Document ID: PHMSA-2009-0201-0055
Agency: phmsa
Document Type: Rule
Title: Hazardous Materials Transportation: Registration and Fee Assessment Program
Posted Date: 2010-03-30T04:00Z

[Federal Register: March 30, 2010 (Volume 75, Number 60)]
[Rules and Regulations]               
[Page 15613-15620]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30mr10-10]                         

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 107

[Docket No. PHMSA-2009-0201 (HM-208H)]
RIN 2137-AE47

 
Hazardous Materials Transportation; Registration and Fee 
Assessment Program

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

ACTION: Final rule.

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SUMMARY: PHMSA is amending the statutorily mandated registration and 
fee assessment program for persons who transport, or offer for 
transportation, certain categories and quantities of hazardous 
materials. For those registrants not qualifying as a small business or 
not-for-profit organization, PHMSA is increasing the annual fee from 
$975 (plus a $25 administrative fee) to $2,575 (plus a $25 
administrative fee) for registration year 2010-2011 and following 
years. The increase is necessary to fund the national Hazardous 
Materials Emergency Preparedness (HMEP) grants program at approximately 
$28,300,000 in accordance with the Administration's Fiscal Year 2010 
budget and proposed Fiscal Year 2011 budget.

DATES: Effective date of this final rule is April 29, 2010.

FOR FURTHER INFORMATION CONTACT: Mr. David Donaldson, Office of 
Hazardous Materials Planning and Analysis, PHMSA, (202) 366-4484, and 
Ms. Deborah Boothe or Mr. Steven Andrews, Office of Hazardous Materials 
Standards, PHMSA, (202) 366-8553.

SUPPLEMENTARY INFORMATION:

I. Background

    Since 1992, PHMSA has conducted a national registration program 
under the mandate in 49 U.S.C. 5108 for persons who offer for 
transportation or transport certain hazardous materials in intrastate, 
interstate, or foreign commerce. The purposes of the registration 
program are to gather information about the transportation of hazardous 
materials, and to fund the Hazardous Materials Emergency Preparedness 
(HMEP) grants program and additional related activities. See 49 U.S.C. 
5108(b), 5116, 5128(b). PHMSA may set the annual registration fee 
between a minimum of $250 and maximum of $3,000. See 49 U.S.C. 
5108(a)(2), 5108(g)(2)(A).
    Since 2006, the annual registration fee has been set at $250 (plus 
a $25 processing fee) for small businesses and not-for-profit 
organizations and $975 (plus a $25 processing fee) for all other 
registrants. See 49 CFR 107.612(d). Because PHMSA had accumulated a 
surplus following a prior adjustment in 2000 (See 65 FR 7297, 7309 
[Feb. 14, 2000]), notwithstanding a temporary reduction between 2003 
and 2006, since Fiscal Year 2008, PHMSA has been able to fully fund the 
obligation limit of $28,318,000 in the Consolidated Appropriations Act 
of 2008 (Pub. L. 110-116 [121 Stat. 1295], November 13, 2007), and the 
Omnibus Appropriations Act, 2009 (Pub. L. 111-8 [123 Stat. 945], March 
11, 2009). However, that surplus has now been reduced to $1,500,000, 
and it is necessary to adjust registration fees in order to collect 
additional monies in the 2010-2011 and following registration years and 
fully fund the current authorization and expected budget requests of 
$28.3 million for Fiscal Years beginning in 2010. This can be done by 
leaving the annual registration fee at $250 (plus a $25 processing fee) 
for those persons who are a small business or not-for-profit 
organization and increasing to $2,575 (plus a $25 processing fee) the 
annual fee paid by all other persons required to register.

II. Notice of Proposed Rulemaking

    On February 2, 2010, PHMSA published a notice of proposed 
rulemaking (NPRM; 75 FR 5258) to ensure full funding of the HMEP grants 
program, by proposing an increase in registration fees beginning with 
the 2010-2011 registration year to fund the program at the $28.3 
million level. As explained in the NPRM, since 2006, the annual 
registration fee has been set at $250 (plus a $25 processing fee) for 
small businesses and not-for-profit organizations and $975 (plus a $25 
processing fee) for all other registrants. See 49 CFR 107.612(d). 
Because PHMSA had accumulated a surplus following a prior adjustment in 
2000 (See 65 FR 7297, 7309 [Feb. 14, 2000]), notwithstanding a 
temporary reduction between 2003 and 2006, since Fiscal Year 2008, 
PHMSA has been able to fully fund the obligation limit of $28,318,000 
in the Consolidated Appropriations Act of 2008 (Pub. L. 110-116 [121 
Stat. 1295], November 13, 2007), and the Omnibus Appropriations Act, 
2009 (Pub. L. 111-8 [123 Stat. 945], March 11, 2009). However, that 
surplus has now been reduced to $1,500,000, and it is necessary to 
adjust registration fees in order to collect additional monies in the 
2010-2011 and following registration years and fully fund the current 
authorization in Fiscal Year 2010 and expected budget requests of $28.3 
million for future fiscal years. Accordingly, PHMSA proposed to 
increase the registration fees for persons other than small businesses 
from $975 (plus $25 processing fee) to $2,975 (plus $25 processing fee) 
for registration year 2010-2011 and following, in order to maintain the 
statutorily mandated goal of funding the HMEP grants program activities 
at approximately $28,300,000.

III. HMEP Grants Program

A. Purpose and Achievements of the HMEP Grants Program

    The HMEP grants program, as mandated by 49 U.S.C. 5116, provides 
Federal financial and technical assistance to States and Indian Tribes 
to ``develop, improve, and carry out emergency plans'' within the 
National Response System and the Emergency

[[Page 15614]]

Planning and Community Right-To-Know Act of 1986 (Title III), 42 U.S.C. 
11001 et seq. The grants are used to: (1) Develop, improve, and 
implement emergency plans; (2) train public sector hazardous materials 
emergency response employees to respond to accidents and incidents 
involving hazardous materials; (3) determine flow patterns of hazardous 
materials within a State and between States; and (4) determine the need 
within a State for regional hazardous materials emergency response 
teams.
    The HMEP grants program encourages the growth of the hazardous 
materials planning and training programs of State, local, and Tribal 
governments by limiting the Federal funding to 80 percent of the cost a 
State or Indian Tribe incurs to carry out the activity for which the 
grant is made. See 49 U.S.C. 5116(e). HMEP grants supplement the amount 
already being provided by the State or Indian Tribe. By accepting an 
HMEP grant, the State or Tribe makes a commitment to maintain its 
previous level of support. See 49 U.S.C. 5116(a)(2)(A) and 
5116(b)(2)(A).
    Since 1993, PHMSA has awarded all States and territories and 45 
Native American Tribes planning and training grants totaling $203 
million. These grants helped to:
     Train 2,420,000 hazardous materials responders;
     Conduct 9,282 commodity flow studies;
     Write or update 55,826 emergency plans;
     Conduct 13,372 emergency response exercises; and
     Assist 25,059 local emergency planning committees (LEPCs) 
or approximately 1670 per year.
    Since the beginning of the program, HMEP program funds have also 
supported the following related activities in the total amounts 
indicated:
     $3.4 million for the development and periodic updating of 
a national curriculum used to train public sector emergency response 
and preparedness teams. The curriculum guidelines, developed by a 
committee of Federal, State, and local experts, include criteria for 
establishing training programs for emergency responders at five 
progressively higher skill levels: (1) First responder awareness, (2) 
first responder operations, (3) hazardous materials technician, (4) 
hazardous materials specialist, and (5) on-scene commander.
     $2.6 million to monitor public sector emergency response 
planning and training for hazardous materials incidents, and to provide 
technical assistance to State or Indian Tribe emergency response 
training and planning for hazardous materials incidents.
     $7.6 million for periodic updating and distribution of the 
North American Emergency Response Guidebook. This guidebook provides 
immediate information on initial response to hazardous materials 
incidents, and is distributed free of charge to the response community.
     $3.5 million for the International Association of Fire 
Fighters (IAFF) to train instructors to conduct hazardous materials 
response training programs.

B. Funding of the HMEP Grants Program

    An estimated 800,000 shipments of hazardous materials make their 
way through the national transportation system each day. It is 
impossible to predict when and where a hazardous materials incident may 
occur or what the nature of the incident may be. This potential threat 
requires State and local agencies to develop emergency plans and train 
emergency responders on the broadest possible scale.
    The HMEP training grants are essential for providing adequate 
training of persons throughout the nation who are responsible for 
responding to emergencies involving the release of hazardous materials. 
There are over 2 million emergency responders requiring initial 
training or periodic recertification training, including 250,000 paid 
firefighters, 850,000 volunteer firefighters, 725,000 law enforcement 
officers, and 500,000 emergency medical services (EMS) providers. Due 
to the high turnover rates of emergency response personnel, there is a 
continuing need to train a considerable number of recently recruited 
responders at the most basic level.
    In addition, training at more advanced levels is essential to 
ensure that emergency response personnel are capable of effectively and 
safely responding to serious releases of hazardous materials. The 
availability of funding for the HMEP grants program will encourage 
State, Tribal, and local agencies to provide more advanced training.
    The funding for HMEP grants will enable PHMSA to help meet 
previously unmet needs of State, local and Tribal governments, and 
public and private trainers by providing for the following activities 
authorized by law:
     $21,800,000 for training and planning grants;
     A new $4,000,000 grant program for non-profit hazmat 
employee organizations to train hazmat instructors who will train 
hazmat employees;
     $1,000,000 for grants to support certain national 
organizations to train instructors to conduct hazardous materials 
response training programs, an increase of $750,000;
     $625,000 for revising, publishing, and distributing the 
North American Emergency Response Guidebook;
     $188,000 for continuing development of a national training 
curriculum;
     $150,000 for monitoring and technical assistance; and
     $555,000 for administrative support.

IV. Discussion of Comments

PHMSA received 42 sets of comments on the NPRM, from the following 
individuals and organizations:

Steven Kovacsi (Mr. Kovacsi)
John Q. Counts (Mr. Counts)
Dale Anderson (Mr. Anderson)
Angela Brenwalt and Jenny Carver (Brenwalt and Carver)
The Council on the Safe Transportation of Dangerous Articles, Inc. 
(COSTHA)
Canadian Trucking Alliance
American Trucking Associations (ATA)
Association of HAZMAT Shippers, Inc. (AHS)
The Institute of Makers of Explosives (IME)
Petroleum Marketers Association of America (PMAA)
New England Fuel Institute (NEFI)
Owner-Operator Independent Drivers Association, Inc. (OOIDA)
Dangerous Goods Advisory Council (DGAC)
Horizon Lines, LLC (Horizon)
Fann Contracting, Inc. (Mr. Fann)
International Vessel Operators Hazardous Materials Association, Inc. 
(VOHMA)
Alexander & Baldwin, Inc. (A&B)
Cleveland County Local Emergency Planning Committee (CCLEPC)
North Central Florida LEPC
South Florida LEPC
Texas Department of Safety/Emergency Management
Missouri Emergency Response Commission
Oklahoma Hazardous Materials Emergency Response Commission (OHMERC) 
(two comments)
National Association of SARA Title III Program Officials (NASTPO)
Tulsa County (OK) Local Emergency Planning Committee (LEPC)
Livingston County (MO) LEPC
Garfield County (WA) Fire District 1
Oklahoma County (OK) LEPC
Grand River Dam Authority LEPC
Benton County (MO) Emergency Management
Douglas County (CO) LEPC
Gila County (AZ) LEPC
Ponca City, OK Emergency Management/LEPC
Jefferson County (IN) LEPC
Jefferson County (CO) LEPC
Garfield County (OK) LEPC
Blaine County (OK) LEPC
Connecticut State Emergency Response Commission (SERC)
Dade County (MO) LEPC

[[Page 15615]]

Arizona Emergency Response Commission
Environmental Protection Agency
Utility Solid Waste Activities Group (USWAG)

    Commenters from the emergency response community support the 
proposed fee increase. They state that the HMEP grants are their only 
source of funding for planning for hazardous materials transportation 
incidents and training local emergency responders. They note that the 
high turnover rate for first responders is a significant issue and 
indicate that increased funding will enable them to ensure that all 
first responders are trained.
    Comments from the regulated community are divided. Some oppose the 
proposal to increase fees for large businesses and suggest that, in the 
interest of fairness, the fee increase should be risk based so that 
higher volume shippers of carriers of hazardous materials bear a higher 
percentage of proposed fees. Other commenters recommend, again in the 
interest of fairness, that PHMSA consider an increase in the 
registration fees paid by small businesses and not-for profit 
organizations. Commenters also express concern about how funds are 
allocated and spent, grants to non-profit hazmat employee 
organizations, and alleged ineffective enforcement of the current 
registration requirements.
    The comments are discussed in more detail below.

A. Support for HMEP Grants and the Registration Fee Increase

    A total of 24 State and local government emergency planning and 
response entities submitted comments on the NPRM. These commenters from 
the emergency response community support the proposed fee increase. As 
indicated above, they state that the HMEP grants are their only source 
of funding for planning for hazardous materials transportation 
incidents and training local emergency responders. For example, Texas 
DPS/Emergency Management notes that almost 80% of fire departments in 
Texas have no paid responders and that volunteers depend on HMEP 
funding to receive appropriate and up-to-date training. According to 
Texas DPS/Emergency Management, ``HMEP is the only source of hazardous 
materials training funds for the majority of our fire departments and 
under the current economical situation is becoming a major source of 
funding for all of our departments.'' Similarly, OHMERC states that, 
throughout most of Oklahoma, the first responders on scene at a 
transportation incident are local volunteers. ``There is no industrial 
tax base in the surrounding area to support the planning and exercising 
activities of these dedicated individuals. There is no industry-based 
training available * * * There are regionally based Hazmat response 
teams that can provide assistance to local volunteers but their 
response times may be in excess of 2 hours. * * *'' CCLEPC states that 
it is ``heavily dependent upon the money it receives each year through 
the * * * HMEP grant. Without this source of funding we would be 
greatly hampered in our ability to carry out our mission. * * *'' The 
Arizona Emergency Response Commission states that ``[w]ithin Arizona as 
with other states, serious financial shortfalls have occurred which 
greatly affect how much funding will be passed through to the local 
communities.''
    These commenters also note that turnover among volunteer 
firefighters is high, so, in the words of Texas DPS/Emergency 
Management, ``a consistent continual training program is necessary. 
Volunteer, rural responders need to have the knowledge to protect 
themselves, the public, and the environment. * * *.''
    PHMSA believes it is critical to fund local emergency planning and 
response efforts to the maximum level allowed under the law. Government 
and industry have a shared responsibility to minimize the consequences 
of hazardous materials transportation accidents. The possible 
consequences of a serious incident require that all communities develop 
response plans and train emergency services, fire, and police personnel 
to assure an effective response. The importance of planning and 
training cannot be overemphasized. Small towns and rural communities 
are served by largely volunteer fire departments and, in many 
instances, these communities' resources already are overextended in 
their efforts to meet routine emergency response needs.

B. Basis of Proposed Registration Fee Increase

    OIDA, NEFI, and PMAA support the two-tiered registration structure. 
PMAA states that it is ``entirely appropriate and inherently fair that 
small business registrants pay a significantly lower fee than large 
HAZMAT offerors * * * Reduced risk should be rewarded with a lower 
fee.'' OIDA agrees and adds that small-business motor carriers already 
pay a ``significantly higher per unit cost than their large 
competitors.'' OIDA suggests that while a one-truck motor carrier faces 
a total cost of $275 per unit, a larger carrier with 15,000 trucks 
would pay the equivalent of 20 cents for each truck in its fleet under 
the proposed higher fee structure.
    VOHMA recommends that fee assessments should be ``more equitably 
determined'' based on volumes of hazardous materials transported. 
``[T]he higher volume carrier[s] who benefit from the revenue of 
carrying such commodities should bear a higher percentage of the * * * 
fees.'' A&B and AHS assert that the current fee structure is unfair 
because it requires registrants who only occasionally offer for 
transportation or transport hazardous materials to pay the same fee as 
registrants who offer or transport hazardous materials as their primary 
business. VOHMA and Horizon suggest that vessel carriers calling at 
U.S. ports have ``little need'' to employ the additional resources of 
Emergency Response Teams funded through the registration fee program as 
they already have a ``vast listing of reserved parties on call'' and 
further, ships are at sea most of the time. ATA, AHS, Mr. Fann, and IME 
suggest that before large businesses are asked to absorb a 200 percent 
fee increase, PHMSA should consider increasing fees paid by small 
businesses and not-for-profit organizations. Alternatively, AHS and IME 
suggest that PHMSA consider a fee structure with multiple fee tiers. 
Further, IME does not agree that large businesses pose a greater risk, 
and, therefore, should shoulder a greater share of funding for the HMEP 
grant program. IME suggests that PHMSA institute a waiver process under 
which businesses that demonstrate that their shipment patterns are 
similar to those of large not-for-profit entities could qualify to pay 
at the small business rate. IME also suggests that PHMSA set a cap on 
total fees paid by subsidiaries of a parent company, stating, ``[s]uch 
qualified relief would accommodate gross inequities resulting from the 
`ability-to-pay' approach to financing the HMEP and would interject a 
dimension to the fee calculation based on risk.'' ATA suggests that 
PHMSA consider eliminating certain exceptions to the current 
registration requirements, including the exception for farmers that 
transport placarded materials in direct support of the farmer's farming 
operations. NACD and DGAC recommend a ``performance-based fee system'' 
under which entities with poor incident histories and safety records 
would pay higher fees. USWAG recommends that the fee increase be 
delayed for at least one more registration year.
    Commenters are correct that under Federal hazmat law, PHMSA has the 
discretion to increase registration fees for both small and large 
businesses. As

[[Page 15616]]

explained in the NPRM, PHMSA considered several alternatives for 
increasing the funds available for the HMEP grants program. One option 
was to increase the fee for all businesses offering for transportation 
or transporting the covered hazardous materials. Another option was to 
maintain the fee for small businesses and not-for-profit organizations 
while adjusting the fee for larger businesses. PHMSA continues to 
believe that this second option is the best approach for meeting our 
overall objectives for both the registration and HMEP programs. 
Although there are exceptions, small businesses and not-for-profit 
organizations generally offer for transportation or transport fewer and 
smaller hazardous materials shipments as compared to larger companies. 
Raising the registration fee only for other-than-small businesses 
rather than for all businesses correlates the fee structure to the 
level of risk associated with shipments offered for transportation and 
transported by larger companies. Moreover, increasing the registration 
fees only for other-than-small businesses will affect significantly 
fewer entities and will affect entities that can more easily absorb the 
increase. PHMSA has received approximately 41,000 registrations for the 
2008-2009 registration year, and expects approximately the same number 
for 2009-2010. Small businesses or not-for-profit organizations make up 
83%, or 35,025 of the registrants, while large businesses make up 17%, 
or 6,975 of the registrants.
    Since the registration program was first established, PHMSA has 
considered, and rejected, methods for apportioning registration fees 
among registrants according to various approximations of the risk 
imposed. For example, in Docket No. HM-208B, there were overwhelming 
objections to basing registration fees on risk factors such as the 
hazard characteristics of specific classes of materials and the 
consequences of a release during transportation; the quantity of 
materials shipped or transported, including the type and size of 
containers (including vehicles); and the number of shipments offered or 
transported. The agency concluded that trying to distinguish among 
distinct levels of risk would require the imposition of a complicated 
system that would necessarily involve significant recordkeeping burdens 
on the regulated public (60 FR 5822). PHMSA remains convinced that even 
the simplest of the suggested alternative fee structures would impose 
significant cost burdens. As a further example, the creation of a third 
level based on a ``waiver'' for registrants that do not meet the 
criteria for a small business but engage in limited hazardous materials 
activities could impose a greater expense on the registrant to maintain 
the necessary records to prove its level of activity than the cost of 
the registration fee. PHMSA believes that the current two-tiered fee 
schedule based on SBA criteria is the most equitable, simple, and 
enforceable method for determining and collecting registration fees. 
The two-tiered fee schedule distributes registration fees according to 
a well-established measurement of business size and ensures the 
collection of sufficient funds to support the HMEP grants program at an 
enhanced level.

C. Oversight and Accountability

    ATA, AHS, PMAA, and IME suggest that PHMSA should provide greater 
oversight and accountability on how the HMEP grant funds are allocated 
and used. IME questions PHMSA's enforcement of the registration program 
and suggests that the two-tier system complicates rather than 
simplifies enforcement efforts. IME also questions PHMSA's data on the 
number of emergency plans and LEPCs supported by the HMEP grant funds 
and suggests that training grants are in greater need of funding. IME 
states, ``given the plethora of other viable alternatives to address 
the needs of the response community, the HMEP is at best 
inconsequential, and in retrospect, a program that has outlived its 
relevance and usefulness as a stand alone resource.''
    In 2008, PHMSA received approval from the Office of Management and 
Budget (OMB) to collect more detailed information from HMEP grantees to 
enable the agency more accurately to evaluate the effectiveness of the 
grant program in meeting emergency response planning and training needs 
(73 FR 39780). PHMSA is now collecting that detailed information. In 
addition, the agency is hiring additional staff to provide an enhanced 
HMEP oversight capability. The HMEP grant program was established over 
15 years ago and has continued with few changes since its initial 
implementation. HMEP grantees have used program funds to train first 
responders; conduct commodity flow studies; write or update emergency 
plans; conduct emergency response exercises; and assist local emergency 
planning committees. Few other resources are available to accomplish 
these tasks. PHMSA recognizes that, because the HMEP grant program is 
funded by registration fees paid by hazardous materials shippers and 
carriers, it is incumbent on the agency administering the grant program 
as well as the grantees themselves to ascertain that the program is 
accountable to those who fund it and is as effective as possible in 
meeting its emergency response planning and training goals.
    The information provided by the grantees will provide data to 
evaluate emergency response planning and training programs conducted by 
States and Indian Tribes. The development of accurate output 
information will also summarize the achievements of the HMEP grant 
program. The information PHMSA seeks from grantees will enhance 
emergency response preparedness and response by allowing the agency and 
its State and Tribal partners to target gaps in current planning and 
training efforts and focus on strategies that have been proven to be 
effective. PHMSA notes in this regard the comments from NASTPO and 
OHMERC that ``one size does not fit all when it comes to community 
preparedness.'' OHMERC states that it is working with grantees to 
establish priorities and outcome metrics so that program effectiveness 
can be demonstrated. NASTPO as well states that it is working to 
address the effectiveness of the HMEP program, including its 
accountability.
    PHMSA believes that funding for both planning and training is 
critical to the local emergency responders' capability of dealing with 
hazardous materials transportation incidents. The emergency response 
community has stressed that rural communities depend on volunteers and 
their ability to plan, train and exercise for a wide range of potential 
events. To ensure effective emergency response, communities must 
continually revise plans, repeat training, and conduct exercises. As 
NASTPO notes, community preparedness and emergency planning is ``a 
process, not an end point.'' An effective planning organization will 
routinely evaluate and update its emergency response plans to account 
for changing circumstances and conditions.

D. Grants to Non-Profit Hazmat Employee Organizations

    DGAC and IME oppose the use of registration fees to fund the 
training grants authorized under Sec.  5107(e) of Federal hazmat law. 
IME asserts that this $4 million training program is a double taxation 
for hazmat employee training since employees trained by third parties 
would still need to meet the specific and specialized training each 
company is responsible for

[[Page 15617]]

providing under the Hazardous Materials Regulations, and that, ``using 
industry fees for this purpose cannot be justified.'' DGAC contends 
that the program does not have industry support and suggests that PHMSA 
has not explained how, and for what purpose, it plans to use the 
training grant funds.
    According to the law, training grant funds awarded to an 
organization may be used to train hazmat instructors and, to the extent 
determined to be appropriate, for such instructors to train hazmat 
employees. Grant funds are not authorized to fund an organization's 
existing hazmat training program. The program is open to non-profit 
hazardous materials employee organizations demonstrating: (1) Expertise 
in conducting a training program for hazmat employees, and (2) ability 
to reach a target population of hazmat employees. For the purposes of 
the grants program, an employee organization is a labor union, 
association, group, or similar organization the members of which are 
hazardous materials employees and the stated purpose of which is to 
represent hazmat employees. Hazmat employees include self-employed 
persons, including owner-operators of motor vehicles; vessel or 
aircraft crewmembers and employees; railroad signalmen; and 
maintenance-of-way employees. Due to budget and other limitations, many 
hazmat employees cannot leave their employment locations for extended 
periods of time to attend training courses. Instructors trained under 
this grant program can offer training to a large number of hazmat 
employees at locations within close proximity to the hazmat employees' 
places of employment, thereby significantly minimizing employee travel 
cost and training time. PHMSA believes the statutorily mandated 
training grants will benefit the transportation industry by providing 
this much needed hazmat training.

E. Rising Transportation Costs

    COSTHA, NACD, Mr. Fann, Horizon, and VOHMA ask PHMSA to take into 
consideration the current state of the economy and the high costs of 
transportation in setting registration fees. These commenters suggest 
that increasing registration fees will impose additional hardships on 
businesses already struggling with rising costs. COSTHA notes that the 
economy is ``still in flux after suffering one of the largest 
recessions in 40 years'' and requests a reconsideration of the fee 
increase in light of current economic conditions. VOHMA requests that 
PHMSA ``consider the fact that vessel operators use large quantities of 
petroleum fuels and are finding it increasingly difficult to remain 
competitive and efficient in this costly energy environment.'' Horizon 
notes that it is ``faced with rising and unstable fuel expenses coupled 
with weather related delays, damages, and a weak economy'' which all 
affect its ability to operate profitably. Mr. Kovacsi states that in 
the current economy, ``this whopping increase is totally inappropriate 
when so many drivers are already out of work due to poor revenues by 
their employers.'' Mr. Fann states that ``[b]usinesses are suffering 
through these hard times also by having to make cut backs, watch 
expenses and find less expensive alternatives to their way of doing 
business.'' Several commenters note as well that adoption of the 
proposals in the final rule will require many businesses to incur 
unbudgeted expenses during the current calendar year.
    PHMSA recognizes the concerns of industry relating to the 
increasing costs of energy and transportation. However, these costs 
affect many industries, as well as consumers and emergency responders. 
PHMSA believes that increasing energy and transportation costs 
reinforce the need to fully fund the HMEP grants program. State 
emergency planners and responders continue to indicate that these HMEP 
grants are the only source of funds they receive to fund the continuing 
need for emergency response planning and training.

F. Surplus in HMEP Grants Fund

    Commenters, including COSTHA, NPGA, Mr. Anderson, Mr. Counts, and 
IME, express concern that the increase in registration fees will result 
in a surplus in the HMEP grants account. For example, IME contends that 
``PHMSA is again embarking on a path to generate millions of dollars in 
excess of the amount authorized.'' NPGA suggests that ``it is 
conceivable that a surplus could exist in a very short period of 
time.''
    As already discussed, the past surplus enabled PHMSA to temporarily 
reduce registration fees for all persons during the 2003-2006 period. 
Further, as discussed in the NPRM, in part because of accumulated 
surpluses, PHMSA was able to fully fund the HMEP program at its 
authorized limit of $28,318,000 for FY 2009. However, that surplus has 
now been reduced to $1.5 million. PHMSA estimates that without the 
proposed increase in fees, the agency will be approximately $8 million 
short of the authorized grant obligations to be made in 2010. Further, 
PHMSA has received approximately 2,000 (6%) fewer registrations for the 
2008-2009 registration year than for 2007-2008. The number of 
registrations for the 2009-2010 registration year has only slightly 
increased over the number for 2008-2009 at this time last year. This 
may be due to the current economic conditions, even though PHMSA has 
been aggressively addressing entities who have failed to register.

G. Enforcement of Registration Fee Requirements

    COSTHA, IME, AHS, and VOHMA express concern about the industry's 
compliance with and PHMSA's enforcement of the registration fee 
requirements. IME states that it has ``long questioned PHMSA's ability 
to provide credible enforcement of the two-tiered registration 
requirement'' and suggests that, extrapolating from a five percent non-
compliance rate and using PHMSA's registration statistics, ``over $1.5 
million in revenue will annually be forgone.'' Similarly, VOHMA 
questions whether all entities that are subject to the registration and 
fee assessment requirements are actually in compliance and recommends 
that PHMSA ``place more emphasis on enforcement of the registration 
requirements to ensure that all persons subject to these requirements 
have filed the applicable forms and paid the fees. * * *''
    PHMSA takes its responsibility to ensure compliance with the 
registration requirements very seriously. Integrated as part of every 
compliance inspection and incident investigation, PHMSA aggressively 
enforces the requirements for Hazardous Materials Registration. The 
agency also instituted a nationwide surveillance and compliance 
operation that identifies, enforces, and collects the unpaid fees of 
persons (in active status) who have failed to renew or file for 
registration. In 2009, for example, PHMSA cited 120 companies for 
registration violations and levied $60,810 in penalties. An additional 
23 companies were issued warning letters or are awaiting determination 
of an appropriate penalty.

H. Multi-Year Registrations

    PHMSA allows a person to register for up to three years in one 
registration statement (49 CFR 107.612(c)). As discussed in the NPRM, 
PHMSA has received approximately 2,100 advance registrations for the 
2010-2011 registration year from other-than-small businesses that have 
paid the fee previously established for those years. Approximately 
1,250 also included advance registrations for the 2011-2012 
registration year. PHMSA applies fees according to the fee structure 
ultimately established by regulation for the

[[Page 15618]]

registration year rather than according to the fee set at the time of 
payment. Thus, when PHMSA adopts an increase in registration fees, 
additional payments are required for registrations paid in advance at 
the lower levels in effect at the time of payment.
    NPGA recommends that PHMSA clarify that any business that has paid 
a multi-year registration fee prior to the effective date of this final 
rule should be deemed as having registered with the agency and not be 
subject to any form of violation related to non-registration as a 
result of the difference in the fee structure between the time of the 
original registration and this final rule. NACD also recommends that 
any difference between the new fee and prepaid fees should be assessed 
in the first subsequent registration year for which the fee has yet to 
be paid.
    PHMSA cannot agree to permit multi-year registrants to postpone 
payment of the increased registration fee until the first subsequent 
registration year for which the fee has yet to be paid. In order to 
ensure full funding of the HMEP grants, PHMSA must account for 
registration fees in the year they are due. PHMSA does not expend 
monies collected through multi-year registrations until the year for 
which they were paid. Further, when PHMSA lowered the fees for all 
registrants in 2003, PHMSA provided more than 7,100 refunds amounting 
to over $2.3 million within the first year to registrants who had 
overpaid the newly established fees. However, PHMSA agrees that 
enforcement action should not be initiated against entities that 
registered in good faith and paid the fee in effect at the time of 
registration provided they remit the difference between the fee 
originally paid and the new registration fee in a timely manner. PHMSA 
will notify each registrant who will be required to pay additional fees 
for the 2010-2011 and following registration years.

V. Provisions of This Final Rule

    PHMSA shares commenters' concern that the agency should only 
collect an amount of registration fees necessary to fully fund the HMEP 
program without the accumulation of a surplus. PHMSA also recognizes 
the challenging business environment in which hazardous materials 
shippers and carriers operate. After consideration of the comments 
received in response to the NPRM, PHMSA re-examined its estimates for 
funding the HMEP grants program based on updated information from the 
Department of Treasury on the HMEP account carry-over balance, de-
obligations of unused grant and administrative funds, increased 
enforcement of the registration requirements, and current registrant 
data. Based on this re-examination, PHMSA has concluded that it will be 
able to fund the HMEP grants program at the $28.3 million level in 
Fiscal Year 2010 and for future years with a smaller increase in 
registration fees than was proposed in the NPRM. For those registrants 
not qualifying as a small business or not-for-profit organization, the 
fee will increase to $2,575 (plus a $25 administrative fee) for the 
2010-2011 registration year and following years. For registrants 
qualifying as a small business or not-for-profit organization, the fee 
will remain at its current level of $250 (plus a $25 administrative 
fee). This fee increase will fund the HMEP grants program at 
approximately $28.3 million in accordance with the Administration's 
Fiscal Year 2010 budget proposal. The cost to industry of increasing 
registration fees will be approximately $14 million per year. The 
increased funding for the HMEP grants program will provide essential 
training to persons throughout the nation who are responsible for 
responding to emergencies involving the release of hazardous materials. 
In addition, training at more advanced levels is essential to assure 
emergency response personnel are capable of effectively and safely 
responding to serious releases of hazardous materials. The increased 
funding for the HMEP grants will enable us to help meet previously 
unmet needs of State, local and Tribal governments by providing more 
adequate funding.
    In addition, PHMSA is adopting the proposal in the NPRM to revise 
Sec.  107.612 to remove information on previous years' registration 
fees. This fee information is no longer needed. Information on fees in 
effect for registration years 1992-1993 to 2009-2010 is available in 
the registration brochure, previous editions of the CFR, and on the 
registration Web site (http: //www.phmsa.dot.gov/hazmat/registration). 
Note that persons subject to registration requirements must pay the 
annual registration fee, including the processing fee, in effect for 
the specific registration year for which the person is submitting 
registration information.

VI. Rulemaking Analyses and Notices

A. Statutory/Legal Authority for This Rulemaking

    This final rule is published under the authority of the Federal 
hazardous materials transportation law (Federal hazmat law; 49 U.S.C. 
5101 et seq.). Section 5108 of the Federal hazmat law authorizes the 
Secretary of Transportation to establish a registration program to 
collect fees to fund HMEP grants. The HMEP grants program, as mandated 
by 49 U.S.C. 5116, authorizes Federal financial and technical 
assistance to States and Indian Tribes to ``develop, improve, and carry 
out emergency plans'' within the National Response System and the 
Emergency Planning and Community Right-To-Know Act of 1986 (Title III), 
42 U.S.C. 11001 et seq.
    The Federal hazmat law makes available funding for the HMEP grants 
program at approximately $28,300,000, and directs PHMSA to establish an 
annual registration fee between a minimum of $250 and a maximum of 
$3,000.

B. Executive Order 12866 and DOT Regulatory Policies and Procedures

    This final rule is not considered a significant regulatory action 
under section 3(f) of Executive Order 12866 and, therefore, was not 
subject to formal review by the Office of Management and Budget. This 
final rule is considered non-significant under the Regulatory Policies 
and Procedures of the Department of Transportation (44 FR 11034).
    The cost to industry of increasing registration fees will be an 
additional $14 million per year. The funding for the HMEP grants 
program will provide essential training of persons throughout the 
nation who are responsible for responding to emergencies involving the 
release of hazardous materials. In addition, training at more advanced 
levels is essential to assure emergency response personnel are capable 
of effectively and safely responding to serious releases of hazardous 
materials. The funding for the HMEP grants will enable PHMSA to help 
meet previously unmet needs of State, local and Tribal governments, and 
public and private trainers by providing funding for activities such 
as: (1) Planning and training grants for local emergency planning 
committees; (2) a new program for non-profit hazmat employee 
organizations to train hazmat instructors that will train hazmat 
employees; (3) support to certain national organizations to train 
instructors to conduct hazardous materials response training programs; 
(4) revising, publishing, and distributing the North American Emergency 
Response Guidebook; (5) continuing development of a national training 
curriculum; and (6) monitoring and technical assistance.
    While the safety benefits resulting from improved emergency 
response

[[Page 15619]]

programs are difficult to quantify, PHMSA believes these benefits 
significantly outweigh the annual cost of funding the grants program. 
The importance of planning and training cannot be overemphasized. To a 
great extent, we are a nation of small towns and rural communities 
served by largely volunteer fire departments. In many instances, 
communities' response resources already are overextended in their 
efforts to meet routine emergency response needs. The planning and 
training programs funded by the HMEP grants program enable State and 
local emergency responders to respond quickly and appropriately to 
hazardous materials transportation accidents, thereby mitigating 
potential loss of life and property and environmental damage. The 
regulatory evaluation to the final rule issued under Docket HM-208 (57 
FR 30620) showed that the benefits to the public and to the industry 
from the emergency response grant program would at least equal, and 
likely exceed, the annual cost of funding the grant program. Based on 
estimates of annual damages and losses resulting from hazardous 
materials transportation accidents, the analysis concluded that the 
HMEP program would be cost-beneficial if it were only 3% effective in 
reducing either the frequency or severity of the consequences of 
hazardous materials transportation accidents. Achieving this level of 
effectiveness is well within the success rates of training and planning 
programs to reduce errors and increase the proficiency and productivity 
of response personnel. A regulatory evaluation for this final rule is 
available for review in the public docket.

C. Executive Order 13132

    This final rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 13132 (Federalism). There is 
no preemption of State fees on transporting hazardous materials that 
meet the conditions of 49 U.S.C. 5125(f). This final rule does not 
impose any regulation having substantial direct effects on the States, 
the relationship between the national government and the States, or the 
distribution of power and responsibilities among the various levels of 
government. Therefore, the consultation and funding requirements of 
Executive Order 13132 do not apply.

D. Executive Order 13175

    This final rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 13175 (Consultation and 
Coordination with Indian Tribal Governments). Because this final rule 
does not have adverse Tribal implications and does not impose direct 
compliance costs, the funding and consultation requirements of 
Executive Order 13175 do not apply.

E. Regulatory Flexibility Act, Executive Order 13272, and DOT 
Procedures and Policies

    The Regulatory Flexibility Act (5 U.S.C. 601-611) requires each 
agency to analyze regulations and assess their impact on small 
businesses and other small entities to determine whether the rule is 
expected to have a significant impact on a substantial number of small 
entities. The provisions of this rule apply specifically to businesses 
not falling within the small entities category. Therefore, PHMSA 
certifies this rule would not have a significant economic impact on a 
substantial number of small entities.

F. Unfunded Mandates Reform Act of 1995

    This final rule does not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. It does not result in costs of 
$141.3 million or more, in the aggregate, to any of the following: 
State, local, or Native American Tribal governments, or the private 
sector.

G. Paperwork Reduction Act

    Under 49 U.S.C. 5108(i), the information management requirements of 
the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) do not apply to 
this final rule.

H. Regulation Identifier Number (RIN)

    A regulation identifier number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each year. The RIN number contained in the heading 
of this document may be used to cross-reference this action with the 
Unified Agenda.

I. Environmental Assessment

    The National Environmental Policy Act of 1969 (NEPA), as amended 
(42 U.S.C. 4321-4347), requires Federal agencies to consider the 
consequences of major Federal actions and prepare a detailed statement 
on actions significantly affecting the quality of the human 
environment. There are no significant environmental impacts associated 
with this final rule. PHMSA is amending the requirements in the 
Hazardous Materials Regulations on the registration and fee assessment 
program for persons who transport or offer for transportation certain 
categories and quantities of hazardous materials. The increase in 
registration fees will provide additional funding for the HMEP program 
to help mitigate the safety and environmental consequences of hazardous 
materials transportation accidents.

J. Privacy Act

    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comments (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit 
http://www.regulations.gov.

List of Subjects in 49 CFR Part 107

    Administrative practice and procedure, Hazardous materials 
transportation, Penalties, Reporting and recordkeeping requirements.

0
In consideration of the foregoing, 49 CFR Part 107 is amended as 
follows:

PART 107--HAZARDOUS MATERIALS PROGRAM PROCEDURES

0
1. The authority citation for part 107 is revised to read as follows:

    Authority: 49 U.S.C. 5101-5128, 44701; Sec. 212-213, Pub. L. 
104-121, 110 Stat. 857; 49 CFR 1.45, 1.53.

0
2. In Sec.  107.612, revise paragraphs (a) and (b) to read as follows:

Sec.  107.612  Amount of fee.

    (a) For the registration year 2010-2011 and subsequent years, each 
person offering for transportation or transporting in commerce a 
material listed in Sec.  107.601(a) must pay an annual registration 
fee, as follows:
    (1) Small business. Each person that qualifies as a small business, 
under criteria specified in 13 CFR part 121 applicable to the North 
American Industry Classification System (NAICS) code that describes 
that person's primary commercial activity, must pay an annual 
registration fee of $250 and the processing fee required by paragraph 
(a)(4) of this section.
    (2) Not-for-profit organization. Each not-for-profit organization 
must pay an annual registration fee of $250 and the processing fee 
required by paragraph (a)(4) of this section. A not-for-profit 
organization is an organization exempt from taxation under 26 U.S.C. 
501(a).
    (3) Other than a small business or not-for-profit organization. 
Each person that does not meet the criteria specified in

[[Page 15620]]

paragraph (a)(1) or (a)(2) of this section must pay an annual 
registration fee of $2,575 and the processing fee required by paragraph 
(a)(4) of this section.
    (4) Processing fee. The processing fee is $25 for each registration 
statement filed. A single statement may be filed for one, two, or three 
registration years as provided in Sec.  107.616(c).
    (b) For registration years 2009-2010 and prior years, each person 
that offered for transportation or transported in commerce a material 
listed in Sec.  107.601(a) during that year must pay the annual 
registration fee, including the processing fee, specified under the 
requirements of this subchapter in effect for the specific registration 
year.
* * * * *

    Issued in Washington, DC, on March 24, under authority delegated 
in 49 CFR part 1.
Cynthia L. Quarterman,
Administrator.
[FR Doc. 2010-7035 Filed 3-29-10; 8:45 am]
BILLING CODE 4910-60-P