Schwarzenegger terminates container fee bill

Importers can breathe a sigh of relief. In late September, California Governor Arnold Schwarzenegger vetoed a bill that would have imposed a $60 fee on each 40-foot container passing through the ports of Los Angeles and Long Beach. The bill, which was intended to provide funding for port security and infrastructure improvements as well as air pollution abatement measures, would have cost shippers $500 million, according to estimates by the National Retail Federation (NRF).

Though he praised the bill's goals, Schwarzenegger said he vetoed the fee because it might have hurt U.S. exports by raising shipping costs and because it was drafted to include only two ports and applied only to goods shipped in containers, ignoring all other forms of shipping and ports of entry. He also criticized the measure for failing to create a mechanism for coordinating with other public and private initiatives. He urged California legislators instead to support his own proposal, an infrastructure bond issue that would provide several billion dollars toward improving air quality, mitigating port congestion and tightening port security.

Retailers are applauding the veto. In a statement commending Schwarzenegger's action, Tracy Mullin, president and CEO of the National Retail Federation, said, "This bill ... would have violated the Commerce Clause of the U.S. Constitution, international law and U.S. treaty obligations, and would have exposed the state of California to court challenges had it become law. Ultimately, it would have driven retailers and other shippers to look for other ports outside the state of California."

The ports of Los Angeles and Long Beach are the nation's busiest, handling the equivalent of 3.6 million containers last year, according to the NRF.