Update: State of California will not seek to collect Hazmat fee retroactively
BNSF is pleased to report that we have successfully negotiated an agreement with the State of California related to the pending hazmat fee litigation. The state has agreed that it will not seek to collect retroactively, or otherwise impose liability on BNSF Railway or Union Pacific Railroad or our customers for any charge that is or could have been imposed under California Senate Bill 84 in the event that the preliminary injunction on imposing a rail car hazmat fee is stayed, vacated, reversed or otherwise dissolved. Instead, the state has agreed to only collect the fee on a prospective basis should the state prevail in their arguments that the preliminary injunction was improperly granted or in the underlying case on the merits.
This negotiated agreement between the railroads and the state means that BNSF will have no need to alert customers of their potential future liability for the period when the case is pending.
While BNSF is very pleased with this agreement and U.S. District Court Judge Richard Seeborg’s decision that a preliminary injunction is appropriate at this stage of the pending case, neither this agreement nor the preliminary injunction means the underlying case has been decided or concluded. Instead, Judge Seeborg has decided that the railroads could suffer irreparable harm if they were to begin collecting the hazmat charge until there can be a full hearing and a decision on whether the state law violates federal statutes.
As a reminder, unless overturned by this judge, this new law, which was part of California Senate Bill 84 and signed into law by Governor Brown, means rail customers shipping hazardous materials into and within the State of California are subject to a $45 charge plus a 5% administrative expense per rail car (or intermodal container or trailer) carrying any amount of the top 25 hazardous materials that are transported by rail into and within the State of California (see 25 most hazardous materials).
BNSF will continue to provide potentially affected customers updates as developments occur. Should you have any questions in the meantime, please feel free to contact your BNSF marketing representative.