WASHINGTON, Dec. 3, 2014 -- Congress could soon pass a tax increase to help fund reconstruction of aging locks on the Mississippi River and other waterways, a top priority for agricultural shippers. 

The House on Wednesday voted 404-17 to approve a barge fuel-tax increase that would raise an estimated $260 million over the next 10 years for work on the waterways. The tax increase is tucked into a bill, known as the ABLE Act, which would authorize new tax savings accounts for people with disabilities.

The Senate has yet to act on a similar measure, but the legislation is popular with advocates for people with disabilities and has 74 Senate cosponsors.  

The bill would increase the barge tax from 20 cents a gallon to 29 cents starting in April. The 20-cent tax currently raises about $80 million for the Inland Waterways Trust Fund. The tax revenue is matched by general tax revenue to pay for navigation improvements.

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The tax increase is the final piece of a strategy to dramatically increase funding for rebuilding locks and dams on the Mississippi and Illinois rivers among other waterways.  A water projects authorization bill that President Obama signed into law this spring would shift away from the waterways fund to the general treasury the ongoing cost of the over-budget Olmsted Project on the Ohio River.

That change, plus the additional barge tax revenue, could increase the amount of money available for non-Olmsted projects to as much as $192 million a year, up from the $82 million spent in fiscal 2014, said Mike Toohey, president and CEO of the Waterways Council Inc., which represents agricultural shippers and other waterway users.

Annual funding levels would remain under the control of congressional appropriators, but the industry will have a number of key supporters in the Senate next year when it is under Republican control, Toohey said. They include Mitch McConnell of Kentucky, who will be the Republican majority leader, and Thad Cochran of Mississippi, who will likely chair the Appropriations Committee.

The House Ways and Means Committee added the barge tax increase to the ABLE Act to help offset its cost, although the barge revenue has historically been dedicated to waterway improvements.

A spokesman for the ABLE Act’s Senate sponsor, Robert Casey, D-Pa., said Wednesday that “we’re increasingly optimistic” that the legislation will be enacted.


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