Rail companies won’t pay Minnesota’s public safety fees, saying it contradicts federal law

After a BNSF train carrying ethanol and corn syrup derailed and caught fire in the town of Raymond, Minn., in March 2023, state politicians passed a law requiring railroad companies to participate in funding Minnesota’s emergency preparedness costs, and training and staffing costs that they cause.

Through additions to the state’s Transportation Omnibus Bill signed last year, $4 million in annual assessments on rail and pipeline companies were reinstated.

Railroad companies have voiced their opposition to paying the state fee, saying the imposed fees discriminates against rail companies, and two of the largest rail operators in the state are objecting to their 2024 invoices.

Three Minnesota lawmakers are calling the refusal by railroad companies to pay millions of dollars in state fees designed to improve railroad safety “troubling.”

The assessments followed the high-profile 2023 derailment, which saw 22 cars on a 117-car train fall into a heap just off the tracks. It happened about 110 miles west of the Twin Cities, forcing Raymond’s 800 residents to temporarily evacuate their homes.

A recent statement by Sen. Scott Dibble, DFL-Minneapolis; Rep. Frank Hornstein, DFL-Minneapolis; and Sen. Rob Kupec, DFL-Moorhead, brought attention to the matter. At least one rail company, Canadian Pacific Kansas City, doing business as CPKC, stated it would not pay an assessment of $916,069 due in February to the Minnesota Department of Public Safety because the invoice “is contrary to law” and is “neither required nor appropriate under the law,” according to a copy of its letter to the department shared with the Star Tribune.

CPKC officials, in response to an invoice sent to its subsidiary Soo Line Railroad Co., said railroads “are already highly regulated” by federal laws, including the ICC Termination Act of 1995 and the Hazardous Materials Transportation Act, which pre-empt Minnesota law. The letter also says Minnesota’s law unfairly targets rail companies. Minnesota law 299A.55 regarding railroad and pipeline safety says “assessment for each railroad is 70% of the total annual assessment amount.”

“As such, CPKC believes that the instant invoiced assessment cannot be valid, and thus, CPKC will not issue payment in response to the invoice,” the letter from CPKC reads.

A report by television outlet KSTP cited BNSF as another large rail company refusing the pay Minnesota’s fee. The Texas-based company owns the rail line in Raymond and took full accountability for the accident. No one was hurt in the derailment.

BNSF said the fee involves all Class 1 railroads in Minnesota, those being BNSF, CPKC, Union Pacific and CN. BNSF referred its response regarding state fees to the Minnesota Regional Railroads Association.

The association asserts Minnesota’s railroad operators were already providing funding and equipment for emergency responders and training, with state laws requiring them to pay into the Department of Transportation State Rail Safety program that pays for state rail inspectors.

“Despite these proactive safety efforts, Minnesota legislators chose to impose millions of dollars in fees on railroads despite requiring no similar contribution from other transportation modes that move hazardous materials, such as trucking companies and vessel operators,” MRRA stated.

State officials argue rail companies are ignoring their public safety obligations in not paying the state fee.

“An industry that sacrifices safety in pursuit of financial gain, reaps 20% profits coming to a cumulative $25 billion, should not be further boosting their margins by cutting back on their responsibilities and forcing the public to pick up their tab,” Dibble, Hornstein and Kupec wrote in a statement.

“If you doubt us, ask the people of Raymond how they felt at 1 a.m. the night of March 30 last year when they were ripped from their beds and forced to flee their homes because of a fiery derailment caused by a broken track — or how they feel months later with the persistence of contamination in the soil and water of cancer-causing chemicals,” their statement continued. “Or ask the people who live in downtown Minneapolis, or Cook, or Lancaster, or Field Township, or Sauk Rapids, or Gorham Township, or those near any one of the 344 train derailments ... that occurred in Minnesota from 2012 to 2022.”

The MRRA disputed claims of any disregard for safety, saying freight rail safety has improved the last decade, with hazardous material train accident rates, per carload, falling 75% nationwide since 2000. In Minnesota, train accidents, excluding crossing incidents, have dropped 39% since 2014, with incidents on mainline tracks dropping 52% in that period.

Since 2014, five derailments in Minnesota resulted in hazmat releases, the MRRA says.

“Actions are louder than words,” the statement from Dibble, Hornstein and Kupec reads. “Railroads’ claims of concern for safety, in light of this action and their continual resistance to any and all policies to reduce their ever-climbing rates of accidents and derailments rings hollow.”