Document ID: PHMSA-2009-0192-0201
Agency: phmsa
Document Type: Proposed Rule
Title: Pipeline Safety: Pipeline Damage Prevention Programs
Posted Date: 2012-04-02T04:00Z

[Federal Register Volume 77, Number 63 (Monday, April 2, 2012)]
[Proposed Rules]
[Pages 19800-19834]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-7550]

[[Page 19799]]

Vol. 77

Monday,

No. 63

April 2, 2012

Part III

Department of Transportation

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Pipeline and Hazardous Materials Safety Administration

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49 CFR Parts 196 and 198

Pipeline Safety: Pipeline Damage Prevention Programs; Proposed Rule

  Federal Register / Vol. 77 , No. 63 / Monday, April 2, 2012 / 
Proposed Rules  

[[Page 19800]]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 196 and 198

[Docket No. PHMSA-2009-0192]
RIN 2137-AE43

Pipeline Safety: Pipeline Damage Prevention Programs

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), 
Department of Transportation (DOT).

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: This Notice of Proposed Rulemaking (NPRM) seeks to revise the 
Pipeline Safety Regulations to: Establish criteria and procedures for 
determining the adequacy of state pipeline excavation damage prevention 
law enforcement programs; establish an administrative process for 
making adequacy determinations; establish the Federal requirements 
PHMSA will enforce in states with inadequate excavation damage 
prevention law enforcement programs; and establish the adjudication 
process for administrative enforcement proceedings against excavators 
where Federal authority is exercised. Pursuant to the Pipeline 
Inspection, Protection, Enforcement, and Safety (PIPES) Act of 2006, 
establishment of review criteria for state excavation damage prevention 
law enforcement programs is a prerequisite should PHMSA find it 
necessary to conduct an enforcement proceeding against an excavator in 
the absence of an adequate enforcement program in the state where the 
violation occurs. The development of these criteria and the subsequent 
determination of the adequacy of state excavation damage prevention law 
enforcement programs is intended to encourage states to develop 
effective excavation damage prevention law enforcement programs to 
protect the public from the risk of pipeline ruptures caused by 
excavation damage, and allow for Federal administrative enforcement 
action in states with inadequate enforcement programs.

DATES: Persons interested in submitting written comments on this NPRM 
must do so by June 1, 2012.

ADDRESSES: Comments should reference Docket Number PHMSA-2009-0192 and 
may be submitted in the following ways:
     Web Site: Comments should be filed at the Federal 
eRulemaking Portal, http://www.regulations.gov. Follow the online 
instructions for submitting comments.
     Fax: 1-202-493-2251.
     Mail: Docket Operations Facility (M-30), U.S. Department 
of Transportation, West Building, 1200 New Jersey Avenue SE., 
Washington, DC 20590.
     Hand Delivery: Docket Operations Facility, U.S. Department 
of Transportation, West Building, Room W12-140, 1200 New Jersey Avenue 
SE., Washington, DC 20590 between 9 a.m. and 5 p.m., Monday through 
Friday, except Federal holidays.
    Instructions: Identify the docket number, PHMSA-2009-0192, at the 
beginning of your comments. If you mail your comments, we request that 
you send two copies. To receive confirmation that PHMSA received your 
comments, include a self-addressed stamped postcard.

    Note: Comments are posted without changes or edits to http://www.regulations.gov, including any personal information provided. 
There is a privacy statement published on http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Sam Hall, Program Manager, PHMSA by 
email at sam.hall@dot.gov or by telephone at (804) 556-4678 or Larry 
White, Attorney Advisor, PHMSA by email at lawrence.white@dot.gov or by 
telephone at (202) 366-9093.

SUPPLEMENTARY INFORMATION: 

I. Executive Summary

    This NPRM proposes to amend the Federal Pipeline Safety Regulations 
to: (1) Establish criteria and procedures PHMSA will use to determine 
the adequacy of state pipeline excavation damage prevention law 
enforcement programs. Such determination is a prerequisite should PHMSA 
find it necessary to conduct an administrative enforcement proceeding 
against an excavator for violation of the Federal requirements proposed 
in this NPRM in the absence of adequate state enforcement of state 
excavation damage prevention laws; (2) establish an administrative 
process for states to contest notices of inadequacy from PHMSA should 
they elect to do so; (3) establish the Federal requirements PHMSA will 
enforce in states with inadequate excavation damage prevention law 
enforcement programs; and (4) establish the adjudication process for 
administrative enforcement proceedings against excavators where Federal 
authority is exercised. In the absence of regulations specifying the 
criteria that PHMSA will use to evaluate a state's excavation damage 
prevention law enforcement program, PHMSA would take no enforcement 
action.
    Executive Orders 12866 and 13563 require agencies to regulate in 
the ``most cost-effective manner,'' to make a ``reasoned determination 
that the benefits of the intended regulation justify its costs,'' and 
to develop regulations that ``impose the least burden on society.'' The 
expected benefit of this rulemaking action is an increased deterrent to 
violations of one-call requirements (though requirements vary by state, 
a one-call system allows excavators to call one number in a given state 
in order to ascertain the presence of underground utilities) 
requirements and the attendant reduction in pipeline incidents and 
accidents caused by excavation damage. Based on incident reports 
submitted to PHMSA, failure to use an available one-call system is a 
known cause of pipeline accidents. PHMSA analyzed the costs and 
benefits of the proposed rule. To determine the benefits, PHMSA was 
able to obtain data for three states over the course of the 
establishment of their excavation damage prevention programs 
(additional information about these states can be found in the 
regulatory analysis that is in the public docket). Each of the three 
states had a decrease of at least 63 percent in the number of 
excavation damage incidents occurring after they initiated their 
enforcement programs. While many factors can contribute to the decrease 
in state excavation damage incidents, PHMSA found these states to be a 
helpful starting point on which to estimate the benefits of this 
rulemaking. PHMSA utilized three separate effectiveness rates to 
conservatively evaluate the benefits of this rulemaking. The rates are 
based on the reduction of incidents of the three states studied and 
more conservative effective rates because state pipeline programs vary 
widely, which may lead to a lower effective rate than the three states 
analyzed. In addition, we compared the overall costs of this rule to 
the average costs associated with a single excavation damage incident. 
PHMSA expects the total cost of this rule to be $1.2 million while the 
benefits are $23 million.\1\
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    \1\ These numbers are discounted over 10 years at 7%.
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    This rulemaking has three separate potential cost impacts. The 
costs to excavators to comply with the Federal excavation standard, the 
cost to states to have their enforcement programs reviewed, to appeal a 
determination of ineffectiveness and to ask for reconsideration, and 
the cost impact on the Federal government to enforce the Federal 
excavation standard. With

[[Page 19801]]

regard to the potential cost impacts on excavators, PHMSA believes that 
excavators will not incur any additional costs because the Federal 
excavation standard, which is also a self-executing standard, mirrors 
the excavation standard in each state and does not impose any 
additional costs on excavators. The cost impacts on states are those 
costs associated with having their enforcement programs reviewed 
(estimated to be $20,000 per year), to appeal a determination of 
ineffectiveness (estimated to be a one time cost of $125,000) and to 
ask for reconsideration (estimated to be a one-time cost of $350,000). 
Therefore, the total estimated first year cost impacts on states are 
(($20,000 (annually) + (14 x $25,000) + (5 x $25,000)) = $495,000. The 
annual cost impacts on states in subsequent years are estimated to be 
$20,000. The annual cost impacts on the Federal government are 
estimated to be approximately $80,000. Therefore, the total first year 
cost of this rulemaking is estimated to be $547,688 ($470,000 + 
$77,688). The following years the costs are estimated to be 
approximately $100,000 per year. The total cost over ten years, with a 
3% discount rate is $1,331,876 and at a 7% discount rate is $1,182,602. 
PHMSA is specifically asking for comments on whether it has adequately 
captured the scope and size of the costs of this rulemaking. The 
average annual benefits range from $10,939,602 to $3,445,975. 
Evaluating just the lower range of benefits over ten years results in a 
total benefit of over $29,000,000, with a 3% discount rate, and over 
$23,000,000, with a 7% discount rate. In addition, over the past 22 
years, the average reportable incident caused $272,200 in property 
damage alone. Therefore, if this proposed regulatory action prevents 
just one average reportable incident per year, this rulemaking would be 
cost beneficial. Interested readers should refer to the Regulatory 
Evaluation that is posted in the docket for additional information.

II. Objective

    Based on incident data PHMSA has received from pipeline operators, 
excavation damage is a leading cause of natural gas and hazardous 
liquid pipeline failure incidents.\2\ Better, more effective 
enforcement of state excavation damage prevention laws is a key to 
reducing pipeline excavation damage incidents. Though all states have a 
damage prevention program, not all states adequately enforce their 
state damage prevention laws. Pursuant to the Pipeline Inspection, 
Protection, Enforcement and Safety Act of 2006 (PIPES Act), PHMSA is 
proposing criteria and procedures for determining whether a state's 
enforcement of its excavation damage prevention laws is adequate. As 
mandated by the PIPES Act, such determination is a prerequisite should 
PHMSA find it necessary to conduct an administrative enforcement 
proceeding against an excavator for violating Federal excavation 
standards. This NPRM also proposes to establish the administrative 
process for states to contest notices of inadequacy PHMSA issues, the 
Federal requirements PHMSA will enforce in states with inadequate 
enforcement programs, and the adjudication process for administrative 
enforcement proceedings against excavators where Federal authority is 
exercised.
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    \2\ Data from the U.S. Department of Transportation, PHMSA 
Office of Pipeline Safety, Incident and Accident Reports of Gas 
Distribution, Gas Transmission & Gathering and Hazardous Liquid 
Pipeline Systems. Pipeline incident and accident summaries are 
available on PHMSA Stakeholders Communication Web site at: http://primis.phmsa.dot.gov/comm/Index.htm?nocache=3320.
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III. Background

A. Pipeline Incidents Caused by Excavation Damage

    Excavation damage is a leading cause of natural gas and hazardous 
liquid pipeline failure incidents. For the period from 1988 to 2010, 
1,613 incidents, 185 fatalities, 697 injuries, and $438,785,552 in 
estimated property damages were reported as being caused by excavation 
damage on all PHMSA regulated pipeline systems in the United States, 
including onshore and offshore hazardous liquid, gas transmission, and 
gas distribution lines, except gathering lines.\3\
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    \3\ Data from the U.S. Department of Transportation, PHMSA 
Office of Pipeline Safety, Incident and Accident Reports of Gas 
Distribution, Gas Transmission & Gathering and Hazardous Liquid 
Pipeline Systems. Pipeline incident and accident summaries are 
available on PHMSA Stakeholders Communication Web site at: http://primis.phmsa.dot.gov/comm/Index.htm?nocache=3320.
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    While excavation damage is the cause in a significant portion of 
all pipeline failure incidents, it is cited as the cause in a 
relatively higher portion of natural gas distribution incidents. To 
look at this issue, PHMSA initiated and sponsored in 2005 an 
investigation of the risks and threats to gas distribution systems. 
This investigation was conducted through the efforts of four joint 
work/study groups, each of which included representatives of the 
stakeholder public, the gas distribution pipeline industry, state 
pipeline safety representatives, and PHMSA. The areas of their 
investigations included excavation damage prevention. The Integrity 
Management for Gas Distribution, Report of Phase I Investigations (DIMP 
Report) was issued in December 2005.\4\ As noted in the DIMP Report, 
the Excavation Damage Prevention work/study group reached four key 
conclusions.
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    \4\ This report is available in the rulemaking docket.
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     Excavation damage poses by far the single greatest threat 
to distribution system safety, reliability and integrity; therefore, 
excavation damage prevention presents the most significant opportunity 
for distribution pipeline safety improvements.
     States with comprehensive damage prevention programs that 
include effective enforcement have a substantially lower probability of 
excavation damage to pipeline facilities than states that do not. The 
lower probability of excavation damage translates to a substantially 
lower risk of serious incidents and consequences resulting from 
excavation damage to pipelines.
     A comprehensive damage prevention program requires nine 
important elements be present and functional for the program to be 
effective. All stakeholders must participate in the excavation damage 
prevention process. The elements are:
    1. Enhanced communication between operators and excavators.
    2. Fostering support and partnership of all stakeholders in all 
phases (enforcement, system improvement, etc.) of the program.
    3. Operator's use of performance measures for persons performing 
locating of pipelines and pipeline construction.
    4. Partnership in employee training.
    5. Partnership in public education.
    6. Enforcement agencies' role as partner and facilitator to help 
resolve issues.
    7. Fair and consistent enforcement of the law.
    8. Use of technology to improve all parts of the process.
    9. Analysis of data to continually evaluate/improve program 
effectiveness.
     Federal legislation is needed to support the development 
and implementation of damage prevention programs that include effective 
enforcement as a part of the state's pipeline safety program. This is 
consistent with the objectives of the state pipeline safety programs, 
which are to ensure the safety of the public by addressing threats to 
the distribution

[[Page 19802]]

infrastructure. The legislation will not be effective unless it 
includes provisions for ongoing funding such as federal grants to 
support these efforts. This funding is intended to be in addition to, 
and independent of, existing federal funding of state pipeline safety 
programs.
    Another recent report (Mechanical Damage Report) prepared on behalf 
of PHMSA \5\ concluded that excavation damage continues to be a leading 
cause of serious pipeline failures and that better one-call enforcement 
is a key gap in damage prevention. In that regard, the Mechanical 
Damage Report noted that most jurisdictions have established laws to 
enforce one-call notification compliance; however, the report noted 
that many pipeline operators consider lack of enforcement to be 
degrading the effectiveness of one-call programs. The report cited that 
in Massachusetts, 3,000 violation notices were issued from 1986 to the 
mid-1990s, contributing to a decrease of third-party damage incidents 
on all types of facilities from 1,138 in 1986 to 421 in 1993. The 
report also cited findings from another study that enforcement of the 
one-call notification requirement was the most influential factor in 
reducing the probability of pipeline strikes and that the number of 
pipeline strikes is proportionate to the degree of enforcement.
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    \5\ Mechanical Damage Final Report, Michael Baker Jr., Inc., 
April 2009.
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    With respect to the effectiveness of current regulations, the 
Mechanical Damage Report stated that an estimated two-thirds of 
pipeline excavation damage is caused by third parties and found that 
the problem is compounded if the pipeline damage is not promptly 
reported to the pipeline operator so that corrective action can be 
taken. It also noted ``when the oil pipeline industry developed the 
survey for its voluntary spill reporting system--known as the Pipeline 
Performance Tracking System (PPTS)--it recognized that damage to 
pipelines, including that resulting from excavation, digging, and other 
impacts, is also precipitated by operators (``first parties'') and 
their contractors (``second parties'')''.
    Finally, the report found that for some pipeline excavation damage 
data that was evaluated, ``in more than 50 percent of the incidents, 
one-call associations were not contacted first'' and that ``failure to 
take responsible care, to respect the instructions of the pipeline 
personnel, and to wait the proper time accounted for another 50 percent 
of the incidents.''

B. State Damage Prevention Programs

    There is considerable variability among the states in terms of 
physical geography, population density, underground infrastructure, 
excavation activity, and economic activity. For example, South Dakota 
is a rural, agricultural state with a relatively low population 
density. In contrast, New Jersey is more densely populated and is host 
to a greater variety of land uses, denser underground infrastructure, 
and different patterns of excavation activity. These differences 
between states equate to differences in the risk of excavation damage 
to underground infrastructure, including pipelines. Denser population 
often means denser underground infrastructure; more rural and 
agricultural states will have different underground infrastructure 
densities and excavation patterns than more urbanized states.
    There is no single, comprehensive national damage prevention law. 
On the contrary, all 50 states in the United States have a law designed 
to prevent excavation damage to underground utilities. However, these 
state laws vary considerably and no two state laws are identical. 
Therefore, excavation damage prevention stakeholders in each state are 
subject to different legal and regulatory requirements. Variances in 
state laws include excavation notice requirements, damage reporting 
requirements, exemptions from the requirements of the laws for 
excavators and/or utility operators, provisions for enforcement of the 
laws, and many others. PHMSA has developed a reference for 
understanding the variability in these state laws at http://primis.phmsa.dot.gov/comm/DamagePreventionSummary.htm.

C. PHMSA Damage Prevention Efforts

    PHMSA has made extensive efforts over many years to improve 
excavation damage prevention as it relates to pipeline safety. These 
efforts have included outreach, grants, and funding of cooperative 
agreements with a wide spectrum of excavation damage prevention 
stakeholders including:
     Public and community organizations.
     Excavators and property developers.
     Emergency responders.
     Local, state and Federal government agencies.
     Pipeline and other underground facility operators.
     Industry trade associations.
     Consensus standards organizations.
     Environmental organizations.
    These initiatives are described in detail in the ANPRM on this 
subject that PHMSA published in the Federal Register on October 29, 
2009 (74 FR 55797). The ANPRM can be viewed at http://www.regulations.gov, Docket ID PHMSA-2009-0192. These initiatives 
appear to have contributed to an overall decline in the rate of 
excavation damages to pipelines and other underground utilities, but 
PHMSA is unaware of any studies of the direct effect of these 
initiatives on the national excavation damage rate to pipelines. PHMSA 
invites comments regarding any studies that might have evaluated the 
effectiveness of these initiatives.

D. The Pipeline Inspection, Protection, Enforcement, and Safety Act of 
2006

    On December 29, 2006, the PHMSA's pipeline safety program was 
reauthorized by enactment of the PIPES Act. The PIPES Act provides for 
enhanced safety and environmental protection in pipeline 
transportation, enhanced reliability in the transportation of the 
Nation's energy products by pipeline, and other purposes. Major 
portions of the PIPES Act were focused on damage prevention including 
additional resources and clear program guidelines as well as additional 
enforcement authorities to encourage states in developing effective 
excavation damage prevention programs. The PIPES Act identifies nine 
elements that effective damage prevention programs should include. 
These are, essentially, identical to those nine elements noted in the 
DIMP Report discussed in the previous subsection.
    The PIPES Act also provided PHMSA with limited authority to conduct 
administrative civil enforcement proceedings against excavators who 
damage pipelines in a state that has failed to adequately enforce its 
excavation damage prevention laws. Specifically, Section 2 of the PIPES 
Act provides that the Secretary of Transportation may take civil 
enforcement action against excavators who:
    1. Fail to use the one-call notification system in a state that has 
adopted a one-call notification system before engaging in demolition, 
excavation, tunneling, or construction activity to establish the 
location of underground facilities in the demolition, excavation, 
tunneling, or construction area;
    2. Disregard location information or markings established by a 
pipeline facility operator while engaging in demolition, excavation, 
tunneling, or construction activity; and
    3. Fail to report excavation damage to a pipeline facility to the 
owner or operator of the facility promptly, and report to other 
appropriate authorities

[[Page 19803]]

by calling the 911 emergency telephone number if the damage results in 
the escape of any flammable, toxic, or corrosive gas or liquid that may 
endanger life or cause serious bodily harm or damage to property.
    The PIPES Act limited the Secretary's ability to take civil 
enforcement action against these excavators, unless the Secretary has 
determined that the state's enforcement of its damage prevention laws 
is inadequate to protect safety.
    The following is the applicable citation from the PIPES Act:

SEC. 2. PIPELINE SAFETY AND DAMAGE PREVENTION.

    (a) ONE CALL CIVIL ENFORCEMENT.--
    (1) PROHIBITIONS.--Section 60114 is amended by adding at the end 
the following:
    (d) PROHIBITION APPLICABLE TO EXCAVATORS.--A person who engages 
in demolition, excavation, tunneling, or construction--
    (1) May not engage in a demolition, excavation, tunneling, or 
construction activity in a state that has adopted a one-call 
notification system without first using that system to establish the 
location of underground facilities in the demolition, excavation, 
tunneling, or construction area;
    (2) May not engage in such demolition, excavation, tunneling, or 
construction activity in disregard of location information or 
markings established by a pipeline facility operator pursuant to 
subsection (b); and
    (3) Who causes damage to a pipeline facility that may endanger 
life or cause serious bodily harm or damage to property--
    (A) May not fail to promptly report the damage to the owner or 
operator of the facility; and
    (B) If the damage results in the escape of any flammable, toxic, 
or corrosive gas or liquid, may not fail to promptly report to other 
appropriate authorities by calling the 911 emergency telephone 
number.
    (e) PROHIBITION APPLICABLE TO UNDERGROUND PIPELINE FACILITY 
OWNERS AND OPERATORS.--Any owner or operator of a pipeline facility 
who fails to respond to a location request in order to prevent 
damage to the pipeline facility or who fails to take reasonable 
steps, in response to such a request, to ensure accurate marking of 
the location of the pipeline facility in order to prevent damage to 
the pipeline facility shall be subject to a civil action under 
section 60120 or assessment of a civil penalty under section 60122.
    (f) LIMITATION.--The Secretary may not conduct an enforcement 
proceeding under subsection (d) for a violation within the 
boundaries of a state that has the authority to impose penalties 
described in section 60134(b)(7) against persons who violate that 
state's damage prevention laws, unless the Secretary has determined 
that the state's enforcement is inadequate to protect safety, 
consistent with this chapter, and until the Secretary issues, 
through a rulemaking proceeding, the procedures for determining 
inadequate state enforcement of penalties.

E. Advance Notice of Proposed Rulemaking

    On October 29, 2009, PHMSA published an Advance Notice of Proposed 
Rulemaking (ANPRM) to seek feedback and comments regarding the 
development of criteria and procedures for determining whether states 
are adequately enforcing their excavation damage prevention laws, and 
for conducting Federal administrative enforcement, if necessary. The 
ANPRM also outlined PHMSA's excavation damage prevention initiatives 
and described the requirements of the PIPES Act, which authorizes PHMSA 
to conduct this rulemaking action. The ANPRM may be viewed at http://www.regulations.gov by searching for Docket ID PHMSA-2009-0192. 
Specifically, the ANPRM sought comments on the following subjects:
    1. Criteria for determining the adequacy of state excavation damage 
prevention law enforcement programs;
    2. The administrative procedures available to a state for 
contesting a notice of inadequacy should it receive one;
    3. The Federal requirements for excavators that PHMSA would be 
enforcing in a state that PHMSA has determined to have an inadequate 
enforcement program;
    4. The adjudication process that PHMSA would use if PHMSA cited an 
excavator for failure to comply with the Federal requirements for 
excavators PHMSA establishes through this rulemaking; and
    5. The adequacy of PHMSA's existing requirements for pipeline 
operators to participate in one-call organizations, respond to dig 
tickets, and perform their locating and marking responsibilities.
    A summary of comments and our response to those comments are 
provided later in the document.

F. Notice of Proposed Rulemaking

    This NPRM proposes to respond to the Congressional mandate 
specified in Section 2 of the PIPES Act to:
    1. Establish criteria and procedures PHMSA will use to determine 
the adequacy of state pipeline excavation damage prevention law 
enforcement programs. Such determination is a prerequisite should PHMSA 
find it necessary to conduct an administrative enforcement proceeding 
against an excavator for violation of the Federal requirements proposed 
in this NPRM in the absence of adequate state enforcement of state 
excavation damage prevention laws.
    2. Establish an administrative process for states to contest 
notices of inadequacy from PHMSA should they elect to do so.
    3. Establish the Federal requirements PHMSA will enforce in states 
with inadequate excavation damage prevention law enforcement programs.
    4. Establish the adjudication process for administrative 
enforcement proceedings against excavators where Federal authority is 
exercised.

G. Summary of the Proposed Rulemaking

A. Standards for Effective State Damage Prevention Enforcement Programs

    This NPRM proposes to establish the criteria by which PHMSA will 
evaluate state excavation damage prevention law enforcement programs 
for minimum adequacy to protect public safety. PHMSA is seeking 
comments on using the following criteria to evaluate the effectiveness 
of a state's damage prevention enforcement program:
    1. Does the state have the authority to enforce its state 
excavation damage prevention law through civil penalties?
    2. Has the state designated a state agency or other body as the 
authority responsible for enforcement of the state excavation damage 
prevention law?
    3. Is the state assessing civil penalties for violations at levels 
sufficient to ensure compliance and is the state making publicly 
available information that demonstrates the effectiveness of the 
state's enforcement program?
    4. Does the enforcement authority (if one exists) have a reliable 
mechanism (e.g., mandatory reporting, complaint-driven reporting, etc.) 
for learning about excavation damage to underground facilities?
    5. Does the state employ excavation damage investigation practices 
that are adequate to determine the at-fault party when excavation 
damage to underground facilities occurs?
    6. At a minimum, does the state's excavation damage prevention law 
require the following?
    a. Excavators may not engage in excavation activity without first 
using an available one-call notification system to establish the 
location of underground facilities in the excavation area.
    b. Excavators may not engage in excavation activity in disregard of 
the marked location of a pipeline facility as established by a pipeline 
operator.
    c. An excavator who causes damage to a pipeline facility:
    i. Must report the damage to the owner or operator of the facility 
at the earliest practical moment following discovery of the damage; 
and,
    ii. If the damage results in the escape of any flammable, toxic, or 
corrosive gas

[[Page 19804]]

or liquid that may endanger life or cause serious bodily harm or damage 
to property, must promptly report to other appropriate authorities by 
calling the 911 emergency telephone number or another emergency 
telephone number.
    7. Does the state limit exemptions for excavators from its 
excavation damage prevention law? A state must provide to PHMSA a 
written justification for any exemptions for excavators from state 
damage prevention requirements. PHMSA will make the written 
justifications available to the public.
    PHMSA may also consider individual enforcement actions taken by a 
state in evaluating the effectiveness of a state's damage prevention 
enforcement program. PHMSA requests comments on this issue.
    PHMSA invites comments on the proposed criteria. In particular, are 
these criteria sufficient to assess the adequacy of state excavation 
damage prevention law enforcement programs? Do these criteria strike 
the right balance between establishing standards for minimum adequacy 
of state enforcement programs without being overly prescriptive?

B. Administrative Process for States

    This NPRM proposes the administrative procedures that would be 
available to a state that elects to contest a notice of inadequacy. The 
proposed procedures involve a paper hearing where PHMSA finds the 
state's excavation damage prevention law enforcement inadequate and 
documents the basis for that finding (i.e., following its annual review 
of the state's pipeline safety program). Then, the state would have an 
opportunity to submit written materials and explanations. PHMSA would 
then make a final written determination including the reasons for the 
decision. PHMSA proposes to make publicly available all notices, 
findings and determinations. The proposed administrative procedures 
also provide for an opportunity for the state to petition for 
reconsideration of the decision. If the state's enforcement program is 
ultimately deemed inadequate, direct Federal administrative enforcement 
against an excavator who damaged a pipeline in that state could 
proceed. The procedures also give a state the opportunity to 
demonstrate at a later time that it has improved its excavation damage 
prevention law enforcement program to an adequate level and upon such 
showing, request that PHMSA discontinue Federal administrative 
enforcement in that state. PHMSA will respond to such requests and 
perform an adequacy review in a timely manner and no later than the 
next annual review.
    PHMSA invites further comments on these proposed administrative 
procedures. In particular, does this process strike the right balance 
between Congress' direction to undertake Federal administrative 
enforcement, where necessary, while providing a state with a fair and 
efficient means of showing that the state's enforcement program is 
adequate? PHMSA is proposing to evaluate state excavation damage 
prevention law enforcement programs consistent with the criteria 
proposed in Section 198.55 below. For states that have been deemed to 
have inadequate enforcement programs in their most recent annual 
reviews and in accordance with the established process, PHMSA could 
conduct Federal administrative enforcement against excavators without 
further state process. A state with an inadequate program will have 
five years from the date of the finding to make program improvements 
that meet PHMSA's criteria for minimum adequacy. A state that fails to 
establish an adequate enforcement program in accordance with 49 CFR 
198.55 within five years of the finding of inadequacy may be subject to 
reduced grant funding established under 49 U.S.C. 60107. The amount of 
the reduction will be determined using the same process PHMSA currently 
uses to distribute the grant funding; PHMSA will factor the findings 
from the annual review of the excavation damage prevention enforcement 
program into the 49 U.S.C. 60107 grant funding distribution to state 
pipeline safety programs. The amount of the reduction in 49 U.S.C. 
60107 grant funding shall not exceed 10% of prior year funding. If a 
state fails to implement an adequate enforcement program within five 
years of a finding of inadequacy, the Governor of that state may 
petition the Administrator of PHMSA, in writing, for a temporary waiver 
of the penalty, provided the petition includes a clear plan of action 
and timeline for achieving program adequacy.
    Even though the proposed rule does not require states to take any 
actions, the states have several incentives for enforcing their own 
excavation damage prevention laws. First, states with effective 
enforcement programs have lower rates of excavation damages to 
underground utilities, including pipelines. Lower damage rates 
translate to increased public and worker safety and decreased repair 
and outage costs for pipeline operators.
    This proposed rule provides several additional incentives for 
states to enforce their own excavation damage prevention laws. First, 
in the comments to the ANPRM on this subject, stakeholders expressed 
their desire for states to maintain control over their own excavation 
damage prevention programs, including the enforcement of damage 
prevention laws. Stakeholders agree that damage prevention is a local 
and state issue and would prefer to avoid Federal involvement in 
enforcement. Second, this NPRM proposes to reduce PHMSA base grant 
funding for state pipeline safety programs if states do not implement 
effective enforcement programs within five years of findings of 
inadequacy (see proposed section 198.53). The potential reduction in 
grant funding will provide incentive to the state to address 
enforcement gaps in the excavation damage prevention laws and programs. 
PHMSA specifically requests comments on the adequacy of these 
incentives and the need for additional incentives for states to enforce 
their own excavation damage prevention laws.
    Currently, states are reevaluating their pipeline safety laws. 
Several states, including Washington and Maryland, made significant 
changes to their damage prevention laws subsequent to the ANPRM on this 
subject. In addition, the following states are in various stages of 
legislative efforts to incorporate effective enforcement into their 
laws (these efforts range from stakeholder meetings, to building 
support for drafting legislation, to actually having a bill before the 
state legislatures): California, Ohio, Michigan, Alabama, Mississippi, 
Montana, Florida, Kentucky, and Delaware.

C. Federal Excavation Standard

    This NPRM proposes to add a new Part 196 to Title 49, Code of 
Federal Regulations that prescribes standards for excavators to follow 
in conducting excavation activities in areas where underground gas or 
hazardous liquid pipelines may be located and the administrative 
enforcement process to address violations of the standards. The Federal 
requirements PHMSA is proposing to be contained in this Part are the 
standards that PHMSA would enforce against excavators in states 
determined to have inadequate damage prevention law enforcement 
programs pursuant to the procedures proposed in this rulemaking. The 
standard that PHMSA is proposing are effectively equivalent to the 
standard in 49 U.S.C. 60114(d) which states:

    (d) Prohibition applicable to excavators.--A person who engages 
in demolition, excavation, tunneling, or construction--
    (1) May not engage in a demolition, excavation, tunneling, or 
construction

[[Page 19805]]

activity in a state that has adopted a one-call notification system 
without first using that system to establish the location of 
underground facilities in the demolition, excavation, tunneling, or 
construction area;
    (2) May not engage in such demolition, excavation, tunneling, or 
construction activity in disregard of location information or 
markings established by a pipeline facility operator pursuant to 
subsection (b); and
    (3) Who causes damage to a pipeline facility that may endanger 
life or cause serious bodily harm or damage to property--
    (A) May not fail to promptly report the damage to the owner or 
operator of the facility; and
    (B) If the damage results in the escape of any flammable, toxic, 
or corrosive gas or liquid, may not fail to promptly report to other 
appropriate authorities by calling the 911 emergency telephone 
number.

    The NPRM proposes to add new excavation standards that include 
requirements to use an available one-call system before digging, to 
excavate with proper regard for location information or markings 
established by a pipeline operator, to promptly report any damage to 
the pipeline operator, and to report any emergency release of hazardous 
products to appropriate authorities by calling 911 immediately. PHMSA 
is seeking comment in this NPRM on whether or not it should establish 
an upper limit on the time frame to report any damage to pipeline 
operators, such as two hours following discovery.

D. Adjudication Process for Excavators

    PHMSA is proposing to use the same adjudication process established 
for pipeline safety violations set forth in 49 CFR Part 190. Under this 
process, excavators would have the same right as pipeline operators to: 
Receive written notice of the allegations including a description of 
the factual evidence the allegations are based on, file a written 
response to the allegations, request a hearing, be represented by 
counsel if the excavator so chooses, examine the evidence, submit 
relevant information and call witnesses on the excavator's behalf, and 
otherwise contest the allegations of violation. PHMSA proposes that 
hearings would be held as they are now for pipeline operators at one of 
PHMSA's regional offices or via teleconference. An excavator would also 
have the same opportunity as pipeline operators to petition for 
reconsideration of the agency's administrative decision. Judicial 
review of the final agency action would be available to the same extent 
it is available to a pipeline operator.
    PHMSA invites further comments on the adjudication process for 
excavators. In particular, is the process too formal in the sense that 
excavators contesting a citation would have to prepare a written 
response for the record and potentially appear before an administrative 
hearing officer? Is the process not formal enough in the sense that it 
does not provide for formal rules of evidence, transcriptions, or 
discovery? Or does this process strike the right balance by being 
informal enough to be efficient and at the same time providing enough 
formality that excavators feel the process is fair and their ``due 
process are maintained''?

E. State Base Grant

    PHMSA already conducts annual program evaluations and certification 
reviews of state pipeline safety programs. PHMSA would also conduct 
annual reviews of state excavation damage prevention law enforcement 
programs. A state that fails to establish an adequate enforcement 
program in accordance with 49 CFR 198.55 within five years of the 
finding of inadequacy may be subject to reduced grant funding 
established under 49 U.S.C. 60107. PHMSA would factor the findings from 
the annual review of the excavation damage prevention enforcement 
program into the 49 U.S.C. 60107 grant funding distribution to state 
pipeline safety programs. The amount of the reduction in 49 U.S.C. 
60107 grant funding would not exceed 10 percent of prior year funding. 
If a state fails to implement an adequate enforcement program within 
five years of a finding of inadequacy, the Governor of that state may 
petition the Administrator of PHMSA, in writing, for a temporary waiver 
of the penalty, provided the petition includes a clear plan of action 
and timeline for achieving program adequacy. PHMSA would use the 
proposed 49 CFR 198.55 criteria to evaluate the effectiveness of a 
state's excavation damage prevention enforcement program.

IV. Analysis of Public Comments on the ANPRM

    PHMSA received comments from 39 organizations and 152 individuals, 
including:
     Associations representing pipeline operators (trade 
associations)
    [cir] The American Gas Association (AGA)
    [cir] The American Petroleum Institute (API)
    [cir] The American Public Gas Association (APGA)
    [cir] The Association of Oil Pipelines (AOPL)
    [cir] The Interstate Natural Gas Association of America (INGAA)
    [cir] The Texas Pipeline Association (TPA)
    [cir] The Texas Pipeline Safety Coalition (TPSC)
    [cir] The Texas Oil and Gas Association (TxOGA)
     Transmission and distribution pipeline companies
    [cir] Atlanta Gas Light Resources (AGL)
    [cir] Baltimore Gas and Electric Company (BGE)
    [cir] CenterPoint Energy
    [cir] El Paso Pipeline Group (EPPG)
    [cir] LDH Energy Pipeline, L.P.
    [cir] Marathon Pipeline
    [cir] Michigan Consolidated Gas Company
    [cir] MidAmerican Energy Company
    [cir] Nicor Gas
    [cir] Northern Natural Gas Company
    [cir] Paiute Pipeline
    [cir] Panhandle Energy
    [cir] San Diego Gas & Electric
    [cir] Southern California Gas Company
    [cir] Spectra Energy Transmission
     The National Association of Pipeline Safety 
Representatives (NAPSR)
     Individual state pipeline regulatory authorities
    [cir] The Florida Public Service Commission
    [cir] The Minnesota Office of Pipeline Safety
    [cir] The Missouri Public Service Commission (PSC)
    [cir] The Public Utilities Commission of Ohio (PUCO)
    [cir] The Tennessee Regulatory Authority (TRA) excavator contractor 
associations
    [cir] The Associated General Contractors of America (AGC)
    [cir] The Associated General Contractors of Texas (AGC of Texas)
    [cir] The National Utility Contractor Association (NUCA)
    [cir] The Wisconsin Underground Contractors Association (WUCA)
     One-call organizations
    [cir] Joint Utility Locating Information for Excavators, Inc. 
(JULIE)
    [cir] GulfSafe
     A utilities locating service
    [cir] The United States Infrastructure Corporation (USIC)
     A local/regional damage prevention council
    [cir] The Greater Chicago Damage Prevention Council
     A citizens' interest group
    [cir] The Pipeline Safety Trust (PST)
     The Association of American Railroads
     An excavation equipment manufacturer
     154 individuals, 145 of whom submitted substantially 
similar to comments submitted by excavation contractors.

[[Page 19806]]

    To a substantial extent, the comments supported the need for this 
rulemaking. When a pipeline is struck during an excavation project, not 
only is the public put at risk and energy supplies potentially 
disrupted, but the excavator personnel are also at risk of serious 
injury or even death. In the ANPRM, PHMSA posed some specific questions 
related to state excavation damage prevention programs. Many comments 
received were general to the entire ANPRM and others addressed specific 
sections and content of the ANPRM. The general comments and comments 
related to specific sections of the ANPRM are addressed individually 
below.
    Many commenters addressed the concept of the questions, as was 
intended. Others addressed the questions as they were deemed to apply 
currently to specific state damage prevention (SDP) programs. 
Additionally, many comments received are outside the scope of the 
proposed regulatory changes. Many of the comments were to the effect 
that PHMSA enforcement should be applied to all underground utilities. 
For example, NAPSR, the Missouri Public Service Commission, AGA, and 
several pipeline operators commented that any rulemaking language 
should clearly specify the scope to which it applies and that if PHMSA 
seeks to expand its enforcement authority outside of pipeline matters, 
its legal authority to do so should be explained. While commenters 
believe that many states will benefit from broadening their damage 
prevention programs beyond pipelines to include other underground 
utilities, PHMSA's authority does not extend beyond pipeline facilities 
and, as defined in the PIPES Act, excavators under certain specified 
conditions.
    Federal pipeline safety regulations require gas and hazardous 
liquid pipeline operators to have excavation damage prevention programs 
in place to protect their pipelines. These regulations require pipeline 
operators to participate in state one-call systems and enable PHMSA 
enforcement against regulated pipeline operators who fail to comply 
with applicable locating and marking requirements, including situations 
where their pipelines are damaged by improper excavation activities of 
the pipeline operator or its contractors (either excavating or locating 
contractors).

General Comments

Involve All Stakeholders in This Rulemaking Process

    A number of comments supported PHMSA's approach of involving all 
stakeholders in this rulemaking process. Several commenters, including 
NAPSR, Missouri Public Service Commission, INGAA, and EPPG commented 
that beyond reviewing the written comments, PHMSA should conduct public 
meetings on this topic, and should lead open and on-going discussions 
of the issues as they arise, through the most appropriate venues. They 
noted that public meetings would allow all stakeholder groups to 
present their viewpoints and hear similar presentations from others, 
thus providing an effective means of gathering additional information 
that would assist PHMSA in developing standards for auditing the 
adequacy of states' excavation damage prevention enforcement programs 
and in issuing an effective and practicable rulemaking. NAPSR 
especially wants to be involved in the rulemaking process.

Response

    PHMSA recognizes the value of open and ongoing discussions related 
to this rulemaking, and, therefore, took the optional step of 
publishing an ANPRM in October 2009 to provide information to and 
solicit feedback from stakeholders. PHMSA also conducted a meeting with 
NAPSR to discuss NAPSR's position and concerns on the issues identified 
in the ANPRM. The minutes from the meeting are available on the ANPRM 
docket (http://www.regulations.gov, Docket ID PHMSA-2009-0192). PHMSA 
does not intend to hold public meetings related to this rulemaking 
after the NPRM is published. As an alternative, PHMSA will post a 
recorded presentation pertaining to the NPRM on the PHMSA Web site. The 
recorded presentation will provide an overview of the proposed rule and 
encourage viewers to read and comment on the NPRM.

Federal Administrative Enforcement

    USIC Locating Services, API, AOPL, INGAA, and several pipeline 
operators commented that PHMSA should develop the necessary processes 
and procedures and should not hesitate to use the Federal 
administrative enforcement authority granted by Congress to enforce 
excavation damage prevention laws where state enforcement programs are 
determined to be inadequate. They consider it to be in the public's 
best interest and that a key element of an effective excavation damage 
prevention program is enforcement action against excavators that do not 
follow the one-call laws, and that without enforcement, there is little 
incentive for excavators to comply with one-call laws. However, AGC, 
API and AOPL commented that Federal administrative enforcement should 
not be permanent. It should only last as long as necessary to ensure 
the state achieves a successful enforcement program. They noted that 
PHMSA should reserve enforcement to only those specific circumstances 
permitted by law when a state fails to meet the test for adequate 
enforcement of its excavation damage prevention laws. They contended 
that where strong and effective state excavation damage prevention laws 
and enforcement programs exist, PHMSA need not and should not exert its 
Federal authority lest a costly, potentially inefficient layer of 
Federal oversight result.
    Conversely, WUCA commented that all enforcement of state excavation 
damage prevention laws should be at a state or local level and that the 
Federal Government should not be involved at all in enforcement. WUCA 
commented that excavators who damage underground facilities already pay 
for ``at fault'' damages and can be removed from bid lists for specific 
utilities. They consider free enterprise to the best ``enforcement'' 
available and want no Federal Government involvement, and prefer, at 
most, state enforcement.
    JULIE, commented that it would seem contradictory that a particular 
state's excavation damage prevention enforcement program could be 
``taken over'' by an agency (i.e., PHMSA) whose jurisdiction is limited 
solely to pipelines. JULIE suggested that PHMSA limit itself to 
providing assistance to state excavation damage prevention systems to 
help them improve enforcement of state excavation damage prevention 
laws.

Response

    Congress provided that PHMSA undertake this rulemaking action in 
Section 2 of the PIPES Act. The PIPES Act requires that PHMSA must 
determine that a state's excavation damage prevention law enforcement 
program is inadequate before PHMSA may take enforcement action for a 
violation by an excavator occurring in that state. Thus, PHMSA cannot 
take enforcement actions against excavators in states determined by 
PHMSA to have adequate enforcement programs. PHMSA's goal is to 
encourage states to implement adequate enforcement programs. Federal 
administrative enforcement is not intended to be the

[[Page 19807]]

primary means of pipeline damage prevention enforcement and is instead 
intended to provide incentives for states to develop and implement 
adequate programs and serve as a backstop in states with inadequate 
programs.

State Program Evaluation Should Include an Appeals Process

    Several commenters noted that the process for determining whether a 
state's enforcement of its excavation damage prevention law is 
``inadequate'' should contain an appeals process and timeframe by which 
PHMSA needs to respond to appeals. Northern Natural Gas commented that 
the rulemaking should provide for an arbitration element when there is 
a dispute over a state's enforcement program, and that the state should 
be allowed an opportunity to improve its excavation damage prevention 
program if PHMSA determines that the program does not meet the minimum 
Federal requirements.

Response

    This NPRM proposes the administrative process by which a state may 
contest a notice of inadequacy from PHMSA. Additionally, states deemed 
to have inadequate excavation damage prevention law enforcement 
programs will have the opportunity to enhance their programs and to 
demonstrate their adequacy through periodic reviews. Programs PHMSA 
previously determined to be inadequate may later be found adequate if a 
state takes steps to implement an effective enforcement program (see 
proposed Subpart D of Part 198).

Minimum Damage Prevention Program Requirements

    API, INGAA, several pipeline operators, and three Texas pipeline 
associations commented that PHMSA should establish clear, well-defined, 
and consistent minimum criteria for determining the adequacy of 
acceptable state excavation damage prevention laws and programs. API, 
AOPL and Nicor commented that the fundamental minimum requirements that 
should apply in evaluating state programs are that all excavators, 
including state agencies and municipalities: (1) Use state one-call 
systems prior to excavation, (2) follow location information or 
markings established by pipeline operators, (3) report all excavation 
damage to pipeline operators, and (4) immediately notify emergency 
responders by calling 911 when excavation damage results in a release 
of pipeline products.
    AGA and several pipeline operators commented that PHMSA should keep 
the overall review process and the criteria for determining the 
adequacy of state programs as simple as possible. They noted that 
PHMSA's evaluation of the adequacy of states' excavation damage 
prevention programs should be based upon a relatively short list of 
elements. They also noted that PHMSA will likely discover that few 
states have an excavation damage prevention program that would clearly 
meet all or even most of the criteria listed in the ANPRM.

Response

    PHMSA agrees that the criteria for evaluating the adequacy of state 
excavation damage prevention law enforcement programs should be clear, 
well-defined, consistent, and as simple as possible. These criteria 
helped guide development of the criteria proposed in this NPRM. PHMSA 
seeks comments on these criteria.

PHMSA Should Encourage States To Implement and Enforce Effective Damage 
Prevention Laws

    Many commenters, including the AGC, API, AOPL, INGAA, state 
regulatory agencies and many individual pipeline operators, agree with 
PHMSA's goal of encouraging states to implement, maintain and enforce 
effective excavation damage prevention laws. They encouraged PHMSA to 
move forward promptly to issue a final rule to accomplish the objective 
set forth in the ANPRM of promoting better, more effective enforcement 
of state excavation damage prevention laws. The NUCA and several 
pipeline trade associations recognized that PHMSA's jurisdiction is 
limited to gas and hazardous liquid pipelines. They commented, however, 
that this regulation's influence on how state authorities adjust their 
programs and enforcement practices to protect all underground 
facilities will be significant, and that addressing enforcement in a 
balanced and comprehensive manner in the proposed rule will facilitate 
the entire process.
    Three Texas pipeline associations suggested that standards 
consistent with key aspects of the Common Ground Alliance Best 
Practices should be adopted by states to ensure the scope of their 
enforcement programs are adequate. They noted those key provisions 
include tolerance zone, positive response, due care in excavating, and 
reporting damages.

Response

    As noted, PHMSA supports effective state excavation damage 
prevention law enforcement to protect pipelines. PHMSA strongly 
believes that individual states should retain the primary 
responsibility to enforce their excavation damage prevention laws 
effectively. The proposed regulations do not conflict with the best 
practices established by the Common Ground Alliance.

Apply Enforcement to All Excavators--No Exemptions

    Several respondents, including NUCA and EPPG, commented that state 
excavation damage prevention laws and enforcement processes should 
apply to pipeline operator ``in-house'' and contractor excavators. They 
noted that ``first-party'' (facility operators) and ``second-party'' 
(operator contractor) damages, although often unreported, carry the 
same consequences as pipeline damages caused by landscapers, home 
owners, and other ``third-party'' excavators.
    AGA and several pipeline operators noted that the term 
``excavator'' is used throughout the ANPRM but that it was not clear 
what constitutes an excavator or excavation, thus clarification is 
needed.
    NUCA, API, AOPL, and several pipeline operators commented that the 
scope of enforcement for all programs, Federal and state, should 
encompass all excavators, including state agencies, municipalities, 
counties, parishes, agricultural entities, and railroads. They believe 
that state law should require all excavators to call the one-call 
center and request facilities to be located and marked before digging, 
and that the exclusion of a category of excavator should be considered 
a basis for PHMSA regulation and direct enforcement.

Response

    PHMSA agrees that state excavation damage prevention laws and 
enforcement should apply to all excavators, including pipeline 
operators and their contract excavators and locators. Current Federal 
pipeline safety regulations at 49 CFR 192.614 and 195.442, require gas 
and hazardous liquid pipeline operators, respectively, to comply with 
specific excavation damage prevention requirements. PHMSA and its state 
partners have authority to enforce these regulations against pipeline 
operators and can pursue enforcement action against pipeline operators 
when an operator's employees or its contractors, including

[[Page 19808]]

excavators and locators, violate the regulations.
    PHMSA also agrees that, in general, exemptions of categories of 
excavators from state excavation damage prevention laws can be 
problematic because exempt excavators can damage underground utilities. 
However, some exemptions may be justifiable in some states, especially 
where substantiated by data (e.g., Virginia's exemptions for VDOT). 
States are ultimately responsible for establishing their own excavation 
damage prevention laws.
    Under this proposed rule, only homeowners using hand tools, as 
opposed to than mechanized excavating equipment, on their own property 
are exempt from Federal administrative enforcement action. All other 
excavators would be subject to Federal enforcement in a state PHMSA 
deems to have an inadequate enforcement program, regardless of an 
excavator's exemption status under that state's law.

Fines and Penalties

    Many commenters acknowledged that the use and application of civil 
penalties is necessary as an effective tool to deter violations of 
state excavation damage prevention laws that could lead to pipeline 
damage. Comments also indicated that civil penalties should be applied 
at an appropriate level to achieve such deterrence, including the 
escalation of fines and penalties for repeat offenders. Northern 
Natural Gas and others agreed that a responsible state agency should 
have the ability to levy fines and civil penalties similar to the 
Federal maximums. However, several commenters, including PUCO, noted 
that PHMSA could clarify the maximum civil penalties PHMSA will require 
for a state program to be determined ``adequate.'' Additionally, some 
commented that education and training should be considered in lieu of 
fines and penalties for minor violations.

Response

    PHMSA is not proposing a specific penalty amount or schedule as a 
criterion in determining the adequacy of state excavation damage 
prevention law enforcement programs. However, state penalty levels 
should be sufficient to deter violations. PHMSA will review state 
enforcement records on a state-by-state basis.

Clarification of Terminology and Parties Subject to PHMSA Enforcement 
Action

    Several comments asked for clarification of some terminology used 
in the ANPRM or, in some cases, clarification of the scope of the 
rulemaking. For example, WUCA asked for clarification of where 
enforcement would start--with gas mains or service lines or both. PUCO 
and some gas pipeline operators asked that the term ``incident'' be 
clarified. Is it as defined in 49 CFR Sec.  191.3? Does it mean only 
incidents reportable under the applicable Federal or state law? Or, 
does it mean every event wherein damage occurs, regardless of the 
magnitude or consequences? PUCO also commented that the definition and 
implications of a state program designation of ``nominally adequate'' 
need to be clarified.
    NAPSR asked what ``available'' means, regarding the question in the 
ANPRM ``Are records of investigations and enforcement available to 
PHMSA?'' Additionally, NAPSR asked for clarification on the terms 
``reasonable care'' and ``timely.'' Other terms noted for clarification 
include: all excavation damage, damage, incident, excavation, and 
excavator.

Response

    This rulemaking applies to all excavators and excavation activities 
that affect any gas or hazardous liquid pipelines subject to the 
pipeline safety laws in 49 U.S.C. 60101 et seq., including gathering, 
transmission, and distribution pipelines (including gas mains and 
service lines). Those terms are defined in existing laws and 
regulations. PHMSA will retain the discretion to determine if 
enforcement action is necessary on a case-by-case basis. In response to 
commenters' concerns, PHMSA has taken care to clearly define terms in 
this regulation.

Complaint-Based Enforcement Process

    Centerpoint Energy suggested a ``complaint-based'' process in which 
a pipeline operator or an excavator can file a complaint to petition 
for enforcement actions by the state, or to petition PHMSA to review 
the adequacy of the state's enforcement process. Centerpoint expressed 
the view that PHMSA should only initiate enforcement actions upon 
receipt of filed complaints and that one allegation in each complaint 
would have to be that the state's enforcement process is not adequate 
to prevent repeated violations. Centerpoint would prefer that the state 
could intervene as an interested party and dispute the claim and PHMSA 
would have to conduct a hearing and require specific findings 
concerning what aspects of the state's enforcement efforts were 
inadequate. Centerpoint considers that findings of inadequacy would 
relieve the complaining parties from the duty to resolve disputes at 
the state level until the state resolved those issues of inadequacy. 
Centerpoint commented that costs for PHMSA could be assessed to the 
losing party or split between the two.
    Centerpoint commented that a complaint-based process would allow 
the operator, excavator, the state agency and PHMSA to direct time and 
resources where they are most needed. Centerpoint believes that a 
pipeline operator is in the best position to determine when an 
excavator is willfully ignoring the excavation damage prevention 
program and will likely continue to do so in spite of any actions the 
operator takes. They also consider that an operator can collect 
evidence to show it was unable to change excavator behavior and that 
punitive enforcement is needed, and to show that Federal administrative 
enforcement is necessary because a state's enforcement efforts were not 
adequate to affect the behavior of the excavators. Similarly, 
Centerpoint comments that excavators should be able to file complaints 
against operators that will not respond to locate requests or that 
consistently do a poor job of locating their facilities.

Response

    PHMSA proposes to use the criteria and procedures proposed in this 
NPRM to assess the adequacy of state excavation damage prevention law 
enforcement programs. Once those evaluations are complete, PHMSA will 
determine, on a state-by-state basis, if Federal administrative 
enforcement action is necessary in states deemed by PHMSA to have 
inadequate enforcement programs. Under Sec.  198.55, PHMSA would 
evaluate the state enforcement program in its entirety, but may also 
consider individual enforcement actions taken by a state where 
warranted. PHMSA may become aware of a potential need for Federal 
administrative enforcement through a variety of mechanisms, including 
notifications of reportable incidents, instances of a serious and 
recurring nature where excavators fail to comply with the Federal 
requirements proposed in this NPRM, or by other means, including 
complaints. PHMSA requests comments on ways or mechanisms that it can 
utilize to become aware of these incidents. PHMSA believes it is 
important to retain flexibility in the process used to make decisions 
concerning the use of Federal administrative enforcement authority. 
PHMSA will only conduct enforcement in states deemed to have inadequate 
enforcement programs in accordance with the criteria outlined in this 
NPRM.

[[Page 19809]]

Evaluate Enforcement Programs, Not Individual Enforcement Actions

    INGAA and others commented that the standards and procedures for 
adequacy proceedings should be directed toward evaluating state 
enforcement programs, not specific enforcement actions. INGAA holds 
that applying adequacy standards and procedures to individual 
enforcement actions invites selective PHMSA involvement contrary to 
vesting primary enforcement responsibility with the states. Similarly, 
and consistent with using adequacy proceedings to examine programs 
instead of decisions, INGAA commented that PHMSA should specify that 
inadequacy findings are not retroactive--that a finding of inadequacy 
should not be used to revisit and alter a state's enforcement findings 
and sanctions.

Response

    In determining a state program's adequacy, PHMSA would evaluate a 
state's overall damage prevention enforcement program, but may evaluate 
past specific state enforcement actions during the evaluation process. 
PHMSA did consider a system of addressing the adequacy of state 
enforcement programs on an incident-by-incident basis instead of 
through an annual review of the state enforcement programs. Under that 
scenario, upon determining that enforcement action in a given incident 
may deter future incidents, PHMSA would assess the state's ability to 
conduct effective enforcement in that particular incident and proceed 
with enforcement action if PHMSA found the state program inadequate. 
However, PHMSA believes that such a system would be inefficient and 
administratively burdensome and that an annual review may be more 
appropriate. PHMSA seeks comment on this issue.

Federal Funding

    API, AOPL, TRA and WUCA commented that PHMSA should continue its 
assistance to state agencies seeking to develop and enforce effective 
excavation damage prevention programs through grants and other support 
mechanisms. They noted that this assistance should include providing 
quantitative analyses that demonstrate the effectiveness of existing 
excavation damage prevention programs and developing incentives to 
ensure that agencies and other stakeholders in the states cooperate in 
these efforts. TRA went on to comment that a state agency that is 
making a concerted effort to make changes to its excavation damage 
prevention law to meet the nine elements should not be punished by 
having its level of funding decreased.
    PUCO was concerned that changes in how PHMSA evaluates state 
excavation damage prevention programs could result in a designation of 
a program being ``inadequate'' or ``nominally adequate,'' and that such 
a designation may affect funding and ultimately gas pipeline safety. 
PUCO commented that despite the stated assurance in the ANPRM that 
funding for the development and implementation of excavation damage 
prevention programs is ``intended to be in addition to, and independent 
of existing Federal funding of the state pipeline safety programs,'' 
the implications of designation of ``inadequate'' or ``nominally 
adequate'' on a state excavation damage prevention program's current 
funding is not addressed. PUCO commented that it would be beneficial 
for PHMSA to describe whether and how state funding for the gas 
pipeline safety program will be affected by a determination of 
``inadequate'' or ``nominally adequate.''
    The three Texas pipeline associations noted that PHMSA should 
evaluate the adequacy of state programs in a similar fashion to that of 
PHMSA's existing state program evaluation. They commented that a 
state's annual program performance evaluation could result in a reward 
of additional grant monies or a penalty of a reduction in grant moneys 
based on PHMSA's excavation damage prevention law enforcement program 
assessment, to a greater degree than is currently practiced.

Response

    PHMSA intends to continue its support of states seeking to develop 
and enforce effective excavation damage prevention programs through 
grants and other means. PHMSA has undertaken a variety of both 
qualitative and quantitative initiatives that demonstrate the 
effectiveness of existing state excavation damage prevention programs. 
These initiatives are described in the ANPRM pertaining to this 
rulemaking (http://www.regulations.gov, Docket ID PHMSA-2009-0192). 
When evaluating a state's overall pipeline safety program, PHMSA will 
continue to consider the extent to which a state has implemented an 
effective excavation damage prevention enforcement program. The effect 
on base grant funding of a declaration that a state's excavation damage 
prevention enforcement program is inadequate is proposed in this NPRM.

State Authority for Interstate Pipeline Operators

    Paiute Pipeline and three Texas pipeline associations submitted 
comments regarding how interstate pipeline operators are expected to be 
treated under a state's excavation damage prevention program and noted 
that PHMSA should provide clarification in this regard. The issue they 
noted is whether the operator is treated as an excavator or as an 
operator and whether state agencies have the authority to enforce state 
excavation damage prevention standards on interstate pipeline operators 
or on excavators working near interstate pipelines. They consider this 
to be especially the case for states that have not applied for, or been 
granted, interstate agent status for natural gas and/or hazardous 
liquid lines. Paiute commented that authority for inspection and 
enforcement of interstate pipelines pursuant to Federal regulations 
should remain with PHMSA, and that in states that don't have interstate 
pipeline inspection and enforcement authority, the state should treat 
an interstate pipeline as an excavator, not a pipeline operator.
    The three Texas pipeline associations commented that there should 
be a process for states to clarify that they have the ability to 
enforce state excavation damage prevention standards with regard to 
interstate pipelines, through a statutory change or through a 
Memorandum of Understanding between PHMSA and the states when certain 
program standards are met. Spectra Energy commented that the existing 
enforcement process in 49 CFR Part 190 should continue to be applied to 
interstate pipeline operators.

Response

    States that have an annual certification under 49 U.S.C. 60105 have 
authority to regulate the intrastate pipelines in that state covered by 
the certification. States that have an interstate agent agreement under 
49 U.S.C. 60106 may conduct inspections and investigations on 
interstate pipelines, but must refer any alleged violations on 
interstate pipelines to PHMSA for enforcement action. While states are 
generally preempted from establishing or enforcing safety standards for 
interstate pipelines, 49 U.S.C. 60104 contains a specific provision 
that allows a state's pipeline damage prevention one-call program to 
apply to interstate pipelines as well as intrastate pipelines.
    Accordingly, all excavators and pipeline operators in a certified 
state are

[[Page 19810]]

generally subject to the requirements of that state's excavation damage 
prevention laws (except when explicitly exempted by state law). The 
applicability of excavation damage prevention requirements within a 
state is determined by that state's law. Under the provisions included 
in this NPRM, state excavation damage prevention laws will continue to 
be enforced as specified by state laws except when PHMSA deems a 
state's enforcement program inadequate. In that case, PHMSA proposes to 
enforce the Federal requirements established by this rulemaking against 
excavators in that state who fail to comply with the Federal 
requirements. Regardless of the status of a state's damage prevention 
program, PHMSA is proposing to retain its existing enforcement 
authority over pipeline operators and will continue to enforce the 
requirements related to excavation damage prevention (49 CFR 192.614 
and 195.442) for pipeline operators it regulates.

Model Programs

    NAPSR, Missouri PSC, AGA and several pipeline operators noted that 
care should be exercised about urging states to adopt concepts of what 
a ``model'' excavation damage prevention program should be. They 
cautioned that PHMSA should be open-minded in its review of state 
programs, allow for alternate approaches for damage investigations, and 
not have preconceived ideas on what an effective state excavation 
damage prevention program should include. AGA and several operators 
noted that PHMSA should avoid taking a prescriptive approach on the 
overall review of the state's excavation damage prevention enforcement 
process. They suggested that PHMSA should adopt a holistic and data-
driven approach to adequacy assessment. For a state with documented 
success at excavation damage prevention, compliance with specific PIPES 
Act criteria should be at most a basis for suggested improvement. They 
noted that a state program should never be deemed inadequate solely 
because it did not meet all of these criteria.
    NAPSR noted that depending on how its proposed provisions are 
interpreted, a program such as the one apparently envisioned by PHMSA 
in the ANPRM could be burdensome and costly. NAPSR noted that PHMSA 
should not presume that states can or will readily change their laws in 
response to Federal initiatives, and should be mindful of unintended 
consequences that may arise upon re-opening the existing state law to 
further amendments. NAPSR stated that it is likely that if onerous 
provisions are adopted in the proposed rule, some states will simply 
defer to Federal administrative enforcement, in which case NAPSR 
expects PHMSA will undertake every action it would otherwise expect a 
state to perform.
    API and AOPL commented that state excavation damage prevention 
program evaluations should be based primarily on the effectiveness of 
the overall programs in place and allow for flexibility in the 
statutory or regulatory language. They noted, for example, a state 
program may be considered adequate if it has met the fundamental 
requirements described in the introduction, but failed to meet other 
program elements required by PHMSA, as long as the state can 
demonstrate overall program effectiveness. They consider that an 
excavation damage prevention program that establishes a generally 
acceptable baseline should provide an objective measuring stick.
    Panhandle Energy commented that a template or recommended practice 
for enforcement of excavation safety is required, so that both PHMSA 
and the states have a clear understanding of the requirements, before 
any program evaluation takes place.

Response

    As noted, PHMSA's goal is to provide incentives to states to 
develop and implement effective excavation damage prevention and 
enforcement programs. PHMSA believes there are some fundamental 
components of effective state enforcement programs. For example, an 
adequate enforcement program requires, at a minimum, the existence of 
statutory enforcement authority that includes civil penalties for 
violations and the use of that authority. The criteria for evaluating 
state enforcement programs proposed in this NPRM address those 
fundamental components (see proposed section 198.55).

Evaluate the Entire State Program

    NUCA commented that PHMSA should evaluate each state's excavation 
damage prevention program as a whole. Even if thorough enforcement 
exists in a particular state, if the program itself does not adequately 
address the nine elements of an effective excavation damage prevention 
program, the entire program itself may be inadequate. If a state's 
excavation damage prevention program and enforcement practices were to 
focus exclusively on excavator responsibilities, that program is not 
fully addressing excavation damage prevention. AGA, APGA, and several 
pipeline operators commented that for a state to have a documented 
excavation damage prevention program alone is not enough; it is 
critical for the state agency to have the resources and the incentive 
to exercise its authority, when necessary.
    In this regard, NAPSR commented that an important factor to 
consider in assessing the overall adequacy of a state excavation damage 
prevention program would be the relative weight given to the various 
proposed individual assessment factors listed in the ANPRM. NAPSR 
noted, for example, that enforcement of excavation damage prevention 
laws has been shown to be an essential element of a successful 
excavation damage prevention program. The issuance of appropriate civil 
penalties has been a demonstrated deterrent to non-compliant behavior. 
When assessing the adequacy of excavation damage prevention programs, 
this factor could be given a heavier weight than, for example, 
exempting certain parties who perform less risky excavations. 
Similarly, APGA commented that some of the assessment factors should 
receive more weighting than others and that weighting should be 
discussed with the affected parties. APGA noted that the ANPRM is a 
good start in opening a dialogue with the affected public, industry and 
state governments.
    With regard to weighting the assessment factors, AGA commented that 
the most important criteria are the ones involving timely reporting of 
pipeline damages, a universal requirement for all parties to notify the 
one-call center prior to excavation, establishment of a single agency 
responsible for oversight of excavation damage prevention laws, and an 
effective enforcement process. AGA noted that the list of criteria 
listed in the ANPRM appears thorough, but how the criteria are weighted 
and actually evaluated is open to several different approaches.
    Michigan Consolidated Gas commented that consideration should be 
given to states that are working on revising their state laws.

Response

    Effective excavation damage prevention law enforcement is critical 
to an effective excavation damage prevention program, but enforcement 
is just one component of an effective program. PHMSA has undertaken 
several efforts to document state excavation damage prevention programs 
in their entirety. Information regarding those efforts is available at 
http:// primis.phmsa.dot.gov/comm./

[[Page 19811]]

damagepreventionsummary.htm. However, the PIPES Act states:

    ``(f) LIMITATION.--The Secretary may not conduct an enforcement 
proceeding under subsection (d) for a violation within the 
boundaries of a state that has the authority to impose penalties 
described in section 60134(b)(7) against persons who violate that 
state's damage prevention laws, unless the Secretary has determined 
that the state's enforcement is inadequate to protect safety, 
consistent with this chapter, and until the Secretary issues, 
through a rulemaking proceeding, the procedures for determining 
inadequate state enforcement of penalties.''

    While evaluating state excavation damage prevention programs in 
their entirety is part of the annual review of a state's overall 
pipeline safety program performed by PHMSA in connection with the state 
grant process, this proposed rulemaking is focused solely on the 
enforcement component. In this NPRM, PHMSA has proposed the criteria 
for evaluating state excavation damage prevention law enforcement 
programs.
    PHMSA does not propose to weight the criteria used in evaluating 
state excavation damage prevention law enforcement programs. Weighting 
the criteria could create an overly-prescriptive set of criteria. PHMSA 
believes the proposed criteria are simple enough to not warrant a 
specific scoring or weighting method. PHMSA specifically asks for 
comments on whether it should weight the criteria, how the critieria 
might be weighted, and the rationale for weighting the criteria in 
evaluating state excavation damage prevention law enforcement programs.
    Evaluation of state enforcement programs will pertain to state laws 
and regulations in effect at the time of evaluation. PHMSA believes 
that states should have the opportunity to demonstrate improvements in 
their enforcement programs and petition PHMSA for reevaluation of their 
programs as necessary and appropriate.

Damage Reporting

    Many commented that they do not support reporting all pipeline 
damages as this will create an unnecessary burden on the operator, the 
state, and PHMSA. Conversely, Northern Natural Gas commented that 
excavators should be required to report all pipeline damage to the 
affected pipeline operator.

Response

    This proposed rulemaking does not address requirements for damage 
reporting by pipeline operators. However, the reporting of damages that 
provides enough detail for analysis and resource allocation is critical 
in developing effective excavation damage prevention programs because 
inadequate reporting will result in a failure to investigate incidents 
that should be investigated. Therefore, PHMSA encourages all states to 
develop effective excavation damage reporting requirements. The CGA 
Damage Information Reporting Tool (DIRT) is an effective means of 
collecting data on damages to pipelines and other underground 
facilities. This is a voluntary filing requirement that can assist in 
the collection of data on damages. The data is made available to the 
Federal government, states and the public by the CGA. As provided in 
the PIPES Act, this proposed rulemaking requires an excavator who 
causes damage to a pipeline facility to report the damage to the owner 
or operator of the facility promptly.

Perform Annual Reviews Only for State Enforcement Programs Deemed 
Inadequate

    AGA and several pipeline operators commented that annual excavation 
damage prevention program reviews are not necessary for those states 
with adequate programs. They noted that it would be reasonable for 
PHMSA to establish a five-year review cycle for those states. Their 
basis is that a state's overall program will change minimally over the 
course of a year and that an annual audit of every program seems 
unnecessary. From the standpoint of administrative efficiency, it would 
be far better for PHMSA to lengthen its review cycle for programs found 
adequate after an initial audit, and focus its resources on the 
programs it found inadequate or adequate subject to specific corrective 
action. PHMSA should only perform annual reviews for states found to 
have a ``nominally adequate'' or inadequate program so that these 
states have the opportunity to have their status re-evaluated to 
identify areas for improvement and additional emphasis.
    JULIE, Inc. commented that there appears to be no probationary 
period or other opportunity for states to improve upon PHMSA's 
recognized ``deficiencies'' prior to PHMSA undertaking enforcement 
actions.

Response

    PHMSA agrees that resources and attention should be focused on 
state excavation damage prevention law enforcement programs that are 
deemed inadequate. However, PHMSA proposes that all SDP enforcement 
programs be evaluated concurrently with PHMSA's annual state pipeline 
safety program evaluations, or at the request of states as appropriate. 
PHMSA does not believe the addition of these evaluations will be overly 
cumbersome. PHMSA also proposes that states be given a five-year grace 
period after notification that their enforcement programs have been 
deemed inadequate to address deficiencies in their programs before 
state pipeline safety base grant funding levels are potentially 
affected. However, PHMSA proposes that Federal excavation damage 
prevention enforcement may take place at any time after a state's 
enforcement program is deemed inadequate. The process for evaluating 
state enforcement programs is described in this NPRM.

Comments on Section IV Issues on Which PHMSA Sought Comment

    In Section IV of the ANPRM, pipeline operators, excavators, states 
and the public were urged to consider the appropriate procedures for 
determining the adequacy of state excavation damage prevention law 
enforcement programs, as well as the need for Federal administrative 
enforcement in the absence of an adequate state program. PHMSA posed 
specific questions to solicit stakeholder input. These included 
questions related to:
    A. Criteria for Determining the Adequacy of SDP Enforcement 
Programs;
    B. Administrative Process;
    C. Federal Requirements for Excavators;
    D. Adjudication Process; and
    E. Existing Requirements Applicable to Owners and Operators of 
Pipeline Facilities.
    Many of the comments received were repetitious of those noted above 
under General Comments.

A: Criteria for Determining the Adequacy of SDP Enforcement Programs

    In Section IV.A of the ANPRM, PHMSA noted that ``a threshold 
criterion for determining the adequacy of a state's damage prevention 
enforcement program will be whether the state has established and 
exercised its authority to assess civil penalties for violations of its 
one-call laws. PHMSA will likely consider the following issues in 
further evaluating the enforcement component of [state damage 
prevention] programs.'' The ANPRM then listed 13 items for 
consideration and comment. Following are comments received relative to 
those items:

Item 1: ``Does state law contain requirements for operators to be 
members of and participate in the state's one-call system (similar to

[[Page 19812]]

current federal pipeline safety regulations, 49 CFR 192.614 and 49 CFR 
195.442)?''

    Several commented that Federal pipeline safety regulations 
adequately address this requirement for pipeline operators. Several 
commenters also said that each state excavation damage prevention 
program should require all underground facilities operators to be 
members of the state's one-call system(s).
    NUCA commented that ``participation'' in excavation damage 
prevention includes calling the one-call center before excavating. 
However, NUCA also commented that underground facility operators being 
members of the appropriate one-call center is fundamental to the 
excavation damage prevention process and that exemptions only increase 
the likelihood of facility damages. NUCA cites the Common Ground Study 
of One-Call Systems and Damage Prevention Best Practices, for which 
``the underlying premise for prevention of damage to underground 
facilities, and the foundation for this study, is that all underground 
facility owners/operators are members of one-call centers, and that it 
is always best to call before excavation.''
    Michigan Consolidated Gas questioned how the state and/or PHMSA 
would take into account operators that do not have the resources, 
equipment, funding, etc., to locate their facilities.

Response

    Sections 192.614 and 195.442 of the pipeline safety regulations 
require regulated pipeline operators to be members of qualified one-
call systems in the states in which they operate. All states certified 
to regulate gas operators will have adopted Sec.  192.614 allowing them 
to enforce it against the intrastate gas operators they regulate.

Items 2 and 3: ``Does state law require all excavators to use the 
state's one-call system and request that underground utilities in the 
area of the planned excavation be located and marked prior to digging? 
Has the state avoided giving exemptions to its one-call damage 
prevention laws to state agencies, municipalities, agricultural 
entities, railroads, and other groups of excavators?''

    NAPSR commented that the standards to which PHMSA would hold a 
state in terms of ``excavation'' must be consistent with the terms used 
in that state's law. NAPSR noted that there may be very legitimate 
reasons for exemptions in a state one-call law. For example, 
agricultural exemptions may recognize the total impracticality of 
attempting to include normal farm tillage. Others may conclude that the 
risk of an activity is so low that regulation is not justified, such as 
opening a grave in a cemetery. Still others may be the result of 
carefully crafted legislative compromises to achieve passage of one-
call legislation, the reopening of which could have negative 
consequences. NAPSR also noted that 49 U.S.C. 60114(d), which lists 
demolition, excavation, tunneling, or construction, or excavation as 
defined in paragraph 192.614(a), is far from all-inclusive, in that it 
seems to exclude farm tillage and gardening, and perhaps activities 
such as pipe or cable plowing. NAPSR considers that PHMSA must 
determine to what extent certain exemptions in individual states will 
be acceptable.
    AGA, along with Nicor, Paiute Pipeline and Southwest Gas 
Corporation, agreed that exemptions are a critical consideration in 
evaluating the adequacy of state excavation damage prevention law 
enforcement programs. They noted that exemptions are inherently counter 
to the entire concept of excavation damage prevention being a shared 
responsibility. They noted that in several states, exemptions have been 
granted, for example, to state DOTs, counties, municipalities, 
railroads, and private land owners. The exemptions can take on 
different forms; some apply so that the entity does not need to belong 
to the one-call center for the purpose of marking its underground 
facilities, while others allow an entity to excavate freely without 
having to notify the one-call center, and still others allow certain 
parties to be free of enforcement penalties. The commenting 
organizations hold that exemptions often exist only because of private 
interests that enable certain entities to escape responsibility in the 
excavation damage prevention process.
    They also commented that exemptions serve as an impediment when 
stakeholders attempt to craft new legislation for state excavation 
damage prevention laws. They referred to the DIMP Phase 1 Report 
(http://primis.phmsa.dot.gov/dimp/docs/IntegrityManagementforGasDistributionPhase1Investigations2005.pdf), in 
commenting that all stakeholders must participate in the excavation 
damage prevention process for it to be successful.
    Spectra Energy commented that PHMSA's criteria should force states 
to eliminate all exemptions from their one-call requirements. Spectra 
noted that a number of states continue to exempt from the one-call 
requirements certain types of excavators, such as agriculture, 
railroads and state/county road commissions. Spectra considers that to 
provide exemptions is contrary to the goal of pipeline safety, noting 
that the pipeline operator is the most qualified entity to determine if 
a pipeline exists within the area of interest, to locate and mark the 
facility, and to determine the safety precautions necessary to ensure 
the pipeline is not impacted.
    JULIE, Inc. expressed a concern that some states' cultures provide 
for the successful existence of more than one excavation damage 
prevention system (one-call center) that does not have overlapping 
geographic areas. There appears to be no process in the ANPRM to 
recognize separate evaluation results in those states, particularly 
when possibly one or both of the systems may have unique but strong 
enforcement programs in place.

Response

    As noted in the response to the General Comments above, some 
exemptions may be justifiable in some states, especially where 
substantiated by data. If having absolutely no exemptions were a 
``pass/fail'' criterion for evaluating state excavation damage 
prevention law enforcement programs, PHMSA believes that nearly every 
state (if not all states) would be declared inadequate.
    PHMSA does not propose an absolute prohibition on exemptions from 
state one-call damage prevention requirements. States are ultimately 
responsible for establishing the excavation damage prevention laws that 
best suit their own circumstances. PHMSA policy strongly encourages 
states to limit exemptions, for both excavators and utility owners/
operators, from excavation damage prevention laws to the extent 
practicable. To that end, one of the criteria for determining the 
adequacy of state excavation damage prevention law enforcement programs 
proposed in this NPRM is ``limited and justified'' exemptions for 
excavators from the requirements of state excavation damage prevention 
laws.
    In assessing state excavation damage prevention law enforcement 
programs, PHMSA will assess all programs if the state under evaluation 
has multiple enforcement programs. In that case, PHMSA may declare one 
or more of the enforcement programs inadequate, thereby allowing PHMSA 
to conduct Federal administrative enforcement actions in geographic 
areas covered by the inadequate program.

Item 4: ``Are the state's requirements detailed and specific enough to 
allow

[[Page 19813]]

excavators to understand their responsibilities before and during 
excavating in the vicinity of a pipeline?''

    Paiute Pipeline and Southwest Gas Corporation recommended that 
PHMSA extend this objective to include excavating in the vicinity of 
any underground facility and supported PHMSA's objective of states 
providing clarity to excavators to ensure that detailed and specific 
information is available so they understand their responsibilities 
before and during excavation within the vicinity of a pipeline. 
Similarly, AGL Resources commented that this item is an appropriate 
consideration when determining the adequacy of a state's excavation 
damage prevention program, and noted that ensuring that excavators 
understand expectations and consequences is an important aspect of 
promoting compliance.
    NAPSR commented that addressing this criterion could be very 
subjective and that specific criteria would be needed for determining 
what is ``detailed and specific enough.'' They noted that some states 
may have extensive regulations, while others may have successful 
excavation damage prevention programs with limited regulatory 
intervention.
    MidAmerican Energy Company commented that the detail and 
specificity of each state's law need not match the level of detail of 
the proposed Federal requirements. They noted that there is value in 
allowing states to tailor their statutory and regulatory requirements 
to the specific circumstances presented in that state. They further 
noted that the level of detail of responsibilities is best determined 
by each situation, condition and scheme and operator requirements for 
excavations on or near its underground facilities, given that 
underground pipelines are constructed and operated in varied geographic 
locations such as remote wilderness, prairie, active agricultural 
lands, forests, residential, commercial, industrial, and subsea 
environments.
    AGA considers that state requirements for most professionals in the 
excavation industry adequately convey the responsibilities involved in 
proper excavation. However, it noted excavators are often non-
professionals who do not understand safe digging practices or even the 
importance of notifying the one-call center. AGA noted that according 
to CGA's 2008 DIRT Report, occupants and farmers have been the 
excavator in 8 to 10 percent of the damage reports collected over the 
three-year period between 2006 and 2008.

Response

    PHMSA encourages states to utilize plain language principles \6\ 
when drafting their pipeline safety regulations. At the same time, 
though, PHMSA does not want to be overly subjective in establishing 
criteria for determining adequacy and PHMSA continues to believe that 
states can and should develop excavation damage prevention laws that 
best suit their particular needs. Therefore, PHMSA is not proposing to 
use the detail and specificity of state law as a criterion at this 
time. However, PHMSA believes that states should collect and manage 
data that is detailed enough to demonstrate that excavators clearly 
understand the requirements of state excavation damage prevention laws.

    \6\ Further information on plain language principles can be 
found in Federal guidance here: http://www.whitehouse.gov/sites/default/files/omb/memoranda/2011/m11-15.pdf.
---------------------------------------------------------------------------

Item 5: ``Are excavators required to report all pipeline damage 
incidents to the affected pipeline operators?''

    Many commenters considered this item to be essential in evaluating 
the adequacy of state excavation damage prevention law enforcement 
programs. The TRA commented that mandatory reporting of damages to 
pipeline facilities should be a part of any effective excavation damage 
prevention program. AGA views this as one of the most important issues 
for evaluation and cited it as being included in the PIPES Act. AGA 
noted that the failure of excavators to notify the pipeline operator of 
damage promptly has resulted in some significant pipeline ruptures 
involving fatalities, injuries, and property loss. AGA cited that past 
incidents have been a painful reminder that just nicking the pipe 
coating or cutting a cathodic protection wire can affect the long-term 
integrity of the pipe and lead to a leak or rupture. Nicor commented 
that despite the requirement, excavators have waited up to several 
hours before reporting damages, thereby exacerbating circumstances. 
Nicor also cited instances where excavators considered damage to be 
minor (coating knick or broken tracer wire) and backfilled an 
excavation prior to reporting it, requiring the operator to then re-
expose the area of reported damage to make repairs. AGL Resources also 
commented that in addition to excavators reporting damages to the 
operator, all utility operators should be required to report damages to 
provide a more complete picture of damage and prevention needs. To whom 
operators should report was not addressed.
    An additional comment received was that PHMSA should clarify how 
``damage'' would be applied to the operator as an excavator, or 
operator's contract excavator and how this might be enforced.
    NUCA commented that while excavators are subject to extensive 
damage reporting requirements in most state laws, the lack of state 
requirements to report ``near misses'' obstructs efforts to provide 
accurate data trends. NUCA considers that when underground facility 
operators fail to locate and mark their lines accurately, that data 
should be captured regardless of whether the facility was damaged. Even 
if reporting of ``near misses'' is required by state law, NUCA believes 
these requirements are rarely enforced.

Response

    Reporting pipeline damages to affected pipeline operators is an 
essential component of pipeline safety. To that end, PHMSA believes 
that states must require that excavators report to pipeline operators 
all incidents that actually result in physical damage to pipelines as a 
criterion for evaluating a state's program. As noted above, states 
should also consider establishing criteria for operators in turn to 
report damage incidents to allow the state to determine whether an 
investigation and enforcement should be undertaken. Therefore, PHMSA is 
proposing, as part of the criteria for determining the adequacy of a 
state's program, that each state has a reliable means for learning 
about excavation damages to underground pipelines (see proposed section 
198.55).
    PHMSA agrees with the importance of damage reporting by all 
underground facility operators. However, PHMSA does not propose to use 
damage reporting by operators as a criterion for evaluating state 
enforcement programs. PHMSA has the authority to require pipeline 
operators to report damages, but does not have the authority to require 
other utility operators to report damages. PHMSA is concerned that this 
special requirement for pipeline operators would be confusing for 
utility operators and cumbersome for the states.
    With regard to the comment about PHMSA's treatment of pipeline 
operators as excavators, PHMSA's existing regulations at 49 CFR 192.614 
and 195.442 address these issues.
    PHMSA is not proposing to require reporting pipeline excavation 
damage near-misses at this time. While data on

[[Page 19814]]

near-misses would be valuable in guiding state excavation damage 
prevention program improvements, this proposed rule pertains 
specifically to excavators who actually damage PHMSA regulated 
pipelines. In addition, this requirement could impose a significant 
cost on excavators. However, there is nothing stopping a state from 
adopting more stringent reporting requirements such as including near-
misses. PHMSA seeks comments on the potential cost impacts of requiring 
reporting of pipeline excavation damage near-misses.

Item 6: ``Does state law contain a provision requiring that 911 be 
called if a pipeline damage incident causes a release of hazardous 
products?''

    AGA and several gas pipeline operators commented that some states 
may adopt statutory language that does not exactly match the Federal 
legislation. For example, a state may adopt language that affords 
pipeline operators some latitude so that they do not need to dial 911 
if they damage their own pipeline. Since operating personnel are 
already on the jobsite, AGA and the commenting companies agree that 
operators should not be required to dial 911 if they cause damage to 
their own pipeline that results in a release that the operators can 
safely control without the aid of emergency response personnel prior to 
making the necessary repair.
    Paiute Pipeline and Southwest Gas Corporation also commented that 
this provision should apply only if the damage may endanger life or 
cause serious bodily harm or damage to property, and results in the 
escape of any flammable, toxic or corrosive gas, and that all releases 
of natural gas do not need to be reported by making a 911 phone call. 
They noted that PHMSA should distinguish between natural gas and other 
gases or liquids instead of trying to include all of these under the 
umbrella of ``hazardous products.''
    NAPSR commented that with regard to calling 911, the question 
should be whether the excavator by law--or appropriate regulation--is 
required to notify local emergency responders and/or law enforcement if 
a release of product poses a danger to the public. NAPSR anticipates 
that where 911 is available the excavator would most likely use it to 
make that notice, but considers that it should not be necessary for 
state law to specify that method if the desired end is achieved. NAPSR 
noted that state laws may predate the advent of 911 emergency call 
systems, and therefore would not specify that 911 must be called. NAPSR 
also noted that calling 911 is generally promoted through state one-
call centers and operators' public awareness programs, and the practice 
may best be achieved through best practices and not through Federal or 
state regulations.

Response

    The PIPES Act requires excavators to promptly call the 911 
emergency telephone number if damage to a pipeline results in the 
escape of any flammable, toxic, or corrosive gas or liquid that may 
endanger life or cause serious bodily harm or damage to property. PHMSA 
understands that excavators are often required to reimburse 911 centers 
for the cost of dispatching emergency response personnel to a damage 
site. Therefore, PHMSA proposes that states require excavators to call 
911 in these instances, but is proposing to permit the excavator to 
exercise discretion as to whether to request that the 911 operator 
dispatch emergency response personnel to the damage site. However, the 
911 operator will always have the discretion to dispatch emergency 
response personnel.

Item 7: ``Has the responsible state agency established a reliable 
mechanism to ensure that it receives reports of pipeline damage 
incidents on a timely basis?''

    Paiute Pipeline and Southwest Gas Corporation commented that states 
that do not have interstate pipeline inspection and enforcement 
authority should treat an interstate pipeline operator as an excavator, 
not a pipeline operator. They consider that authority for inspection 
and enforcement of interstate pipelines should remain with PHMSA and no 
reporting of pipeline damage to the state is needed.
    Southwest Gas Corporation commented that if PHMSA desires 
individual incident report information on non-Federally reported 
incidents from the states, PHMSA should recommend establishing a 
reporting time period with the state agencies. Southwest Gas 
Corporation noted that to eliminate any increased burden on the state 
agency, PHMSA should consider specific criteria levels for those state-
only reportable incidents of which they want notification.
    Paiute and Southwest Gas Corporation also commented that 
notification requirements are different than reporting requirements. 
They noted that state and Federal reporting requirements provide 
initial notification to the respective agency within a very short time 
(usually one to two hours) after discovery. The extent of product 
release, service interruptions, product loss, property damage, 
evacuations, injuries, fatalities, or environmental damage, which may 
not be known for days, are generally included on a written report form 
filed with the appropriate agency, within 30 days or less in accordance 
with state or Federal requirements. They noted that for interstate 
pipelines not subject to state jurisdiction, PHMSA has requirements for 
reporting incidents that meet certain criteria. The requirements 
include an initial notification deadline and a documented incident 
report deadline.
    NAPSR inquired whether PHMSA is going to require that all reports 
be sent to PHMSA, or that specific reports be made available upon 
request, and commented that if PHMSA wants reports of all damages, it 
should simply require the operators report directly to PHMSA instead of 
placing an additional burden on the states.

Response

    For a state to have an effective excavation damage prevention 
enforcement program, the enforcement authority must have a reliable 
mechanism for learning about excavation damage incidents. The details 
of how this mechanism functions, however, may vary considerably from 
state-to-state. For example, some state law may require mandatory 
reporting of excavation damages, while other states use complaint-based 
systems of reporting damages. Because PHMSA must evaluate state 
enforcement programs, PHMSA's goal is to assess how states learn of 
excavation damages and how this mechanism drives enforcement decisions, 
which has an effect on the adequacy of states' enforcement programs. 
PHMSA will not be collecting state damage reports, but may review them 
during evaluation of the state's program.

Item 8: ``Does the responsible state agency conduct investigations of 
all excavation damage to pipeline incidents to determine whether the 
excavator appropriately used the one-call system to request a facility 
locate, whether a dig ticket was generated, how quickly the pipeline 
operator responded, whether the pipeline operator followed all of its 
applicable written procedures, whether the excavator waited the 
appropriate time for the facilities to be located and marked, whether 
the pipeline operator's markings were accurate, and whether the digging 
was conducted in a responsible manner?''

    NAPSR commented that the listing of anticipated review items during 
an excavation damage incident investigation may be helpful during

[[Page 19815]]

investigation of an event reportable as a pipeline incident or 
accident. However, it is unrealistic to expect an investigation of this 
magnitude into each and every event where a pipeline is damaged. NAPSR 
considers that the resources required would exceed those of entire 
state pipeline safety programs, and noted that PHMSA is considering 
these regulations at a time when many states are suffering financial 
hardship and their pipeline safety programs are struggling to remain 
afloat. Other commenters repeated this consideration.
    NAPSR commented that the following listed items should be clarified 
and that, to the extent that any of them are incorporated into Federal 
regulations, PHMSA should clarify its intent and expectation for each 
item:
    [cir] ``Whether the excavator appropriately used the one-call 
system to request a facility locate''--Does having a ticket number 
suffice?
    [cir] ``Whether the excavator appropriately used the one-call 
system to request a facility locate''--Does one need to determine if 
the site was pre-marked?
    [cir] ``Whether the dig ticket was generated''--Does having the 
ticket number suffice? [Or] Does transmission of the ticket to 
operators need to be confirmed?
    [cir] ``How quickly the pipeline operator responded''--Is the 
question here whether the operator responded within the time frame 
allowed by the law or regulation in that state? And, would this 
information be relevant if the incident cause is that the facilities 
were marked and excavation practices were insufficient?
    [cir] ``Whether the pipeline operator followed all of its 
applicable written procedures''--Would this require a field audit and 
review of the operator's (employee or contract) locator on the site of 
the incident?
    [cir] ``Whether the excavator waited the appropriate time for the 
facilities to be located and marked''--Would this require verifying 
that all utilities had marked the site prior to the excavator 
performing the work? [Or] Would comparing the start date on the ticket 
to the incident date suffice?
    [cir] ``Whether the pipeline operator's markings were accurate''--
Would this require field verification of the marks? If yes, how much 
delay can be justified in an excavator's downtime while the marks are 
being verified? Can the word of the operator and excavator be taken as 
fact? Can an emergency locate be performed and excavation activities 
resumed before arrival of a government inspector on site?
    [cir] ``Whether the digging was conducted in a responsible 
manner''--Would this require a field investigation including interviews 
with the foreman, operator and laborers? Can the results of the 
investigation by the operator be considered as fact? If it is 
ascertained that best practices were not followed, would this 
constitute a ``violation''? What are the essential elements of an 
``investigation''?
    NAPSR also commented that all DOT-reportable excavation damage 
incidents should be investigated. However, it noted that there are many 
thousands of DOT non-reportable incidents each year that involve 
superficial damage and no escaping gas. NAPSR considers that a one-
size-fits-all investigation approach is not practical, and that the 
extent of investigation of non-reportable incidents should be on a 
state-by-state basis, left to the discretion of the responsible state 
agency. The state should be allowed to adopt a basis for investigation, 
such as establishing thresholds, or perform periodic sampling coupled 
with enforcement proceedings on the incidents sampled, so a deterrent 
effect is achieved.
    NAPSR further commented that it may be possible that the PHMSA 
Office of Pipeline Safety Failure Investigation Policy document will 
play a role in connection with this aspect of the proposed rulemaking. 
NAPSR, therefore, suggested that this policy be considered along with 
other factors before formalizing a notice of proposed rulemaking.
    AGA commented that the evaluation process should recognize those 
states that have adopted some basis for investigation. The basis could 
be event significance or it could investigate some subset of the 
damages, such as state reportable incidents. AGA noted that it is not 
feasible for a state agency to conduct a formal investigation for every 
occurrence of excavation damage to pipelines in a state. AGA also 
commented that most importantly, the state should have a mechanism that 
enables all stakeholders to express formal concerns and complaints with 
non-compliant parties, citing, for instance, that excavators should 
have a process to file complaints against utilities that fail to mark 
their facilities accurately or on time. Additionally, pipeline 
operators should have a process to file complaints or seek injunctions 
against excavators who either fail to notify the one-call center, fail 
to respect the markings or fail to wait the required time before 
beginning excavation activity.
    APGA commented that this consideration should apply only to 
reportable incidents as defined in 49 CFR Part 191 because it would not 
be reasonable to expect operators and/or state agencies to investigate 
and report in this detail on all excavation damage events. APGA noted 
that some lesser level of reporting may be considered for events that 
do not meet the reportable incident criteria. Nicor suggested that 
states should have a process for determining which reported excavation 
damages will be investigated. APGA also noted that under the 
Distribution Integrity Management Programs (DIMP) rule, operators will 
annually report the number of excavation damages to PHMSA, and that 
these reports could also be made available to states.
    Southwest Gas Corporation commented that if PHMSA means only 
reportable incidents (as defined by each state) that result from 
excavation damage, then determining the effectiveness of the state 
excavation damage prevention program should include a review of all 
excavation damage, not just excavation damage to pipelines, and include 
analysis of any trends and areas for improvement.
    NUCA commented that states must ensure that those conducting damage 
investigations look at the entire excavation damage prevention process, 
from the excavator notifying the one-call center to the facility 
operator providing accurate and timely markings, to safe excavation and 
backfill practices by the excavator. NUCA believes that the ANPRM 
adequately addressed the factors needed to be investigated, but that 
several state authorities fail to fulfill their investigative 
responsibilities in all areas of excavation damage prevention, 
especially with regard to locating and marking of facilities.

Response

    PHMSA's primary interest with regard to pipeline damage 
investigations is to ensure that state enforcement is fair and balanced 
and is targeted to the at-fault party in an excavation damage incident. 
PHMSA recognizes that states have resource issues to contend with and 
need the ability to focus investigatory resources on significant 
incidents as opposed to minor incidents. PHMSA intends to address this 
consideration in determining the adequacy of enforcement programs by 
reviewing state enforcement records and the adequacy of the 
investigations that preceded enforcement actions. In addition, PHMSA 
intends to assess states' incident investigation practices to ensure 
their adequacy in determining the at-fault party in an excavation 
damage incident involving a pipeline subject to PHMSA pipeline safety

[[Page 19816]]

regulations. PHMSA does not intend to use PHMSA's Failure Investigation 
Policy as a model for assessing the adequacy of state damage incident 
investigation practices.

Item 9: ``Does the state's damage prevention law provide enforcement 
authority including the use of civil penalties, and are the maximum 
penalties similar to the federal maximums (see 49 U.S.C. 60122(a))?''

    With regard to the amount of the civil penalty, PUCO noted that the 
ANPRM does not indicate how large state maximum civil penalties would 
have to be in order to be considered ``similar'' to Federal maximums or 
the appropriateness of Federal maximum penalties against non-gas 
pipeline excavators. NAPSR commented that for pipeline operators some 
states' fines are equal to the Federal maximums, but that for 
excavators, fines may vary from small amounts per violation and 
gradually increase, depending on the circumstances, with no maximum. 
NAPSR noted that in practice, some states have found that an 
administrative process with modest fines (i.e., large enough to have a 
financial impact on the offender) works well. The larger the fine, the 
harder it is to collect and the collection process tends to consume a 
lot of the state agency's resources. NAPSR also commented that in state 
legislatures, the authorized amount of a civil penalty can be a serious 
issue. Legislatures may be reluctant to approve penalties so high that 
small companies could be put out of business, noting that although the 
assessed penalty does not have to be the maximum, the possibility 
remains a concern. NAPSR notes that the penalties incorporated in state 
laws may be the product of laborious and protracted negotiations--and 
the penalties provided for in 49 U.S.C. 60122 are quite high by many 
state standards. NAPSR notes that there is no evidence that state 
penalties must be comparable to Federal penalties for state enforcement 
to be effective, and that if such a comparison must be a consideration 
it should be a minor one.
    MidAmerican Energy commented that the amount of the maximum civil 
penalty that may be assessed may not be the critical factor in 
evaluating a state's enforcement program. Instead, the aggressiveness 
and consistency by which a state investigates and enforces the 
excavation damage prevention laws may be a more effective gauge. 
Michigan Consolidated Gas noted that consideration should be made 
regarding a state's funding and resources to administer its enforcement 
program, i.e., does the state have the manpower to investigate, hold 
hearings, document findings, etc., for every violation found or 
complaint filed especially if this includes non-regulated or non-
pipeline entities?
    The PST commented that if PHMSA is going to ascertain whether the 
amounts of civil penalties assessed reflect the seriousness of the 
incident, then PHMSA must develop a set of guidelines that sets out 
each type of offense and the range of penalties that PHMSA deems 
appropriate. PST noted that this will also help to provide clarity 
regarding the question in the ANPRM about whether a state program's 
civil penalties ``are the maximum penalties similar to the Federal 
maximums.''
    The several Texas pipeline associations commented that a 
substantial portion of state grant monies should be tied to enforcement 
and collection of substantial civil penalties for failure to comply 
with a state one-call law that is found to be adequate. They also 
suggested that penalties related to excavation damage prevention being 
collected by states should be dedicated to pipeline safety, and not 
just the general revenue fund.
    Spectra Energy Transmission commented that PHMSA's criteria should 
consider a state's historical enforcement action against excavators 
that fail to place one-call tickets prior to excavating or fail to 
adhere to the mandatory waiting period following one-call notification. 
Spectra also commented that states should take enforcement action 
against intrastate pipeline or distribution system operators that fail 
to respond to one-call tickets or fail to properly locate or mark their 
facilities. They noted that penalties should escalate for repeated 
violations and that the existence of repeat violations may signal a 
weakness of deterrents and need for PHMSA action.

Response

    While state civil penalty levels must be high enough to deter 
violations, PHMSA recognizes that states will often be conducting 
enforcement against smaller entities. Therefore, penalty levels lower 
than the Federal levels may be sufficient to achieve deterrence. 
Accordingly, PHMSA does not propose to require states to assess civil 
penalties at a level equal to Federal civil penalties. PHMSA's primary 
interest with regard to state civil penalties is that (1) civil penalty 
authority exists within the state, and (2) civil penalty authority is 
used by the state consistently enough to deter violation of state 
excavation damage prevention laws. PHMSA seeks comments on this issue.
    PHMSA does not intend to address impacts to pipeline safety grant 
funding levels for states with excavation damage law enforcement 
programs PHMSA deems adequate.

Item 10: ``Has the state designated a state agency with responsibility 
for administering the damage prevention laws?''

    Marathon Pipeline commented that a state agency should be 
responsible for receiving and investigating reports of pipeline damage 
and near miss incidents caused by excavation. Paiute Pipeline agrees 
that the agency responsible for administering the excavation damage 
prevention laws should be designated in states where excavation damage 
prevention laws exist. Echoing this comment, the Texas pipeline 
associations commented that the first criterion for a state should be a 
single state agency designated to oversee the state's underground 
excavation damage prevention program. They noted that a state agency 
must not only be designated as the agency responsible for the program, 
but must also have the authority to enforce the safety standards to 
protect underground facility operators, excavators, and the public.
    Going further, AGA and AGL Resources commented that effective 
excavation damage prevention requires more than merely designating a 
state agency with responsibility for administering the excavation 
damage prevention laws. They noted that although many states have 
agencies that have been delegated authority for administering the 
excavation damage prevention laws, often the state agency has not been 
given either the personnel, financial resources, or the incentives 
needed to exercise its authority. The three Texas pipeline associations 
commented that the adequacy of funding should be documented and 
reported by the states through several basic data elements. Such 
elements could include items like ratio of reported damages to calls, 
numbers of damages reported per mile and number of enforcement actions 
completed. There may be better measures of enforcement effectiveness, 
but whatever is used must demonstrate that enforcement is occurring.
    AGL Resources also commented that a state should establish, 
designate and utilize an ``advisory type'' committee made up of the 
various stakeholders as the responsible state agency.

Response

    PHMSA's primary interest in this area is assessing whether a state 
has a

[[Page 19817]]

designated excavation damage prevention law enforcement authority to 
act as the lead in law enforcement cases. That authority needs to 
establish a close working relationship with the state pipeline 
investigators and develop a familiarity with the state's pipeline 
safety and damage prevention laws and requirements. Once that authority 
begins to take enforcement action consistently, PHMSA will be 
interested to learn whether the state enforcement authority has 
adequate resources to perform its mission. In addition, PHMSA's 
periodic review of states' damage prevention enforcement records 
performed under the state certification process will provide PHMSA with 
information on the adequacy of enforcement resources.
    Committees comprised of representatives of all excavation damage 
prevention stakeholders that advise enforcement agencies may help to 
ensure fair and balanced excavation damage prevention law enforcement. 
However, PHMSA does not believe that advisory committees should have a 
``veto'' on enforcement decisions made by responsible officials and 
PHMSA also believes that advisory committees are not the only effective 
means of ensuring fair and balanced enforcement. PHMSA, therefore, does 
not propose to use as a criterion whether states utilize advisory 
committees in assessing the adequacy of states' enforcement programs.

Item 11: ``Does the state official responsible for determining whether 
or not to proceed with enforcement action document the reasons for the 
decision in a transparent and accountable manner? Are the records of 
these investigations and enforcement decisions made available to 
PHMSA?''

    NAPSR commented that in some jurisdictions this would be privileged 
information not subject to disclosure. It also noted that a decision on 
whether to take formal enforcement action is a decision on whether to 
prosecute; thus, the concept of ``prosecutorial discretion'' may apply. 
NAPSR also inquired about what kind of documentation would be expected.
    Paiute Pipeline and Southwest Gas Corporation commented that 
transparency and consistency are important to an effective enforcement 
program. They consider that states should be responsible for 
documenting and recording investigations, decisions, and enforcement 
actions taken or not taken to ensure consistency in decisions and 
enforcement actions with all excavators. They also commented that PHMSA 
should consider if instead of being informed of every investigation and 
enforcement decision of every state, it would be more effective for 
PHMSA to recommend specific criteria levels for being informed of 
investigations and enforcement decisions.

Response

    PHMSA will be reviewing state enforcement records to help assess 
whether states that have enforcement authority are actually using their 
authority and how they are using their authority. PHMSA believes that 
states should be able to explain the reasons behind their decisions as 
to whether or not to take enforcement action, but is not necessarily 
seeking access to privileged and confidential information.

Item 12: ``With respect to cases where enforcement action is taken, is 
the state actually exercising its civil penalty authority? Does the 
amount of the civil penalties assessed reflect the seriousness of the 
incident? Are remedial orders given to the violator legally 
enforceable?''

    AGA, API and AOPL supported the focus on utilization of civil 
penalties to enforce excavation damage prevention laws. API and AOPL 
supported PHMSA's proposed threshold criteria to determine whether a 
state has established and exercised authority to assess civil penalties 
for violation of one-call laws. They noted that most of the other 
criteria listed in the ANPRM derive from these criteria and demonstrate 
that laws are in place and being enforced.
    AGA and others, including several pipeline operators, commented 
that fines and penalties should be significant enough to affect 
behaviors, yet they should not be so high that they give excavators 
incentive to be deceitful or fearful of reporting damages due to the 
potential repercussions. They consider that fines and penalties should 
escalate for repeat and willful violators, particularly those who have 
a history of being counseled on the importance of adhering to all safe 
digging laws and practices. They also commented that the maximum fine 
or penalty for any Federal administrative enforcement actions taken 
within state jurisdiction should be no more than the maximum amount 
cited in the state law, even if that state's enforcement has been 
deemed inadequate. They commented that maximum penalties in 49 U.S.C. 
60122(a) should not be used for excavation damage prevention law 
enforcement as they are excessive for excavation damage prevention 
programs and can have adverse unintended consequences.
    Nicor commented that the state's one-call statute should set forth 
aggravating or mitigating factors in determining the civil penalty. 
They also commented that when considering a history of noncompliance, 
excavator violations should not aggravate the penalty calculation for 
locating and marking violations, and vice versa, and that penalty 
assessments should be transparent to all excavators.
    Paiute Pipeline and Southwest Gas Corporation commented that 
PHMSA's evaluation of a state's enforcement program should consider 
whether the state has the ability to exercise its authority to assess 
civil penalties and whether it is fair and consistent in doing so. They 
also noted that not all damage incidents warrant financial penalties, 
and PHMSA should not limit its review to only penalties of a financial 
nature. They acknowledged that civil penalties are part of an effective 
excavation damage prevention program; however, they commented that in 
some states excavation damage prevention training has been effectively 
mandated in lieu of civil penalties.

Response

    PHMSA's primary interests with regard to state civil penalties for 
violations of excavation damage prevention law are that: (1) Civil 
penalty authority exists within the state, and 2) the state uses civil 
penalty authority to deter violation of state excavation damage 
prevention laws. PHMSA proposes to assess these two factors through a 
review of state law/regulation and records of past enforcement actions. 
PHMSA does not intend to hold states to an overly-prescriptive 
construct of civil penalty authority or to an overly-prescriptive civil 
penalty fee schedule. Sanctions other than civil penalties may have the 
desired effect of deterring non-compliant behavior. State excavation 
damage prevention enforcement records should be made available to the 
public to the extent practicable. PHMSA seeks comment on these issues.

Item 13: ``Are annual statistics on the number of excavation damage 
incidents, investigations, enforcement actions, penalties proposed, and 
penalties collected by the state made available to PHMSA and the 
public?''

    AGA agreed that statistics are useful to understand trends and 
areas deserving attention, that past enforcement actions are one 
barometer of the enforcement activity in the state, and that past 
reports of enforcement against excavators should be reviewed for the 
type of excavator that is being fined or penalized. AGA also

[[Page 19818]]

commented that other items should be considered to determine whether or 
not enforcement has been active and effective, but noted that many 
states only collect data on excavation damages involving natural gas 
pipelines. AGA commented that each state should be expected to 
establish some clear, minimum reporting guidelines for the state 
enforcement agency, but that PHMSA should not expect the various state 
reporting guidelines to be uniform.
    NAPSR commented that although annual statistics are important, 
PHMSA should not place much emphasis on comparing the states against 
each other on the basis of these parameters. It noted that there is 
bound to be significant variability between the states due to factors 
including, but not limited to, the volume of excavation activity in the 
state, the density of the underground infrastructure, the number of 
one-call centers, the resources available to the entity in charge of 
enforcement, and the political climate in the state with respect to the 
prevailing preference as to what the excavation damage prevention law 
should cover.
    Paiute Pipeline and Southwest Gas Corporation commented that having 
data available to the public is not the standard for which a state's 
program should be judged. They consider that damage incident 
investigations, enforcement actions, and penalties proposed or 
collected should not be provided to the general public without 
providing a clear and concise description of the information, as most 
of the general public has limited knowledge of, or experience with, the 
information that would be provided.
    Nicor commented that statistics collected should include damages by 
all excavators and on all facilities, not just pipelines. Paiute and 
Southwest Gas Corporation noted that data from the CGA DIRT could be 
used for analyzing excavation damages; however, providing damage 
information to DIRT is not mandated in all states.
    NUCA commented that timely gathering of damage data is important, 
as is the type of information collected. However, NUCA considers that 
damages incurred by the excavator should be collected as well. This 
should include costs to the excavator in cases where a facility is hit 
because of a failure to locate and mark facilities accurately in a 
timely fashion, including any damage to the excavator's equipment or 
property, and any downtime incurred by the excavator while the true 
location of underground facilities is determined.
    Washington Transportation Builders Association commented that its 
industry is concerned that contractors will be singled out for 
incidents that were caused by others, such as mismarked utilities and 
failure to address utilities during the design process, and that PHMSA 
should determine what are appropriate ``annual stats on damage 
incidents'' to report to the public.
    API and AOPL commented that the reporting requirements suggested as 
a basis for evaluation could have the effect of requiring duplicate (or 
even triplicate) reporting for pipeline operators and/or other 
regulated entities. They noted that given that recently proposed 
revisions to PHMSA's own accident and incident reports (7000.1 and 
7000.2) would collect, and CGA's DIRT report already collects, 
significant information about excavation damage incidents, PHMSA should 
consider changing the reporting requirements by which a state program 
is judged to allow for the use of the CGA or PHMSA data. Similarly, the 
WUCA commented that state agencies and PHMSA should explore means to 
share reported information electronically rather than imposing 
additional reporting requirements.
    The Michigan Public Service Commission (PSC) commented that 
reportable information should include the nature of the incident, the 
cause of the incident, the extent of service interruptions, property 
damage, evacuations, injuries and fatalities, and that product loss 
would be factored into the total dollar amount of the incident.

Response

    Variability among the states makes it difficult to seek 
standardized information pertaining to excavation damage incidents, 
investigations, enforcement actions, penalties proposed, and penalties 
collected. Variability also makes it difficult to compare state 
enforcement programs. PHMSA does, however, propose under criterion 3 
that availability of this type of information to the general public be 
a factor in evaluating state enforcement programs because public 
understanding and involvement of state enforcement can help to drive 
more effective enforcement.

Additional Comments Related to Section IV.A

    Commenters were also invited to comment on additions and 
alternatives to the items listed in the ANPRM, as noted above, that may 
be equally suitable for the purpose of evaluating the adequacy of state 
excavation damage prevention law enforcement programs.

Clarification

    PST and several other commenters noted that state excavation damage 
prevention programs apply to many utilities besides pipelines, and that 
it is unclear from the ANPRM whether a state's entire excavation damage 
prevention program, including other utilities such as waterlines, 
sewer, electric, etc., will be judged or whether PHMSA will only review 
how excavation damage prevention is working for pipelines. PST 
commented that it is also unclear whether PHMSA intends to expand its 
authority to include damage to utilities other than pipelines, and if 
not, what effect PHMSA's selective enforcement of only the part of the 
program regarding pipelines will have on a state's more comprehensive 
excavation damage prevention program. Will states be driven to create 
two separate excavation damage prevention programs? What would be the 
unintended consequences of not regulating utilities other than 
pipelines? Similarly, the TRA commented that the proposed rule should 
distinguish between enforcing one-call laws and pipeline facility 
excavation damage prevention. TRA noted that one-call laws in many 
states cover many different types of utilities, and that it appears 
that a state may meet the requirements stated in the PIPES Act by 
enforcing pipeline facility excavation damage prevention without 
exercising the same level of authority over other underground 
utilities, such as water, sewer, telecommunications and electricity.
    PST also commented that it concurs with the general criteria set 
out in the ANPRM for determining whether a state's enforcement program 
is adequate, and the use of the nine elements from the PIPES Act as a 
foundation for excavation damage prevention law enforcement programs. 
However, it noted that PHMSA also needs to consider and clarify:
    1. Whether each criterion is of equal importance or if a relative 
weight should be assigned to each;
    2. Whether the failure of a state to meet a single criterion 
results in the state's damage prevention program being inadequate; and,
    3. Whether the failure to meet certain ``core'' criteria or attain 
a ``passing'' score (based on relative weights of each criterion) will 
trigger an ``inadequacy'' determination.

Response

    PHMSA proposes to review the adequacy of states' excavation damage 
prevention law enforcement programs.

[[Page 19819]]

However, PHMSA's regulatory authority extends only to pipelines subject 
to PHMSA's pipeline safety regulations. PHMSA does not have the 
authority to enforce Federal excavation damage prevention standards in 
cases of damage to underground utilities other than pipelines. Despite 
PHMSA's limited regulatory authority, PHMSA believes that if states 
implement effective enforcement programs that are driven by the goal of 
preventing excavation damage to pipelines, other utilities and 
excavation damage prevention stakeholders will benefit. PHMSA does not 
intend for states to develop separate excavation damage prevention 
programs for pipelines and other utilities.
    PHMSA proposes in this notice to use seven criteria to evaluate 
state enforcement programs. PHMSA, however, will not take a one-size-
fits-all approach. Because of the wide variability among state 
enforcement programs, PHMSA believes these reviews must take into 
account the experiences of each state and limit comparison between 
state programs.
    PHMSA's primary goal in evaluating the adequacy of state excavation 
damage prevention law enforcement programs is to seek clear evidence 
that:
     State laws/regulations are adequate to protect underground 
infrastructure from excavation damage;
     The state has a designated authority responsible for 
enforcement of the excavation damage prevention law;
     The enforcement authority has a reliable means of learning 
about excavation damage incidents and possible violations of state 
excavation damage prevention law; and,
     Enforcement authority is exercised effectively, including 
the use of civil penalties, to ensure compliance with state excavation 
damage prevention law.
    There are multiple ways a state can meet the more subjective 
criteria. Reviews of state enforcement programs would entail detailed 
conversations with excavation damage prevention stakeholders at the 
state level and must allow for some flexibility to permit a thorough 
and accurate review of state enforcement programs.
    PHMSA strongly believes that excavation damage prevention law 
enforcement is a state responsibility. Overly prescriptive Federal 
criteria for the review of state enforcement programs would be counter 
to this principle. This rulemaking is intended to provide limited, 
backstop Federal administrative enforcement authority regarding 
excavation damage to pipelines in states PHMSA finds to have inadequate 
enforcement programs and to encourage those states to enhance their 
existing excavation damage prevention programs or to implement programs 
to include effective enforcement through the use of civil penalties.

Criteria for Review of SDP Enforcement Programs

    AGC of Texas recommended that when evaluating the adequacy of a 
state's excavation damage prevention program, PHMSA should include 
criteria for a mandatory positive response system, which requires 
operator and excavator participation, enforceable with penalties.
    The WUCA commented that state excavation damage prevention law 
enforcement processes should include an appeals process that includes 
an appeals board with members who have adequate knowledge of design and 
construction administration processes, allowing them to assign 
responsibility to the appropriate party. They commented that failure to 
assign responsibility to the appropriate parties, such as operators, 
one-call centers, locators and design engineers, creates uncontrollable 
risk for contractors.
    API and AOPL commented that PHMSA should establish clear guidelines 
and criteria for determining which state excavation damage prevention 
programs are effective and effectively enforced, and noted that these 
criteria should be based on transparent data, where available, but 
should not impose additional data collection on the states. AGA noted 
that the most important criteria are the ones involving timely 
reporting of pipeline damages, a universal requirement for all parties 
to notify the one-call center prior to excavation, establishment of a 
single agency responsible for oversight of excavation damage prevention 
laws, and an effective enforcement process. AGA also commented that the 
criteria regarding the evaluation of state programs, as listed in the 
ANPRM, appears thorough, but acknowledged that how the criteria are 
weighted and actually evaluated is open to several different 
approaches.
    Several commenters expressed support for the need and intent of the 
proposed rulemaking, the development of criteria by which to evaluate 
state excavation damage prevention programs, and Federal administrative 
enforcement, if needed, when state enforcement is deemed inadequate. 
EPPG commented that a ``standard model'' for enforcement of excavation 
safety is needed to ensure existing state programs are not audited 
against unsettled standards. However, EPPG commented that Federal 
administrative enforcement intervention should not occur prior to a 
state being audited and provided an opportunity to improve on any 
deficiencies.
    NAPSR expressed the view that most of the items listed in the ANPRM 
are subjective and that additional examination of the assessment 
factors may be required to further eliminate some of the subjectivity. 
Alternatively, they suggested there may be need to develop some non-
mandatory guidance to provide added detail.
    PST commented that if PHMSA decides to create a situation where a 
state can be found to have a program that is ``nominally adequate,'' 
PHMSA needs to define clearly what this means and how a state can 
achieve an ``adequate'' status. PST's preference would be for PHMSA to 
clearly communicate possible areas where improvements could be made in 
a state's program rather than to create a hard to define status of 
``nominally adequate.'' They encouraged PHMSA to create criteria that 
are clear enough that a state's program is either adequate or 
inadequate.
    Spectra Energy commented that PHMSA criteria should weigh whether 
state excavation damage prevention laws include requirements for 
excavators to notify the state and the pipeline operator if they damage 
a pipeline during excavation and whether enforcement procedures exist 
for instances of non-compliance.
    TRA commented that the threshold criterion for evaluating the 
adequacy of a state's excavation damage prevention program should 
include the lack of exemptions to the state's excavation damage 
prevention laws, such as exemptions for state agencies, municipalities, 
agricultural entities, railroads, and other groups of excavators. TRA 
cautioned, however, that it, and likely other state regulatory 
agencies, does not have authority to make changes to the state pipeline 
excavation damage prevention law. To minimize exemptions, much effort 
and time must be expended to reach consensus regarding the entities to 
be exempted and to determine the extent of an exemption. While TRA 
agrees with the threshold criteria noted in the ANPRM, TRA asserted 
that as part of the evaluation to determine the adequacy of a state's 
enforcement of its pipeline excavation damage prevention law, the 
state's record of progress in strengthening its law should be 
considered. Every effort should be made to allow a state to continue 
working with stakeholders to improve pipeline excavation damage 
prevention laws without Federal intervention.

[[Page 19820]]

    AGA commented that PHMSA should build flexibility into how it 
applies the performance criteria for the 13 criteria listed in the 
ANPRM. AGA noted that several of the items listed do not lend 
themselves to a simple rating or score, or even a definitive `yes' or 
`no' evaluation. For example, a state may require all parties to call 
before they dig, but it may give certain exemptions when the type of 
excavation involves the use of hand tools, noting that CGA's 2008 DIRT 
report indicates that 22 states fall into this category. AGA wondered 
how this type of scenario would affect a state's evaluation.

Response

    PHMSA does not propose to include a criterion for a mandatory 
positive response system that requires operator and excavator 
participation. PHMSA believes this criterion is outside the scope of 
this rulemaking.
    Effective excavation damage prevention enforcement programs require 
adequate processes for identifying the at-fault party in damage 
incidents to enable action to be taken against the at-fault party in 
any enforcement case. PHMSA does not consider this proposed rule to 
unfairly target excavators for enforcement action, but instead to 
address an enforcement gap in pipeline safety excavation damage 
prevention.
    PHMSA does not propose to make a distinction between ``nominally 
adequate'' and ``adequate'' state enforcement programs. The proposed 
criteria for evaluating state enforcement programs are designed to 
establish the threshold for minimum adequacy of state enforcement 
programs. PHMSA intends to deem state enforcement programs either 
adequate or inadequate through use of the review criteria and processes 
outlined in this NPRM. PHMSA does not propose to use weighted criteria 
in the evaluation.

B. Administrative Process

    Section IV.B of the ANPRM sought comment on the administrative 
procedures available to a state that elects to contest a notice of 
inadequacy, should it receive one. It noted that the procedures would 
likely involve a ``paper hearing'' process where PHMSA would notify a 
state that it considers its excavation damage prevention law 
enforcement inadequate (i.e., following its annual review), and the 
state would then have an opportunity to submit written materials and 
explanations. PHMSA would then make a final written determination 
including the reasons for the decision. The administrative procedures 
would also likely provide for an opportunity for the state to petition 
for reconsideration of the decision, and would likely allow the state 
to show later that it has improved its excavation damage prevention law 
enforcement program to an adequate level and request that PHMSA 
discontinue Federal administrative enforcement in that state.
    The ANPRM asked for comments regarding whether the described 
process would strike the right balance between the Congressional 
directive to PHMSA to undertake Federal administrative enforcement, 
where necessary, while providing a state with a fair and efficient 
means of showing that the state's enforcement program is adequate.
    Section IV.B suggested that PHMSA would likely evaluate state 
excavation damage prevention enforcement programs on an annual basis, 
considering factors such as those set forth in Section IV.A. It noted 
that this annual review would likely include a review of all of the 
enforcement actions taken by the state over the previous year.
    Section IV.B noted that if the state's enforcement program is 
ultimately deemed inadequate in its most recent annual review, direct 
Federal administrative enforcement against an excavator who violated 
Federal requirements and damaged a pipeline in that state could proceed 
without further process.
    The ANPRM also asked if the process should enable PHMSA to evaluate 
a state enforcement decision concerning an individual incident during 
the course of the year and potentially conduct Federal administrative 
enforcement where a state deemed ``nominally adequate'' in its most 
recent annual review decided not to undertake enforcement for an 
incident that PHMSA believes may warrant enforcement action.

Process for Determining the Adequacy of State Enforcement

    PUCO commented that the administrative due process for determining 
whether a state program is ``inadequate,'' as stated in the ANPRM, is 
very general and appears to be an informal process. PUCO noted that it 
is unclear whether the determination that a state program is 
``inadequate'' is to be made by the head of PHMSA, PHMSA regional 
managers, a board or panel at PHMSA, or some other entity altogether.
    The WUCA commented that PHMSA should provide information and 
guidance that will clearly outline what the state must do to create an 
acceptable damage enforcement program by PHMSA's standards.
    The Greater Chicago Damage Prevention Council commented that it 
endorses the development and implementation of best practices to 
prevent damage to pipelines and other underground facilities, but that 
it opposes enactment of the proposed rule. Its opposition is based on 
the following regarding Section IV, Paragraph B--Administrative 
Process: The proposed rule: (a) Fails to use imperative language and 
speaks in generalities, such as, what ``the process would likely 
involve;'' (b) is devoid of elements mandating PHMSA provide those 
states deemed ``inadequate'' or ``nominally adequate'' with detailed 
evaluation results that support PHMSA's determination; (c) fails to 
provide adequate due process in the appeal of PHMSA's determination; in 
fact, there is no appeal process identified relative to PHMSA's 
``final'' determination, other than to try again next year; (d) offers 
the state no opportunity whatsoever to undertake corrective action or 
improvement prior to PHMSA undertaking enforcement actions; and (e) 
fails to ``strike the right balance between the Congressional directive 
to PHMSA to undertake Federal administrative enforcement where 
necessary while providing a state with a fair and efficient means of 
showing that the state's enforcement program is adequate.'' The Council 
also noted that the proposed rule fails to meet ``Element 7,'' 
stipulated in the Rule as mandatory for a ``comprehensive damage 
prevention program.'' The commenter noted that the proposed rule is 
limited to PHMSA regulated pipelines and excludes all other underground 
facilities. It considers that by undertaking enforcement actions 
relating only to pipelines, PHMSA creates a de facto dual enforcement 
system, which in itself is a key criterion in determining whether an 
enforcement program is adequate. Therefore, the proposed rule 
establishes an ``inadequate enforcement program'' and should not be 
implemented.

Response

    This NPRM proposes a clearly-defined process for determining the 
adequacy of state enforcement programs. PHMSA is authorized by Congress 
through the PIPES Act of 2006 to pursue this rulemaking. The ANPRM was 
designed to solicit input from interested stakeholders on how to 
construct the proposed rule. To the extent the ANPRM used the term 
``likely'' in discussing a given approach, it only means that PHMSA has 
not made any final decisions on anything at the ANPRM or NPRM stage. 
Once the final

[[Page 19821]]

rule is published, the word likely will not appear in the text of any 
final requirement.
    PHMSA agrees that specific reasoning should be provided for any 
declaration of state excavation damage law enforcement program 
inadequacy. In addition, PHMSA would evaluate states' progress on a 
yearly basis to assess adequacy. PHMSA proposes to make public the 
results of the reviews of state excavation damage prevention law 
enforcement programs. As noted above, comparisons of states are not 
practical given the wide variety seen in state enforcement programs.

Findings

    Missouri PSC commented that a state's enforcement program should 
either be deemed adequate or not adequate; a process that would set 
``levels'' of adequacy would simply be more subjective. Similarly, API 
and AOPL noted that a state either has an adequate program or it 
doesn't, and that the state should not be held in ``limbo'' and should 
not constantly be second-guessed. They agree that if a state program is 
deemed deficient then PHMSA should work with the state to make it 
better.
    The WUCA commented that if a written statement is provided to the 
state notifying it of an inadequate excavation damage prevention law 
enforcement program, specific reasoning must be provided for the 
ruling. Additionally, rather than a ``likely'' opportunity to provide a 
showing at a later time, if deemed inadequate, a clear policy should be 
developed.
    AGC commented that the administrative procedures should include 
public notice of PHMSA's determination of inadequacy in the Federal 
Register with a detailed explanation of the circumstances justifying 
PHMSA's determination.
    Paiute Pipeline and Southwest Gas Corporation commented that PHMSA 
should not pursue a comparison of one state to another, but should only 
evaluate individual states through review of their excavation damage 
prevention programs, including state laws and enforcement authority.

Response

    PHMSA is proposing to have state excavation damage prevention law 
enforcement programs be deemed either adequate or inadequate; PHMSA is 
not proposing to establish levels of adequacy. PHMSA intends to 
continue its SDP grant program, one-call grant program, and various 
other initiatives designed to assist states with improving their 
excavation damage prevention programs. These initiatives were described 
in more detail in the ANPRM.

Federal Administrative Enforcement

    Regarding the precept in the ANPRM, ``If the state's enforcement 
program is ultimately deemed inadequate, direct Federal administrative 
enforcement against an excavator who violated the state's damage 
prevention law and damaged a pipeline in that state could proceed,'' 
AGA commented:
     PHMSA should also consider what will trigger Federal 
administrative enforcement action. Is damage the only trigger or is 
there a potential for enforcement action due to repeated complaints 
from operators of reckless excavation activities? (e.g., no 
notification to 811; failure to hand-expose pipeline; etc.)
     The process should not allow PHMSA to evaluate a state 
enforcement decision that has already been made.
     Only states determined to have an inadequate program 
should have the possibility of PHMSA intervention.
    Like AGA, APGA, AGC, others commented that PHMSA should not 
evaluate a state's enforcement decision concerning an individual damage 
incident in a state where PHMSA has found the enforcement program to be 
adequate or nominally adequate. Instead, APGA suggested PHMSA should 
consider whether certain high profile events received adequate 
enforcement action by the state in the course of its periodic review of 
the state's overall enforcement program.
    NAPSR strongly suggested that only the states with inadequate 
programs be subject to PHMSA examination of enforcement decisions made 
at the state level, and only after PHMSA determines the principal 
factor of the state's inadequacy has been repeated failure to enforce 
the law against clear cases of egregious violations. Similarly, Nicor 
stated that if a state is deemed nominally adequate, the state's 
enforcement decision concerning an individual event should be upheld, 
but PHMSA should provide guidance to that state so that it improves its 
program for the next review. EPPG noted that if PHMSA took action in a 
state that had passed the most recent assessment of its enforcement 
program, it would undermine the purpose of the assessment itself.
    EPPG commented that PHMSA should define how enforcement 
responsibility between PHMSA and the state would be implemented. EPPG 
noted that as important as it is to identify and intercede in states 
found to have inadequate one-call enforcement, it is also important to 
clarify how enforcement responsibility should be conducted elsewhere. 
Excavators should not be exposed to multiple, divergent and possibly 
conflicting enforcement authorities and standards, and the standards 
and procedures should clearly define which agency will have 
jurisdiction.
    NUCA commented to reemphasize the importance of balanced 
enforcement in that Federal administrative enforcement against an 
excavator who violated the state's excavation damage prevention law 
should be coupled with Federal administrative enforcement against 
pipeline operators who fail to locate and mark their pipelines 
accurately in accordance with the law.
    API and AOPL commented that they question the efficacy of direct 
Federal administrative enforcement against an excavator who violates a 
state's excavation damage prevention law and damages a pipeline. They 
noted that state one-call laws vary with respect to elements such as 
notification time, ticket life, tolerance zone, and white lining. 
Without a Federal minimum standard to support Federal administrative 
enforcement, they do not believe it is appropriate or practical for 
PHMSA to enforce state laws evenly or consistently.
    AGC noted that the goal of enforcement should be to fairly arrive 
at rational outcomes, such as education and penalties that correspond 
to the gravity of the violation, without imposing unnecessarily high 
transaction costs on any participant, including the enforcement 
authority.
    PST offered comments/questions regarding consequences to states 
that choose to be inadequate. PST noted that ``PHMSA should clearly 
define in the NPRM what the consequences are for a state that is found 
to have an ``inadequate'' or ``nominally adequate'' excavation damage 
prevention program. Will excavation damage prevention grants/monies be 
the only thing affected or will other state funding and authority be 
penalized as well?'' Additionally, PST noted ``While we agree with 
PHMSA and Congress that states have a responsibility to ensure a system 
is in place to protect underground pipelines, what are the consequences 
if a state chooses to ignore that responsibility in hopes that PHMSA 
will take it on? Will the financial consequences or loss of authority 
be greater than the possible short-term financial benefits to a state 
faced with a budget crisis? Is PHMSA staffed and funded adequately to 
take on such a greater enforcement role?''

[[Page 19822]]

Response

    PHMSA intends to evaluate the existence and adequacy of state 
excavation damage prevention law enforcement programs. PHMSA is 
proposing that this will be done, in part, by reviewing state 
enforcement records to ascertain whether a state is effectively 
applying its enforcement authority, assuming such authority is provided 
for in state excavation damage prevention law. PHMSA proposes to 
evaluate states' pipeline damage investigation practices to ensure they 
are adequate to determine the at-fault party for excavation damage 
incidents. As noted, excavators will be subject to Federal 
administrative enforcement only in states determined to have inadequate 
enforcement programs, and PHMSA is proposing to make decisions 
regarding Federal administrative enforcement in those states on a case-
by-case basis.
    Balanced enforcement of excavation damage prevention laws is 
important. As appropriate, PHMSA is proposing to enforce either this 
rule (once it is final) against excavators or existing regulations 
applicable to pipeline operators and their contractors against the at-
fault party. PHMSA has enforced existing excavation damage prevention 
regulations applicable to pipeline operators. PHMSA believes that 
enforcement of existing excavation damage prevention regulations 
applicable to pipeline operators, at both state and Federal levels, is 
a deterrent to non-compliant behavior and reduces excavation damage to 
pipelines.
    PHMSA does not have authority to enforce state laws and has 
included the proposed Federal requirements for excavators in this 
proposed rulemaking.
    PHMSA proposes to consider state enforcement program adequacy to be 
a factor in determining state pipeline safety grant funding levels 
(after a lengthy grace period). PHMSA believes this approach will 
provide a financial disincentive for states to disregard their 
enforcement responsibility. PHMSA is seeking comment on this 
conclusion.

Appeals

    Several commenters, including API, AOPL, PUCO, and Michigan 
Consolidated Gas, commented that states should be provided 
opportunities to respond to and appeal PHMSA's decisions on the 
adequacy of a state enforcement program. PUCO noted that procedures for 
determining the adequacy of a state's program and the process for 
appeals for reconsideration should be more fully described, and include 
a requirement for PHMSA to review and respond to any petition for 
reconsideration within a certain time frame. API, AOPL, Nicor, and 
Panhandle Energy support the development of administrative procedures 
that would be available for states that elect to contest a notice of 
inadequacy. Nicor noted that this would afford the state a fair and 
efficient means of showing that the enforcement program is adequate.
    PUCO noted that a definition of ``nominally adequate,'' a 
description of how states may be qualified as ``nominally adequate,'' 
and a listing of the implications of this designation for state 
programs should be provided.
    MidAmerican Energy noted that the ``paper hearing'' process 
described in the ANPRM would be appropriate.

Response

    The criteria PHMSA will use to determine the adequacy of state 
enforcement programs and the administrative process for a state to 
appeal a determination of inadequacy are proposed in this NPRM.

Civil Penalties

    AGC commented that PHMSA must consider education as an alternative 
or supplement to civil or other penalties, and in cases where financial 
penalties are assessed revenues generated must be reserved to finance 
excavation damage prevention education and technologies used in support 
of excavation damage prevention activities.

Response

    Enforcement tools other than civil penalties, such as compliance 
orders, can be useful tools for enforcement of excavation damage 
prevention laws. However, PHMSA believes that civil penalty authority 
and effective use of that authority are essential components of 
effective excavation damage prevention law enforcement programs. PHMSA 
does not propose to require the use of sanctions other than those 
provided in existing pipeline safety statutes or regulations.

Costs

    API and AOPL noted that PHMSA may consider using its grant 
resources, such as the SDP grants, to encourage state compliance with 
the elements of this rulemaking. That may require changes to the 
existing grant criteria that could be included in a proposed and final 
rule.

Response

    PHMSA agrees that the SDP grant program can be targeted to improve 
state excavation damage prevention law enforcement programs, and PHMSA 
does have discretion in weighting the evaluation criteria applicable to 
SDP grant applications. However, PHMSA has not proposed any changes to 
the SDP grant criteria in this proposed rule.

Process

    AGC commented that subsequent to public hearings, a commission 
should be convened to establish a predetermined timeline in which 
states must meet certain benchmarks demonstrating steps to address 
inadequacies and that any penalties or enforcement be coupled with 
direct enforcement against pipeline operators who fail to accurately 
locate and mark facilities.
    The Texas pipeline associations commented that the first step in 
the process used to determine the adequacy of a state's program should 
be an evaluation of each state's program against a common set of known 
factors. They commented that once PHMSA completes its evaluation, the 
state should be permitted to comment on the evaluation before it is 
finalized. They also consider that excavation damage prevention 
stakeholders should be given an opportunity to comment on the 
evaluation. When a final determination has been made and a state's 
program is found inadequate in some respect, the state should be 
provided an opportunity to make improvements to its program.
    API and AOPL commented that PHMSA should use a multi-step process 
when determining whether a state's program is inadequate, perhaps 
including preliminary determinations, interim determinations, and 
eventually final determinations. They also noted that at each step of 
the process, PHMSA should clearly describe, in functional rather than 
prescriptive terms, changes required for a state's program to be deemed 
adequate. They commented that the process for this provision should be 
the same as is currently used in the state certification program and 
that assessment of a state's program should be at the program level, 
not at an individual case level. API and AOPL also consider that enough 
time should be granted at each step of the process to allow states time 
to modify their programs as needed at the legislative and/or regulatory 
level. This process should, however, be completed expeditiously to 
ensure that compliance is timely and the public interest is preserved.
    Similarly, PST commented that the administrative process for states 
to contest notices of inadequacy described in the ANPRM seems fair to 
the states. Among the concerns PST expressed, however, are the time 
periods that

[[Page 19823]]

would be established for: (1) PHMSA to issue a notice of inadequacy 
after its annual review; (2) a state to contest this notice; (3) PHMSA 
to make a final written determination; (4) a state to petition for 
reconsideration; and (5) PHMSA to rule on the petition for 
reconsideration. PHMSA needs to strike the right balance between 
waiting too long to intervene and not waiting long enough.
    The Texas pipeline associations echoed this comment in that the 
opportunity for a state to make improvements must take into account an 
appropriate time period for the state agency to make the required 
improvements in a manner complying with state law. These time periods 
will need to be tailored to each situation because some may require 
legislative action while others may only require an internal agency 
policy change. They noted that while Federal administrative enforcement 
may be necessary in some states, reasonable efforts should be exerted 
and sufficient time provided to promote adequate state-based 
enforcement of excavation damage programs. They suggested that there 
may be situations where PHMSA could facilitate discussions between 
state stakeholders to establish a plan to address certain deficiencies.
    Missouri PSC commented that the process outlined in the ANPRM 
appears to strike an appropriate balance between the Congressional 
directive to PHMSA to undertake Federal administrative enforcement 
while providing a state with a fair and efficient means of showing that 
its enforcement program is adequate. However, Missouri PSC noted 
further comments may well be necessary depending on the provisions of 
the actual proposed rule.
    NAPSR questioned how PHMSA would anticipate seeking information 
from other agencies in those states where the enforcement agency is not 
the state pipeline safety agency?

Response

    PHMSA does not propose to convene a commission to establish a 
predetermined timeline in which states must meet benchmarks 
demonstrating steps to address inadequacies in their damage prevention 
enforcement programs. PHMSA believes the state enforcement program 
evaluation criteria proposed in this NPRM, in effect, establish 
benchmarks.
    PHMSA has proposed the process for evaluation of state enforcement 
programs and the process by which states may contest notices of 
inadequacy. PHMSA does not propose to consider excavation damage 
prevention stakeholder comments on state enforcement program 
evaluations.
    PHMSA proposes to evaluate the states' enforcement programs whether 
they are administered by state pipeline agencies or other state 
authorities. PHMSA proposes to communicate the implications of this 
proposed rule with state enforcement authorities outside of state 
pipeline safety agencies, including attorneys general, state police 
agencies, and other authorities, as required.
    PHMSA would plan to make its determination as to the adequacy of a 
state program as soon as practicable after completion of the state 
annual review. A state would then have 30 days from receipt of the 
notice of inadequacy to respond.

Review Cycle

    API and AOPL noted that PHMSA should require annual reviews of 
state excavation damage prevention programs, but such reviews should be 
initiated after initial adequacy determinations have been completed. 
They noted that annual reviews should focus on continuing effectiveness 
indicators (i.e., whether or not excavation damage incidents are 
declining) and not simply on whether every incident has merely been 
documented and investigated.
    NAPSR commented that the frequency of review of a state excavation 
damage prevention program should be tailored to the level of adequacy 
initially determined for the program, using criteria included in the 
final rule resulting from this ANPRM. Thus, states with the lowest 
level of initial adequacy could be reviewed annually, while states with 
higher levels could be reviewed less often. NAPSR also noted that the 
ANPRM speaks about an annual review that will likely include a review 
of all of the enforcement actions taken by the state over the previous 
year, and questioned whether this would be the state liaison asking a 
few additional questions during the annual evaluation or something more 
substantial with extensive documentation.
    Similarly, Paiute Pipeline and Southwest Gas Corporation suggested 
that if a state is found nominally adequate in its most recent annual 
review, PHMSA should recommend placing the state on a staggered review 
period, such as two or more years. They commented, however, that if a 
state is found to be inadequate, PHMSA should recommend continuing with 
an annual review to assist the state in enhancing its excavation damage 
prevention program.
    Michigan Consolidated Gas commented that considering the state has 
the funding and resources to administer its enforcement program, a 
periodic review is acceptable, but suggested that yearly is not 
necessary.
    MidAmerican Energy commented that an annual review of a state's 
excavation damage prevention law enforcement program would be 
appropriate with the provision that a state should be allowed to 
petition PHMSA to show that its previously inadequate enforcement 
program has been upgraded so that Federal administrative enforcement is 
no longer required.

Response

    PHMSA agrees that annual reviews of state excavation damage 
prevention law enforcement programs should include reviews of program 
effectiveness indicators and is proposing this in the NPRM. However, 
PHMSA believes it appropriate to include program adequacy as part of 
its annual review process, but does not propose to include additional 
evaluation of continuing effectiveness indicators.

Standards

    API and AOPL commented that PHMSA should consider the establishment 
of minimum standards for critical elements of state one-call laws, such 
as, but not limited to, notification time, tolerance zones and white-
lining (or otherwise denoting the area of intended proposed 
excavation).
    EPPG and Panhandle Energy also noted that prior to an audit by 
Federal authorities of any state program, a clear and understood 
``standard'' should be prepared that a state can be audited against and 
met. EPPG supports the ANPRM's annual audit proposal of state programs 
but is concerned that this effort could draw unnecessary resources away 
from PHMSA's other safety programs. Therefore, EPPG advocated a 
``standard,'' which is understood by all parties that could be more 
quickly used as an audit tool during the annual audit.

Response

    The criteria for review of state enforcement programs are proposed 
in this NPRM and PHMSA welcomes comment on these criteria. However, 
PHMSA is not proposing a model state one-call law or other audit 
standard in this rulemaking.

State Resources

    APGA expressed concern that the review process may become very time 
consuming for both PHMSA and the states, which would have the 
unintended effect of diverting limited resources away from the 
excavation damage prevention effort. APGA

[[Page 19824]]

considers that there should be further discussion about exactly what 
this review would entail before a rule is proposed.
    Michigan Consolidated Gas commented that PHMSA should consider when 
evaluating a state's enforcement program that this proposed process can 
be influenced by the ability of the state to carry out enforcement 
(i.e., state resources, funding, volume of complaints, etc.). 
Similarly, the Michigan PSC commented that PHMSA must be flexible 
depending upon the resources given to the state to provide for an 
adequate program.

Response

    The state enforcement program review process should not be too time 
consuming or divert resources away from excavation damage prevention 
responsibilities. The review criteria and process in this proposed rule 
have been written to be as simple as possible to address this concern. 
However, PHMSA is seeking comment on this conclusion.
    Resources can affect the ability of a state to meet its excavation 
damage prevention law enforcement responsibilities. However, PHMSA does 
not propose to assess state enforcement resources, but instead to 
assess state enforcement records. If state resources are insufficient 
to enforce the state excavation damage prevention law adequately, state 
enforcement records are likely to reflect the insufficiency.

C. Federal Requirements for Excavators

    Section IV.C of the ANPRM sought comment on the establishment of 
the Federal requirements for excavators that PHMSA would be enforcing 
in a state that PHMSA has found to have an inadequate enforcement 
program. It noted that at a minimum the standards will reflect the 
words cited in the PIPES Act regarding requirements for excavators.
    Section IV.C gave examples to which some commenters addressed 
specifically, including:
     Should the Federal requirements for excavators be limited 
to the minimum requirements reflected in the PIPES Act or should they 
be more detailed and extensive?
     Will implementing the 911 requirement cause any unintended 
consequences in practice?
     Are there suggested alternatives to these standards?
    The ANPRM also suggested that the CGA Best Practices and API 
Recommended Practice 1166, Excavation Monitoring and Observation 
(November 2005), could be used to inform the development of such 
standards.

Federal Requirements

    Several commenters, including AGA, API, AOPL, Michigan Consolidated 
Gas, and others, support establishing a Federal requirement for 
excavators. They noted that the minimum requirements in the PIPES Act 
and the U.S. Code are sufficient for establishing Federal requirements, 
and that keeping it simple is the most effective approach. API and AOPL 
commented that the proposed requirements should lead to greater 
pipeline safety by making excavators more aware of their one-call 
responsibilities and the consequences of failing to comply with state 
laws and regulations. AGA commented, however, that the ANPRM was 
unclear whether PHMSA intends to try and impose these standards on 
excavators that might include homeowners, land owners, private 
contractors, and other utilities.
    AGC commented that if PHMSA deems a state's excavation damage 
prevention law enforcement program inadequate, the basic premises in 
the ANPRM are reasonable. AGC suggested that PHMSA should refer to the 
CGA Best Practices as a template for guidance standards in the absence 
of appropriate state standards until a determination of the adequacy of 
the state excavation damage prevention program is made.
    Similarly, EPPG fully supports the development of a Federal 
requirement that PHMSA could use to determine if a state's excavation 
safety program is adequate but that PHMSA should not be the sole, or 
even primary, developer of this standard. A national consensus standard 
should be developed by all the various stakeholders, including Federal 
and state agency regulators, industry, the excavation community, 
members of the public, one-call organizations, and other excavation-
affected parties.
    GulfSafe commented that setting standards for excavators would 
bring some consistency to the excavation community, especially for 
those excavators who consistently work in multiple states. GulfSafe 
also considers it important that any prescriptive rule use the CGA Best 
Practices as a foundation for the rule to gain acceptance in the 
excavation community. The organization noted that the CGA Best 
Practices have long been a consensus based approach that has understood 
that one size doesn't fit all and has made allowances for geography and 
soil types as well as local practices. Best Practices are intended to 
be voluntary, not prescriptive, and there is evidence that they are 
working.
    The APGA opposes establishment of Federal requirements for 
excavators and considers that PHMSA should defer to existing state laws 
where they prescribe excavation damage prevention requirements. APGA 
considers that creating a Federal requirement that would overrule state 
requirements only if the state is found not to be enforcing its 
excavation damage prevention law would create confusion in both the 
excavation and utility communities as to which requirements apply. APGA 
noted that only where a state has no standards for such activities 
should PHMSA apply Federal requirements. On the other hand, API and 
AOPL consider that while conditions vary from state-to-state and that 
``one size does not fit all,'' PHMSA should establish minimum 
requirements through a notice and comment rulemaking process.
    MidAmerican Energy Company commented that the minimum requirements 
presented in the ANPRM are an appropriate starting point, and that if 
experience reveals that additional or revised requirements are 
necessary, then revisions can be made based on the documented record. 
However, they noted that any additional or revised standards should 
consider that state excavation damage prevention laws pertain to more 
than just pipelines--they pertain to all types of underground 
facilities. It does not appear to be practical or prudent to approach 
this set of issues soley from a pipeline-only perspective, or to 
promote a ``one size fits all'' approach to underground facilities 
excavation damage prevention.
    Missouri PSC, Paiute Pipeline, and Southwest Gas Corporation 
commented that Federal requirements limited to the minimum requirements 
reflected in the referenced Federal statute should be sufficient. 
However, Missouri PSC noted that Federal requirements should also refer 
to any state statutory provisions that are either more stringent or 
different in practice (such as damages being reported to the one-call 
center rather than the pipeline operator directly). EPPG and Panhandle 
Energy support the development of a template that PHMSA could use to 
determine if a state's excavation safety program is adequate. Panhandle 
considers that a national consensus standard or recommended practice 
should be developed by all the involved stakeholders, including Federal 
and state agency regulators, industry, the excavation community, 
members of the public, one-call organizations, and other excavation-
affected parties. EPPG and Panhandle consider that a national consensus 
standard should address the issues mentioned in the ANPRM in

[[Page 19825]]

Section IV.C, at a minimum, but should also address many other issues 
including, among others:
     Expectations of individual state's programs; expectations 
of excavators, regardless of legal or contractual affiliation.
     Types of excavators covered by the standard (all 
excavators regardless of affiliation).
     Individual state's abilities to contest an annual Federal 
audit's findings.
     Physical excavation guidelines (locating, marking, 
communications, etc.).
     The role of one-call programs.
     Excavation damage reporting requirements.
     Description of excavator's responsibilities prior to and 
following any excavation, including any spill or damaging incident to 
the pipeline operator.
     Requirements to contact 911 if any release of product or 
natural gas occurs.
     Establishment of a mechanism to ensure the state receives 
reports of pipeline damage incidents in a timely manner.
     Use of ``emergency'' excavation processes.
     Excavation investigation requirements if pipeline damage 
occurs.
     Explicit state authority.
     Enforcement documentation requirements.
     Reference to other useful guidance documents, such as the 
Common Ground Alliance's work.
     Due process criteria for excavators if liability is found.
    EPPG noted that some of these issues may not be suitable for a 
national consensus standard, and enforcement provisions are left out 
altogether since they are not suitable for a national consensus 
standard, but those not included in a standard could be incorporated 
within a future PHMSA ``state guide'' for excavation safety.
    Michigan PSC commented that more detailed and extensive 
requirements are not necessary and may be in direct conflict with 
various states' laws. It also asked that ``excavator'' be defined. For 
example, will homeowners be subject to the Federal requirements?
    NAPSR commented that PHMSA should not undermine state requirements 
with a second layer of excavator standards, but should defer to the 
individual states in such matters. They noted that the Federal law 
appears to define the expectations for excavators reasonably and 
provides a basis for enforcement. If PHMSA adopts regulations further 
defining what standards it believes an excavator should be held to, it 
risks creating two sets of standards, state and Federal, which 
excavators must follow. Due to the diversity of state requirements, the 
Federal requirements would undoubtedly contain inconsistencies and 
conflicts with the standards of at least some states.
    Nicor commented that one aspect of the minimum standards that is 
inadequate involves the locating and marking of facilities for which 
ownership is unclear. During this period prior to completion, such 
facilities may be left unmarked after a call to the one-call system. As 
an example, Nicor noted that in a new subdivision, it is often unclear 
who has ownership of and responsibility for locating and marking sewer 
and water lines prior to completion, at which point the property owner 
or municipality takes ownership.
    NUCA commented that the proposed Federal requirements effectively 
cover the primary responsibilities of the excavator, and are consistent 
with past DOT excavation damage prevention messages, such as the ``Dig 
Safely'' initiative of the 1990s. However, NUCA noted that utilization 
of ``location information'' is too vague for inclusion in a new Federal 
requirement. General information of underground pipeline facilities 
should never substitute for meeting all of the operator's locating and 
marking responsibilities.
    Ohio PUC commented that requirements for pipeline operators and 
excavators should parallel, and PHMSA should consider providing 
guidance on how it intends to evaluate liability and enforcement if an 
excavator damages a pipeline system due to a pipeline owner/operator 
failing to mark underground lines or marking them incorrectly or 
inaccurately. Ohio PUC also commented that any Federal requirements 
should avoid specific requirements for marking standards that may 
conflict with reasonable and appropriate marking standards developed by 
individual states.
    The PST commented that there are a number of issues that need to be 
addressed if PHMSA imposes Federal requirements on excavators when 
PHMSA deems a state to have an inadequate enforcement program. For 
example: (1) Will these standards be permanent or will excavators again 
be held to state standards once the state program is deemed adequate? 
(2) What happens if the state enforcement program is deemed inadequate 
but some of the state's standards or requirements are more stringent 
than the Federal government's? Will PHMSA impose its lesser standards? 
(3) If the standards revert to those of the state once the enforcement 
program is deemed adequate, it is conceivable that excavators would 
only be required to meet the Federal requirements for a short period of 
time (from one annual review to another). Should this happen, 
excavators are likely to become confused about their compliance 
responsibilities.
    Southern California Gas and California Gas and Electric prefer that 
the standards for excavators for reporting damage should define 
``damage'' in more detail, similarly to California Government Code 
4216.4.(c). They noted that all damage, even coating or cathodic 
protection wire damage, can affect the integrity of the pipeline over 
time.
    The three Texas pipeline associations commented that it is probably 
best if PHMSA adopts some set of Federal requirements for excavation 
damage prevention to be enforced in situations where a state program is 
determined to be inadequate. They noted that if the scope of a state 
agency's excavation damage prevention standards was not the source of 
the finding of inadequacy, it would be least disruptive to all aspects 
of industry for PHMSA to simply enforce the existing state standards. 
They further noted that this approach may cause some legal and 
practical issues for PHMSA to provide consistent enforcement. It could 
represent a significant challenge for PHMSA to educate its staff on the 
large variety of state standards that they would need to enforce.
    USIC Locating Services' comments indicate that it is in favor of 
establishing standards for excavators with regard to: the use of a 
mandatory 72-hour notice requirement; limiting the scope of a ticket to 
1,320 feet; use of a 24'' tolerance zone on either side of the buried 
facility; requiring white-marking (as opposed to just suggesting white-
marking); emergency locate requests made by excavators; and strict 
penalties levied against excavators abusing emergency locate 
provisions.
    The Wisconsin Transportation Builders Association (WTBA) commented 
that industry is concerned about the emphasis being placed solely on 
the excavator. They noted that while some requirements may be 
appropriate and helpful, they will nearly always create unintended 
consequences such as unnecessary cost and uncontrollable risk. 
According to the WTBA, there is rarely discussion regarding who is 
responsible for costs associated with unexpected delays to contractors. 
These costs are substantial and continue to affect the cost of public 
projects adversely.

[[Page 19826]]

Response

    PHMSA proposes to apply Federal requirements to all excavators, 
with the exception of homeowners excavating with hand tools on their 
own property, in states PHMSA deems to have inadequate excavation 
damage prevention law enforcement programs. The term ``excavator'' is 
defined in this proposed rule. PHMSA cannot enforce state laws in the 
absence of Federal requirements because, to the extent state 
requirements go above and beyond the minimum Federal laws, PHMSA has no 
authority to enforce such requirements. Development of Federal 
requirements is, therefore, a prerequisite to Federal administrative 
enforcement. The standards proposed in this NPRM are designed to 
establish minimum requirements for excavators to avoid excavation 
damage to pipelines.
    PHMSA does not propose to develop the Federal requirements through 
a consensus process, but rather through this rulemaking process. PHMSA 
used the PIPES Act to inform the development of the proposed Federal 
requirements.
    This proposed rule does not refer to any state standards; PHMSA 
believes to do so could create an overly-prescriptive set of standards. 
Different states have different geographic and demographic conditions 
and an effective damage prevention program for one state may not 
necessarily work for another. However, PHMSA considers the proposed 
Federal regulations to be the minimal standard that is basic to any 
effective excavation damage prevention law enforcement program. Because 
state and Federal requirements will never be enforced simultaneously, 
the existence of a Federal requirement should not present any conflicts 
with existing state requirements for excavators. However, PHMSA is 
seeking comment on this issue. PHMSA does recognize that excavators 
should be informed of the Federal requirements in states where those 
standards will apply. To that end, PHMSA intends to continue to work 
with excavator trade associations, state agencies and one-call centers, 
the Common Ground Alliance, and other key excavation damage prevention 
stakeholders to communicate the requirements of the final rule and the 
adequacy status of each state as broadly as possible.
    As we have stated previously, PHMSA's statutory enforcement 
authority pertains only to excavation damage prevention as it relates 
to pipelines. Because PHMSA has no jurisdiction over sewer and water 
facility operators, this proposed rule does not address those 
operators' responsibilities.
    Requirements for pipeline operators regarding locating and marking 
their facilities are clearly defined in existing pipeline safety 
regulations (49 CFR Parts 190-199). PHMSA will continue to enforce 
existing Federal excavation damage prevention regulations applicable to 
pipeline operators if investigations reveal that pipeline operators 
fail to comply with those regulations. PHMSA does not propose to amend 
the standards currently applicable to pipeline operators in this 
rulemaking proceeding.
    PHMSA considered the comments regarding one-call standards, but 
believes those types of standards would be overly-prescriptive and 
confusing for the purposes of this proposed rule. This proposed 
rulemaking does not impede any party's legal rights to pursue 
restitution of damages from any other party involved in a damage 
incident.

Implementing 911 Requirement

    AGA commented that implementation of the 911 requirement can result 
in some unintended consequences that may actually cause behaviors and 
actions that are detrimental to pipeline safety. It noted that as a 
practice in responding to 911 calls being made, fire departments often 
bill their costs to the excavator and in some circumstances the natural 
gas utility. Very often, the excavator is a professional contractor. As 
a result, excavators are having second thoughts about dialing 911 when 
damage results in a leak, particularly on smaller diameter plastic pipe 
that is viewed as an ``easy'' repair for professional contractors who 
think they have the ability and the means to make an acceptable repair. 
Having unqualified personnel making repairs on natural gas lines can 
lead to catastrophic consequences.
    AGA also noted that natural gas utilities try to foster a culture 
that encourages a contractor to notify the gas utility promptly when a 
pipe is dented or nicked, its coating scratched, or even when a tracer 
wire is cut or anode wire broken. The motivation for the utility is 
that it can respond and determine what repair actions are needed, to 
ensure the pipe will not fail or leak at some point in the future, and 
that the pipe can be located in response to future excavation activity. 
The utilities have developed relationships with contractors so that 
they trust they will not be billed in circumstances where the 
contractors are forthcoming and can demonstrate they have made a 
reasonable attempt to dig responsibly and follow one-call and state 
statutes.
    AGA, Missouri PSC, NUCA, Southern California Gas, California Gas 
and Electric, and others expressed concern that the volume of calls 
resulting from this requirement may be unmanageable and could result in 
limited emergency response resources being used in situations that 
really do not necessitate an emergency response. AGA, Southern 
California Gas, and California Gas and Electric noted, for example, 
that as a result fire departments could have to respond to every 
excavation damage incident reported via 911, including breaks on small 
diameter service lines where the gas may be safely venting to the 
atmosphere and public safety is generally not threatened. The response 
of fire departments to potentially thousands of inconsequential 
excavation damages could compromise their ability to respond to other 
events that are actually life-threatening emergencies. Missouri PSC was 
aware of one major gas distribution operator that is having its 
practice of advising excavators to call 911 questioned by local 
emergency officials.
    MidAmerican Energy Company, Paiute Pipeline and Southwest Gas 
Corporation commented that the 911 requirement should not be mandated 
for all releases of hazardous materials. If a violation of the 
excavation damage prevention laws results in a public safety emergency 
that may endanger life or cause serious bodily harm or damage to 
property, then, as for any public safety emergency, the use of the 911 
telephone notification system would be appropriate. Otherwise, calling 
911 should not be necessary.
    Regarding emergency responders, NUCA commented that the proposed 
rule should address the role of first responders in situations where 
the escape of flammable, toxic, or corrosive product is released as a 
result of damage to an underground pipeline. NUCA noted that if a 911 
call is made, the responders must be trained in how to respond to the 
situation effectively. NUCA noted that traditionally, representatives 
from the company that owns the gas or hazardous liquid pipeline are 
best educated and equipped to handle these situations.
    Nicor commented that the 911 requirement is most appropriate when 
someone other than the pipeline owner or operator damages the pipeline. 
Operators who accidentally damage their own facilities should have the 
flexibility of calling 911 if they need further assistance in making an 
area safe. As a basis, Nicor cited that pipeline operators are also 
sometimes excavators and that provisions should be developed for 
instances where an

[[Page 19827]]

operator's excavation crew accidentally damages its own facility and 
that results in a release of natural gas. The crews are trained and 
qualified to handle emergency response and to make repairs. Often 
times, the release of gas is secured very quickly and should not 
warrant calling 911. Additionally, after responding to a 911 call 
involving excavator damage and a release of natural gas from a 
pipeline, some fire departments have sent invoices to natural gas 
operators for costs incurred for hazmat response. Nicor noted that the 
inability of an operator to exercise discretion in calling 911 may lead 
to strained relationships between natural gas pipeline operators and 
fire departments.
    NUCA, Paiute Pipeline and Southwest Gas Corporation commented that 
PHMSA should specify that excavators must call 911 if the ``damage 
results in the escape of any flammable, toxic, or corrosive gas or 
liquid,'' as specified in the PIPES Act, instead of trying to include 
all of these under the umbrella of ``hazardous products.'' They noted 
that excavators are not emergency responders, and the regulation should 
be as specific as possible to distinguish between natural gas and other 
gases or liquids to identify what products are considered ``hazardous'' 
by PHMSA.
    Michigan PSC noted that implementing the 911 requirement will not 
cause any unintended consequences in practice. Paiute and Southwest Gas 
Corporation also commented that all API RP 1162 related communications 
and activities should promote the requirement of calling 911 if a 
pipeline damage incident causes a release of product. They also noted 
that although they cannot reference any empirical evidence that 
identifies any unintended consequences of implementing the 911 
requirement, as excavators become better educated on this requirement, 
calls to emergency response agencies will likely increase.

Response

    PHMSA considered all of the comments pertaining to implementing the 
911 requirement. The PIPES Act requires excavators to promptly call the 
911 emergency telephone number if a damage results in the escape of any 
flammable, toxic, or corrosive gas or liquid that may endanger life or 
cause serious bodily harm or damage to property. PHMSA understands that 
excavators and utility operators are sometimes required to reimburse 
911 centers for the cost of dispatching emergency response personnel to 
a damage site. Therefore, PHMSA is proposing that excavators must call 
911 in these instances, but may exercise discretion as to whether to 
request that the 911 operator dispatch emergency response personnel to 
the damage site. PHMSA welcomes additional comments on the 911 issue.

Reference to API RP 1166

    AGA commented that API RP 1166 does not apply in developing 
standards for excavators in that it does not apply to natural gas 
distribution operators. AGA noted that this standard is a useful 
resource for gas transmission pipeline operators, but that the decision 
to monitor and possibly observe any excavation activity is at the 
discretion of the pipeline operator.
    Several commenters noted that the CGA Best Practices and API 
Recommended Practice 1166 could be used to inform the development of 
such standards, but that the minimum requirements stated in 49 U.S.C. 
60114 are appropriate. Paiute Pipeline and Southwest Gas Corporation 
commented that PHMSA should refrain from citing best practices from any 
organization, publication or individual entity as regulation.

Response

    PHMSA is not proposing to use API RP 1166 to inform the development 
of the Federal requirement for enforcement and believes the 
requirements stated in the PIPES Act are appropriate.

D. Adjudication Process

    Section IV.D of the ANPRM sought comment on the adjudication 
process that PHMSA would use if it cited an excavator for failure to 
comply with Federal requirements established by this rulemaking process 
in a state where PHMSA has deemed the enforcement program inadequate. 
It noted that at a minimum, an excavator that allegedly violated the 
applicable requirement would have the right to: receive written notice 
of the allegations, including a description of the factual evidence 
supporting the allegations; file a written response to the allegations; 
request a hearing; be represented by counsel if the excavator chooses; 
examine the evidence; submit relevant information and call witnesses on 
his or her behalf; and otherwise contest the allegations of violation. 
Hearings would likely be held at one of PHMSA's five regional offices 
or via teleconference. The hearing officer would be an attorney from 
PHMSA's Office of Chief Counsel. The excavator would also likely have 
the opportunity to petition for reconsideration of the agency's 
administrative decision and judicial review of final agency action 
would be available to the same extent it is available to a pipeline 
operator.
    Commenters were invited to submit their views on this process or 
suggest alternatives. For example:
     Is the process too formal in the sense that excavators 
contesting a citation would have to prepare a written response for the 
record and potentially appear before a hearing officer?
     Is the process not formal enough in the sense that it does 
not provide for formal rules of evidence, transcriptions, or discovery? 
Or does this process strike the right balance by being efficient and at 
the same time providing enough formality that excavators feel the 
process is fair and their due process rights are maintained?
     How should the civil penalty criteria found in 49 U.S.C. 
60122(b) apply to excavators?

All Parties

    AGC and NUCA commented that the adjudication process outlined by 
PHMSA seems fair; however, PHMSA must carefully consider that if an 
excavator is not found to be at fault, excavators must maintain the 
right to pursue damages for downtime and the ability to recover legal 
expenses. Allowing excavators all rights to due process should be 
recognized, and the same privileges afforded to others subject to 
Federal administrative enforcement (i.e., pipeline operators) should be 
afforded to excavators. NUCA noted that ensuring excavators the right 
to pursue damages (i.e., downtime expenses), must be considered when 
establishing a new Federal adjudication process. NUCA also noted that 
excavators regularly lose significant revenue in downtime expenses 
after having to shut down projects because of underground facilities 
that were either not marked or marked inaccurately. According to NUCA, 
this is an enormous financial problem facing professional excavators, 
and one that must be addressed in the PHMSA regulation. AGC agreed that 
hearings should be open to the public and conducted at one of PHMSA's 
five regional offices or an alternative location accessible to all 
parties.
    MidAmerican Energy Company also noted that participation in any 
process should not preclude the ability to pursue further legal 
remedies a participant may determine to be appropriate.
    USIC Locating Services commented that whatever process is 
established should provide interested parties a right of intervention 
so that the resulting record accurately reflects the positions of all 
affected parties.

[[Page 19828]]

    Nicor noted that excavators who are also operators of pipelines 
regulated under 49 CFR Part 192 already fall under the enforcement 
requirements of Subpart B in 49 CFR Part 190. If PHMSA determines that 
it must take enforcement action against other excavators the same 
process could be followed.

Response

    PHMSA agrees that an excavator must maintain the right to pursue 
damages for downtime and the ability to recover legal expenses if the 
excavator is not found to be at fault in an excavation damage incident 
investigation; this proposed rule does not infringe upon those rights. 
In addition, this proposed rule is intended to establish adjudication 
procedures that protect the rights of excavators to due process. PHMSA 
also believes that interested parties should have the opportunity to 
attend and observe hearings and the opportunity to request intervention 
status within the PHMSA adjudication process so that the resulting 
record accurately reflects the position of all affected parties.

Appeals

    AGC commented that the excavator should have the opportunity to 
petition for reconsideration of PHMSA's administrative decision, and 
judicial review of final agency action should be available to the same 
extent it is available to a pipeline operator. Similarly, the three 
Texas pipeline associations commented that there should be an appeals 
process for a party to challenge the outcome of the hearing.

Response

    The process for an excavator to request reconsideration or appeal a 
finding of violation by PHMSA is provided in this proposed rule.

Arbitration and Advisory Committees

    Spectra Energy commented that each state should have a clearly 
defined process for arbitration or review of enforcement actions for 
violations of excavation damage prevention regulations. Spectra 
suggested that one possible method is to have an independent panel that 
would review and recommend final enforcement action. The panel should 
include members that represent the one-call center, pipeline operators 
and the excavator community.

Response

    As noted above, committees composed of representatives of all 
excavation damage prevention stakeholders to advise enforcement 
agencies are a proven method of ensuring fair and balanced excavation 
damage prevention law enforcement. Such may be the case with 
arbitration committees. While PHMSA does not propose to use an advisory 
committee for Federal administrative enforcement proceedings, PHMSA 
does not object to a state's use of an advisory committee in the state 
enforcement process.

Civil Penalties

    AGA noted that PHMSA must distinguish between levying any fines on 
entities or persons engaged in excavation damage prevention activities, 
as opposed to the fines and enforcement actions PHMSA traditionally 
takes against pipeline operators under 49 U.S.C. 60122(a). Similarly, 
Paiute Pipeline and Southwest Gas Corporation commented that the 
penalty criteria found in 49 U.S.C. 60122(b) are excessive to the 
average excavator and to the average excavation damage.
    Paiute Pipeline, Southwest Gas Corporation, and Missouri PSC 
commented that PHMSA should work with the individual states on invoking 
civil penalties in their individual laws. Missouri PSC agreed, 
commenting that unless the civil penalty provisions existing in a 
state's law are the reason a state's enforcement program is deemed 
inadequate, the state's penalties should be applied rather than the 
Federal penalties.
    Paiute Pipeline and Southwest Gas Corporation commented that the 
adjudication process outlined is generally adequate, but to make the 
process fair and efficient a step should be added allowing an alleged 
violator to accept PHMSA's recommendation for a reduced penalty and 
agreement to take some remedial action such as attending an educational 
seminar on underground excavation damage prevention and pipeline 
safety.
    WTBA commented that civil penalties should not apply to excavators 
unless there was a truly unlawful act of negligence.
    MidAmerican Energy Company agreed that the penalty criteria found 
in 49 U.S.C. 60122(b) are reasonable to consider in evaluating the 
amount of a civil penalty to assess for a violation of the one-call 
provisions. MidAmerican also questions whether the violator's (1) 
ability to pay and (2) any effect on the ability of the violator to 
continue doing business are necessarily relevant criteria in all cases. 
MidAmerican noted that the remainders of the penalty criteria appear to 
provide the flexibility for the agency to tailor the assessment of a 
civil penalty to the specific circumstances of a particular violation. 
It considers that ``an egregious violation or a pattern of violations 
evidencing an intentional or negligent disregard of the one-call 
provisions could present a serious threat to the public safety. In 
those, hopefully unusual, cases, the dangers presented by an excavator 
continuing to exhibit such a callous disregard for the public safety 
should take precedence over the effect that the assessment of a civil 
penalty might have on the violator's ability to pay or to continue 
doing business. The Illinois administrative regulations also contain 
these two penalty criteria.''
    The three Texas pipeline associations commented that regardless of 
process, any person or entity found guilty of violating the Federal 
requirements should face financial penalties that provide incentives 
for future compliance and reflect the seriousness of the violation.

Response

    PHMSA proposes to use the civil penalty provisions described in 49 
U.S.C. 60101 et seq. as a basis for civil penalties levied against 
excavators subject to this proposed rule. PHMSA believes this approach 
is preferable to establishing alternate civil penalty provisions 
specific to this proposed rule. PHMSA proposes to take into account a 
violator's ability to pay, ability to continue to do business, and the 
seriousness of the violation when determining appropriate civil 
penalties. PHMSA seeks comment on the proposed use of civil penalties.

Formality

    AGA, AGC, MidAmerican Energy, and Missouri PSC agree that the 
adjudication process noted in the ANPRM is not too formal. API, AOPL, 
and NUCA all support the process as described. API and AOPL commented 
that the adjudication should allow the hearing officer sufficient 
flexibility to conduct the proceeding promptly and efficiently, such 
that decisions may be rendered without undue delay.
    Panhandle Energy and EPPG both suggested that the processes defined 
in 49 CFR Part 190 be followed. Spectra Energy Transmission noted that 
when an enforcement action relating to violation of excavation damage 
prevention regulations is initiated, the excavator and pipeline 
operator should have the opportunity for a hearing.
    AGA commented that the adjudication process must be a formal one, 
where the excavator is able to defend his or her actions, explaining 
how and why the damage occurred, and to contest an alleged violation. 
AGA and

[[Page 19829]]

AGC both noted that the adjudication process must provide for formal 
rules of evidence, transcriptions, and discovery, to conduct fair 
proceedings that ensure all parties' rights to due process are 
maintained. AGC commented that a formal adjudication process should be 
adopted to preserve the rights of an excavator charged with a 
violation. The process should include the right(s) to: receive written 
notice of the allegations, including a description of the evidence the 
allegations are based on; allow for a submission in response to the 
allegations; and, allow for an informal hearing with counsel if 
necessary. AGC also noted that the adjudication procedure should 
thoroughly examine the evidence and allow for submission of relevant 
information and testimony from witnesses to adjudicate the allegation 
of violation thoroughly.
    MidAmerican Energy commented that while the proposed process 
strikes the appropriate balance, strict adherence to the formal rules 
of evidence or extensive discovery is not necessary or appropriate. 
MidAmerican also suggested that transcripts could be optional at the 
expense of the state or requesting party.
    Paiute Pipeline and Southwest Gas Corporation commented that the 
adjudication process should remain at the state level, and not a formal 
Federal process. They noted that excavators would appreciate the 
efficiency of maintaining the adjudication process at the state level, 
and that if damages are involved, there is always the claim/court 
system for excavators, operators and states with enforcement authority 
for billable and damage awards. They consider that PHMSA should only 
step in when the entire program is deemed inadequate, and should not 
mandate enforcement at the Federal level but rather partner with the 
states to enhance the enforcement at the state or local level. They 
consider that PHMSA's support of states and their excavation damage 
prevention programs will ultimately provide the excavation damage 
prevention authority and enforcement PHMSA is seeking with the proposed 
rulemaking procedures. They commented that PHMSA may want to include a 
provision for the excavating community to submit a request for Federal 
involvement if they feel the process is unfair and their rights are not 
being maintained at the state level.
    WTBA commented that the proposed process appears to be too formal 
and does not sound like an ``informal hearing.'' It noted that there 
must be an opportunity for a true informal hearing, at a location near 
the project, to discuss actual facts of the incident. It also commented 
that an informal hearing must involve individuals that are 
knowledgeable of construction and design that are capable of 
determining whether reasonable efforts were made by all parties 
involved.
    APGA agrees that enforcement proceedings should be conducted at the 
PHMSA regional office level rather than headquarters. APGA also noted 
that Virginia has an excavation damage prevention law enforcement 
program that involves a panel comprised of excavators, facility owners 
and others to advise on the appropriate level of penalties, if any. 
APGA suggests that PHMSA consider whether a similar system could work 
for any Federal administrative enforcement actions.

Response

    The majority of commenters support PHMSA's approach for the 
adjudication process proposed in this NPRM and that the process is 
sufficiently formal to protect the rights of excavators to due process, 
but not so formal as to be overly burdensome for alleged violators.
    PHMSA is not proposing to use an advisory panel modeled after 
Virginia's excavation damage prevention program, but instead to follow 
the process described in this proposed rule.

E. Existing Requirements Applicable to Owners and Operators of Pipeline 
Facilities

    Section IV.E of the ANPRM invited commenters to submit their 
feedback and comments on the adequacy of PHMSA's existing requirements 
for pipeline operators to participate in one-call organizations, 
respond to dig tickets, and perform their locating and marking 
responsibilities. Under existing pipeline safety regulations 49 CFR 
192.614 for gas pipelines and 49 CFR 195.442 for hazardous liquid 
pipelines, operators are required to have written excavation damage 
prevention programs that require, in part, that the operator provide 
for marking its pipelines in the area of an excavation for which the 
excavator has submitted a locate request.
    Comments could address, for example, whether PHMSA should consider 
making the existing regulatory requirements more detailed and explicit 
in terms of:
     The amount of time for responding to locate requests;
     The accuracy of facility locating and marking; or
     Making operator personnel available to consult with 
excavators following receipt of an excavation notification.

Federal One-Call

    No commenters that addressed the existing pipeline safety damage 
prevention regulations, 49 CFR 192.614 and 195.442, considered these 
requirements to be inadequate, nor did they believe that PHMSA needed 
to make these requirements more detailed or specific. Several commented 
that to do otherwise would lead to confusion where the Federal 
requirements were different from state standards.
    Commenters suggested that PHMSA should enforce states' laws and 
that states already have the ability to establish more detailed 
regulations on pipeline operators for facility locating and marking. 
AGA considers that it is not logical for PHMSA to suggest that Federal 
requirements addressing one-call types of issues can be imposed at the 
national level. They consider that adding more details at the Federal 
level will be problematic since it may conflict with existing state 
regulations and cannot take unique state laws into consideration. AGA 
also commented that no language in the Federal regulations is necessary 
regarding the ability of excavators to request a consultation or job-
site meeting with underground facility operators, since most one-call 
centers already have a procedure for this.
    AGC suggested that PHMSA encourage state regulatory authorities to 
equally enforce state laws applicable to underground facility owners 
and operators who fail to respond to a location request or fail to take 
reasonable steps, in response to such a request. AGC also noted that 
state enforcement programs should consider the costs involved for 
excavators when they incur downtime due to a violation by an operator 
or a locator.
    Nicor commented that state authorities must make enforcement of 
owner/operator requirements a higher priority and should consider the 
CGA Best Practices.
    API and AOPL commented that pipeline operators should be held to 
the same standards as other facility owners and excavators, and should 
be held accountable to respond to locate requests in a timely and 
accurate manner. They noted, however, that they do support regulations, 
such as those in California (CA Govt. Code Section 4216-4216.9), that 
impose more explicit and additional requirements for both the owner and 
the excavator when excavating in close proximity to high priority, 
subsurface installations.
    GulfSafe commented that offshore operators are exempt from being 
members of a one-call system. It noted

[[Page 19830]]

that this was an appropriate exemption at the time it was written but 
may need revisiting as technology has progressed over the past two 
decades to be a more practicable solution to prevent damages offshore. 
GulfSafe also suggested that this is the suitable time to address the 
enforcement issue that goes along with this exemption, since there are 
large differences in state laws regarding offshore pipelines and 
enforcement may fall to Federal agencies by default.
    Ancillary to this concern, Michigan Consolidated Gas commented that 
PHMSA consider the excavator's ability to call in an unreasonable 
number of tickets per day causing resource allocation issues for locate 
personal. Also, Michigan PSC recommended that all meetings between an 
excavator and operator be documented and digital pictures be taken at 
job-sites prior to excavation activity.

Response

    PHMSA does not have the authority to enforce state laws. PHMSA 
believes that specifying the number of tickets per day an excavator can 
create, as well as how meetings between excavators and operators should 
be documented as part of the Federal requirement is not appropriate 
given the ``backstop'' (i.e., Federal enforcement only in the absence 
of adequate state enforcement) nature and use of the Federal authority. 
In addition, PHMSA believes that addressing the exemption for offshore 
operators is outside the scope of this NPRM.

V. Regulatory Analysis and Notices

    The proposed rule would amend the Federal Pipeline Safety 
Regulations (49 CFR Parts 190-199) to establish criteria and procedures 
PHMSA will use to determine the adequacy of state pipeline excavation 
damage prevention law enforcement program.

Statutory/Legal Authority for This Rulemaking

    PHMSA's general authority to publish this proposed rulemaking and 
prescribe pipeline safety regulations is codified at 49 U.S.C. 60101 et 
seq. Section 2(a) of the PIPES Act (Pub. L. 109-468) authorizes the 
Secretary of Transportation to enforce pipeline damage prevention 
requirements against persons who engage in excavation activity in 
violation of such requirements provided that, through a proceeding 
established by rulemaking, the Secretary has determined that the 
relevant state's enforcement is inadequate to protect safety.

Executive Order 12866, Executive Order 13563, and DOT Policies and 
Procedures

    This proposed rule is a significant regulatory action under section 
3(f) of Executive Order 12866 (58 FR 51735) and 13563, therefore, was 
reviewed by the Office of Management and Budget. This proposed rule is 
significant under the Regulatory Policies and Procedures of the 
Department of Transportation (44 FR 11034).
    Executive Orders 12866 and 13563 require agencies to regulate in 
the ``most cost-effective manner,'' to make a ``reasoned determination 
that the benefits of the intended regulation justify its costs,'' and 
to develop regulations that ``impose the least burden on society.''
    Because excavation damage is one of the major causes of pipeline 
incidents, the expected benefits of this rulemaking action are an 
increased deterrent to violations of one-call requirements and the 
attendant reduction in pipeline incidents and accidents caused by 
excavation damage. Failure to use an available one-call system is a 
known cause of pipeline accidents.
    A regulatory evaluation containing a statement of the purpose and 
need for this rulemaking and an analysis of the costs and benefits is 
available in the docket.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), PHMSA 
must consider whether rulemaking actions would have a significant 
economic impact on a substantial number of small entities. Pursuant to 
5 U.S.C. 603, PHMSA has made an initial determination that the proposed 
rule will not have a significant economic impact on a substantial 
number of small entities. This determination is based on the minimal 
cost to excavators to call the one-call center. In addition, the 
proposed rule is procedural in nature and its purpose is to set forth 
an administrative enforcement process for actions that are already 
required. The proposed rule would appear to have no material effect on 
the costs or burdens of compliance for regulated entities, regardless 
of size. Thus, the marginal cost, if any, that would be imposed by the 
rule on regulated entities, including small entities, would not be 
significant. Based on the facts available about the expected impact of 
this rulemaking, I certify that this proposed rulemaking will not have 
a significant economic impact on a substantial number of small 
entities. PHMSA invites public comments on this certification.
    Since the Regulatory Flexibility Act does not require an initial 
(or final) regulatory flexibility analysis when a rule will not have a 
significant economic impact on a substantial number of small entities, 
such an analysis is not necessary for this proposed rule. Nonetheless, 
PHMSA invites public comment on the proposed rule's effect on the 
costs, profitability, competitiveness of, and employment in small 
entities to ensure that no significant economic impact on a substantial 
number of small entities would be overlooked. The following information 
is provided to assist in such comment:

Description of the small entities to which the proposed rule will 
apply.

    In general, the enforcement process set forth in the proposed rule 
will potentially apply to any person conducting excavation activity in 
the vicinity of a pipeline who fails to call the one-call center or 
otherwise violates applicable requirements. The rule does not apply to 
homeowners excavating with hand tools on their own property. A precise 
estimate of the number of small entities is not currently feasible 
because Federal administrative enforcement will only be considered in 
states that do not have an adequate enforcement program and 
determinations on state programs turn on a number of factors that will 
require a factual analysis on a case-by-case basis. PHMSA seeks any 
information or comment on these issues, as noted below.

Description of the projected reporting, recordkeeping and other 
compliance requirements of the proposed rule, including an estimate of 
the classes of small entities that will be subject to the requirement 
and the type of professional skills necessary for preparation of the 
report or record.

    This proposed rule imposes no additional reporting costs to 
businesses, including small businesses. The proposed rule is procedural 
in nature and its purpose is to set forth an administrative enforcement 
process for actions that are already required. The costs impacts 
associated with this proposed rulemaking would be imposed on Federal 
and state governments.

Identification, to the extent practicable, of all relevant Federal 
rules that may duplicate, overlap or conflict with the proposed rule.

    PHMSA is unaware of any duplicative, overlapping, or conflicting 
Federal rules. As noted below, PHMSA seeks comments and information 
about any such rules, as well as any industry

[[Page 19831]]

rules or policies that would conflict with the requirements of the 
proposed rule.

Description of any significant alternatives to the proposed rule that 
accomplish the stated objectives of applicable statutes and that 
minimize any significant economic impact of the proposed rule on small 
entities.

    PHMSA seeks comments and information about any alternatives such 
as: (1) Establishment of differing compliance or reporting requirements 
or timetables that take into account the resources available to small 
entities; (2) clarification, consolidation, or simplification of 
compliance and reporting requirements under the rule for such small 
entities; (3) any exemption from coverage of the rule, or any part 
thereof, for such small entities.

Executive Order 13175

    PHMSA has analyzed this proposed rule according to the principles 
and criteria in Executive Order 13175, ``Consultation and Coordination 
With Indian Tribal Governments.'' Because this proposed rule would not 
significantly or uniquely affect the communities of the Indian tribal 
governments or impose substantial direct compliance costs, the funding 
and consultation requirements of Executive Order 13175 do not apply.

Paperwork Reduction Act

    Pursuant to 5 CFR 1320.8(d), PHMSA is required to provide 
interested members of the public and affected agencies with an 
opportunity to comment on information collection and recordkeeping 
requests. PHMSA estimates that the proposals in this rulemaking will 
cause an increase to the currently approved information collection 
titled ``Gas Pipeline Safety Program Certification and Hazardous Liquid 
Pipeline Safety Program Certification'' identified under Office of 
Management and Budget (OMB) Control Number 2137-0584. Based on the 
proposals in this rule, PHMSA estimates a 20% increase to states with 
gas pipeline safety program certifications/agreements. PHMSA estimates 
the increase at 12 hours per respondent for a total increase of 612 
hour (12 hrs*51 respondents). As a result, PHMSA will submit an 
information collection revision request to OMB for approval based on 
the requirements in this proposed rule. The information collection is 
contained in the pipeline safety regulations, 49 CFR Parts 190-199. The 
following information is provided for that information collection: (1) 
Title of the information collection; (2) OMB control number; (3) 
Current expiration date; (4) Type of request; (5) Abstract of the 
information collection activity; (6) Description of affected public; 
(7) Estimate of total annual reporting and recordkeeping burden; and 
(8) Frequency of collection. The information collection burden for the 
following information collection will be revised as follows:
    Title: Gas Pipeline Safety Program Certification and Hazardous 
Liquid Pipeline Safety Program Certification.
    OMB Control Number: 2137-0584.
    Current Expiration Date: 6/30/2012.
    Abstract: A state must submit an annual certification to assume 
responsibility for regulating intrastate pipelines, and certain records 
must be maintained to demonstrate that the state is ensuring 
satisfactory compliance with the pipeline safety regulations. PHMSA 
uses that information to evaluate a state's eligibility for Federal 
grants.
    Affected Public: State and local governments.
    Annual Reporting and Recordkeeping Burden:
    Total Annual Responses: 67.
    Total Annual Burden Hours: 4,532 (this estimate includes an 
increase of 612 hours).
    Frequency of Collection: Annually and occasionally at states' 
discretion.
    Requests for a copy of this information collection should be 
directed to Cameron Satterthwaite, Office of Pipeline Safety (PHP-30), 
Pipeline Hazardous Materials Safety Administration (PHMSA), 2nd Floor, 
1200 New Jersey Avenue SE., Washington, DC 20590-0001, Telephone (202) 
366-4595.

Comments are invited on:
    (a) The need for the proposed collection of information for the 
proper performance of the functions of the agency, including whether 
the information will have practical utility;
    (b) The accuracy of the agency's estimate of the burden of the 
revised collection of information, including the validity of the 
methodology and assumptions used;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    (d) Ways to minimize the burden of the collection of information on 
those who are to respond, including the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques.
    Send comments directly to the Office of Management and Budget, 
Office of Information and Regulatory Affairs, Attn: Desk Officer for 
the Department of Transportation, 725 17th Street NW., Washington, DC 
20503. Comments should be submitted on or prior to June 1, 2012.

Unfunded Mandates Reform Act of 1995

    This proposed rule would not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. It would not result in costs of 
$141 million, adjusted for inflation, or more in any one year to either 
state, local, or tribal governments, in the aggregate, or to the 
private sector, and is the least burdensome alternative that achieves 
the objective of the proposed rulemaking.

National Environmental Policy Act

    PHMSA analyzed this proposed rule in accordance with section 
102(2)(c) of the National Environmental Policy Act (42 U.S.C. 4332), 
the Council on Environmental Quality regulations (40 CFR Parts 1500-
1508), and DOT Order 5610.1C, and has preliminarily determined that 
this action will not significantly affect the quality of the human 
environment. A preliminary environmental assessment of this rulemaking 
is available in the docket and PHMSA invites comment on environmental 
impacts of this rule, if any.

Executive Order 13132

    PHMSA has analyzed this proposed rule according to the principles 
and criteria of Executive Order 13132 (``Federalism''). A rule has 
implications for federalism under Executive Order 13132 if it has a 
substantial direct effect on state or local governments, on the 
relationship between the national government and the states, or on the 
distribution of powers and responsibilities among the various levels of 
government.
    The Federal pipeline safety statutes in 49 U.S.C. 60101, et seq., 
create a strong Federal-state partnership for ensuring the safety of 
the Nation's interstate and intrastate pipelines. That partnership 
permits states to regulate intrastate pipelines after they certify to 
PHMSA, among other things, that they have and are enforcing standards 
at least as stringent as the Federal requirements, and are promoting a 
damage prevention program. PHMSA provides Federal grants to states to 
cover a large portion of their pipeline safety program expenses, and 
PHMSA also makes grants available to assist in improving the overall 
quality and effectiveness of their damage prevention programs.
    In recognition of the value of this close partnership, PHMSA has 
made and continues to make every effort to ensure that our state 
partners have the

[[Page 19832]]

opportunity to provide input on this rulemaking. For example, at the 
ANPRM stage, PHMSA sought advice from the National Association of State 
Pipeline Safety Representatives (NAPSR) and offered NAPSR officials the 
opportunity to meet with PHMSA and discuss issues of concern to the 
states. As a result of these consultation efforts with state officials 
and their comments on the ANPRM, PHMSA became aware of state concerns 
regarding the rigorousness of the criteria for program effectiveness. 
PHMSA has taken these concerns into account in developing the proposed 
criteria in the NPRM. State and local governments will be able to raise 
any other federalism issues during the comment period for this NPRM and 
we invite state and local officials with an interest in this rulemaking 
to comment on any impacts to their governments.
    Under the proposed rule, Federal administrative enforcement against 
an excavator that violates damage prevention requirements would be 
taken only in the demonstrable absence of enforcement by a state 
authority. Additionally, the proposed rule would establish a framework 
for evaluating state programs individually so that the exercise of 
Federal administrative enforcement in one state has no effect on the 
ability of all other states to continue to exercise state enforcement 
authority. This proposed rule would not preempt state law in the state 
where the violation occurred, or any other state, but would authorize 
Federal enforcement in the limited instance explained above. Finally, a 
state that establishes an effective damage prevention enforcement 
program has the ability to be recognized by PHMSA as having such a 
program.
    For the reasons discussed above, and based on the results of our 
consultations with the states, PHMSA has concluded the proposed rule 
will not have a substantial direct effect on the states, the 
relationship between the national government and the states, or the 
distribution of power and responsibilities among the various levels of 
government. In addition, this proposed rule does not impose substantial 
direct compliance costs on state and local governments. Accordingly, 
the consultation and funding requirements of Executive Order 13132 do 
not apply.

Executive Order 13211

    This proposed rule is not a ``significant energy action'' under 
Executive Order 13211 (Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use). It is not 
likely to have a significant adverse effect on supply, distribution, or 
energy use. Further, the Office of Information and Regulatory Affairs 
has not designated this proposed rule as a significant energy action.

Privacy Act Statement

    Anyone may search the electronic form of all comments received for 
any of our dockets. You may review DOT's complete Privacy Act Statement 
in the Federal Register published on April 11, 2000 (70 FR 19477) or 
visit http://dms.dot.gov.

List of Subjects

49 CFR Part 196

    Administrative practice and procedure; Pipeline safety; Reporting 
and recordkeeping requirements.

49 CFR Part 198

    Grant programs-transportation; Pipeline safety; Reporting and 
recordkeeping requirements.

    For the reasons discussed in the preamble, PHMSA proposes to amend 
49 CFR Subchapter D as follows:
    1. Part 196 is added to read as follows:

PART 196--PROTECTION OF UNDERGROUND PIPELINES FROM EXCAVATION 
ACTIVITY

Subpart A--General
Sec.
196.1 What is the purpose and scope of this part?
196.3 Definitions.
Subpart B--One-Call Damage Prevention Requirements
Sec.
196.101 What is the purpose and scope of this subpart?
196.103 What must an excavator do to protect underground pipelines 
from excavation-related damage?
196.105 Are there any exceptions to the requirement to use one-call 
before digging?
196.107 What must an excavator do if a pipeline is damaged by 
excavation activity?
196.109 What must an excavator do if damage to a pipeline from 
excavation activity causes a leak where product is released from the 
pipeline?
196.111 What if a pipeline operator fails to respond to a locate 
request or fails to accurately locate and mark its pipeline?
Subpart C--Administrative Enforcement Process
Sec.
196.201 What is the purpose and scope of this subpart?
196.203 What is the administrative process PHMSA will use to conduct 
enforcement proceedings for alleged violations of excavation damage 
prevention requirements?
196.205 Can PHMSA assess administrative civil penalties for 
violations?
196.207 What are the maximum administrative civil penalties for 
violations?
196.209 May other civil enforcement actions be taken?
196.211 May criminal penalties be imposed?

     Authority: 49 U.S.C. 60101 et seq.

Subpart A--General

Sec.  196.1  What is the purpose and scope of this part?

    This part prescribes the minimum requirements that excavators must 
follow to protect underground pipelines from excavation-related damage. 
It also establishes an enforcement process for violations of these 
requirements.

Sec.  196.3  Definitions.

    Damage or excavation damage means any impact that results in the 
need to repair or replace a pipeline due to a weakening, or the partial 
or complete destruction, of the pipeline, including, but not limited 
to, the pipe, its protective coating, lateral support, cathodic 
protection or the housing for the line device or facility.
    Excavation means any operation using non-mechanical or mechanical 
equipment or explosives used in the movement of earth, rock or other 
material below existing grade. This includes, but is not limited to, 
augering, blasting, boring, demolishing, digging, ditching, dredging, 
drilling, driving-in, grading, plowing-in, pulling-in, ripping, 
scraping, trenching, and tunneling. This does not include homeowners 
excavating on their own property with hand tools.
    Excavator means any person or legal entity, public or private, 
proposing to or engaging in excavation.
    One-call means a notification system through which a person can 
notify pipeline operators of planned excavation to facilitate the 
locating and marking of any pipelines in the excavation area.
    Pipeline means all parts of those physical facilities through which 
gas, carbon dioxide, or a hazardous liquid moves in transportation, 
including, but not limited to, pipe, valves, and other appurtenance 
attached or connected to pipe, pumping units, compressor units, 
metering stations, regulator stations, delivery stations, holders, 
fabricated assemblies, and breakout tanks.

[[Page 19833]]

Subpart B--One-Call Damage Prevention Requirements

Sec.  196.101  What is the purpose and scope of this subpart?

    This subpart prescribes the minimum requirements that excavators 
must follow to protect underground pipelines from excavation-related 
damage.

Sec.  196.103  What must an excavator do to protect underground 
pipelines from excavation-related damage?

    Prior to commencing excavation activity where an underground gas or 
hazardous liquid pipeline may be present, the excavator must:
    (a) Use an available one-call system before excavating to notify 
operators of underground pipeline facilities of the timing and location 
of the intended excavation;
    (b) If underground pipelines exist in the area, wait for the 
pipeline operator to arrive at the excavation site and establish and 
mark the location of its underground pipeline facilities before 
excavating;
    (c) Excavate with proper regard for the marked location of 
pipelines an operator has established by respecting the markings and 
taking all practicable steps to prevent excavation damage to the 
pipeline; and
    (d) Make additional use of one-call as necessary to obtain locating 
and marking before excavating if additional excavations will be 
conducted at other locations.

Sec.  196.105  Are there any exceptions to the requirement to use one-
call before digging?

    Homeowners using only hand tools, rather than mechanized excavating 
equipment, on their own property are not required to use a one-call 
prior to digging.

Sec.  196.107  What must an excavator do if a pipeline is damaged by 
excavation activity?

    If a pipeline is damaged in any way by excavation activity, the 
excavator must report such damage to the pipeline operator, whether or 
not a leak occurs, at the earliest practicable moment following 
discovery of the damage.

Sec.  196.109  What must an excavator do if damage to a pipeline from 
excavation activity causes a leak where product is released from the 
pipeline?

    If damage to a pipeline from excavation activity causes the release 
of any flammable, toxic, or corrosive gas or liquid from the pipeline 
that may endanger life or cause serious bodily harm or damage to 
property or the environment, the excavator must immediately report the 
release of hazardous products to appropriate emergency response 
authorities by calling 911. Upon calling the 911 emergency telephone 
number, the excavator may exercise discretion as to whether to request 
emergency response personnel be dispatched to the damage site.

Sec.  196.111  What if a pipeline operator fails to respond to a locate 
request or fails to accurately locate and mark its pipeline?

    PHMSA may enforce existing requirements applicable to pipeline 
operators, including those specified in 49 CFR 192.614 and 195.442 and 
49 U.S.C. 60114 if a pipeline operator fails to respond to a locate 
request or fails to accurately locate and mark its pipeline. The 
limitation in Sec.  60114(f) does not apply to enforcement taken 
against pipeline operators and excavators working for pipeline 
operators.

Subpart C--Enforcement

Sec.  196.201  What is the purpose and scope of this subpart?

    This subpart describes the enforcement authority and sanctions 
exercised by the Associate Administrator, OPS for achieving and 
maintaining pipeline safety under this Part. It also prescribes the 
procedures governing the exercise of that authority and the imposition 
of those sanctions.

Sec.  196.203  What is the administrative process PHMSA will use to 
conduct enforcement proceedings for alleged violations of excavation 
damage prevention requirements?

    PHMSA will use the existing adjudication process for alleged 
pipeline safety violations set forth in 49 CFR Part 190, Subpart B. 
This process provides for notification that a probable violation has 
been committed, a 30-day period to respond including the opportunity to 
request an administrative hearing, the issuance of a final order, and 
the opportunity to petition for reconsideration.

Sec.  196.205  Can PHMSA assess administrative civil penalties for 
violations?

    Yes. When the Associate Administrator, OPS has reason to believe 
that a person has violated any provision of the 49 U.S.C. 60101 et seq. 
or any regulation or order issued thereunder, including a violation of 
excavation damage prevention requirements under this Part and 49 U.S.C. 
60114(d) in a state with an excavation damage prevention law 
enforcement program PHMSA has deemed inadequate under 49 CFR Part 198, 
Subpart D, PHMSA may conduct a proceeding to determine the nature and 
extent of the violation and to assess a civil penalty.

Sec.  196.207  What are the maximum administrative civil penalties for 
violations?

    The maximum administrative civil penalties that may be imposed are 
specified in 49 U.S.C. Sec.  60122.

Sec.  196.209  May other civil enforcement actions be taken?

    Whenever the Associate Administrator, OPS has reason to believe 
that a person has engaged, is engaged, or is about to engage in any act 
or practice constituting a violation of any provision of 49 U.S.C. 
60101 et seq., or any regulations issued thereunder, PHMSA, or the 
person to whom the authority has been delegated, may request the 
Attorney General to bring an action in the appropriate U.S. District 
Court for such relief as is necessary or appropriate, including 
mandatory or prohibitive injunctive relief, interim equitable relief, 
civil penalties, and punitive damages as provided under 49 U.S.C. 
60120.

Sec.  196.211  May criminal penalties be imposed for violations?

    Yes. Criminal penalties may be imposed as specified in 49 U.S.C. 
60123.

PART 198--REGULATIONS FOR GRANTS TO AID STATE PIPELINE SAFETY 
PROGRAMS

    2. The authority citation for part 198 is amended to read as 
follows:

    Authority:  49 U.S.C. 60101 et seq.; 49 U.S.C. 6101 et seq.; 49 
CFR 1.53.

    3. 49 CFR Part 198 is amended by adding a new Subpart D to read as 
follows:
Subpart D--State Damage Prevention Enforcement Programs
Sec.
198.51 What is the purpose and scope of this subpart?
198.53 When and how will PHMSA evaluate state damage prevention 
enforcement programs?
198.55 What criteria will PHMSA use in evaluating the effectiveness 
of state damage prevention enforcement programs?
198.57 What is the process PHMSA will use to notify a state that its 
damage prevention enforcement program appears to be inadequate?
198.59 How may a state respond to a notice of inadequacy?
198.61 How is a state notified of PHMSA's final decision?
198.63 How may a state with an inadequate damage prevention law 
enforcement program seek reconsideration by PHMSA?

[[Page 19834]]

Subpart D-- State Damage Prevention Enforcement Programs

Sec.  198.51  What is the purpose and scope of this subpart?

    This subpart establishes standards for effective state damage 
prevention enforcement programs and prescribes the administrative 
procedures available to a state that elects to contest a notice of 
inadequacy.

Sec.  198.53  When and how will PHMSA evaluate state excavation damage 
prevention law enforcement programs?

    PHMSA conducts annual program evaluations and certification reviews 
of state pipeline safety programs. PHMSA will also conduct annual 
reviews of state excavation damage prevention law enforcement programs. 
PHMSA will use the criteria described in Sec.  198.55 as the basis for 
the reviews, utilizing information obtained from any state agency or 
office with a role in the state's excavation damage prevention law 
enforcement program. If PHMSA finds a state's enforcement program 
inadequate, PHMSA may take immediate enforcement against excavators in 
that state. The state will have five years from the date of the finding 
to make program improvements that meet PHMSA's criteria for minimum 
adequacy. A state that fails to establish an adequate enforcement 
program in accordance with 49 CFR 198.55 within five years of the 
finding of inadequacy may be subject to reduced grant funding 
established under 49 U.S.C. 60107. The amount of the reduction will be 
determined using the same process PHMSA currently uses to distribute 
the grant funding; PHMSA will factor the findings from the annual 
review of the excavation damage prevention enforcement program into the 
49 U.S.C. 60107 grant funding distribution to state pipeline safety 
programs. The amount of the reduction in 49 U.S.C. 60107 grant funding 
shall not exceed 10% of prior year funding. If a state fails to 
implement an adequate enforcement program within five years of a 
finding of inadequacy, the Governor of that state may petition the 
Administrator of PHMSA, in writing, for a temporary waiver of the 
penalty, provided the petition includes a clear plan of action and 
timeline for achieving program adequacy.

Sec.  198.55  What criteria will PHMSA use in evaluating the 
effectiveness of state damage prevention enforcement programs?

    (a) PHMSA will use the following criteria to evaluate the 
effectiveness of a state excavation damage prevention enforcement 
program:
    (1) Does the state have the authority to enforce its state 
excavation damage prevention law through civil penalties?
    (2) Has the state designated a state agency or other body as the 
authority responsible for enforcement of the state excavation damage 
prevention law?
    (3) Is the state assessing civil penalties for violations at levels 
sufficient to ensure compliance and is the state making publicly 
available information that demonstrates the effectiveness of the 
state's enforcement program?
    (4) Does the enforcement authority (if one exists) have a reliable 
mechanism (e.g., mandatory reporting, complaint-driven reporting, etc.) 
for learning about excavation damage to underground facilities?
    (5) Does the state employ excavation damage investigation practices 
that are adequate to determine the at-fault party when excavation 
damage to underground facilities occurs?
    (6) At a minimum, does the state's excavation damage prevention law 
require the following:
    a. Excavators may not engage in excavation activity without first 
using an available one-call notification system to establish the 
location of underground facilities in the excavation area.
    b. Excavators may not engage in excavation activity in disregard of 
the marked location of a pipeline facility as established by a pipeline 
operator.
    c. An excavator who causes damage to a pipeline facility:
    i. Must report the damage to the owner or operator of the facility 
at the earliest practical moment following discovery of the damage; and
    ii. If the damage results in the escape of any flammable, toxic, or 
corrosive gas or liquid that may endanger life or cause serious bodily 
harm or damage to property, must promptly report to other appropriate 
authorities by calling the 911 emergency telephone number or another 
emergency telephone number.
    (7) Does the state limit exemptions for excavators from its 
excavation damage prevention law? A state must provide to PHMSA a 
written justification for any exemptions for excavators from state 
damage prevention requirements. PHMSA will make the written 
justifications available to the public.
    (b) PHMSA may also consider individual enforcement actions taken by 
a state in evaluating the effectiveness of a state's damage prevention 
enforcement program.

Sec.  198.57  What is the process PHMSA will use to notify a state that 
its damage prevention enforcement program appears to be inadequate?

    PHMSA will issue a notice of inadequacy to the state in accordance 
with 49 CFR Sec.  190.5. The notice will state the basis for PHMSA's 
determination that the state's damage prevention enforcement program 
appears inadequate for purposes of this subpart and set forth the 
state's response options.

Sec.  198.59  How may a state respond to a notice of inadequacy?

    A state receiving a notice of inadequacy will have 30 days from 
receipt of the notice to submit a written response to the PHMSA 
official that issued the notice. In its response, the state may include 
information and explanations concerning the alleged inadequacy or 
contest the allegation of inadequacy and request the notice be 
withdrawn.

Sec.  198.61  How is a state notified of PHMSA's final decision?

    PHMSA will issue a final decision on whether the state's damage 
prevention enforcement program has been found inadequate in accordance 
with 49 CFR 190.5.

Sec.  198.63  How may a state with an inadequate excavation damage 
prevention law enforcement program seek reconsideration by PHMSA?

    At any time following a finding of inadequacy, the state may 
petition PHMSA to reconsider such finding based on changed 
circumstances including improvements in the state's enforcement 
program. Upon receiving a petition, PHMSA will reconsider its finding 
of inadequacy promptly and will notify the state of its decision on 
reconsideration promptly but no later than the time of the next annual 
certification review.

    Issued in Washington, DC on March 26, 2012.
Jeffrey D. Wiese,
Associate Administrator for Pipeline Safety.
[FR Doc. 2012-7550 Filed 3-30-12; 8:45 am]
BILLING CODE 4910-60-P