BILL ANALYSIS
AB 2041
Page 1
ASSEMBLY THIRD READING
AB 2041 (Lowenthal)
As Amended May 6, 2004
Majority vote
TRANSPORTATION 8-5 LOCAL GOVERNMENT 6-3
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|Ayes:|Oropeza, Chan, Kehoe, |Ayes:|Salinas, Lieber, Leno, |
| |Liu, Longville, Pavley, | |Mullin, Steinberg, |
| |Salinas, Simitian | |Wiggins |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Houston, Bates, La Suer, |Nays:|Daucher, Garcia, La Suer |
| |Mountjoy, Parra | | |
| | | | |
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APPROPRIATIONS 14-5
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|Ayes:|Chu, Berg, Corbett, | | |
| |Firebaugh, Goldberg, | | |
| |Leno, Nation, | | |
| |Negrete McLeod, Oropeza, | | |
| |Pavley, Ridley-Thomas, | | |
| |Wesson, Wiggins, Yee | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Runner, Bates, Daucher, | | |
| |Haynes, Keene | | |
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SUMMARY : Establishes a Port Congestion Management District
(District) to alleviate congestion in the Ports of Los Angeles
and Long Beach (Ports) by, among other things, charging a fee
for commercial traffic moving in and out of the Ports during
business hours. Specifically, this bill :
1)Makes legislative declarations and findings regarding the
volume of traffic on State Route 710 and of ship travel
through the Ports the importance of these Ports to the state's
economy, and the possible use of traffic-reduction strategies
such as shifting rail and shipping activities to less
congested hours.
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2)Establishes the District as an entity of local government, to
be governed by a seven-member board of specified membership
appointed by, and serving indefinite terms at the pleasure of,
the Secretary of Business, Transportation and Housing (BT&H).
3)Limits the geographic jurisdiction of the District to the
Ports.
4)Authorizes the District to impose a specified charge,
establish and manage a specified fund, and develop and build
projects necessary to alleviate congestion in the Ports.
5)Allows the District to:
a) Accept grants, fees, and allocations from the state,
local agencies, and private entities;
b) Acquire property, through purchase or eminent domain;
c) Incur indebtedness, secured by pledges of revenue;
d) Contract with public and private entities for the
planning, design, and construction of congestion management
projects;
e) Enter into cooperative or joint-development agreements
with local governments or private entities; and,
f) Relocate utilities, as necessary for completion of
congestion management projects.
6)Requires the District to establish a charge for the privilege
of transporting cargo by commercial motor vehicle into or out
of the Ports during the hours of 8 a.m. to 5 p.m., inclusive,
on Monday to Friday, inclusive.
7)Requires the charge to be paid by the person who orders the
shipment and to be expended to help alleviate the traffic
congestion caused by scheduling shipments by commercial motor
vehicle during those hours.
8)Prohibits the person ordering the shipment and paying the
charge from imposing the charge on an operator of a commercial
motor vehicle, directly or indirectly, as a payment charge,
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charge back, or offset charge.
9)Requires all marine terminals at the Ports, and all shipping
lines being serviced at those marine terminals, to provide
offpeak operations to persons who order shipments.
10)Requires each marine terminal at the Ports to report both of
the following to the District on a quarterly basis:
a) The average turn times for each hour of daytime
operation and each hour of offpeak operation; and,
b) The percentage of truck traffic at each terminal during
daytime operations and during offpeak operations.
11)Requires the District to hold quarterly public hearings to
report and discuss the results of these reports. At the
public hearings, the District would be required discuss and
seek input from all interested stakeholders and communities
near the Ports on any impacts from increased truck traffic to
and from the Ports at offpeak hours.
12)Requires the District to report annually to the Legislature
on the use of offpeak gates at the Ports.
13)Requires the District to establish and manage a Port
Congestion Management Fund (Fund) and to deposit all revenues
derived from imposition of the above-referenced charge into
the Fund.
14)Allows expenditures from the Fund to be used for:
a) Projects to encourage inland shipping of cargo into and
out of the ports via means other than by commercial motor
vehicle, including, but not limited to, rail;
b) Projects to repair, improve, and expand existing
transportation infrastructure serving the ports to reduce
congestion; and,
c) Projects to encourage scheduling of shipments during
other than normal business hours.
15)Provides that this bill will not go into effect if the BT&H
Secretary determines, on January 1, 2005, that a local
AB 2041
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transportation agency or authority that has jurisdiction at,
or near, the Ports has established a port cargo container fee
and that at least 20% of the inbound cargo transported by
commercial motor vehicles at the Ports occurs outside normal
business hours.
16)Requires the BT&H Secretary to notify the Secretary of State
in the event that he or she makes such a determination.
EXISTING LAW : Authorizes two or more harbor agencies, as
defined, to form a joint powers authority for the purpose of
establishing an infrastructure fund and financing port or harbor
infrastructure, as specified.
FISCAL EFFECT : According to the Assembly Appropriations
Committee analysis, moderate potential revenue to the District,
starting fiscal year (FY) 2005-06, generated by the daytime
cargo charges imposed on recipients. This revenue is intended
to cover the costs of District activities and projects.
Potential cost pressure of perhaps $500,000 annually starting in
FY 2005-06, to the BT&H Agency to provide grants and other
allocations to support the activities of the District.
COMMENTS : The intent of this bill, according to the author, is
to shift some the 12 million containers a year that move through
the Ports to off-peak hours. This would alleviate some of the
port area congestion and help in the efficiency of moving that
cargo, which is estimated to grow to 47 million containers a
year by 2025. For a point of reference, the author notes that
the Ports combined moved approximately four million containers a
year in 1997 and cargo traffic has tripled since then.
Weekday truck traffic on the Long Beach Freeway, which serves
these Ports, is expected to more than double to almost 100,000
vehicles a day over the next two decades. Residents complain of
a steady increase in daytime truck-related accidents, and they
and environmentalists fear a continuing increase in diesel
pollution. At the same time, the Alameda Corridor, a rail
conduit between the Ports and downtown Los Angeles rail yards
that opened in 2002, has not eased truck traffic as much as had
been hoped.
This bill is intended to encourage high volume port customers
such as Wal-Mart and Target to shift their container deliveries
to nights and weekends in order to reduce traffic congestion,
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accidents, and diesel emissions. The author hopes that the
introduction of this bill will convince importers, exporters,
maritime terminal operators, truckers and unions to find a
solution on their own. Press reports quote him as saying, "I've
told them that if they don't do it themselves, the state is
going to do it for them."
Importers and operators of the Ports' terminals, where
containers are transferred from ships to trucks and rail cars,
have participated in task force meetings and pilot projects
aimed at shifting more shipping activity to night hours.
However, the Waterfront Coalition, a Washington-based trade
group representing major importers and exporters, has expressed
skepticism "about whether a fee in of itself will be sufficient
to change behavior on the waterfront." In part that is because
moving cargo at night can dramatically increase the cost of
operating a port. Opening all 14 terminals three nights a week
could cost approximately $100 million a year just in labor
costs, according to the Pacific Merchant Shipping Association
(PMSA), which represents cargo ship and port terminal owners.
PMSA acknowledges the need to address congestion at the Ports
and to identify and implement programs to move greater volumes
of cargo during off-peak hours. They contend that marine
terminal operators have made enormous investments in technology
and equipment to move cargo efficiently and that there has been
a corresponding investment in warehouses and distribution
centers throughout California. But, they assert, inadequate
public infrastructure has led ocean carriers, marine terminal
operators, major retail cargo owners and others continue to seek
private sector solutions to the problems this bill attempts to
address. "Currently 17% of all cargo that moves through the
Ports of Los Angeles and Long Beach does so at off-peak hours -
a reflection of the needs, demands and business models of the
cargo owners and receivers. We believe the approach our
industry is taking - a collaborative and comprehensive
market-driven approach - will ultimately be more effective and
less disruptive to international trade that is so important to
California's economy." Consequently, they oppose this bill.
They complain that the proposed District is given "unfettered
authority" to tax international trade cargoes; it provides no
mechanism or assurance it will reduce congestion; it poses
hardships on small and mid-size importers and exporters; it
creates additional burdens on California businesses in a very
competitive marketplace; and, it focuses solely on areas
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adjacent to the ports while ignoring outlying communities.
The author acknowledges that private solutions are probably
preferable to the adoption of new statutory initiatives.
However, he believes that this bill may spur development of a
consensus solution and, in any event, offers an alternative that
is clearly superior to maintenance of the status quo.
Analysis Prepared by : Howard Posner / TRANS. / (916) 319-2093
FN: 0005589