Railroading of a locomotive mitigation tax

By CMTA Staff

Capitol Update, May 13, 2005 Share this on FacebookTweet thisEmail this to a friend

AB 459 (Gloria Romero, D-Los Angeles) would authorize the South Coast Air Quality Management District (SCAQMD) to adopt an air emissions mitigation fee on specified railroads that operate within certain Southern California counties.  The fee revenues are required to be used to reduce emissions from locomotives and other heavy-duty vehicles and engines or to fund emission reduction projects from other sources that contribute to air pollution in the area.  Passenger rail equipment is exempted from the mitigation fee.  The bill precludes SCAQMD from adopting any regulations within the scope of the preemption established by federal law.

Although termed a "fee" to avoid the required 2/3 majority vote required for approval of a tax, this SCAQMD sponsored bill is clearly a tax whose revenues are likely to be used for purposes unrelated to locomotives.  If approved, the law will undoubtedly be challenged in the courts by the railroads both for definining it as a fee and because of the federal preemption.  Since the bill does not establish a fee structure, or specify a fee amount, it is possible that the SCAQMD could choose to impose mitigation fees in the millions of dollars.

The bill is another example of SCAQMD’s attempts to expand its authority.  

The Department of Finance issued an oppose position for the following reasons:

1.  The bill’s provisions would jeopardize the existing and legally binding Memorandum of Understanding between the Air Board and the railroads;
2.  The mitigation fees appear to violate the provisions of the Interstate Commerce Act, which preempts discriminatory fees and taxes on railroads that could shift intermodal movement of goods from rail to trucks;
3.  The bill would likely violate the federal Clean Air Act preemption that specifies that state and local governments lack authority to regulate locomotives; and
4.  Legal challenges on both the Clean Air Act and the Interstate Commerce Act preemption would potentially cost hundreds of thousands, or even millions of dollars.

AB 459 was passed by the Senate Environmental Quality Committee on a split vote, 6-3, along party lines.  It is now in its third reading on the floor of the Senate.  CMTA is part of a coalition of business, industry, retail, and transportation associations opposing this bill. 

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