BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: SB 1277 Hearing Date: 4/12/2016
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|Author: |Hancock |
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|Version: |4/4/2016 Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Erin Riches |
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SUBJECT: California Environmental Quality Act: supplemental
environmental impact report: City of Oakland: coal shipment
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 to consider
and mitigate the shipment of coal through the terminal.
ANALYSIS:
AB 32 and Disadvantaged Communities
AB 32 (Núñez and Pavley, Chapter 488, Statutes of 2006) requires
the state Air Resources Board (ARB) to develop a plan to reduce
emissions to 1990 levels by 2020. It also requires ARB to
ensure that programs to reduce greenhouse gas (GHG) emissions
are targeted, to the extent feasible, to the most disadvantaged
communities (DACs) in the state. AB 32 authorizes ARB to
deposit any fees paid by GHG emission sources into the
Greenhouse Gas Reduction Fund (GGRF).
SB 535 (De León, Chapter 830, Statutes of 2012) requires 25% of
GGRF funds to be allocated to projects that provide benefits to
DACs, and at least 10% to projects located within DACs. DACs
have been identified by the California Environmental Protection
Agency using census tract data based on geographic,
socioeconomic, public health, and environmental hazard criteria.
SB 1277 (Hancock) Page 2 of ?
Proposition 1B and the Trade Corridor Improvement Fund (TCIF)
Proposition 1B, the Highway Safety, Traffic Reduction, Air
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 environmental impact report (EIR) completed in
2002; an addendum was prepared in 2012.
SB 1277 (Hancock) Page 3 of ?
Meanwhile, the City of Oakland forged an agreement with two
private entities, California Capital and Investment Group (CCIG)
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 is currently on the desk of the state's Republican
Governor, Gary Herbert, who is expected to sign it.
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,
SB 1277 (Hancock) Page 4 of ?
unless an exemption applies. Specifically:
1)If the initial study shows there would not be a significant
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.
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
SB 1277 (Hancock) Page 5 of ?
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.
COMMENTS:
1)Purpose. 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 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.
2)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
SB 1277 (Hancock) Page 6 of ?
rail ? the terminal would also accommodate project cargo such
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.
3)Recent amendments. The prior version of this bill prohibited
the transport of coal to or through the Bulk or Oversized
Terminal located in the former Oakland Army Base. The author
amended this bill on April 4 to instead require a public
agency with discretionary authority over this project to
prepare or cause to be prepared a supplemental EIR to consider
and mitigate coal shipment through the terminal. Under the
new version of this bill, when the next step of this project
is reached, the agency with discretionary approval of that
step (e.g., the local air district, the water board) will have
to prepare or commission a supplemental EIR.
4)How would this bill impact the Oakland project? 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.
5)Opposition concerns. The American Planning Association,
California Chapter, writing in opposition to the current
version of 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 the current version of 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." The
Industry also states that the bill's provisions extend beyond
the state's authority in areas such as interfering with
federal rail operations, discriminating against common
carriers, restricting the export of coal in conflict with
multiple treaties to which the U.S. is a party, discriminating
against interstate and foreign commerce, and imposing
retroactive restrictions on a project that has already been
approved.
To help allay concerns about conflicts with federal
regulations or treaties, the author amended this bill on March
SB 1277 (Hancock) Page 7 of ?
31 to clarify that it will be implemented only to the extent
it is consistent with federal law.
6)Double-referral. This bill has also been referred to the
Environmental Quality Committee.
Related Legislation:
SB 1279 (Hancock) - prohibits the CTC from programming or
allocating state funds for any port facility project in or
adjacent to one or more DACs which exports or proposes to export
coal from California. This bill is also being heard by this
committee today.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
April 6, 2016.)
SUPPORT:
Alameda County Democratic Central Committee
Berkeley Climate Action Coalition
California Nurses Association
City of Berkeley
City of Emeryville
City of Richmond
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
SB 1277 (Hancock) Page 8 of ?
Physicians for Social Responsibility
Public Advocates
San Francisco Baykeeper
SEIU Local 1021
Sierra Club California
West Oakland Environmental Indicators Project
One individual
OPPOSITION:
American Planning Association, California Chapter
California Building Industry Association
California Railroad Industry
California Teamsters Public Affairs Council
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