The Inland Waterway Revenue Act of 1978 (Public Law 95-502) established a surcharge on fuel consumed in the transportation of commodities by commercial inland waterway users. Initiated at four cents per gallon on October 1, 1980 the surcharge is scheduled to increase to ten cents per gallon by the 1985 navigation season. Revenues generated from the user tax have been earmarked to finance the maintenance and operations of existing navigation structures and practices and to defray the cost of current and planned construction. The legislated level of taxation, however, is insufficient to recover the total expenditures associated with these categories. This dissertation considers the impact of various taxation mechanisms designed to recover 100 percent of inland waterway navigation related expenditures.;The focus of this study is narrowly defined, in that it is only the impact on shipments of the leading agricultural export commodities--corn, soybeans and wheat--which are considered. The impact of inland waterway user changes on transport costs, origin-destination routing, modal traffic share and modal revenue generated from shipments of grain are estimated utilizing a linear programming model. A solution to the model specifies that combination of corn, soybean and wheat shipments that minimizes the annual transportation costs of shipping grain from U.S. origin-surplus regions to domestic and foreign demand-deficit regions. Results are established upon comparison of a base--no user fee--solution and five user tax solutions. The five user tax types include a fuel tax, segment ton-mile tax, combination fuel segment ton-mile tax, and segment ton-mile tax accompanied by assumed 50 and 100 percent rail rate responses in water competitive regions.;The results indicate that the impact on grain shipments is dependent upon the type of tax implemented. Of projected 1989-1990 crop year barge shipments, equal to 2.4 billion bushels, between 10.6 and 17.6 percent are diverted to direct rail or truck shipments. The tax revenue generated from grain shipments ranges from $59.3 to $67.0 million dollars. On a per bushel basis, user charges result in an average increase in barge transportation costs ranging from 3.0 to 3.4 cents per bushel.
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