Calif. lawmakers OK bunker exemption

Calif. lawmakers OK bunker exemption

LOS ANGELES - The California Legislature over the weekend approved a bill that will exempt sales of bunker fuel from tax in the state for the next 10 years. The bill is awaiting the signature of Gov. Gray Davis.

In another action that will affect port operations, the legislature did not address a bill that would force terminal operators to repay harbor truckers any fees levied for the late return of chassis and empty containers during and after the West Coast port shutdown last fall. That bill will be held over for the 2004 legislative session.

Maritime interests are continuing their lobbying efforts in Sacramento to convince Davis to sign the bunker tax exemption. California is the only state that taxes bunker fuel. When the 8.5 percent tax went into effect in January, bunker fuel sales in the state began to drop off, and in recent months bunker interests reported that sales were down 50 percent compared to last year.

The legislature earlier this year approved a 10-year extension of the tax exemption, but Davis vetoed that bill because of the state's large budget deficit. Davis has until Oct. 12 to sign or veto the emergency bill that the legislature approved on Friday.

The harbor drayage legislation was a last-minute attempt by the California Trucking Association to seek refunds of late charges, known as per-diem or detention fees, that terminals levied from Sept. 15, 2002, to Feb 1, 2003.

With one week left in the legislative session, the trucking association sponsored the per-diem bill as an amendment to an unrelated piece of legislation. The legislature never got around to the bill, so it will be held over for the 2004 session. Two-year bills are common in Sacramento.

Truckers maintained that they attempted to return chassis and empty containers to the marine terminals last fall before the customary five days of free time had expired. However, the terminals were so congested due to the 10-day employer lock-out of longshoremen that drivers couldn't return the equipment.

Congestion at marine terminals continued for months after the ports were reopened in mid-October. Truckers said some terminals ran abbreviated gate hours so they could clear out their yards, while others refused to accept empty containers. Truckers say they should not be charged late fees for a condition that was beyond their control.

Terminal operators replied that there were many incidents when the truckers or their customers were at fault, so a blanket exemption for all per-diem and detention charges is uncalled for. They suggested that truckers should have sought relief on a case-by-case basis in direct negotiations with terminal operators.