BILL NUMBER:  SB 974
  VETOED	DATE: 09/30/2008




To the Members of the California State Senate:

I am returning Senate Bill 974 without my signature.

This bill would impose a maximum fee of $30 per twenty-foot
equivalent unit on each shipping container processed in the Ports of
Los Angeles, Long Beach and Oakland.  The revenues would be used for
two broad purposes:  to alleviate congestion of the ports by funding
projects to improve the flow and efficiency of the ports and to
mitigate air pollution caused by the movement of cargo to and from
the ports.

Improving the quality of life for all Californians through congestion
relief and environmental mitigation has been one of my highest
priorities, as evidenced by the introduction of my Strategic Growth
Plan and the passage of the Proposition 1B transportation bond which
I supported.  Proposition 1B provides $1 billion in new funding to
improve air quality in California which will directly benefit the
communities in and around the Ports of Long Beach, Los Angeles, and
Oakland.  The measure also provides $1 billion to address port
mitigation issues, $2.1 billion for trade infrastructure, and $100
million for port security funding.

Although the bill's policy objectives to provide additional funding
for congestion relief and environmental mitigation are laudable, this
measure is problematic in its implementation.

This bill does not provide necessary assurances that projects will
achieve the greatest cost-effectiveness, emission reductions, and
public health protection.  Also, the bill does not adequately provide
the San Joaquin Valley with access to funds to reduce pollution
related to container cargo coming directly to and from the ports
throughout the Valley.

Additionally, this bill would not provide any mechanism for the
coordination and integration of infrastructure projects.  As such,
this bill would fail to provide long-term, strategic planning for the
state's goods movement infrastructure.  State and regional entities
have already developed congestion relief and environmental mitigation
plans, including the Goods Movement Action Plan and Emission
Reduction Plan.  Yet this bill would provide very little oversight to
ensure compliance with these plans. In addition to lacking the
coordination needed for long-term strategic growth, this bill misses
the opportunity to leverage billions of dollars in available funding
through public-private partnerships, which could otherwise increase
investments in infrastructure geometrically.

Given the current economic downturn, it is vitally important that the
state does not worsen the situation by mandating added costs on
business that do not provide any public benefit.  Since this bill was
introduced, container fees have been raised by the ports at a rate
67% higher than the fee contemplated in this bill to pay for many of
the same programs.  Careful consideration must be given to any
proposed solution as to its potential impact to our state's economy.


I have been publicly supportive of the concepts in this bill for over
a year.  My Administration worked with stakeholders of all interests
to craft a bill that I could sign into law.  Unfortunately, the bill
does not include amendments requested by my Administration that
would address the critical shortcomings of this legislation.  I
encourage the Legislature to develop legislation that provides proper
guidance, oversight and accountability, ensures that the San Joaquin
Valley is eligible for funds to address port-related cargo
pollution, and allows for varied congestion reduction infrastructure.


For these reasons, I am returning this bill without my signature.

Sincerely,



Arnold Schwarzenegger