S 1175 Introduced – Rail Hazmat Safety

Just about three weeks ago Sen Wyden (D,OR) introduced S 1175, the Hazardous Materials Rail Transportation Safety Improvement Act of 2015. The bill takes a somewhat unique method of improving the safety of hazardous material rail transportation.

Rail Spill Liability Account

Title I of the bill adds a new section to 26 USC 9509, the Oil Spill Liability Trust Fund, establishing the Hazardous Liquids Rail Spill Liability Account within that Trust Fund. The Secretary of the Treasury would put any new monies deposited into the OSLTF resulting from rail transportation of oil from:

∙ Amounts recovered under §1006(f) or §1015 the Oil Pollution Act of 1990 for damages to natural resources;

∙ Any penalty paid pursuant to §309(c) of the Federal Water Pollution Control Act,

∙ The Deepwater Port Act of 1974; or

∙ Section 207 of the Trans-Alaska Pipeline Authorization Act.

Additionally §103 of the bill would add a new Subchapter E to 26 USC Chapter 38 levying a new fee on shippers of ‘hazardous flammable liquids’ that loads such materials into a DOT 111 railcar. The sliding scale fee would be $175/car loading for cars loaded before January 1^st, 2017; $350 between that date and January 1^st, 2018; $700 until January 1^st 2019; and $1400 thereafter. The monies from this fee would be deposited in the Oil Spill Liability Trust Fund established in this bill.

Monies from the HLRSL account may be appropriated for purposes outlined later in this proposed bill in addition to monies for DHS hazmat response planning and training under 49 USC 5116.

To ensure that rail road related discharges of flammable liquids are covered by the Oil Pollution Act of 1990 for the financial purposes of this act. First the bill would amend 33 USC 2702 by specifically adding dangerous flammable liquid spills “resulting from rail transportation of such oil” {§102(a)} to the elements necessary for liability under the Oil Pollution Act without respect to the location of the spill “into or upon the navigable waters or adjoining shorelines or the exclusive economic zone”.

Next the legislation would require the PHMSA Administrator to designate as a hazardous substance any Class 3 hazardous material that is “discharged due to rail transportation" {new 33 USC 1321(b)(2)(A)(ii)}.

Finally, §104 will add a new section 45S to Chapter A of 26 USA that would add a limited tax credit for converting CPC-1232 tank cars into the new type designated for flammable liquid service. The bill was written before the publication of the DOT HHFT final rule, but the wording makes it clear that the conversion would be to the DOT 117R standards. The Treasury would be compensated for the monies lost to the tax credit from the Oil Spill Liability Trust Fund.

Preparedness

Section 201 would add a new requirement to the public sector hazmat response training standards of 49 USC 5115. It would mandate that the training curriculum would also recommend a  “course of study to train public sector employees to respond to an accident or incident involving trains transporting at least 20 tank cars of flammable liquids or gases” {new §5115(b)(1)(B)}.

Section 202 would amend 49 USC 5116 to add as an allowable use of the §5116(a) planning grants to “develop, improve, and carry out emergency plans for communities through which railroads transport a train or trains transporting at least 20 tank cars of flammable liquids or gases” {new §5116(a)(1)(C)}. A similar change would be made to the §5116(b) training grants by §203 of the bill.

Section 204 would require the DOT Secretary to establish a grant program to “provide financial assistance for local projects, activities, and personnel that mitigate the impacts of, and public health or environmental risks associated with, the transport of flammable liquids or gases by rail” {§204(b)}.

Section 205 would require the Secretary of Transportation to implement the following recommendations from the NTSB within 1 year of the enactment of this act:

∙ R-07-002;

∙ R-14-014;

∙ R-14-018;

∙ R-14-019; and

∙ R-14-075/76

Data Collection

Title III of the bill requires the conduct of a number of studies and submission of reports to Congress. They include reports on:

∙ The availability of equipment and firefighting materials appropriate for a large-scale release of flammable liquids or gases along HHFT routes;

∙ A census of the number and types of rail tank cars used to carry Class 3 hazardous materials;

∙ A quarterly survey of the volume of flammable energy products transported by rail; and

∙ An analysis of the risks to public health, public safety, the environment, and property that are associated with transporting large volumes of hazardous materials in unit trains.

Appropriations

The bill would add authorizations for many of the programs required in this bill. The new rail hazardous response planning and training grants would be authorized $15 Million in spending for the next three years. The new rail hazmat mitigation project grants would be authorized at $25 Million. And $5 Million would be authorized for each of the first three studies reported above.

Finally there would be $100 Million authorized for spending on CERCLA responses to hazardous substance releases resulting from rail transportation. The CERCLA funds would remain available until expended.

Moving Forward

This bill was referred to the Senate Finance Committee because of the tax code measures included in the bill. Wyden is the Ranking Member of that Committee and one of the eight cosponsors, Sen. Schumer (D,NY), is an influential member of that Committee. There is a slight chance that this bill may make it to the Committee for consideration. I doubt, however, that this bill will make it to the floor of the Senate.

Commentary

This is a rather unusual take on the problem of flammable train safety; addressing the financial side of the issue. The idea of setting up a trust fund to handle the cleanup costs associated with the crude oil spills (and make no mistake that is the major target of this bill) certainly has a long precedence. Adding this to the current oil spill trust fund (which was really intended to deal with spills into waterways) seems like a bit of a stretch, but it would save the administrative costs of setting up a completely new administrative agency.

We have not been hearing much about the cost of cleaning up after these crude train derailments. I’m sure that there are significant costs involved, but I think that they are mainly being dealt with by the railroads. Communities will still have costs associated with these incidents, but it doesn’t really seem that those are being addressed in this legislation.

There is really only one very controversial component of this bill and that is the tax (I’m sorry ‘fee’) on loading flammable liquids into DOT 111 railcars. This is certainly a different way to go about forcing the industry to changing out the use of DOT 111 railcars. There will certainly be opposition to these provisions from the owners/leasers of these cars. They are already suing DOT about the phase out schedule in the HHFT rule and the tax schedule is much steeper in this bill. Vocal and effective political opposition to this new fee must be expected.

Even if this bill does manage to move forward (and a major HHFT accident in a town or urban area will would drastically change the political considerations moving this bill forward) there will have to be a number of modifications made to make it better align with the HHFT final rule. The frequent reference to the ’20 flammable railcars’ language comes quick to mind.