California to levy fee on rail cars carrying dangerous chemicals


California plans to levy a fee on rail cars carrying dangerous chemicals across the state, starting later this year.

The move follows several oil train derailments around the country, including in neighboring Oregon. A recent analysis conducted by the Office of Emergency Services found gaps in California’s ability to handle such spills, prompting the state Legislature to order the fee program.

Railroad companies call the proposed fee illegal. Federal law prohibits states from imposing constraints on interstate commerce of railways.


The state compiled a list of 25 of the most hazardous materials shipped by rail. Each car carrying one of those materials is to face a $45 fee. The list includes substances dangerous to humans by direct contact or because they are highly flammable, such as oils, petroleum gases, fertilizers and acids.

Money collected — an estimated $10 million annually — is to go to a fund designed to help the state improve its response capabilities, particularly in the gap areas identified in the analysis.

“When one of these trains derails, it puts lives, property and the economy at risk,” state Fire and Rescue Chief Kim Zagaris said. “Right now, we don’t have the surge capacity to deal with a major spill.”

Twelve specially trained hazmat teams would be created through the fund to cover the regions where the gaps were noted. Some large fire departments already have similar teams.

Railroad firms and shippers of dangerous chemicals contend the need for hazmat teams is overstated, suggesting that very few trains derail and that most spills are small.

A Sacramento Bee review of the state’s rail spill database found that hundreds of hazardous material spills happen annually. A railyard in Roseville, near Sacramento, saw 50 reported spills in 2015. And although large spills are relatively rare, they can be harmful to wildlife and rural economies, the Bee found.


Under California’s plan, the companies that own the chemicals will pay the fee, rather than the railroads.

Still, railroad companies, including major shippers Union Pacific and BNSF, say the fee would interfere in their business transactions. They would be expected to collect the money from their shipping customers and send it to the state.

“No state can regulate the rates or charges a railroad collects from its customers,” Phillip Christensen, assistant vice president at Union Pacific, wrote in an email to the Bee. “This kind of ‘economic regulation’ is categorically prohibited” by federal interstate commerce law.

An organization representing hazardous materials shippers, the American Chemistry Council, said members are worried that the move could lead to rail fees in other states with no certainty about where the money would go.

Still, state Office of Emergency Services officials said they expect to began collecting the fee this year. They said conversations with railroad companies and hazardous materials shippers will continue as they fine-tune the fee program.