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September 06, 2007 

California Container Fee Proposal Withdrawn

The controversial bill (SB 974) that would have imposed a $30 per twenty foot equivalent unit (TEU) user fee on container cargo imported and exported through the ports of Long Beach, Los Angeles and Oakland has been withdrawn by its sponsor in the California Assembly after Governor Arnold Schwarzenegger threatened to veto the measure. The author of the bill, California State Senator Alan Lowenthal (D-Long Beach), has vowed to reintroduce the bill next year.

In a joint statement, Governor Arnold Schwarzenegger and Senator Alan Lowenthal (D-Long Beach) said:

“Our ports are an integral component of goods movement in and out of California. I support the concept of SB 974 and want to work together with Senator Lowenthal on the bill so it addresses the future of goods movement while also reducing environmental impacts. 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,” said Governor Schwarzenegger.

“I am pleased that the Governor understands the need to fund air quality improvements and rail infrastructure, especially grade separations. I accept the Governor’s offer to work together and make SB 974 a reality,” stated Lowenthal.

SB 974, which was approved by California Senate's Appropriation Committee in July, would have imposed a "user fee" on all container cargo going in and out of the ports of Los Angeles, Long Beach and Oakland. It is estimated that more than $500 million would be collected annually from the fee and would fund projects intended to alleviate pollution of containerized cargo moved to and from these ports and improve the movement of cargo in California.

The California Legislature passed a similar bill last year (SB 927) to that would impose user fees on containers moving through he ports of Long Beach and Los Angeles. However, California Governor Arnold Schwarzenegger vetoed the bill. In his veto statement, the Governor said that the bill was "flawed in its construction" and was drafted "to include only two ports and applies only to goods shipped in containers, ignoring all other forms of shipping and ports of entry." Governor Schwarzenegger also stated that the bill would have a negative impact on the "the sale and delivery of goods grown and manufactured in California." SB 974 addressed one of the Governor's concern by expanding the scope of the user fee to include the port of Oakland.

The container fee has been strongly opposed by many trade groups on grounds that the user fee will hurt California's ports, is anti-consumer and is likely to be unconstitutional.

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