Preemption Faces Trashing

Preemption Faces Trashing

A little-noticed section of the Railroad Safety Improvement Act will whittle away at the preemption from state regulation railroads have enjoyed.

The pertinent provision of the federal statute, 49 U.S.C.10501(b), preempts state laws and regulations which in any manner intrude upon the Surface Transportation Board's regulation of rail transportation. As the court held in CSX Transportation Inc. v. Georgia Pub Service Commission, "It is difficult to imagine a broader statement of Congress's intent to preempt state regulatory authority over railroad operations."

Federal preemption is fundamental to interstate commerce and so has long been central to much of transportation regulation, as important to shippers as it is to carriers. Any diminution of preemption carries with it the risk of further, very troubling erosion.

The preemption provision has permitted the STB, among other things, to authorize the acquisition of track by newly formed railroads to be used as facilities for the transfer of construction and demolition debris and other waste products - notwithstanding the protests of state environmental regulatory bodies.

Under the new law, the board no longer will be able to so. Section 602 of the Railroad Safety Improvement Act of 2008 effectively withdraws from the STB its jurisdiction over railroad operated solid waste transfer facilities.

Section 603 adds two new sections to Subtitle IV of Title 49 of the U.S. Code, sections 10908 and 10909. The first states generally that, except as provided in the later section, each solid waste rail transfer facility shall be subject to and comply with all state environmental laws and regulations as any other solid waste transfer facility. A second provision allows an existing railroad solid waste transfer facility to apply to the state environmental regulatory agency to demonstrate that it is in compliance with the agency's rules and regulations and to obtain such permits as are required of non-railroad owned or operated solid waste transfer facilities, with the exception of siting permits.

The governor of a state, however, may petition the board to require the railroad, in lieu of a state-issued siting permit, to apply for a land-use exemption, which would need to be approved by the STB if the railroad's solid waste transfer facility were to continue to operate.

A provision of the 2008 Rail Safety Act authorizes the STB to issue a land-use exemption for a proposed solid waste rail transfer facility to be operated by or on behalf of a rail carrier. The board, on petition of the railroad or the governor, may issue a land-use exemption upon finding that a state or local requirement affecting the siting of such facility unreasonably burdens the interstate transportation of solid waste by the railroad or discriminates against railroad transportation of solid waste and a solid waste transfer facility.

The law gives the STB 90 days to promulgate regulations for the receipt and processing of petitions for solid waste rail transfer facility land-use exemptions. The sub-section details the information that the board's regulations shall require the petitioner to provide, foremost of which is information that the solid waste rail transfer facility will not pose an unreasonable risk to public health, safety or the environment.

Another section would allow the board to issue a land use exemption only if it determines that the facility at its existing or proposed location would not note pose an unreasonable risk to public health, safety or the environment.  No exemption could be granted for facilities to be located in protected lands, as those affiliated with the National Wildlife Refuge System and similar programs.

Section 10909(d) details the considerations to which the STB shall give due weight in passing on petitions for land-use exemptions, including, among others, local land-use, zoning and siting regulations and state environmental protection laws or regulations applicable to the site.

The precursor of sections 602 and 603 of the new law was a provision in the Consolidated Appropriations Act of 2008, which prohibited the STB from taking any action which would permit a railroad to collect, store or transfer uncontainerized solid waste unless a governor assured the agency such activity would comply with the state and local regulations regarding public health, safety and environmental standards for such facilities. Under that provision, the STB has authorized acquisitions of rail lines only subject to the petitioners' disclaimer that it will engage in the collection, storage or transfer of uncontainerized solid waste.

The impetus for narrowing the scope of the preemption provision came from Sen. Frank R. Lautenberg, D-N.J., who introduced a bill, S. 719, in 2007 to remove solid waste management facilities from its coverage. He may have been motivated by the alleged unsavory and unsanitary solid waste transfer facilities maintained in New Jersey by the New York, Susquehanna and Western Railway. See New York Susquehanna and Western Railway Corporation v. Jackson.

No matter where the blame may lie, the scope of the exemption provision now has been significantly diminished.

Preemption has spared the railroads countless hours of paperwork and immeasurable amounts of money in siting yards, installing transloading facilities and making other plant improvements without the need to comply with state or local zoning, permitting and similar restrictive requirements. Shippers, through spared costs and improved service, have been the ultimate beneficiaries.

Hopefully, solid waste transfer facilities will be deemed unique, and the Congress will not further erode preemption.

 -- Kahn is a transportation attorney in Washington and former general counsel of the Interstate Commerce Commission.