BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1277|
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THIRD READING
Bill No: SB 1277
Author: Hancock (D)
Amended: 4/4/16
Vote: 21
SENATE TRANS. & HOUSING COMMITTEE: 7-3, 4/12/16
AYES: Beall, Allen, Galgiani, Leyva, McGuire, Roth, Wieckowski
NOES: Cannella, Bates, Gaines
NO VOTE RECORDED: Mendoza
SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-2, 4/20/16
AYES: Wieckowski, Hill, Jackson, Leno, Pavley
NOES: Gaines, Bates
SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/27/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Bates, Nielsen
SUBJECT: California Environmental Quality Act: supplemental
environmental impact report: City of Oakland: coal
shipment
SOURCE: Author
DIGEST: This bill requires a public agency with discretionary
authority over the Bulk and Oversized Terminal project, located
in the former Oakland Army Base, to prepare or cause to be
prepared a supplemental environmental impact report (EIR) to
consider and mitigate the shipment of coal through the terminal.
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ANALYSIS:
Existing law:
1) Requires, under the California Environmental Quality Act
(CEQA), the lead agencies with the principal responsibility
for carrying out or approving a proposed discretionary
project to prepare a negative declaration, mitigated negative
declaration, or environmental impact report (EIR) for this
action, unless the project is exempt from CEQA (CEQA includes
various statutory exemptions, as well as categorical
exemptions in the CEQA Guidelines). (Public Resources Code
(PRC) §21000 et seq.)
2) Enacts, pursuant to Proposition 1B (Prop. 1B), enacts the
Highway Safety, Traffic Reduction, Air Quality, and Port
Security Bond Act of 2006 and authorizes $19.9 billion in
general obligation bonds to fund a variety of transportation
projects. (Government Code §8879.22 et seq.)
This bill:
1)Requires a public agency with discretionary authority over the
Bulk and Oversized Terminal project, located in the former
Oakland Army Base, to prepare or cause to be prepared a
supplemental EIR to consider and mitigate the shipment of coal
through the terminal.
2)States that coal shipment was not considered under the
original EIR for this project as a commodity that would be
shipped through the terminal.
3)States that the proposal to export coal from the terminal
constitutes a change in the proposed project and is new
information that was not known, and could not have been known,
at the time the EIR was certified as complete.
Background
Proposition 1B and the Trade Corridor Improvement Fund (TCIF).
Proposition 1B, the Highway Safety, Traffic Reduction, Air
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Quality, and Port Security Bond Act of 2006, was approved by
California voters in November 2006. Proposition 1B authorized
the issuance of $19.9 billion in general obligation bonds to
fund a variety of transportation projects. Of this, $2 billion
was allocated to the TCIF for infrastructure improvements along
high-volume freight corridors.
The TCIF program requires at least a 50% match from local,
federal, or private sources. The project application must
include a specific description of non-TCIF funding (source,
amount, and availability) to be applied to the project. The
California Transportation Commission (CTC) evaluates TCIF
applications based on factors including increased speed of
freight traffic; relief for freight system bottlenecks; and
reduction of local and regional emissions of diesel particulate
matter (PM), carbon dioxide (CO2), oxides of nitrogen (NOx), and
other pollutants.
The Oakland Army Base Redevelopment Project. After the Oakland
Army Base was closed in 1999, part of the property reverted to
the City of Oakland, while another portion went to the Port of
Oakland. The following year, the Oakland City Council
designated the base and surrounding properties, an area totaling
1,800 acres, as a redevelopment project area. In 2009, the Port
of Oakland secured TCIF funding for a project to develop
warehouse space, logistics facilities, and a rail terminal on
the site. By diverting freight from trucks to trains, the new
rail terminal complex was expected to reduce diesel PM emissions
while simultaneously increasing the efficiency of goods movement
through the Port.
Following the dissolution of the redevelopment agency in 2012,
the area owned by the redevelopment agency was transferred to
the City of Oakland. The Port and the City began working
together on the site and significantly expanded the scope of the
redevelopment, including the addition of a bulk terminal. The
Port obtained a grant under the federal Transportation
Investment Generating Economic Recovery (TIGER) program, as well
as additional TCIF funds. The expansion of the project required
an update to the EIR completed in 2002; an addendum was prepared
in 2012.
Meanwhile, the City of Oakland forged an agreement with two
private entities, California Capital and Investment Group (CCIG)
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and Prologis, to develop the site. These two companies were
tasked with finding additional investors and tenants for the
project. Details of what commodities would be transported
through the bulk terminal were largely contingent upon the
contracts that would be executed, and therefore were not
reviewed in the new environmental documents.
To date, the Port and the City have secured about two-thirds of
needed project funding. Of this, the majority comes from public
funding sources; specifically, the state TCIF ($242 million);
the federal TIGER program ($15 million); the Port of Oakland
($16 million); and the City of Oakland ($55 million). In
addition, CCIG and Prologis have identified funding totaling
approximately $172 million.
In spring of 2015, stories surfaced in the media revealing that
the state of Utah was in discussions with Port developers about
shipping coal from Utah to China through the bulk terminal in
Oakland. Utah currently exports about 1 million tons of coal
each year, mainly through the ports of Richmond, Stockton, and
Long Beach. As coal-fired power plants in the U.S. close or
switch to natural gas, access to overseas markets is becoming
increasingly important for coal-producing states. In February
2016, eight working days before the end of the Utah legislative
session, a bill surfaced to authorize, and provide $53 million
in funding for, the deal. The legislation passed by a wide
margin and was signed by Governor Gary Herbert on March 22,
2016.
As noted above, the City had tasked two companies, CCIG and
Prologis, to come up with additional project funding. CCIG, in
turn, executed a contract with Terminal Logistics Solutions, a
company headed by Jerry Bridges, a former executive director of
the Port of Oakland. It was this company that negotiated the
deal with Utah.
California Environmental Quality Act (CEQA). CEQA requires state
and local agencies to identify the significant environmental
impacts of their actions and to avoid or mitigate those impacts,
if feasible. Every development project that requires a
discretionary government approval requires at least some
environmental review pursuant to CEQA, unless an exemption
applies. Specifically:
1)If the initial study shows there would not be a significant
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impact on the environment, the lead agency must prepare a
negative declaration.
2)If the study shows potentially significant impacts but the
applicant revises the project plan in a manner to avoid or
mitigate those impacts, before the proposed negative
declaration and initial study are released for public review,
the lead agency must prepare a mitigated negative declaration.
3)If the initial study shows the project might have a
significant effect on the environment, the lead agency must
prepare an EIR.
Generally, an EIR must accurately describe the proposed project,
identify and analyze each significant environmental impact
expected to result from the proposed project, identify
mitigation measures to reduce those impacts to the extent
feasible, and evaluate a range of reasonable alternatives to the
proposed project.
CEQA also requires a lead agency or responsible agency to
prepare a subsequent or supplemental EIR if one or more of the
following occurs:
1)Substantial changes are proposed in the project that will
require major revisions of the EIR.
2)Substantial changes occur in the circumstances under which the
project is being undertaken that will require major revisions
to the EIR.
3)New information, which was not known and could not have been
known at the time the EIR was certified as complete, becomes
available.
Comments
1)Why didn't the TCIF application mention coal? The TCIF
application, in reference to the bulk terminal portion of the
project, stated that it would be "converted to a modern bulk
cargo marine terminal for movement of commodities such as iron
ore, corn, and other products brought in to the terminal by
rail ? the terminal would also accommodate project cargo such
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as windmills, steel coils, and oversized goods." The TCIF
application did not require the applicant to disclose, or
commit to, exactly what commodity or commodities would be
transported through the terminal.
2)How would this bill impact the Oakland project? This bill
requires that when the next step of this project is reached,
the agency with discretionary approval of that step (e.g., the
local air district or the water board) will have to prepare or
commission a supplemental EIR. By requiring a supplemental
EIR, this bill could potentially delay the project timeline.
At the same time, however, a supplemental EIR will help ensure
that any potential impacts from shipping coal through the port
and community are addressed. Because there has been no
movement by a local agency, for nearly a year, seeking to put
on record that potential coal shipment is new information that
should be analyzed, this bill seeks to clarify and ensure that
this issue gets addressed.
3)Concerns. The Pacific Merchant Shipping Association (PMSA)
has taken a position of "concern" on this bill, citing legal
concerns and noting that "all of these facilities in question
have already received their environmental clearances, mostly
through exceptionally thorough and highly-scrutinized EIR
processes ?"
Related/Prior Legislation
SB 1279 (Hancock, 2016) prohibits the CTC from programming or
allocating state funds for any port facility project in or
adjacent to one or more DACs which export or propose to export
coal from California.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee:
Unknown significant costs, which could be state or local costs
depending on which public agency would have the next
discretionary authority over approving a project. These costs
would be recovered by fees charged to the project proponent for
the cost of preparing the supplemental EIR.
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SUPPORT: (Verified5/27/16)
Alameda County Democratic Central Committee
Berkeley Climate Action Coalition
California Nurses Association
Center for Environmental Health
City of Berkeley
City of Emeryville
City of Richmond
East Bay Regional Park District
East Bay Young Democrats
Ecology Center
El Cerrito Democratic Club
Environment California
Fossil Free California
Friends Committee on Legislation
inNative
International Longshore and Warehouse Union, Northern California
District Council
No Coal in Oakland
Oakland Unified School District
Peace, Earthcare, and Social Witness Committee of Strawberry
Creek Quaker
Meeting
Physicians for Social Responsibility
Public Advocates
San Francisco Baykeeper
Save the Bay
SEIU Local 1021
Sierra Club California
West Oakland Environmental Indicators Project
350 Bay Area
One individual
OPPOSITION: (Verified5/27/16)
American Planning Association, California Chapter
California Building Industry Association
California Business Properties Association
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California Capital and Investment Group
California Chamber of Commerce
California Manufacturers and Technology Association
California Railroad Industry
California Teamsters Public Affairs Council
ARGUMENTS IN SUPPORT: The author states that coal transport
spreads the damages caused by coal dust and contributes to the
likelihood that residents in adjacent communities will suffer
from illnesses linked to pollution, such as cancer, heart
disease, and asthma. Coal dust is a source of PM that is
dangerous to breathe and is responsible for most occupational
lung disease. West Oakland is already heavily impacted by
pollution: Its residents are 2.5 times more likely to get
cancer due to breathing air which contains three times the
amount of diesel PM than air in other parts of the Bay Area. In
addition, West Oakland residents are two times as likely to go
to the emergency room with asthma as people in other parts of
Alameda County.
The author states that the initial redevelopment project
proposal provided to the CTC in the TCIF application did not
include the potential for the transport and export of coal, nor
did the initial EIR examine the use of a coal export facility.
Now, however, the project proposes to transport up to 9 million
tons of coal each year from Utah, through the Port, to China and
other countries. West Oakland, the location of the project, has
already been designated by the state as a disadvantaged
community (DAC) due to its high asthma rates, cancer risks, and
pollution levels. The author states that this proposal is not
in accordance with Proposition 1B and contradicts California's
efforts in reducing climate change.
ARGUMENTS IN OPPOSITION: The American Planning Association,
California Chapter, writing in opposition to this bill, states
that "While APA supports the State's renewable energy portfolio;
we do not support the idea of special CEQA treatment of an
individual project by the Legislature." The California Railroad
Industry, also writing in opposition to this bill, states that
it "singles out coal-related projects at a specified bulk cargo
terminal, treating coal shipments differently than every other
commodity that moves through that facility."
Prepared by:Erin Riches / T. & H. / (916) 651-4121
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5/28/16 17:15:15
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