BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 974|
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UNFINISHED BUSINESS
Bill No: SB 974
Author: Lowenthal (D), et al
Amended: 7/14/08
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 6-4, 4/17/07
AYES: Lowenthal, Cedillo, Corbett, Oropeza, Simitian,
Torlakson
NOES: McClintock, Ashburn, Dutton, Harman
NO VOTE RECORDED: Kehoe
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 6-0, 4/23/07
AYES: Simitian, Aanestad, Florez, Kuehl, Lowenthal,
Steinberg
NO VOTE RECORDED: Runner
SENATE APPROPRIATIONS COMMITTEE : 10-6, 5/31/07
AYES: Torlakson, Cedillo, Corbett, Florez, Kuehl, Oropeza,
Ridley-Thomas, Simitian, Steinberg, Yee
NOES: Cox, Aanestad, Ashburn, Dutton, Runner, Wyland
NO VOTE RECORDED: Battin
SENATE FLOOR : 22-12, 6/6/07
AYES: Alquist, Cedillo, Corbett, Florez, Kehoe, Kuehl,
Lowenthal, Margett, Migden, Negrete McLeod, Oropeza,
Padilla, Perata, Ridley-Thomas, Romero, Scott, Simitian,
Steinberg, Torlakson, Vincent, Wiggins, Yee
NOES: Ackerman, Ashburn, Calderon, Cogdill, Correa, Cox,
Denham, Harman, Hollingsworth, Maldonado, McClintock,
Wyland
NO VOTE RECORDED: Aanestad, Battin, Ducheny, Dutton,
Machado, Runner
CONTINUED
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ASSEMBLY FLOOR : 46-24, 7/15/08 - See last page for vote
SUBJECT : Fees on containerized cargo
SOURCE : Author
DIGEST : This bill imposes a fee on container cargo
imported and exported through the ports of Long Beach, Los
Angeles, and Oakland in an amount not to exceed $30 per
twenty-foot equivalent unit. This bill requires that 50
percent of fee revenues be used to develop infrastructure
projects that reduce congestion and 50 percent of revenues
be used to mitigate the air quality impacts associated with
the movement of freight in and out of the three ports.
Finally, this bill specifies the processes for determining
which congestion relief and mitigation projects shall be
funded with fee revenue.
Assembly Amendments made numerous substantial changes to
the bill including updating the implementation dates from
2008 to 2009, clarifying that the fee in this bill is
separate from any fee the ports of Los Angeles, Long Beach
or Oakland may enact, specifying which projects are
eligible, changing the makeup of the entity in Southern
California (the Authority) that is compiling the list of
infrastructure projects, allowing the Authority to remove a
project listed in the bill if it is determined that the
project does not directly relate to the movement of
container cargo to and from the ports, allowing the
Authority to approve a project that is similar, but not
identical to one listed in the bill, changing the makeup of
the selection for infrastructure in Northern California to
specify that the Metropolitan Transportation Commission
(MTC) and the Port of Oakland shall jointly compile the
list of infrastructure projects using the funds generated
from the Port of Oakland, clarifying that the funds from
this bill can be used to match other funds (including Trade
Corridor Improvement Funds (TCIF), clarifying that if a
project is being funded from TCIF, that this bill's funds
are intended to supplement not supplant the funds for the
TCIF, allowing the MTC to approve in advance an
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infrastructure project listed in the bill for advance
construction authority, specifying that the South Coast Air
Quality Management District, the Port of Los Angeles and
the Port of Long Beach, shall jointly develop the list of
air quality projects, and submit the list to the Air
Resources Board (ARB) for acceptance, in Southern
California, directing the Air District and ports when
developing the air quality project list to give the highest
priority for truck retrofit and replacement, specifying
that the Bay Area Air Quality Management District and the
Port of Oakland shall jointly develop the list of air
quality projects and submit the list to the ARB for
acceptance, and deleting the requirement that the financing
be done by the California Infrastructure Bank.
ANALYSIS :
Existing law:
1. Under the Harbors and Ports Mitigation Law, requires a
public agency to approve certain mitigation for port
projects involving filling of subtidal habitats within
ocean or inland ports [Section 1720 et seq. of the
Harbors and Navigation Code].
2. Establishes the California Transportation Commission
(CTC) and sets various duties and procedures for the CTC
[Section 14500 et seq. of the Government Code (GOV)].
3. Authorizes the ARB to coordinate efforts to attain and
maintain ambient air quality standards [Section 39003 of
the Health and Safety Code (HSC)] and specifies its
powers [HSC Section 39500 et seq.].
4. Creates the State Infrastructure and Economic
Development Bank and specifies its powers [GOV Section
63020 et seq.].
This bill:
1. Requires the Ports of Long Beach, Los Angeles and
Oakland, by January 1, 2009, to develop a process to
notify and collect user fees from container cargo
owners. The ports must notify the cargo owners by March
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1, 2009, that a fee of up to $30 per 20-foot equivalent
unit (TEU) will be assessed. Certain information must
be provided, such as the process and frequency of
payment, and that the user fee is being assessed to
improve goods movement infrastructure serving the port,
and to reduce air pollution from all forms of
port-related equipment.
2. Requires the three ports to collect the fee twice a
year, with 50 percent of the fees directed to congestion
relief (to fund projects that improve the flow and
efficiency of container cargo) and 50 percent to air
pollution mitigation (to mitigate air pollution caused
by cargo movement).
3. Provides that congestion relief funds generated by the
fee on containers moved through the Ports of Los Angeles
and Long Beach are governed by the Southern California
Goods Movement Authority, established by this bill, and
specifies particular grade separation projects in Los
Angeles, Orange, Riverside and San Bernardino Counties
as the projects eligible for funding.
4. Provides that air pollution mitigation funds generated
by the fee on containers moved through the Ports of Los
Angeles and Long Beach are governed jointly by the ports
and the South Coast Air Quality Management District.
5. Provides that congestion relief funds generated by the
fee on containers moved through the Port of Oakland are
governed jointly by the port and the MTC.
6. Provides that air pollution mitigation funds generated
by the fee on containers moved through the Port of
Oakland are governed jointly by the port and the Bay
Area Air Quality Management District.
7. Requires congestion relief projects to be approved by
the CTC and air pollution mitigation projects to be
approved by the ARB.
8. Authorizes the ports to issue revenue bonds to finance
port congestion relief and mitigation projects.
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9. Provides that fees authorized by this bill shall be
separate from, and in addition to, fees that have been
or may be adopted by the ports under existing authority.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee:
1. Substantial revenue, in the range of $100 million in
2008-09 and $340 million annually thereafter, generated
by the maximum $30 per TEU fee on containerized cargo
imposed by the Ports of Los Angeles and Long Beach.
2. Substantial revenue, in the range of $17 million in
2008-09 and $54 million annually thereafter, generated
by the maximum $30 per TEU fee on containerized cargo
imposed by the Port of Oakland.
3. Substantial revenue bond debt, up to $5 billion
outstanding principal at any one time, resulting from
the issuance and sale of revenue bonds secured by
revenue generated by the containerized cargo fee.
4. Minor one-time costs, in the range of $300,000,
primarily in 2007-08, for the CTC and the ARB to develop
the list of projects eligible to be funded from
containerized cargo fee revenue. These costs are
covered by fee revenue.
SUPPORT : (Verified 7/28/08)
Alameda Corridor-East Construction Authority
American Academy of Pediatrics, California Division
American Cancer Society
American Heart Association
American Lung Association of California
Anaheim Mayor Curt Pringle
Asthma Coalition of Los Angeles County
Ballard Power Systems Inc.
Bay Area Air Quality Management District
Breast Cancer Fund
Breathe California
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California Air Pollution Control Officers Association
California Labor Federation
California League of Conservation Voters
California Natural Gas Vehicle Coalition
California-Nevada Conference of Operating Engineers
California Nurses Association
California Teamsters
California Thoracic Society
Cerritos Chamber of Commerce
Cities of Burbank, Cerritos, Commerce, Cudahy, Downey,
Lakewood, Long Beach, Signal Hill, and South Gate
Clean Power Campaign
Clear Edge Power
Clergy and Laity United for Economic Justice
Coalition for Clean Air
Coalition for A Safe Environment
Coalition on the Environment and Jewish Life of Southern
California
Communities for Clean Ports
Community Action to Fight Asthma
Consumer Attorneys of California
Defenders of Wildlife
DeMenno/Kerdoon
Downey Chamber of Commerce
Earth Day Los Angeles
East Yard Communities for Environmental Justice
Elizabeth Hudson Elementary School - Environmental
Committee
Environment California
Environmental Defense
Foothill Cardiology
Friends of the Earth
Gateway Chamber Alliance
Gateway Council of Governments (27 cities)
Glendale Heart Institute Medical Group
Harbor Watts Economic Development Corp.
Intex Solutions Inc.
Interfaith Environmental Council
Lakewood Chamber of Commerce
Long Beach Alliance for Children with Asthma
Long Beach Unified School District
Los Angeles Alliance for a New Economy
Los Angeles County Democratic Party
Los Angeles County Metropolitan Transportation Authority
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Los Angeles County Supervisor Michael Antonovich
Los Angeles Environment Commissioner Maria Armoudian
Los Angeles Mayor Antonio R. Villaraigosa
Mayor Todd Campbell, City of Burbank
Medical Advocates for Healthy Air
Natural Resources Defense Council
Orange County Taxpayers Association
Orange County Transportation Authority
Pacific Coast Drapery Manufacturing (Anaheim, CA)
Pasadena Mayor Bill Bogaard
Parents for a Safer Environment
Parents for Safer Schools
People for Parks
Physicians for Social Responsibility
Planning and Conservation League
Plug In America
Progressive Christians Uniting
Regional Asthma Management & Prevention Initiative
Riverside Mayor Ron Loveridge
The River Project
San Gabriel Valley Council of Governments
San Gabriel Valley Economic Partnership
Santa Barbara County Air Pollution Control District
San Francisco Medical Society
SEIU Local 721 (85,000 members)
Sierra Club California
South Bay Cities Council of Governments (16 cities)
Southern California Association of Governments
South Coast Air Quality Management District
State Association of Electrical Workers
State Building and Construction Trades Council
Steven Bocho Productions
Strategic Concepts in Organizing & Policy Education
South Gate Chamber of Commerce
Union of Concerned Scientists
West Long Beach Association
West Oakland Environmental Indicators
World Oil Corp.
OPPOSITION : (Verified 7/28/08)
Abercrombie and Fitch
ACG Cotton Marketing LLC
Ag Processing, Inc.
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Agricultural Council of California
Agriculture Transportation Coalition
Allenberg Cotton Co.
Allen Group
Aloha Airlines
American Apparel and Footwear Association
American Chemistry Council
American Cotton Shippers Association
American Council for Food Safety and Quality
American Eagle Outfitters Inc.
American Electronics Association
American Foods Group
American Forest and Paper Association
American Import Shippers Association
Anheuser-Busch Companies, Inc.
Anzco Foods North American, Inc.
APL
Association of International Automobile Manufacturers
Badger Forest Products
Bank of Hawaii
Beall's, Inc.
Belk, Inc.
Best Buy
Blue Diamond Growers
Bonanza Foods and Provisions, Inc.
Bon-Ton Stores, Inc.
Border Valley Trading LTD
Borders Group, Inc.
Borges of California
Boscov's Department Stores, LLC.
Braun Export
Burger King, Inc.
CA Commodity Export Corporation
Calcot LTC
California Bean Shippers Association
California Business Properties Association
California Cattlemen's Association
California Chamber of Commerce
California Citrus Mutual
California Cotton Ginners and Growers Association
California Farm Bureau Federation
California Fisheries and Seafood Institute
California Grain and Feed Association
California Grape and Tree Fruit League
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California Grocers Association
California Independent Grocers Association
California League of Food Processors
California Manufacturers & Technology Association
California Metals Coalition
California Nevada Soft Drink Association
California Railroad Industry
California Restaurant Association
California Retailers Association
California Seed Association
California Taxpayers Association
California Trade Coalition
California Trucking Association
California Warehouse Association
Carriere Family Farms
Castle & Cooke Homes Hawaii, Inc.
Casual Male Retail Group, Inc.
Central Pacific Bank
Chamber of Commerce of Hawaii
Charming Shoppes, Inc.
Circuit City
Coca-Cola Bottling Company of California
Coca-Coal Bottling Co. of Southern CA
Colorado Food Products
Columbine Vineyards of Delano, CA
Corona Chamber of Commerce
Crain Walnut Shelling, Inc.
Crate & Barrel
CTP Transport, Inc.
Dairy America, Inc.
Del Monte Foods
Derco Associates, Inc.
Diamond Foods, Inc.
Distilled Spirits Council
Dole Food Company, Inc.
Dressbarn, Inc.
Duncan and Sons Lines, Inc.
DVN Louis Dreyfus Corporation
E.I. DuPont de Nemours & Co.
ECOM USA, Inc.
Edwards Luggage
EFI Logistics, Inc.
Ethan Allan Global, Inc.
Food Marketing Institute
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Foreign Trade Association of Southern California
Gap Inc.
Grain Millers, Inc.
Grocery Manufacturers/Food Products Association
Harbor Association of Industry & Commerce
Harland M. Braun and Company
Hawaii Island Chamber of Commerce
Hawaii Korean Chamber of Commerce
Hawaii Tourism Authority
Hedley Construction and Development
Heineken USA, Inc.
Hewlett-Packard Company
Home Depot
Howard Jarvis Tax Payers Association
Intel Corporation
JC Penney
Jo-Ann Fabric and Craft Stores
Jockey International
Kailua Chamber of Commerce
Kohl's Corporation
Lake Elsinore Valley Chamber of Commerce
Leading Lady
Levi Strauss & Co.
Limited Brands, Inc.
Limtiaco Company
Liz Claiborne Inc.
Long Beach Area Chamber of Commerce
Lowes
Macy's/Macy's West
Mallory Alexander International Logistics
Mathiesen Maritime Services, Inc.
Matson Navigation
Maurice's, Inc.
Mazda North American Operations
Meat Importers Council of America
Meridian Nut Growers LLC
Michaels Arts and Crafts
Midwest Shippers Association
Miller Brewing Company
Milpitas Chamber of Commerce
Mohawk Industries
Murphy Imports, LLC
Murrieta Chamber of Commerce
NAIOP Inland Empire
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NAIOP SoCal
National Association of Industrial and Office Properties -
CA State Council
National Association of Manufacturers
National Chicken Council
National Federation of Independent Business
National Industrial Transportation League
National Retail Federation
National Turkey Federation
Natural & Organic Imports
Neiman Marcus
New Balance Athletic Shoe, Inc.
Newell Rubbermaid Inc.
Nike, Inc.
Nisei Farmers League
North Dakota Department of Agriculture
Office Depot
OZ Logistics Inc.
Pacific Coast Council of Customs Brokers & Freight
Forwarders
Pacific Egg and Poultry Association
Pacific Merchant Shipping Association
Panasonic Corporation of North America
Payless Shoe source
Perry Ellis International
Pier 1 Imports
Polo Ralph Lauren Corporation
Preferred Freezer Services
Ralphs Grocery Company
Red Wing Shoe Company
Redondo Beach Chamber of Commerce
Regional Legislative Alliance - Ventura/Santa Barbara
Counties
Rekerdres and Sons Insurance
Retail Industry Leaders Association
Retail Merchants of Hawaii
Rite-Aid
Rocky Brands, Inc.
Safeway, Inc.
SAMPCO, Inc.
San Rafael Luggage Center
Seaboard Foods LP
Securakey
Smurfit-Stone Container Company
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Sonnet Technologies
Southlands Organic Ltd
Southwest California Legislative Council
Southwest Hide Company
Specialty Crop Trade Council
Spencer Gifts LLC
Spirit Halloween Superstores
Sporting Goods Manufacturers Association
SSA Marine
Starboard Alliance Company
Stop Hidden Taxes Coalition
Sunview Marketing International
Target
Temecula Valley Chamber of Commerce
The Refrigerated Shipping Association
Toy Association of Southern California
Toy Industry Association, Inc.
Transgroup Worldwide Logistics
Travel Goods Association
U.S. Association of Importers of Textiles & Apparel
U.S. Chamber of Commerce
United Laundry Services, Inc.
United States Council for International Business
U.S. Dairy Export Council
USA Poultry & Egg Export Council
Valley Industry and Commerce Association
Vergel N. Adonis Realty Inc.
VF Outdoor, Inc.
Voit Development Company
Walgreens
Wal-Mart Stores, Inc.
Washington State Potato Commission
Waste Management
Waterfront Coalition
Weil Brothers Cotton, Inc.
Western Cotton Shippers Association
Western Growers
Western United Dairymen
Wilson Homecare
Wine Institute
World Sake Imports
WS Badcock Corp, DBA Badcock Home Furnishings and More
ARGUMENTS IN SUPPORT : According to the author's office,
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the ports of Los Angeles, Long Beach, and Oakland are the
nation's first, second, and fourth largest ports,
respectively, and are projected to experience tremendous
growth. The author's office cites certain information as
the basis for this bill, including the following:
1. According to a 2006 report by the ARB, pollution from
our state's ports causes 2,400 premature deaths
annually.
2. The ARB recently estimated that over the next 15 years,
polluting activity from operations at California's ports
will have an aggregate health impact equivalent to
approximately $200 billion in present value dollars.
3. A disproportionate number of communities impacted by
port pollution are low-income communities of color, the
state currently shoulders much of these port-caused
health costs.
4. By 2020, ports and freight transport operations will be
the largest source of particulate matter (PM) and
nitrogen oxide (NOx) emissions in the state, producing
more diesel PM than all passenger vehicles, off-road
equipment and stationary sources combined.
5. According to the Los Angeles Economic Development Corp.
(LAEDC), Southern California must spend at least $10.5
billion to improve railroads, rail yards and highways to
keep up with surging international trade or risk losing
more than 500,000 new jobs and more than $1 billion of
taxes a year.
6. Inefficiencies in the freight transport system are
costly to the state. Improving our rail system will
reduce the number of diesel trucks on our freeways and
alleviate congestion. For example, "on-dock rail" is a
less polluting and more efficient alternative to
trucking goods on our freeways. Congestion costs
Southern California more than $10 billion in 2003.
7. Southern California risks losing $12.1 billion in
federal highway funds if federal Clean Air Act standards
are not met. So far, the basin has failed to meet
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national standards for ozone or for particulate
emissions.
8. The growth of the ports of Los Angeles and Long Beach is
staggering. The two ports move approximately 40 percent
of the nation's cargo. The Los Angeles/Long Beach port
complex is the largest port complex in the United States
and under current operating conditions will see cargo
triple (from 15 million TEUs, to 47 million TEUs) by
2020. The ports are the single largest source of air
pollution in the South Coast Basin.
ARGUMENTS IN OPPOSITION : Opponents of this bill,
generally retailers who own the cargo being imported and
exported through the ports, oppose on two grounds:
imposing the fee as proposed in this bill violates the
commerce clause of the United States Constitution and
increasing the costs of importing and exporting through
these ports will cause retailers to ship their cargo
through other ports.
ASSEMBLY FLOOR :
AYES: Arambula, Beall, Berg, Brownley, Caballero, Carter,
Coto, Davis, De La Torre, De Leon, DeSaulnier, Eng,
Evans, Feuer, Fuentes, Furutani, Galgiani, Hancock,
Hayashi, Hernandez, Huff, Huffman, Jones, Karnette,
Krekorian, Laird, Leno, Levine, Lieber, Lieu, Ma,
Mendoza, Mullin, Nava, Nunez, Parra, Portantino, Price,
Ruskin, Salas, Saldana, Solorio, Swanson, Torrico, Wolk,
Bass
NOES: Aghazarian, Anderson, Berryhill, Blakeslee, Cook,
DeVore, Fuller, Gaines, Garrick, Horton, Jeffries, Keene,
La Malfa, Maze, Nakanishi, Niello, Plescia, Silva, Smyth,
Spitzer, Strickland, Tran, Villines, Walters
NO VOTE RECORDED: Adams, Benoit, Charles Calderon, Duvall,
Dymally, Emmerson, Garcia, Houston, Sharon Runner, Soto
JJA:mw 8/4/08 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
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