Retailers Oppose California Container Tax
WASHINGTON, D.C., September 7, 2006 – The National Retail Federation this week urged California Governor Arnold Schwarzenegger to veto legislation that would impose a $60 fee on containers moving through two of the nation’s largest ports, saying the measure would force retailers to bring imported goods into the country through ports in other states.
“Container fees of the sort contemplated in the Lowenthal bill would violate the Commerce Clause of the U.S. Constitution, international law and U.S. treaty obligations, and would expose the state of California to court challenge were it to become law,” NRF President and CEO Tracy Mullin said in letter sent to Schwarzenegger on Wednesday. “In addition, the fee would substantially increase the cost of moving goods through LA/Long Beach and adversely impact these ports’ competitiveness and workforce as retailers and other shippers are forced to look for alternative ports outside the state of California to enter their goods.”
SB 927, sponsored by state Senator Alan Lowenthal, D-Long Beach, passed the state Senate 22-16 August 31, one day after being approved 42-35 in the state Assembly, and is now awaiting action by Schwarzenegger. The measure, which would cost retailers and other shippers an estimated $500 million a year, would impose a $60 tax on each 40-foot container (or the equivalent number of other size containers) moving through the ports of Los Angeles and Long Beach.
Supporters say the bill would raise funds for improving port security, cleaning up pollution and building port infrastructure, but the measure is written in a way that would allow it to be used for non-transportation projects and initiatives as well.
LA and Long Beach are the two largest container ports used by retailers to import merchandise from Asia that is then distributed to stores across the nation. The two ports handled a combined 3.6 million 40-foot-equivalent containers last
year, according to the Port Tracker report prepared each month by NRF and the economic research, forecasting and analysis firm Global Insight.
The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.4 million U.S. retail establishments, more than 23 million employees - about one in five American workers and 2005 sales of $4.4 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations.
www.nrf.com.
California Adds $60 Container Tax
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