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Gov. Gary Herbert said Tuesday he supports "the concept" of using $51 million in taxpayer money to make loans to developers of a deep-water port project in Oakland, Calif., that could serve as a departure point for Utah coal to China and other overseas markets.
"I'm OK with the concept of what is being proposed," said Herbert, who argued there is a role for Utah to play to ensure that California can't interfere with the "free market" and stop the port project.
"There certainly is a role for the government to play to make sure the free market can work," Herbert told reporters. "This is an investment. This is not just an expense only. You invest $50 million and you're going to get back three or four times your investment."
Asked how the state loaning taxpayer money to a private enterprise is an example of the free market, Herbert became adamant, hitting his hand against a table and insisting, "We have the [California] government trying to stop the free market from happening."
Herbert was responding to SB246, released late Monday night by Sen. Stuart Adams, R-Layton, that would use $51 million in sales-tax revenue earmarked for transportation to make loans to help develop the Oakland port.
The money would be replaced with Community Impact Board funds that had been pledged to four coal-producing counties that wanted to buy into the port. But a pair of complaints filed with the Utah attorney general's office challenged whether it was legal to use impact fees designed to mitigate the impact of mineral and resource development on local communities for the shipping port.
Adams argued it was "cleaner" to have the state make the loans through the Governors Office of Economic Development.
But California Sen. Loni Hancock, a Democrat whose district includes the Oakland port, said she has four bills intended to block the shipment of coal through the port and said she plans to fight the project.
"I am very opposed to the coal depot and I am reflective of the will and concerns of the community I represent," Hancock said. "The City of Oakland and the East Bay is united in opposition to this project."
Cities around the harbor have passed resolutions opposing the project and she said there is concern in the California Legislature about the impacts.
Part of that stems from the environmental concerns of shipping coal through the state and burning it elsewhere, polluting the atmosphere and warming the planet, she said.
One of her bills would assess carbon fees to offset the pollution that would come from the coal if it is burned overseas. Another declares the coal shipments a public health danger and prohibits shipments through Oakland to a facility paid for with public funds. It is early in the California legislative session, so the bills are still in the beginning stages.
"For us it is very ironic that the state of Utah would use Utah taxpayer money to build a railroad to take coal to California where people do not want it," she said. "Why don't they keep their money in Utah and create sustainable jobs for those [communities]."
Herbert said it is wrong for California to force its will on other states that need access to ports.
"It's disappointing to me that any state thinks they can stop commerce. If you happen to be a state on the coast to stop … them from exporting their natural resources, including coal, is disappointing to me," he said. "We need to have access to the ports and the fact you don't like it should not stop us from doing what's in the best interest of the people of Utah."
Adams bill has been sent to the Senate Government Operations and Political Subdivisions Committee and is scheduled for a hearing Wednesday afternoon.