TABLE OF CONTENTS(Click on Section)

PURPOSE

BACKGROUND

CHAIRMAN'S OPENING STATEMENT

WITNESSES

This hearing will explore current areas of concern in the transportation of hazardous materials by rail, with a view to identifying current policy deficiencies and possible elements of future policy solutions.

Federal Regulatory Jurisdiction

Comprehensive federal regulation of hazmat transportation began with the Hazardous Materials Transportation Act of 1986. Within the Department of Transportation, primary responsibility was first assigned to the Research and Special Programs Administration (RSPA) and now rests with its successor, the Pipeline and Hazardous Materials Safety Administration (PHMSA). With respect to each mode of transport, the relevant administration (the Federal Railroad Administration for rail) is responsible for enforcement and, in FRA’s case, the safety standards applicable to tank cars. PHMSA administers the standards for the handling, placarding and licensing requirements for hazmat transport.

Routing Requirements for Rail Hazmat Shipments

When the Hazardous Materials Transportation Act regulatory structure was revised in 1991, Congress adopted an elaborate procedure for state and local governmental participation in regulating the routing of hazardous materials shipped by truck. See 49 U.S.C. 5112. There is no comparable federal cession of authority concerning routing of rail hazmat traffic. Nevertheless, there are a number of pending disputes, notably the current litigation between CSX Railroad and the District of Columbia government, over local attempts to require the rerouting of rail hazmat shipments. A number of federal legislative proposals have also been introduced to restrict or ban the routing or parking of rail hazmat trains within or near urban areas.

Current Federal Rail Hazmat Requirements

Tank car structural standards were first mandated in 1991 [49 U.S.C. 5111 (2004)], but specific executed mandates were repealed in last year’s SAFETEA: LU legislation [Public Law 109-59, Sec. 7111, 119 Stat. 1899 (Aug. 10, 2005)]. However, the same legislation required FRA to develop with one year a new predictive model of the dynamic forces affecting tank cars under accident conditions, and to initiate a rulemaking to establish new design standards for pressurized tank cars within 18 months. FRA is also required to conduct a comprehensive impact analysis of the materials used in pre-1989 tank cars within one year, and to report to Congress with accompanying recommendations within an additional 6 months. [Public Law 109-59, Sec. 9005(b), 119 Stat. 1924-25 (Aug. 10, 2005), now codified at 49 U.S.C. 20155]

With regard to railroad employees, current federal law requires hazmat awareness and familiarization training for maintenance-of-way employees, railroad signalmen and other railroad employees who directly affect hazardous materials safety. [Public Law 109-59, Sec. 7108, 199 Stat. 1897 (Aug. 10, 2005), now codified at 49 U.S.C. 5107(f)] There has been a continuing labor-management debate concerning the adequacy and scope of training requirements for railroad employees whose jobs may bring them into contact with dangerous hazardous materials. The SAFETEA LU legislation authorized appropriations of $4 million per year for nonprofit employee organizations to train hazmat employee instructors and to the extent determined appropriate by the Secretary, for such instructors to then train hazmat employees.

When a major railroad accident (including hazmat accidents) occurs, the National Transportation Safety Board (NTSB) is responsible for investigating and determining the probable cause of the accident, and making any relevant recommendations for future improvements in railroad safety. The NTSB has recently investigated both the Graniteville, South Carolina, and Minot, North Dakota accidents.

Compulsory Legal Duty to Transport

Transportation of hazmat by rail (even high-hazard, toxic-by-inhalation commodities) is subject to the common carrier duty of a railroad to provide transportation service (and quote a rate) on request. [49 U.S.C. 11101] The one attempt in recent history by railroads to refuse transportation of a hazardous material (spent nuclear fuel) failed in the late 1970s, when the federal courts ruled that the carriers’ common carrier obligation was applicable. In general, the administrative enforcement of this common carrier duty rests with the Surface Transportation Board (STB), the successor to the Interstate Commerce Commission.

Liability Exposure

When hazmat commodities are transported by rail, the rates collected by the rail carriers are among the highest-markup prices in the railroads’ product mix, as confirmed by multiple General Accounting Office studies that analyzed “snapshots” of the railroads’ traffic and rate database through the waybill sample maintained by the STB. However, higher accident risk exposure aside, most hazmat commodities could be transported by truck or barge. Thus, some competitive limits exist for railroad pricing of hazmat transportation, even for high-hazard materials.

As reflected in recent hazmat rail accidents such as the chlorine release in Graniteville, South Carolina, and the hazmat derailment in Minot, North Dakota, the potential liability exposure of rail carriers and associated parties who may become defendants can run into the billions of dollars. This has led to an effort by railroads to either limit this liability exposure by statute, reduce the scope of their Interstate Commerce Act common carrier obligation, establish some federally backed fund to defray liability costs that could potentially bankrupt a rail carrier, or a combination of such measures. Although most high-hazard commodities are transported by the large Class I carriers, some do travel on the tracks of smaller short-line railroads. A collateral issue is the availability vel non of commercial insurance for rail carriers at the levels of exposure involved in a major hazmat release. There may also be additional issues related to the availability and affordability of adequate insurance coverage for shippers of high-hazard hazmat commodities.

Pre-emption of state tort liability law

On the plaintiffs’ side of hazmat-release litigation, a number of recent federal court decisions have reached the somewhat surprising conclusion that the pre-emption provision of the Federal Railroad Safety Act [49 U.S.C. 20106] pre-empts not only state regulatory requirements that conflict with those promulgated by FRA, but also state tort liability law that might otherwise allow recovery for injury or damage resulting from a rail carrier’s negligence in a hazmat release accident. See, e.g., Lundeen v. Canadian Pacific Ry. Co., __F.3d__ (No. 05-1918, 8th Cir., May 16, 2006); Mehl v. Canadian Pacific Ry. Ltd., (No. 4-02-cv-009, D.N.D. March 6, 2006). It had previously been assumed that such pre-emption of a “law, regulation or order related to railroad safety” was confined only to state regulatory actions. Section 20106 provides that:

Laws, regulations, and orders related to railroad safety shall be nationally uniform to the extent practicable. A State may adopt or continue in force a law, regulation or order related to railroad safety until the Secretary of Transportation prescribes a regulation or issues an order covering the subject matter of the State requirement. A State may adopt or maintain in force an additional or more stringent law, regulation or order related to railroad safety when the law, regulation or order_--

(1) is necessary to eliminate or reduce an essentially local safety hazard;
(2) is not incompatible with a law, regulation or order of the United States Government; and
(3) does not unreasonably burden interstate commerce.