PHMSA Response Letter

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Office of the Chief Counsel

Mr. Kevin D. Sagis
President
Paragon Astronautics
543 South York Street
Denver, Colorado 80209

Dear Mr. Sagis:

This responds to your letter, dated June 10, 2000, requesting clarification of the applicability of the Hazardous Materials Regulations (HMR; 49 CFR Parts 171-180) to a non-profit corporation that manufactures and transports various rocket propulsion elements and subsystems for use in education and youth awareness activities. You state that these rocket propulsion elements and subsystems have been developed for the corporation's "own use" and are not being transported in commerce because they are not "hazardous cargo transported via motor carrier an a commercial trade activity." You also refer us to a July 26, 1994 letter that states that the HMR do not apply to integral parts of a motor vehicle, such as fuel systems and equipment.

Federal hazardous materials transportation law, codified at 49 U.S.C. 5101 et seq., defines "commerce" to mean "trade or transportation in the jurisdiction of the United States between a place in a state or a place outside of the state; or that affects trade or transportation between a place in a state and a place outside of the state." 49 U.S.C. 5102(1). Historically, we have considered commerce to include all private -- that is, non-governmental -- transportation of a hazardous material except for transportation in a personal vehicle for the personal use of an individual.

A corporation is a legal entity, separate from its shareholders or employees. In general, we regard the activities of a corporation to be its "business" regardless of whether the corporation charges fees, either from persons inside or outside the corporation, to finance its activities.

Thus, the fact that your corporation is established as a non-profit entity is not relevant to the determination of whether it performs activities "in commerce." A non-profit corporation may engage in commercial activities to the same extent as a for-profit company. For example, if your corporation offers hazardous materials for transportation to a commercial carrier, then the corporation is offering hazardous materials for transportation "in commerce" and is subject to all applicable requirements of the HMR. Further, if your corporation charges fees to finance its youth awareness programs, then the corporation is performing activities in commerce, and any transportation of hazardous materials related to those activities, then the corporation is performing activities in commerce, and any transportation of hazardous materials related to those activities is subject to the HMR. In addition, if your corporation employs paid staff to conduct any of its activities, then the corporation is performing activities in commerce, and any transportation of hazardous materials related to those activities is subject to the HMR.

The July 26, 1994 letter you cite is not relevant to your situation. Your rocket propulsion elements and subsystems are being transported as cargo by,or on behalf of, the corporation. A rocket is not a transportation vehicle until it has been launched. Thus, rocket propulsion elements and subsystems are not integral parts of the transportation vehicle prior to launch of the rocket.

For these reasons, it is the opinion of this office that the HMR apply to your corporation's activities as an offeror or transporter of hazardous materials.

I hope this information is helpful. If you have further questions, please do not hesitate to contact this office.

Sincerely,

Edward H. Bonekemper, III
Assistant Chief Counsel
Hazardous Materials Safety and
Research and Technology Law