BILL ANALYSIS Ó
SB 1277
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Date of Hearing: June 27, 2016
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
SB
1277 (Hancock) - As Amended April 4, 2016
SENATE VOTE: 26-13
SUBJECT: California Environmental Quality Act: supplemental
environmental impact report: City of Oakland: coal shipment
SUMMARY: 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.
EXISTING LAW:
1) Requires 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).
2) Requires a lead agency or responsible agency to prepare a
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subsequent or supplemental EIR only if specified events
occur, such as when new information, which was not known and
could not have been known at the time the EIR was certified
as complete, becomes available.
3) 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 Trade
Corridor Improvement Fund (TCIF) for infrastructure
improvements along high-volume freight corridors.
THIS BILL:
1)Requires a public agency, before approving a project that is
necessary for, and directly related to, the use of the Bulk
and Oversized Terminal in the City of Oakland for the shipment
of coal, to prepare or cause to be prepared a supplemental EIR
to consider and mitigate the environmental impacts of coal
shipment through the terminal.
2)Includes related findings and declarations.
FISCAL EFFECT: 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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COMMENTS:
1)CEQA background. CEQA provides a process for evaluating the
environmental effects of applicable projects undertaken or
approved by public agencies. If a project is not exempt from
CEQA, an initial study is prepared to determine whether the
project may have a significant effect on the environment. If
the initial study shows that there would not be a significant
effect on the environment, the lead agency must prepare a
negative declaration. If the initial study shows that the
project may 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. If mitigation measures are required or
incorporated into a project, the agency must adopt a reporting
or monitoring program to ensure compliance with those
measures.
CEQA also requires a lead agency or responsible agency to
prepare a subsequent or supplemental EIR if one or more of the
following occurs:
a) Substantial changes are proposed in the project that
will require major revisions of the EIR.
b) Substantial changes occur in the circumstances under
which the project is being undertaken that will require
major revisions to the EIR.
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c) New information, which was not known and could not have
been known at the time the EIR was certified as complete,
becomes available.
1)Oakland Bulk and Oversize Terminal 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.
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
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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 Utah
Governor Gary Herbert.
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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.
2)Author's statement:
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 --
cancer, heart disease, asthma and other ailments. Coal puts
residents and workers at risk, and defeats efforts to ensure a
clean and healthy environment. Coal dust is a source of
particulate matter that is dangerous to breathe and is also
responsible for most occupational lung disease due to airborne
particulate. West Oakland is already heavily impacted by
pollution. Residents are 2.5 times more likely to get cancer
due to breathing air which contains three times the amount of
diesel particulate matter 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 City of Oakland was awarded $176 million from the CTC via
the Trade Corridor Improvement Fund (TCIF) for site preparation
and infrastructure redevelopment of the former Oakland Army
Base. The initial redevelopment project proposal provided to
the CTC, did not include the potential for the transportation
and export of coal, nor was the initial EIR done with the use of
a coal export facility examined. However, the current proposal
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plans to transport up to 10 million tons of coal to West Oakland
each year. Coal would come on railroad lines from Utah and be
transferred to cargo ships for export to China and other
countries. West Oakland, the location of the development
project, is designated by the CalEnviroScreen as being a
disadvantaged community due to its high asthma rates, cancer
risks, and pollution levels. This proposal to transport
approximately 10 million tons of coal is not in accordance with
Proposition 1B and contradicts California's efforts in reducing
climate change. Further, this development would be the largest
export facility on the west coast of the United States.
When the EIR was prepared by the City of Oakland for the bulk
and oversized terminal, coal was not considered as a commodity
that would be shipped through the terminal. This constitutes a
change to the project and could not have been know at the time
the EIR was certified as complete. There needs to be further
review done to review the impacts of a coal terminal.
3)Related legislation. SB 1279 (Hancock) prohibits the
California Transportation Commission (CTC) from programming or
allocating any state funds, including proceeds from the sale
of general obligation bonds, under its jurisdiction for any
new bulk coal terminal project proposed on or after January 1,
2017. SB 1279 is pending in the Assembly Transportation
Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
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350 Bay Area
Alameda County Board of Supervisors
Alameda County Democratic Party
Asian Pacific Environmental Network
Berkeley Climate Action Coalition
California League of Conservation Voters
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
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Ecology Center
El Cerrito Democratic Club
Environment California
Fossil Fuel California
inNative
International Longshore and Warehouse Union, Northern California
District Council
No Coal in Oakland
Oakland Unified School District Board
Peace, Earthcare and Social Witness Committee
Physicians for Social Responsibility, San Francisco Bay Area
Chapter
Planning and Conservation League
Public Advocates
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San Francisco Baykeeper
Service Employees International Union Local 1021
Sierra Club California
West Oakland Environmental Indicators Project
Opposition
American Planning Association, California Chapter
BNSF Railway Company
California Building Industry Association
California Business Properties Association
California Capital and Investment Group
California Chamber of Commerce
California Manufacturers and Technology Association
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California Short Line Railroad Association
California Teamsters Public Affairs Council
California Trade Coalition
Union Pacific Railroad Company
Ventura County Railroad
Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916)
319-2092