California ports hope to become among the greenest in the world. A state Senate committee recently proposed a tax break that would bring the ports closer to that goal.
The Senate Select Committee on Ports and Goods Movement proposal would offer a partial tax exemption to terminal operators that purchase zero or near-zero emission cargo handling equipment. The proposal passed the committee with unanimous support. From its successful start it will move through other committees before ending up with the full Senate and Legislature for a vote. State Senator Ricardo Lara, D-Bell Gardens, the chairman of the Select Committee on Ports and Goods Movement, proposed the bill and said he hopes it is passed by August.
Bill broad on what sort of equipment qualifies
The bill isn't very specific on what sort of equipment will garner the almost 4 percent sales tax cut, according to the Long Beach Press Telegram. The requirement is simply to use equipment with zero emission or close to it.
"We want to have it broad, so we allow and don't discourage any emerging technologies," Lara said, according to the Press Telegram.
"The partial tax exemption does not require automation."
The proposal would help ports reduce dangerous diesel emissions and greenhouse gases in a cost-effective manner. This will ensure that they can maintain their competitive advantage by avoiding passing additional costs on to shippers. As Pacific ports work to recapture business lost during the 2014-15 congestion crisis, they've made many attempts to shift to more efficient technology and equipment. Going green without passing the cost on could be another way to bring shippers back to terminals in Los Angeles and Long Beach among others.
Automation not mentioned in proposal
The partial tax exemption does not require automation, according to the Journal of Commerce (JOC), despite the fact that green equipment often is automated. This sort of technology could end up eliminating some longshore jobs. Lara has been working with the International Longshore and Warehouse Union (ILWU) on the proposed bill. The union hopes to reduce the number of jobs lost to automation and secure control over positions created through automation.
Legislative Analyst's review of the bill found that the cost of replacing the equipment currently used at the ports of Los Angeles and Long Beach in favor of zero or near-zero emission alternatives would be around $23 billion, the Press Telegram reported. In addition, the tax reduction could cut California tax revenue by around $4.6 million annually.