The Legal Implications of Container Fees: A Case Study of California Senate Bill 974

Abstract

California’s transportation infrastructure is aging while the revenue to support that infrastructure is declining. Traditional financing mechanisms to support infrastructure maintenance and enhancements have included bonds, Private Public Partnerships (PPPs), regulatory fees, and taxes. California Senate Bill 974 sought to impose a charge on containerized cargo moving through three California ports -- Long Beach, Los Angeles and Oakland. The revenue generated from this bill would have been used to attempt to improve port infrastructure, mitigate traffic congestion surrounding the ports, and reduce environmental pollution. SB 974 was passed by both houses of the California legislature but was ultimately vetoed by Governor Arnold Schwarzenegger. Using SB 974 as a case study, we address the primary legal issues surrounding such a container fee bill. We also address the political and economic pushback that ultimately led to the bill’s defeat.  

Keywords: Container fees, constitutionality, transportation, infrastructure, air quality improvements, general fund, international trade, export, import, Senate Bill 974