Port Development:

Sponsors Have Not Used User Fee Financing to Date

RCED-89-125: Published: May 4, 1989. Publicly Released: May 4, 1989.

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Pursuant to a legislative requirement, GAO reviewed the operations of nonfederal interests that levy port or harbor dues under the Water Resources Development Act to recover their share of the cost of harbor improvement projects, to determine their compliance with the applicable conditions.

GAO found that: (1) no nonfederal interest had initiated action to use the cost recovery authority; and (2) although there were 25 federal harbor improvement projects initiated under the cost-sharing provisions, the nonfederal share of the applicable costs was financed through other means, such as general revenues. GAO also found that reasons for failure to use the cost recovery provisions included: (1) a provision prohibiting user fees until project completion, which precluded using dues as a basis for selling securities to provide financing for development and construction costs; (2) a provision limiting charges to vessels that benefit from the particular project; and (3) possible competitive disadvantages.

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