Lowenthal container fee bill offers billions of dollars for projects

Lowenthal container fee bill offers billions of dollars for projects California Sen. Alan Lowenthal plans to amend his proposed statewide container fee bill to specify more than 140 specific projects to benefit from the bill's projected $500 million a year in collected revenue.

Sen. Alan Lowenthal, D-Long Beach

   While confident the bill will pass and be signed into law, the Long Beach Democrat does not plan to move the bill forward in the Legislature until at least late next week.
   According to Lowenthal's office, the 'billions of dollars worth' of projects will not include any bridge replacement or highway expansion projects such as those being proposed by the two Southern California ports. Instead, they will primarily comprise rail-traffic grade separations in the Orange County, Inland Empire and San Gabriel Valley areas.
   This is Lowenthal's third attempt to pass the $30-per-TEU container fee, following a previous attempt that failed on the Legislature floor and a second attempt that was vetoed by Gov. Arnold Schwarzenegger. Lowenthal tabled the third and current version of the bill last year after Schwarzenegger threatened to veto the bill if it reached his desk. Schwarzenegger has since said he is now in favor of a statewide container fee, though he has not publicly said he would specifically support Lowenthal's bill.
   The current bill, SB974, passed the Senate last year and was approaching a final vote in the Assembly when Lowenthal tabled it in September. On Monday, the bill was removed from the inactive list and sent to the Assembly where it appeared on Thursday's Assembly agenda but was not acted upon.
   Lowenthal Chief of Staff John Casey said the proposed amendments would be added by next Thursday, and he 'guaranteed' there would be no movement of the bill until then. If SB974 passes an Assembly vote, Casey said the bill would have to return to the Senate for a concurrence vote before heading to Schwarzenegger's desk.
   According to state rules, when a bill proposes collecting money for specific projects that directly benefit those paying the funds, the collection is not a tax, but a fee. A bill seeking to impose a fee requires only a simple majority vote in the Legislature, while a tax requires a two-third majority vote in both the state Senate and the Assembly.
   'That is why we have been very specific about what (the fee) can be used for,' Casey said. 'It cannot be used for bridge replacements. It cannot be used for highway upgrades, because there is not a clear nexus between those paying the fee and the benefits of the projects.'
   In the case of SB974, the end user, or beneficial cargo owner, will pay the $30-per-TEU fee set to be collected on containers moving through the Long Beach, Los Angeles and Oakland ports. The bill is expected to generate more than $500 million per year for infrastructure and air quality projects related to goods movement.
   Casey said projects such as the $800 million Gerald Desmond Bride replacement being proposed by the ports of Long Beach and Los Angeles are not a good fit for the SB974 funds because of the dual-use nature of the bridge. The aging structure, which connects Terminal Island to downtown Long Beach, is a primary egress point for drayage trucks moving containers out of the two ports' terminals on the island. However, it is also a primary route for commuters heading into southeastern Long Beach from the west.
   A similar situation with other bridge and highway projects led Lowenthal to look beyond capacity-increasing projects and focus on cargo flow-enhancement projects such as the rail-traffic grade separations, which allow trains to travel above or below commuters.
   The $2.4 billion, 20-mile-long Alameda Corridor rail expressway project, opened in 2002, eliminated virtually all of the rail traffic grade crossings between the two Southern California ports and the transcontinental rail yards east of downtown Los Angeles. The project dramatically sped up rail traffic from the ports to the rail yards, but hundreds of similar crossings in the Inland Empire east of Los Angeles remain a serious speed-limiting factor for trains moving out of Southern California.
   To deal with this situation, Casey said Lowenthal's staff developed the 'significant' list of more than 140 projects to be covered by SB974.
   'It basically is every grade separation project that has been listed by the transportation agencies of Orange County, Riverside, San Bernardino, the Alameda Corridor East and San Gabriel Valley,' Casey said.
   Officials in these counties have lamented the impact on local residents by the crossings for years, simultaneously fighting an uphill battle to obtain funding for the grade separations. As an example, up to 130 trains a day pass through the city of Riverside alone. According to city officials, some crossings gates at rail-traffic crossings in Riverside are lowered for more than six hours a day.
   “We are at a crisis. We have the worst air quality in the nation. We have the worst congestion in the nation,” Art Leahy, chief executive officer of the Orange County Transportation Authority, told the California Transportation Commission earlier this month in a plea for state transportation funds for projects including the Inland Empire grade separations.
   Inland Empire transportation and government officials are seeking more than $400 million from the state's $20 billion Proposition 1B transportation bond funds. The state has allocated nearly $3 billion of the Prop-1B funds for goods movement projects, and is deciding which of the proposed local projects from across the state will be funded. The vast majority of the Inland Empire requests are for rail-traffic grade separations.
   Twelve of the top 13 funding requests by Riverside County, costing from $6 million to $20 million each, are for grade separation projects. Eight of the top 10 requests by San Bernardino County, with costs ranging from $6.5 million to $9.4 million, are for grade separation projects.
   One project not yet on the Lowenthal list is the controversial Colton Crossing rail project. The proposed $200 million project seeks to separate an at-grade Inland Empire intersection of an east-west Union Pacific track and a north-south BNSF track. While mainly a freight route, public transit trains also utilize the BNSF rack and Amtrak trains use the UP track.

A Union Pacific train heads over the Colton Crossing rail intersection.

   More than 100 trains a day cross through the four-way intersection, and trains waiting to cross sometimes sit idling for hours. Freight and transit rail officials have identified the crossing as one of the region's most serious rail congestion points, and one with national impact due to the slowing of freight from the Southern California ports 65 miles to the west.
   While Lowenthal is still considering whether to add the project to the itemized list to be included in the SB974 amendments, Casey pointed out that 'there is nothing in the bill that says that the funds could not be used for the Colton Crossing project.'
   The Colton Crossing project has generated several controversies, with local residents and the railroads differing on the how the project should eventually look. Inland Empire transportation officials, with their own ideas of where scarce state funds should be spent, do not want taxpayer funds used to support what they say is essentially a private infrastructure project.
   Local residents want to see at least one of the tracks sunk into the ground in a trench, thus minimizing impacts on surrounding areas. The railroads are pushing for the cheaper option: a bridge built to carry one track over the other.
   Casey said that because the Lowenthal container fee would be paid by private industry, it is a better funding fit for projects like Colton Crossing than state funds such as the Prop-1B bond funds approved by voters in 2006. Proponents of the Colton Crossing project, including UP, BNSF, Schwarzenegger and the California Department of Transportation, have been seeking up to $100 million in public funds for the project, with the railroads expected to pick up the balance of the costs.
   Lowenthal's bill, according to Casey, will not include any crossing projects in the Bay Area. The Bay Area's rail issues revolve around capacity constrains and not flow restrictions, he said. Several Bay Area related project, including rail projects to increase cargo flow through the Donner Pass will be included. ' Keith Higginbotham