Many of the industry's most important policy issues are not only being debated in Washington DC, but in state houses across the country. RILA is dedicated to working with state retail associations and state elected officials in both the legislative and executive branches to help develop policy that benefits consumers and businesses alike. The foundation of RILA's state public policy focus is made up of integrated efforts in five specific areas: supply chain, human resources, finance, asset protection and enterprise issues, which encompasses those issues that affect the entire business such as sustainability and privacy issues.
RILA supports strong action to combat organized retail crime (ORC), including tightening regulations for online auction sites and other entities that may serve as conduits for stolen goods, recognizing ORC as a federal felony offense and providing law enforcement the necessary funding to effectively deter and prosecute ORC. In addition, state governments should enact ORC legislation that would address felony theft levels.
Prior to the close of the 111th Congress, the House of Representatives passed legislation that was supported by RILA and other national trade associations, as a good first step to addressing ORC. Entering the new Congress, RILA led the effort among coalition partners to establish consensus priorities for Federal ORC legislation that included both investigative and preventative measures. The priorities agreed upon in that document were to serve as a unified stakeholder voice on Capitol Hill.
Following the creation of this document, RILA, and other stakeholders met with eBay to discuss legislation and determine whether a compromise could be reached, and if so, what that compromise would entail. These discussions are ongoing; however, eBay has stated that, in order to support any legislation, current bills would need to be extended to include all “Ecommerce Enablers,” defined as “a service accessible on the Internet that allows a business or person to promote the sale of goods or services, excluding payment processor services.”This definition would extend to Amazon, Google, Facebook, Craigslist and other Internet businesses, including brick-and-mortar retailers with an internet presence. The political make up of Congress, along with priority issues, such as budget and debt reduction, poses challenges for any legislation in the 112th Congress. While Members of Congress who have introduced legislation in the past remain interested in filing legislation again this Congress, to date, no ORC legislation has been introduced. RILA will continue to monitor relevant legislation proceeding through the committees of jurisdiction, as well as both chambers of Congress in order to add effective ORC provisions to a moving bill.
Support state legislation that would address ORC rings and create reasonable felony theft levels.
Working with member companies and trade association partners, RILA has taken the lead in advocating for federal legislation that would recognize ORC as a federal crime. The growth of ORC has clear interstate commerce relevance because criminals have increasingly sold these stolen goods online as well as transported the merchandise across state lines to avoid tougher criminal penalties.
The growth of the online marketplace has also given criminals an unfettered avenue to fence their goods to unwitting customers. The absence of face-to-face contact with buyers allows ORC gangs to sell the stolen merchandise at prices close to 70 cents on the dollar compared to the average 30 cents on the dollar a similar product would sell for at a flea market or pawn shop. Given the still largely unrestricted environment that the Internet provides, compared to other sources of income, e-fencing is a low-risk, high-reward venture for organized crime. Addressing these concerns and creating new federal and state laws will assist in making ORC a high-risk, low-profit crime.
For more information, please contact David Garriepy, director of government affairs at david.garriepy@rila.org, or Doug Thompson, vice president of government affairs at doug.thompson@rila.org.
The retail industry is at the forefront of business innovation, consumer choice and corporate responsibility. Retailers play a vital role in addressing the issues facing the businesses they run, the workers they employ and the customers and communities they serve. RILA members are committed and responsible corporate citizens who recognize their important role in shaping our nation's future. They are engaged in efforts to advance environmentally sustainable business practices and processes, and will champion other emerging issues that strengthen our nation's economy, communities and workforce.
Key enterprise issues for RILA include:
RILA supports federal legislation that would grant states the authority to require businesses to collect and remit, through a simplified system, state sales and use taxes on remote sales, including sales made over the Internet and through other remote methods. RILA also supports state action seeking to allow states collection authority by establishing nexus for online-only retailers through various means, or through direct state assessments of online-only retailers that have established facilities in a given state, as stop-gap measures until federal action to level the playing field can be enacted. Today, brick-and-mortar retailers are required to collect sales taxes while many online and catalog retailers are not. This difference is not only unfair to brick-and-mortar retailers, which create jobs in the community, but it is also costing states and localities, which are already facing severe budget crises, billions of dollars in lost revenue that could benefit vital public services and/or lower state tax rates.
Faced with significant budget deficits caused by the recent recession and slow economic recovery, states have been grappling with steep drop offs in revenues, which has prompted many states to consider various approaches to crack down on the sales-tax collection loophole enjoyed by online-only retailers. States like New York, North Carolina, Rhode Island, and most recently, California, Illinois, Connecticut, Vermont and Arkansas, have enacted affiliate-nexus legislation, while other states, like California, Texas, Oklahoma and South Dakota have taken steps to expand their nexus definitions to require businesses with a sufficient connection to the state to collect sales tax. Colorado has adopted a more contentious requirement that online retailers (not already collecting sales taxes) report to state tax authorities regarding purchases made by state residents, which is currently subject to an injunction pending the outcome of litigation challenging the statute. The State of North Carolina has taken a similar approach by administrative action. Legislatures in many other states have considered one or more of these approaches during the 2011 legislative sessions. At the federal level, a new approach to provide states with sales-tax collection authority has been introduced in both Houses of Congress, which recognizes the states’ right to enforce their sales tax collection laws while leveling the playing field for brick-and-mortar retailers. On October 13, 2011, Rep. Steve Womack (R-AR) and Rep. Jackie Speier (D-CA) introduced the Marketplace Equity Act of 2011 (H.R. 3179), along with a strong bipartisan group of cosponsors. /1/ In the Senate, Sen. Mike Enzi (R-WY), Sen. Richard Durbin (D-IL) and Sen. Lamar Alexander (R-TN), introduced the Marketplace Fairness Act 2011 (S.1832) on November 9, 2011, also with strong bipartisan cosponsorship. /2/ Both bills would provide a state with authority to require out-of-state businesses to collect sales taxes if the state implements specified minimum simplification requirements, including an exemption for small businesses, an easily identifiable tax rate, uniform tax-base rules, and centralized filing and remittance of the sales taxes withheld. The bills would also provide collection authority for states opting to join the Streamlined Sales and Use Tax Agreement, which has been the focus of the Main Street Fairness Act (MSFA), introduced earlier this year by Sen. Durbin and Rep. John Conyers (D-MI) and Peter Welch (D-VT) – S. 1452 /3/ and H.R. 2701. /4/
The House Judiciary Committee, which has jurisdiction over sales-tax collection legislation, held a hearing on November 30, 2011, to examine the Internet sales tax collection issue and the need for a federal solution. RILA secured the testimony of a small business owner from Michigan who provided the perspective of a brick-and-mortar retailer struggling to compete with online-only giants that do not collect sales tax in every state.
Streamlined Sales Tax Project
The Streamlined Sales and Use Tax Agreement (SSUTA) /5/ is an agreement among participating states that simplifies and modernizes state sales and use tax laws. The agreement was developed in 2002 in response to two U.S. Supreme Court rulings – National Bellas Hess v. Department of Revenue of the State of Illinois /6/ and Quill Corp. v. North Dakota /7/ – holding that remote sellers could only be required to collect sales tax from customers in states where the sellers have a physical presence. With more than 7,500 state and local jurisdictions collecting sales tax at that time – many with different rates, different kinds of taxable items, and different definitions – the Court recognized that requirements on out-of-state merchants to collect and remit state and local sales taxes were unfair and overly burdensome.
Responding to this situation, 30 states and the District of Columbia – working in conjunction with the business community – approved the SSUTA on November 12, 2002. The agreement simplifies state and local sales tax systems, limits the burdens on interstate commerce, levels the playing field between local and out-of-state merchants, and reduces administrative costs.
Today, 24 states /8/ have enacted legislation to conform their tax laws and implement the requirements of the SSUTA. Legislation has been introduced in additional states to expand the SSUTA’s membership. Sellers also support the SSUTA as evidenced by the more than 1,100 companies volunteering to take advantage of its streamlined compliance requirements. In return, those companies have collected more than $500 million in state and local revenues that would not otherwise have been collected. It is widely accepted, however, that these revenues constitute a small fraction of the amount of sales tax that goes uncollected. Some studies estimate that states lose as much as $23 billion each year in uncollected sales tax.
The SSUTA does not impose a new tax on Internet commerce; it merely provides states with the mechanism to collect legally owed sales taxes that currently go uncollected since few consumers understand that they are obligated to pay the tax directly to their state if the online merchant does not collect sales taxes. Because not all states are likely to join the SSUTA, a comprehensive federal solution now also includes a non-SSUTA avenue for states to begin collecting remote sales taxes. /9/
State Legislative and Administrative Efforts
Without federal legislation, a growing number of states have turned to alternative approaches to collect their sales taxes from out-of-state vendors. Overall, these individual state efforts highlight the significant disadvantage that brick-and-mortar retailers face in the Internet marketplace and the difficult challenges states face in collecting sales taxes due on sales from out-of-state vendors.
The New York affiliate-nexus statute is currently being challenged in New York State court on the grounds that it violates the Commerce Clause of the U.S. Constitution as defined by the 1992 Supreme Court case. Last year, the New York Supreme Court Appellate Division released its ruling on Amazon’s (and Overstock’s) appeal upholding the lower court’s finding that the parties do not have a case that the states’ affiliate-nexus statute is unconstitutional on its face. The court also remanded the case back to the trial court (New York Supreme Court Trial Division) for further proceedings on the specific facts of the case to determine if Amazon’s relationship with its affiliates constitutes actual solicitation and sales to Amazon, thereby establishing sufficient nexus OR if the relationship is merely advertising, which would not be considered sufficient nexus to require Amazon to collect New York sales taxes.
As expected, several companies affected by Colorado’s reporting law have initiated a lawsuit in an effort to overturn the reporting requirement. The Federal court overseeing the litigation issued an injunction in January 2011 against the state’s implementation of the statute until the litigation is decided. Amazon also sued North Carolina in response to the state’s request for similar information on purchases made by North Carolina residents. The litigation gained the support of the American Civil Liberties Union as the case centers on consumer privacy and the First Amendment rights of North Carolina residents. The Federal District Court (Western District of Washington) found that while North Carolina had overstepped privacy boundaries in its broad request, the state could still make a more limited request from online retailers that could include name, address and total purchase amount, which would enable the state to collect the lawful, but to date practically unenforceable, sales taxes directly from its residents.
In September 2010, the Texas comptroller assessed Amazon for roughly $260 million in uncollected sale taxes from Internet sales between 2005 and 2009 citing the presence of an Amazon-owned facility in the state. Other states where Amazon maintains a physical presence but does not collect a sales tax include Arizona, California, Florida, Indiana, Michigan, Nevada, New Jersey, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin. Special exemptions for new Amazon distribution facilities in Tennessee and South Carolina raised significant public opposition given the impact that such special deals would have on Main Street businesses and state budgets in those states.
In California, after the state adopted both the affiliate NY model legislation as well as the expanded nexus definitions, Amazon started the process for a ballot initiative to reverse the new statute. In response, the California legislature undertook compromise legislation under which Amazon would begin collecting sales tax in California by September 2012 or January 2013 if a federal bill is enacted. That legislation, which Amazon ultimately endorsed, was enacted in September 2011, and represents a significant victory for the state and brick-and-mortar retailers and has led to Amazon’s endorsement of a federal solution to this issue. RILA has been vigilant in monitoring and weighing in as appropriate on these state efforts. The recently formed “Alliance for Main Street Fairness” is an Alliance of large and small brick-and-mortar retailers that are actively supporting many of these independent state efforts. Some notable challenges with this state-by-state legislative approach are that Amazon’s response to such bills has been either to sever its relationships with its in-state affiliates in smaller market states, thereby eliminating its liability for sales tax collection, or to take the state to court, as seen in larger market states like New York. Other state efforts similar to Colorado and North Carolina raise privacy concerns regarding government access to consumer data. Despite these challenges, however, state statutes continue to put pressure on pure-play Internet sellers to collect state sales taxes and compete fairly with brick-and-mortar retailers, including RILA members. RILA will continue to take advantage of the negative public perception that these state efforts create for Amazon and other online-only retailers that do not collect state sales taxes, and will continue to drive home the need for federal legislation that can provide a comprehensive solution.
Federal Legislative Efforts
Although the SSUTA went into effect on a voluntary basis in 2005, passage of federal legislation is needed to level the playing field between retailers and to allow states to collect legally owed sales taxes from out-of-state merchants.
In the last Congress, former Rep. Delahunt introduced Main Street Fairness Act (H.R. 5660), /10/ and in the 110th Congress, former Reps. Delahunt and Ray LaHood (R-IL) and Sen. Mike Enzi (R-WY) introduced the Sales Tax Fairness and Simplification Act (H.R. 3396, /11/ S. 34 /12/ ), to give states that have joined the SSUTA the authority to require out-of-state sellers to collect sales tax on remote sales. In the House, this legislation has been referred to the Judiciary Committee, and while in the Senate, it has been referred to the Finance Committee. On November 30, 2011, the House Judiciary Committee held an oversight hearing on the issue.
As a result of the ongoing state activity, there has been a dramatic shift in attention paid to this issue on Capitol Hill, leading to the introduction of the new approach embodied in the Marketplace Equity Act and the Marketplace Fairness Act. Ultimately, federal legislation is the only comprehensive solution for states to have the authority to require out-of-state vendors to collect sales tax. A federal solution is supported by brick-and-mortar and online retailers, retail and real estate associations, publicly and privately owned shopping centers, state government groups, and organizations representing firefighters, teachers, police and other public-sector workers.
For more information, please contact Joe Rinzel, vice president of state government affairs, at joe.rinzel@rila.org, or Bill Hughes, senior vice president of federal government affairs, at bill.hughes@rila.orgAdditional References
Despite significant volume reduction as a result of the economic contraction, America’s ports and infrastructure require new investment to handle existing cargo volume and mitigate the environmental impact caused by congestion. Federal, state and local officials continue to propose and implement numerous fees and regulations on those operating at the ports. However, in many cases fee collection has been postponed due to the economic downturn. It is a sure bet that the tide will turn when the economy begins to bounce back, and so RI LA members are committed to working with federal, state, and local governments to help proactively address emerging port issues.
National Freight Policy Discussions Congress is scheduled to reauthorize legislation for surface transportation (highways, transit) projects. The two issues that affect RILA members most directly are the source of funding for the legislation and the inclusion of a national freight policy. Surface transportation reauthorization legislation is expected shortly in both the House and the Senate; currently one bill has been introduced that suggests there will be additional fees on the freight community.
ON TIME Act: Representative Ken Calvert (R-CA) reintroduced his legislation that directs the Secretary of Transportation to designate key trade transportation corridors, or National Trade Gateway Corridors, extending out from every official air, land, and sea port of entry in the United States. The bill plans to derive its trade-based dedicated funding stream through the establishment of a capped and nominal ad valorem fee (at .075 percent) on all goods entering and exiting through official ports of entry. The fee is capped at $500 per shipment and would be deposited into the newly created “National Trade Gateway Corridor Fund.” Discussion has taken place on possibly including this fee to help finance the next surface transportation reauthorization bill, but the authors of the bill have not hinted that they intend to use this mechanism. This legislation was introduced in 2008 and 2009 and did not gain traction.The Freight is the Future of Commerce in the United States Act of 2011 (Freight FOCUS Act): In March 2011, Congresswoman Richardson reintroduced legislation aimed at developing a more comprehensive approach to funding freight. The legislation (H.R. 1122) creates an Office of Freight Planning at the Department of Transportation to prioritize key freight corridors and arranges for both public and private sector involvement in the process. It creates a dedicated source of funding for goods movement, while providing funding to mitigate the effects of goods movement on the environment and public health by increasing the diesel tax by 12 cents. This legislation was endorsed by RILA.Clean Trucks EffortsDespite recent reductions in volumes at ports across the country as a result of the recession, basic infrastructure improvements remain a necessity in order to improve the shipments of goods. Environmental mitigation will continue to be combined with infrastructure improvement needs especially in localities surrounding major port operations as local leaders struggle with health concerns for their constituencies and maintaining the competiveness of their ports. This once local fight has moved to the national arena. As Congress continues to deliberate on congestion issues, major U.S. ports have added an additional item for possible consideration: a new policy shift focused on sustainability at the ports.
Local Level:Port of Los Angeles and Long Beach: In 2006, both ports approved a Clean Air Action Plan (CAAP) to reduce emissions from trucks, vessels and operating equipment by 45 percent over five years. The Los Angeles/Long Beach plans are as follows:
Port of Seattle/Tacoma: In Spring 2009, the Port of Seattle Commission and the Port of Tacoma Commission separately approved plans to reduce emissions from trucks that serve the port without involving additional cargo fees. The Port of Seattle’s plan prohibits the most polluting trucks (1994 model-year and older) from entering port terminals which began on January 1, 2011, in keeping with the 2010 standard of the Northwest Ports Clean Air Strategy. The program includes measures to scrap the old trucks, compensate truck owners for their older trucks and help them buy or lease newer ones. The Port of Tacoma’s plan does not have a truck replacement program. Port officials are instead encouraging the use of low sulfur fuels and are using an on-dock rail system to minimize the concentration of trucks in the port.
Port of Oakland: In March 2008, the Port of Oakland approved a container fee but the fee collection has been postponed. Port of Oakland commissioners also approved an air quality improvement plan in April 2009 designed to reduce diesel emissions from port activities 85 percent by 2020. In June, the Port of Oakland approved its Maritime Comprehensive Truck Management Plan, which sets hard targets for truck retirement goals without the imposition of new container fees or an employee driver mandate. Oakland became the second major west coast port (after Seattle/Tacoma) to adopt a retailers supported clean truck plan. Port of New York/New Jersey: In March 2010, the Port Authority of New York and New Jersey announced their clean truck program; a truck phase-out plan. As of January 1, 2011 all pre-1994 model trucks were be banned from the Port Authority marine terminals, trucks not equipped with engines that meet or exceed 2007 federal emissions standards will no longer be able to serve the marine terminals starting on January 1, 2017.
State Level:California: On a state level, the west coast has been focused on establishing standards to continue their focus on “greening” the economy. The California Air Resources Board (CARB) passed a series of vehicle and fuel rules to cut port diesel emissions. One rule bars old diesel trucks from visiting California ports after January 1, 2010, unless they install diesel filters. CARB also announced that it is releasing $90 million in state bond money for the state's Goods Movement Emission Reduction Program. The funding will go toward cleaning up port trucks, upgrading trucks in the Central Valley and Mexican Border regions and installing shore-based electrical power for two ship berths at the Port of Oakland.
Two new pieces of legislation will also aid in California’s effort to force an employee mandate on all drayage truckers and to levy a container fee on Beneficial Cargo Owners (BCOs):
AB 950: This legislation, introduced in February by Speaker of the Assembly John Perez (D-Los Angeles) and coauthored by Assemblyman Sandre Swanson (D-Oakland), Chairman of the Assembly Labor & Employment Committee, seeks to force an employee mandate on all drayage truckers in the state. The language in the bill states that it will “deem drayage truck operators as employees of those persons who arrange for or engage their services.” The result of this bill will be a ban all independent contractors, also known as owner-operators, from California ports including Los Angeles, Long Beach and Oakland. The Committee passed the legislation on a 4-1 party-line vote, but the bill stalled, and was not brought up for a vote on the Assembly floor prior to the end of the 2011 session. Since the California State Legislature has large pro-labor majorities in both the Senate and the Assembly, along with a pro-labor Governor, this is a real threat in the 2012 session, one that RILA is actively working to oppose. SB 862: Senator Alan Lowenthal (D-Long Beach) introduced legislation to levy a container fee on Beneficial Cargo Owners (BCO) through PierPASS. This bill would establish the Southern California Goods Movement Authority comprised of local port, city and county officials. Although the bill did not pass this session, RILA will actively oppose this legislation in the 2012 session.
AB 950: This legislation, introduced in February by Speaker of the Assembly John Perez (D-Los Angeles) and coauthored by Assemblyman Sandre Swanson (D-Oakland), Chairman of the Assembly Labor & Employment Committee, seeks to force an employee mandate on all drayage truckers in the state. The language in the bill states that it will “deem drayage truck operators as employees of those persons who arrange for or engage their services.” The result of this bill will be a ban all independent contractors, also known as owner-operators, from California ports including Los Angeles, Long Beach and Oakland. The Committee passed the legislation on a 4-1 party-line vote, but the bill stalled, and was not brought up for a vote on the Assembly floor prior to the end of the 2011 session. Since the California State Legislature has large pro-labor majorities in both the Senate and the Assembly, along with a pro-labor Governor, this is a real threat in the 2012 session, one that RILA is actively working to oppose.
SB 862: Senator Alan Lowenthal (D-Long Beach) introduced legislation to levy a container fee on Beneficial Cargo Owners (BCO) through PierPASS. This bill would establish the Southern California Goods Movement Authority comprised of local port, city and county officials. Although the bill did not pass this session, RILA will actively oppose this legislation in the 2012 session.
While legislative activity has seen activity in California, other states have begun to focus their attention on legislative vehicles focused on employee misclassification and container fees. They are as follows:New Jersey (AB 4146): This bill, introduced in the New Jersey Assembly, addresses misclassification of drayage truck operators and is currently in the Assembly Labor Committee awaiting further action. It is important to note that since New Jersey’s legislative session is rolling (no session end date), there is no deadline to when this bill must be passed to become law.
Washington (SB 5945): This legislation would raise business & occupation (B&O) tax rates for several areas related to logistics and international trade, including drayage trucking, customs brokers, stevedoring services and freight forwarders. The bill was not reported out of the Senate Committee on Ways & Means in the 2011 Special Session, but all indications suggest this legislation will remain alive for the 2012 session. Illinois (Transportation District Authority Act): This legislative language, intended as an amendment to a Senate bill, would create the Illinois Transportation District Authority to have sole power and responsibility to impose regulations and commercial vehicle user fees related to roadway infrastructure within the territorial jurisdiction. The proposed fee schedule for container/truck movements in and out of the Authority range from $3.50 to $12 a movement. This legislation was introduced in the state’s General Assembly only three days prior to the end of the session and although this bill did not pass, it will likely be brought up in the next session.
Federal Level:National Update: Following the U.S. District Court’s initial decision on the Port of Los Angeles’ clean air action plan, the Los Angeles Harbor Commission hired a Washington lobbying firm to develop language that would override current federal law. Advocacy efforts focused on amending the Federal Aviation Administration Authorization Act (F4A) to grant ports regulatory authority. The Port of Oakland, the Port Authority of New York New Jersey, and a number of big city mayors also added their support for a change in legislation. In July 2010, Congressman Jerrold Nadler (D-NY) introduced the Clean Ports Act of 2010 (H.R. 5967), which had widespread Democratic support in the House with over 90 co-sponsors in the 111th Congress. In February 2011, Nadler reintroduced this bill in and currently has 56 co-sponsors.
Amending the F4A could, and most certainly would, lead to the unionization of harbor truck drivers across the nation. Last May, the House Transportation and Infrastructure (T&I) Subcommittee held a hearing to shed light on the Port of Los Angeles /Long Beach’s Clean Air Action Plan. The Coalition for Responsible Transportation (CRT) testified at the hearing to convey the proactive measures that shippers are taking at the ports. Instead of the hearing focusing on the original intent of sustainability efforts at the ports, the outcome of the hearing turned the discussion towards viable leasing agreements between licensed motor carriers (LMCs) and independent owner operators (IOOs).
With a Republican majority now in the House of Representatives, it is highly unlikely that legislation to open up the definition of interstate commerce and allow a patchwork of regulations on the trucking industry will gain any traction. If the House and Senate do not take up the issue, as expected, it can be anticipated that attention to this issue could very well divert to the Administration through regulatory actions on employee misclassification.
RILA continues to work with stakeholders to ensure that onerous legislation is not enacted. RILA is continuing to protect retailer interests by working to ensure that policies address real infrastructure shortcomings and that policies do not unfairly punish infrastructure users with duplicative costly fees and mandates.
In 2009, RILA partnered with the Coalition for Responsible Transportation (CRT) to further advocate the retailers’ sustainability efforts at the ports. Through RILA’s efforts with CRT, the Environmental Protection Agency (EPA) launched a new SmartWay Drayage partnership to bring SmartWay long-haul benefits to our nation’s ports. RILA will also work with local port authorities considering environmental mitigation and/or infrastructure plans to ensure the development of sound programs that achieve shared goals and without disrupting the movement of goods.
American ports require new investment in infrastructure to handle the annual increase in cargo volume and mitigate the environmental impact caused by port congestion. Dramatic environmental action plans that include new port fees, and sometimes employee mandates, are becoming increasingly popular to fund port investments, reduce congestion, and alleviate pollution caused by port operations.
Nowhere is this dynamic more true than in California, particularly at the ports of Los Angeles and Long Beach. Los Angeles and Long Beach are the nation’s two largest ports, handling approximately 44 percent of the nation’s containerized cargo. Congestion at the ports is significant, and operations from both locations have been recognized as a substantial source of pollution in the Los Angeles metropolitan area. Taken in total, the port fee proposals at the state and local levels have the potential to cost RILA companies an additional $182 per 40-foot container to import goods into Southern California. Other west coast ports have followed suit, including Seattle/Tacoma and Oakland, and now New York/New Jersey has implemented their own plan. It is only a matter of time before these proposed fees expand to all ports located throughout the nation.
Discussions on addressing port matters are not only taking place at the local level but are also happening at the federal level. As Congress continues to deliberate on transportation focused legislation, there is potential for national policies to be crafted to address these issues directly. Some policies currently under consideration will result in a positive outcome for industry; other policies will potentially hamper the economy and the productivity of the retailer’s supply chains.
State Level:
California: On a state level, the west coast has been focused on establishing standards to continue their focus on “greening” the economy. The California Air Resources Board (CARB) passed a series of vehicle and fuel rules to cut port diesel emissions. One rule bars old diesel trucks from visiting California ports after Jan. 1, 2010, unless they install diesel filters. CARB also announced that it is releasing $90 million in state bond money for the state's Goods Movement Emission Reduction Program. The funding will go toward cleaning up port trucks, upgrading trucks in the Central Valley and Mexican Border regions and installing shore-based electrical power for two ship berths at the Port of Oakland.
Local Level:
Port of Los Angeles and Long Beach: Last year, both ports approved a Clean Air Action Plan (CAAP) to reduce emissions from trucks, vessels and operating equipment by 45 percent over five years. The Los Angeles/Long Beach plans are as follows:
Port of Seattle/Tacoma: In Spring 2009, the Port of Seattle Commission and the Port of Tacoma Commission separately approved plans to reduce emissions from trucks that serve the port without involving additional cargo fees. The Port of Seattle’s plan calls for prohibiting the most polluting trucks (1994 model-year and older) from entering port terminals beginning January 1, 2011, in keeping with the 2010 standard of the Northwest Ports Clean Air Strategy. The program will include measures to scrap the old trucks, compensate truck owners for their older trucks and help them buy or lease newer ones. The Port of Tacoma’s plan does not have a truck replacement program. Port officials are encouraging the use of low sulfur fuels and are using an on-dock rail system to minimize the concentration of trucks in the port.
Port of Oakland: Last year, the Port of Oakland approved a container fee but the fee collection has been postponed. Port of Oakland commissioners also approved an air quality improvement plan in April 2009 designed to reduce diesel emissions from port activities 85 percent by 2020. In June, the Port of Oakland approved its Maritime Comprehensive Truck Management Plan, which sets hard targets for truck retirement goals without the imposition of new container fees or an employee driver mandate. Oakland now becomes the second major west coast port (after Seattle/Tacoma) to adopt a retailers supported clean truck plan.
For more information, please contact Kelly Kolb, vice president of government affairs, at kelly.kolb@rila.org.
In August 2011, Congress enacted modest changes to improve the implementation of the CPSIA. The amendment addressed several major concerns with the CPSIA, and gave the CPSC meaningful new authorities and flexibilities that were previously missing. Some of the most important fixes for retailers included:
RILA continues to advocate with the CPSC on issues related to CPSIA implementation, and encourages retailers to continue to actively engage with RILA on these issues.
In August 2008, Congress enacted the CPSIA with broad, bipartisan support. The CPSIA established new federal standards for lead and phthalates, and requires testing, certification and labeling for certain children's products. The CPSIA was the most comprehensive overhaul of consumer product safety laws since the CPSC was created in 1972.
Some of the most significant impacts of the CPSIA include:
Since enactment of the CPSIA, the law’s inflexibilities have led to unintended consequences that have cost industry millions of dollars without necessarily always improving product safety. Some examples included the retroactive effective dates for the lead and phthalate bans, prohibitive testing costs for small-batch toy producers, and effective bans on children’s all-terrain vehicles, bicycles and books.
For more information, please contact Jim Neill, vice president of product safety, at jim.neill@rila.org or Stephanie Lester, vice president of international trade, at stephanie.lester@rila.org.