Archived Legislative & Regulatory Agendas
Current agenda items are here.
2020 Legislative & Regulatory Agenda
Current agenda items are here.
STATE OF CALIFORNIA
AB 398 (Chu), COVID-19 Local Government and School Recovery Relief Act
Background: AB 398 would impose a “head count tax” of $275 per employee on all business entities with more than 500 employees working in California. The money raised would be used to offset deficits in state and local government entity budgets caused by the COVID-19 pandemic. The tax would be in effect for 5 years.
Recent Status: Although there was substantial opposition, AB 398 passed the Assembly on June 10th on a 41-22 vote and is currently in the Senate Rules Committee.
CSLRA Position: Oppose
Reasons for CSLRA Position: This bill creates a strong disincentive for corporations to keep or add employees in California, and encourages them to move employment to other states. Quoting CalChamber’s opposition letter, “During times of economic prosperity AB 398 would be a job killer. During this time of economic crisis, AB 398 is catastrophic.”
Opposition letter: click here.
Oil and Gas: Oil Spills: Financial Security, Fines and Penalties AB 3214 (Limon)
Background: Inland oil spill regulations apply to facilities located within ¼ mile of any inland waters of the state. The term facilities means oil wells, pipelines, vessels, barges, tank farms, refineries, truck and railroad operations where the cargo is “oil” as defined in state regulations. Existing regulations provide for how much financial responsibility (insurance or bonding) must be demonstrated by entities handling “oil” in inland facilities and what penalties apply for violation of oil spill regulations. This bill would double all of these amounts, specifically: Financial responsibility would change form $1 billion to $2 billion for “tank vessels” and $300 million to $600 million for “non-tank vessels,” and minimum/maximum fines imposable for spills would double from $2,500 – $250,000 (first offense)/$5,000 – $500,000 (2nd offense) to twice those amounts. Also, a new fine for persons engaging in illegal conduct as defined in the bill would be added, creating personal liability of up to $10,000 per gallon spilled.
Recent Status: AB 3214 passed on the Assembly floor in June 2020 and is in the Senate Policy Committee.
CSLRA Position: Oppose
Reasons for CSLRA Position: While large transportation companies can self-insure, short line railroads can only engage in the transportation of “oil” as defined in California regulations if they can obtain oil spill liability coverage, and at a price that is not prohibitive. CSLRA worked extensively with OSPR two years ago to rationalize these insurance requirements as they apply to short lines by studying incident data and cleanup costs appropriate to short line track speeds. This bill would likely upend that effort, and could set up a conflict between California financial responsibility requirements for transporting “oil” and a short line’s responsibility to carry commodities tendered to it as a federal common carrier of freight. Further, there does not appear to be any data suggesting that the proposed changes are necessary.
Oppose letters: California Railroads | PMSA | WSPA
Taxation: Tax Expenditures – Repeal Dates SB 956
Background: This measure is a re-introduction of SB 468 from the 2019 legislative session, which was vetoed by the Governor. As introduced, this measure does not address concerns from the 2019 version of the bill. As originally worded in 2019, it would repeal all major business tax incentives by December 2023, if certain conditions are not met, and would have resulted in one of the largest tax increases in recent years. Tax incentives affected included: R&D tax credit, water’s edge elections, like-kind exchanges, tax exemptions on farm machinery and many others. In response to opposition it was re-worded to require study of existing tax incentives before further action was taken. CSLRA opposed the bill in the 2019 session and continues to oppose it in 2020, as the study mechanism is duplicative of existing functions in state executive departments. Also, the 2020 version does not address concerns raised in the Governor’s 2019 veto message: “While it is meritorious for the state to consider the effectiveness of tax policies and program expenditures, this measure would create significant uncertainty with respect to the future of the state’s tax structure and would adversely affect California’s ability to retain and attract investment. The threat of repeal of tax incentives, considering our state’s already high cost of doing business, poses a significant barrier to jobs, investment and the state’s long-term economy.”
Recent Status: SB 956 is in Senate committee review as of February 2020.
CSLRA Position: Oppose (unless amended)
Reasons for CSLRA Position: As originally written SB 956 (468) would disproportionately punish those industries that provide some of the highest paying wages in California. Among others, this measure would have repealed the state’s R&D tax credit, which primarily affects technology and manufacturing sectors. Railroad-specific tax incentives could also have been affected by this bill, adversely affecting CSLRA’s membership. As amended and reintroduced, the bill still relies on unnecessary new bureaucracy and lacks adequate metrics for ascertaining the effectiveness of existing tax credits.
Additional Info:
2019 documents: Coalition | Legislative Info | Opposition Letter
2020 documents: Pending resumption of State Assembly Committee activity.
California Short Line Credit
Background: A number of states have state-level short line tax credits, along the lines of the federal “45G” tax credit, but California does not. Lack of a state-level tax credit inhibits capital investment in infrastructure improvements by small railroads
AB 1397 (Burke) would establish a 5-year tax credit program for California Class 2 and Class 3 railroads commencing in January 2020. Up to 50% of qualified expenditures could be deductible, with a cap of $3,500 x the track mileage owned or leased within the state. “Qualified railroad reconstruction or replacement expenditures” means the costs paid or incurred by the qualified taxpayer for reconstruction or replacement of railroad infrastructure, including, but not limited to, track, roadbed, bridges, industrial leads, and track-related structures owned or leased by the qualified taxpayer as of January 1, 2020. “Qualified railroad reconstruction or replacement expenditures” also includes the costs paid or incurred by the qualified taxpayer for new construction of industrial leads, switches, spurs and sidings, and extensions of existing sidings.
Recent Status: After being heard in committee, because of an excess of tax credit proposals in the 2019 legislative session, AB 1397 has been deferred to consideration in the 2020 session.
CSLRA Position: Support
Reasons for CSLRA Position: This legislation will facilitate needed repairs and upgrades to CSLRA-member railroad infrastructure.
Support Letter | Fact Sheet | Assembly Bill #1397
California Ocean Protection Council Strategic Plan to Protect California’s Coast and Ocean – 2020-2025
Background: The California Ocean Protection Council (OPC) was established by the Legislature via the California Ocean Protection Act (Act) in 2004. In the Strategic Plan, the OPC proposes a number of aggressive goals not called for elsewhere in law or regulation, including phasing out coastal sewage discharge by 2022, stopping all trash discharges into state waters by 2030, banning polystyrene in foodservice packaging by 2022, and decarbonizing ports and shipping. The draft Plan goes well beyond the “coordinating” and “advisory” responsibilities of the OPC as outlined in the Act, by improperly delegating to the OPC the authority to create and implement regulations. It also does not evaluate the economic impacts of the proposed actions.
Recent Status: CSLRA joined with BNSF Railway and Union Pacific Railroad as “California Railroads” in signing a comment letter from the California Chamber of Commerce expressing concern about various elements of the draft plan, including the OPC exceeding its authority.
CSLRA Position: Opposed to elements of the draft plan as currently written.
Reasons for CSLRA Position: The OPC should not assume regulatory authority not granted to it by the Legislature, and in so doing bypass stakeholders and procedures that should be included when various goals are formulated and pursued.
Additional Information: Coalition Letter
Intermodal Chassis – Inspection and Repair
Background: Existing law authorizes but does not require roadability inspections of intermodal chassis at ocean terminals. Chassis inspections are carried out by Intermodal Equipment Providers (IEPs) at off-terminal locations. AB 1575 would make inspections within the ocean terminals mandatory.
Recent Status: This bill will remain in Committee for the 2019 Assembly session. It may return for consideration in the 2020 session.
CSLRA Position: Watch
Reasons for CSLRA Position: This proposal may make ocean terminal operations less efficient. It is alleged that the existing chassis inspection regime is deficient and that unsafe chassis are routinely dispatched onto state roadways. CSLRA is investigating these background issues.
Additional Information: AB 1575 fact sheet
FEDERAL
Section 45G Tax Credit
HR.217/S.407 The Building Rail Access for Customers and the Economy Act (BRACE Act)
Since 2005, the Short Line Tax Credit has allowed smaller freight railroads to upgrade their increasing infrastructure to serve the customers in a better and safer manner. The credit allows for a $1 tax credit for every $2 of private investment in infrastructure upgrade and maintenance.
The Short Line Tax Credit (a.k.a 45G Tax Credit) was created in 2005 under Section 45G of the US tax code, and has been renewed with a series of one and two-year extensions. The BRACE Act is intended to make the 45G Tax a permanent addition to the tax code.
Recent status: The ‘45G’ tax credit has been extended retroactively through December 31, 2017 as part of the Bipartisan Budget Act of 2018 signed February 9, 2018. Extension into 2018 and beyond will require additional legislation. In the 116th Congress, the BRACE Act (H.R. 510 and S. 203) have been introduced, and call for permanence of the Credit. In July of 2019, a U.S. Senate Finance Committee task force report concluded that the Section 45G tax credit should be made permanent.
The CSLRA currently supports the passage of the BRACE Act.
Additional information:
American Short Line and Regional Railroad Association – The Case for a Permanent Short Line Tax Credit
45G Support and Thanks Letter to Sen Feinstein
2019 Legislative & Regulatory Agenda
Current agenda items are here.
CSLRA is monitoring the following legislative and regulatory activity:
STATE OF CALIFORNIA
SLC APPROVAL OF PORT AUTOMATED EMISSION REDUCTION TECHNOLOGY
Background: This bill, AB 1321, was completely amended recently to authorize the State Lands Commission (SLC) to reject the use of automated technology at California ports, including technology that would improve air quality. The SLC approval process would override the provisions of other agreements including labor contracts.
Recent Status: An additional amendment that would change this bill’s focus to require a study of the effects of automation at ports rather than inserting the SLC into negotiations about automation is pending.
CSLRA Position: Opposed
Reasons for CSLRA Position: California Railroads are very concerned that this bill will be an obstacle to ports and terminals meeting many critical economic and environmental goals sought by the State of California, and the freight, maritime and rail industries. California Railroads are also concerned that the processes in the bill will: simply add a political decision-making layer to an already long approval process for automation projects at the ports; pick winners and losers depending on which terminals are allowed to automate, creating a competitive advantage for automated terminals over non-automated terminals; and, make future port collective bargaining agreements unreliable at best, since the process in this bill bypasses those agreements, thereby causing alarm throughout the cargo industry.
Additional Information: NOTICE OF OPPOSITION TO AB 1321
Taxation: Tax Expenditures – Repeal Dates SB 468
Background: As originally introduced, this measure would repeal all major business tax incentives by December 2023, if certain conditions are not met, and would have resulted in one of the largest tax increases in recent years. Tax incentives affected included: R&D tax credit, water’s edge elections, like-kind exchanges, tax exemptions on farm machinery and many others. CSLRA opposed the bill as introduced. The bill has since been amended substantially, substituting study of tax incentives rather than automatic repeal, but the opposition coalition which includes CSLRA remains opposed unless it is further amended.
Recent Status: SB 468 has been passed by the Senate and is now before the Assembly Revenue & Taxation Committee.
CSLRA Position: Oppose (unless amended)
Reasons for CSLRA Position: As originally written SB 468 would disproportionately punish those industries that provide some of the highest paying wages in California. Among others, this measure would have repealed the state’s R&D tax credit, which primarily affects technology and manufacturing sectors. Railroad-specific tax incentives could also have been affected by this bill, adversely affecting CSLRA’s membership. As amended, the bill still relies on unnecessary new bureaucracy and lacks adequate metrics for ascertaining the effectiveness of existing tax credits.
Additional Info: Coalition | Legislative Info | Opposition Letter
California Short Line Grant Program SB 498
Background: Because of leftover funds ($12M) in the trade corridors improvement section of Proposition 1B (approved by voters in 2006), there is an opportunity to create a 2-year grant program (2020-2022) for CA short lines. The proposal is known as the Short-Line Infrastructure Improvement Act of 2019, SB 498.
The CA Transportation Commission will have to develop project guidelines, but the following criteria in the proposed law would apply to short line grants:
- i) The amount of a grant awarded shall not exceed 50 percent of the total project cost.
(ii) In order to be awarded a grant, a short-line railroad operator shall provide at least 30 percent of the total project cost from nongovernmental sources.
(iii) A grant shall not exceed 25 percent of the total funding available in a fiscal year.
(2) The following definitions related to short line projects apply:
(A) “Railroad reconstruction, maintenance, upgrading, or replacement expenditures” means the costs paid or incurred by the short-line railroad operator for reconstruction, maintenance, or replacement of railroad right-of-way infrastructure, including, but not limited to, track, roadbed, bridges, industrial leads, and track-related structures on Class III railroads as defined by the United States Surface Transportation Board as of January 1, 2020. “Railroad reconstruction, maintenance, upgrading, or replacement expenditures” shall also include the costs paid or incurred by the short-line railroad operator for new construction of industrial leads, switches, spurs and sidings, and extensions of existing sidings.
(B) “Short-line railroad operator” means a company that owns a railroad that is classified by the United States Surface Transportation Board as a Class III railroad.
Recent Status: This bill, with amendment, has passed the Senate and has been referred for hearing to the Assembly Transportation Committee..
CSLRA Position: Support
Reasons for CSLRA Position: This legislation will facilitate needed repairs and upgrades to CSLRA-member railroad infrastructure.
Additional information: Bill Text | Support letter from CSLRA
Amendment to Section 583 of the Public Utilities Code
Background: AB 1323 would amend Section 583 of the CA Public Utilities Code. The bill would completely reverse existing confidentiality requirements for documents provided to the PUC by utilities and would substantially eliminate current CPUC statutes that limit public access to highly sensitive documents required by, and supplied to, the Commission by public utilities, including freight railroads.
Recent Status: This bill has been in “hearing postponed” status in the Assembly Utilities and Energy Committee since April 8, 2019.
CSLRA Position: Oppose
Reasons for CSLRA Position: AB 1323 is an overly-broad bill. The requirement to disclose all information including confidential information is arbitrary. The bill fails when it comes to CPUC’s own stewardship value which states: “Service as responsible caretakers of the human, financial, information, and natural resources entrusted to us.” Disclosure of confidential information to the public must be weighed against the benefits of non-disclosure. The bill should be amended to maintain the responsibility of the CPUC to secure information that utilities are compelled to provide; information that is extremely safety-sensitive and security-sensitive and dangerous if disclosed to those that wish to do harm to the public or utility.
Additional information: AB1323 | Railroad Opposition Letter
Treated Wood Regulations
Background: Regulations in place since 2004 provide rules for handling and disposal of treated wood products that are supported by the Western Wood Preservers Institute and the California Railroad Industry. These regulations will sunset without new legislative action.
Recent Status: SB 68 has been introduced in 2019 to maintain and further simplify regulations for handling and disposal of treated wood products (including railroad ties). Without renewal action current regulations would sunset in December 2020.
CSLRA Position: Support
Reasons for CSLRA Position: The regulations in SB 68 continue a regulatory structure which has protected people and the environment without being unnecessarily burdensome to businesses. SB 68 will also make the regulations permanent.
Warning Sign | Fact Sheet | TWW Coalition Letter Support Senate EQ
Freight Transportation – Statewide Economic Vitality Assessment
Background: A competitive freight sector is essential to California’s economy, workforce, communities, environment, and most importantly, safety. Increasing the competitiveness of the California freight sector will supply the private capital required for infrastructure maintenance and improvements. As more freight moves greater distances, e-commerce transforms supply chains, and the industrial economy and energy markets re-tool, regulatory and transportation policy makers need a better understanding of how their actions impact competitiveness, and in turn the growing need for a robust supply of private capital investment. If adopted, AB 371 will support that understanding, and would require the State Transportation Agency to incorporate the findings of the assessment into the next and subsequent revisions of the state freight plan.
Recent Status: AB 371 will be heard in committee in April 2019.
CSLRA Position: Support
Reasons for CSLRA Position: Without further investment, California’s advantages in freight transportation will be marginalized by major transportation investments in the European Union, China, Canada, Mexico and other U.S. states. Competitors are investing significant funds in trade and transportation infrastructure to attract imports to their locales.
AB 371 would provide policy makers an essential starting point for understanding the impacts of various public policies upon freight industry vitality and competitiveness. Maintaining and strengthening the economic vitality of the California freight industry will supply the private investment required to compete for market share, meet community needs through affordable freight delivery and job creation, reduce adverse environmental impacts, and improve transportation safety.
Additional Information: AB371 text | Frazier to Jobs Committee
2018 Legislative & Regulatory Agenda
Current agenda items are here.
CSLRA is monitoring the following legislative and regulatory activity:
STATE OF CALIFORNIA
SB 224 (Jackson)
This bill was amended for the 2018 session to cover a different topic and is no longer relevant for CSLRA.
ACA 22 (McCarthy and Ting)
Background: ACA 22, the “Middle Class Fiscal Relief Act” was introduced by Assembly Members McCarthy and Ting on January 18, 2018. ACA 22 would impose a 10 percent surcharge on California corporations subject to corporate income and franchise taxes with annual revenue exceeding $1 million. This proposal is offered in response to the 2017 federal tax cuts for corporations.
Recent status: First hearing in Committee will be on or after February 18, 2018.
CSLRA Position: Opposed.
Reasons for CSLRA position: This proposal is one of the largest tax increases in State history. It would be additive to the current state corporate tax rate of 8.84 percent, which is already the highest corporate tax rate among Western states. The combined 18.84 percent tax would be the highest corporate tax rate in the United States, creating a strong incentive for California corporations to move their jobs and operations to other states. It would be highly detrimental to most of CSLRA’s member companies.
“Massive Tax on Business” (CalTax)
Opposition Letter (CalTax)
FEDERAL
Surface Transportation Board (STB) proposed forced access rules
Background: On July 7, 2011, the National Industrial Transportation League (NITL)filed a petition to institute a rulemaking proceeding to modify the Surface Transportation Board’s standards for reciprocal switching. The Board took public comment and held a hearing on the issues raised in the petition. After consideration of the petition and the comments and testimony received, the Board is granting NITL’s petition in part and instituting a rulemaking proceeding in Docket No. EP 711 (Sub-No. 1) to modify the Board’s standards for reciprocal switching. Specifically, NITL proposes regulations under which Board-ordered competitive switching by a Class I railcarrier would be mandatory if four criteria were met: (1) The shipper (or group of shippers) is served by a single Class I rail carrier; (2) there is no effective intermodal or intramodal competition for the movements for which competitive switching is sought; (3) there is or can be ‘‘a working interchange’’ between a Class I carrier and another carrier within a “reasonable distance” of the shipper’s facility; and (4) switching is safe and feasible and would not unduly hamper the carrier’s ability to serve existing shippers.
Recent status: Action on this proposal is held in abeyance pending the appointment of
additional members of the STB. Since January 2017 the STB has only had two of five
appointments filled.
CSLRA Position: Opposed.
Reasons for CSLRA position: The proposed regulations would allow a competing rail carrier access to privately-owned land and rail infrastructure of another railroad, a situation not unlike telling a manufacturer that it must give use of part of a privately-owned production facility to one of its competitors. Aside from its economic impact the proposed rule would disrupt rail networks by creating additional interchange points where they are otherwise not needed, adding to network congestion and dwell time. Notably, the proposed regulations do not specifically exempt short lines, so although they are aimed at class 1 railroads it is entirely possible that they could be applied to a situation that would cause a short line to lose its “first mile/last mile” status to a larger railroad that was given “forced access” to the short line’s customers.
Additional information:
Forced Access oppose letters to members of Congress (2/23/17)
Point/Counterpoint discussion on “Forced Access” (3/16/17)
Section 45G Tax Credit
HR.217/S.407 The Building Rail Access for Customers and the Economy Act (BRACE Act)
Since 2005, the Short Line Tax Credit has allowed smaller freight railroads to upgrade their increasing infrastructure to serve the customers in a better and safer manner. The credit allows for a $1 tax credit for every $2 of private investment in infrastructure upgrade and maintenance.
The Short Line Tax Credit (a.k.a 45G Tax Credit) was created in 2005 under Section 45G of the US tax code, and has been renewed with a series of one and two-year extensions. The BRACE Act is intended to make the 45G Tax a permanent addition to the tax code.
Recent status: The ‘45G’ tax credit has been extended retroactively through December 31, 2017 as part of the Bipartisan Budget Act of 2018 signed February 9, 2018. Extension into 2018 and beyond will require additional legislation.
The CSLRA currently supports the passage of the BRACE Act.
Additional information:
American Short Line and Regional Railroad Association – The Case for a Permanent Short Line Tax Credit
45G Support and Thanks Letter to Sen Feinstein
2017 Legislative & Regulatory Agendas
STATE OF CALIFORNIA
SB 1 (Beall) Transportation infrastructure funding
SB 1 Support Letter
AB 1 Support Letter
SB 4 (Mendoza) Clean goods movement bond
SB 224 (Jackson)
CSLRA has taken an “oppose” position. This bill is carried over to 2018.
AB 151 (Burke-Cooper) Extension of CA Cap and Trade program beyond 2020
SB 562 (Lara-Atkins CA Universal Healthcare)
AB 695 (Bocanegra)- Railroad Safety: On-Track Equipment
AB 695 Support Letter
South Coast AQMD Container Fee Proposal
Pacific Merchant Shipping Association (PMSA) oppose letter (including California Railroad Industry opposition)
FEDERAL
Surface Transportation Board (STB) proposed forced access rules
Forced Access oppose letters to members of Congress (2/23/17)
Point/Counterpoint discussion on “Forced Access” (3/16/17)
Congress to vote on “Heavier Trucks” pilot program
Read the Legislative Alert post
Text of CSLRA communication to Representatives Valadaro (CA 21st Congressional District) and Calvert (CA 42nd Congressional District) on July 17, 2017 regarding truck weight
Section 45G Tax Credit
45G Support and Thanks Letter to Sen Feinstein