California Legislature Passes Shipping Container Fee
The California State Legislature last week passed a bill, SB 927, that would impose a container fee of $30 per twenty foot equivalent unit (TEU) and $60 per forty foot equivalent unit (FEU) on all cargo – both imports and exports – moving through the ports of Los Angeles and Long Beach (the first and second busiest port in the U.S.). The bill is now waiting for Governor Schwarzenegger's signature or veto.
If signed into law, the "user fee" that would be collected after January 1, 2008 is estimated to generate more than $500 million per year. The bill provides that one-third of the revenues would be earmarked for improving the rail system moving port container cargo to and from the Ports of Los Angeles and Long Beach. Another third would be spent to fund port security programs. The final third of revenues would go to the California Air Resources Board to reduce truck, ship and rail pollution associated with the ports.
Many legal experts believe that the container user fee created in SB 927 is unconstitutional.
Governor Schwarzenegger previously vetoed a similar measure on grounds that such a container fee was bad for business.
However, this year is an election year and it is uncertain how the Governor will act. The Los Angeles Times, in an editorial in today's edition entitled "Clean Up the Killer Ports", urged the Governor to sign the bill.
The California Chamber of Commerce, the National Retail Federation and many other trade associations have announced their opposition to this bill.
|posted by Douglas N. Jacobson| Permalink 
