BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: SB 1278 Hearing Date: 4/5/2016
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|Author: |Hancock |
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|Version: |3/30/2016 Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Erin Riches and Sarah Carvill |
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SUBJECT: California Environmental Quality Act: Port of Oakland:
coal shipment
DIGEST: This bill requires every public agency with
discretionary approval of any portion of a project relating to
the shipment of coal through the Port of Oakland to prepare or
cause to prepare an environmental impact report (EIR).
ANALYSIS:
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:
If the initial study shows there would not be a significant
impact on the environment, the lead agency must prepare a
negative declaration.
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.
SB 1278 (Hancock) Page 2 of ?
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.
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 funding from the state Trade
Corridor Improvement Fund (TCIF) 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 particulate
(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 Port and the City 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
SB 1278 (Hancock) Page 3 of ?
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 with the Port. 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 Port and 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.
This bill requires every public agency with discretionary
approval of any portion of a project relating to the shipment of
coal through the Port of Oakland to prepare or cause to prepare
an EIR.
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
SB 1278 (Hancock) Page 4 of ?
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 California Transportation Commission
(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
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)Expanding CEQA. CEQA assigns responsibility for environmental
review of a project to the lead agency on the project. In the
case of this project, the City of Oakland was the lead agency;
the documents were prepared by environmental consultants hired
by the City. This bill would expand the EIR requirement to
every public agency that approves any part of this project.
Because the CTC allocated TCIF funding to the project, this
bill would require the CTC to conduct an EIR for this project.
The CTC currently does not conduct EIRs and does not have the
capacity to do so, and this bill does not include funding for
the CTC to execute a contract to conduct an EIR. In the case
of the Oakland project, an EIR was prepared; however, it did
not examine the possibility of coal being one of the
SB 1278 (Hancock) Page 5 of ?
commodities that could be shipped through the bulk terminal.
This bill would retroactively impose an EIR requirement on a
project for which funding has already been approved.
4)Does this bill violate federal law? The California Railroad
Industry, writing in opposition to this bill, states that it
"sets up a damaging CEQA precedent and exceeds the authority
of the state." The Industry states that this bill would
prolong the CEQA permitting process based on the commodity and
would violate various interstate commerce clauses and
treaties. In addition, this bill could eliminate the ability
of public transit agencies to invest public funds on freight
railroad rights-of-way to improve passenger rail operations.
The author states that Legislative Counsel indicates that this
bill would only apply in a case where a project has not
undergone a full environmental review that includes all parts
of the project. In addition, this bill would not violate any
treaties because it would only apply to environmental review.
To help allay concerns, the author amended this bill on March
31 to clarify that it will be implemented only to the extent
it is consistent with federal law.
5)Double-referral. This bill has also been referred to the
Environmental Quality Committee.
Related Legislation:
SB 1277 (Hancock) - prohibits transport of coal to or through
the Bulk and Oversized Terminal located in the former Oakland
Army Base. This bill is also being heard by this committee
today.
SB 1279 (Hancock) - prohibits the CTC from programming or
allocating any 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.
SB 1280 (Hancock) - requires, for any project receiving TCIF
monies, either a ban on coal shipment or full mitigation of the
coal shipment. This bill is also being heard by this committee
SB 1278 (Hancock) Page 6 of ?
today.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: Yes
POSITIONS: (Communicated to the committee before noon on
Wednesday,
March 30, 2016.)
SUPPORT:
Alameda County Democratic Central Committee
California Nurses Association
City of Berkeley
City of Emeryville
City of Richmond
East Bay Young Democrats
El Cerrito Democratic Club
Environment 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
SEIU Local 1021
Sierra Club California
OPPOSITION:
CalChamber
California Building Industry Association
California Business Properties Association
California Capital and Investment Group
California Independent Petroleum Association
California Railroad Industry
California Teamsters Public Affairs Council
California Transportation Commission
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Friends Committee on Legislation
National Federation of Independent Business
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