[Federal Register: February 14, 2000 (Volume 65, Number 30)]
[Rules and Regulations]
[Page 7297-7310]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14fe00-9]
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DEPARTMENT OF TRANSPORTATION
Research and Special Programs Administration
49 CFR Part 107
[Docket No. RSPA-99-5137 (HM-208C)]
RIN 2137-AD17
Hazardous Materials Transportation; Registration and Fee
Assessment Program
AGENCY: Research and Special Programs Administration (RSPA), DOT.
ACTION: Final rule.
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SUMMARY: This final rule amends the statutorily mandated registration
and fee assessment program for persons who transport or offer for
transportation certain categories and quantities of hazardous
materials. In this final rule, RSPA is: (1) Expanding the criteria for
those persons required to register to include all persons who offer for
transportation or transport hazardous materials that require placarding
(except for those activities of farmers directly in support of farming
operations); (2) Adopting a two-tiered fee schedule--$300 for those
registrants meeting the U.S. Small Business Administration criteria for
defining a small business and $2,000 for all other registrants; and (3)
Permitting registration for one, two, or three years on a single
registration statement. This final rule is intended to increase funding
for the national Hazardous Materials Emergency Preparedness grants
program.
EFFECTIVE DATE: May 1, 2000.
FOR FURTHER INFORMATION CONTACT: Mr. David Donaldson, Office of
Hazardous Materials Planning and Analysis, (202) 366-4484, or Ms.
Deborah Boothe, Office of Hazardous Materials Standards, (202) 366-
8553, Research and Special Programs Administration, U.S. Department of
Transportation, 400 Seventh Street, SW, Washington, DC 20590.
SUPPLEMENTARY INFORMATION:
List of Topics
I. Background
A. Current Registration Program
B. Hazardous Materials Emergency Preparedness (HMEP) Grants
Program
II. Summary of Proposal to Increase HMEP Funding
[[Page 7298]]
III. Discussion of Comments and Regulatory Changes
A. General
B. Expansion of Base
C. Two-Tiered Fee Structure
D. Clarification of ``Offeror'' and ``Shipper''
E. Registration Number Display
F. Constitutionality of Program
G. Statutory Language and Intent
H. FY 2000 Hazardous Materials Program Funding
IV. Rulemaking Analysis and Notices
I. Background
A. Current Registration Program
In 1990, amendments to Federal hazardous materials transportation
law, now codified at 49 U.S.C. 5101 et seq. (the law), required the
Secretary of Transportation to establish a registration program for
persons who transport or offer for transportation in commerce certain
types and quantities of hazardous materials. The Secretary delegated
this authority to RSPA's Administrator (49 CFR 1.53(b)(1)). The
registration program enables RSPA to gather information about the
transportation of hazardous materials and to fund a grants program to
support hazardous materials emergency response planning and training
activities by State and local governments.
Section 5108 of the law requires each person who transports or
causes to be transported in commerce one or more of the following
categories of hazardous materials to file a registration statement with
RSPA and pay an annual registration fee:
(1) A highway-route controlled quantity of Class 7 (radioactive)
materials;
(2) More than 25 kilograms (55 pounds) of a Division 1.1, 1.2, or
1.3 (explosive) material in a motor vehicle, rail car, or freight
container;
(3) A package containing more than one liter (1.06 quarts) of a
hazardous material the Secretary designates as extremely toxic by
inhalation, which has been identified as a material meeting the
criteria for a Zone A material that is toxic by inhalation;
(4) A hazardous material in a bulk packaging, container, or tank
with a capacity equal to or greater than 13,248 liters (3,500 gallons)
for liquids or gases or more than 13.24 cubic meters (468 cubic feet)
for solids; or
(5) A shipment in other than a bulk packaging of 2,268 kilograms
(5,000 pounds) or more gross weight of a class of hazardous materials
for which placarding of a vehicle, rail car, or freight container is
required.
Section 5108(a)(2) of the law permits RSPA to extend registration
requirements to persons who:
(1) Transport or cause to be transported hazardous material in
commerce but do not engage in the activities listed above; or
(2) Manufacture, fabricate, mark, maintain, recondition, repair,
or test packagings that the person represents, marks, certifies, or
sells for use in transporting hazardous materials in commerce.
In addition, Sec. 5108 (g)(2)(A) requires RSPA to set the fee at
a minimum of $250 to a maximum of $5000.
In establishing the registration and fee assessment program in
1992, RSPA chose to require registration only by those persons under a
statutory obligation to do so. All registrants currently pay the same
registration fee regardless of their size, their income, or the extent
to which they engage in hazardous materials transportation activities.
RSPA imposed the minimum $250 fee on all registrants, plus an
additional fee, currently set at $50, to pay for the costs of
processing the registration statements, as authorized by 49 U.S.C.
5108(g). (See final rule 57 FR 30630 (July 9, 1992) and current
regulations at 49 CFR part 107, subpart G.) The current regulations, in
Sec. 107.608(a), require an annual submission of a registration
statement.
To ensure that all persons required to register know of and comply
with the requirements of the registration program, RSPA has conducted
extensive outreach efforts. Approximately 780,000 informational
brochures have been distributed through direct mailing campaigns and
during presentations to industry. RSPA has annually mailed registration
brochures and forms to hazardous materials shippers and carriers newly
entered into the Federal Highway Administration's (FHWA) Motor Carrier
and Highway Safety census of highway carriers and shippers, and to
newly identified shippers and carriers named on the hazardous materials
incident reports, (DOT Form F 5800.1). In addition, the registration
program has been publicized in trade magazines and industry
newsletters, and seven notices of the registration requirements have
been published in the Federal Register. The registration instructional
brochure and form are also available on RSPA's Hazardous Materials
Safety internet website: (http://hazmat.dot.gov).
Responsibility for enforcement of the registration requirement is
shared by RSPA, the DOT operating administrations, and state and local
agencies that have assumed this role as part of a cooperative Federal/
state partnership. Inspections conducted by RSPA, FHWA, and the Federal
Railroad Administration routinely have included a check for
registration. We believe that the rate of compliance with the
registration requirements is relatively high. Persons knowing of a
violation of the registration requirements should notify an Office of
Hazardous Materials Enforcement regional office, a DOT operating
administration office, or state or local enforcement authority of the
violation.
B. Hazardous Materials Emergency Preparedness (HMEP) Grants Program
1. Purpose and Achievements of the HMEP Grants Program
The HMEP grants program, as mandated by 49 U.S.C. 5116, provides
Federal financial and technical assistance, national direction, and
guidance to enhance State, local, and tribal hazardous materials
emergency planning and training. The HMEP grants program builds on
existing programs and supports the working relationships within the
National Response System and the Emergency Planning and Community
Right-To-Know Act of 1986 (Title III), 42 U.S.C. 11001 et seq. The
grants are used to develop, improve, and implement emergency plans, to
train public sector hazardous materials emergency response employees to
respond to accidents and incidents involving hazardous materials, to
determine flow patterns of hazardous materials within a State and
between States, and to determine the need within a State for regional
hazardous materials emergency response teams.
The HMEP grants program encourages the growth of hazardous
materials planning and training programs of State, local, and tribal
governments. To ensure this growth, Secs. 5116(a)(2)(A) and
5116(b)(2)(A) of the law require a State or Native American tribe
applying for a grant to certify that the amount it spends on hazardous
materials planning and training, not counting Federal funds, will at
least equal the average amount spent for these purposes during the last
two fiscal years. The HMEP grants, therefore, represent additional
funds that supplement the amount already being provided by the State or
tribe. To further encourage growth in planning and training funds,
Sec. 5116(e) limits the Federal share to 80 percent of the costs of the
additional activity for which the grants are made, thus requiring the
State or tribe to provide 20 percent of these additional costs. By
accepting an HMEP grant, the State or tribe commits itself not only to
maintaining its previous level of support, but increasing that level by
an amount representing 20 percent of the funds newly expended on grant-
supported activities each year. For
[[Page 7299]]
example, an HMEP grant of $100,000 requires an additional commitment of
$25,000 in State or tribal funds over the average amount spent by the
agency during the previous two years. These additional State or tribal
funds may be provided in the form of direct fiscal support or through
the provision of in-kind resources.
Since 1993, all States and territories and 35 Native American
tribes have been awarded planning and training grants totaling $47.1
million. These grants, which supplement funds from States, tribes, and
local agencies, helped to:
<bullet> Train 694,000 hazardous materials responders;
<bullet> Conduct 2,220 commodity flow studies;
<bullet> Write or update more than 19,600 emergency plans over
the last 5 years;
<bullet> Conduct 3,600 emergency response exercises; and
<bullet> Assist 8,910 local emergency planning committees
(LEPCs) over the last 5 years.
In addition, over the past six years, HMEP grants program funds
have been used to support the following related activities in the total
amounts indicated:
<bullet> $2.3 million for development and periodic updating of a
national curriculum of courses necessary to train public sector
emergency response and preparedness teams. The curriculum
guidelines, developed by a committee of Federal, State, and local
experts, include criteria for establishing training programs for
emergency responders at five progressively more skilled levels:
First responder awareness, first responder operations, hazardous
materials technician, hazardous materials specialist, and on-scene
commander.
<bullet> $1.7 million to monitor public sector emergency
response planning and training for an accident or incident involving
hazardous materials, and to provide technical assistance to a State
or Native American tribe for carrying out emergency response
training and planning for an accident or incident involving
hazardous materials.
<bullet> $3.3 million for periodic updating and distribution of
the North American Emergency Response Guidebook.
<bullet> $750,000 for supplemental grants to the International
Association of Fire Fighters (IAFF) to train instructors to conduct
hazardous materials response training programs.
2. Increased Funding of the HMEP Grants Program
In each of the eight registration years since 1992, RSPA has
received approximately 27,000 registration statements and an average of
$6.8 million to support the HMEP grants program. This has provided an
average of $6.4 million annually for planning and training grants, only
50% of the $12.8 million authorized by law for these purposes ($5
million for planning and $7.8 million for training). As discussed in
RSPA's April 15, 1999, notice of proposed rulemaking (NPRM) (64 FR
18786), the HMEP grants program has accomplished much in a short time,
but many needs are not being met. The HMEP training grants are
essential for providing adequate training of persons throughout the
nation who are responsible for responding to emergencies involving the
release of hazardous materials, both through direct Federal financial
assistance for such training and by encouraging the provision of
additional state and local funds for this purpose.
In a recent review, RSPA estimated that 800,000 shipments of
hazardous materials make their way through the national transportation
system each day. These shipments range in size and type from single
small parcels of consumer commodities, such as flammable adhesives and
corrosive paint strippers, to bulk shipments of gasoline in cargo tank
motor vehicles and flammable or toxic gases in railroad tank cars. Such
shipments are transported in every State, every day of the year, and it
is impossible to predict with any degree of certainty when and where an
incident may occur. The potential threat requires the development of
emergency plans and training of emergency responders on the broadest
possible scale. Yet, RSPA also believes there are over 2 million
emergency responders requiring initial training or periodic
recertification training, including 250,000 paid firefighters, 800,000
volunteer firefighters, 725,000 law enforcement officers, and 500,000
emergency medical services (EMS) providers.
The continuing need for training for emergency response personnel,
whether paid or volunteer, is partially the result of a relatively high
rate of turnover caused by the extraordinary demands expected of
response providers in terms of time, physical exertion, and emotional
stress. Emergency response personnel must be available at any time and
at a moment's notice to respond to situations that by their very nature
are unpredictable and pose a threat not only to the public in general
but to the responder in particular. This turnover means that each year
there is a significant number of recently recruited responders who must
be trained at the most basic level. In addition, training at more
advanced levels is not simply desirable; it is essential if emergency
response personnel capable of effectively and safely responding to
serious releases of hazardous materials are to be provided. For this
reason, RSPA advocates advanced training at the first responder
operations, hazardous materials technician, hazardous materials
specialist, and on-scene commander levels in every emergency response
team in the country. An increase in the funds available to the HMEP
Grants Program will encourage the State, tribal, and local agencies to
provide this more advanced, and more expensive, training.
The unmet needs of States and Native American tribes for financial
assistance in emergency preparedness planning and training for
transportation-related incidents involving hazardous materials are
great. RSPA is determined to narrow the current gap between the
authorized grant levels and the available Federal funds by its careful
targeting of the additional funds collected as a result of this
rulemaking. RSPA believes that it is essential to increase the awards
for emergency planning and training grants to the full $12.8 million
authorized by the law and, at the same time, maintain current funding
of the additional activities supported by the HMEP Grants Program
described above.
In FY 2000, RSPA intends to provide from registration fees $14.3
million for:
<bullet> Training and planning grants ($12.8 million);
<bullet> Grants support to certain national organizations to
train instructors to conduct hazardous materials response training
programs ($250,000);
<bullet> Revising, publishing, and distributing the North
American Emergency Response Guidebook ($600,000);
<bullet> Monitoring and technical assistance ($150,000);
<bullet> Continuing development of a national training
curriculum ($200,000); and
<bullet> Administering the grants program ($300,000).
II. Summary of Proposal To Increase HMEP Funding
To achieve its goal of funding the HMEP grants program activities
at $14.3 million, RSPA published an NPRM on April 15, 1999 (64 FR
18786), in which it proposed to expand the definition of those persons
required to register and to impose a fee schedule based on the size of
a business. RSPA conducted public meetings on May 25, 1999, in
Washington, DC, and on June 22, 1999, in Des Moines, Iowa. The closing
date for the comment period was extended until July 2, 1999. (64 FR
28135)
In the NPRM, RSPA proposed to require registration by any person,
other than a ``farmer,'' who offers for transport or transports a
shipment of hazardous materials that requires placarding. RSPA proposed
a two-tiered fee schedule ($300 and $2,000), with the lower fee to be
imposed on a registrant that meets the Small Business Administration
[[Page 7300]]
(SBA) criteria for a small business. The proposed exception for a
``farmer,'' as defined in Sec. 171.8 of the Hazardous Materials
Regulations (HMR), is limited to operations in direct support of the
farmer's farming operations. RSPA also proposed reducing the processing
fee from $50 to $25 in order to bring the aggregate amount collected
closer to the amounts needed to process the registration statement and
to issue the Certificate of Registration. Finally, RSPA proposed to
permit registration for one, two, or three years on a single
registration statement.
III. Discussion of Comments and Regulatory Changes
A. General
RSPA received approximately 400 written comments, and 31 persons
made oral presentations at the two public meetings. The commenters
included representatives of emergency response organizations and LEPCs;
individuals engaged in all modes of transportation, agricultural
retailing, petroleum distribution, farming, and convenience store
operations; and industry associations representing a broad spectrum of
businesses that transport or offer for transport hazardous materials.
Many commenters supported the intent of the proposal to fully fund
the HMEP grants program. Grant recipients expressed strong support for
the proposed changes. The National Association of SARA Title III
Program Officials (NASTTPO) expressed strong support for fully funding
the HMEP grants program through increased registration fees and stated
the need for increased funding at all levels, especially in emergency
planning and curriculum development. NASTTPO stated:
The intent to raise additional funds to enhance support for the
National Hazardous Materials Emergency Preparedness (HMEP) Grants
Program is commendable and needed. It has been largely through the
HMEP Grants program that significant planning actions, training
programs and curriculum development have been accomplished that
ultimately have better protected the hazardous materials responder,
hazardous materials shipper, receiver and user alike. * * *
Increased focus and impetus through an enhanced HMEP program are
direly needed, particularly in light of potential diminished
hazardous materials response support from other federal sources.
The Connecticut State Emergency Response Commission stated, ``We
support the proposed rule which would raise additional funds for the
National Hazardous Materials Emergency Preparedness (HMEP) Grants
Program. Funding from this grant program is extremely important to
Connecticut's hazardous materials emergency planning and responder
training efforts.''
Emergency responders also strongly supported the proposal. The
International Association of Fire Fighters (IAFF) stated:
The IAFF has developed extensive experience training hazardous
materials instructors through other federal grants dating back to
1987. The RSPA program enabled us to expand our instructor training
efforts and reach fire service trainers in all regions of the United
States. * * * [W]e are able to target responders along common
hazardous materials transportation routes and hubs. Our first
project year was a tremendous success.
Mr. Bradley D. Robinson, Captain in Charge of Hazmat Operations for
the Sioux City Fire Department's Regional HazMat Team and current
President of the Iowa Hazardous Materials Task Force, offered strong
support for the proposed expansion of the base of registrants and
increase in the registration fee. He stated that the:
* * * funding for that training gets harder and harder, which brings
us back to the need to fully fund the HMEP Grants Program. * * * I
would like to strongly urge that all of [the] proposed changes to 49
CFR Part 107 be implemented. More importantly, I would like to ask
those opposing these changes to join with us, the emergency
responders, and accept more of the financial responsibility in
training us to properly protect the public and environment from
uncontrolled releases of the hazardous materials you use and/or
transport. The bulk of financial responsibility of training and
planning for your release should not be placed on the backs of the
tax paying citizens.
Mr. John Gardner, Fire Marshal of the Chandler, Arizona, Fire
Department and a Maricopa County LEPC member, fully supported the
proposed expansion of the base of registrants and increased
registration fees. He stated, ``Increased funding needs to be provided
for increased curriculum development that will ensure the innovation of
programs is consistent with the rapidly changing technological and
electronic advancements [that] are being made.''
Several industry organizations and associations also expressed
their support for fully funding the HMEP grants program. The Hazardous
Materials Advisory Council (HMAC) stated, ``We recognize that the
current system does not generate the amount of funding that was
anticipated when the program was established. Moreover, we support the
goal of funding the HMEP Grants Program to the $12.8 million level.''
B. Expansion of Base
In 1995, an Industry Working Group (IWG) facilitated by HMAC
provided recommendations on how the registration and fee collection
requirements could be improved under Docket HM-208B. Among the IWG's
recommendations was the expansion of the registration rule to apply to
all shipments for which display of hazard warning placards is required.
This IWG recommendation was joined by many industry associations and
other persons who provided additional comments to the 1995 proposal. In
the April 15, 1999, NPRM, RSPA proposed to expand the base of
registrants to include any person who offers for transportation or
transports a shipment of hazardous materials for which a hazard warning
placard must be displayed on a bulk packaging, freight container, unit
load device, transport vehicle or rail car. This proposal attracted
both strong support and opposition in the public comments.
Commenters who support the current proposal to expand the base of
registrants note that the proposal would simplify compliance and
enforcement. For example, HMAC commented that, ``extension of the
requirement to register to such parties [that offer or transport any
shipment that requires placarding] would greatly simplify the
requirement to register; additionally, the requirement to placard is a
generally accepted measure of the degree of hazard presented by any
specific load.''
The Chemical Manufacturers Association (CMA) also supports RSPA's
proposed expansion of the base of registrants to include shippers and
carriers of all placarded loads, with the exception of farmers (as
defined in 49 CFR 171.8). CMA stated, ``Ease of compliance and
simplicity of enforcement are critical components of a successful
registration program and CMA believes the placarding requirement will
satisfy these conditions.''
The Association of Waste Hazardous Materials Transporters (AWHMT)
and the National Tank Truck Carriers (NTTC) support expansion of the
base of registrants to include all placarded loads, but oppose the
exception proposed for farmers.
A significant number of commenters oppose expansion of the base of
registrants to all placarded loads. In particular, petroleum marketers
and agricultural retailers and their associations assert that expanding
the base to include all placarded loads and increasing the registration
fee would place undue burdens on their industries. Over 250 commenters
from
[[Page 7301]]
the petroleum distribution industry, such as the Petroleum Marketers
Association of America (PMAA) and its member companies, expressed
opposition to the proposed expansion of the base of registrants and the
two-tiered fee structure. Many of these commenters stated that it is
not ``fair'' to ``tax'' them to fund the HMEP grants program because
they already pay local taxes to fund local firefighters. These
commenters stated that they already provide adequate training to their
customers and local emergency responders.
The Petroleum Marketers and Convenience Store Association of Kansas
also opposes expansion of the base of registrants and any fee increase.
It stated that the proposed fee is excessive and favors the ``nation's
largest corporations at the expense of small businesses.'' It stated,
``to include small cargo tank operators into a program that should
clearly be predicated on interstate commerce, and to require a small
convenience store owner to pay the same fees assessed huge corporations
is inequitable, at minimum.'' Finally, it stated, ``if DOT feels it
must increase Hazmat funding by requiring that anyone hauling a
placarded material be included in the program, then the agency should
take steps to ensure that all classes of Hazmat transporters are
subject to the provisions of the program and consequently required to
pay the annual registration fee.''
The Independent Lubricant Manufacturers Association (ILMA) stated,
``this proposed expansion would create paperwork and administrative
burdens on independent lubricant manufacturers far out of proportion to
the potential benefits of the proposal, particularly in instances where
a company might have only a handful of placarded shipments during the
course of the year.'' ILMA stated that RSPA could meet its objectives
by retaining the current structure of persons required to register and
``a very modest across-the-board fee increase, would suffice to fully
fund the HMEP grants program.'' Finally, ILMA did not support the
exemption provided to farmers.
The Fertilizer Institute (TFI) also opposes expansion of the
registrant base to include placarded loads. TFI stated, ``RSPA fails to
demonstrate a need for more registrants and, in any event, including
agricultural retailers and others transporting farm inputs as part of
the registration program contravenes clear Congressional intent
regarding the scope of the registration program.''
The Illinois Fertilizer and Chemical Association (IFCA) opposes
lowering the threshold to any placarded load as an unjustified fee
increase, stating, ``there is no indication that seasonal shipments of
smaller, placarded loads in rural communities pose a substantial hazmat
risk to responders.'' IFCA further stated, ``Most [agricultural]
retailers also offer or transport placarded loads of pesticides;
therefore, exempting only anhydrous ammonia nurse tanks from the
registration program would provide no relief whatsoever for 99% of the
ag retailers in Illinois.'' RSPA did not propose to except anhydrous
ammonia nurse tanks except when operated by farmers in direct support
of their farming operations.
Other parties favor even greater extension of the registration
requirement. The Iowa Department of Transportation (IDOT) suggested
requiring registration by anyone who offers to transport or transports
a shipment that is required to be marked and/or placarded, including
marine pollutants, class 9 materials and cryogenics, with the exception
of farmers. IDOT contends that requiring these persons to register
would produce sufficient revenues without implementing two fee levels.
IDOT stated, ``By lowering the registration threshold quantity, more
offerors and carriers would be required to register. Keep it simple, if
you offer or transport HM in quantities that require placarding, or the
marine pollutant mark, or the display of identification numbers on
placards, white square on point configurations or orange panels you
must register.'' Phillips Petroleum Company (Phillips) also proposed
expansion of the registration base to include marine pollutants and
bulk shipments requiring the hazardous material identification number
marking.
Based on its review of comments received in response to the NPRM,
and the public meetings, RSPA is adopting the proposal to expand the
base of registrants to each person who offers for transport or
transports a shipment of hazardous materials for which placarding of a
bulk packaging, freight container, unit load device, transport vehicle,
or rail car is required. Expansion of the base of persons required to
register by including all persons offering or transporting placarded
loads recognizes the greater risks posed to health and safety or
property by the transportation of hazardous materials in quantities
that require placarding. Thus, shippers and carriers involved in the
shipment of a placarded load of hazardous materials will bear a fair
share of the financial burden that falls on State and local government
agencies to develop emergency plans and to train first-on-the-scene
responders. Also, by requiring all offerors and transporters of
placarded shipments of hazardous materials to register, RSPA will
create the most current list of persons engaged in the transportation
of appreciable shipments of hazardous materials, one of the primary
intentions of the registration requirement.
RSPA has provided one exception to this rule for those activities
of a ``farmer'', as defined in Sec. 171.8 of the HMR, that support the
farmer's farming operations. However, this is not a blanket exception
for all farmers from the registration rule. If a farmer offers for
transportation or transports in commerce a hazardous material that is
specifically identified in Sec. 5108(a)(1) of the law, or offers for
transportation or transports a placarded shipment that is not in direct
support of the farmer's farming activities, that farmer must submit a
registration statement and pay the required fee.
The proposals to expand the proposed definition of persons required
to register to include not only all shipments requiring placarding but
also those requiring marking, including marine pollutants, class 9
materials and cryogenics, would not appreciably increase the number of
persons required to register. Further, such an approach would make what
was intended to be a simplification of the registration requirements
more complicated. RSPA has, therefore, chosen not to adopt the
suggested expansion of the scope of the registration rule.
The application of generally well understood hazard communication
criteria for placarding greatly simplifies the matter of whether a
shipper, carrier, or other person is required to register.
Simplification of the regulations similarly makes the rule much easier
to enforce, thereby further assuring a high rate of compliance.
C. Two-Tiered Fee Structure
In the April 15, 1999 NPRM, RSPA proposed a two-tiered fee schedule
under which a company meeting the small business criterion for its
category established by the SBA at 13 CFR 121.201 would pay a smaller
registration fee than a company that does not meet the SBA criterion.
The proposal specified that a small business would pay an annual
registration fee of $300, while a larger business would pay $2,000.
Many commenters oppose the two-tiered fee structure, advocating an
increased registration fee for all registrants instead. For example,
the
[[Page 7302]]
International Warehouse Logistics Association suggested, ``If an
increase is necessary * * * for the sake of clarity and simplification,
we would urge a minimal increase in the registration fee for all
registrants rather than a two-tiered plan.'' Similarly, AWHMT opposes
the two-tiered fee structure as flawed and difficult to enforce,
suggesting as a more equitable approach a minimal incremental increase
in the fee across the board, regardless of the size of the business or
its hazardous materials operations. IDOT stated that a tiered fee
program may be more difficult to implement than expected and stated
that ``Basing it on gross revenue of a company's total operation is
unfair to say the least. They may have a high gross revenue, but only a
small percentage is derived from Hazardous Materials activities.''
The Conference on Safe Transportation of Hazardous Articles, Inc.
stated that RSPA should simply, ``Determine the total amount necessary
to be collected and divide it by the number of current and prospective
registrants under an expanded pool. A two-tiered system would be more
difficult to enforce, and presumes that smaller companies have a lesser
impact on transportation safety than larger ones.''
Other commenters criticized use of the SBA criteria for small
businesses. Morganite Incorporated stated the Environmental Protection
Agency categorizes it as a small quantity generator of hazardous waste.
While its level of revenues and number of employees is not at all
related to the shipment of hazardous materials, Morganite stated that
it would be unfair for it to ``be assessed $2000/year for the
transportation of these occasional small quantities.'' The Canadian
Trucking Alliance (CTA) similarly argued that basing the registration
fee ``on a motor carrier's total revenue as opposed to its revenue
earned transporting hazardous materials does not appear to be
equitable, although it is clearly administratively simple.'' CTA
requested that RSPA allow Canadian carriers to use only the revenue
earned in the United States to determine whether those motor carriers
are classified as a small business under SBA criteria.
Several large entities stated that basing registration fee amounts
on the SBA criteria will require them, in essence, to financially
subsidize potentially higher-risk, smaller entities. Southwest Solvents
& Chemicals stated, ``Generally, larger companies are capable and
devote more personnel, time and money to promoting safety and
developing proficiency in their operations than do smaller companies.''
It further stated, ``Assuming an increase is justifiable, there is
nothing equitable in imposing on larger businesses a 660% increase in
fees without asking small businesses to share the load.''
Phillips commented that the proposed fee increase puts an unfair
burden for funding the HMEP grants program on larger businesses.
Phillips stated, ``As it is currently proposed, the two-tier fee
structure would increase the total amount that Phillips and its
subsidiaries pay to register from $1,500 to $10,000 annually. * * *
Here again, the large corporations are being unfairly burdened.''
Phillips also stated that small businesses are more likely to fail
to comply fully with the HMR because they do not employ full-time
regulatory compliance staffs. Phillips and other large entities with
multiple subsidiaries proposed that a single registration fee should
cover both a parent company and its subsidiaries. Alternatively, one
commenter from a large business entity suggested that no more than
$20,000 should be collected from a family of companies that enjoy
common equity or ownership.
Some commenters suggested a third level of registration fees for
larger entities that offer relatively smaller amounts of hazardous
materials, or who would be near the dividing line between small and
larger businesses under SBA criteria. The Utility Solid Waste
Activities Group suggested adding a mid-level third tier for entities
who cannot satisfy the SBA criteria for a small business but offer or
transport ``low volume/low risk hazardous materials.''
A number of commenters expressed the view that RSPA should not base
the amount of the registration fee on SBA criteria because that does
not consider risk appropriately, and it is not one of the factors
explicitly set forth in the statute. Tower Group International stated:
Whether a registrant is categorized as a small business or not
under SBA rules is simply a measure of revenue and employee head
count. The SBA definition does not consider the volume or type of
the person's hazardous materials activities. If Congress had
intended that the SBA's small business criterion be a basis for
determining the fee, it would have included appropriate language in
Sec. 5108.
The International Sanitary Supply Association (ISSA), which opposes
expansion of the base of registrants, stated that RSPA's two-tier fee
proposal fails ``to properly consider the criteria that the [law]
requires it to do. As such, the imposition of a substantially higher
fee without a finding that these companies present greater hazards
across the board is inherently inequitable and cannot be supported by
the ISSA.'' ISSA stated it would support a risk-based alternative such
as charging a higher fee for Table 1 placarded materials than for Table
2 placarded materials, and within each category a higher fee assessed
for greater quantities.
Air Products and Chemicals Inc. stated that the lack of
standardization in using SBA criteria for small and larger businesses
would create confusion and difficulty in enforcement, because
``companies will have difficulty understanding the Standard Industrial
Code * * * to recognize whether they meet Small Business Administration
criteria for a small business.'' It went on to say, ``We believe that
the proposed two-tier fee schedule may cause misunderstanding with
current and potential registrants. Also, we doubt whether the
Department of Transportation has the time and resources to verify the
size criteria for registrants for enforcement.''
Some commenters expressed a preference for basing registration fees
on the number or size of containers or vehicles used to transport
hazardous materials. The Petroleum Transportation and Storage
Association stated that it ``believes that the most efficient and
equitable method to structure a multi-tiered fee system based on risk
is to assign the fee according to the number of bulk packagings in a
HAZMAT shipper's fleet.'' The Illinois Fertilizer and Chemical
Association urged RSPA to ``Apply a graduated fee based on size of
hazardous material containers,'' suggesting a three-tier level of fees
triggered by vehicle gross weight, number of rail cars, or a
combination of both.
Farmland Industries, Inc. suggested a three-tier fee as follows:
(1) Persons who offer for transport or transport a hazardous
material only in vehicles weighing less than 26,001 pounds should
pay $300.
(2) Persons who offer for transport or transport a hazardous
material only in vehicles weighing 26,001 pounds or more should pay
$500.
(3) Persons who offer for transport or transport a hazardous
material by rail, or by rail and in vehicles weighing 26,001 pounds
or more should pay $700.
RSPA has carefully considered the comments submitted in response to
the NPRM, and has weighed them against the objectives declared in the
April 15, 1999, notice. These objectives required the resulting program
to: (1) Be simple,
[[Page 7303]]
straightforward, and easily implemented and enforced; (2) Employ an
equity factor that reflects the differences between the risk imposed on
the public by the business activities of large and small businesses;
(3) Ensure the adequacy of funding for the HMEP grants program; and (4)
Be consistent with the law. While some of the recommendations made in
the comments might come closer to satisfying one of these objectives,
RSPA remains convinced that its proposal will most adequately address
all four of them.
RSPA does not agree with the commenters opposing the two-tiered fee
structure. RSPA considers the proposal to enlarge the definition of
those persons required to register and simultaneously to increase the
required fee for the larger registrants to be a reasonable distribution
of the costs of the program among the varying types and sizes of
businesses that contribute to the need for trained emergency response
personnel. The expansion of the definition to include all offerors and
transporters of placarded shipments of hazardous materials will most
directly affect relatively small businesses that use smaller bulk
containers or offer to transport or transport placarded shipments of
less than 5,000 pounds in non-bulk packages. Requiring these entities
to register recognizes that their activities contribute to the need for
enhanced emergency response programs. The imposition of a larger fee of
$2,000 on persons that do not meet the criteria for a small business,
most of whom have been required to register since 1992, places a
greater, but not unduly burdensome, share of these costs on companies
most likely to be offering to transport or transporting large volumes
of hazardous materials.
RSPA spent considerable time and effort evaluating several methods
of apportioning the fee among registrants according to various
approximations of the risk imposed. We considered factors such as Table
1 and Table 2 materials, the type and size of containers (including
vehicles), and the number of shipments offered or transported. We
concluded that trying to reasonably distinguish between distinct levels
of imposed risk would require the imposition of a complicated system
that would necessarily involve significant recordkeeping burdens on the
regulated public. Persons interested in a more detailed analysis of
such a risk-based proposal may consult Docket HM-208B, RSPA's 1995
proposal to base a four-level fee structure on risk factors.
Further, we are convinced that even the simplest of the suggested
alternative fee structures would impose significant cost burdens. For
example, the creation of an intermediate fee level for registrants that
do not meet the criteria for a small business but engage in limited
hazardous materials activities could impose a greater expense on the
registrant to maintain the necessary records to prove its level of
activity than the cost of the $2,000 fee. Similarly, the suggestion
from the Canadian Trucking Alliance that only revenue earned in the
United States be used to determine a foreign company's business size
(for those businesses for which the SBA size standard is the annual
revenue) would involve foreign carriers in complicated and detailed
record-keeping.
In response to the commenters who supported retention of a flat fee
for all persons required to register, we note that, if the base of
registrants is not expanded and the current number of annual
registrants is maintained, a flat fee of approximately $555 (including
a processing fee of $25) would be necessary to collect $14.3 million in
grant monies. If the universe of registrants is expanded to
approximately 45,000 persons, a flat fee of $345 (including a $25
processing fee) would be necessary to meet that collection amount.
Given Federal directives to consider the needs of small businesses in
establishing fees, we cannot justify an increase in the fee required of
small businesses when clear alternatives are available.
RSPA also disagrees with commenters who stated that RSPA's proposed
use of the SBA criteria: (1) favors big businesses over small
businesses; (2) is not one of the determinants allowed by 49 U.S.C.
5108(g)(2)(A); and (3) would be difficult for potential registrants to
understand and apply to their business operations. We believe that our
goals are best met by establishing a two-tiered fee schedule under
which a person not meeting the criterion established for it by the SBA
at 13 CFR 121.201 pays a larger fee than that required for a small
business. This regulatory approach provides fee levels that reflect a
key factor contained in 49 U.S.C. 5108(g)(2)(A), specifically, the
relative size of a business.
In addition, this approach generally addresses the different levels
of risk posed by small businesses that make fewer and smaller shipments
of hazardous materials as compared to larger businesses that annually
manufacture, offer, or transport thousands of tons of hazardous
materials. Five of the specific factors permitted by 49 U.S.C. 5108
(g)(2)(A) as fee determinants are indicators of the level of risk
imposed by the registrants, and two are indicators of the size of the
business. Use of the SBA standards for differentiating small businesses
offers a simple and direct factor that is commonly used and established
by Federal regulation. The use of alternate size criteria would impose
additional burdensome, and significant recordkeeping requirements on
most registrants.
In relation to the comments suggesting that a limit be placed on
the number of registrations required from corporately connected
subsidiary companies, RSPA points out that the law requires
registration of each ``person'' that engages in certain activities, and
that the definition of ``person'' is governed by Section 1 of Title 1
of the U.S. Code. A corporation that elects the option of forming
itself into more than one person for whatever reason also assumes
certain legal responsibilities for each of those persons, including the
requirement to register.
Many commenters believe that use of the SBA size criteria would be
confusing to registrants. However, most businesses are already aware of
the Standard Industrial Classification (SIC) code applicable to them or
can easily determine that code from the list published by the SBA on
its Internet web site at the following address: ``http://
www.sbaonline.sba.gov/regulations/siccodes/''. This list also contains
the size standard established for each SIC code. With few exceptions,
the specified standard is either annual receipts (as defined in 13 CFR
121.104) or maximum number of employees (as defined in 13 CFR 121.106).
A company that considers the size determinant for its industrial code
to be improper can request SBA to reconsider the standard by writing to
the Assistant Administrator for Size Standards, Small Business
Administration, 409 3rd Street, S.W., Washington, D.C. 20416. The SBA
web site also has a link (``http://www.osha.gov/oshstats/sicser.html'')
to the Occupational Safety and Health Administration Standard
Industrial Classification search engine for persons needing a fuller
description of the definition of the businesses included within
particular SIC codes.
For these reasons and based on our review of comments received in
response to the NPRM and at the public meetings, we believe that the
proposed two-tiered fee schedule based on SBA criteria is the most
equitable, simple, and enforceable method for determining and
collecting registration fees. Therefore, RSPA is adopting, as proposed,
the two-tiered fee schedule
[[Page 7304]]
based on SBA criteria for small businesses.
With regard to use of SIC codes, RSPA notes that SBA recently
issued a notice of proposed rulemaking (64 FR 57188, October 22, 1999)
to amend its size regulations in 13 CFR 121.201 by establishing small
business size standards for industries defined under the North American
Industry Classification System (NAICS). In addition, SBA proposed that
the new size standards be effective for Fiscal Year 2001, which begins
October 1, 2000. SBA estimates that relatively few firms would gain or
lose small business status as a result of this rule. SBA intends that,
in establishing a new table of size standards, firms that are now
eligible for Federal small business programs will remain eligible to
the maximum extent practicable.
A review of the proposed NAICS table of size standards compared to
industries identified by SIC codes in RSPA's regulatory evaluation
revealed few instances in which an entity may lose its status as a
small business.
The two-tiered fee schedule distributes registration fees according
to a well-established measurement of business size and ensures the
collection of sufficient funds to support the HMEP grants program at an
enhanced level. RSPA will achieve its goal of raising $14.3 million
annually (exclusive of funds collected for administrative processing),
by collecting a fee of $300 (which includes a $25 processing fee) from
an estimated 43,500 registrants that are small businesses and a fee of
$2,000 (which includes a $25 processing fee) from an estimated 1,500
registrants that do not meet the criteria for a small business. If the
number of estimated new registrants is significantly larger than RSPA's
current estimate, RSPA will consider adjusting the registration fees in
subsequent years to avoid collecting an annual amount in excess of the
$14.3 million required for more appropriate funding of the HMEP grants
program.
D. Clarification of ``Offeror'' and ``Shipper''
Some commenters, such as PMAA, Petroleum Transportation and Storage
Association (PTSA), AWHMT, and several public meeting speakers,
requested that RSPA further clarify and define the terms ``offeror''
and ``shipper.'' These commenters are particularly concerned about a
person's name appearing on the shipping paper and containing the
information required by Secs. 172.202, 172.203, and 172.204. The
commenters' concern involves an interpretation [57 FR 48739-41 (October
28, 1992)] by RSPA on activities which the agency considers as indicia
of an entity's direct role in causing hazardous materials to be
transported in commerce. These commenters include convenience store
operators whose names appear on shipping papers when they order bulk
quantities of gasoline for resale at their convenience stores. The
referenced interpretation (No. 92-1-RSPA) was issued by RSPA's Chief
Counsel in response to a request from PMAA and QTI Service Corporation.
This interpretation references two previous interpretations (Nos. 88-1-
RSPA and 89-1-RSPA) issued by RSPA's Chief Counsel's Office in 1988 and
1989 in response to requests from the National Tank Truck Carriers,
Inc., and published in the Federal Register on February 26, 1990 (55 FR
6760-62).
PMAA stated that RSPA's instructions and DOT Form F 5800.2 for
registration year 1999-2000 contain a definition of ``offeror'' that is
in conflict with RSPA's official interpretation. RSPA's instructions
state, `` If your company's name appears on the shipping papers as the
shipper or as one of the shippers, you have assumed responsibility as
an offeror and must therefore register.'' PMAA pointed out that ``Under
some state tax laws, the marketer [who orders a shipment of gasoline]
is named as the shipper on the shipping papers, since the state
requires the marketer's name to be listed since he is the owner of the
product.'' PMAA requested RSPA rewrite the registration instructions to
clarify that the company's name appearing on the shipping paper as the
``shipper'' does not automatically require registration as an
``offeror.''
PTSA also requested clarification of ``offeror'' and recommended:
RSPA should clarify the term offeror to include only those
functions that relate to the physical control of hazardous material
shipments. At the very least, RSPA should allow petroleum marketers
who hire common carriers to include their company name on the
shipping papers as the billing party without rising to the level of
an offeror. This clarification makes sense because the common
carrier is the only one in the position to comply with the hazardous
material regulations since it has sole control over the physical
shipment.
The AWHMT disagrees with PMAA and PTSA and states, ``In our view,
if a person's name appears on a shipping paper, the person has engaged
in a commercial hazmat transaction and the person is subject to the HMR
and if, for purposes of this rulemaking, the shipping paper causes to
be transported hazardous materials which are placarded, the person
should be'' required to pay a registration fee.
RSPA disagrees with PTSA's position that only those functions
normally performed by an offeror that ``relate to the physical control
of hazardous materials shipments'' are appropriate in determining
whether a person is an offeror of hazardous materials. All of the
functions enumerated in Interpretation No. 92-1-RSPA continue to be
valid factors for determining whether a person is a ``shipper'' or
``offeror.'' These functions, also printed in the annual registration
brochures, include, but are not limited to, selection of the packaging
for a regulated hazardous material, physical transfer of hazardous
materials to a carrier, determining hazard class, preparing shipping
papers, reviewing shipping papers to verify compliance with the HMR or
their international equivalents, signing hazardous materials
certifications on shipping papers, placing hazardous materials markings
or placards on vehicles or packages, and providing placards to a
carrier.
RSPA has carefully considered PMAA's request to clarify the advice
given in the registration brochure extending the term ``offeror'' to
persons whose name appears as the shipper or one of the shippers on the
shipping paper. The 1996-97 registration brochure added a statement to
the discussion of the term ``offeror'' that if a company's name appears
on the shipping papers as the shipper or as one of the shippers, that
company has assumed responsibility as an offeror and is therefore
required to register. This does not contradict the 1992 interpretation
and was intended to clarify the circumstances in which RSPA considers a
party to a transaction to be one of the offerors. In the 1992
interpretation and the two related 1988 and 1989 interpretations
(published in the Federal Register in 1990), RSPA emphasized the
principle that more than one person may perform one or more of the
functions of an offeror in the course of a transaction. PMAA and other
commenters now allege that certain persons who do not engage in any
activity of an offeror nevertheless are listed as the shipper or one of
the shippers on the shipping papers in compliance with state tax or
other regulatory requirements.
RSPA agrees that the act of ordering hazardous materials is not
included within the meaning of ``causes to be transported'' and, in and
of itself, does not require registration. Beginning in Registration
Year 2000-2001, RSPA, as a matter of policy, will no longer consider
the presence of a person's name on the shipping paper as the shipper or
one of the shippers as
[[Page 7305]]
conclusive evidence of whether that person is required to register. The
registration brochure will be revised to eliminate that statement.
Therefore, a person who purchases a hazardous material, has his or her
name on the shipping paper as the shipper, and performs no ``offeror''
functions will not be required to register. However, RSPA notes that,
most commonly, a person who is named as a ``shipper'' on a shipping
paper performs one or more of the functions of an offeror and is
required to register.
Some commenters expressed concern about applicability of the
requirement to register to persons who return ``empty'' tank cars to
the original shipper or to any other location. Commenters indicated
that this requirement may have a significant adverse impact on a number
of persons, especially petroleum marketers. According to commenters,
many petroleum marketers receive a significant part of their propane
supplies by tank car. Commenters argued that payment of the
registration fee constitutes a significant cost of doing business and
could absorb all of the savings realized by transporting a large volume
of propane by tank car.
RSPA has long held that performance of functions necessary to
assure the safe return of a tank car or cargo tank motor vehicle
containing residue is subject to the HMR and clearly within the meaning
of ``offering'' a hazardous material for transportation in commerce.
When a propane tank car is unloaded (but not cleaned and purged), the
petroleum marketer meets RSPA's criteria for an ``offeror'' when it
returns the ``empty'' tank car to a railroad for return to the original
shipper or another party. It is not uncommon for an ``empty'' tank car
to retain several hundred gallons of product, which in the case of
propane is likely to be extremely volatile. RSPA considers this issue
to be settled and no comment submitted to the docket concerning this
matter causes the agency to reconsider its position.
E. Registration Number Display
The American Trucking Associations (ATA) asked RSPA to remove the
requirement for a motor carrier to carry a copy of its current
Certificate of Registration issued by RSPA or another document bearing
the registration number identified as the ``U.S. DOT Hazmat Reg. No.''
on board each truck and truck tractor as specified in Sec. 107.620 (b).
ATA stated:
Other modes of transportation and shippers are merely required
to retain the registration certificate at their principal place of
business. This is a more reasonable approach, since the registration
certificate does not measure a motor carrier's fitness to transport
hazardous materials. It merely identifies who has or has not paid a
fee to RSPA. As this is merely a record keeping requirement to prove
payment of the fee, a large portion of enforcement should be
accomplished during safety and compliance reviews at the motor
carrier's place of business instead of at the roadside during a
driver/vehicle inspection.
Roadside enforcement is a key element of enforcement of the
registration rule. Keeping records only at the motor carriers's place
of business instead of in the motor vehicle where they are readily
accessible for inspection would adversely impact enforcement efforts by
Federal motor carrier inspectors and their partners in the States. A
single day of roadside inspections enables inspectors to efficiently
verify the registration status of a large number of carriers.
Therefore, RSPA is not changing the requirement that a copy of the
Certificate of Registration or another document bearing the
registration number identified as the ``US DOT Hazmat Reg. No.'' be on
board each truck and truck tractor.
F. Constitutionality of Program
PMAA asserts that the registration fee is a ``tax'' and
constitutionally deficient. It claims that the registration fee is
unconstitutional because the ``originations'' clause in Article I
Sec. 7 of the Constitution provides that ``[a]ll bills for raising
revenue shall originate in the House of Representatives.'' According to
PMAA, the 1990 amendments (as enacted in the Hazardous Materials
Transportation Uniform Safety Act of 1990 (HMTUSA), Pub. L. 101-615)
``originated as a bill in the Senate.'' Next, PMAA claims that, because
Article I Sec. 8 of the Constitution provides that ``Congress shall
have power to lay and collect taxes,'' the authority to set and collect
a registration fee has been improperly delegated to DOT. Third, PMAA
contends that the registration fee violates the ``equal protection
component of the Fifth Amendment due process'' because it is not
``rationally related to a legitimate government objective'' and it
``unfairly discriminates against small transporters.''
The Supreme Court has made it clear that the ``originations''
clause in Article I Sec. 7 applies only to ``a statute that raises
revenue to support Government generally.'' United States v. Munoz-
Flores, 495 U.S. 385, 398 (1990). The Court cited its prior decision
that ``revenue bills are those that levy taxes in the strict sense of
the word, and are not bills for other purposes which may incidentally
create revenue,'' so that ``a statute that creates a particular
governmental program and that raises revenue to support that program''
is not a ``bill for raising revenue'' within the meaning of the
originations clause. 495 U.S. at 397, 398. HMTUSA created a specific
governmental program, the HMEP grants program, and devised the
registration fee to support that specific program. Under the Supreme
Court's long-standing interpretation, the registration fee is not
subject to the originations clause, and it is unnecessary to undertake
the sometimes difficult task of determining the body of Congress in
which a particular statutory provision originated. Moreover, cases such
as United States v. Sperry Corp., 493 U.S. 52, 66 (1989), and United
States v. Munoz-Flores, 863 F.2d 654, 660-61 (9th Cir. 1988), rev'd on
other grounds, 495 U.S. 385 (1990), discredit PMAA's theory that the
number of the bill enacted into law determines the house in which the
specific provision in the bill originated. In these cases, the court
analyzed where the specific fee provision actually originated.
According to AWHMT, the registration fee was first proposed in a House
bill, which the Senate then substituted ``for the Senate bill and
returned the bill to the House with a Senate number.''
The Supreme Court has also clarified that a single, straightforward
principle governs Congress's power to delegate to an administrative
agency the authority to set a fee, regardless of whether the ``fee'' is
found to be ``a form of taxation because some of the administrative
costs paid by the regulated parties inure to the benefit of the public
rather than directly to the benefit of those parties.'' Skinner v. Mid-
America Pipeline Co., 490 U.S. 212, 223 (1989). Under that principle,
delegation is permitted ``so long as Congress provides an
administrative agency with standards guiding its actions such that a
court could ascertain whether the will of Congress has been obeyed.''
490 U.S. at 218 (internal quotation marks omitted). Section 5108
contains clear standards, which RSPA has followed in developing this
rule, with respect to both the amount of the registration fee and the
persons that may be required to register and pay the fee. RSPA notes
that Sec. 5108(g)(2) provides that the Secretary may set the amount of
the registration fee based on the amount needed to carry out the HMEP
grants program. That is exactly the basis on which RSPA has determined
the total amount to be raised in registration fees. With the total
amount set in this fashion, and the
[[Page 7306]]
permissible $250-$5,000 range of the registration fee specified, there
are sufficient standards in the law against which to measure RSPA's
actions.
As explained in the NPRM, RSPA also believes that the registration
fee should be ``fair'' in terms of having ``an equity factor that
reflects the differences between the risk imposed on the public by the
business activities of large and small businesses,'' and also being
``simple, straightforward, and easily implemented and enforced.'' 64 FR
at 18790. RSPA does not read Sec. 5108(g)(2) as requiring a single fee
for all registrants nor, however, does it believe that it must provide
perfect equity among all persons that are required to register. The
Supreme Court has commented that the due process and equal protection
clauses do not guarantee perfection in treatment, but rather protect
against governmental actions ``that are downright irrational.'' Hudson
v. United States,__U.S.__,118 S.Ct. 488, 495 (1997). The use of
registration fees to fund training and planning for emergency response
to a hazardous material incident in transportation is clearly a
rational governmental action. Congress perceived a nationwide need and
fashioned a nationwide program to address that need. The fact that all
businesses, including both small and ``large, national transporters,''
pay local taxes that may (or may not) be used by their local
communities to train and plan for emergency response to transportation
incidents involving hazardous materials is not a constitutional
infirmity in a program that uses a national registration fee program to
benefit all communities that respond to hazardous materials incidents
in transportation. RSPA sees no discrimination against small businesses
that pay the minimum fee (under the current program) or (under the
program applicable after July 1, 2000) a significantly lower
registration fee than a company that is not a small business. As
discussed elsewhere (see Section III.C), the dividing line between a
small business that will pay a $300 fee and a larger one that will pay
a $2,000 fee is based on the size determinations of the Small Business
Administration, which, even if not perfect, are appropriate bases for
apportioning the costs of funding the HMEP grants program.
G. Statutory Language and Intent
PMAA and others argued that RSPA's proposal departs from the
statutory language and intent. PMAA stated that Congress meant to apply
the registration fee only to ``large, national hazmat offerors and
transporters'' who are directly involved in interstate commerce, and
not to an offeror or carrier of ``any placarded load,'' because that
criterion is not set forth in Sec. 5108(a)(1). It also contended that
the proposed exception for farmers is a political ``call'' which is not
authorized in the statute and violates Article I Sec. 8 of the
Constitution. The Agricultural Retailers Association (ARA) acknowledged
that the statute allows RSPA the discretion to require ``any hazmat
carrier'' to register, but it ``believes Congress contemplated this to
operate on a carrier-by-carrier basis, and not to operate in an across-
the-board fashion.'' ARA urged RSPA to explain Congress's intent in
setting the mandatory registration criteria in Sec. 5108(a)(1) and the
authority in Sec. 5108(a)(2) for RSPA to require additional persons to
register. Senator Conrad Burns (R-MT) expressed concern that the
proposed rule contravenes the 1992 technical correction that added the
words ``except in a bulk package'' to the mandatory registration
provision now codified at Sec. 5108(a)(1)(E), because it will require
persons other than farmers who offer or transport nurse tanks with a
capacity less than 3,500 gallons to register. PMAA also agreed with
other commenters who stated that RSPA should not base the amount of the
registration fee on business size instead of the ``eight specific
factors'' listed in Sec. 5108(g)(2)(A), and it urged RSPA to wait until
congressional reauthorization of the appropriations language in
Sec. 5127 before increasing the registration fee.
RSPA believes that Sec. 5108(a)(2) clearly reflects Congress's
intent to allow the Secretary to require any person ``transporting or
causing to be transported hazardous material in commerce'' to pay the
registration fee. As reported by the House Committee on Energy and
Commerce in April 1990, H.R. 3520 would have required all offerors and
transporters of hazardous materials (among others) to register and
allowed the Secretary to ``exempt any class or category of persons from
the requirement of this paragraph.'' H.R. Rep. No. 101-444, Part 1, at
80 (Apr. 3, 1990). In contrast, the Senate bill reported in August 1990
contained a provision requiring the Secretary to ``initiate a
rulemaking proceeding concerning the need to establish annual or other
registration requirements for persons or any class or category of
persons who transport, ship, or cause to be transported or shipped in
commerce hazardous materials * * *'' S. Rep. No. 101-449 (Aug. 30,
1990), at 1990 U.S.C.C.A.N. 4595, 4623. These two approaches evolved
into the provisions in HMTUSA specifying five categories for which
registration is mandatory plus the authority for the Secretary to
require other persons to register. Congress clearly left to the
Secretary's discretion the determination of which additional categories
of persons would be required to register and pay a registration fee,
including the creation of exceptions from these categories. This
conclusion is fully consistent with the direction in Sec. 5103(b)(1)
for the Secretary to ``prescribe regulations for the safe
transportation of hazardous materials ``in intrastate * * * commerce''
and the broad definition of ``commerce'' in Sec. 5102(l). Accordingly,
RSPA has applied the registration requirement to purely intrastate
carriers since 1992. See 57 FR 30620, 30622, 30630 (July 9, 1992).
RSPA does not believe that Congress somehow intended the agency to
require additional persons to register under Sec. 5108(a)(2) ``on a
carrier-by-carrier basis,'' as ARA suggests. Nor does RSPA agree that
an exception for farmers from the additional categories of persons to
be required to register is irrational, improper, or inconsistent with
the will of Congress as expressed in the 1992 technical correction that
added the words ``except in bulk packagings'' to current
Sec. 5108(a)(1)(E). The technical correction enacted in Public Law 102-
508 removed a contradiction between two categories for which
registration was mandatory in HMTUSA. As enacted in 1990, one provision
of HMTUSA required a person to register if it offers or transports
hazardous materials in a bulk packaging, container, or tank that has a
capacity of 3,500 gallons or more. However, another provision of HMTUSA
required registration by a shipper or carrier of any shipment of at
least 5,000 pounds of a class of hazardous materials for which
placarding of a vehicle, rail car, or freight container is required
under RSPA's regulations. This meant that a shipper or carrier of
hazardous materials (such as anhydrous ammonia) in a nurse tank or
other bulk packaging with a 1,000-gallon capacity was covered by the
latter provision (because the shipment weighed more than 5,000 pounds)
but left out of the former provision. To eliminate this inconsistency,
the law was clarified by adding the phrase ``except in a bulk
packaging'' to the latter criterion. The 1992 technical change modified
the language related to statutorily-mandated registrations and was not
related to additional registrations that the Secretary could require by
regulation.
[[Page 7307]]
Nothing in P.L. 102-508 or its legislative history restricts the
Secretary's discretion to require additional persons to register under
Sec. 5108(a)(2).
In summary, this regulation is consistent with the Secretary's
Sec. 5108(a)(2) authority to require additional persons to register and
with the Secretary's Sec. 5108(g)(2) authority to impose an annual fee
based on at least one of several criteria. These criteria include
several that support this regulation: (1) The type of hazardous
material transported or caused to be transported; (2) the amount of
such hazardous material; (3) the threat to property, individuals, and
the environment from an accident or incident involving such hazardous
materials; and (4) other factors the Secretary considers appropriate.
H. FY 2000 Hazardous Materials Program Funding
In the NPRM, RSPA noted that the Administration's Fiscal Year 2000
Budget and Hazardous Materials Transportation Reauthorization proposals
to Congress include legislative authority to fund RSPA's entire
Hazardous Materials Safety Program from the registration fee program,
beginning with the fourth quarter of fiscal year 2000.
Several commenters expressed opposition to RSPA funding the entire
Hazardous Materials Safety Program from the registration fee program.
The Chemical Manufacturers Association (CMA) stated, ``CMA believes
that the Hazardous Materials Safety Program (excluding the registration
program) should continue to be funded through general purpose funds;
user fees should not be assessed for a program that benefits the
general public. CMA also questions whether user fees of that scope
could be assessed in a fair and equitable manner. CMA's willingness to
support RSPA's proposals in this NPRM does not extend to funding the
entire Hazardous Materials Safety Program through the fees collected
from the registration program.''
The American Petroleum Institute (API) is also opposed to this
proposal to Congress. API stated: ``API does not believe that user fees
are the appropriate method to fund the hazardous materials
transportation program as its reason for existing is by design, to
protect the public against risks to life and property that may result
from the transportation of hazardous materials.''
The Association of American Railroads (AAR) expressed its
opposition to funding RSPA's Hazardous Materials Safety Program through
registration fees, and stated, ``AAR has consistently opposed requiring
the regulated community to fund the hazardous materials program. That
position extends to using registration fees to pay for RSPA's hazardous
materials program.''
The Sulfur Institute expressed its concern about possibly funding
RSPA's hazardous materials program from registration fees and believed
the proposal needed more clarification to reduce potential confusion.
The proposal to fund RSPA's entire hazardous materials safety
program from the registration fee program is unrelated to this
rulemaking. The reauthorization proposal is currently pending in
Congress, but the FY 2000 budget does not include fourth quarter
funding of the entire program through registration fees. If Congress
takes action on the reauthorization proposal, RSPA will take
appropriate action.
IV. Rulemaking Analysis and Notices
A. Executive Order 12866 and DOT Regulatory Policies and Procedures
This final rule is considered a significant regulatory action under
section 3(f) of Executive Order 12866 and, therefore, was reviewed by
the Office of Management and Budget. This final rule is considered
significant under the Regulatory Policies and Procedures of the
Department of Transportation (44 FR 11034). A regulatory evaluation is
available for review in the public docket. This final rule is intended
to collect annual registration fees in the amount of $14.3 million to
support the HMEP grants program. Because Federal hazardous materials
transportation law mandates the establishment and collection of fees,
the discretionary aspects of this rulemaking are limited to setting the
amount of the fees within the statutory range for each person subject
to the registration program, and to extending the registration
requirements to persons who transport or cause the transportation of
hazardous materials but who are not specifically required to register
by law. The increased fees are not related to the operational cost of
RSPA's hazardous materials safety program. The fees to be paid by
shippers and carriers of certain hazardous materials in transportation
are related to the benefits received by these persons from the sale and
transportation of hazardous materials and from emergency preparedness
and response services provided by public sector resources. The fees are
also related to expenses incurred by State, Native American tribal, and
local governments in carrying out hazardous materials emergency
preparedness and response activities.
B. Executive Order 13132
This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13132 (``Federalism''). This
final rule does not adopt any regulation that:
(1) Has substantial direct effects on the States, the relationship
between the national government and the States, or the distribution of
power and responsibilities among the various levels of government;
(2) Imposes substantial direct compliance costs on State and local
governments; or
(3) Preempts state law.
Therefore, the consultation and funding requirements of Executive
Order 13132 do not apply.
C. Executive Order 13084
This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13084 (``Consultation and
Coordination with Indian Tribal Governments''). Because this final rule
does not significantly or uniquely affect the communities of the Indian
tribal governments and does not impose substantial direct compliance
costs, the funding and consultation requirements of Executive Order
13084 do not apply.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601-611) requires each
agency to analyze proposed regulations and assess their impact on small
businesses and other small entities to determine whether the proposed
rule is expected to have a significant impact on a substantial number
of small entities. Based on our assessment in the accompanying
regulatory evaluation, and the absence of contradictory information
submitted to the docket during the public comment period, I certify
that the requirements adopted in this final rule are applicable to a
substantial number of small businesses, but that the economic impact on
these small businesses will not be significant.
Objectives and Legal Basis for the Final Rule
The goal of this rulemaking is to increase annual funding for the
national Hazardous Materials Emergency Preparedness (HMEP) grants
program from the current level of approximately $6.8 million to $14.3
million. Federal hazardous materials transportation law (49 U.S.C.
5108) directs the Secretary of Transportation to prescribe regulations
[[Page 7308]]
for the filing of a registration statement, and payment of an annual
fee, by each person transporting or causing to be transported in
commerce: (1) A highway-route controlled quantity of Class 7
(radioactive) materials; (2) More than 55 pounds of a Division 1.1,
1.2, or 1.3 (explosive) material in a motor vehicle, rail car, or
freight container; (3) A package containing more than one liter of a
hazardous material designated as extremely toxic by inhalation (Zone
A); (4) A hazardous material in a bulk packaging, container, or tank
with a capacity equal to or greater than 3,500 gallons for liquids or
gases, or more than 468 cubic feet for solids; or (5) A shipment in
other than a bulk packaging of 5,000 pounds or more gross weight of a
class of hazardous materials for which placarding of a vehicle, rail
car, or freight container is required. In addition, Sec. 5108 permits
the Secretary to extend registration requirements to persons who: (1)
Transport or cause to be transported hazardous materials in commerce
but do not engage in the activities listed above; or (2) Manufacture,
fabricate, mark, maintain, recondition, repair, or test packagings that
the persons represents, marks, certifies, or sells for use in
transporting in commerce hazardous materials. Section 5108 directs the
Secretary to impose and collect an annual fee of between $250 and
$5,000 from each person required to prepare and file a registration
statement. Since 1992, RSPA has chosen to require registration only by
those persons under a statutory obligation to do so, and to assess the
minimum registration fee of $250 (plus $50 for processing).
Under the current regulations, the approximately 27,000 persons
that register and pay the fee of $250 generate annually funds in the
amount of $6.8 million. As indicated elsewhere in this preamble, that
$6.8 million is inadequate to meet funding levels necessary to carry
out critical elements ($7.8 million for training grants, and $5 million
for planning grants) of Sec. 5116 of the law at the levels intended by
Congress. The means adopted in this final rule for collecting
sufficient monies to adequately fund the HMEP grants program is
determined to be the best of all evaluated alternatives. This is
particularly the case with regard to the potential impact on small
businesses.
Identification of Potentially Affected Small Entities
Unless alternative definitions have been established by the agency
in consultation with the Small Business Administration (SBA), the
definition of ``small business'' has the same meaning as under the
Small Business Act. Since RSPA has established no such special
definition, we employ the thresholds established by SBA and codified at
13 CFR 121.201.
Expanded Scope of Registration Rule. As noted in the preamble to
this rule and the associated regulatory evaluation, RSPA anticipates an
additional 15,000 to 18,000 persons will be required to register each
year, with all but 500 of those persons being small businesses. Of this
expanded base of registrants, RSPA estimates that potentially as many
as 7,000 dealers of refined petroleum products (residential fuel oil,
diesel fuel, propane, gasoline, etc.) comprise the single greatest
segment of industry engaged in the transportation of hazardous
materials that will now be required to prepare and file a registration
statement and pay the required fee. Essentially all of these newly
affected entities (a substantial number) are thought to meet the
applicable SBA criteria for a small business, thereby subjecting them
to an annual fee of $300 (including a $25 processing fee).
Based on RSPA's assessment of generally available information, we
believe the following is a reasonable generalization of the scope of
operations for some of the smaller of small businesses engaged in the
distribution of petroleum products. For liquid petroleum products, we
considered a theoretical marketer operating three small cargo tank
motor vehicles for an average annual delivery to residences of 2
million gallons of distillate number 2 (home heating oil). For
liquefied gases, we considered a theoretical marketer operating three
small cargo tank motor vehicles for an annual delivery to residences of
400,000 gallons of consumer grade propane.
For the smaller marketer of liquid petroleum products, RSPA notes
that over the five-year period between 1994-1998, the national average
price per gallon by all sellers of distillate number 2 to residences
(excluding tax) ranged from $0.852 to $0.989. (Source: Energy
Information Administration, Annual Energy Review, All Sellers Sales
Prices for Selected Petroleum Products, 1983-1998). With sales of 2
million gallons per year, the business would generate annual revenues
of at least $1.7 million. Given this scenario, the $300 registration
fee represents 0.000176% of sales, which is an amount that should not
have a significant impact on the viability of the business. In fact, it
is more reasonable to expect that rather than absorbing the $300 fee as
overhead, the fuels dealer would pass this cost on to the ultimate
consumer. Of 2 million gallons sold, the $300 fee represents an
additional cost per gallon of $0.00015, or an increased cost to the
consumer of $0.02 on a delivery of 150 gallons of distillate number 2.
It is unlikely that a consumer would choose an alternate source of
energy on the basis of such a price increase.
For the smaller marketer of liquefied gas products, RSPA notes that
over the five-year period between 1994-1998, the national average price
per gallon by all sellers of consumer grade propane (excluding tax)
ranged from $0.766 to $0.886. (Source: Energy Information
Administration, Annual Energy Review, All Sellers Sales Prices for
Selected Petroleum Products, 1983-1998). With sales of 400,000 gallons
per year, the business would generate annual revenues of at least
$306,000. Given this scenario, the $300 registration fee represents
0.001% of sales, an amount that should not have a significant impact on
the viability of the business. In fact, it is more reasonable to expect
that rather than absorbing the $300 fee as overhead, the propane
marketer would pass this cost on to the ultimate consumer. Of 400,000
gallons sold, the $300 fee represents an additional cost per gallon of
$0.00075, or an increased cost to the consumer of $0.11 on a delivery
of 150 gallons of propane. It is unlikely that a consumer would choose
an alternate source of energy on the basis of such a price increase.
Alternate Requirements for Small Businesses
The Regulatory Flexibility Act suggests that it may be possible to
establish exceptions and differing compliance standards for small
business and still meet the objectives of the applicable regulatory
statutes. RSPA believes it has met that goal through the adoption of a
two-tier fee schedule in which a small business must pay an annual fee
of $300 (including a $25 processing fee) while persons that do not meet
SBA criteria for a small business must pay an annual fee of $2,000
(including a $25 processing fee).
Conclusion
For small businesses, the cost of compliance with the requirement
adopted in this final rule is so little that RSPA is confident that it
will not have a significant impact on their ability to continue to
successfully conduct operations related to the transportation of
placarded shipments of hazardous materials. Based on its analysis, RSPA
determined that although the requirement adopted in this final rule
applies to a substantial number of small businesses, its economic
burden is not
[[Page 7309]]
significant, even for the smaller of the universe of affected small
businesses.
E. Unfunded Mandates Reform Act of 1995
This final rule will not impose unfunded mandates under the
Unfunded Mandates Reform Act of 1995. It will not result in costs of
$100 million or more, in the aggregate, to any of the following: State,
local, or Native American tribal governments, or the private sector.
This final rule is the least burdensome alternative that achieves the
objectives of the rule.
F. Paperwork Reduction Act
Under 49 U.S.C. 5108(i), reporting and recordkeeping requirements
pertaining to the registration rule are specifically excepted from the
information management requirements of the Paperwork Reduction Act (44
U.S.C. 3501 et seq.).
G. Impact on Business Processes and Computer Systems
We do not want to impose new requirements that would mandate
business process changes when the resources necessary to implement
those requirements would otherwise be applied to ``Y2K'' or related
computer problems. This final rule does not mandate business process
changes or require modifications to computer systems. Because this rule
does not affect organizations' ability to respond to those problems, we
are not delaying the effectiveness of the requirements.
H. Regulation Identifier Number (RIN)
A regulation identifier number (RIN) is assigned to each regulatory
action listed in the Unified Agenda of Federal Regulations. The
Regulatory Information Service Center publishes the Unified Agenda in
April and October of each year. The RIN number contained in the heading
of this document may be used to cross-reference this action with the
Unified Agenda.
List of Subjects in 49 CFR Part 107
Administrative practice and procedure, Hazardous materials
transportation, Penalties, Reporting and record keeping requirements.
In consideration of the foregoing, 49 CFR part 107 is amended as
follows:
PART 107--HAZARDOUS MATERIALS PROGRAM PROCEDURES
Subpart G--Registration of Persons Who Offer or Transport Hazardous
Materials
1. The authority citation for part 107 continues to read as
follows:
Authority: 49 U.S.C. 5101-5127, 44701; Sec 212-213, Pub.L. 104-
121, 110 Stat. 857; 49 CFR 1.45, 1.53
2. Section 107.601 is revised to read as follows:
Sec. 107.601 Applicability.
(a) The registration and fee requirements of this subpart apply to
any person who offers for transportation, or transports, in foreign,
interstate or intrastate commerce--
(1) A highway route-controlled quantity of a Class 7 (radioactive)
material, as defined in Sec. 173.403 of this chapter;
(2) More than 25 kg (55 pounds) of a Division 1.1,1.2.or 1.3
(explosive) material (see Sec. 173.50 of this chapter) in a motor
vehicle, rail car or freight container;
(3) More than one L (1.06 quarts) per package of a material
extremely toxic by inhalation (i.e., ``material poisonous by
inhalation,'' as defined in Sec. 171.8 of this chapter, that meets the
criteria for ``hazard zone A,'' as specified in Secs. 173.116(a) or
173.133(a) of this chapter);
(4) A shipment of a quantity of hazardous materials in a bulk
packaging (see Sec. 171.8 of this chapter) having a capacity equal to
or greater than 13,248 L (3,500 gallons) for liquids or gases or more
than 13.24 cubic meters (468 cubic feet) for solids;
(5) A shipment in other than a bulk packaging of 2,268 kg (5,000
pounds) gross weight or more of one class of hazardous materials for
which placarding of a vehicle, rail car, or freight container is
required for that class, under the provisions of subpart F of part 172
of this chapter; or
(6) Except as provided in paragraph (b) of this section, a quantity
of hazardous material that requires placarding, under provisions of
subpart F of part 172 of this chapter.
(b) Paragraph (a)(6) of this section does not apply to those
activities of a farmer, as defined in Sec. 171.8 of this chapter, that
are in direct support of the farmer's farming operations.
(c) In this subpart, the term ``shipment'' means the offering or
loading of hazardous material at one loading facility using one
transport vehicle, or the transport of that transport vehicle.
3. In Sec. 107.608, paragraphs (a), (b), and (d) are revised to
read as follows:
Sec. 107.608 General registration requirements.
(a) Except as provided in Sec. 107.616(d), each person subject to
this subpart must submit a complete and accurate registration statement
on DOT Form F 5800.2 not later than June 30 for each registration year,
or in time to comply with paragraph (b) of this section, whichever is
later. Each registration year begins on July 1 and ends on June 30 of
the following year.
(b) No person required to file a registration statement may
transport a hazardous material or cause a hazardous material to be
transported or shipped, unless such person has on file, in accordance
with Sec. 107.620, a current Certificate of Registration in accordance
with the requirements of this subpart.
* * * * *
(d) Copies of DOT Form F 5800.2 and instructions for its completion
may be obtained from the Hazardous Materials Registration Program, DHM-
60, U.S. Department of Transportation, Washington, DC 20590-0001, by
calling 617-494-2545 or 202-366-4109, or via the Internet at ``http://
hazmat.dot.gov''.
* * * * *
4. Section 107.612 is revised to read as follows:
Sec. 107.612 Amount of fee.
(a) Registration year 1999-2000 and earlier. For all registration
years through 1999-2000, each person subject to the requirements of
Sec. 107.601(a)(1)-(5) of this subpart must pay an annual fee of $300
(which includes a $50 processing fee).
(b) Registration year 2000-2001 and following. For each
registration year beginning with 2000-2001, each person subject to the
requirements of this subpart must pay an annual fee as follows:
(1) Small business. Each person that qualifies as a small business
under criteria specified in 13 CFR part 121 applicable to the standard
industrial classification (SIC) code that describes that person's
primary commercial activity must pay an annual fee of $275 and the
processing fee required by paragraph (b)(3) of this section.
(2) Other than a small business. Each person that does not meet
criteria specified in paragraph (b)(1) of this section must pay an
annual fee of $1,975 and the processing fee required by paragraph
(b)(3) of this section.
(3) Processing fee. The processing fee is $25 for each registration
statement filed. A single statement may be filed for
[[Page 7310]]
one, two, or three registration years as provided in Sec. 107.616(c).
5. In Sec. 107.616, paragraphs (c) and (d)(2) are revised to read
as follows:
Sec. 107.616 Payment procedures.
* * * * *
(c) Payment must correspond to the total fees properly calculated
in the ``Amount Due'' block of the DOT form F 5800.2. A person may
elect to register and pay the required fees for up to three
registration years by filing one complete and accurate registration
statement.
(d) * * *
(2) Pay a registration and processing fee of $350 (including a $50
expedited handling fee). For registration years 2000-2001 and
following, persons who do not meet the criteria for a small business,
as specified in Sec. 107.612(b)(1), must enclose an additional payment
of $1,700 with the expedited follow-up material, for a total of $2,050
(including a $50 expedited handling fee); and
* * * * *
Issued in Washington, D.C. on February 8, 2000, under authority
delegated in 49 CFR part 1.
Kelley S. Coyner,
Administrator.
[FR Doc. 00-3300 Filed 2-11-00; 8:45 am]
BILLING CODE 4910-60-P
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