Yesterday the Surface Transportation Board (STB) published a
notice in the Federal Register (78 FR 6173)
announcing that it would be conducting a ‘declaratory order proceeding’ to move
forward with a resolution of a petition filed with the Board back in August of
last year. The
petition filed by seven private citizens in Upton, MA asked the STB to
declare that operations at a local rail transloading station do not constitute ‘transportation
by a rail carrier’. Currently the facility is claiming that it is not subject
to local regulation since the STB federal preemption applies.
The Dispute
The petitioners argue that the operations at the facility
operated by the Grafton and Upton Railroad do not meet the definitions of ‘transportation
by a rail carrier’ established by regulation and actions by the STB. If the
facility does not meet the definition then its operation would not be regulated
by the STB and there would be no federal preemption that would stop local
authorities from regulating the facility.
Briefly the issues revolve around who does what to the
material that is being transferred from rail cars to ground transportation.
Materials that are being handled at this particular facility include wood
pellets that are being removed from bulk railcars, put into 40-lb bags and
loaded on truck for transport off site. Additionally bulk chemicals are being
transferred from railcars to tank trucks for further transportation to
customers.
As is to be expected in this type of dispute the two sides
disagree in the facts and the interpretations that are central to the case. A
total of nine legal documents have been filed in the back in forth over the
last six months (STB Docket FD 35652) and more will undoubtedly be filed before
the principles appear before the Board.
Chemical Security Implications
There is nothing in the initial petition that describes the
specific chemicals that are being transloaded at the facility. If the facility
handles chemicals included in the list of DHS chemicals of interest (COI) in
Appendix A of the CFATS regulations and those chemicals are put into ‘storage’
at the facility, then the STB ruling could have repercussions with regards to
the facility’s status with regard to the CFATS regulations.
When the final interim
rule for the CFATS regulations was published it included language in the
preamble to the rule that indicated that DHS was going to allow TSA to conduct
security regulation of railroad. Specifically the document stated (72 FR 17699)
that:
“DHS presently does not plan to
screen railroad facilities for inclusion in the Section 550 regulatory program,
and therefore DHS will not request that railroads complete the Top-Screen risk
assessment methodology.”
So if the STB rules that this particular facility is ‘transportation
by a rail carrier’ then it would not be regulated under the CFATS regulations;
DHS would rely on the less stringent and more narrowly focused (in terms of
materials covered) TSA security rules. On the other-hand, if STB rules that
this is not a railroad operation, then the unofficial TSA exemption for the facility
would no longer apply. The facility might then have to submit a CFATS Top
Screen to determine if it is a high-risk chemical facility under the definition
of that regulation.
Implications for other Facilities
In reading the original petition it does not seem that the
petitioners are breaking any ground here in the terms of why they are claiming
that the facility should not be regulated by the STB. However, case law
frequently pivots on minor changes and interpretations. That being the case
this petition could have implications for other transloading facilities around
the country that are operating on the boundary between being railroad
operations and being some other sort of processing or transportation facility.
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