Port container tax bill put to rest in California

| 9/11/2007

A bill that has been sidelined in the California Assembly sought to generate about $400 million annually from shippers at ports in the state.

At the urging of Gov. Arnold Schwarzenegger, Sen. Alan Lowenthal, D-Long Beach, opted to table his bill until next year to avoid a potential veto. The Senate previously approved it.

The bill – SB974 – would allow the collection of a fee on every unit passing through the Los Angeles, Long Beach and Oakland port complexes. The bill outlines a maximum fee of $30 on the cargo in each 20-foot equivalent unit (TEU) container. Since many shipping containers are now 40 feet in length, the maximum fee imposed on the cargo inside would presumably be $60.

The money collected at the nation’s first-, second- and fourth-largest container ports would be used solely to ease congestion and to reduce air pollution.

Schwarzenegger said the bill is incomplete and lacks accountability. Instead, a year after he vetoed a similar effort he offered to work with Lowenthal on a compromise version for inclusion in the regular session that starts in January 2008.

“I support the concept of SB974 and want to work together with Sen. Lowenthal on the bill so it addresses the future of goods movement while also reducing environmental impacts,” Schwarzenegger said in a released statement. “I look forward to working during the fall recess with the Senator, his fellow legislators and all interested parties to craft a solution that will protect California’s air quality and also facilitate the goods movement through California.”

The current version 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. 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.

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.

Los Angeles Mayor Antonio Villaraigosa also is on the list of opponents. He wants a portion of container revenues to help pay for two key harbor area bridges.

Lowenthal doesn’t want to put money toward the bridges. But the governor wants to include Villaraigosa in discussions on the bill, the Los Angeles Times reported.

To view other legislative activities of interest for California in 2007, click here.

– By Keith Goble, state legislative editor