Hazardous Materials in Intrastate Commerce; Delay of Compliance Date, Technical Amendments, Corrections and Response to Petitions for Reconsideration

SUMMARY: On January 8, 1997, RSPA published a final rule which amended

the Hazardous Materials Regulations (HMR) to expand the scope of the

regulations to intrastate transportation of hazardous materials. The

intended effect of the January 8, 1997 rule is to raise the level of

safety in the transportation of hazardous materials by applying a

uniform system of safety regulations to all hazardous materials

transported in commerce throughout the United States. In this final

rule, RSPA is providing one additional year, until October 1, 1998, for

compliance, responding to petitions for reconsideration and correcting

errors in the January 8, 1997 final rule. The minor editorial changes

made by this final rule will not impose any new requirements on persons

subject to the HMR.

DATES: Effective dates: This final rule is effective October 1, 1997.

The effective date for the final rule published under Docket HM-200 on

January 8, 1997 (62 FR 1208) remains October 1, 1997.

Compliance dates: Voluntary compliance with the January 8, 1997

final rule has been authorized beginning April 8, 1997. Voluntary

compliance with this final rule is authorized as of September 22, 1997.

Mandatory compliance with the HMR by intrastate motor carriers of

hazardous materials is required beginning October 1, 1998, except that

intrastate motor carriers of hazardous waste, hazardous substances,

marine pollutants, and flammable cryogenic liquids in portable tanks

and cargo tanks are already subject to the HMR.

FOR FURTHER INFORMATION CONTACT: Diane LaValle or Deborah Boothe, (202)

366-8553, Office of Hazardous Materials Standards, RSPA, 400 Seventh

Street, SW, Washington, DC 20590-0001.

SUPPLEMENTARY INFORMATION:

I. Background

On January 8, 1997, RSPA issued a final rule under Docket HM-200

[62 FR 1208]. The final rule amended the HMR by expanding the scope of

the regulations to intrastate transportation of hazardous materials in

commerce. In the final rule, RSPA created or amended exceptions for

agricultural operations (Sec. 173.5), materials of trade (Sec. 173.6),

non-specification packagings used in intrastate transportation

(Sec. 173.8) and minimum qualifications for registered inspectors

(Sec. 180.409).

Since publication of the final rule, RSPA has discovered minor

errors in Sec. 173.6 (materials of trade) that are being corrected in

this document. In response to a petition for reconsideration, RSPA is

also amending Sec. 173.6 to include provisions that materials of trade

may include Division 2.2 materials in permanently installed cylinders

or tanks built to the American Society of Mechanical Engineers (ASME)

standards. RSPA is denying another part of this petition for

reconsideration and two other petitions for reconsideration of the

final rule.

To offset burdens that may fall on intrastate motor carriers and

their shippers who were not previously subject to requirements

comparable to those in the HMR because of State exceptions, RSPA is

providing an additional year for compliance. RSPA is adding to

Sec. 171.1 the wording ``except that until October 1, 1998, this

subchapter applies to intrastate carriers by motor vehicle only in so

far as this subchapter relates to hazardous waste, hazardous

substances, flammable cryogenic liquids in portable tanks and cargo

tanks, and marine pollutants.'' This will ensure that the final rule

will be printed in the 1997 edition of the Code of Federal Regulations

while still providing additional time for compliance. It is important

for people who choose to voluntarily comply to have up-to-date

information on these requirements. However, RSPA concludes that an

additional year is appropriate for these persons to learn and come into

compliance with the requirements in the HMR.

In addition, the July 1, 1998 date set forth in Secs. 173.5(a)(2)

and 173.8(d)(3) as the deadline for States to enact legislation that

authorizes exceptions for agricultural operations and non-specification

cargo tanks is being changed to October 1, 1998, for consistency with

the mandatory compliance date of the final rule. This will eliminate

the potential problem of requiring compliance before a State has the

opportunity to enact legislation to allow carriers in that state to

take advantage of the exceptions.

II. Materials of Trade (Sec. 173.6)

RSPA is making several changes to Sec. 173.6, as follows:

As provided by Sec. 173.6, only certain hazardous materials are

authorized the materials of trade exception. Although proposed in the

March 20, 1996 supplemental notice of proposed rulemaking (SNPRM) [61

FR 11484], the final rule inadvertently omitted Division 5.2 (organic

peroxide) materials from the list. Therefore, Division 5.2 materials

are added to the list in Sec. 173.6(a)(1) and are authorized under the

materials of trade exception.

A reference to regulations of the Occupational Safety and Health

Administration (OSHA) applicable to construction activities (29 CFR

1926.152) was inadvertently omitted in the requirements for packaging

gasoline (Sec. 173.6(b)(4)). These OSHA requirements address storage

and use of gasoline at construction sites and authorize up to one-

gallon capacity plastic containers for gasoline. RSPA believes that the

material of trade exception should also authorize these small plastic

safety cans for the transportation of gasoline to avoid the transfer of

gasoline from one container to another. Therefore Sec. 173.6(b)(4) is

revised to reference the OSHA standard in 29 CFR 1926.152(a)(1).

Additionally the reference to 29 CFR 1910.106 is expanded to identify

the specific paragraph that references the OSHA safety can standard.

The aggregate gross weight of all materials of trade on board a

vehicle is limited by Sec. 173.6(d). This paragraph erroneously refers

to ``permanently mounted tanks'' authorized by paragraph (a)(1)(iii) of

this section. Therefore, Sec. 173.6(d)is revised to refer to

``materials of trade authorized under paragraph (a)(1)(iii).''

The last sentence in Sec. 173.6(d) is placed in new paragraph (e)

for clarity. New paragraph (e) clarifies that materials of trade may be

transported on a motor vehicle with other hazardous materials and still

be authorized exceptions.

Phillips Petroleum Company (Phillips) petitioned that the materials

of trade exception be expanded to authorize transportation of Division

2.2 (non-flammable gas) materials in non-specification permanently

mounted cylinders. Phillips stated that these cylinders for compressed

air are

[[Page 49561]]

constructed to the American Society of Mechanical Engineers (ASME)

Pressure Vessel Code and are typically less than 70 gallons water

capacity. Phillips further stated that since the air cylinders do not

meet DOT specifications, they must be depressurized before they can be

transported and then must be repressurized at the next job site before

use.

RSPA agrees that the materials of trade exception may properly be

expanded to include permanently installed tanks built to the ASME

Pressure Vessel Code containing non-liquefied non-flammable compressed

gases with no subsidiary hazard. This provision has been adopted into

Sec. 173.6(a)(1)(iv).

Phillips also petitioned RSPA to authorize the transportation, as

materials of trade, of DOT exemption cylinders containing compressed or

flammable gas samples. Several exemptions are in existence authorizing

such transportation, and Phillips stated that these cylinders have been

used for many years and have a proven track record of safety and

reliability.

As provided in the final rule, Sec. 173.6(b)(5) authorizes

transportation of a cylinder or other pressure vessel containing a

Division 2.1 or 2.2 material, conforming to the packaging,

qualification, maintenance, and use requirements of this subchapter, as

a material of trade. A cylinder manufactured under the terms of an

exemption is an authorized packaging under the provisions of the

subchapter. Therefore, no regulatory change is necessary to authorize

such transportation and, accordingly, this part of Phillips's petition

is denied.

III. Non-Specification Packagings Used in Intrastate Transportation

(Sec. 173.8); Minimum Qualifications for Inspectors and Testers

(Sec. 180.409)

National Tank Truck Carriers, Inc. (NTTC) petitioned RSPA to

reconsider its authorization for continued use of non-specification

cargo tanks by intrastate carriers transporting flammable liquid

petroleum products. NTTC stated that the exceptions provided in the

final rule for the continued use of these non-specification cargo tanks

create a patchwork regulatory system that cannot be enforced and do not

provide an ``equivalent'' level of safety. They also provided scenarios

that, in NTTC's opinion, could create difficulties for enforcement and

carrier personnel to determine compliance with the inspection and

testing requirements of Part 180.

Two rebuttal letters were received in response to NTTC's petition

for reconsideration. The Petroleum Marketers Association of America

stated that States have traditionally been responsible for public

safety and allowing the States to continue to exercise their rational

judgement in packaging of certain hazardous materials in intrastate

commerce does not endanger public safety. The Petroleum Transportation

& Storage Association also opposed NTTC's petition and stated that NTTC

completely misstates the effect HM-200 will have on the regulated

community and public safety in general.

RSPA denies NTTC's petition. The situation described by NTTC

regarding the unfair advantage given to intrastate motor carriers by

allowing them to use non-specification cargo tanks is not new to the

regulated industry. In fact, HM-200 will eventually lead to the

elimination of non-specification cargo tanks and their replacement with

DOT specification cargo tanks in the same manner the older MC 300

series cargo tanks are being removed from service, some of which are

more than 25 years old.

The continuing use provision recognizes that a State may assume the

responsibility on behalf of its citizens to allow the use of non-

specification cargo tanks to transport liquid fuels in that State under

specified conditions. In an effort to minimize the impact of a total

replacement of the intrastate cargo tank fleet for small businesses in

these States, RSPA decided to provide for the continued use of these

non-specification cargo tanks. This provision applies only in those

States that have or will provide a specific provision for their use by

State law or regulation. No new non-specification cargo tanks used to

transport flammable liquid petroleum products may be placed in service

after October 1, 1998. In addition to any operational requirements

placed on their use by the States in which they are operated, they are

only authorized for continued operation in conformance with the

inspection and test requirements of Part 180 after July 1, 2000. RSPA

believes that the inspection and test requirements will provide an

incremental safety increase in the operation of these cargo tanks.

RSPA denies NTTC's petition opposing the exception provided for

registered inspectors. Educational requirements are waived for a person

who only performs annual external visual inspections and leakage tests

on cargo tank motor vehicles owned or operated by that person. These

cargo tank motor vehicles must have a capacity of less than 3500

gallons and be used exclusively for transportation of flammable liquid

petroleum fuels. The inspectors must register with DOT advising that

they are performing inspections, thereby providing the Federal Highway

Administration (FHWA) the identity and location of such inspection and

testing facilities in order that they be included in FHWA's compliance

program.

IV. Agricultural Operations (Sec. 173.5)

A petition bearing the names of 45 agricultural retailers and

associations requested that RSPA revise Sec. 173.5 ``to incorporate

language that will provide an exception from the HMR for both farmers

and retailers who transport agricultural products from retail-to-farm,

between fields, and from the farm back to the local source of supply.''

These parties stated that RSPA had failed to provide adequate relief

from the HMR's requirements ``for both farmers and retailers.'' (In a

separate, letter, one of these agricultural organizations stated that:

``Arizona members stand firmly behind current safety regulations and

have no reason to adopt exceptions in our state, however, we encourage

our state counterparts to have the opportunity to respond to their

local needs.'')

The petition asserted that farmers and retailers should not be

forced to comply with the HMR for the ``few brief periods during the

year'' that agricultural shipments take place: a 45-day period for

planting crops and other periods in the fall when fertilizer is

applied. Included with the petition was an estimate that it will cost

each retail facility, assumed to handle 100 loads of agricultural

products a day during the 45-day planting season, a total of $12,300

per year to determine whether the HMR apply (i.e., whether the

agricultural product is a hazardous material) and, for those that are

covered, comply with the HMR's shipping paper and placarding

requirements. According to these parties, HM-200 does not achieve the

goal of uniformity because movements of agricultural products from

retail-to-farm will be subject to the HMR, but movements of the same

products between fields of the same farm are excepted.

On this basis, these petitioners appear to seek a broad exception

from the HMR for any retailer or farmer that transports agricultural

products ``from retail-to-field, between fields, and from the farm back

to the local source of supply,'' that would be applicable throughout

the United States, and not just in those few States that allow

exceptions for movements of agricultural products.

[[Page 49562]]

The literal wording of the exception requested in this petition would

apply to all hazardous materials transported by any retailer that made

a single delivery of a hazardous material to a farmer. Under this

interpretation, a company that delivers gasoline to a farm, for use in

farm machinery, could claim that all its deliveries fit under the

requested exception, even though other deliveries would be to

businesses having no direct connection with agriculture.

In response to this petition, opposing comments were submitted

jointly by the American Trucking Association, the Association of Waste

Hazardous Materials Transporters, and NTTC. These organizations

questioned whether agricultural retailers could or should be

distinguished from other shippers and carriers of hazardous materials,

stating that they did not believe agricultural retailers deserved

``special treatment.'' These organizations also referred to:

--The availability of educational materials to foster understanding of

the HMR and compliance, furnished by RSPA and other industry

organizations.

--The many crop protection products which are EPA-designated

``hazardous substances'' and, accordingly, have been subject to the HMR

in intrastate shipments since 1980, so that many agricultural retailers

should already be complying with the HMR in shipping or transporting

these hazardous substances.

--The inclusion among the petitioners of retailers and organizations in

many States that have already adopted the HMR as State law and have not

provided broad exceptions for agricultural operations, implying that

these petitioners seek to ``rollback'' existing regulations.

--Questions about whether the petitioners estimates of the costs of

compliance are valid and actually: (1) apply in those States where the

transportation of agricultural products is already subject to the HMR;

(2) consider existing inventory and delivery systems; and (3) account

for the information provided to the retailer when it receives a

shipment of hazardous materials from its supplier.

--The absence of any condition or qualification (distance, type of

road, public access, etc.) that might limit public exposure to risks

involved in the transportation of hazardous agricultural products.

Both the petition for reconsideration and the responding comments are

set forth in full at the end of this section (IV).

RSPA denies the petition for reconsideration because it believes

that the broad exception requested would eliminate or preclude

application of many of the basic requirements that are designed to

promote a safe transportation system. Shipping papers, labels,

placards, and identification number displays are the basic elements of

a hazard communication system that is recognized throughout the United

States and the world. The hazard communication system provides basic

information to emergency responders so that they can better respond to

hazardous materials incidents and protect themselves, the public, and

the environment. The chemical and physical hazards presented by

hazardous materials are the same whether being transported in

interstate or intrastate commerce by an agricultural supplier.

Hazardous materials, such as gasoline, which is an extremely flammable

liquid, and anhydrous ammonia, which is poisonous when inhaled, are

frequently transported in both interstate and intrastate commerce by

agricultural retailers. Hazardous materials releases can occur

regardless of whether a motor carrier is a common carrier or a private

carrier, such as an agricultural retailer. During a recent hearing, a

Senator reminded RSPA of an incident in which six people were killed

and 76 hospitalized as a result of a release of agricultural grade

anhydrous ammonia from cargo tank in Houston, Texas.

Lack of adequate hazard information at the site of an incident can

result in inappropriate responses. In some cases, an emergency

responder may not realize a hazardous material is involved and not take

appropriate action. In other cases, unnecessary actions could be taken

that result in significant disruptions to transportation corridors and

unnecessary evacuations until sufficient information is obtained about

the commodity being transported. RSPA believes that the safe

transportation of hazardous materials cannot be achieved without a

hazard communication system that provides the minimum information

necessary to the carrier, enforcement personnel, and emergency

responders when hazardous materials are involved in transportation

incidents.

In adopting Sec. 173.5, RSPA provided significant relief to farmers

who transport hazardous materials. Taking into account the limited

potential for high-exposure incidents, RSPA completely excepted from

coverage of the HMR a farmer's transportation of an agricultural

product (other than a Class 2 gas) over local roads between fields of

the same farm, so long as the movement conforms to State requirements.

RSPA also excepted a farmer from certain compliance requirements in the

HMR involving training and emergency response (Part 172, Subparts G and

H), when the farmer transports certain quantities of agricultural

products to or from his or her farm, over distances up to 150 miles

from the farm, if in conformance with State requirements. In the latter

situation, RSPA did not provide exceptions from the HMR's other

requirements, such as those for packaging, shipping papers, and

placarding. Beyond a farmer's short trips between fields of a single

farm over local roads, RSPA does not believe there is justification for

waiving these fundamental requirements. Certain quantities of

agricultural products that are hazardous materials remain eligible for

the ``materials of trade'' exception in Sec. 173.6, and non-

specification packagings used by an intrastate carrier of agricultural

products may also be authorized under the exception from the HMR's

requirements in Sec. 173.8.

Packaging requirements ensure that hazardous materials can survive

normal transportation conditions, by assuring that the packaging

material is compatible with its contents and that the container has

been designed, constructed and closed in such a manner to prevent

failure and an unintentional release of the hazardous material.

Shipping papers, placards, and other forms of hazard communication are

essential to provide emergency responders with the minimum information

necessary to protect themselves, the public, and the environment, when

an incident occurs during the transportation of hazardous materials. In

the SNPRM, RSPA expressed its concern over ``the potential for the lack

of uniform communication and miscommunication to emergency responders

in any location where they may encounter hazardous materials

incidents.'' Under the exception requested by the petitioners, vehicles

transporting agricultural products that are hazardous materials would

not be required to bear placards; an emergency responder would have to

assume that any unplacarded vehicle contained hazardous materials if it

had an in-State license plate, no matter where the vehicle was found

within the State.

The petitioners represent many types of commercial businesses, of

varying sizes, that routinely offer and transport hazardous materials.

Many of them are already subject to the HMR. Five companies listed in

the petition that are interstate carriers have combined gross sales of

more than $11 billion per year

[[Page 49563]]

and combined annual profits of more than $1 billion per year. All of

the hazardous materials carried by any interstate carrier (not just

those shipments between States) are already covered by the HMR. Other

petitioners may operate within one of the many States that have adopted

the HMR without exceptions for agricultural products, and the HMR

requirements already apply to them. Still others transport agricultural

products that are hazardous substances, such as anhydrous ammonia and

many pesticides. That transportation has been subject to the HMR for 17

years, even within those States that have agricultural exceptions.

For these types of businesses, HM-200 does not impose new

regulations, as the petition suggests. RSPA believes that Congress'

intent, in mandating the extension of the HMR to all intrastate motor

carriers, was to bring the remainder up to the same standard of safety,

and not to eliminate the existing application of the HMR where it

already exists. The latter would be the effect of the exception sought

in the petition.

The petitioners' cost estimates appear overstated, if only for the

fact that many retailers are already subject to the HMR, so that any

marginal costs in evaluating shipments, adding necessary information to

bills of lading (or other documentation that already exists), and

applying placards would be minimal. It does not seem reasonable that

retailers' employees would need an additional ten minutes, 100 times a

day, throughout a 45-day period, to determine if the agricultural

product being shipped is a hazardous material. As the opposing comment

noted, all necessary information concerning an agricultural product,

including whether it is hazardous, is already provided on documents

that accompany the product, including shipping papers and material

safety data sheets, when an agricultural retailer receives it from its

supplier. In addition, packaged hazardous materials are marked with the

shipping name and identification number of the hazardous materials and

most display a hazard warning label. According to the requirements of

the Occupational Safety and Health Administration, markings and

labeling required by the HMR must remain on packages of hazardous

materials until they have been emptied. Therefore, packages of

hazardous materials in an agricultural retailer's storage area should

already display the markings and labels required by the HMR.

A retailer should not have to apply new placards for each load of

agricultural products subject to the HMR, as petitioners' cost

estimates assume. Placards can easily be reused or permanently mounted

on vehicles. The estimated cost of $1,575 per year for placards, for 25

loads per day, amounts to several times the cost of using permanently-

mounted changeable metal placard sets on 25 separate vehicles (if that

many separate vehicles were needed for the 25 loads per day assumed to

require placarding), at approximately $120 per vehicle (4 sets per

vehicle), when the cost of metal placards is amortized over their

expected ten-year life.

In the normal course of their business activities, retailers

routinely prepare documents in connection with sales and deliveries of

their agricultural products, such as invoices, bills of lading, and

delivery receipts, many of which are generated by computer. Even in

those situations where a permanent ``laminated'' shipping paper may not

be feasible, any of these existing documents can be used as the

shipping paper required by the HMR. Once standard forms or computer

programs are prepared, there should be little or no additional cost to

include any additional information required by the HMR on these

documents.

Even using the petitioners' estimates, which RSPA finds to be

excessive, given the discussion above, the total annual projected cost

of $12,300 for a retailer that handles 100 loads per day, over a 45-day

period, works out to less than $2.75 per load. This appears to be a

small fraction of the sales price of a load of agricultural products

that may consist of thousands of pounds of fertilizer or pesticides.

These minimal additional costs are outweighed by the benefits of

applying the safety requirements of the HMR to those commercial motor

vehicle operations.

All hazardous materials, including agricultural products, pose the

same flammable, toxic, or explosive risks regardless of who is

transporting them. Petitioners have not demonstrated that the factors

underlying the exceptions in Sec. 173.5 should apply to retailers, nor

that the broad additional exceptions requested would be justified.

The petition for reconsideration of the agricultural exception in

Sec. 173.5 and the responding comment are set forth below:

February 7, 1997.

Mr. Alan I. Roberts,

Administrator, Research & Special Programs Administration, U.S.

Department of Transportation 400 Seventh Street, S.W., Washington,

D.C. 20590

Re: Petition for Reconsideration of Docket HM-200

Dear Mr. Roberts: As per 49 CFR 106.35, please accept this

petition for reconsideration of HM-200 (62 Federal Register 1208),

which in its present form will have a serious economic and

operational impact on the agricultural industry in the United

States.

Statement of Complaint

In the preamble of the HM-200 rule, RSPA acknowledges that it

received ``more than 500 comments from farmers and agricultural

supply businesses who expressed concern that this rule would

prohibit states from granting exceptions for farmers.'' In the final

rule, RSPA provided an exception from the HMR for farmers who

transport agricultural products between fields of the same farm. We

appreciate this action by RSPA, as it will provide some relief for

farmers. However, we know that many of the 500 comments to RSPA also

expressed concern about the impact of the rule on ag retailers as

well. RSPA failed to acknowledge the concerns of the retail segment

of the industry, whose operations have a direct impact on the

farmer, and whose transport of materials is often identical to that

of the farmer.

We are also aware that RSPA was directed in a conference report

accompanying the FY 1997 DOT appropriations bill ``to give serious

consideration to establishing an agriculture exception consistent

with similar exemptions already granted by the department.''

Finally, Dr. D.K. Sharma received a ``Dear Colleague'' letter

signed by 48 Congressmen and Senators that urged RSPA to ``carefully

consider the concerns of the (ag) industry'' when formulating this

rulemaking.

Despite all the directives to do so, after evaluating the

language in the final HM-200 rule we are deeply disappointed that

RSPA has failed to provide adequate relief from the HMR for both

farmers and retailers. The minimal exceptions granted in Section

173.5 will do little to facilitate the efficient and historically

safe movements of ag inputs from retail to farm, and will take a

devastating economic toll on the agricultural industry.

Final Rule Unreasonable, Impractical

HM-200 effectively negates state exceptions for ag retailers and

farmers from the HMR. In most cases, these exceptions have existed

for decades. Because many farmers and ag businesses have never had

to comply with the HMR, they are unaware of the implications of

applying these federal rules to movements of agricultural products

from retail-to-farm.

This rule is unreasonable and impractical from several

standpoints.

1. The rule is effective October 1. Beginning next fall and

extending into the spring, it will cause tremendous confusion for

farmers, ag businesses and state officials who must now deal with a

federal law that dictates the application of complicated hazardous

materials regulations on local, rural shipments of agricultural

inputs. On average, the bulk of agricultural product shipments occur

during a 45-day period when planting commences, and periodically in

the fall when some fertilizer is applied. Farmers and ag businesses

do not transport agrichemicals every day of the year. Forcing them

to comply with this complex regulation

[[Page 49564]]

for a few brief periods during the year is not justified and will

only result in confusion and misunderstanding as each planting

season rolls around--and we don't see it getting any easier as time

goes on.

2. Although farmers received some relief from the HMR for

between-field movements of DOT regulated agrichemicals, agricultural

retailers were dealt a massive blow when RSPA completely ignored

their similar need for relief when delivering these same products to

the farm, or when the farmer himself picks up these products at the

retail site and takes them to the farm.

Based on valid industry estimates, it will cost a typical

agricultural retail facility $12,300 annually to comply with the

mandates of HM-200. (See Attachment A for analysis of costs.) In the

midwest alone, the number of ag retail facilities affected exceed

5,000 in number. At $12,300 per facility, that's a cost of

$61,500,000 per year to comply with HM-200, and that's only in the

midwest (i.e. Illinois, Indiana, Iowa, Wisconsin, Minnesota, Ohio).

These are costs that will eventually be passed on in terms of higher

costs of products and services to the farmer. The farmer, however,

cannot pass along these costs due to the ag marketing structure. The

added expense of complying with HM-200 will ultimately contribute to

lower net farm income nationwide, without any significant increase

in public safety.

3. Although the goal of HM-200 is uniformity, state officials in

agricultural states will still be required to enforce the HMR only

on certain types of agricultural movements, even though the movement

of agricultural products--whether from retail-to-farm or between

fields--will remain similar in their makeup. In essence, the same

quantities and types of agricultural products will be on trucks

leaving retail sites and on trucks traveling between fields.

We believe that for purposes of uniformity and enforcement, it

makes more sense to allow exceptions from the HMR for both retail-

to-farm and farm-to-farm shipments, whether the ag products are

picked up by the farmer or delivered by the retailer. The excellent

safety record of the ag industry merits this exception.

We believe HM-200 to be an unreasonable burden on the

agricultural industry, impractical in terms of compliance and

enforcement, and unnecessary based on the excellent safety record

for retail-to-farm and farm-to-farm shipments of ag products. We

stand behind our safety record and would welcome contradictory data

from RSPA that proves that these movements of ag products pose an

unreasonable threat to public safety.

We, the undersigned, petition RSPA to reconsider the impact that

HM-200 will have on farmers and agricultural supply businesses. We

urge RSPA to revise 49 CFR, Section 173.5 to incorporate language

that will provide an exception from the HMR for both farmers and

retailers who transport agricultural products from retail-to-farm,

between fields, and from the farm back to the local source of

supply.

We offer our knowledge and expertise to you in this endeavor,

and would welcome the opportunity to sit down with RSPA and create a

workable regulation--one that recognizes the unique needs of the

agricultural industry, streamlines enforcement and provides a

framework in which we can continue to safely and efficiently provide

farmers with the tools they need to feed the U.S. and the world.

Sincerely,

Agribusiness Association of Iowa

Agricultural Retailers Association

Alabama Farmers Cooperative, Inc.

Alliance of State Agri-Business Assoc.

American Farm Bureau Federation

Arizona Crop Protection Association

CF Industries, Inc.

Countrymark Coop, Inc.

Farmland Industries, Inc.

Georgia Agribusiness Council

Gold Kist, Inc.

GROWMARK, Inc.

Illinois Farm Bureau

Illinois Fertilizer & Chemical Assoc.

Indiana Farm Bureau, Inc.

Indiana Plant Food & Ag Chemical Assoc.

Iowa Farm Bureau Federation

Iowa Institute for Cooperatives

Kansas Fertilizer & Chemical Association

Kansas Grain & Feed Association

Louisiana Ag Industries Association

Michigan Agribusiness Association

Minnesota Crop Production Retailers

Mo-Ag Industries Council

Montana Agricultural Business Association

National Association of Wheat Growers

National Cotton Council

National Council of Farmer Cooperatives

Nebraska Cooperative Council

Nebraska Fertilizer & Ag-Chemical Inst., Inc.

New England Council for Plant Protection

Ohio Agribusiness Association

Ohio Farm Bureau Federation

Oklahoma Fertilizer & Chemical Association

Rocky Mountain Plant Food & Ag Chem Asc.

SF Services, Inc.

South Dakota Farm Bureau

South Dakota Fertilizer & Ag Chemical Asc.

Southern States Cooperative

Tennessee Farmers Cooperative

The Andersons

United Suppliers, Inc.

WILFARM L.L.C.

Wisconsin Agri-Service Association, Inc.

Wyoming Agri-Business Association

Attachment A

Cost to Retail Ag Facilities to Comply with HM-200.

Manpower: 10 additional minutes per load to evaluate

shipments of agricultural products to determine applicability to the

HMR.

On average, during spring season each agrichemical facility

processes 100 loads per day of agricultural products (both packaged

and in solution), which includes loads picked up by the farmer and

loads delivered by the retailer.

100 loads per day x additional 10 minutes = 1000 minutes

60 min/hour = 16.666 additional manhours per day spent on

compliance.

16.666 hours x $14 per hour average salary for personnel =

$233.333 per day for additional manhours to evaluate loads for

compliance.

$233.333 per day x 45 days of peak movement of agricultural

products = $10,500 (rounded). This does not take into account

movements made during off-season.

Placards: Assume 25% of the 100 loads per day will

require placarding. Most inexpensive placard is .35 cents. .35 x 4

= $1.40 per load. 25 loads per day x $1.40 = $35 per day. $35 x

45 days of spring season = $1575.

Shipping Papers: It is highly unlikely that we can use

``laminated'' shipping papers as RSPA indicates in the preamble.

Products, package sizes and shipping descriptions for ag products

change too often to make pre-printed papers feasible. However,

assuming we can generate some type of shipping paper at .05 cents

per page, the costs are as follows: 100 loads per day x .05 for

shipping paper = $5.00 x 45 days of spring season = 225. This does

not take into account unknown cost for software and software

maintenance to keep the descriptions up to date.

Minimum Annual Cost to Comply for AG Businesses to Comply With HM-200

$10,500. in manhours

1,575... in placards

225..... in shipping papers (this cost likely to be substantially more)

---------

$12,300. annually for each retail ag facility--with thousands of

facilities in the U.S., the economic impact may be in the

hundreds of millions of dollars.

Source: Data provided by management personnel at retail

agribusiness facilities.

March 17, 1997.

Alan I. Roberts,

Associate Administrator, Hazardous Materials Safety, Research and

Special Programs Administration, U.S. Department of Transportation,

400 Seventh St., SW., Washington, DC 20590

RE: HM-200

Dear Mr. Roberts: The undersigned associations representing

carriers of hazardous materials are writing to express concern over

the filing by the Agricultural Retailers Association (ARA), on

behalf of a number of organizations with ties to the agri-business,

of a petition for reconsideration RSPA's final rule in the matter of

HM-200, hazardous materials in intrastate commerce. We realize that

these comments are not timely filed. However, we beg the indulgence

of RSPA as provided by 49 CFR 106.23 to consider late filed comments

``as far as practicable.''

For over a decade, carriers we represent have been required to

follow RSPA's hazardous materials regulations (HMRs) when engaged in

the intrastate commerce of hazardous substances, hazardous waste,

flammable cryogenic liquids and, more recently, marine pollutants.

Our members have benefitted by the consistent application of

hazardous materials rules to all operations whether the

transportation is intrastate, interstate or foreign. Our review of

the ARA petition causes us to raise the following concerns:

For Whom Is Relief Requested?

The petitioner states that HM-200 provided relief for farmers,

but did not

[[Page 49565]]

extend relief to ``ag retailers.'' In describing why HM-200 is

``unreasonable and impractical'', the petitioner repeatedly links

the retail segment of the industry with farmers. However, no

information is provided to support the linkage other than both, as

an incidental part of their business, may use the same roads for

transport. We find it hard to believe that the business operation of

a typical ag retailer described in the petitioner's ``Attachment A''

comports with the typical business operation of a farmer.

Just as we see little similarity between an ag retailer and a

farmer, it is not clear what circumstance(s) distinguishes the

retailer from other shippers/carriers of hazardous materials that do

not ship/haul agricultural-related hazardous materials. We

understand that the agricultural supply industry is quite diverse as

to the size of company involved and the scope of these company

operations. Companies engaged in agri-business range from multi-

national corporations to those that would be considered local small

businesses. We note, however, that we would hardly qualify as

``small'' operations which, according to the petitioner, ship on

average from each facility 100 hazardous materials loads a day. In

any event, we have to assume that the petitioner would not want to

create price competitive advantages for one segment of its industry

over another. Consequently, the relief sought must be assumed to

apply to all sizes and configurations of shipper/carriers.

Non-agricultural shippers/carriers of hazardous materials, no

matter the size of the operation, have not been granted universal

relief from the HMRs simply by virtue of how the consignees served

by the shipper/carriers use the commodity transported. Since the

HMRs are established to ``protect[] against the risks to life and

property inherent in the transportation of hazardous material'' [49

U.S.C. 5101.], we fail to see how the petitioner has justified

special treatment that will allow ag retailers to ignore these

protective measures.

What Is the Justification for the Relief Being Sought?

The petitioner claims that HM-200 is ``unreasonable and

impractical'' for a number of reasons, and that the only appropriate

response to these concerns is to ``provide an exception from the

HMRs retailers who transport agricultural products from retail-to-

farm, between field, and from the farm back to the local source of

supply.'' Such a zero-sum proposal lacks credibility.

Based on the ag retailers' own justification for exception from

the HMRs, we offer the following observations:

Complexity of Rules: the rules may be ``new'', but

``complex'' is a relative term that deserves more analysis. For

example, compared to rules issued under statutes administered by the

U.S. Environmental Protection Agency (EPA), the HMRs are simple.

Congress has granted DOT/RSPA authority to require nationally

uniform and internationally harmonized rules. RSPA provides free, or

at cost, numerous services and products to aid compliance. These

services and products include a comprehensive advisory guidance

document published in the Federal Register to remind persons

involved in the transportation of hazardous materials of their

regulatory responsibilities, newsletters, conferences, training

modules, and the like. Those representing the ag retail industry

could perform a great service to their membership by informing

members of these resources.

Hazardous Substances: Congress mandated that DOT

regulate EPA-designated ``hazardous substances'' as ``hazardous

materials.'' [42 U.S.C. 9656(a).] Hazardous substances have been

regulated by RSPA in intrastate commerce since 1980. [49 CFR 171.1]

Many crop protection products are regulated hazardous substances. In

short, ag retailers should have been complying with the HMRs for the

transport of these materials for the last 15 years. Any relief RSPA

could grant from the HMRs will not change the fact that the

materials are regulated by EPA.

In terms of any non-hazardous substance materials that are

shipped/carried by ag retailers, the petitioner provides no

information about the number, kind, and quantity of such materials

now newly regulated by HM-200. Such information would be critical

for RSPA to evaluate the merit of the level of relief requested.

Scope of the Exception Requested: The HMRs apply

nationally. Prior to HM-200, the federal government provided

incentives to states to adopt the HMRs for intrastate commerce.

According to data of the Federal Highway Administration, all but one

state had adopted the HMRs and of those that adopted them only 8

provided exceptions specific to farmers and/or the broader agri-

business community. In short, 41 states do not provide farm-specific

exceptions from the HMRs. Yet, organizations that by their names

represent agri-business in at least 18 states joined the ARA in

support of this petition. Some organizations joining the petition

appear to have nationwide representation. Is RSPA to infer that the

petitioner wishes to rollback regulation that has already been

implemented in 41 states?

Costs: As noted above, agri-business has already been

subject to the HMRs in the great majority of states. Any costs

associated with the implementation of HM-200 should only reflect

compliance costs that may ensue in the 9 states where some

exceptions were granted to segments of the agri-business community.

Also, some discount should be factored in for the proportion of the

100 shipments/day that are hazardous substances and have been

subject to the HMRs even in those states that have not adopted these

federal rules as a matter of state law.

Whatever is ultimately determined to be the proper scope in

computing the cost basis, we question some of the cost estimates

used by the petitioner in ``Attachment A.'' The petitioner states

that ``[p]roducts, package sizes and shipping descriptions for ag

products change * * * often * * *'' Obviously, to serve their

customers, the ag retail industry has systems in place to track and

fill orders for ag products in a rapidly changing environment. At

the same time, we are unaware of commercial transactions involving

the exchange of freight where some sort of shipping paper does not

accompany the load for proof of delivery and/or billing purposes.

Recognizing this fact, RSPA does not require a unique form to

communicate the presence of hazardous materials in a load and to

communicate appropriate emergency response information. [Shipments

required by EPA to be tracked on the Uniform Manifest are the

exception.] Additionally, we would assume that most deliveries to

local ag retail facilities were transported in full compliance with

the HMRs and that necessary shipping paper information could be

readily transcribed from the papers accompanying these movements to

the shipping papers necessary for further downstream distribution.

We specifically question the reliability of the estimate for

placarding vehicles where the implication is given that placards are

not reusable. Reusable configurations of placards can be purchased.

In short, we do not believe the economic analysis is accurate.

Risk: The requested ``retail-to-farm and from the farm

back to the local source of supply'' exception is subject to no

qualification such as distance traveled, condition of the roads,

access of the public, time-of-travel, or any other conditions that

might limit the exposure of public to the excepted transportation

events. We simply note that the roads used to support what would be

movements subject to no official safety standards are public and

shared by farmer and non-farmer alike. A public that, by law, RSPA

must protect.

Conclusion

The petitioner references two congressionally-generated

documents that request RSPA to carefully consider the concerns of

the agriculture industry when issuing rules under HM-200. No

evidence is provided that suggests RSPA did not fulfill this charge.

To the contrary, we believe the attention drawn to this issue by

agri-business ensured that RSPA not propose a rule that could not be

supported on its merits. RSPA walked a careful balance between those

in agri-business that advocated for exemption from the HMRs and

those primarily in the emergency response community that opposed

exceptions to safety rules.

RSPA provides many services to help the regulated community

achieve compliance. We have no doubt that RSPA would make every

effort to provide needed compliance services to ag retailers.

We appreciate the opportunity to submit these comments. Please

contact us if additional input is necessary on any of the points

raised above.

Sincerely,

Paul Bomgardner,

Hazardous Materials Specialist, American Trucking Associations, Inc.

Cynthia Hilton,

Executive Director, Association of Waste Hazardous Materials

Transporters.

Cliff Harvison,

President, National Tank Truck Carriers, Inc.

This final rule delays for one year the mandatory compliance date

for all requirements in the January 8, 1997, final rule under Docket

HM-200 that

[[Page 49566]]

otherwise would become mandatory on October 1, 1997. Because of the

relief provided by this final rule, it is effective October 1, 1997,

without the customary 30-day delay following publication.

V. Regulatory Analyses and Notices

A. Executive Order 12866 and DOT Regulatory Polices 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) due to significant public

and congressional interest. A regulatory evaluation was prepared for

the January 8, 1997 final rule and is available for review in the

Docket. The regulatory evaluation was reviewed and determined not to

require updating. The effect of this final rule will delay for one year

the costs and benefits of applying the HMR to intrastate motor

carriers. There is no delay in the materials of trade exception and its

benefits.

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.

This rule concerns the packaging, marking, labeling, placarding and

description of hazardous materials on shipping papers. This rule

preempts State, local, or Indian tribe requirements in accordance with

the standards set forth above. RSPA lacks discretion in this area, and

preparation of a federalism assessment is not warranted.

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

concerning any of the covered subjects, 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. RSPA determined that the effective date of Federal

preemption for the requirements in this rule concerning covered

subjects is January 1, 1998.

C. Regulatory Flexibility Act

The January 8, 1997 final rule affects many small business entities

that ship or transport hazardous materials, however any adverse

economic impact should be minimal. Many small entities affected by this

final rule also receive relief from current regulatory requirements.

The regulatory evaluation developed in support of the January 8, 1997

final rule includes a benefit-cost analysis that justifies its

adoption, primarily due to the positive net benefits that may be

realized by small entities under the materials of trade exception. RSPA

has reviewed this regulatory evaluation and determined it was not

necessary to update it. As noted earlier, RSPA is not delaying the

materials of trade exception. This final rule, however, delays for one

year the costs and benefits of applying the HMR to intrastate motor

carriers.

D. Paperwork Reduction Act

There are no new information collection requirements in this final

rule.

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

Unified Agenda.

List of Subjects

49 CFR Part 171

Exports, Hazardous materials transportation, Hazardous waste,

Imports, Reporting and recordkeeping requirements.

49 CFR Part 173

Hazardous materials transportation, Packaging and containers,

Radioactive materials, Reporting and recordkeeping requirements,

Uranium.

In consideration of the foregoing, 49 CFR parts 171 and 173 are

amended as follows:

PART 171--GENERAL INFORMATION, REGULATIONS, AND DEFINITIONS

1. The authority citation for part 171 continues to read as

follows:

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

Sec. 171.1 [Amended]

2. In Sec. 171.1 as revised at 62 FR 1215 effective October 1,

1997, paragraph (a)(1) is amended by removing the last period in the

paragraph and adding at the end of the last sentence the wording ``,

(except that until October 1, 1998, this subchapter applies to

intrastate carriers by motor vehicle only in so far as this subchapter

relates to hazardous waste, hazardous substances, flammable cryogenic

liquids in portable tanks and cargo tanks, and marine pollutants).''

PART 173--SHIPPERS--GENERAL REQUIREMENTS FOR SHIPMENTS AND

PACKAGINGS

3. The authority citation for part 173 continues to read as

follows:

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

Sec. 173.5 [Amended]

4. In Sec. 173.5 as revised at 62 FR 1215 effective October 1,

1997, paragraph (a)(2) is amended by revising the date ``July 1, 1998''

to read ``October 1, 1998''.

Sec. 173.6 [Amended]

5. In Sec. 173.6 as added at 62 FR 1216 effective October 1, 1997,

paragraphs (a)(1) introductory text, (a)(2), (b)(4), and (d) are

revised; paragraph (a)(1)(iii) is amended by removing the semicolon and

adding a period in its place; and a new paragraph (e) is added to read

as follows:

Sec. 173.6 Materials of trade exceptions.

* * * * *

(a) * * *

(1) A Class 3, 8, 9, Division 4.1, 5.1, 5.2, 6.1, or ORM-D material

contained in a packaging having a gross mass or capacity not over--

* * * * *

(2) A Division 2.1 or 2.2 material in a cylinder with a gross

weight not over 100 kg (220 pounds), or a permanently mounted tank

manufactured to ASME

[[Page 49567]]

standards of not more than 70 gallon water capacity for a non-liquefied

Division 2.2 material with no subsidiary hazard.

* * * * *

(b) * * *

(4) For gasoline, a packaging must be made of metal or plastic and

conform to the requirements of this subchapter or to the requirements

of the Occupational Safety and Health Administration of the Department

of Labor contained in 29 CFR 1910.106(d)(2) or 1926.152(a)(1).

* * * * *

(d) Aggregate gross weight. Except for a material of trade

authorized by paragraph (a)(1)(iii) of this section, the aggregate

gross weight of all materials of trade on a motor vehicle may not

exceed 200 kg (440 pounds).

(e) Other exceptions. A material of trade may be transported on a

motor vehicle under the provisions of this section with other hazardous

materials without affecting its eligibility for exceptions provided by

this section.

Sec. 173.8 [Amended]

6. In Sec. 173.8 as added at 62 FR 1216 effective October 1, 1997,

paragraph (d)(3) is amended by revising the date ``July 1, 1998'' to

read ``October 1, 1998''.

Issued in Washington, DC on September 16, 1997 under authority

delegated in 49 CFR, part 1.

Kelley S. Coyner,

Deputy Administrator.

[FR Doc. 97-25065 Filed 9-18-97; 8:45 am]

BILLING CODE 4910-60-P