Plan to send $53 million in state funds to West Coast export terminal project advances in the Utah Legislature

(Eric Risberg | AP Photo) This Feb. 5, 2016, file photo shows the former Oakland Army Base pier at left and the Port of Oakland at lower right in Oakland, Calif. A federal judge last year struck down the city of Oakland's ban on coal shipments at a proposed cargo terminal, siding with a developer who wants to use the site to transport Utah coal to Asia.

A bill that could direct more than $50 million toward developing a deep-water export terminal on the West Coast passed the House on Wednesday.

Supporters of the legislation couched it as a way to bolster state industries by making coal, soda ash, alfalfa, grain and other rural products available to a global market.

"This is important to rural Utah," Rep. Mike McKell, R-Spanish Fork, told fellow lawmakers ahead of the 51-19 vote.

Opponents of the measure questioned the merits of sending millions of dollars out-of-state rather than spending it on projects inside Utah.

The bill, SB248, would require the state’s Community Impact Board to look at supporting a “bulk commodities ocean terminal project” with money from mining, oil and gas royalties.

The royalties are from federal mineral leases, which are typically used to pay for roads and other local government impacts related to mineral extraction. To avoid those restrictions, the Legislature diverted $53 million in CIB money under 2016 legislation to the "throughput infrastructure" fund, meant to provide loans for pipelines, transmission lines, rail and marine export terminals.

The original bill would’ve shifted authority over those throughput funds from the CIB to the Utah Office of Energy Development. A revised version of the bill, which is going back to the Senate for consideration, leaves oversight with the CIB but requires the board to put the export terminal project first in line for the throughput funding.

Despite McKell’s repeated insistence that the money is not taxpayer funds, the left-leaning Alliance for a Better Utah said in a news release that this $53 million technically does comes from taxpayers. In an elaborate “shell game,” lawmakers put the $53 million in restricted mineral lease royalties into rural roads projects in 2016, then shifted the same amount in sales tax proceeds from the transportation fund to the throughput account.

Four coal-producing counties have hoped to invest in a controversial export terminal under development in Oakland, Calif., in exchange for guaranteed export capacity of up to 10 million tons a year. That project has been mired in litigation over a coal-handling ban Oakland leaders enacted in response to Utah’s involvement.

McKell said the focus is still on Oakland for a future port but told House members that putting the terminal in Mexico is also a possibility.