BILL ANALYSIS Ó
SB 1277
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1277
(Hancock) - As Amended April 4, 2016
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill requires a public agency with discretionary authority
over the Bulk and Oversized Terminal project, located in the
former Oakland Army Base (OBOT), to prepare or cause to be
prepared, a supplemental environmental impact report (EIR) to
consider and mitigate the shipment of coal through the terminal.
This bill also states legislative findings and declarations
including that during the consideration of the EIR, coal was not
considered as a commodity that would be shipped through the
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terminal.
FISCAL EFFECT:
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.
The duty to prepare a supplemental EIR could fall to any one of
several public entities that may have permitting authority over
a project, including the City of Oakland, the Bay Area Air
Quality Management District (BAAQMD), the San Francisco Bay
Conservation and Development Commission (BCDC), or other public
agency.
To the extent the responsibility falls to a state entity, there
would be significant state costs, and potential impacts
particularly if the agency has no expertise in considering
environmental issues that fall outside of its purview. These
costs would eventually be recovered by fees charged to the
project proponent, but the responsible agency could experience
significant workload disruptions and incur secondary fiscal
impacts.
COMMENTS:
1)Purpose. According to the author:
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"Most recently, the City of Oakland has adopted a zoning
ordinance to amend the Oakland Municipal Code and to prohibit
the storage and handling of coal and coke at bulk material
facilities or terminals throughout the City of Oakland. The
City's zoning ordinance comes as a result of a proposed
project at the former Oakland Army Base that would bring 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 overseas countries. If
built, it will be nearly four times larger than any coal
export terminal in the West Coast.
Although the zoning ordinance was adopted, it does not stop
the coal export terminal from being built. The project
developer has publicly advised that he will enter litigation
and sue the City of Oakland for breach of contract and
violation of his vested rights. If litigation takes place, and
the developer is victorious in court, he can move on with the
coal export facility and not have to do an Environmental
Impact Report (EIR). The City's zoning ordinance adopts CEQA
exemption findings and relies on the previously certified 2002
and 2012 EIRs; both EIRs did not analyze the impact of the
coal export facility."
2)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 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.
CEQA also requires a lead agency or responsible agency to
prepare a subsequent or supplemental EIR if one or more of the
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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.
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)The Oakland Bulk and Oversized Terminal (OBOT) and coal.
After the Oakland Army Base was closed was closed in 1999,
part of the property reverted to the City of Oakland, while
another portion was transferred to the Port of Oakland. The
following year, the Oakland City Council designated the base
and surrounding properties as a redevelopment project area,
and the City of Oakland prepared an EIR in 2002 related to
proposed development in the project area. In 2009, the Port
of Oakland secured state transportation bond funding for a
project to develop warehouse space, logistics facilities, and
a rail terminal on the site.
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
(OBOT). The expansion required an update to the original EIR
that was completed in 2002, and the City prepared an addendum
in 2012.
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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 proposed
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.
On July 19, 2016, the Oakland City Council adopted an
Ordinance to prohibit the storage and handling of coal and
coke at bulk material facilities or terminals throughout the
City of Oakland and declaring the ordinance exempt from CEQA.
2)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 also on today's calendar.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081
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