California bill would tax port containers

| 4/12/2007

A California state lawmaker has renewed and revised his effort to generate more than $525 million annually from shippers at ports in the state.

Sponsored by Sen. Alan Lowenthal, D-Long Beach, the bill would collect a $30 fee on every 20-foot equivalent unit passing through the Los Angeles, Long Beach and Oakland port complexes. Money from the nation’s first-, second- and fourth-largest container ports would be used solely for improvements to road and rail infrastructure and clean-air programs.

The portion provided to alleviate port congestion would go to the California Transportation Commission to fund projects that improve the rail system that moves containers to and from the ports. The text of the bill says the commission would be prohibited “from using the funds to construct, maintain, or improve highways.”

Money earmarked for mitigation relief would be used by the California Air Resources Board to develop a list of projects to reduce pollution caused by the movement of containers.

This is Lowenthal’s third attempt at implementing container fees. The most recent effort was vetoed a year ago by Gov. Arnold Schwarzenegger.

Since then, Lowenthal included the Oakland port to ease concerns in Los Angeles that shippers would take their business up the coast if the fee was imposed. As a concession to the governor, he also removed wording that required a third of funds to be used for security.

Schwarzenegger also said security funding is a federal issue, the Los Angeles Business Journal reported.

Despite the changes, opposition isn’t hard to find. Retailers and ocean carriers say the bill would lead to cargo being diverted outside the state and drive up prices on consumer goods.

Anxiety about the bill also can be found in Hawaii, where it is estimated the fee would cost shippers based in the state $34 million a year. To show their disapproval, a resolution has been offered in the state’s House urging California lawmakers to consider alternative means for raising revenue for infrastructure.

Lowenthal, chairman of the Committee on Environmental Quality, is unmoved by concerns of the opposition. “It is high time that major retailers and business interests in this country realize that the public will not tolerate growth without reductions in air pollution,” he said in a written statement.

The bill – SB974 – is in the Senate Transportation & Housing Committee.

– By Keith Goble, state legislative editor