Inland Waterways Trust Fund
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Updated February 26, 2018
Inland Waterways Trust Fund
Overview
Figure 1. Federal Fuel-Taxed Inland Waterways
The Inland Waterways Trust Fund (IWTF) is a fund in the
U.S. Treasury that receives revenues from a tax (also
known as the inland waterway user fee) on commercial-
barge fuel on federally designated waterways.
Approximately 11,000 miles of the nation’s 36,000 miles of
inland waterways are part of this system and subject to the
fuel tax (see Figure 1). Pursuant to the Water Resources
Development Act of 1986 (WRDA 1986; P.L. 99-662),
IWTF monies are subject to appropriation and used to
finance construction and major rehabilitation projects on
these waterways. IWTF funds are used to match federal
appropriations from the General Fund of the Treasury.
Overall, expenditures from the IWTF typically make up
5%-15% of total spending by the Army Corps of Engineers
(Corps) on federal inland waterways. Regular operations
Source: CRS, based on Corps data.
and maintenance costs on these waterways, including
Note: Alaska and Hawaii have no fuel-taxed waterways.
dredging and minor lock repairs, are funded entirely from
the General Fund.
Whereas total freight tonnage for all other modes of
domestic shipping has increased in recent years, traffic and
The Water Resources Reform and Development Act of
tonnage on the inland waterways system has remained
2014 (WRRDA 2014; P.L. 113-121) authorized changes to
relatively flat over the last 20 years. Future inland
IWTF project planning and delivery, altered the cost-
waterways shipping is expected to increase, albeit at a rate
sharing threshold for major rehabilitation projects, and
slower than other modes. A primary concern for many
partially exempted one project (Olmsted Locks and Dam
commercial waterway users is the age of inland waterways
Project, on the Ohio River) from IWTF cost sharing. That
infrastructure and the potential for delays in shipping as this
same year, P.L. 113-295 included among its provisions an
infrastructure deteriorates. Some are concerned that these
increase to the inland waterway fuel tax. These changes
delays could lead users to turn to other modes of freight
have stabilized the IWTF balance and allowed for an
transit.
overall increase in IWTF-related expenditures on inland
waterways (see Figure 2). This In Focus discusses the
IWTF Financing Trends
IWTF, inland waterways, and related issues for Congress.
Congress established the inland waterways user fee in 1978.
Inland Waterways Background
WRDA 1986 formally established the system by which
these fees are utilized, including the IWTF and the current
Annual commercial traffic on the federal inland waterways
system of financing inland waterways construction and
system (i.e., fuel-taxed waterways designated by Congress
major rehabilitation projects. Costs for these projects are
and eligible for funding from the IWTF) accounts for 4%-
shared equally between the IWTF and the General Fund,
5% of total commercial tonnage shipped in the United
whereas regular waterway operations and maintenance
States. Although inland waterways are a relatively small
costs are funded entirely from the General Fund. The IWTF
part of the nation’s freight transportation network, they are
balance has varied considerably over time, reaching its
an important transportation route in some regions. In some
highest level in FY2002. Shortly thereafter, IWTF
areas that rely on movement of bulk goods, the percentage
appropriations increased significantly as the George W.
of commercial tonnage shipped by barge, especially for
Bush Administration requested and Congress appropriated
specific commodities, is high. Along with freight rail,
greater investments in IWTF-funded projects. At the same
inland waterways are a means of transport for the nation’s
time, fuel tax receipts declined. As a result, the balance fell
grain and oilseed exports and for bulk products such as
sharply from FY2005 to FY2010 (see Figure 2).
coal, petroleum, chemicals, processed metals, cement, sand,
and gravel.
https://crsreports.congress.gov
Inland Waterways Trust Fund
Figure 2. IWTF Financing Trends, FY1990-FY2017
previous threshold of $8 million). WRRDA 2014 also
reduced the IWTF cost-sharing requirement for the Olmsted
Locks and Dam Project from 50% to 15%. WRRDA 2014
directed additional study by the Corps of new user-fee and
revenue options, including studies of the efficiency of
revenue collection on the inland waterways system and the
potential use of bonds or new fees to finance the IWTF.
WRRDA 2014 also authorized a stakeholder roundtable to
review and evaluate inland waterways policy alternatives.
Commercial Barge Fuel-Tax Increase. The Tax Increase
Prevention Act of 2014 (P.L. 113-295) included among its
provisions an increase of $0.09 (from $0.20 to $0.29) per
gallon to the inland waterways fuel tax. This increase was
generally consistent with the user-fee recommendation of
the IWUB proposal and took effect on April 1, 2015. Since
enactment of these changes, new fuel-tax receipts accruing
to the IWTF have been approximately $25 million per year.
Budget Proposals. Similar to prior Administrations, budget
Source: U.S. Army Corps of Engineers data. Graphic by CRS.
proposals both before and after WRRDA 2014 requested
Notes: FY2009 and FY2010 reflect American Recovery and
Reinvestment Act of 2009 (P.L. 111-5) funding. FY2014 reflects
significant increases to inland waterways user fees to
alterations enacted under WRRDA and related legislation.
provide additional revenues and allow increased spending
on inland waterways. These requests have, in most cases,
To stabilize the IWTF balance, Congress has enacted a
recommended replacing or supplementing the fuel tax with
number of stopgap measures in recent years. For instance,
other fees (tolls, licensing fees, etc.). Congress and industry
Congress exempted certain projects from IWTF cost
interests have rejected these proposals, concluding that they
sharing under the American Recovery and Reinvestment
would impose an unacceptable burden on shippers.
Act (P.L. 111-5). In appropriations bills from FY2009 to
Issues for Congress
FY2014, Congress limited IWTF spending to the annual
amount received in fuel taxes. These limitations had the
The enactment of WRRDA 2014, coupled with the
desired effect of stabilizing the IWTF, but, combined with
increases to the IWTF fuel tax, has made it possible for
cost overruns at the Olmsted Project, they also greatly
Congress to both provide significant appropriations for the
limited the number of new and ongoing projects. More
Olmsted Project and make available a greater share of the
recently, the IWTF balance and overall spending have
IWTF balance for other qualifying inland waterway
increased as a result of the changes discussed below.
projects. Receipt collections have increased marginally, and
the trust fund remains subject to discretionary
Proposals and Recent Changes
appropriations.
Inland Waterways Users Board Proposal. In 2010, the
Inland Waterways Users Board (IWUB), a federal advisory
After the Olmsted Project is complete, inland waterway
committee advising the Corps on inland waterways,
expenditures may decrease, as the unique cost-sharing
endorsed a proposal supported by some shipping-industry
arrangement for that project will no longer be in effect.
interests. The IWUB proposed to increase the fuel tax by a
Furthermore, despite the aforementioned fuel-tax increase,
maximum of $0.09 per gallon, and that the federal
recent Administration budgets (including the FY2019
government increase its share of projects funded, to cover
budget request) have continued to propose new inland
all project costs for dam rehabilitations, as well as other
waterway user fees and reduced expenditures on IWTF
inland waterways rehabilitation projects less than $100
construction. In considering future proposals, Congress may
million (since WRDA 1986, the policy of the federal
consider what level of improvements and increased
government had been to fund such costs from the General
appropriations are warranted, if any; the appropriate cost
Fund only when they were less than $8 million). The IWUB
share between the federal government and users; and the
also proposed project-delivery changes aimed at preventing
preferred type and amount of user fees. Other topics for
future cost overruns, among other things. Bills to authorize
consideration include sequencing and funding of individual
these changes were introduced but not enacted.
projects, efficiency of user-fee collections, and addition or
deauthorization of the individual waterways system.
WRRDA 2014 Changes. WRRDA 2014 made changes to
inland waterways financing but did not alter the fuel tax or
Charles V. Stern, Specialist in Natural Resources Policy
add other user fees. It authorized the project-delivery
Nicole T. Carter, Specialist in Natural Resources Policy
recommendations of the IWUB proposal and made the
IF10020
federal government responsible for paying all rehabilitation
costs less than $20 million (i.e., less than the IWUB’s
proposed threshold of $100 million but more than the
https://crsreports.congress.gov
Inland Waterways Trust Fund
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10020 · VERSION 9 · UPDATED
Updated February 26, 2018
Inland Waterways Trust Fund
Overview
Figure 1. Federal Fuel-Taxed Inland Waterways
The Inland Waterways Trust Fund (IWTF) is a fund in the
U.S. Treasury that receives revenues from a tax (also
known as the inland waterway user fee) on commercial-
barge fuel on federally designated waterways.
Approximately 11,000 miles of the nation’s 36,000 miles of
inland waterways are part of this system and subject to the
fuel tax (see Figure 1). Pursuant to the Water Resources
Development Act of 1986 (WRDA 1986; P.L. 99-662),
IWTF monies are subject to appropriation and used to
finance construction and major rehabilitation projects on
these waterways. IWTF funds are used to match federal
appropriations from the General Fund of the Treasury.
Overall, expenditures from the IWTF typically make up
5%-15% of total spending by the Army Corps of Engineers
(Corps) on federal inland waterways. Regular operations
Source: CRS, based on Corps data.
and maintenance costs on these waterways, including
Note: Alaska and Hawaii have no fuel-taxed waterways.
dredging and minor lock repairs, are funded entirely from
the General Fund.
Whereas total freight tonnage for all other modes of
domestic shipping has increased in recent years, traffic and
The Water Resources Reform and Development Act of
tonnage on the inland waterways system has remained
2014 (WRRDA 2014; P.L. 113-121) authorized changes to
relatively flat over the last 20 years. Future inland
IWTF project planning and delivery, altered the cost-
waterways shipping is expected to increase, albeit at a rate
sharing threshold for major rehabilitation projects, and
slower than other modes. A primary concern for many
partially exempted one project (Olmsted Locks and Dam
commercial waterway users is the age of inland waterways
Project, on the Ohio River) from IWTF cost sharing. That
infrastructure and the potential for delays in shipping as this
same year, P.L. 113-295 included among its provisions an
infrastructure deteriorates. Some are concerned that these
increase to the inland waterway fuel tax. These changes
delays could lead users to turn to other modes of freight
have stabilized the IWTF balance and allowed for an
transit.
overall increase in IWTF-related expenditures on inland
waterways (see Figure 2). This In Focus discusses the
IWTF Financing Trends
IWTF, inland waterways, and related issues for Congress.
Congress established the inland waterways user fee in 1978.
Inland Waterways Background
WRDA 1986 formally established the system by which
these fees are utilized, including the IWTF and the current
Annual commercial traffic on the federal inland waterways
system of financing inland waterways construction and
system (i.e., fuel-taxed waterways designated by Congress
major rehabilitation projects. Costs for these projects are
and eligible for funding from the IWTF) accounts for 4%-
shared equally between the IWTF and the General Fund,
5% of total commercial tonnage shipped in the United
whereas regular waterway operations and maintenance
States. Although inland waterways are a relatively small
costs are funded entirely from the General Fund. The IWTF
part of the nation’s freight transportation network, they are
balance has varied considerably over time, reaching its
an important transportation route in some regions. In some
highest level in FY2002. Shortly thereafter, IWTF
areas that rely on movement of bulk goods, the percentage
appropriations increased significantly as the George W.
of commercial tonnage shipped by barge, especially for
Bush Administration requested and Congress appropriated
specific commodities, is high. Along with freight rail,
greater investments in IWTF-funded projects. At the same
inland waterways are a means of transport for the nation’s
time, fuel tax receipts declined. As a result, the balance fell
grain and oilseed exports and for bulk products such as
sharply from FY2005 to FY2010 (see Figure 2).
coal, petroleum, chemicals, processed metals, cement, sand,
and gravel.
https://crsreports.congress.gov
Inland Waterways Trust Fund
Figure 2. IWTF Financing Trends, FY1990-FY2017
previous threshold of $8 million). WRRDA 2014 also
reduced the IWTF cost-sharing requirement for the Olmsted
Locks and Dam Project from 50% to 15%. WRRDA 2014
directed additional study by the Corps of new user-fee and
revenue options, including studies of the efficiency of
revenue collection on the inland waterways system and the
potential use of bonds or new fees to finance the IWTF.
WRRDA 2014 also authorized a stakeholder roundtable to
review and evaluate inland waterways policy alternatives.
Commercial Barge Fuel-Tax Increase. The Tax Increase
Prevention Act of 2014 (P.L. 113-295) included among its
provisions an increase of $0.09 (from $0.20 to $0.29) per
gallon to the inland waterways fuel tax. This increase was
generally consistent with the user-fee recommendation of
the IWUB proposal and took effect on April 1, 2015. Since
enactment of these changes, new fuel-tax receipts accruing
to the IWTF have been approximately $25 million per year.
Budget Proposals. Similar to prior Administrations, budget
Source: U.S. Army Corps of Engineers data. Graphic by CRS.
proposals both before and after WRRDA 2014 requested
Notes: FY2009 and FY2010 reflect American Recovery and
Reinvestment Act of 2009 (P.L. 111-5) funding. FY2014 reflects
significant increases to inland waterways user fees to
alterations enacted under WRRDA and related legislation.
provide additional revenues and allow increased spending
on inland waterways. These requests have, in most cases,
To stabilize the IWTF balance, Congress has enacted a
recommended replacing or supplementing the fuel tax with
number of stopgap measures in recent years. For instance,
other fees (tolls, licensing fees, etc.). Congress and industry
Congress exempted certain projects from IWTF cost
interests have rejected these proposals, concluding that they
sharing under the American Recovery and Reinvestment
would impose an unacceptable burden on shippers.
Act (P.L. 111-5). In appropriations bills from FY2009 to
Issues for Congress
FY2014, Congress limited IWTF spending to the annual
amount received in fuel taxes. These limitations had the
The enactment of WRRDA 2014, coupled with the
desired effect of stabilizing the IWTF, but, combined with
increases to the IWTF fuel tax, has made it possible for
cost overruns at the Olmsted Project, they also greatly
Congress to both provide significant appropriations for the
limited the number of new and ongoing projects. More
Olmsted Project and make available a greater share of the
recently, the IWTF balance and overall spending have
IWTF balance for other qualifying inland waterway
increased as a result of the changes discussed below.
projects. Receipt collections have increased marginally, and
the trust fund remains subject to discretionary
Proposals and Recent Changes
appropriations.
Inland Waterways Users Board Proposal. In 2010, the
Inland Waterways Users Board (IWUB), a federal advisory
After the Olmsted Project is complete, inland waterway
committee advising the Corps on inland waterways,
expenditures may decrease, as the unique cost-sharing
endorsed a proposal supported by some shipping-industry
arrangement for that project will no longer be in effect.
interests. The IWUB proposed to increase the fuel tax by a
Furthermore, despite the aforementioned fuel-tax increase,
maximum of $0.09 per gallon, and that the federal
recent Administration budgets (including the FY2019
government increase its share of projects funded, to cover
budget request) have continued to propose new inland
all project costs for dam rehabilitations, as well as other
waterway user fees and reduced expenditures on IWTF
inland waterways rehabilitation projects less than $100
construction. In considering future proposals, Congress may
million (since WRDA 1986, the policy of the federal
consider what level of improvements and increased
government had been to fund such costs from the General
appropriations are warranted, if any; the appropriate cost
Fund only when they were less than $8 million). The IWUB
share between the federal government and users; and the
also proposed project-delivery changes aimed at preventing
preferred type and amount of user fees. Other topics for
future cost overruns, among other things. Bills to authorize
consideration include sequencing and funding of individual
these changes were introduced but not enacted.
projects, efficiency of user-fee collections, and addition or
deauthorization of the individual waterways system.
WRRDA 2014 Changes. WRRDA 2014 made changes to
inland waterways financing but did not alter the fuel tax or
Charles V. Stern, Specialist in Natural Resources Policy
add other user fees. It authorized the project-delivery
Nicole T. Carter, Specialist in Natural Resources Policy
recommendations of the IWUB proposal and made the
IF10020
federal government responsible for paying all rehabilitation
costs less than $20 million (i.e., less than the IWUB’s
proposed threshold of $100 million but more than the
https://crsreports.congress.gov
Inland Waterways Trust Fund
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10020 · VERSION 9 · UPDATED