the Interstate Commerce Commission [and later the Surface
Transportation Board (STB)] to balance the interests of railroads and
shippers in cases with insufficient competition. The technical and pol-
icy issues concerning the performance of STB are complex. A study in
×
parallel with this one is under way to examine STB’s performance and
suggest reforms tothe U.S. Inland
address Waterways
shipper concerns. System: What Po…
A possible national
MyNAP benefit
membersofsave
investingTRB
in Special
the inland
Report 315:waterways is the en-
Funding and Managing the U.S.
vironmental 10% online. that barge mayInland
advantage haveWaterways
over other System:modes:
What Policy Makers Need to
barge’s
Loginper
lower fuel usage or Register
ton-mile to than other transportation
federally modessystem,
funded inland waterways may result
priorities
save!
in lower air emissions. Whether barge for orfuture
rail is the more
investment, energy-efficient
its beneficiaries, and sources of
funding.
mode (measured as fuel use per ton-mile) depends in large part on the wa-
ter route, since theDownload
increased Free PDF of
circuity someyears,
In recent rivers offsets
the inland the reduced
waterways system has
energy required to move products by water (see Appendix G for details of
the committee’s assessment of the availablecomponent research and its
of the national examination
of data for selected major corridors). A comprehensive analysis at the sub-
corridor level would be needed to obtain a better
resources, understanding
the most of inland
critical need for the the
waterways system is a sustainable
magnitude of the benefit. Challenges of such an analysis would be (a) the and well-executed
difficulty of modeling the potential forperformance.
commodities to shift
Reliability modes and
and performance (b)
will depend
accounting for the comparative reliance on placing
on truck higher priority on investments
movements to andinfrom
the water and rail modes. Both rail andfunding
waterstrategy
can depend on system
that prioritizes truckspreservation,
to
move commodities from the origin to the maintenance
rail ormay watercontinue to be deferred,
terminal which
and from
the rail or water line-haul movement to the ultimate
effective destination.
and less reliable system. Since
trucking involves much greater energy and emissions per ton-mile than
either water or rail (GAO 2011), the distances of commodity
pays” funding strategy for the movement by
truck to the true origin and destination affects
system the net
is feasible, wouldenergy
generate and emis- for
new revenues
sion benefits of movement by either mode. efficiency.
A full assessment of environmental benefit wouldsuggests

The committee also need toasset
that an account for
management
the environmental damages associatedimplemented
with maintaining waterways for
and linked to the budgeting process,
navigation. The mitigation of environmental
would helpcosts is considered
prioritize in bene-
ascertain the funding
fit–cost analyses for construction and major rehabilitation levels required for reliable
freight service.

projects for which it is classified as an aquatic ecosystem benefit, under-
stood as restoration of some of the preproject conditions with regard to
pattern and timing of river flows that may result from changes in a
facility.24
×
Congestion reduction is another possible environmental benefit of barge,

Funding andthat
and one Managing
USACEthemayU.S. Inland
include in Waterways
benefit–costSystem: analysis,What but itPo… is difficult
to assess. A reduction in congestion may be realized if the availability of
barge results in traffic shifts from an alternative mode to the waterways.
The initial assumption of thesave
MyNAP members investmentTRBanalysis
Special Report typically
315: Fundingis and
that the al-
Managing the U.S.
ternative modes—rail, Inland Waterways System:
10% online.highway, and pipeline—have What Policy
sufficient Makers to
capacity Need to
Login or
continue to move Register
traffic to
at current rates without
federally fundedthe waterway
inland improve-
save!
ment and that congestion reduction could for future
notinvestment, its beneficiaries,
be a benefit. For that andas-
sources of
funding.
sumption to be modified, USACE’s analysis would need to show congestion
on some other mode, Download Free PDFhowIn the
demonstrate recentshift
years,tothewaterway
inland waterwayswould systemre-has
duce that congestion, and then evaluate the
miles of beneficial
cargo. The system effects of but
is a small conges-
important
tion reduction. Environmental Protection Agency
component models
of the mightsystem,
national freight thenparticularly
be
used to estimate the impact of such a change in highway traffic on emis-
sions. Models are available for predicting the impact
resources, the most of such
critical needtraffic diver-
for the inland
sions on safety. However, all of these estimates depend on the accurate
prediction of traffic diversion, which requires
performance. realistic
Reliabilityestimates
and performance of howwill depend
on placing higher priority
much modal shift will take place even if costs change substantially. To on investments in
monetize the impact of the investmentfunding on congestion reduction
strategy that prioritizes system requires
preservation,
maintenancetime
assigning a dollar value to time (for congestion may continue
savings),to betodeferred,
costswhich
of
accidents (including a value for lives saved),
effectiveand to reliable
and less emission system.reduction ef-
fects on human health and ecosystems. If such effects can be identified,
ranges of dollar values may be used forpays” estimates, but there
funding strategy may be con-
for the commercial navigation
siderable disagreement as to the monetary size of these impacts.
efficiency.
In addition to possible reductions in emissions and congestion, oil spill
and safety advantages may result fromTheshipping
committeeby bargethat
suggests (Frittelli
an asset management
24 If the restoration was an outcome offreight
a project
service. investment, USACE’s
procedures would allow that benefit toView
be the
claimed andReport
TRB Special made
315part of the
webcast.
project cost justification, even though such river restoration benefits are
not monetized. However, the more common claim is that inland waterway
project investments for commercial navigation are detrimental to the
aquatic ecosystem. When that is the case, the alternative must include ac-
tions to mitigate the unavoidable adverse impacts on the aquatic environ-
ment, and the costs of those actions are part of project cost. For facilities
×
no longer operated for commercial navigation, restoration of preproject

conditions would bethe U.S. Inland Waterways System: What Po…
a priority.
2014; Frittelli10% online.
et al. 2014; GAO 2011). TheKnow
policy question for deciding on the
explores the role and importance of the
federal role in funding the system is not whether
federally fundedenvironmental
inland waterways system, benefits
priorities
exist from moving freight by barge, but whether the size of the benefits
funding.
warrants current levels of federal investment required to obtain them. On
DownloadisFree
this question the evidence PDF Inbecause
uncertain recent years, the inland waterways system has
a definitive study has not
been done. As noted above, a Transportation Research
miles of cargo. Board
The system committee
concluded that development of reliablecomponent
estimates of the
ofnational freight system,
the marginal costsparticularly
of
shipments by truck, rail, and barge would be topossible
in order and recommended
ensure efficient use of limited navigationa
study to allow generalizations that could resources,
inform the decisions
most critical need
about for the
theinland
size
of federal support for surface freight transportation
plan for maintaining(TRB
system1996).
reliabilityHowever,
and
federal agencies have declined to fund performance.
the data collection
Reliability andand analysis
performance willthat
depend
would be required to develop completeoperations
and policy-relevant
and maintenance conclusions.
(O&M). Without a
ECONOMIC AND PRACTICAL CONSIDERATIONS
maintenance may INcontinue
DECIDING ON which
to be deferred,
CHARGES FOR BENEFITS
In view of the constraints on federal funds and the

The committee importance
finds of O&M
that more reliance in
on a “user-
the inland navigation budget, Congresspays”
andfunding strategy for the commercial navigation
the executive office will need
to decide how to pay for the system and how to prioritize
maintenance, inland
and would promote water-
economic
ways expenditures versus other federalefficiency.
expenditures. Economic principles
for charging system users and the practicalities
The committeeofsuggests
implementing charges
that an asset management
for the benefits received are importantprogram focused on economic
considerations efficiency, fully
in an analysis of
how to fund the system. would help prioritize maintenance spending and
freight service. impose either marginal
According to economic principles, if beneficiaries
costs or opportunity costs, user charges will
View improve
the TRB economic
Special Report efficiency
315 webcast.
(Chapter 5 describes the economic rationale for user charges in more de-
tail). A next step would be to determine whether efficient or practical ways
exist to charge groups of users who impose significant costs for the costs
associated with their use of the system. The various beneficiaries can be
grouped into four classes: commercial navigation, flood control and hy-
dropower, ancillary, and environmental.
×
Commercial Navigation Beneficiaries

This group is a direct beneficiary and imposes marginal costs to obtain
these benefits. Chapter 5 presents options for charging users for commer-
cial navigation and criteria for deciding among the options. User
charges for the system have been proposedfunding.since the 1940s, which the
Download
shipping industry has Free PDFopposed.
consistently In recentSupporters
years, the inlandofwaterways
user charges
system has
have included OMB, the Government Accountability Office, and domestic ton-
transported six to seven percent of all
Presidential administrations of both parties
componentsince Roosevelt,
of the both
national freight before
and after implementation of the first fuel tax approved by Congress infinds that,
for bulk commodities. The study committee
1978 (see Box 3-3 for a brief history of proposals
resources, thefor
mostuser
criticalcharges).
need for the inland
plan the
An increase in charges for shippers using for maintaining
waterways system reliability
raises and
concern
about a resulting shift of cargo from water to rail
on placing higherand highway,
priority perhaps
on investments in
accompanied by negative effects on highway
operations congestion,
and maintenance noise,
(O&M). air quality,
Without a
safety, and wear and tear on highways.maintenance
Analysis of the possible mode shift
may continue to be deferred, which
from temporary closure of a waterwaywouldindicates,
result in in thedeterioration
further case examined, and in a less cost
that, of the tonnage that would shift, most would move to rail and little to
truck (Kruse et al. 2012). Moreover, after
Thethe start finds
committee of thethatdiesel fuel on
more reliance tax,
a “user-
several studies of the potential impact of the barge diesel fuel tax on barge
freight were conducted in the 1980s. The consensus
maintenance, conclusion
and would of these
promote economic
studies was that any diversion of bargeefficiency.
freight to rail would be minimal.
For example, Babcock and German (1983) found that
The committee a 100
suggests thatpercent cost re-
an asset management
covery user fee would divert only 4 to 5program
percentfocused on economic
of barge efficiency,
tonnage to fully
rail-
roads. However, as noted in the discussion
would ofhelpthe potential
prioritize for mode
maintenance spending shift
and
ascertain the funding levels
in Box 2-1, the shift from one mode to another is highly dependent on required for reliable
freight service.
commodity, distance, subcorridor infrastructure, cost, and other variables,
View the
which makes generalizations difficult. The TRB Special
policy Reportthat
question 315 webcast.
arises in
deciding the federal role is whether theView
emission, safety, highway conges-
the press release.
tion, and infrastructure costs are greater than the costs of preventing
them.
Flood Control and Hydropower Beneficiaries
×
Bray et al. (2011) include flood control and hydropower as beneficiaries of

Funding
inland and ManagingFor
navigation. theprojects
U.S. Inland
that Waterways System: What
support commercial Po… as well
navigation
as other purposes such as flood control, the cost of serving that purpose is
allocated as described in Table 3-1. The beneficiaries of some purposes
(e.g., hydropower)
MyNAP pay directlysave
members for theirTRB
allocated cost,
Special Report 315:and some
Funding purposes
are paid for via
10%general Inland Waterways
online. revenues (e.g., flood control). System:
As aWhat Policy commer-
result, Makers Need to
Login
cial navigation or Registerthe
is allocated to costs attributable
federally fundedtoinland
thatwaterways
purpose, andpriorities
system, the
save!
other purposes are allocated for future investment, its beneficiaries, and sources of
funding.
BOX 3-3 for bulk commodities. The study committee finds that,
Brief History of Proposals for User Charges
waterways for
systemtheis aCommercial Inland
sustainable and well-executed
Waterways Systema plan for maintaining system reliability and
The Constitution (Article 1, Section 8)operations
gives Congress
and maintenancepower to Without
(O&M). regu- a
late commerce, including navigationfunding strategy that waterways.
and navigable prioritizes system preservation,
Section
10 of the first article protects the freedom of commerce
would result throughout
in further deterioration and in a less cost
the country by prohibiting the layingeffective
of “any andduty of tonnage”
less reliable system. to carry
out that intent. Furthermore, Congress instituted
The committee findsathat
free waterway
more reliance onpol-
a “user-
icy for the new Northwest Territory pays”
in the Northwest
funding strategy forOrdinance
the commercialofnavigation
1787. It declared that navigable waters leading into the Mississippi and
Saint Lawrence and those of any other states that may be admitted
efficiency.
into the Confederation “shall be common highways and forever free . .
. without any tax, impost, or duty therefore.” Lateronlegislative
program focused acts from
economic efficiency, fully
1790 to 1803 extended these exemptions to the territory south of the
Ohio River and declared that navigable rivers
ascertain the were
fundingpublic highways.
freight service.
During this period, Congress limited initial federal financial invest-
ments in the inland waterways system to snagging and clearing oper-
View the
ations. These were modest actions taken topress release.free use during
support
the colonial period because of the importance of inland waterways to
the early geographical and economic expansion of the nation. States
undertook the expensive construction of canals, locks, and dams and
made other improvements for navigation. States often charged ton-
nage duties and tolls for waterways use but were still unable to fi-
×
nance large navigation expenditures. Private enterprise also had diffi-

Funding andinManaging
culty recoveringthe
theU.S. Inland
costs Waterways
of water System:
transport What Po…
investments, espe-
cially after railroads emerged as competition.
By the 1940s, a transportation system had emerged that included both

water and rail carriers. The federal policy of subsidizing
Inland Waterways System: What commercial
Policy Makers Need to
10% online.
navigation Login
beganorto be questioned Know explores the role
(U.S. Office of the Federal and importance of the
Register to federally funded inland waterways system, priorities
Coordinator of Transportation 1939, for
save! 125). Highway
future investment, transport alsoand
its beneficiaries, wassources of
funding.
emerging, but not yet for long-haul movements. The Franklin
Roosevelt administration
Downloadof 1940
Free PDFwasInthe first
recent years,totheconsider seriously
inland waterways system has
transported six to seven percent
the idea that modifying the policy of free inland water transportation of all domestic ton-
to recover the costs of providing for component
navigation of thewas allowable
national and fea-
sible. Since the Roosevelt administration,
for bulkuser
commodities. The study committee finds that,
________________
a Box 3-3 draws from Ashton et al. (1976) and Shabman
performance. (1976).
Reliability and performance will depend
charges as a funding source for the inland waterways

The committee finds thathave been pro-
posed or supported by presidents of system
both parties. The President’s
Water Resources Policy Commissionmaintenance,
(1950, 202–203)and wouldunder President
promote economic
efficiency.
Truman was consistent with the position of the Roosevelt administra-
tion, illustrated as follows: The committee suggests that an asset management
Decisions as to user charges, or tollsimplemented
for waterand linked to theshould
commerce budgetingbeprocess,
worked out as part of the whole problem ofthe
ascertain reconciling
funding levelsand making
required for reliable
freight service.
workable a coordinated transportation system. But with rates from all
forms of transportation based on fullViewcosts, anSpecial
the TRB interconnected system
Report 315 webcast.
of modern waterways, coordinated with land transportation, should be
able to sustain itself with tolls based on full costs and yield returns on
the public investment, while contributing to most economic use of the
Nation’s resources.
In 1956, President Eisenhower submitted a report favoring some type

of user charges with regard to the cost of O&M (Senate Committee on
×
Commerce 1961, 32). In 1962, President Kennedy proposed user pay-

Funding
mentandforManaging thewaterways
the inland U.S. Inland Waterways
and suggestedSystem: a fuel taxWhat Po…per
of $0.02
gallon. President Johnson reiterated President Kennedy’s proposal in
his budget messages and recommended a fuel tax that would extend to
all domestic vessels
MyNAP with a save
members maximumTRB draft ofReport
Special 15 feet315:or less.andThe
Funding Managing the U.S.
10% online. also indicatedInland
Carter administration supportWaterways
for System:
some What
form Policy
of Makers
user Need to
charge. Login or Register to federally funded inland waterways system, priorities
In 1978 and 1986 Congress passed thefunding.
two pieces of legislation that be-
gan to transformDownload
funding Free
for the
PDFinland waterways
In recent andwaterways
years, the inland createdsystem the has
funding framework followed today. This transported six to seven
legislation percent of allthe
established domestic
fuel ton-
tax on commercial barges, increasedcomponent
user cost-sharing
of the nationalrequirements,
and established the IWTF to fund construction with The
for bulk commodities. fuelstudy
taxes paid by
committee finds that,
the barge industry. The industry opposed the lockage fees to fund con-
struction and maintenance proposedwaterwaysin the Inland
system is aWaterways
sustainable and Revenue
well-executed
Act of 1978; this opposition led to theplan for maintaining
current fuel tax,system reliability
which and di-
is less
rectly tied to the usage of waterwaysonfacilities andpriority
placing higher paysonfor construc-
investments in
tion and not maintenance. operations and maintenance (O&M). Without a
A number of proposals have been made
wouldmore recently
result in by both and
further deterioration thein a less cost
Bush and Obama administrations to effective
change and
userless reliable
paymentssystem.to recover
the system costs associated with commercial shipping
The committee (see reliance
finds that more Chapter on a5).
“user-
efficiency.

costs specific to their use. Hence, beneficiaries of nonnavigation
program focused purposes
on economic efficiency, fully
implemented and linked to the budgeting
are expected to pay their allocated share and are not an additional source process,
of funding for supporting the commercial navigation
ascertain the fundingpurpose within
levels required mul-
for reliable
tipurpose projects. If the navigation function were to cease for these mul-
freight service.
tipurpose projects because of minimal View
or nothe traffic,
TRB Specialthe other
Report project pur-
315 webcast.
poses would be allocated the costs of the project. If the whole project was
decommissioned, the federal government would be responsible for either
removing the project or paying to make sure it would not fail in a
weather-related or other event. In the case of hydropower, the beneficia-
ries already pay for the O&M costs associated with their use of the system
and a share of the capital costs. For the commercial navigation projects
that also provide hydropower, the hydropower beneficiaries pay 100 per-
×
cent of capital costs allocated to hydropower and any allocated costs for
operations. the U.S. Inland
If the navigation Waterways
function ceased forSystem: What Po…hy-
these waterways,
dropower beneficiaries would have to pay to maintain the dams to con-
tinue to receive this benefit.
Ancillary Beneficiaries Inland Waterways System: What Policy Makers Need to
10% online.
Login or Register to federally funded inland waterways
Groups that receive other benefits from projects authorized forsystem,
commer-priorities
cial navigation are referred to as ancillary beneficiaries because they were
funding.
incidental to the purpose for which these waterways investments were
made. Municipal water supply, slack water boating,
transported six to and
seven landside
percent of allrecre-
domestic ton-
ation are possible ancillary benefits recognized by USACE. A more com-
prehensive assessment of these benefits and their levels could be under-
taken, but even if the benefits proved to be large,
in order theefficient
to ensure marginal and oppor-
use of limited navigation
tunity costs to navigation imposed by these users of the system are mini-
mal. Furthermore, a practical way of charging these users
plan for maintaining systemdoes not
reliability andexist,
because they cannot be excluded from performance.
receiving Reliability
the benefit and performance
of waterway will depend
projects maintained for commercial navigation
operations and if they do not
maintenance pay.Without
(O&M). This a
funding strategy
case refers to segments used for commercial that prioritizes
navigation; system preservation,
if maintenance
for navigation ceased because of minimalwouldorresult
no incommercial navigation
further deterioration and in a less cost
effective and less reliable
traffic, the ancillary users would become the primary users and may besystem.
charged for their benefits. Chapter 5 provides
The committeefurther discussion
finds that more reliance ofonthis
a “user-
case. pays” funding strategy for the commercial navigation
A possible exception is recreational boats that could be charged a fee for
efficiency.
the operation of locks on waterways used for commercial
navigation. Pools behind dams permit freight
boating,service.
fishing, and other water-
based recreation. Lockages are required for
View therecreational craft
TRB Special Report to pass be-
315 webcast.
tween pools. Recreational lockages impose marginal costs on the lock and
dam system. Lockage service can increase financial outlays for system op-
erations, increase wear on the lock itself, and cause traffic delays. USACE
has adopted a number of management measures to reduce commercial
navigation delay cost (for example, scheduling of limited times for recre-
ational boat passages), but financial costs are still incurred. USACE could
calculate the costs of providing recreational lockages across the system,
×
and if justified, Congress could choose to increase the inland waterways

Funding andbyManaging
budget theor
that amount U.S. Inland Waterways
authorize System:
USACE to base What Po…user fee
a recreational
on that cost. This user fee is discussed further in Chapter 5.
Environmental Beneficiaries
If environmental benefits are sufficiently
Knowsizable
explores and broadly
the role distributed,
and importance of the
taxpayers would be the beneficiary. As federally
explainedfunded inland waterways
earlier, system, priorities
environmental
benefits of inland navigation exist, butfunding.
the magnitude of the benefit is un-
certain. As a practical matter, the challenge of paying for the benefit in the
context of federal budget constraints persists,
transportedleading
six to sevenback to ofa all
percent considera-
domestic ton-
tion of other funding options. miles of cargo. The system is a small but important
Findings and Conclusions in order to ensure efficient use of limited navigation
The inland waterways system infrastructure
waterwaysissystem
managed by USACE
and well-executed
funded from the USACE budget. Fundsplan for maintaining
available system reliability
for inland waterways and nav-
igation are in decline in constant dollars. As the
on placing system
higher priorityhas aged, mainte-
on investments in
nance has become a higher priority and operations and maintenance
now accounts (O&M).three-
for about Without a
fourths of the administration’s inland navigation
maintenance may budget
continuerequest.
Federal general revenues cover most ofeffective and less
the cost of reliable system.waterways
the inland
system. Users pay a share of construction costs through
The committee a barge
finds that more fuel
reliance on tax,
a “user-
pays” funding strategy for
but none of the cost of O&M. System users recognize that they need tothe commercial navigation
pay more. The 113th Congress and the shipping
maintenance,industry
and would supported a
promote economic
$0.09-per-gallon increase in the bargeefficiency.
fuel tax in 2014. However, under
federal legislation, fuel tax revenues can
freight service.
be used only to pay for construction; they cannot be used for O&M. While
the amount of funding required to sustain View the TRB Special
reliable Reportservice
freight 315 webcast.
is not
clear, it is evident that total revenues after the
View the increase
press release. in the fuel tax will
not be sufficient to maintain the system.25 Furthermore, increased capital
funding from users would compete with available federal funding for
O&M, since the federal government must both match the user contribu-
tion for capital improvements and pay all of the costs of O&M.
×
Because of historical precedent, the federal role in the management and

Funding andofManaging
funding the inlandthe U.S. Inland
waterways forWaterways
commercialSystem: navigation What Po…
is already
greater than for other freight modes. The total federal share of the cost of
the inland waterways system is estimated to be about 90 percent (TRB
2009). The federal
MyNAPshare
membersis roughly
save 25 percent
TRB Specialfor the
Report 315:highways
Funding and used bythe U.S.
Managing
motor carriers10%and 0 percent for pipelines
online. Inland Waterways
and nearly System:
soWhat
for Policy Makers Need to
railroads
(both privateLogin or Register
industries to
for which the federal role isinland
federally funded primarily
waterwaysone of safety
system, priorities
save!
and environmental regulation). Whereas for future
federalinvestment,
general its beneficiaries,
revenues cover and sources
all of
funding.
O&M expenses for the inland waterways, states pay 100 percent of the
O&M expenses, mostly Download
fromFree
userPDF
fees, Infor
recent years, thehighways
intercity inland waterwaysusedsystem has
by mo-
tor carriers. O&M expenses for railroads milesand pipelines
of cargo. The system areis paid
a smallfor
but by the
important
private industries responsible for thesecomponent
modes. of the national freight system, particularly
In a climate of constrained federal funds and with O&M becoming a
greater part of the inland navigation budget,
waterwaysasystem
pressing policy issue
is a sustainable is how
and well-executed
plan forof
to pay to preserve the system. Examination maintaining
whether system reliability and could
beneficiaries
help pay for the system is rational and on
would
placingimprove economic
higher priority on investmentsefficiency.
in
Commercial navigation beneficiaries are operations
a viableandoption,
maintenance (O&M).
since Without a
commercial
carriers impose significant marginal costs (Chapter
maintenance 5 discusses
may continue options
to be deferred, for
which
would result
these user charges and criteria for deciding amongin further deterioration and in a less cost
them).
Flood control and hydropower beneficiaries are not
The committee findsoptions
that morefor additional
funding for commercial navigation projects. The cost of flood controlnavigation
pays” funding strategy for the commercial for
the few commercial navigation projects that provide
maintenance, a flood
and would control
promote bene-
economic
fit is allocated for that purpose and paid via
efficiency.

________________ program focused on economic efficiency, fully
25 It is possible, though not likely, that would
federalhelpbudgets
prioritize maintenance
will growspending
substan- and
tially over time with significant increases for
freight inland navigation, but the
service.
committee assumes a more modest budget consistent with observed
trends and the policy goal of efficient use of resources with or without
budgetary constraints. View the press release.
general revenues. For the few commercial navigation projects that also
provide hydropower, hydropower beneficiaries already pay 100 percent of
×
new capital costs and any marginal costs for operations of benefits they
Funding andPractical
receive. Managing the U.S. Inland
mechanisms Waterways
or economic reasonsSystem: do not What Po…to exist
appear
for charging ancillary beneficiaries of waterways projects used for com-
mercial navigation (municipal water supply, irrigation, higher property
values for property
MyNAP owners,
memberssewage
save assimilation, mosquito
TRB Special Report 315: Funding control,
and Managingandthe U.S.
recreation), with the possible exceptionInland
10% online. Waterways System:
of charging What Policy Makers
for recreational Need to
boat
Login orbeneficiaries
lockages. Ancillary Register to may be charged
federally fundedforinland
waterways with mini-
save!
mal or no commercial navigation sinceforinfuturethisinvestment,
case they its beneficiaries,
would become and sources
the of
funding.
primary beneficiaries. (This case is discussed further in Chapter 5.)
transported six to seven
Barge transportation may provide an environmental percentto
benefit ofthe
all domestic
largerton-
public that includes lower emissions, safety,
componentspills,
of theand congestion,
national freight system, butparticularly
whether the size of the benefit is in lineforwith the current
bulk commodities. levelcommittee
The study of federal finds that,
investment is uncertain. Further analysis of corridors would be needed to
quantify the benefit. In the absence of waterways
definitive evidence
system concerning
is a sustainable the
and well-executed
plan forsuch
size of inland waterways benefits and until maintaining
evidencesystembecomes
reliability andavail-
able, Congress and the executive branch will have
on placing higherto use their
priority best judg-
on investments in
ment in determining the share the federal operations and maintenance
government should (O&M).
pay Without
and a
how to prioritize these expenditures versus other
maintenance may federal
continueexpenditures.
Regardless of who pays for the system,effective
a processand less
is reliable
needed system.
for prioritizing
spending. The capital projects backlog Theis not a reliable
committee indicator
finds that of on
more reliance thea “user-
pays” funding strategy for
amount of funding required for the system. A modest amount of the back- the commercial navigation
log is for navigation projects. A portionmaintenance,
of the navigation backlog
and would promote includes
economic
major rehabilitation to maintain the system,
efficiency.but it does not include O&M.
Furthermore, the navigation backlog may includesuggests
The committee projects thatthat aremanagement
an asset a lower
priority for spending. Congress has long authorized
program focused onand appropriated
economic efficiency, fully
USACE capital projects on a project-by-project basis. A benefit–cost
analysis prepared by USACE is the primary source
ascertain of technical
the funding informa-
freight service.
tion that Congress uses during the authorization process in deciding when
spending is justified for capital projects.
ViewWhile
the TRBbenefit–cost
Special Report 315 analyses
webcast. have
been used for determining whether a project meets a minimum threshold
for funding, they have not been used to rank projects, and the result has
been far more projects being authorized than can be afforded within the
constraints of the budget. A method for prioritizing projects on the basis
×
of the service needs of the system would be more useful than an attempt
to estimate and seekthe U.S. Inland
funding for theWaterways System:
existing backlog. What Po…
(Chapter 4 discusses
an approach for prioritizing spending, with an emphasis on O&M.)
References
ABBREVIATIONS Know explores the role and importance of the
CBO save!
Congressional Budget Office
for future investment, its beneficiaries, and sources of
funding.
CRS Congressional Research Service
GAO Government Accountability
Download Free PDF InOffice
recent years, the inland waterways system has
NRC National Research Council transported six to seven percent of all domestic ton-
TRB Transportation Research Boardcomponent of the national freight system, particularly
Anderson, S., and W. Wilson. 2008. Spatial Competition,
in order Pricing
to ensure efficient and navigation
use of limited
resources, the
Market Power in Transportation: A Dominant mostModel.
Firm critical need for theof
Journal inland
Regional Science, Vol. 48, No. 2, pp. 367–397.
on placing1976.
Ashton, P., C. Cooper Ruska, and L. Shabman. higherApriority on investments in
Legal–Historical
Analysis of Navigation User Charges. Journal of Water
funding strategy Resources
that prioritizes Planning
system preservation,
and Management Division, Vol. 102.WR1, April, pp.may
maintenance 89–100.
continue to be deferred, which
Babcock, M. W., and H. W. German. 1983. Forecast of Water Carrier
Demand to 1985. Proc., 24th Annual Meeting of thefinds
The committee Transportation
that more relianceResearch
on a “user-
Forum, Vol. 24, No. 1, pp. 249–257. system is feasible, would generate new revenues for
Bray, L. G., C. M. Murphree, and C. A. Dager. 2011. Toward a Full Accounting
efficiency.
of the Beneficiaries of Navigable Waterways. Center for Transportation
Research, University of Tennessee, Knoxville.
Burton, M. 1993. Railroad Deregulation,would help prioritize
Carrier Behavior,maintenance spending and
and Shipper
Response: A Disaggregated Analysis. Journal of Regulatory Economics, Vol.
freight service.
5, pp. 417–434.
Burton, M. 1995. Rail Rates and the Availability of release.

View the press Water Transportation:
The Missouri Valley Region. Review of Regional Studies, Vol. 25, No. 1, pp.
79–95.
Burton, M., and W. W. Wilson. 2006. Network Pricing: Service Differentials,

Scale Economies, and Vertical Exclusion in Railroad Markets. Journal of
Transport Economics and Policy, Vol. 40, No. 2, pp. 255–277.
×
Carter, N. T., and C. V. Stern. 2011. Army Corps Fiscal Challenges: Frequently
Funding
Askedand Managing
Questions. the U.S. Inland
Congressional Waterways
Research System:
Service, What Po…
Washington, D.C.
Carter, N. T., and C. V. Stern. 2014. Army Corps of Engineers: Water Resource
Authorizations, Appropriations, and Activities. Congressional Research
Service, Washington, D.C. Inland Waterways System: What Policy Makers Need to
10% online.
funding.
Download
CBO. 2014. The Highway Free
Trust PDFand
Fund the Treatment
In recent of Surface
years, the inland waterways system has
transported six to seven percent
Transportation Programs in the Federal Budget. United States Congress, of all domestic ton-
Washington, D.C. http://www.cbo.gov/sites/default/files/45416-
TransportationScoring.pdf. for bulk commodities. The study committee finds that,
Dager, C. A. 2013. Fuel Tax Report, 2011. waterways
Center system
for Transportation
is a sustainable and well-executed
Research, University of Tennessee, Knoxville.
Ferejohn, J. A. 1974. Pork Barrel Politics:operations
Rivers and Harbors Legislation,
and maintenance (O&M). Without a
1947–1968. Stanford University Press, Stanford, Calif.
Frittelli, J. 2013. Harbor Maintenance Finance and Funding. Report R43222.
Congressional Research Service, Washington, D.C.
Frittelli, J. 2014. Shipping U.S. Crude Oilpays”
By funding
Water:strategy
VesselforFlag
the commercial navigation
Requirements
and Safety Issues. Congressional Research Service,
maintenance, andWashington, D.C.
would promote economic
efficiency.
Frittelli, J., A. Andrews, P. W. Parfomak, R. Pirog, J. L. Ramseur, and M.
Ratner. 2014. U.S. Rail Transportation of Crude
program Oil: Background
focused and Issues
on economic efficiency, fully
implemented and linked
for Congress. Congressional Research Service, Washington, D.C. to the budgeting process,
GAO. 2010. Army Corps of Engineers: Budget Formulation Process
freight service.
Emphasizes Agencywide Priorities but Transparency of Budget Presentation
Could Be Improved. GAO-10-453.
GAO. 2011. Surface Freight Transportation: A Comparison of the Costs of
Road, Rail and Waterways Freight Shipments That Are Not Passed On to
Consumers. GAO-11-13.
GAO. 2012. Highway Trust Fund: Pilot Program Could Help Determine the
Viability of Mileage Fees for Certain Vehicles. GAO-13-77.
×
http://www.gao.gov/products/GAO-13-77.
Harbor, A. L. 2009. An Assessment of the Effect of Competition on Rail
Rates for Export Corn, Soybean, and Wheat Shipments. Journal of Food
Distribution Research, Vol. 40, No. 1, pp. 70–78.
Inland Marine Transportation System Know
Capital Investment
explores StrategyofTeam.
the role and importance the
2010. Inland Marine Transportation System (IMTS) Capital Projects
Business Model. Final Report, Revision 1. Inland Waterways Users Board,
funding.
Alexandria, Va.
Kruse, C. J., D. Ellis, A. Protopapas, andmiles
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MacDonald, J. M. 1987. Competition andwaterways
Rail Rates
systemfor
is a the Shipment
sustainable of
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Corn, Soybeans, and Wheat. Rand Journal of maintaining
Economics system
, Vol.reliability
18, No. and1, pp.
151–163. on placing higher priority on investments in
funding strategy
McMullen, B. S. 1991. Determinants of Wheat that prioritizes Rates
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for
Pacific Northwest Shippers. Journal of would
the Transportation Research
result in further deterioration in a less, cost
andForum
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NRC. 2011. National Water Resources Challenges
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of Engineers. National Academies Press, Washington D.C.
efficiency.
NRC. 2012. Corps of Engineers Water Resources Infrastructure:
Deterioration, Investment, or Divestment? Nationalsuggests
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that an asset management
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in Policy and Economic Impact. Virginia Water Resources Research Center,
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Copyright © 2023 National Academy of Sciences. All rights reserved.

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With the authorization of Congress, USACE, under its Civil Works

ment; hydropower generation facilities; and recreation. The primary

CAPITAL PROJECTS: NEW CONSTRUCTION AND suggests

resources projects, including infrastructure for freight transportation, has

Two types of congressional authorizations are required

After Congress authorizes a project, it becomes eligible to receive imple-

The committee suggests that an asset management

A previous National Research Council (NRC) report (2012) encouraged less

infrastructure. The traditional focus on WRDA for authorizing large new

The committee finds that more reliance on a “user-

The committee suggests that an asset management

The local assessment of assets and maintenance needs follows general

View the TRB Special Report 315 webcast.

View the press release.

established in a series of Water Resources Development Acts from 1986 to

Requires approval by the Secretary of the Army and construction is

9The Federal Highway Administration, for example, more clearly distin-

icantly alter the function or expand the physical capacity of an asset.

designated only for O&M of federally authorized channels for commercial

Flood and hurricane damage reduction View the press release.

Locally constructed flood projects NA 80d

d View the press

The balance of the IWTF, which is used to pay 50 percent of construction

View the press release.

The committee finds that more reliance on a “user-

The committee suggests that an asset management

View the TRB Special Report 315 webcast.

View the press release.

The committee finds that more reliance on a “user-

The committee suggests that an asset management

SOURCE: Adapted from Kruse et al. 2012.

View the TRB Special Report 315 webcast.

View the press release.

CAPITAL PROJECTS BACKLOG

Congress also authorized 34 new construction projects,

FUEL TAX REVENUES AS USER CONTRIBUTION

Federal legislation specifies the waterways subject to the collection of fuel

The committee finds that more reliance on a “user-

The committee suggests that an asset management

View the TRB Special Report 315 webcast.

View the press release.

States and private enterprise led the initial building

View the press release.

Department of Homeland Security) manage the marine and inland water-

for freight transportation and the economic and practical considerations

Download Free PDF

tween shippers and carriers. No authoritative study has estimated ei-

sidies are meaningful in specific subcorridors for specific

22 The Principles and Guidelines are available at

federal Water Resources Council, a body that no longer exists. In the

The committee finds that more reliance on a “user-

on the monopoly segment are often higher than comparable rail-only

View the TRB Special Report 315 webcast.

A full assessment of environmental benefit wouldsuggests

View the TRB Special Report 315 webcast.

View the press release.

Congestion reduction is another possible environmental benefit of barge,

no longer operated for commercial navigation, restoration of preproject

In view of the constraints on federal funds and the

Commercial Navigation Beneficiaries

Flood Control and Hydropower Beneficiaries