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    Schwarzenegger Vetoes Karnette's De-Fee'd Container/Port Security Bill

    (Oct. 9, 2005) -- A bill by Assemblywoman Betty Karnette (D., LB) that originally sought to levy a $10 fee on shipping containers at all CA ports to help finance port security, but was thereafter weakened to direct CA's Office of Homeland Security to determine how much money is needed to meet federal port security requirements, how much DC is giving CA for this and how much remains to be funded, and to offer recommendations on developing revenue streams for doing so, has been vetoed by CA Governor Arnold Schwarzenegger.

    "This bill is unnecessary by requiring duplicative reporting functions and will not directly improve port security. In an effort to secure federal dollars to protect California ports, I have augmented the funding levels by $5 million dollars this year. In addition, at my urging, the U.S. Department of Homeland Security implemented a risk-based formula for the distribution of port security funds. This new formula was more advantageous resulting in 23% of the entire allotment being awarded to California."

    In its original container fee form, Assemblywoman Karnette's bill was supported by the CA Teamsters Public Affairs Council but opposed by the CA Chamber of Commerce, Cal-Tax and the Waterfront Coalition. Assemblywoman Karnette subsequently agreed to amendments that turned the bill into a request for a report...and an August 31 Senate legislative analysis listed supporters as including the Pacific Merchant Shipping Association and Signal Hill Chamber of Commerce, plus several labor and L.A. harbor area groups (with no opposition publicly listed in the legislative analysis). The legislative analysis said in part:

    The author's office states, that port security funds have fallen far short of what is needed, and that further study is essential to determine the precise level of port security needs on a state-by-state basis. The author's office admits that while it may be difficult to determine the exact cost of port security needs, it is clear that a great level of unmet need exists. The author's office cites, the U.S. Coast Guard estimate that its compliance with just the federal Maritime Security Act carries a 10-year price tag of $7.3 billion. And further, the author's office states, that the American Association of Port Authorities recently urged the federal government to provide $400 million annually for security projects. The author's office emphasizes, that funding is not the only problem though. The author's office also states, precious port security resources are not directed to the locations with the greatest need and cites a recent audit report issued by the U.S. Department of Homeland Security (Review of the Port Security Grant Program) that led a leading California newspaper to call the federal system "criminally irresponsible." The author's office points out, that the report states that "the current design of the program compromises the program's ability to direct resources toward the nation's highest priorities."

    A July 11 analysis by the Senate Appropriations committee said:

    By itself the report merely requires a report. Because the bill does not impose detailed report requirements, costs to issue the report could be minor, perhaps even absorbable. However, to the extent the report helps the state identify its security needs, the bill creates pressures to fund measures to mitigate the risks. To meet these pressures, the cost could be millions of dollars annually. To finance these costs-beginning as early as 2006-07-the Legislature could appropriate General Fund revenues. Alternatively; it could levy a special tax or fee on the ports or the shippers.

    As previously in August by LBReport.com, State Senator Alan Lowenthal (D., LB-SP) acknowledged that he was withholding his own container fee bill (and other port-related bills he's authored, including a key "no net increase in pollution" bill) to focus on talks with industry reps and the Schwarzenegger administration on the container fee legislation.

    At that time, Senator Lowenthal's office said in a written release that it was "[e]ncouraged by recent talks with the goods movement industry and the Governor's office." The release quoted Senator Lowenthal as saying, "I am holding SB 760 in the Assembly now in the hope we can work something out with the Administration. I believe that I could move this bill to the Governor this year, however with the Governor's recent work on Goods Movement issues, I think a more collaborative proposal can be worked out, it will just take a few more months."

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