(NewsNation) —Two of Minnesota’s largest freight rail companies have refused to pay railway safety assessment fees that were signed into state law following a derailment that forced the evacuation of hundreds of residents.
BNSF Railway and Canadian Pacific Kansas City Limited (CPKC) have objected to the fees citing that they discriminate against railways and that federal law preempts the state mandate.
The Minnesota legislature passed a law last year requiring railroads and pipeline companies to pay roughly $1 million in assessments to be used for emergency preparedness, training, and staffing costs.
The move came after a BNSF train hauling ethanol and corn syrup derailed and caught fire in Raymond, about 100 miles west of Minneapolis, on the morning of March 30.
While no one was injured, the derailment prompted the evacuation of 250 homes and hundreds of residents who were within a half mile of the crash.
National Transportation Safety Board inspectors estimated that the derailment caused $1.9 million of damage to railroad equipment and the tracks.
In response, Minnesota legislators amended the state’s Transportation Omnibus Bill to reinstate $4 million in annual assessments on rail and pipeline companies, reported the Star Tribune.
The move was met with staunch pushback by railroad companies who said the imposed assessment fees discriminate against rail companies.
That pushback became defiance last month when CPKC and BNSF both said they would not pay.
In a letter to state officials shared with NewsNation, CPKC stated that it would not pay an assessment of $916,069 due in February because the invoice “is contrary to law” and is “neither required nor appropriate under the law.”
BNSF also refused to pay the fees saying that 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, the Star Tribune reported.
BNSF did not immediately return a request for comment by NewsNation.
“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,” the companies said in a statement through the Minnesota Regional Railroads Association.
Minnesota lawmakers called the stance “extremely troubling.”
“The Minnesota Legislature has oversight of the rail networks within Minnesota, and a solemn duty to look out for the safety and security of Minnesotans. We are bound by our offices to hold those responsible and to account when their actions undermine safety. We urge railroad companies to reverse course and respect the laws and the people of Minnesota and take action to protect our communities,” several state legislators said in a joint statement.
Since the February 2023 derailment in East Palestine, Ohio, both state and federal lawmakers have increased attention and scrutiny on railway safety.
On Tuesday, The Transportation Department’s Federal Railroad Administration finalized a new federal rule requiring freight railroads to maintain two-person crews on most routes for added safety.
Rail unions have long opposed one-person crews because of safety and job concerns. They say that conductors are crucial in helping operate the train and keeping engineers alert and that they serve as first responders.
But the Association of American Railroads, a group representing the major freight railroads of North America including BNSF and CPKC, denounced the change.
“FRA is doubling down on an unfounded and unnecessary regulation that has no proven connection to rail safety,” Ian Jefferies, AAR President and CEO, said in a statement. “Instead of prioritizing data-backed solutions to build a safer future for rail, FRA is looking to the past and upending the collective bargaining process.”
The Associated Press contributed to this story.
