Potential Charge for Hazmat Shipments in California
On June 24, 2015, Governor Brown of California signed Senate Bill 84 into law, which imposes a charge on hazmat transported by rail in California and requires railroads operating in the state to collect the charge from the "owner" of the top 25 hazmat commodities.
As a result of this new law, BNSF customers shipping hazardous materials into and within the state of California may be 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 moved by rail (see 25 most hazardous materials). BNSF and the other railroads operating in the state of California will be required to collect the charge beginning as early as October 1, 2016 and will be required to remit to the state of California the collected charge beginning January 31, 2017.
BNSF Railway and Union Pacific Railroad are aggressively challenging the proposed $45 charge in a federal lawsuit filed on July 29, 2016. The railroads argue in the lawsuit that the $45 charge is illegal because it singles out and targets rail transportation. Federal law already bars states from unreasonably burdening rail transportation, and singling out railroads for disfavored treatment.
While the court considers this anti-competitive issue, it is possible that BNSF will be required to bill shippers the $45 per charge and administrative fee as early as October 1. Consequently, BNSF wants customers to be aware of this new charge so they can make the necessary contingency plans should the legal challenges be unsuccessful.
BNSF will regularly update potentially affected customers as developments occur. Should you have any questions in the meantime, please feel free to contact your BNSF marketing representative.