Exemption, Approval, Registration and Reporting Procedures; Miscellaneous Provisions

Federal RegisterMay 9, 1996

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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Parts 107, 171, 173 and 178

[Docket No. HM-207C, Amdt. Nos. 107-38, 171-141, 173-249, and 178-113]

RIN 2137-AC63

Exemption, Approval, Registration and Reporting Procedures;

Miscellaneous Provisions

AGENCY: Research and Special Programs Administration (RSPA), DOT.

ACTION: Final rule.

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SUMMARY: In this final rule, RSPA revises procedures for applying for

exemptions and establishes procedures for applying for approvals, and

registering and filing reports with RSPA. In addition, RSPA amends

certain provisions, mostly procedural, in the Hazardous Materials

Regulations. This rulemaking action is intended to expedite processing

of applications and to promote clarity and program consistency. It is

part of the President's Regulatory Reinvention Initiative to revise all

agency regulations that are in need of reform.

DATES: Effective date: The effective date of these amendments is

October 1, 1996.

Compliance date: Voluntary compliance with the regulations, as

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amended herein, is authorized as of July 12, 1996.

FOR FURTHER INFORMATION CONTACT: Kathleen Stokes Molinar, Office of the

Chief Counsel, (202) 366-4400, or Diane LaValle, Office of Hazardous

Materials Standards, (800) 467-4922, RSPA, Department of

Transportation, 400 7th Street, SW, Washington, DC 20590-0001.

SUPPLEMENTARY INFORMATION:

I. Background

The Federal hazardous material transportation law (Federal hazmat

law; 49 U.S.C. 5101-5127) directs the Secretary of Transportation to

prescribe regulations for the safe transportation of hazardous

materials in commerce. RSPA is the agency within the Department of

Transportation primarily responsible for implementing the Federal

hazmat law. RSPA does so through the Hazardous Materials Regulations

(HMR; 49 CFR Parts 171-180). Under 49 U.S.C. 5117(a), RSPA is

authorized to issue an exemption from specific requirements of the

Federal hazmat law or the HMR if an applicant demonstrates that public

safety will not be compromised. The procedures governing application

for an exemption and the manner in which the application is processed

are found at 49 CFR part 107, subpart B.

In numerous instances, the HMR require approval by, or registration

with, RSPA before a person may engage in particular hazmat

transportation-related activities in areas such as manufacturing and

certifying hazardous material packagings, offering hazardous materials

for transportation, and transporting hazardous materials. The HMR also

impose reporting requirements on persons engaging in certain hazardous

materials transportation activities. A significant portion of the

regulated community is subject to one or more of these requirements.

Procedures to be followed in seeking an approval from RSPA, registering

with RSPA, or reporting to RSPA are often found in the HMR provision

establishing the particular requirement, but in many cases these

procedures are absent or incomplete.

This final rule revises procedures for exemptions in subpart B of

part 107 and establishes procedures for approvals, registrations and

reports in subpart H of part 107. Establishment of formal procedures

for approval, registration, and reporting activities provides uniform

and consistent guidance to all those who may be subject to these

requirements in the HMR, and fosters consistency in RSPA's handling of

these matters. Additionally, this final rule minimizes RSPA's need to

seek additional information from applicants in order to complete the

processing of these matters.

The procedures adopted in this final rule for approvals,

registrations, and reports are limited in their application. Other

Federal agencies (e.g., the United States Coast Guard (USCG) and the

Federal Railroad Administration (FRA)) issue approvals or receive

registrations or reports under the HMR. For example, under

Sec. 176.415, persons are required to obtain approvals from the USCG

before loading or unloading certain explosives onto or from vessels.

The procedures established in this rule apply only with respect to

those matters under the HMR that are handled by RSPA. Those matters for

which the HMR assign responsibility to other entities will continue to

be handled according to the procedures of those entities.

II. Regulatory Reinvention Initiative

In a March 4, 1995 memorandum, the President directed Federal

agencies to review all agency regulations and eliminate or revise those

that are outdated or in need of reform. On April 4, 1995 (60 FR 17049),

and July 28, 1995 (60 FR 38888), RSPA issued notices requesting

comments on regulatory reform and announcing several public meetings

nationwide to identify obsolete and burdensome regulations that can be

eliminated from the HMR and techniques to improve RSPA's customer

services. Some of the commenters responding to those notices and

participating in the public meetings identified the exemption and

approval procedures as areas in need of clarification and reform. This

rule is consistent with the goals of the President to clarify and

revise Federal agency regulations to relieve unnecessary regulatory

burdens and to clarify regulatory requirements.

III. Summary of Comments and Regulatory Changes

On September 14, 1995, RSPA published a notice of proposed

rulemaking (NPRM) under Docket HM-207C (60 FR 47723). In the NPRM, RSPA

proposed to revise the exemption procedures of subpart B of part 107

and adopt new procedures in subpart H of part 107 for approvals,

registration, and reporting information to RSPA.

RSPA received 16 comments to the NPRM from offerors and carriers of

hazardous materials, chemical and packaging manufacturers, consulting

firms, and the United States Department of Energy. Commenters were

generally supportive of RSPA's effort to revise and clarify the

procedures for exemptions and establish procedures for approvals,

registration, and reporting. The comments and RSPA's response to them

are discussed below.

Part 107

Subpart A--General Provisions

Sec. 107.3 Definitions.

Commenters requested clarification of the difference between

approvals and exemptions and, further, requested that RSPA explain the

difference between an approval and a competent authority approval. An

approval is a written authorization to take some action delineated in a

particular regulation (e.g., Sec. 173.21) in the HMR and is

specifically authorized in that regulation. Approvals generally are

limited in scope, such as in Sec. 178.604(b)(2) that authorizes an

applicant to apply for an approval to deviate from the number of

samples used in conducting a leakproofness test. Because issuance of

all approvals is specifically recognized in the HMR and almost all

approval documents can be made available for public review,

applications are not published in the Federal Register.

Sections 171.11 and 171.12 authorize compliance with international

standards (i.e., the International Civil Aviation Organization's

Technical Instructions for the Safe Transport of Dangerous Goods by Air

(ICAO Technical Instructions) and the International Maritime Dangerous

Goods Code (IMDG Code)) as an alternative to compliance with certain

provisions of the HMR. For certain types of activities, both the ICAO

Technical Instructions and the IMDG Code have provisions which require

that the activity be approved by the competent authority of the country

of origin. The Associate Administrator for Hazardous Materials Safety

(Associate Administrator), RSPA, is the competent authority for the

United States of America (see the definition of ``competent authority''

in 49 CFR Sec. 171.8).

A competent authority approval means an approval by the competent

authority which is required under the provisions of international

regulations, such as the ICAO Technical Instructions or the IMDG Code.

To the extent that it satisfies the requirement of the international

regulations, any of the following may serve as a competent authority

approval: a specific regulation of subchapter A or C, an exemption or

approval issued under the provisions of subchapter A or C, or a

separate document issued to one or more persons by the Associate

Administrator. In other words, if an activity is authorized for

international transport under the HMR,

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then the HMR serves as the competent authority approval. An exemption

or approval may serve as a competent authority approval provided the

exemption or approval does not prohibit any international transport. To

facilitate international commerce, for a function that relates only to

a requirement of an international standard, and not to the HMR, the

Associate Administrator may issue a competent authority approval as a

separate document that is not related to either an approval or an

exemption under the HMR.

An exemption allows an applicant to perform a function which is not

authorized under the HMR and which, in fact, would be a violation of

the HMR in the absence of the exemption. An exemption may involve an

authorization to engage in a function for which there is no provision

in the regulations. A ``manufacturing exemption'' is an exemption

issued to a manufacturer of packagings who does not offer for

transportation or transport hazardous materials in packagings subject

to the exemption.

The process of applying for an exemption, as provided by the

Federal hazardous materials transportation law (49 USC 5117), requires

that the applicant provide documentation demonstrating that the

proposed process or activity will meet a level of safety at least

equivalent to that provided by the HMR or, if the regulations do not

contain a specified level of safety, will be consistent with the public

interest. Notice of most exemption applications is published in the

Federal Register for public comment prior to their being granted or

denied.

For clarity, RSPA is adopting definitions in Sec. 107.3 for

``approval,'' ``competent authority approval,'' ``exemption,'' and

``manufacturing exemption'' to differentiate between approvals and

exemptions and clarify the types of exemptions and approvals that are

issued.

One commenter requested that the proposed term ``accident'' be

replaced with ``incident'' to avoid confusion. The commenter stated

that the word ``incident'' is currently used in the HMR and has the

same connotation as the proposed definition of accident. The commenter

also stated that other modal agencies within DOT use the term

``accident'' to mean a collision between moving vehicles (e.g., the

FHWA expressly defines ``accident'' as a motor vehicle collision). RSPA

agrees and is adopting the term ``incident'' to refer to an event

resulting in the unintended or unanticipated release of hazardous

material or an event which meets incident reporting requirements in

171.15 or 171.16.

Another commenter suggested that RSPA define the term

``registration'' to describe what the term includes, rather than what

it does not include. The commenter recommended that the wording ``

`registration' does not include registration under Subpart F or G of

this part'' be removed. RSPA agrees that providing examples of the

types of registration covered under this definition is beneficial and

is adding several examples. RSPA has not granted the commenter's

request to delete the language referencing specific registration

requirements that are not included in the definition. RSPA believes

that this exclusionary language provides as much guidance as a

description of what types of ``registration'' are included in the

definition.

No comments were received concerning other proposed definitions,

and those definitions are adopted as proposed.

Subpart B--Exemptions

Sec. 107.101 Purpose and scope. One commenter requested that all

exemptions be described as ``competent authority approvals'' to provide

for greater acceptance outside the United States since competent

authority approvals are accepted internationally. An exemption concerns

a variance from the HMR and not the international regulations. As

previously indicated, an exemption may be used as competent authority

approval to the extent that it is suitable for international transport

and satisfies the approval requirement of the applicable international

regulation. However, a number of exemptions, such as those applicable

to transportation by motor vehicle only, are not applicable under

international regulations. Therefore, RSPA is not adopting the

commenter's suggestion.

Another commenter suggested that RSPA adopt only two procedures:

one for approvals and exemptions, and the other for registrations and

reports. The commenter contended that the requirements, procedures, and

justifications related to exemptions and approvals are sufficiently

different that users of the regulations are better served by RSPA

providing separate, self-contained provisions for exemptions and

approvals. This commenter added that since applicants are not always

sure whether to submit an application requesting an exemption, approval

or registration, RSPA should be responsible for determining the

appropriate action since the data required for each is the same. RSPA

is not adopting the commenter's suggestion that RSPA determine the

appropriate action for submitted applications because it is the

applicant's responsibility to make this determination and the

requirements are different. By defining the terms ``exemption,''

``approval,'' and ``registration,'' as well as clarifying the

procedures for obtaining each, RSPA is assisting applicants in

determining the appropriate action.

One commenter stated that the exemption procedures do not provide

for carrier exemptions. The commenter requested that more general

procedures be adopted for carrier exemptions because the application

information differs from that required for shippers and packaging

manufacturers. For consistency, RSPA utilizes the same exemption

application procedure for all applicants (e.g., packaging

manufacturers, shippers, and carriers). In this final rule, RSPA is

clarifying the types of information required of an exemption applicant

(see preamble discussion under Sec. 107.105). Additionally, RSPA is

including language in the rule under the ``emergency processing''

provisions of Sec. 107.117 which should assist carriers by directing an

applicant to seek an emergency exemption through the modal office for

the proposed initial mode of transportation.

One commenter strongly recommended that RSPA incorporate more

exemptions into the HMR to allow industry more flexibility and reduce

the number of exemptions. The commenter requested that RSPA explain the

standards which it utilizes to determine which exemptions are

incorporated into the HMR. The commenter stated that ``making this

information [the standards which RSPA utilizes] public would provide a

clearer picture of the need for a more flexible regulatory scheme and

give a benchmark on which to assess efforts to incorporate existing

exemptions.''

Although RSPA has no formal set of standards for selecting

exemptions to be converted to regulations of general applicability,

RSPA periodically reviews existing exemptions to prioritize them as to

their suitability for conversion to regulations. Whether a specific

exemption is a candidate for regulatory action depends on any number of

factors, such as the expressed interest of the exemption holder or

others, the suitability of the exemption for conversion, rulemaking

activity in related areas, agency priorities, and whether the process,

packaging or activity authorized by the exemption has provided a

clearly demonstrated

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level of safety equivalent to that which is provided by the HMR.

Another commenter recommended that RSPA automatically incorporate

exemptions into the HMR after the second renewal of the exemption. RSPA

agrees that if an exemption of general applicability demonstrates a

level of safety equivalent to the HMR, the provisions of the exemption

ultimately may be suitable for incorporation into the HMR. However,

RSPA is not adopting the commenter's recommendation. As previously

discussed, a number of factors influence whether an exemption is

proposed for conversion to a regulation.

Sec. 107.105 Application for exemption. Commenters supported

RSPA's proposal to require that applicants submit exemption

applications in duplicate, rather than triplicate. Commenters stated

that this amendment would reduce the burden on applicants, and RSPA is

adopting the requirement as proposed.

One commenter requested that applicants be required to submit the

application information in numerical order consistent with the

application procedures so that RSPA can quickly determine if any

information is missing. While RSPA encourages applicants to follow the

format utilized in the rule when submitting application materials, RSPA

believes that its personnel can expeditiously determine the

completeness of an application. Further, RSPA does not want to place

another requirement on applicants; therefore, RSPA recommends but is

not mandating use of this commenter's suggestion.

Another commenter suggested that proposed Sec. 107.105 (a)(2) and

(a)(4) be combined. Proposed paragraph (a)(2) requires that an

applicant who is not an individual (i.e., the applicant is a

corporation, partnership, or the like) designate an agent pursuant to

the laws of the United States. Proposed paragraph (a)(4), however,

requires a foreign applicant to designate an agent within the United

States. This paragraph applies to both individuals and legal entities.

To avoid confusion between an agent for a U.S. applicant that is not an

individual and an agent for a foreign applicant, RSPA is keeping the

two requirements as separate paragraphs (a)(2) and (a)(3),

respectively, in this final rule.

One commenter suggested that RSPA require applicants to provide a

Material Safety Data Sheet (MSDS) or emergency response information for

hazardous materials in an application to confirm that this information

is consistent with the Emergency Response Guidebook. RSPA agrees that

an MSDS may contain useful information, such as hazard properties of a

commodity, for inclusion in an application and this information may be

needed to justify an application. RSPA believes that an MSDS is not

necessary in most instances and did not propose to require MSDS' or

emergency response information with exemption applications. Therefore,

RSPA is not adopting the commenter's suggestion.

Several commenters expressed concern regarding what they perceive

as the increased quantity and detail of information required to be

included in an exemption application. Some commenters stated that

supplying this information would place an undue burden on applicants

and make it more difficult or even impossible to obtain an exemption or

approval. Without providing any supporting statistics or financial

data, one commenter stated that trying to meet some of these

requirements could substantially increase the paperwork burdens for

both the applicant and RSPA, and the U.S. Department of Energy (DOE)

stated that the new requirements would impose severe economic impacts

on applicants who use contractors because the contractors would have to

perform extensive analyses and compilation of information to satisfy

the new requirements.

RSPA believes that the administrative burden on applicants remains

unchanged under proposed Sec. 107.105 and under the provisions adopted

in this final rule. The information and analyses set forth in this

final rule for exemption applications are essentially what is required

under the Federal hazmat law and what RSPA historically has requested,

often during the processing of the exemption. By clearly specifying

this information in the regulations, RSPA hopes to minimize delays in

application processing and requests for extra submissions from

applicants occasioned by RSPA's having to obtain additional information

from exemption applicants at a later time. Additionally, the commenters

who raised these ``increased burden'' arguments have not submitted

supporting documentation demonstrating that exemption applicants'

paperwork or economic burdens will be increased by this regulatory

change. Finally, RSPA notes that an applicant is not required to submit

information which is inapplicable to the exemption request or which is

impracticable for the applicant to obtain. Therefore, RSPA does not

believe that paperwork and economic burdens upon an exemption applicant

will increase, and is adopting the regulatory change essentially as

proposed.

Several commenters requested that RSPA clarify certain information

required in the proposed application procedures. Specifically, one

commenter recommended that RSPA consolidate and clarify the information

required in proposed paragraphs (a)(14) through (a)(18). Another

commenter requested clarification of what is meant in proposed

Sec. 107.105(a)(16) by ``any increased risk to safety or property that

may result if the exemption is granted.'' The commenter stated that

RSPA needs to specify the extent of analysis an applicant is required

to provide in the application. Another commenter requested that RSPA

add language in proposed paragraphs (a)(16) and (a)(18) that applicants

provide risks that ``are known or could reasonably have been expected

to be known'' to clarify that a ``full-blown'' risk assessment is not

intended by RSPA. Another commenter added that it is unclear whether an

applicant is required to include the information in proposed paragraph

(a)(18). The commenter requested that RSPA add some examples to clarify

when the provision is required.

The Federal hazmat law requires each person seeking an exemption to

provide a safety analysis that justifies the exemption (49 U.S.C.

5117(b)). The information required under Sec. 107.105 is intended to

elicit the information and analyses necessary to demonstrate that the

requested exemption provides an equivalent level of safety to that

afforded by the HMR or, if the HMR do not establish a level of safety,

is consistent with the public interest and will adequately protect

against risk to life and property.

The safety analyses required to support exemptions can vary

greatly. The analyses may range from simple comparative analyses relied

upon by an applicant seeking an exemption which will permit minor

variations in packaging, to complex risk analyses for complex packaging

systems involving new technologies or materials of construction. The

risks presented by new technologies and materials are often more

difficult to evaluate, and may require a more extensive safety

analysis.

Successful shipping experience may be useful to support a safety

analysis, but does not necessarily demonstrate that a particular

package or transport practice provides a level of safety equivalent to

that authorized. Successful shipping experience may only indicate that

a package was not subjected to a drop, impact, or fire during

transportation. A safety analysis

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of a package or transport practice that includes exposure to normal and

accident environments is a more valid indication of the level of safety

provided by the package or transport practice, than simply looking to

whether a history of incidents exists. Therefore, RSPA is requiring the

applicant to describe all relevant shipping and incident experience of

which the applicant is aware that relates to the application. The

applicant also must specify safety control measures (e.g., use of a

private carrier or additional packaging) necessary to demonstrate that

the proposed package or transport practice meets a level of safety

equivalent to that afforded by the HMR and is in the public interest.

In response to commenters' requests, RSPA is clarifying the information

specified in proposed paragraphs (a)(16) through (a)(18).

Several commenters stated that certain requested information may be

unavailable to the applicant. One commenter stated that some of the

requested information, such as service life and performance of an

alternative packaging, constitutes reasons for the exemption--to find

these answers by authorizing controlled shipments under an exemption.

Commenters stated that the proposed changes facilitate the ability of

the Associate Administrator to reject an application not deemed

complete. One commenter stated that, if an applicant cannot identify a

potential failure mode and its possibility of an occurrence, the

application would be deemed incomplete and could be denied.

The proposed language of Sec. 107.105 was intended to expedite

processing of exemption applications for the benefit of persons seeking

exemptions. RSPA acknowledges that not all information about a proposed

alternative packaging or activity is available at the time an exemption

is requested. However, an exemption is granted only when an applicant

has provided sufficient information to demonstrate that the requested

variation from the regulatory requirement will afford a level of safety

equivalent to that which is provided by the HMR. This demonstration

must include information relevant to the expected service, performance

and limitations of the packaging.

Commenters also stated that certain information may not be

applicable to some exemptions. For example, some commenters expressed

concern that the requirement to provide detailed commodity information

(proposed Sec. 107.105(a)(12)) may not be necessary or appropriate for

an exemption that authorizes manufacture of a packaging. The commenters

stated that lack of this information could result in the rejection of

the application. Commenters requested that Sec. 107.105 be modified to

indicate that such detailed information must be included in an

application only when appropriate based on the nature of the exemption

being sought. In response to commenters' concerns, RSPA is requiring

the applicant to provide information in the application only when it is

appropriate to demonstrate that the proposal meets the statutory and

regulatory standards. Therefore, this final rule indicates that an

applicant need only submit information that is relevant to an

application.

Other commenters expressed opposition to RSPA's proposal to extend

the recommended time period for filing an exemption application from

120 days to 180 days before the requested effective date of the

exemption. The commenters indicated that this extended deadline

appeared to be contrary to the stated purpose of the rule--reduction of

the processing time of exemption applications and renewals. Another

commenter requested that RSPA also issue or deny an exemption in the

same time period when a properly prepared application is submitted.

RSPA's proposal was intended to parallel the Federal hazmat law

requirement, 49 U.S.C. 5117, that the Secretary of Transportation issue

or renew an exemption for which an application was filed, or deny such

issuance or renewal, within 180 days after the first day of the month

following the date of the filing of such application. RSPA understands

that many parties requesting exemptions cannot anticipate their needs

beyond four months. Therefore, RSPA is addressing the needs of its

customers by retaining the 120-day application filing time. However,

RSPA notes that 120 days is often not enough time for processing an

incomplete or very complicated exemption application, and encourages

parties to file an application for an exemption as early as possible.

Another commenter objected to the proposal to limit the use of

manufacturing exemptions to specific plants or locations. The commenter

stated that many shippers are also manufacturers and use more than one

vendor to supply a packaging. The commenter requested the flexibility

to use alternative suppliers of its packaging. RSPA did not propose to

limit the use of manufacturing exemptions to particular plants, but to

require applicants to identify the location of each facility where an

exemption would be used. It was RSPA's intention to limit the

application and definition of a manufacturing exemption to a

manufacturer of packagings who does not offer for transportation or

transport hazardous materials in the exemption packagings it produces

(i.e., a business entity engaged in the manufacturing and marketing

packagings for use by other entities). A person who manufacturers,

marks and sells packagings under an exemption may do so at dozens of

facilities without restriction; however, RSPA is retaining the

requirement that applicants for manufacturing exemptions identify the

location of each facility where manufacturing under an exemption will

occur. The requirement does not apply to shippers who produce

packagings for their own use.

Based on the foregoing, RSPA is revising the exemption application

procedures essentially as proposed with modifications as described

above, reformatting of the section and revising of certain provisions

to make them less burdensome.

Sec. 107.107 Application for party status. This section is adopted

essentially as proposed. Paragraph (a)(4) is revised to delete an

information requirement pertaining to consent to U.S. jurisdiction.

Paragraph (c) is revised to reference Sec. 107.113 (e) and (f) for the

manner by which the Associate Administrator grants or denies

applications.

Sec. 107.109 Application for renewal. This section is adopted

essentially as proposed. One commenter requested that one renewal

application suffice for all parties to an exemption. A single renewal

application would not provide all incident experience encountered by

all parties to an exemption. Further, where there are numerous parties

to an exemption and each attained party status on a different date,

issuance of a blanket renewal for all parties becomes unworkable from a

timing perspective. For example, persons who attained party status

close to the date for the blanket renewal may find themselves

immediately faced with renewal. RSPA, therefore, is not adopting this

suggestion.

One commenter encouraged RSPA to extend the exemption renewal

process from two years to five years to alleviate some of the

administrative burdens on RSPA and the regulated industry. The

commenter stated that RSPA could determine whether an exemption should

continue based on any incidents that occur during the life of the

exemption. Another commenter stated that an exemption period of three

years may be more appropriate for the information required in the

revised application procedures. Another

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commenter suggested that RSPA seek a legislative change that allows

exemptions to remain in effect until such time as the Secretary finds

that continuation is no longer in the public interest or the exemption

holder withdraws the exemption. The Federal hazardous materials

transportation law (49 U.S.C. 5117) currently provides that an

exemption can be issued for no more than a two-year maximum period of

time; therefore, RSPA lacks statutory authority to extend the two-year

period. However, on March 27, 1996, a legislative proposal was sent to

Congress which included a request that the two-year exemption

limitation be extended to four years.

Sec. 107.111 Withdrawal. One commenter requested that RSPA clarify

that all documents deemed confidential by the Associate Administrator

in accordance with Sec. 107.5 that are related to an active or inactive

application will remain confidential. RSPA accepts the commenter's

suggestion and is adding a statement in this section clarifying this

point and further clarifying that the time period for which

confidential treatment will be afforded comports with the guidelines of

the Freedom of Information Act (5 U.S.C. 552(b)). Specifically,

submissions which fall within the definition of ``trade secrets'' or

``commercial or financial information obtained from a person and

privileged or confidential'' will remain confidential indefinitely,

unless the party requesting the confidential treatment notifies the

Associate Administrator that the confidential treatment is no longer

desired.

Sec. 107.113 Application processing. Commenters raised concerns

about the proposed language in paragraph (a) with respect to the time

frame in which a determination is made concerning whether an

application is complete. The commenters requested that RSPA remove the

proposed wording ``usually is made'' and retain the current wording

``will be made.'' One commenter stated that the requirement is

reasonable since it is only a determination of the application's

completeness and not a decision on its merits. RSPA agrees with the

commenter and is retaining the current wording in paragraph (a) as

requested.

Seven of the 15 commenters were strongly opposed to RSPA's proposal

to consider the existence of pending or completed enforcement actions

as a factor in determining whether an exemption applicant demonstrates

fitness to conduct an activity that would be authorized under the

exemption. One commenter stated that RSPA's technical experts should be

able to determine the safety of the subject of a proposed exemption

request without reference to enforcement actions on unrelated subjects.

Another commenter stated that, historically, RSPA could deny an

exemption application on any basis. The commenter stated that the

proposed language could create an unnecessarily adversarial situation.

One commenter stated that it objected to consideration of pending or

completed enforcement actions as ``prima facie evidence of an

applicant's capability or integrity.'' The commenter stated that, in

cases where assessed penalties were low, respondents in enforcement

actions may have adopted a ``no contest'' posture in an enforcement

action and paid a penalty, rather than expend the time and money

necessary to litigate an action. If enforcement history is used against

these respondents, the commenter said that a business decision to not

contest the action would have more severe consequences than successful

resistance to an enforcement action by a more litigious respondent. The

commenter also stated that denial of an exemption or approval because

of enforcement history would punish the violator twice for a violation.

The commenter added that Congress, in developing the hazardous

materials transportation legislation, had considered and rejected

adoption of a licensing concept because existing enforcement powers are

sufficiently strong to address violations, without denying authority to

operate under an exemption or approval. The commenter concluded that

the ``enforcement history'' provision should be very narrowly tailored:

only prior violations which indicate flagrant disregard for HMR

compliance should be considered. Another commenter suggested that only

enforcement actions of a ``significant nature'' be considered evidence

of insufficient competence or integrity.

In general, RSPA believes that consideration of completed

enforcement actions and certain pending enforcement actions as evidence

of an applicant's capability and integrity is a legitimate means of

protecting the public. It is not punishment but recognition of relevant

information. Enforcement actions may be indicative of an applicant's

ability or willingness to comply with the applicable regulations.

Because the Associate Administrator is considering whether to authorize

compliance with specific alternatives to the HMR, the likelihood of an

applicant's compliance with those alternatives is relevant to public

safety.

One commenter suggested that RSPA revise paragraph (a)(5) to read

``The application may be denied if the shipping and accident experience

supplied by the applicant in accordance with Sec. 107.105(a) which

directly relates to the exemption being sought demonstrates that

approval of the application poses a potential threat to life or

property.'' Limiting consideration to only an applicant's shipping and

accident experience which directly relates to the exemption sought

fails to protect the public from applicants with poor compliance

histories who seek exemptions to authorize new hazardous materials

transportation activities.

One commenter stated that the rule is unclear as to whether

violations that qualify for the ticketing program are considered

``enforcement actions'' under the proposed rule. The commenter

recommended that RSPA not consider ticketed violations. RSPA will

consider ticketed violations as part of an applicant's compliance

history, using the criteria specified in Sec. 107.331 to assess the

weight to be given to the violation.

DOE requested clarification of the provision concerning

consideration of past violations in determining an applicant's

capability and integrity as it applies to government entities that use

contractors. DOE also asked RSPA to clarify the terms ``pending'' and

``complete'' as used in the proposed regulation and the type of

activity that warrants a determination of ``lack of integrity.''

For purposes of regulatory compliance, RSPA looks to the entity

whose act or omission constitutes a violation of the HMR. In response

to DOE's question regarding the status of an enforcement action as

either ``pending'' or ``complete,'' an enforcement case historically

has been initiated by issuance of a Notice of Probable Violation

(NOPV). However, RSPA recently established a pilot ``ticketing''

program permitting initiation of an enforcement case by issuance of a

ticket. Thus, a case is ``pending'' from the date of issuance of either

the NOPV or the ticket until a final order has been issued and the time

for appeal has expired. If the order has been appealed in a timely

manner, the case is ``pending'' until the RSPA Administrator

(Administrator) issues an Action on Appeal. When an order has become

final or when an order was appealed and the Administrator has issued an

Action on Appeal, the enforcement action is considered to be

``complete.''

RSPA is adopting the proposed rule with several modifications. In

making a determination to grant or deny a request for an exemption,

RSPA will consider information submitted in the

[[Page 21090]]

application package, compliance history of the applicant, and other

information available to the Associate Administrator.

Another commenter objected to the proposed language providing that

an applicant who failed to respond within 30 days to a request for

additional information would have his or her application deemed

incomplete and denied. The commenter stated that, where reasonable and

appropriate, an extension of time should be granted. RSPA understands

the commenter's concern. Currently, if an applicant fails to respond to

a request for additional information for good cause, RSPA grants a 30-

day extension. To clarify this point, RSPA is adding a provision in

this section and Sec. 107.709 (approval application processing) that

allows an applicant to submit a written request for a 30-day extension.

Finally, commenters stated that, while they favored initiating a

rulemaking in addition to issuing an exemption, they did not agree with

initiating a rulemaking in lieu of issuing an exemption. The commenters

stated that the latter penalized an applicant because rulemaking

usually has taken longer than processing of an exemption request. One

of the commenters noted that, in its experience, RSPA staff faced with

this situation would issue an exemption to the applicant, and

concurrently initiate a rulemaking action, which could lead ultimately

to issuance of a rule of general applicability.

RSPA has seldom issued a rulemaking in lieu of processing an

exemption application, and RSPA does not intend to change that policy.

However, RSPA believes that if the subject of an exemption application

is so broad and of such general applicability that it should result in

a rulemaking action, going forward with issuance of the exemption

during the pendency of the rulemaking process may have the effect of

prejudging the rulemaking. A large number of applications for similar

exemptions or ``party to'' status may also adversely impact RSPA's

programs. For these reasons, the Associate Administrator may either

process the exemption application, use the application as a basis for

rulemaking, or do both. When an applicant meets all other regulatory

requirements and demonstrates a compelling necessity for an exemption,

the Associate Administrator may issue an exemption.

Sec. 107.115 Priority processing. Some commenters supported RSPA's

proposal to establish a new priority processing category for

applications that do not qualify for emergency processing but merit

more expeditious consideration than routine processing. One commenter

stated that overall processing time should be reduced. However, other

commenters expressed concern that the processing time of routine and

priority exemption applications would be the same if each must undergo

the same review process as proposed. Some commenters opposed a priority

processing category because it would delay the preparation and

processing of applications for exemptions as each applicant tried to

demonstrate significant economic loss and RSPA evaluated each

application.

One commenter requested that RSPA provide an indication of the time

in which RSPA would respond to a priority exemption application.

Another commenter requested that RSPA provide the Associate

Administrator the flexibility to issue temporary exemptions to

applicants who qualify for priority processing while the application is

being processed to minimize financial burdens on the applicant.

Commenters stated that cases that have the potential for severe

economic harm are already handled by emergency processing.

Another commenter requested that RSPA clarify why current emergency

processing should be replaced by two separate processing categories

that appear to be more complex. The commenter noted that, in the NPRM,

priority processing would be based on economic factors and emergency

processing would be based on life and property criteria. The commenter

stated that, in the current emergency processing procedures, RSPA

considers either endangerment to life or property or serious economic

loss. The commenter asked whether RSPA, by proposing two separate

processing categories, is suggesting that it considers a health threat

to be more important than economic loss, even if the health threat is

remote and the economic loss is substantial.

One commenter objected to the proposed rule requiring non-

government entities to meet higher standards than government entities

to qualify for priority processing. Based on the comments, RSPA has

determined that adding a priority processing category is not warranted.

Therefore, the proposal is not adopted in this final rule.

Sec. 107.117 Emergency processing. Commenters favored the

continued existence of an emergency processing category. One commenter

stated that the current procedures require that ``an applicant need

only show that existing conditions necessitate the transportation of a

hazardous material, or that the protection of life and property would

not be possible if such material is not transported.'' The commenter

objected to the proposed emergency processing procedures in that they

require applicants to demonstrate that such processing is necessary to

prevent ``significant injury'' to persons or property. The commenter

requested that RSPA remove the term ``significant'' because it is

subjective. The current procedures allow only applicants who can show

that a life-threatening situation exists to qualify for emergency

processing. In the proposed rule, RSPA responded to requests of

applicants that a broader standard be utilized in determining that

emergency processing is warranted. At the same time, RSPA proposed to

include the term ``significant'' to set a reasonable limit on the

expanded criteria, and believes that the term is necessary to ensure

fairness to applicants awaiting routine processing by not allowing

applicants to allege ``minor'' injuries or losses as the basis for

emergency processing.

One commenter stated that, under the proposed rule, the Associate

Administrator could deny priority or emergency processing if timely

application could have been made. The commenter requested that RSPA

allow an applicant to explain circumstances that may have contributed

to the applicant not filing an application in a timely manner so that

the applicant may still be considered for priority or emergency

processing. RSPA contemplates that an applicant seeking emergency

processing will provide evidence of circumstances that prevented the

applicant from filing the application in a timely manner.

One commenter stated that it is unlikely that applicants who

request emergency processing will be able to supply the information

specified in proposed Sec. 107.105(a)(17) for analyses, data, or test

results. In response to comments to the proposed application procedures

in Sec. 107.105, RSPA is clarifying the extent to which applicants are

required to supply analyses, data, or test results. See preamble

discussion under Sec. 107.105.

Another commenter stated that the ``emergency processing'' language

appeared to apply only to ``carrier'' exemptions and questioned its

applicability to exemptions issued to shippers. The commenter stated

that the proposed rule directs carriers to send the exemption

application to the office of the modal administration which has

oversight responsibility for the carrier's mode of transportation

(e.g., FHWA, the Federal Railroad Administration, etc.).

[[Page 21091]]

The commenter stated that shippers often utilize more than one mode and

therefore the proposed requirement that an application be sent to only

one modal office requires ``fine tuning.'' Any applicant, including a

shipper, seeking an emergency exemption must submit the application to

the specified modal contact official for the initial mode of

transportation to be utilized.

Some commenters suggested that emergency exemption applications be

submitted directly to RSPA, consistent with other exemption

submissions, and not to the specific modal administration. An emergency

exemption application is most expeditiously handled when submitted to

the applicable modal administration, where an immediate analysis of the

proposed transportation can be performed by personnel having expertise

in the affected mode of transportation. This process will eliminate the

need for RSPA to forward the exemption application to the affected mode

for input, thus allowing for more expeditious application review and

more timely and efficient customer service.

In this final rule the section is adopted essentially as proposed

with editorial changes for clarity. Proposed paragraph (f) is deleted

as unnecessary, and proposed paragraph (g) and (h) are redesignated as

(f) and (g), respectively.

Sec. 107.121 Modification, suspension, or termination of exemption

or grant of party status. One commenter expressed concern that the

proposed rule would allow termination simply ``for no other reason than

if the Department wants it terminated regardless of the shipping and

incident experience * * *.'' The commenter argued that: (1) This

provision appears contrary to the performance-oriented packaging

system; (2) this provision gives no regard to contracts for the supply

of materials between shippers and consignees; (3) the exemption holder

is placed at the mercy of RSPA personnel; (4) it is doubtful that the

proposed rule comported with the intent of Congress; (5) the proposed

rule does not comport with the preamble, which indicates that the

purpose of the NPRM is to expedite processing of applications and

promote program consistency; and (6) based on the foregoing, the

proposed rule is ``significant.''

This rule clarifies standards for exemption modification,

suspension, and termination and gives the Associate Administrator more

flexibility to determine which of the three remedies is appropriate in

a given situation. Presently, the Associate Administrator may modify or

suspend an exemption if its provisions are violated or if new

information suggests that the activity under the exemption creates a

risk to life or property. The Associate Administrator may terminate an

exemption if it is no longer consistent with the public interest, is no

longer necessary due to a change in the regulations, or was granted on

the basis of false or misleading information. The ``public interest''

criterion encompasses all grounds on which the Associate Administrator

may terminate an exemption, but it is vague. Furthermore, the sharp

distinction that the existing regulation draws between those conditions

that justify modifying or suspending an exemption and those that

justify terminating it handicap the Associate Administrator in taking

the action that is most appropriate in a particular circumstance. For

example, the current regulation may require the termination of an

exemption when modification would suffice.

The Associate Administrator's decision to modify, suspend, or

terminate an exemption must be based on the criteria specified in the

proposed regulatory text (see 49 CFR 107.121 (a) and (b)).

In this final rule Sec. 107.121 is adopted essentially as proposed.

Paragraph (d) is added to specify conditions by which the Associate

Administrator may declare a proposed action immediately effective.

Sec. 107.123 Reconsideration. One commenter suggested that RSPA

clarify that applications denied pursuant to Sec. 107.113(d) are

eligible for reconsideration in accordance with this section. RSPA

agrees that they are eligible for reconsideration, but sees no reason

for a rule change. In the NPRM, RSPA specifically stated that

applicants may request reconsideration of decisions made under

Secs. 107.113(g), 107.117(e), and 107.121(c). This section is adopted

as proposed.

Subpart C--Preemption

One commenter suggested that ``Associate Administrator for

Hazardous Materials Safety'' be revised to read ``Associate

Administrator'' for consistency with other sections in part 107. RSPA

agrees and, in the interest of achieving consistency, is modifying the

language of subpart C as suggested in all general references to the

Associate Administrator. Also, RSPA is making other minor modifications

to the regulatory language of subpart C for clarity and consistency.

Sec. 107.205 Notice. One commenter recommended changing ``may

publish notice of an application'' in paragraph (b), to ``will publish

notice of, including an opportunity to comment on, an application.''

RSPA agrees and is revising the paragraph to require publication of the

notice in the Federal Register.

In paragraph (c) and in Secs. 107.211(c), 107.217(c), and

107.223(c), RSPA is adding a sentence, ``Late-filed comments are

considered so far as practicable.'' This sentence reflects the manner

in which RSPA has handled late-filed comments in preemption matters and

is consistent with Sec. 106.23 concerning the handling of late-filed

comments in rulemaking actions. Because this change is merely a

modification to a rule of agency procedure, public notice and an

opportunity to comment on the change are not mandated by the

Administrative Procedure Act.

Sec. 107.209 Determination. Commenters also favored revision of

paragraph (c) to change ``may publish'' to ``will publish''. RSPA

agrees and is making this change.

One commenter disagreed with the proposed deletion of paragraph (b)

to eliminate the Associate Administrator's authority to issue a

preemption determination on his or her own initiative. The commenter

did not agree that the authority was eliminated by the Hazardous

Materials Transportation Uniform Safety Act of 1990 (HMTUSA). The

commenter recommended adding language allowing the Associate

Administrator to issue a preemption determination where he or she is

directly affected by a requirement of a State or political subdivision

or Indian tribe. RSPA disagrees. The pre-HMTUSA regulations authorized

RSPA to issue inconsistency rulings, which were merely advisory in

nature, on its own initiative. However, in enacting HMTUSA, Congress

replaced these advisory inconsistency rulings with authorization to

issue binding preemption determinations and, further, provided for

issuance of preemption determinations only in response to applications

by ``directly affected'' persons. See 49 U.S.C. 5125(d). In light of

these statutory changes, RSPA believes that it is inappropriate for the

Associate Administrator to initiate a preemption determination

proceeding on his or her own initiative. Therefore, paragraph (b) is

eliminated as proposed.

Sec. 107.211 Petition for reconsideration. RSPA proposed to amend

this section by revising paragraph (a) to read ``The petition must be

filed within 20 days of publication of the determination in the Federal

of RSPA's proposal to make publication

[[Page 21092]]

optional. As previously stated, RSPA will publish all preemption

determinations and, therefore, this language will not be problematic.

The proposal is adopted in this final rule.

Sec. 107.213 Judicial review. In the NPRM, RSPA proposed to add a

new section to allow a party to a proceeding under Sec. 107.203(a) to

seek review by the appropriate district court of the United States of a

decision of the Administrator by filing a petition with the court

within 60 days after the Administrator's decision becomes final. One

commenter recommended that references to the ``Administrator'' be

changed to the ``Associate Administrator.'' RSPA agrees with this

suggestion and amends this section accordingly. The commenter also

requested that RSPA specify when its decision on a petition for

reconsideration of a preemption determination becomes final. The

Associate Administrator's decision becomes final when it is published

in the Federal Register. RSPA is amending this section to clarify this

issue. In addition, RSPA is revising the wording ``decision'' to read

``determination'' to minimize confusion.

Sec. 107.217 Notice. One commenter suggested that the word

``ruling'' in paragraph (d) be changed to ``outcome of a determination

on the application.'' RSPA agrees with this suggestion, and is making

the change accordingly.

Sec. 107.221 Determination. A commenter asked that, in paragraph

(d), the word ``may'' be changed to ``will'' concerning publication of

determinations in the Federal Register. RSPA agrees and is making this

change.

Sec. 107.223 Petition for reconsideration. One commenter suggested

that the term ``order'' be changed to ``determination.'' For clarity

and consistency, RSPA is making this change.

Sec. 107.227 Judicial review. RSPA is amending this section for

consistency with Sec. 107.213. See preamble discussion under

Sec. 107.213.

Subpart D--Enforcement

Sec. 107.305 Investigations. A commenter opposed the proposal to

authorize RSPA inspectors to issue subpoenas for the production of

documents or other tangible evidence because of the potential for

abuse. RSPA is adopting the provision as proposed. RSPA inspectors are

broadly empowered, through delegations of investigatory authority under

the Federal hazmat law, 49 U.S.C. 5121, to collect evidence reasonably

related to hazardous materials compliance inspections. Their use of a

subpoena without involvement of RSPA's Office of the Chief Counsel will

improve program efficiency by expediting the information-gathering

process. The potential for inspectors to abuse this authority is

minimal because the Director of the Office of Hazardous Materials

Enforcement must approve the issuance of the subpoena and the recipient

of the subpoena may seek review of the subpoena by RSPA's Office of the

Chief Counsel under Sec. 107.13(h).

For clarity, RSPA added the words `also known as ``hazmat

inspectors'' or ``inspectors''' after the words ``Hazardous Materials

Enforcement Specialists.'' This addition was not proposed in the NPRM,

but is added on RSPA's initiative to provide consistency between

Sec. 107.305(b) and subparagraphs (1), (2), and (3) which refer to

``inspectors.''

Sec. 107.315 Admission of violations. Paragraphs (c) and (d) are

revised to delete the recommendation that payment of a civil penalty be

documented by forwarding a photocopy of the respondent's electronic

fund transfer receipt or check to the Office of the Chief Counsel. This

administrative change, not in the NPRM, eliminates a potential

paperwork burden on the regulated industry. Because this change is

merely a modification to a rule of agency procedure, public notice and

opportunity to comment on the change are not required by the

Administrative Procedure Act.

Sec. 107.331 Assessment considerations. This section is adopted

essentially as proposed, with a minor editorial revision.

Subpart H--Approvals, Registrations and Submissions.

Sec. 107.107 Purpose and scope. This section is adopted as

proposed.

Sec. 107.705 Registration and reporting. One commenter recommended

that RSPA develop a standard form in place of general procedures for

registrations and reports. RSPA does not believe that a standard form

is practical, considering the variation in information required for the

numerous approvals, registrations, and reports that would have to be

accommodated by a standard generic form.

Except as discussed in the following paragraph, this section is

adopted as proposed.

Sec. 107.707 Applications. The proposed provisions for renewal of

approvals state that RSPA will issue a written extension to operate

under an expired approval until RSPA makes a final determination on the

application. One commenter requested that the renewal procedures for

approvals be consistent with renewal procedures for exemptions in that

if an application is submitted at least 60 days prior to the expiration

date, the expiration is automatically extended until RSPA makes a final

determination on the application. RSPA agrees with the commenter, and

is adopting the suggestion. Further, since the requirements for

registration and reporting specified in the proposed Sec. 107.705 and

the requirements for an approval application specified in Sec. 107.707

are essentially the same, RSPA is eliminating the separate language of

Sec. 107.707, and combining the ``registration and reporting''

requirements of Sec. 107.707 with the ``approval application''

requirements Sec. 107.705, in a section entitled ``Registrations,

reports, and applications for approval.''

Sec. 107.709 Application processing. Commenters again expressed

opposition to RSPA's proposal to permit the Associate Administrator to

consider pending or completed enforcement actions in determining

whether an approval application is processed or denied. This issue is

discussed under Sec. 107.113 and RSPA is modifying this section

similarly.

Sec. 107.711 Withdrawal. With respect to documents submitted in

conjunction with an exemption application which is later withdrawn, one

commenter requested that RSPA clarify that all documents deemed

confidential by the Associate Administrator in accordance with

Sec. 107.5 that are related to an active or inactive application will

remain confidential. RSPA has agreed to do so, and is extending this

confidential treatment to documents submitted in conjunction with an

approval application. See preamble comments to 49 CFR Sec. 107.111.

Sec. 107.713 Approval modification, suspension, or termination.

One commenter raised the same concerns about the proposed procedures

for modification, suspension, or termination of approvals as he raised

regarding modification, suspension, or termination of exemptions. RSPA

discussed these issues under Sec. 107.121. Paragraph (d) is added to

specify conditions by which the Associate Administrator may declare a

proposed action immediately effective. Otherwise, the section is

adopted as proposed.

Sec. 107.715 Reconsideration. Paragraph (b) is adopted as

proposed.

Sec. 107.717 Appeal. Proposed paragraph (c) is not adopted for the

same reasons as discussed under Sec. 107.715 above. Otherwise, the

section is adopted as proposed.

[[Page 21093]]

Part 171

Sec. 171.1 Purpose and scope. One commenter recommended that the

wording ``in commerce'' be added following ``hazardous materials''

throughout this section for clarity and consistency with the Federal

hazardous material transportation law. RSPA agrees and is modifying

paragraph (a) accordingly.

Additionally, a new paragraph (d) is added, as proposed, to clarify

that the requirements of subchapter C are applicable to the use of

terms and symbols prescribed in this subchapter for marking, labeling,

placarding, and describing hazardous materials and packagings used in

their transport.

Sec. 171.2 General requirements. The modifications of paragraphs

(a) through (d), and the addition of paragraph (h) are adopted

essentially as proposed in the NPRM, with minor modifications to the

regulatory language for accuracy and clarity. Identifications listed in

paragraph (d) have been expanded to include most, if not all, of the

identifications covered by the regulations.

Sec. 171.3 Hazardous waste. A commenter objected to RSPA's

proposal to eliminate paragraph (c) of this section; the commenter

opined that the paragraph implements a requirement of the Resource

Conservation and Recovery Act (RCRA), 42 U.S.C. 6923(b), that all RCRA

rules issued by the Environmental Protection Agency be consistent with

the Federal hazmat law and the HMR. The commenter also stated that

retention of this provision is necessary to inform states implementing

RCRA of the necessity for consistency with the Federal hazmat law and

the HMR. For preemption purposes, RSPA looks at hazardous waste issues

together with issues covering all other hazardous materials. RCRA's

directive that EPA's hazardous waste requirements be consistent with

the Federal hazmat law does not mandate that RSPA establish a separate

preemption provision for hazardous waste. Therefore, RSPA is deleting

paragraph (c), including the note contained therein, as proposed.

Sec. 171.8 Definitions. RSPA is adopting a definition for

``approval'' and revising the definition for ``person'', as proposed.

In addition, RSPA is adding a definition for ``exemption'' for clarity.

Because this latter change is merely informative, public notice and

opportunity to comment on the change are not required by the

Administrative Procedure Act.

Part 172

Sec. 172.302 General marking requirements for bulk packagings. A

commenter requested that RSPA authorize markings for small portable

tanks and intermediate bulk containers (IBC's) to be only one inch

high. The commenter suggested that, instead of incorporating the

minimum height of exemption number markings into Sec. 172.302(c), RSPA

should cross-reference Sec. 172.302(b), which requires exemption

markings to be the same size as other required markings on bulk

packagings and makes the marking size dependent upon the size and

capacity of the packaging. The commenter also requested that width

requirements for exemption markings be specified. RSPA is considering

changes to the marking height and width requirements under a separate

rulemaking action. Therefore, the proposed change in the NPRM and this

commenter's suggested change regarding size of exemption markings are

not adopted as part of this final rule.

Part 173

Sec. 173.22a Use of packagings authorized under exemptions.

Proposed paragraph (c) is revised to refer to ``offeror'' rather than

``shipper.'' Also, a sentence is added to clarify that a carrier shall

maintain a copy of an exemption in the same manner as for a shipping

paper.

Part 178

Sec. 178.3 Marking of packagings. Paragraph (d) is adopted as

proposed.

IV. Rulemaking Analyses and Notices

A. Executive Order 12866 and DOT Regulatory Policies and Procedures

This final rule is not considered a significant regulatory action

under section 3(f) of Executive Order 12866 and, therefore, was not

subject to review by the Office of Management and Budget. The rule is

not significant according to the Regulatory Policies and Procedures of

the Department of Transportation (44 FR 11034).

This final rule will not result in any additional costs to persons

subject to the HMR. Therefore, preparation of a regulatory impact

analysis or regulatory evaluation is not warranted.

B. Executive Order 12612

This final rule has been analyzed in accordance with the principles

and criteria contained in Executive Order 12612 (``Federalism''). The

Federal hazardous materials transportation law (49 U.S.C. 5101-5127)

contains an express preemption provision that preempts State, local,

and Indian tribe requirements on certain covered subjects. Covered

subjects are:

(i) the designation, description, and classification of hazardous

material;

(ii) the packing, repacking, handling, labeling, marking, and

placarding of hazardous material;

(iii) the preparation, execution, and use of shipping documents

pertaining to hazardous material and requirements respecting the

number, content, and placement of such documents;

(iv) the written notification, recording, and reporting of the

unintentional release in transportation of hazardous material; or

(v) the design, manufacturing, fabrication, marking, maintenance,

reconditioning, repairing, or testing of a package or container which

is represented, marked, certified, or sold as qualified for use in the

transportation of hazardous material.

Title 49 U.S.C. 5125(b)(2) provides that if DOT issues a regulation

concerning any of the covered subjects after November 16, 1990, DOT

must determine and publish in the Federal Register the effective date

of Federal preemption. That effective date may not be earlier than the

90th day following the date of issuance of the final rule and not later

than two years after the date of issuance. The effective date of

Federal preemption for this final rule is October 1, 1996. Because RSPA

lacks discretion in this area, preparation of a Federalism assessment

is not warranted.

C. Regulatory Flexibility Act

I certify that this final rule will not have a significant economic

impact on a substantial number of small entities. This final rule

amends existing requirements and adds new procedural provisions to

clarify existing practice. The amendments contained in this rule do not

impose any new requirements on persons subject to the HMR; thus, there

are no direct or indirect adverse economic impacts for small units of

government, businesses, or other organizations.

D. Paperwork Reduction Act

Information collection requirements applicable to applications for

exemptions contained in this final rule are unchanged in substance and

amount of burden from those currently approved by the Office of

Management and Budget (OMB) under OMB control number 2137-0051. RSPA is

requesting revision of the OMB approval to update section references in

accordance with changes made in this final rule. Information collection

requirements applicable to approvals are unchanged in substance and

amount of burden from those previously approved under OMB control

number 2137-0557. RSPA is requesting reinstatement and revision of this

approval from OMB and will

[[Page 21094]]

display, through publication in the Federal Register, the control

number when it is approved by OMB. Public comment on this request has

been invited through publication of a Federal Register notice on March

5, 1996 (61 FR 8706). Under the Paperwork Reduction Act of 1995, no

person is required to respond to a requirement for collection of

information unless the requirement displays a valid OMB control number.

E. Regulation Identification 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 can be used to cross-reference this action with the

Unified Agenda.

List of Subjects

49 CFR Part 107

Administrative practice and procedure, Hazardous materials

transportation, Packaging and containers, Penalties, Reporting and

recordkeeping requirements.

49 CFR Part 171

Exports, Hazardous materials transportation, Hazardous waste,

Imports, Incorporation by reference, Reporting and recordkeeping

requirements.

49 CFR Part 173

Hazardous materials transportation, Packaging and containers,

Radioactive materials, Reporting and recordkeeping requirements,

Uranium.

49 CFR Part 178

Hazardous materials transportation, Motor vehicle safety, Packaging

and containers, Reporting and recordkeeping requirements.

In consideration of the foregoing, 49 CFR chapter I is amended as

follows:

PART 107--HAZARDOUS MATERIALS PROGRAM PROCEDURES

1-2. The authority citation for part 107 continues to read as

follows:

Authority: 49 U.S.C. 5101-5127, 44701; 49 CFR 1.45, 1.53.

3. In Sec. 107.3, definitions are added in alphabetical order to

read as follows:

Sec. 107.3 Definitions.

* * * * *

Acting knowingly means acting or failing to act while

(1) Having actual knowledge of the facts giving rise to the

violation, or

(2) Having the knowledge that a reasonable person acting in the

same circumstances and exercising due care would have had.

Administrator means the Administrator, Research and Special

Programs Administration.

Applicant means the person in whose name an exemption, approval,

registration, a renewed or modified exemption or approval, or party

status to an exemption is requested to be issued.

Application means a request under subpart B of this part for an

exemption, a renewal or modification of an exemption, party status to

an exemption, or a request under subpart H of this part for an

approval, or renewal or modification of an approval.

Approval means a written authorization, including a competent

authority approval, from the Associate Administrator to perform a

function for which prior authorization by the Associate Administrator

is required under subchapter C of this chapter.

* * * * *

Associate Administrator means the Associate Administrator for

Hazardous Materials Safety, Research and Special Programs

Administration.

* * * * *

Competent Authority Approval means an approval by the competent

authority which is required under the provisions of an international

standard, such as the International Civil Aviation Organization's

Technical Instructions for the Safe Transport of Dangerous Goods by Air

or the International Maritime Dangerous Goods Code. To the extent that

it satisfies the requirement of the international standard, any of the

following may serve as a competent authority approval: a specific

regulation of this subchapter or subchapter C of this chapter, an

exemption or approval issued under the provisions of this subchapter or

subchapter C of this chapter, or a separate document issued to one or

more persons by the Associate Administrator.

Exemption means a document issued under the authority of 49 U.S.C.

5117 by the Associate Administrator that authorizes a person to perform

a function that is not otherwise authorized under this subchapter,

subchapter C, or other regulations issued under 49 U.S.C. 5101-5127

(e.g., Federal Highway Administration routing).

* * * * *

Filed means received at the Research and Special Programs

Administration office designated in the applicable provision or, if no

office is specified, at the Office of Hazardous Materials Exemptions

and Approvals (DHM-30), Research and Special Programs Administration,

U.S. Department of Transportation, 400 7th Street SW., Washington DC,

20590-0001.

Holder means the person in whose name an exemption or approval has

been issued.

* * * * *

Incident means an event resulting in the unintended and

unanticipated release of a hazardous material or an event meeting

incident reporting requirements in Sec. 171.15 or Sec. 171.16 of this

chapter.

* * * * *

Investigation includes investigations authorized under 49 U.S.C.

5121 and inspections authorized under 49 U.S.C. 5118 and 5121.

Manufacturing exemption means an exemption from compliance with

specified requirements that otherwise must be met before representing,

marking, certifying (including requalifying, inspecting, and testing),

selling or offering a packaging or container as meeting the

requirements of subchapter C of this chapter governing its use in the

transportation in commerce of a hazardous material. A manufacturing

exemption is an exemption issued to a manufacturer of packagings who

does not offer for transportation or transport hazardous materials in

packagings subject to the exemption.

Party means a person, other than a holder, authorized to act under

the terms of an exemption.

* * * * *

Registration means a written acknowledgment from the Associate

Administrator that a registrant is authorized to perform a function for

which registration is required under subchapter C of this chapter

(e.g., registration with RSPA as a cylinder retester pursuant to 49 CFR

173.34(e)(1), or registration in accordance with 49 CFR 178.503

regarding marking of packagings). For purposes of subparts A through E,

``registration'' does not include registration under subpart F or G of

this part.

Report means information, other than an application, registration

or part thereof, required to be submitted to the Associate

Administrator pursuant to this subchapter, subchapter B or subchapter C

of this chapter.

* * * * *

[[Page 21095]]

4. In Sec. 107.5, paragraph (a) is revised to read as follows:

Sec. 107.5 Request for confidential treatment.

(a) If any person filing a document with the Associate

Administrator claims that some or all the information contained in the

document is exempt from the mandatory public disclosure requirements of

the Freedom of Information Act (5 U.S.C. 552), is information referred

to in 18 U.S.C. 1905, or is otherwise exempt by law from public

disclosure, and if that person requests the Associate Administrator not

to disclose the information, that person shall file, together with the

document, a second copy of the document with the confidential

information deleted. The person shall indicate each page of the

original document that is confidential or contains confidential

information by marking or stamping ``confidential'' on each page for

which a claim of confidentiality is made, and may file a statement

specifying the justification for the claim of confidentiality. If the

person states that the information comes within the exception in 5

U.S.C. 552(b)(4) for trade secrets and commercial or financial

information, that person shall include a statement as to why the

information is privileged or confidential. If the person filing a

document does not mark or stamp a document as confidential or submit a

second copy of the document with the confidential information deleted,

the Associate Administrator may assume that there is no objection to

public disclosure of the document in its entirety.

* * * * *

Sec. 107.5 [Amended]

5. In addition, in Sec. 107.5, in paragraph (b), the phrase

``Associate Administrator for Hazardous Materials Safety'' is revised

to read ``Associate Administrator'' both places it appears.

6. Subpart B of part 107 is revised to read as follows:

Subpart B--Exemptions

107.101 Purpose and scope.

107.105 Application for exemption.

107.107 Application for party status.

107.109 Application for renewal.

107.111 Withdrawal.

107.113 Application processing and evaluation.

107.117 Emergency processing.

107.121 Modification, suspension or termination of exemption or

grant of party status.

107.123 Reconsideration.

107.125 Appeal.

107.127 Availability of documents for public inspection.

* * * * *

Sec. 107.101 Purpose and scope.

This subpart prescribes procedures for the issuance, modification

and termination of exemptions from requirements of this subchapter,

subchapter C of this chapter, or regulations issued under chapter 51 of

49 U.S.C.

Sec. 107.105 Application for exemption.

(a) General. Each application for an exemption or modification of

an exemption must--

(1) Be submitted in duplicate and, for timely consideration, at

least 120 days before the requested effective date to: Associate

Administrator for Hazardous Materials Safety, Research and Special

Programs Administration, U.S. Department of Transportation, 400 7th

Street, SW, Washington, DC 20590-0001. Attention: Exemptions, DHM-31;

(2) State the name, street and mailing addresses, and telephone

number of the applicant; if the applicant is not an individual, state

the name, street and mailing addresses, and telephone number of an

individual designated as an agent of the applicant for all purposes

related to the application;

(3) If the applicant is not a resident of the United States, a

designation of agent for service in accordance with Sec. 107.7 of this

part; and

(4) For a manufacturing exemption, a statement of the name and

street address of each facility where manufacturing under the exemption

will occur.

(b) Confidential treatment. To request confidential treatment for

information contained in the application, the applicant shall comply

with Sec. 107.5(a).

the following information that is relevant to the exemption proposal:

(1) A citation of the specific regulation from which the applicant

seeks relief;

(2) Specification of the proposed mode or modes of transportation;

(3) A detailed description of the proposed exemption (e.g.,

alternative packaging, test, procedure or activity) including, as

appropriate, written descriptions, drawings, flow charts, plans and