BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: SB 1280 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: coal shipments:
mitigation
DIGEST: This bill requires, for any project receiving Trade
Corridor Improvement Fund monies, either a ban on coal shipment
or full mitigation of the coal shipment.
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 1280 (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 environmental impact report (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.
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 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 PM emissions while
simultaneously increasing the efficiency of goods movement
SB 1280 (Hancock) Page 3 of ?
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
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,
SB 1280 (Hancock) Page 4 of ?
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:
1)Prohibits a lead agency from adopting a negative declaration
or mitigated negative declaration, or from certifying an EIR,
unless the lead agency, in the relevant environmental
document, either:
a) Prohibits coal shipment through the port facility, or
b) Requires full and complete mitigation of GHG emissions
resulting from the combustion of coal shipped through the
port facility, as determined by ARB.
2)Requires the lead agency to conduct a supplemental or
subsequent environmental review in compliance with this bill.
3)Provides that this bill only applies with respect to a port
facility receiving TCIF funds.
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
SB 1280 (Hancock) Page 5 of ?
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 disadvantaged community (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)Does this bill address the problem? This bill requires either
full mitigation of, or a ban on, coal shipment for any project
receiving TCIF monies. In the case of the Oakland project, an
EIR was prepared on the project; however, since the
application did not cite coal as a commodity that would be
shipped through the terminal, the EIR did not address
mitigation for coal. It would be difficult to amend the TCIF
guidelines to retroactively change the rules for TCIF monies
that have already been allocated. Alternatively, the state
could adopt a policy to not allocate funds to a goods movement
project unless and until the CTC, Air Resources Board, or
other appropriate entity determines that the commodity or
commodities being moved do not violate AB 32 goals. From a
practical standpoint, however, this would need to be a
prospective policy, not a retroactive one.
4)Does this bill violate federal law? The California Railroad
Industry, writing in opposition to this bill, states that
because it imposes CEQA mitigation requirements for both new
and existing projects, it sets a major new precedent and
potentially puts the state at risk for numerous CEQA lawsuits.
Further, this bill violates various federal regulations and
treaties.
The author states that Legislative Counsel indicates it does
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not analyze treaties when drafting legislation and that each
treaty would need to be reviewed on a case-by-case basis. 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 1278 (Hancock) - 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. 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.
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
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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
National Federation of Independent Business
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