BILL ANALYSIS �
SB 739
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Date of Hearing: June 20, 2011
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 739 (Alan Lowenthal) - As amended: June 13, 2011
SENATE VOTE : 32-7
SUBJECT : Port Air Quality and Infrastructure Needs and Financing
Plans
SUMMARY : Requires the ports of Los Angeles, Long Beach, and
Oakland, beginning January 1, 2012, to assess their
infrastructure and air quality improvement needs. Specifically,
this bill :
1)Makes various findings and declarations relative to the need of
infrastructure improvements and air quality reduction measures
for the state's major ports.
2)Requires the ports of Long Beach, Los Angeles (San Pedro
Ports), and the port of Oakland (Oakland) to assess
infrastructure and air quality improvement needs beginning
January 1, 2012.
3)Requires the San Pedro ports to consult with the Southern
California Association of Governments, and Oakland to consult
with the Metropolitan Transportation Commission, on
infrastructure projects that improve cargo movement efficiency
and reduce congestion impacts associated with cargo movement.
The ports must identify the project, funding sources or
possible funding sources, and estimated project timeliness for
completion.
4)Requires the San Pedro ports to consult with the South Coast
Air Quality Management District (South Coast), and Oakland to
consult with the Bay Area Air Quality Management District
(BAAQMD), on air quality projects that reduce pollution
associated with cargo movement, including projects that reduce
pollution from trucks, cargo handling equipment, locomotives,
and ships. The ports must identify the project, funding
sources or possible funding sources, and estimated project
timelines for completion.
5)Requires the ports to provide the assessments to the
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Legislature by July 1, 2012, including assessments of
infrastructure and air quality improvement costs, funding
sources, and possible funding options for projects without a
funding source.
6)Makes inoperative the report requirement four years after bill
enactment.
7)Makes non-substantive changes to the California Marine and
Intermodal Transportation System Advisory Council (CALMITSAC).
EXISTING LAW :
1)Establishes 11 ports in the state: Humboldt Bay, Hueneme, Long
Beach, Los Angeles, Oakland, Redwood City, Richmond,
Sacramento, San Diego, San Francisco, and Stockton. The law
allows each port to lay out, plan, and establish a general plan
and port system improvements and prescribe the specifications
for such improvements.
2)Requires a public agency to approve certain mitigation for port
projects involving filling of subtidal habitats within ocean or
inland ports.
3)Requires, pursuant to the California Coastal Act, that each
port governing body prepare and adopt a port master plan that
includes:
a) Proposed uses of land and water areas;
b) Projected design and location of port land areas, water
areas, berthing, and navigation ways and systems intended to
serve commercial traffic within the area of jurisdiction of
the port governing body;
c) An estimate of the effect of development on habitat areas
and the marine environment, a review of existing water
quality, habitat areas, and quantitative and qualitative
biological inventories and proposals to minimize and
mitigate any substantial adverse impact; and,
d) Adequate public hearing and public participation in port
planning and development decisions.
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4)Establishes CALMITSAC and requests it to study and compile
information on the impacts of port growth on the state's
transportation system and report its findings to the
Legislature with recommendations on methods to better manage
port growth and address the environmental impacts of moving
goods through the ports. Establishes it as a regional subunit
of the Marine Transportation System National Advisory Council
chartered by the federal Secretary of Transportation under the
Federal Advisory Council Act.
5)Authorizes the California Air Resources Board (ARB) to
coordinate statewide efforts to attain and maintain ambient air
quality standards and specifies its powers. Establishes South
Coast and BAAQMD as the regional air quality management
districts in their respective areas of the state.
6)Authorizes, through the enactment of Proposition 1B, the
Highway Safety, Traffic Reduction, Air Quality, and Port
Security Bond Act of 2006, as approved by the statewide voters
in November 2006, the state to sell approximately $20 billion
of general obligation bonds to fund transportation projects to
relieve congestion, improve the movement of goods, improve air
quality, and enhance the safety and security of the
transportation system. Of the $20 billion, allocates $1
billion to ARB for emission reductions, not otherwise required
by law or regulation, from activities related to the movement
of freight along California's trade corridors (commencing at
the state's airports, seaports and land ports of entry).
Provides funds for the replacement, repower, or retrofit of
heavy-duty trucks, locomotives, commercial harbor craft,
ocean-going vessels related to freight, and cargo-handling
equipment with cleaner technology alternatives. Port environs
qualify as one of four targeted freight corridors for
expenditure of the $1 billion.
7)Establishes through the enactment of Proposition 1B (see above
#5), the Trade Corridor Improvement Program, that includes $2
billion, for allocation by the California Transportation
Commission (CTC) for infrastructure improvements along
federally designated "Trade Corridors of National Significance"
in this state or along other corridors within this state that
have a high volume of freight movement. The CTC is to consult
the Trade Infrastructure and Goods Movement Plan, trade
infrastructure and goods movement plans adopted by regional
transportation planning agencies, regional transportation
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plans, and Cal-MITSAC Statewide Port Master Plan.
8)Requires any bill that includes a requirement for the
preparation of a report to include a provision that either
repeals the report requirement or makes the requirement
inoperative no later than four years of enactment.
FISCAL EFFECT : Accordingly to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : Ports are local government agencies governed by port
commissions that are responsible for developing, maintaining, and
overseeing the operation of shore side facilities for the
intermodal transfer of cargo between ships, trucks, and
railroads. In some cases, certain ports have jurisdiction over
affiliated airports, build and maintain terminals for the
passenger cruise ship industry, or manage marinas and other
public facilities. Many industrial, manufacturing, and other
businesses locate their facilities near ports to take advantage
of the low-cost inbound transportation of raw materials and
cost-efficient outbound shipments of products for both domestic
and foreign markets.
California's 11 public ports, located along the coast from San
Diego to Humboldt and inland along the Sacramento and San Joaquin
Rivers, are the global gateways for goods movement. Governed by
"port commissions," these local government bodies develop,
maintain, and oversee the operation of shore side facilities for
the intermodal transfer of cargo between ships, trucks, and
railroads. A significant number of jobs in the state are tied to
trade, and the value of international trade alone exceeds $350
billion. Ports are seen as integral to keeping California the
sixth largest economy in the world.
As public entities, and due to their geographical location, ports
are regulated by several state and local government agencies,
including the Business, Transportation and Housing Agency, State
Resources Agency, Bay Conservation and Development Commission,
State Air Resources Board, BAAQMD, and South Coast, among others.
According to a 2006 report by ARB, pollution from our state's
ports causes 2,400 premature deaths annually. ARB recently
estimated that over the next 15 years, polluting activity from
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operations at California's ports will have an aggregate health
impact equivalent to approximately $200 billion in present value
dollars.
As a disproportionate number of communities impacted by port
pollution are low-income communities of color, the state
currently shoulders much of these port-caused health costs. By
2020, ports and freight transport operations will be the largest
source of particulate matter (PM) and nitrogen oxide (NOx)
emissions in the state, producing more diesel PM than all
passenger vehicles, off-road equipment and stationary sources
combined. On a related note, Southern California risks losing
$12.1 billion in federal highway funds if federal Clean Air Act
standards are not met. So far, the basin has failed to meet
national standards for ozone or for particulate emissions.
Relative to goods movement infrastructure development needs,
according to the Los Angeles Economic Development Corp., Southern
California must spend at least $10.5 billion to improve
railroads, rail yards and highways to keep up with surging
international trade or risk losing more than 500,000 new jobs and
more than $1 billion of taxes a year. Inefficiencies in the
freight transport system are costly to the state. Improving the
rail system will reduce the number of diesel trucks on the
state's freeways and alleviate congestion.
According to the author's office, "there have been several plans
either for goods movement infrastructure or for reducing goods
movement emissions, however those plans are several years old and
most do not identify where funds will come from to build goods
movement infrastructure or to reduce emissions from goods
movement in California."
This bill seeks to find out how the San Pedro ports and the Port
of Oakland will fund their improvements along with providing
estimated timelines for implementation of the action measures.
San Pedro Ports Clean Air Action Plan (CAAP) : Adopted by the San
Pedro Ports, the CAAP addresses every category of port-related
emission sources - ships, trucks, trains, cargo-handling
equipment and harbor craft - and outlines specific, detailed
strategies to reduce emissions from each category. The measures
that will be implemented under the CAAP are expected to eliminate
more than 47 % of diesel PM emissions from port-related sources
within the next five years and significantly reduce associated
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health risks. Smog-forming NOx emissions will be reduced by more
than 45 %. Measures outlined in the CAAP will also result in the
reduction of sulfur oxides (SOx) by 52 %. It is expected that in
five years, under the CAAP, diesel PM from all port-related
sources would be reduced by a total of 1,200 tons per year; NOx
emissions would be reduced by 12,000 tons per year; and SOx
emissions would be reduced by 8,900 tons a year. It is estimated
that the total cost to implement CAAP is over $2 billion.
Port of Oakland's Maritime Air Quality Improvement Program
(MAQIP) : According to the Port of Oakland, the MAQIP was
developed in collaboration with a task force of diverse
stakeholders, to reduce criteria pollutants, notably diesel
particulate matter, associated with maritime (seaport) activities
at the port. The MAQIP, adopted on April 7, 2009, is the Port's
master plan to reduce air pollution from both mobile and
stationary on/near-shore and off-shore sources at the seaport.
Achievement of the MAQIP goals by 2020 will be costly, with
millions of dollars of costs borne by the Port's tenants and
related businesses and customers as they upgrade equipment and
take other steps to comply with state, federal, and international
air quality regulations and measures.
The MAQIP indicates that "historically the port's principal
funding sources for maritime environmental improvement activities
have been operational revenues and bond funding secured by such
revenues. Because these revenue sources are insufficient to meet
the needs of the MAQIP for the foreseeable future, the port is
evaluating new funding and financing mechanisms, including but
not limited to user fees. A user fee could be used to fund key
infrastructure and environmental projects and generate matching
funds for Proposition 1B grants. It is important to note that
because projects funded through a user fee may have to be
financed on a pay-as-you-go basis, the timing of any fee
collection may be directly related to the scope and pace of
project implementation? It is clear that new funding mechanisms
and close partnerships with federal and state funding agencies
are needed to pay for the port's MAQIP goals. Realizing this
need, BAAQMD launched its "Green Ports Initiative," with its
emphasis on funding emissions reduction measures along with
enforcement of air quality regulations."
CALMITSAC : As required by state statute, CALMITSAC was required
to prepare and transmit a report to the Legislature by January 1,
2006 on several issues including, among other items, the
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projected growth of each maritime port in the state; the costs
and benefits of developing a coordinated state program to obtain
federal funding for maritime port growth, security, and
congestion relief; impacts of maritime port growth on the state's
transportation system; and air pollution caused by movement of
goods through the state's maritime ports, and proposed methods of
mitigating or alleviating that pollution. According to their
April 2007 report entitled Growth of California Ports:
Opportunities and Challenges, on- and off-port infrastructure
improvements are estimated to cost over $20 billion for the San
Pedro ports, the states smaller ports, and off-port improvements.
State Plans : According to ARB, their 2006 Emission Reduction
Plan for Ports and Goods Movement in California is an essential
component of California's effort to reduce community exposure to
air pollution and to meet new federal air quality standards for
ozone and fine particulate matter (PM 2.5). The ARB emission
reduction plan estimates that the cumulative implementation costs
of its recommendations could range from $6 billion to $10 billion
through 2020.
The ARB emission reduction effort is also the next step in
implementing the Goods Movement Action Plan developed by the
California Business, Transportation and Housing Agency and the
California Environmental Protection Agency. The plan estimates
goods movement infrastructure costs to exceed $20 billion over
the next decade" (based upon 2006 dollars). Phase II of the
plan, released on January 11, 2007, addresses capacity expansion,
environmental and community mitigation, and goods
movement-related homeland security and public safety enhancement.
According to CALMITSAC that was represented on the plan's
Integrating Working Group, the plan recommends projects at an
estimated cost of $10.3 billion for consideration for goods
movement infrastructure funding under the Trade Corridor
Improvement Fund of Proposition 1B.
Support : The author contends that ensuring the completion of
infrastructure and air quality improvements in California is
especially important in light of increased competition from ports
on the East Coast and in the Southern United States, noting that
a project to widen the Panama Canal to allow for more shipping
between Asia and other parts of the U.S. is expected to be
completed in 2014.
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Further, according to a coalition of clean air/environmental
advocacy groups, "California ports and goods movement
infrastructure went through a statewide planning exercise some
time ago with the Governor's Goods Movement Action Plan of 2006.
This plan, while useful, is now quite dated. The ports have also
gone through air quality planning efforts with the San Pedro Bay
(Ports) Clean Air Action Plan in Southern California and the
Maritime Air Quality Improvement Program in Oakland. These
plans, however, have never been integrated into a statewide
policy articulating progress towards state and local clean air
goals as well as funding needs."
Related bills : SB 632 (Lowenthal) of 2009, a similar bill that
was amended to delete provisions that are similar to this bill.
SB 974 (Lowenthal) of 2008, would have authorized a fee of up to
$30 on each shipping container processed at the Ports of Los
Angeles, Long Beach, and Oakland, to fund congestion relief and
air pollution mitigation projects related to the ports. That
bill was vetoed by the Governor who indicated that Proposition 1B
provides funds for port related air quality emission reductions
as well as the bill's potential impact upon the economy.
SB 764 (Lowenthal) of 2006, would have required the San Pedro
Ports to establish air quality emission baseline levels. That
bill died in the Assembly Appropriations Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
American Lung Association in California
Bay Area Air Quality Management District
Breathe California
Coalition for Clean Air
Community Action to Fight Asthma
Environmental Defense Fund
Natural Resources Defense Council
Sierra Club California
South Coast Air Quality Management District
Opposition
None on file
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Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093