Rail Shipment of Hazmat in California

If your company is shipping hazmat in California, you will want to read this quick summary of a new law imposing new fees on such shipments.

Also, you may want to take a look at a rather long piece from the California Legislative Counsel which your legal departments may wish to review carefully.  We received this from a colleague who provides legal services to the Council on Safe Transportation of Hazardous Articles (COSTHA). Send an email to solutions@tranzact.com if you’d like to receive a copy.



California Rail Hazmat Legislation Enacted.  On June 23, 2015 California Governor Jerry Brown signed into law S.B. 84, which goes into effect immediately.  The new law will impose a  fee on the 25 most hazardous materials transported by rail.  The 25 hazardous materials to be subject to the fee will be established by rulemaking by the California Office of Emergency Services (OES).  The owners/shippers will be required to pay the fees to the railroads, which will then remit the fees to the state.   The revenue will be used by the OES for equipment and personnel to respond to a rail incident.  

This issue first surfaced in Aug 2014 in response to recent revelations of major volumes of crude oil being shipped from North and South Dakota to the San Francisco Bay area via rail, and recent incidents in Canada and the U.S. in which such shipments had resulted in major accidents.   The American Chemistry Council (ACC) and coalition allies worked to ensure the bill included a hard cap on the fee authority, provided specific chemical industry representation on a program implementation advisory panel, and included significant legislative oversight of the entire program. 

The law states that the fees must be fair, as required by the federal Hazardous Materials Transportation Act, and must reflect the proportionate risks to both the public safety and the environment resulting from a release of hazardous materials and the expense of preparing to respond to those risks. The OES may to exempt from the fee a shipment of hazardous materials that meets certain criteria and prohibit the collection of fees in excess of the reasonable regulatory costs to the state.  There will also be an industry advisory panel to assist in the setting of fees.