California port container fee bill clears statehouse

| 8/8/2008

A bill on its way to the governor’s desk in California would generate about $400 million annually from shippers at ports in the state.

The state’s Senate voted 22-9 Tuesday, Aug. 5, to sign off on Assembly changes to a bill that would allow the collection of $30 fees 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 evenly distributed to ease congestion and to reduce air pollution.

“We have taken a stand. ... We must deal with congestion and reduce pollution caused by the ports,” Sen. Alan Lowenthal, D-Long Beach, said in a written statement.

The bill – SB974 – now moves to Gov. Arnold Schwarzenegger’s desk. If signed into law, the ports would have until the end of this year to develop a process to notify and collect user fees at least twice a year from container cargo owners. Collection of the fees would begin July 1, 2009.

According to the analysis of the bill, revenue from the fees at the ports of Los Angeles and Long Beach are expected to reach $100 million by the end of 2009. Each year thereafter, revenue at the ports is expected to be $340 million annually.

The Port of Oakland is expected to generate $17 million in fees by the end of 2009. Revenue at the site is expected to grow to $54 million annually thereafter.

Lowenthal’s bill allots the portion provided to alleviate port congestion to the California Transportation Commission to fund projects that improve the rail system that moves containers to and from the ports.

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.

Supporters of the bill say something must be done now. The ports account for nearly 50 percent of the nation’s imports, and by 2020 cargo at the ports is expected to triple, they say.

In addition, advocates say that a CARB report from 2006 stated that pollution from ports in the state causes 2,400 premature deaths each year. Also, during the next 15 years, there will be an estimated $200 billion in additional health costs that CARB attributes to goods movement.

Opponents of the legislation include retailers and ocean carriers who say the bill would lead to the diversion of cargo outside the state and drive up prices on consumer goods. Others say the bill violates the U.S. commerce clause by regulating goods that travel through states.

To view other legislative activities of interest for California in 2008, click here.

– By Keith Goble, state legislative editor