Document ID: PHMSA-2012-0260-0004
Agency: phmsa
Document Type: Proposed Rule
Title: Hazardous Materials: Special Permit and Approvals Standard Operating Procedures and Evaluation Process
Posted Date: 2014-08-12T04:00Z

[Federal Register Volume 79, Number 155 (Tuesday, August 12, 2014)]
[Proposed Rules]
[Pages 47047-47063]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-18925]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 105, 107, and 171

[Docket No. PHMSA-2012-0260 (HM-233E)]
RIN 2137-AE99

Hazardous Materials: Special Permit and Approvals Standard 
Operating Procedures and Evaluation Process

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

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: PHMSA is proposing to address certain matters identified in 
the Hazardous Materials Transportation Safety Act of 2012 related to 
the Office of Hazardous Materials Safety's Approvals and Permits 
Division. Specifically, we propose to revise the regulations to include 
the standard operating procedures and criteria used to evaluate 
applications for special permits and approvals. These proposed 
amendments do not change previously established special permit and 
approval policies. This rulemaking also proposes to provide clarity 
regarding what conditions need to be satisfied to promote completeness 
of the applications submitted. An application that contains the 
required information reduces processing delays that result from 
rejection, and further facilitates the transportation of hazardous 
materials in commerce while maintaining an appropriate level of safety.

DATES: Comments must be received by October 14, 2014. To the extent 
possible, PHMSA will consider late-filed comments as a final rule is 
developed.

ADDRESSES: You may submit comments by identification of the docket 
number (PHMSA-2012-0260 (HM-233E)) by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Fax: 1-202-493-2251.
     Mail: Docket Operations, U.S. Department of 
Transportation, West Building, Ground Floor, Room W12-140, Routing 
Symbol M-30, 1200 New Jersey Avenue, SE., Washington, DC 20590.
     Hand Delivery: To Docket Operations, Room W12-140 on the 
ground floor of the West Building, 1200 New Jersey Avenue, SE., 
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays.
    Instructions: All submissions must include the agency name and 
docket number for this notice at the beginning of the comment. All 
comments received will be posted without change to the Federal Docket 
Management System (FDMS), including any personal information.
    Docket: For access to the dockets to read background documents or 
comments received, go to http://www.regulations.gov or DOT's Docket 
Operations Office (see ADDRESSES).

FOR FURTHER INFORMATION CONTACT: Donald Burger, Office of Hazardous 
Materials Safety, Approvals and Permits Division, (202) 366-4535 or 
Eileen Edmonson, Office of Hazardous Materials Safety, Standards and 
Rulemaking Division, (202) 366-8553, Pipeline and Hazardous Materials 
Safety Administration (PHMSA), 1200 New Jersey Avenue SE., Washington, 
DC 20590.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Executive Summary
II. Background
    A. MAP-21
    B. Standard Operating Procedures
    C. Fitness
    D. Public Meetings
    i. PHMSA's Basis for Fitness Review
    ii. Data Accuracy
    iii. Streamline the Special Permit Review Process
    iv. Adjudication, Resolutions, and Denials
    v. Develop the Fitness Program Through the Rulemaking Process
    vi. Modal or Hazardous Material Regulatory Agencies and Other 
Country Competent Authorities
    E. Notice No. 12-5
III. Special Permit and Approval Standard Operating Procedures
    A. Completeness Phase
    B. Federal Register Publication
    i. Special Permit
    ii. Emergency Special Permit
    iii. Approval
    C. Evaluation Phase
    i. Special Permit
    ii. Emergency Special Permit
    iii. Approval
    D. Disposition Phase
    i. Special Permit
    ii. Approval
IV. Special Permit and Approval Application Evaluation Criteria
V. Miscellaneous Proposals
    i. Clarifying the Definitions for Special Permits and Approvals
    ii. Clarifying That An Approval Application is Subject to the 
HMR When Submitted to Other Agencies
VI. Summary Review of Proposed Amendments
VII. Regulatory Analyses and Notices
    A. Statutory/Legal Authority for this Rulemaking
    B. Executive Order 12866, 13563, and DOT Regulatory Policies and 
Procedures
    C. Executive Order 13132
    D. Executive Order 13175
    E. Regulatory Flexibility Act, Executive Order 13272, and DOT 
Procedures and Policies
    F. Paperwork Reduction Act
    G. Regulation Identifier Number (RIN)
    H. Unfunded Mandates Reform Act
    I. Environmental Assessment
    J. Privacy Act
    K. Executive Order 13609 and International Trade Analysis
VIII. List of Subjects

I. Executive Summary

    On July 6, 2012, the President signed the Moving Ahead for Progress 
in the 21st Century Act (MAP-21), which includes the Hazardous 
Materials Transportation Safety Improvement Act of 2012 (HMTSIA) as 
Title III of the statute. See Public Law 112-141, 126 Stat. 405, July 
6, 2012. Under Sec.  33012 of HMTSIA, Congress directed the U.S. 
Department of Transportation (Department or DOT) to issue a rulemaking 
to provide:
     Standard operating procedures (SOPs) to support the 
administration of the special permit and approval programs; and
     Objective criteria to support the evaluation of special 
permit and approval applications.
    In this NPRM, we are proposing to provide the public with notice 
and an opportunity to comment on the procedures PHMSA currently uses to 
support the administration of its special permits and approvals 
programs with the intent of eventually adding these procedures to a new 
Appendix A to Part 107, Subpart B of the 49 CFR. Incorporation of SOPs 
and objective criteria to support the evaluation of special permits and 
approvals accomplishes the mandate under Sec.  33012 of MAP-21.

[[Page 47048]]

    The benefits of this NPRM include: increasing the public's 
understanding of the special permit and approval application and 
renewal process, improving the quality of information and completeness 
of applications submitted, and improving application processing times. 
This NPRM does not impose any additional costs on industry. This 
proposed rule would affect only agency procedures; therefore, we assume 
no change in current costs or benefits.

II. Background

A. MAP-21

    To assist PHMSA with managing its special permit and approval 
programs, Federal hazardous materials (hazmat) transportation law (law) 
requires PHMSA to ``. . . issue regulations that establish--(1) 
standard operating procedures to support administration of the special 
permit and approval programs; and (2) objective criteria to support the 
evaluation of special permit and approval applications.'' See 49 U.S.C. 
33012(a)(1) and (a)(2). PHMSA established a work group in July 2012 to 
examine ways to streamline the fitness review process while maintaining 
an acceptable level of safety, and to define and determine the adequacy 
of criteria that should be used to initiate fitness reviews. As a 
result of this workgroup's efforts, PHMSA is proposing in this NPRM to 
add updated SOP and evaluation criteria we currently use to process 
special permit and approval applications into the Hazardous Materials 
Regulations (HMR; 49 CFR Parts 171-180).
    The HMR prescribe regulations for the transportation of hazardous 
materials in commerce. PHMSA issues variances from the HMR in the form 
of a ``special permit.'' It also provides written consent to perform a 
function that requires prior consent under the HMR in the form of an 
``approval.'' These variances are designed to accommodate innovation, 
provide consent, and allow alternatives that meet existing 
transportation safety standards and/or ensure hazardous materials 
transportation safety. Federal hazmat law directs the Department to 
determine if the actions specified in each application for a special 
permit establish a level of safety that meets or exceeds that already 
present in the HMR, or if not present in the HMR establish a level of 
safety that is consistent with the public's interest. PHMSA, through 
the HMR, applies these same conditions to the issuance of an approval. 
Due to the unique features that may exist in each application, PHMSA 
issues special permits and approvals on a case-by-case basis.
    The HMR currently define a special permit as ``a document issued by 
the Associate Administrator [for Hazardous Materials Safety, herein 
described as `Associate Administrator'], or other designated Department 
official, under the authority of 49 U.S.C. 5117 permitting a person to 
perform a function that is not otherwise permitted under'' the 
regulations ``or other regulations issued under 49 U.S.C. 5101 et seq. 
(e.g., Federal Motor Carrier Safety routing requirements).'' (See 49 
CFR 105.5, 107.1, and 171.8.) An approval is currently defined in the 
HMR as ``written consent from the Associate Administrator or other 
designated Department official, to perform a function that requires 
prior consent under'' the HMR. (See Sec.  171.8.) Applicants who apply 
for a special permit must do so in conformance with the requirements 
prescribed in Sec. Sec.  107.101 to 107.127. Applicants who apply for 
an approval must do so in conformance with the requirements prescribed 
in Sec. Sec.  107.401 to 107.404, and Sec. Sec.  107.701 to 107.717. In 
the following section, we describe the history of PHMSA's SOPs for its 
special permit and approval programs and the evaluation criteria we 
currently use to process special permit and approval applications.

B. Standard Operating Procedures

    In the mid-2000's, PHMSA, in conjunction with the DOT's Office of 
the Secretary, conducted an internal agency review of its special 
permit and approval program practices. This review indicated that some 
active special permit holders that were no longer in business had used 
their special permit in locations not designated in the application, 
changed company names and locations without informing the agency, or 
otherwise used their special permit in ways not authorized in the 
special permit. The Department determined that PHMSA's current 
practices for assessing the fitness of its special permit and approval 
holders needed improvement. During the mid and late 2000's, PHMSA 
experienced an increase in special permit and approval applications 
while it simultaneously revised its computer software for processing 
these applications.
    In 2009, PHMSA revised its procedures for processing and evaluating 
special permits and converted them into SOPs for its Special Permits 
Program. In 2011, PHMSA revised its SOPs for its Approvals Program. As 
a result of ongoing program evaluation, PHMSA has periodically updated 
these SOPs to include recommendations, refine its processes, increase 
uniformity, and respond to upgrades to its data management systems. 
Further, we discontinued the practice of allowing party status (also 
referred to as ``party-to'' status) to an applicable special permit to 
large associations, instead requiring each holder to apply separately 
for party status. Party status is granted to a person who intends to 
offer for transportation or transport a hazardous material, or perform 
an activity subject to the HMR, in the same manner as the original 
applicant. We have also issued several rulemakings to incorporate into 
the HMR special permits that are generally applicable and have a safe 
performance history. Although PHMSA has incorporated more special 
permits into the HMR in recent years, requiring individual persons to 
apply for party status on existing special permits has increased the 
number of special permit applications received and, thus, the time 
needed to process them. PHMSA receives approximately 3,000 special 
permit applications and approximately 20,000 approval applications 
annually.
    To avoid additional processing delays for the special permit and 
approvals programs, PHMSA has revised its SOPs to change how it manages 
incomplete applications from the practice of ``retaining them while 
requesting and waiting for missing information'' to ``rejecting 
incomplete applications.'' Applicants who would like to have their 
applications reconsidered must resubmit the entire application along 
with the requested missing information. PHMSA informs applicants in 
writing of the reason for the rejection and what information is missing 
from their applications. In the past, some individuals in receipt of 
rejected applications communicated to PHMSA that the materials they 
received did not explain how or exactly what was to be resubmitted, 
which led to more incomplete submissions and processing delays. PHMSA 
seeks comments on ways to improve the effectiveness of its 
communications and the completeness of applications it receives.
    If, according to the HMR, a special permit or approval application 
is complete but PHMSA requires an on-site review or additional 
information to make an appropriate determination, PHMSA may make this 
request within 30 days of its receipt of an application for a special 
permit, modification of a special permit, or party to a special permit, 
and within 15 days of PHMSA's receipt of an application for renewal of 
a special permit (see Sec.  107.133(a)). The applicant has 30 days from 
the day it

[[Page 47049]]

receives this request in writing to provide the information. If the 
applicant does not respond to a written request for additional 
information within 30 days of the date the request was received, PHMSA 
may deem the application incomplete and deny it. However, if the 
applicant responds in writing within the 30-day period requesting an 
additional 30 days within which it will gather the requested 
information, the Associate Administrator may grant the 30-day 
extension. Over the past year, PHMSA has received fewer complaints from 
applicants about this phase of the special permit and approval review 
processes.

C. Fitness

    In 1996, PHMSA amended the HMR so that it may [emphasis added] 
issue a special permit and/or approval upon finding that ``the 
applicant is fit to conduct the activity authorized'' by the special 
permit and/or approval, and the special permit's or approval's renewal 
or modifications. See Docket No. HM-207C, 61 FR 21084. We later revised 
these provisions on January 5, 2011, in a final rule, entitled 
``Hazardous Materials Transportation: Revisions of Special Permits 
Procedures,'' issued under Docket HM-233B (76 FR 454). The final rule 
clarified existing requirements in the special permits application 
procedures. It also required additional, more detailed information in 
each application so PHMSA could strengthen its oversight of the special 
permits program. Specifically, the final rule established regulations 
that:
     Authorized electronic service for all special permit and 
approval actions;
     Replaced the obsolete word ``exemption'' with ``special 
permit'' and removed language stating these terms were equivalent;
     Revised the requirements to submit an application for 
party-to status and to renew, modify, reconsider, and appeal a special 
permit;
     Revised the requirements to process, evaluate, modify, 
suspend, or terminate a special permit; and
     Provided applicants with an online application option to 
promote flexibility and reduce the paperwork burden on applicants.
    In addition, Sec.  107.113(f)(5) was revised in the Docket No. HM-
233B final rule to state that a fitness ``assessment may be based on 
information in the application, prior compliance history of the 
applicant, and other information available to the Associate 
Administrator.'' As a result of these activities, stakeholders 
expressed concerns regarding the fitness assessment process and 
requested a rulemaking with a notice and comment period to address how 
fitness is determined under the HMR.

D. Public Meetings

    On February 29, 2012, PHMSA hosted a public meeting at the 
Department's Washington, DC, headquarters. The goals of the meeting 
were to ascertain the concerns of special permit and approval 
stakeholders, examine what conditions may be used to successfully 
assess an applicant's ability to operate under a special permit or 
approval, solicit comments on past changes, and hear ideas regarding 
process improvement. Eighteen stakeholders spoke at the meeting. These 
stakeholders expressed interest in becoming involved in PHMSA's process 
to resolve special permit and approval processing concerns, but were 
especially concerned with the special permit process. Representatives 
from the following companies provided comments and/or asked questions:

 American Chemistry Council
 American Coatings Association
 Arrowhead Industrial Services
 Association of Hazmat Shippers
 Chlorine Institute
 Citizens for All Transit Chemical Contamination
 Council on Safe Transportation of Hazardous Articles, Inc. 
(COSTHA)
 Dangerous Goods Advisory Council
 Gases and Welding Distributors Association 
 Institute of Makers of Explosives
 Industrial Packaging Alliance of North America
 Labelmaster Services
 National Private Truck Council
 North American Transportation Consultants, Inc.
 Nuclear Information and Resource Service
 Praxair, Inc.
 Teledyne Consulting Group
 United Parcel Service

    You may review the meeting's transcript at ``http://regulations.gov'' under Docket No. PHMSA-2012-0260 (HM-233E). Key 
issues raised during the public meeting are summarized below.
    i. PHMSA's Basis for Fitness Review--Under Sec.  107.113(f)(5), the 
HMR authorize PHMSA to consider evidence of an applicant's fitness, 
i.e., the applicant's demonstrated and documented knowledge and 
capability to conduct the activity the special permit would authorize, 
when deciding whether to issue or deny an application. Most attendees 
at the meeting were concerned about what types of criteria would be 
used to determine fitness and if these criteria would fairly assess an 
applicant's ability to perform the tasks authorized in the special 
permit. Some attendees requested PHMSA spend less time assessing an 
applicant's fitness and more time evaluating the application for its 
safe (technical) merit, the assumption being that using a safe design 
would inherently be safe because of the user's knowledge of the tasks 
required in a special permit, regardless of the user's safe performance 
and/or incident history. PHMSA disagrees. The establishment of safe 
practices and procedures is an essential part of each special permit 
and approval. However, PHMSA and DOT's internal review and on-site 
inspections of how special permits were applied revealed in many 
instances that special permits were not being used in ways authorized 
in the special permit. Further, PHMSA found reliance on the 
requirements in the special permit alone was inadequate to determine an 
applicant's ability to carry out these tasks, who was performing the 
tasks, or where these tasks were being done. In addition, tasks and 
procedures requested in special permit and approval applications vary 
and must be considered on a case-by-case basis. As a result, PHMSA 
needed additional information to determine the applicant's ability to 
satisfactorily complete required tasks. PHMSA revised its previous 
system for making these determinations to include a fitness requirement 
in the HMR in response to the March 4, 1995 Presidential Memorandum 
entitled ``Regulatory Reinvention Initiative,'' which directed the 
federal government, in part, to partner with people and other federal 
agencies ``to issue sensible regulations that impose the least burden 
without sacrificing rational and necessary protections.'' PHMSA then 
developed SOPs in guidance documents, as mentioned earlier in this 
preamble, to further explain how PHMSA managed the fitness review 
process. In this NPRM, PHMSA proposes to revise its SOPs to clarify 
what phases in the review process are used based on the type of 
application submitted.
    Several attendees suggested that fitness assessments should be 
based only on a risk evaluation of number and type of incidents, 
reports, approvals, independent inspection agencies, and the high 
degree of risk of the activities requested in each special permit 
application. Many supported limiting the assessment criteria to those 
incidents involving death and serious injury, stating that this 
position is consistent with the original intent of PHMSA's fitness 
assessment

[[Page 47050]]

requirements. One attendee suggested different criteria should be 
established for large and small operators due to the differences in 
their exposure to events that can cause an incident, and stated the 
``one-size fits all'' approach PHMSA is proposing is inappropriate and 
unfair. A few attendees recommended that fitness reviews be based on 
the ability of the applicant to perform the functions requested in the 
special permit or approval application. Another attendee recommended an 
applicant's fitness be evaluated for new or alternative operations only 
because the successful performance of these tasks is ``heavily 
dependent'' on the applicant's ability to perform them. Cynthia Hilton, 
Institute of Makers of Explosives, recommended that PHMSA use the 
following procedural and fitness criteria to make this assessment: (1) 
``a standardized look-back period of four years. . .the typical 
duration of a special permit, (2) fitness reviews not . . . triggered 
by the filing of an application but periodically performed'' and 
designed to ``expire after four years unless revoked or suspended due 
to subsequent findings of imminent hazard or a pattern of knowing or 
willful non-compliance,'' (3) when processing applications to make 
determinations of fitness ``start with a presumption of applicant 
fitness rather than . . . a position that an applicant must establish 
fitness,'' (4) combine evaluation tasks, (5) undertake ``site visits by 
Field Operations only . . . where fitness cannot be demonstrated by 
some other means,'' (6) do not select an applicant ``for additional 
scrutiny solely because they're moving a Table 1 [Sec.  172.504(e)] 
material,'' and (7) do not include ``errors on shipping papers, minor 
leaks in packaging, inadequacies in test reports'' when determining ``a 
finding of unfitness'' but do include ``a flagrant pattern of serious 
violations affecting safety. . . .''
    PHMSA agrees with many of the recommendations of these attendees. 
In this NPRM, PHMSA has revised its SOPs to base its fitness evaluation 
and safety profile reviews on the ability of each applicant to perform 
the tasks authorized in a special permit or approval. Further, PHMSA's 
approach for detecting applicant incidents and/or violations is 
designed to detect flagrant patterns and serious violations in the four 
years prior to submitting an application. In addition, applicants must 
have two or more incidents to trigger a review; they are not subject to 
review just because they are moving a Sec.  172.504(e) Table 1 
material. To the extent possible, PHMSA has combined evaluation tasks. 
For example, the automatic and technical reviews are performed 
concurrently. However, PHMSA also disagrees with some of the attendees' 
suggestions. For example, PHMSA disagrees with the attendee's 
suggestion that an applicant's fitness be evaluated for new or 
alternative operations only. Historically, PHMSA has found an 
applicant's pattern of minor violations could reveal larger problems, 
such as with training. PHMSA initially processes each application 
automatically by computer. As a result, this process does not presume 
innocence or guilt and cannot be limited to a six-month time period 
before another automatic review is done. However, after the automatic 
review is complete, for new applications PHMSA may consider only 
fitness data since the last fitness review. For new companies with no 
performance history, PHMSA will assess their training records. In 
addition, companies that handle special permit and approval packagings 
without opening them typically may reship these packaging when in 
conformance with the terms of the special permit or approval. PHMSA 
requests public comment on how to assess hazmat manufacturers that do 
not ship.
    PHMSA finds the suggestion to ignore minor leaks in packaging may 
not be inconsequential depending on the risks contained in the 
material, and, therefore, may not eliminate this as a consideration in 
a fitness evaluation. Regarding the elimination of on-site visits or 
performing such visits as a last resort, PHMSA disagrees because an on-
site review is part of the process to determine if a fitness 
determination is accurate. PHMSA has found some information can only be 
determined by visiting the applicant at its facility because the agency 
or appropriate Department official is in the best position to determine 
what packagings and/or operations requested in the application are safe 
under the HMR and what appropriate operational controls or limitations 
may be needed. On-site visits are also used to clear up 
misunderstandings or inaccuracies. A special permit provides an 
equivalent level of safety or consistency with the public interest in a 
manner that will adequately protect against the risks to life and 
property inherent in transporting hazardous materials. A negative 
fitness determination may suggest that an applicant has not 
demonstrated or documented its knowledge and capabilities to assure 
that it has an appropriate level of safety and performance. Although 
the automated review PHMSA is proposing does not include variations 
weighted for company size, based on our history with making fitness 
determinations, PHMSA believes the SOPs proposed in this NPRM will be 
effective in determining the safety of the tasks requested in the 
application and the applicant's ability to perform these tasks safely 
under the HMR.
    One attendee recommended PHMSA perform fitness determinations of 
each special permit holder every one or two years, or on the basis of 
another determining factor, so that holders will know when a review is 
coming and, presumably, can plan for it accordingly. PHMSA disagrees as 
it conducts reviews for new or renewal applicants at the time of 
application. Further, PHMSA does not have sufficient resources or funds 
to perform this task.
    One attendee suggested fitness evaluations include determining if 
employees are hazmat trained in conformance with 49 CFR Part 172, 
Subpart F, are able to demonstrate that they can follow the 
requirements authorized under the special permit and HMR, and perform 
their assigned tasks. This attendee also recommended the fitness 
evaluation include determining if the applicant has a quality assurance 
program. Another attendee suggested PHMSA use the fitness review 
process to ensure the applicant is properly registered under PHMSA's 
Hazardous Materials Registration program prescribed in 49 CFR Part 107, 
Subpart G. PHMSA agrees. Each applicant's registration, if required, 
will be assessed during the safety profile review, and hazmat training 
will be assessed during the on-site inspection, if one is conducted.
    One attendee suggested applicants requesting party-to status for an 
existing special permit be excepted from a fitness evaluation because 
they will be manufacturing the same package that is successfully 
manufactured by others already party to that special permit. PHMSA 
disagrees. A fitness review is different from a safety equivalency 
evaluation. When an applicant applies for party status to an existing 
special permit, the technical review is not repeated since PHMSA has 
already determined what provisions in the special permit will provide 
an adequate level of safety. However, PHMSA has found historically that 
applicants vary in their ability to perform the tasks required in a 
special permit and must be individually assessed to ensure the safe 
execution of the special permit.
    One attendee asked if an applicant has more than one location, will 
PHMSA perform a fitness assessment on each individual location or will 
a single

[[Page 47051]]

location be used to determine the assessment for the entire company. 
PHMSA will review companies with multiple locations as one 
organization, placing an emphasis on its examination of the company's 
locations where the requested actions and/or processes are being 
performed. If deficiencies are noted, it is the company's 
responsibility to correct these deficiencies throughout its 
organization.
    ii. Data Accuracy--PHMSA uses its own incident history and 
compliance information as well as that from other sources, e.g., 
federal and state agencies, to assist in determining which applicant is 
subject to a fitness assessment. Some attendees stated that this 
information is either inaccurate or reflects incidents that do not 
correspond with special permit performance, such as technical errors on 
shipping papers, minor leaks, or inadequacies in test reports. Some 
attendees questioned the accuracy of information in other agencies' 
databases, and how these inaccuracies may affect PHMSA's use of this 
information when determining if an applicant will be subject to a 
fitness assessment. Stakeholders also questioned if using data not 
intended for PHMSA's purposes could lead to inaccurate determinations. 
Other attendees were concerned about the age of the incidents in the 
database and whether companies with recorded incidents had corrected 
problems. One attendee suggested PHMSA use the Federal Motor Carrier 
Safety Administration's (FMCSA) Compliance, Safety, and Accountability 
(CSA) program data as a more accurate example of information that 
represents a 6-month time frame. If PHMSA did use older information, 
one attendee suggested it use a fixed time period. Robyn Heald, 
Chlorine Institute, stated ``an applicant's capability can best be 
judged by its past and current performance and compliance with the 
current regulations. PHMSA should continue to review an applicant's 
level of fitness in cases of new or alternative operations prior to 
considering approval. Based on the background PHMSA provided,. . . it 
appears that when all is said and done the majority of applicants are 
determined to be fit.''
    PHMSA enters the applicant's information into the Hazmat 
Intelligence Portal (HIP), a web-based application that provides an 
integrated information source to identify hazardous materials safety 
trends through the analysis of incident and accident information. HIP 
incorporates data from the Hazardous Materials Information System 
(HMIS), which maintains and provides access to comprehensive 
information on hazardous materials incidents, special permits and 
approvals, enforcement actions, and other elements that support PHMSA's 
regulatory program. HIP also incorporates data from FMCSA's Safety 
Fitness Electronic Records (SAFER) System to evaluate an applicant's 
fitness, which provides company safety data and related services to the 
industry and public. This information is readily available through 
PHMSA's database search and FMCSA's portal system and SAFER. These 
databases only provide triggers for a safety review. Determinations are 
made only after a safety profile review or on-site inspection is 
complete. At this time, PHMSA has determined that less than one percent 
of special permit applications are found unfit.
    Many sources for this information are self-reporting and vary on 
the type and quantity of information collected. As a result, the data 
collected may contain errors or inconsistencies, such as reporting 
multiple spills from one packaging in one incident as separate 
incidents, reporting the same type of event differently, or providing 
gathered data that may be too dissimilar to provide an adequate 
comparison. We know some information from other databases used in HIP 
does not meet all the conditions in PHMSA's special permit and approval 
programs but has merit as a tool to show areas where potential problems 
may exist. PHMSA normalizes this data during the safety profile review 
by contacting the applicant to obtain the number of hazardous materials 
shipments and the applicant's hazardous materials incident ratio. PHMSA 
or the Operating Administration (OA) also evaluate incident reports 
during the safety profile review to determine if any incidents are 
attributable to the applicant or a package, or if the incident reports 
contain errors. In this NPRM, PHMSA is reducing the number of incident 
categories that trigger a review from five to three, focusing on death 
and injury and high-consequence incidents only. PHMSA is removing low-
level incident data from its fitness determination process. In 
addition, triggers have been raised by 50 percent in two of the 
categories. PHMSA notes that errors in other agency databases must be 
corrected by contacting the agency or authority in charge of that 
database directly. PHMSA has no authority to change their information. 
However, we are always trying to improve the quality of our data and 
invite public comment on how to improve this information. Specifically, 
PHMSA requests public information on how long it takes applicants to 
get incorrect incident information recorded in databases corrected.
    iii. Streamline the Special Permit Review Process--As a part of the 
HMTSIA directive to issue SOPs that support how the special permit and 
approval programs are administered, PHMSA is looking at ways to improve 
how applicants' submissions are processed. The majority of attendees 
supported PHMSA's efforts to streamline its fitness assessment 
procedures, but differed in how they believed results should be 
achieved. One attendee indicated that the length of time PHMSA takes to 
process and issue a special permit or approval adversely impacts the 
competition of U.S. industry, and recommended that all evaluation 
criteria be risk-based. Another attendee suggested PHMSA would make the 
special permit and approval application process more effective and 
efficient if it differentiated between how it processes applications 
concerning packaging design and those concerning operations. This 
attendee recommended applications concerning packaging design should 
concern only the merits of the design itself, because a safer, better 
performing design stands on its own merit and should not be affected by 
an applicant's performance history. One attendee suggested the review 
process would be more efficient if PHMSA checked to determine if an 
applicant is hazmat registered, if applicable, under PHMSA's program 
specified in Subpart G of 49 CFR Part 107 (Registration of Persons Who 
Offer or Transport Hazardous Materials).
    PHMSA is continually improving its database capabilities, and in 
this NPRM is restructuring its fitness program to increase efficiency. 
To capture faulty behaviors that may prevent the safe transportation of 
hazardous materials in commerce, PHMSA applies the same fitness 
criteria to hazmat packaging designs and operations. However, this 
process cannot consider all impacts. PHMSA relies on the expertise of 
the modal agencies to clarify the risks associated with each material 
and procedure the applicant requests for use in a specific 
transportation mode. PHMSA also shares its databases with the modal and 
other hazmat-related agencies to run in their own programs for their 
use to alert them to potential problem areas. PHMSA proposes in this 
NPRM to use information generated four years prior to submission of the 
application and to limit its information to exclude lessor incidents. 
PHMSA believes limiting the fitness review to a fixed time period and 
excluding lessor

[[Page 47052]]

incidents will improve the timeliness of its review process. FMCSA uses 
information generated in the last 24 months of motor carrier data. 
PHMSA also seeks public comment for ways to improve the processing of 
its special permit and approval application processes, and to improve 
the clarity of its communications with the applicants to ensure they 
know how, where, and what type of information to submit to improve 
PHMSA or the OA's processing of their applications.
    iv. Adjudication, Resolutions, and Denials--PHMSA is proposing in 
this NPRM to clarify its process for issuing adjudications, 
resolutions, and denials to include determinations of an applicant's 
fitness. Several attendees were concerned with how PHMSA will 
adjudicate, resolve, or deny its determinations of special permit 
applicants as unfit. One attendee suggested that PHMSA not deny an 
application for a single criterion unless there is an imminent hazard. 
This same attendee also requested that PHMSA create a process where an 
applicant can show cause why the agency should not revoke, suspend, or 
deny the application. Another suggestion was for PHMSA to give 
applicants a corrective action plan and an opportunity to perform in 
compliance with the HMR for six months, similar to a type of probation.
    By proposing to limit its special permit and approval review 
processes to eliminate lower level risks, all applicants are presumed 
fit unless a minimum level of fitness criteria indicates the 
application has triggered additional review. Further, all denials are 
based on on-site inspections or modal criteria. PHMSA's reconsideration 
process allows applicants to provide corrective actions to document 
compliance following a denial. Problems with recordkeeping to keep 
applications accurate and intact require that PHMSA requests each 
applicant to submit the entire application again, including any missing 
or requested information, for a denied or rejected application to be 
reconsidered. PHMSA requests public comment on how this process may be 
improved, and if letters requesting additional information clearly 
describe what information is needed to make the application complete 
and the process for resubmission.
    v. Develop the Fitness Program Through the Rulemaking Process--As 
mentioned earlier in this preamble, the HMR have required PHMSA to 
review an applicant's fitness to perform the tasks requested in a 
special permit or approval application since 1996. In this NPRM, PHMSA 
proposes to promote clarity by explaining in the SOPs the factors the 
agency uses to conduct a fitness review.
    Most attendees requested that PHMSA issue a notice and comment 
rulemaking on its proposal to incorporate SOPs and fitness criteria 
into the HMR for processing special permits. This rulemaking satisfies 
that request. Another attendee expressed the belief that incorporating 
the SOPs and fitness criteria through a rulemaking would promote 
greater accountability and transparency, as well as encourage HMR 
compliance. PHMSA agrees, and for several years has undertaken many 
rulemaking projects to incorporate special permits and approvals with a 
safe performance history and tasks with general applicability into the 
HMR. Once special permits and approvals are incorporated into the HMR, 
their fitness will be evaluated with all other HMR regulations based on 
the percentage of incidents. In addition, PHSMA believes that by 
clarifying how it proposes to process these applications through this 
NPRM, applicants will be able to substantially reduce the processing 
times for their applications.
    Additional attendees indicated that incorporating an elaborate 
review system into the HMR for assessing special permit applications 
would be extremely difficult to apply to the wide range of applicants. 
PHMSA agrees that a cumbersome review system is not beneficial, and 
therefore is proposing to incorporate a more straightforward, user-
friendly review system in this NPRM. Attendees also requested that 
PHMSA limit withholding special permits except in those cases involving 
egregious violations or willful negligence. PHMSA disagrees. As stated 
earlier in this preamble, historically PHMSA has found an applicant's 
pattern of minor violations may reveal larger problems that could 
adversely affect transportation safety.
    vi. Modal or Hazardous Material Regulatory Agencies and Other 
Country Competent Authorities--When appropriate and based on current 
agreements between the OAs, PHMSA coordinates the special permit and 
approval applications it receives with the applicable modal (e.g., 
Federal Aviation Administration (FAA), Federal Motor Carrier Safety 
Administration (FMCSA), Federal Railroad Administration (FRA), or U.S. 
Coast Guard (USCG)) or hazardous material regulatory agencies (e.g., 
International Atomic Energy Agency (IAEA), Nuclear Regulatory 
Commission (NRC), Department of Health and Human Services Centers for 
Disease Control and Prevention (CDC), etc.). By coordinating review of 
special permit and approval applications with the appropriate subject-
matter expert or experts, PHMSA better ensures safe performance of the 
tasks requested in the application and improves efficiency through the 
sharing of information. Further, the HMR permit, in various sections, 
some federal agencies limited authority to directly issue certain types 
of approvals because of the proven safety of the type of action and/or 
process requested in the approval, and the subject matter expertise 
each agency can provide regarding hazardous materials transportation. 
This is discussed in greater detail later in this preamble. Approvals 
issued by authorized federal agencies under the HMR are independent 
actions by these agencies; however, PHMSA may be asked to review such 
approvals. It should be noted that these agencies are not subject to 
the actions PHMSA is required to perform under this proposed 
rulemaking, but may choose to do so. In addition, PHMSA typically 
acknowledges hazardous materials approvals issued by competent 
authorities of other countries.
    Attendees offered varied positions on how PHMSA should coordinate 
with other modal and international agencies. One attendee indicated 
that coordination with other modal agencies would streamline the 
fitness assessment process. Another attendee questioned the necessity 
and costs incurred by other modal agencies to provide PHMSA with their 
incident information. Two attendees requested that PHMSA accept and 
recognize similar hazardous materials transportation relief granted by 
other competent authorities, but did not suggest how PHMSA would make 
this determination. One attendee requested that PHMSA not allow 
Department modal agencies to use PHMSA's fitness procedures to impose 
more stringent fitness requirements than already exist in their modal 
regulations, and that PHMSA should not use the fitness assessment 
process to impose its regulations on the modal agencies as to whom is a 
fit carrier.

E. Notice No. 12-5

    On July 5, 2012, PHMSA issued a notice to clarify and provide 
further guidance on its policy of conducting initial fitness reviews of 
applicants for classification approvals under Docket No. PHMSA-2012-
0059; Notice No. 12-5 (77 FR 39798). In the notice, PHMSA established 
that it will no longer carry out Initial Fitness Reviews (IFR) as part 
of the process for classification approvals, including those for 
fireworks,

[[Page 47053]]

explosives, organic peroxides, and self-reactive materials. PHMSA has 
found that the use of available agency information in the HIP and FMCSA 
SAFER databases is focused on transportation and does not adequately 
indicate a company's capability to manufacture the approved product in 
conformance with the application submitted to PHMSA. Therefore, PHMSA 
will continue to review the fitness of applicants for classification 
approvals through application evaluation, inspection, oversight, and 
intelligence received from PHMSA and/or another OA (e.g., FRA, FAA, 
FMCSA, and USCG).

III. Special Permit and Approval Standard Operating Procedures

    The hazardous materials community is a leader in developing new 
materials, technologies, and innovative ways of moving materials. 
Because not every transportation situation can be anticipated and built 
into the regulations, special permits and approvals enable the 
hazardous materials industry to quickly, effectively, and safely 
integrate new products, technologies, and procedures into production 
and transportation. Before they are authorized by this agency, the 
applicant must prove that the relief requested is of a safety level 
that is at least equivalent to that provided in the HMR, or 
demonstrates an alternative consistent with the public interest that 
will adequately protect against the risks to life and property inherent 
in the transportation of hazardous materials. Further, unlike 
approvals, special permits can occasionally have hundreds of party 
status holders. As mentioned earlier in this preamble, party status is 
granted to a person who intends to offer for transportation or 
transport a hazardous material, or perform an activity subject to the 
HMR, in the same manner as the original applicant. Historically, PHMSA 
has found that the new methods introduced in special permits and 
approvals promote increased transportation efficiency and productivity, 
and help to ensure our nation's global competitiveness.
    Special permits and approvals also reduce the volume and complexity 
of the HMR by addressing unique or infrequent transportation situations 
that would be difficult to accommodate in regulations intended for use 
by a wide range of shippers and carriers. The discussion below provides 
an overview of the existing procedures involved in the processing of 
special permit and approval applications, as well as their 
implementation.
    PHMSA's Approvals and Permits Division manages special permit and 
approval application processing, application completeness, and 
coordination of their technical and modal agency reviews. This Division 
also processes modifications to, suspensions of, and terminations of 
special permits and approvals. By proposing to include its SOPs into 
the HMR, it is the goal of the Approvals and Permits Division to 
fulfill the requirements of MAP-21 and improve each applicant's 
understanding of the special permits and approvals application process.
    The SOPs for the administration of the Approvals and Permits 
Program are summarized below. These procedures support the timely and 
accurate processing of approvals and special permits, including New and 
Modification special permit applications (Sec.  107.105), Renewals 
(Sec.  107.109), Party Status (Sec.  107.107), as well as New, Renewal, 
or Modification approval applications (Sec. Sec.  107.705 and 107.709).
    PHMSA assesses all special permit and approval applications in four 
phases, which it calls the ``Application Review Process.'' We describe 
these phases--Completeness, Federal Register Publication, Evaluation, 
and Disposition--in greater detail in sections A through D that follow. 
PHMSA may reject an application if it is incomplete or insufficient 
(i.e., it does not conform to the requirements of the applicable 
subpart). Further, PHMSA will process reconsiderations and appeals in 
the same manner that the HMR require for new applications. Specific 
practices for each may be found in the Approvals and Permits guides 
posted on the PHMSA Web page at ``http://www.phmsa.dot.gov/hazmat/regs/
sp-a''.
    A. Completeness Phase. During the completeness review, PHMSA 
determines if the application contains all of the information required 
in 49 CFR Part 107, and if this information is sufficient to determine 
the safety level of the relief the applicant is requesting. For a 
special permit, the purpose of the completeness phase is to determine 
if the applicant submitted the information required by Sec. Sec.  
107.105, 107.107, or 107.109, and as provided in Sec.  107.113(f). 
PHMSA then must analyze this information to assess whether the action 
and/or process the applicant requests is sufficient to provide a level 
of safety equal to that of the HMR, or demonstrates an alternative 
consistent with the public interest that will adequately protect 
against the risks to life and property inherent in the transportation 
of hazardous materials, in conformance with Sec.  107.105(d)(3). For an 
emergency special permit, the purpose of the completeness phase is to 
determine if the applicant submitted the information required by Sec.  
107.117 to justify emergency status, as well as the full application 
required by Sec.  107.105, as provided in Sec.  107.117(d). The purpose 
of an approval's completeness phase is to determine if the applicant 
submitted the information required by Sec. Sec.  107.402 or 107.705 and 
as provided in Sec. Sec.  107.709.

B. Federal Register Publication

    i. Special Permit--When a special permit application is sufficient 
and complete, a summary of the application will be published in the 
Federal Register, as required by Sec.  107.113(j), for 30 days to allow 
for public comment.
    ii. Emergency Special Permit--Within 90 days of an emergency 
special permit being issued, the application will be published in the 
Federal Register, as required by Sec.  107.117(g), for 30 days to allow 
for public comment.
    iii. Approval--New approvals that are issued are not required to be 
published in the Federal Register; however, PHMSA will publish them on 
the PHMSA Web site.
    C. Evaluation Phase. During the evaluation phase, if the tasks or 
procedures requested in each special permit or approval application are 
determined to provide an equivalent level of safety to that required in 
the HMR or, if a required safety level does not exist, that they 
provide a level of safety that demonstrates an alternative consistent 
with the public interest that will adequately protect against the risks 
to life and property inherent in the transportation of hazardous 
materials. PHMSA also evaluates the applicant to determine its fitness 
to operate under a special permit or approval.
    If PHMSA completes its initial evaluation and determines that the 
tasks or procedures the applicant requests are mode specific, precedent 
setting, or meet federal criteria for a ``significant economic 
impact,'' PHMSA coordinates the application's evaluation with the 
appropriate OA. PHMSA will also coordinate an application evaluation 
with an OA if the OA specifically requests participation. All other 
applications not meeting these criteria are evaluated within PHMSA. 
Whenever possible, coordination of an application occurs within an 
electronic system to maintain awareness of the document's location as 
well as version control.
    As part of the evaluation phase, PHMSA and/or the OA conducts 
technical analyses of the risks that may

[[Page 47054]]

be associated with transporting a hazardous material using the proposed 
packaging or operation in the specific mode or modes of transportation 
the applicant is requesting. Some of the research areas considered 
include package integrity; risk assessment, management and mitigation; 
emerging technologies; and human factors that may affect safety. In 
addition, an OA evaluation provides mode-specific feedback, 
particularly regarding operational controls, and provides mode-specific 
information and recommendations concerning task and/or procedure 
equivalency with the HMR and the applicant's fitness. PHMSA also 
coordinates discussions with an OA to resolve any differences 
concerning these assessments. Based on these analyses, the OHMS 
Associate Administrator (AA), or the approving official to which the AA 
has delegated this responsibility, such as an authorized OA official, 
determines whether the requested proposal meets the required criteria. 
If the application meets the criteria, the Approvals and Permits 
Division staff or delegated approving official issues the special 
permit or approval, along with the agency-specified modifications, if 
applicable, and documents the results of the evaluation and cause for 
approval. If the AA or delegated approving official determines that the 
application does not meet the required criteria, the Approvals and 
Permits Division staff and, if the application was coordinated, the OA, 
documents the results of the evaluation and the cause for denial.
    i. Special Permit--The purpose of the evaluation phase is to: (1) 
Determine if the application is complete and the actions or processes 
it requests demonstrate a level of safety at least equal to the HMR or 
that is consistent with the public interest, and (2) assess if an 
applicant is fit to operate under a special permit, as provided in 
Sec. Sec.  107.113(f)(4) and 107.113(f)(5). Applicants applying for a 
renewal or party status to an existing authorized special permit are 
not subject to an evaluation of the tasks requested in the special 
permit, but are subject to a fitness review to determine the 
applicant's ability to carry out these tasks.
    ii. Emergency Special Permit--The purpose of the evaluation phase 
is to determine if the application is complete and in conformance with 
the requirements prescribed in Sec.  107.117, and if an applicant is 
fit to operate under a special permit, as provided in Sec. Sec.  
107.113(f)(4) and 107.113(f)(5). When PHMSA finds that an emergency 
basis does exist for the issuance of a special permit, in the same 
manner as with a non-emergency special permit, PHMSA will determine a 
schedule responsive to the timing needs and/or associated risks of the 
emergency. If PHMSA finds that an emergency does not exist, the 
application will be processed in the same manner as a non-emergency 
special permit.
    iii. Approval--The purpose of the evaluation phase is to determine 
if the application is complete and: (1) If an approval is necessary for 
the type of activity the applicant wants to perform; (2) if the 
activity requested is safe and complies with the regulations for its 
specific approvals category; and (3) if the applicant or registered 
user is qualified to hold and successfully carry out the tasks 
prescribed in an approval, as provided in Sec. Sec.  107.402, 
107.709(d)(4) or 107.709(d)(5).
    D. Disposition Phase. PHMSA issues the following final dispositions 
to the applicant in writing: (1) ``Reject,'' if the application is 
incomplete or insufficient to determine an equal level of safety or 
demonstrate an alternative consistent with the public interest that 
will adequately protect against the risks to life and property inherent 
in the transportation of hazardous materials; (2) ``Deny,'' if the 
application does not provide an equal level of safety or the applicant 
is not fit to operate under a special permit or approval; or (3) 
``Issue,'' if the application is approved and the special permit or 
approval is issued, with appropriate guidance for its safe operation if 
applicable.
    i. Special Permit--Once a decision has been made to issue or deny a 
special permit, the applicant will be notified in writing with the 
Document or Denial Letter, as provided in Sec.  107.113(g). If PHMSA 
denies an application for a special permit, the applicant may request 
reconsideration as provided in Sec.  107.123 and, if PHMSA denies the 
reconsideration, the applicant may appeal, as provided in Sec.  
107.125. Reconsiderations and appeals must state, in detail, any errors 
in the denial, provide additional information that may impact the 
disposition, and state the modification of the final decision sought. 
PHMSA will process special permit reconsiderations and appeals in the 
same manner that the HMR require for new applications.
    ii. Approval--Once a decision has been made to issue or deny an 
approval, the applicant will be notified in writing with the Approval 
or Denial Letter as provided in Sec. Sec.  107.403 and 107.709(f). If 
PHMSA denies an application for an approval, the applicant may request 
reconsideration as provided in Sec.  107.715 and, if the 
reconsideration is denied, may appeal as provided in Sec.  107.717. 
Reconsiderations and appeals must state, in detail, any errors in the 
denial, provide additional information that may impact the disposition, 
and state the modification of the final decision sought. PHMSA will 
process approval reconsiderations and appeals in the same manner that 
the HMR require for new applications.

IV. Special Permit and Approval Application Evaluation Criteria

    PHMSA currently uses a variety of methods to assess the safety 
level of each applicant's request and the applicant's fitness. These 
include a detailed technical review of the information in each 
application, telephone and/or in-person interviews with the applicants 
or their representative, and/or inspections. PHMSA also uses incident 
reports received from industry, safety and performance data from other 
federal, state, and local agencies, and information from scientific and 
technical handbooks, journals, and texts.
    As mentioned earlier in this preamble, to fulfill this assessment 
responsibility, PHMSA coordinates the review of special permit and 
approval applications with the appropriate OA if the tasks requested in 
the application meet specific criteria, or if the OA specifically 
requests participation. The OA's review the application materials, 
conduct a technical evaluation, and provide their comments and 
recommendations, which may include recommendations for operational 
restrictions or limitations for the special permit. If an OA does not 
concur, the Project Officer works with that OA to resolve any issues. 
If the agency PHMSA or the HMR designates as responsible for making 
this determination finds that as a result of these analyses the 
requested proposal meets the safety conditions prescribed in the HMR, 
it documents the results of the evaluation and advances the application 
for further processing; otherwise it documents the results of the 
evaluation and the cause for denial.
    PHMSA's Field Operations Division and/or the appropriate OA are 
responsible for conducting HMR compliance inspections and 
investigations. The Field Operations Division is also responsible for 
conducting safety profile reviews and determining an applicant's 
fitness following the safety profile review. Similar to the initial 
review process of a special permit or approval application, PHMSA 
coordinates special permit and approval safety profile reviews and 
fitness determinations with the

[[Page 47055]]

appropriate OA for its subject-matter expertise and to improve process 
efficacy. The Field Operations Division or OA may recommend audits of 
the applicant's operations when determining the applicant's fitness. 
The Field Operations Division is also responsible for taking 
enforcement actions for violations of the HMR (such as issuing warning 
letters and tickets, and recommending civil and criminal penalties), 
and providing training.
    Prior to 2010, PHMSA's methods for evaluating special permits and 
approval applicants did not allow us to easily assess the fitness of 
all parties authorized to use a special permit, such as parties to 
special permits issued to large organizations like industry groups and 
associations for the use of their members, single holders with multiple 
facility locations, or new or smaller businesses with little or no 
hazmat incident or field inspection histories. Without this 
information, PHMSA principally relied on the safe practices inherent in 
each special permit to maintain the safety of the hazardous materials 
transported under their authorization. An internal review found this 
method to be insufficient to ensure public safety and determine an 
applicant's fitness. As a result, PHMSA no longer issues special 
permits to industry associations and limits a special permit's scope to 
a specific location.
    Since 2010, PHMSA has conducted approximately 12,250 special permit 
fitness evaluations. The following lists the number of applications 
PHMSA denied over the last four years:

 2010: 126
 2011: 429
 2012: 119
 2013: 42.

    As of June 20, 2013, these include applications PHMSA denied for 
being technically unjustified and for applicants PHMSA denied for being 
unfit.

    Since 2010, PHMSA has conducted approximately 105,000 approval 
fitness evaluations, and denied the following approval applications, 
listed by type and year.

                        Table 1--Denied Approvals
                          [Date Run: 6/21/2013]
------------------------------------------------------------------------
                                                              Number of
     Effective calendar year             Approval type        approvals
------------------------------------------------------------------------
2010.............................  COMPETENT AUTHORITY.....           56
2010.............................  EXPLOSIVE...............          453
2010.............................  FIREWORK................        6,699
2010.............................  MANUFACTURER SYMBOL.....            1
2010.............................  REQUALIFIER.............            9
2011.............................  COMPETENT AUTHORITY.....           47
2011.............................  EXPLOSIVE...............           15
2011.............................  FIREWORK................        6,227
2011.............................  REQUALIFIER.............           12
2012.............................  COMPETENT AUTHORITY.....           37
2012.............................  EXPLOSIVE...............           70
2012.............................  FIREWORK................        4,656
2012.............................  REQUALIFIER.............            6
2013.............................  COMPETENT AUTHORITY.....           16
2013.............................  CYLINDER REQUALIFIER                1
                                    (VISUAL).
2013.............................  EXPLOSIVE...............           52
2013.............................  FIREWORK................        2,342
2013.............................  REQUALIFIER.............            3
------------------------------------------------------------------------

    Based on information gathered while evaluating special permit and 
approval applications and during field inspections, PHMSA determined 
there was a gap in our oversight and fitness review process. To address 
this concern and improve the overall efficiency of the fitness review, 
PHMSA established a Fitness Restructuring Team and assigned it the 
following tasks:
     Define what criteria PHMSA should use to trigger fitness 
reviews;
     Evaluate the adequacy of the current three-tier fitness 
review system; and
     Recommend processes that will improve efficiency and 
eliminate or prevent future fitness evaluation backlogs exceeding 60 
days.

This team also clarified and revised the fitness evaluation process to 
include these items:

     All applications receive an automated review;
     The technical review runs concurrently with the automated 
review;
     Use four years of data for all determinations;
     Conduct a safety profile review based on the triggers in 
Table 2, entitled ``Safety Profile Review and On-Site Inspection 
Triggers'' (which appears later in this preamble);
     Conduct an On-Site Inspection based on the triggers in 
Table 2; and
     Establish conditions under which an applicant may be 
capable of complying with the approval or special permit, and what 
safety deficiencies may cause a determination of ``Unfit.''
    The team developed a risk model that mandates the automated initial 
fitness review described in this paragraph. If an applicant does not 
pass, a safety profile review and/or on-site inspection, as 
appropriate, will be conducted by PHMSA's Field Operations Division 
staff or a modal partner. To ensure the correct company is assessed, 
each application is assigned a unique identifier (currently the 
organization's Data Universal Numbering System (DUNS) number). In this 
model, PHMSA uses automated processing to compare an applicant's 
performance history to our inspection data and make a determination 
based on the risk model shown in Table 2 below. This automated review 
flags entities that meet one or more of the triggers identified in 
Table 2. If any item in the left column of Table 2 is identified during 
the automated review, a safety profile review is triggered. If any item 
in the right column of Table 2 is identified during the automated 
review or safety profile review, an on-site inspection is triggered. If 
PHMSA previously

[[Page 47056]]

conducted a safety profile review of a company, the new safety profile 
review will start from the date after the last safety profile review 
was completed. After a review or inspection of an applicant is 
complete, including modal coordination if appropriate, PHMSA's Field 
Operations Division staff will submit a fitness memorandum with a 
recommendation of fit or unfit, with justification, to the Approvals 
and Permits Division. PHMSA believes, based on the results of this 
effort, that the revised SOPs it is proposing in this rulemaking will 
offer a more effective way to determine an applicant's potential 
fitness to operate under a special permit or approval.

     Table 2--Safety Profile Review and On-Site Inspection Triggers
------------------------------------------------------------------------
                                          Trigger for on-site inspection
   Trigger for safety profile review                    *
------------------------------------------------------------------------
Death or Injury:
    Sec.   172.504(e) Table 1            Any incident attributable to
     (Placarding) material AND Two or     the applicant or package (not
     more Incidents.                      driver error).
    Bulk AND Three or more Incidents.
Two or More Prior Enforcement Case       Insufficient Corrective Actions
 Referrals.                               on any enforcement case OR
                                          Independent Inspection Agency
                                          (IIA) Items (Except when
                                          reinspected with no violations
                                          noted).
Foreign Cylinder Manufacturer Or         Never Inspected under current
 Requalifier.                             criteria (2010).
------------------------------------------------------------------------
* The Fitness Coordinator assesses and applies these triggers.

V. Miscellaneous Proposals

i. Clarifying the Definitions for Special Permits and Approvals

    The current definitions in 49 CFR 105.5, 107.1, and 171.8 for 
``special permits'' and ``approvals'' state that other designated 
Department officials may also issue these documents under the HMR on 
behalf of PHMSA's Associate Administrator for Hazardous Materials 
Safety. This is not entirely correct. As stated earlier in this 
preamble, 49 U.S.C. 5117(a) of the Federal hazmat law gives the 
Secretary of Transportation the authority to issue, modify, or 
terminate a special permit that varies from 49 U.S.C. Chapter 51, 
entitled ``Transportation of Hazardous Materials,'' or a regulation 
prescribed under 49 U.S.C. 5103(b), 5104, 5110, or 5112. These 
regulations apply to a person who performs a function regulated by the 
Secretary under Sec.  5103(b)(1) in a way that achieves a safety level 
at least equal to the safety level required under 49 U.S.C. Chapter 51, 
or that is consistent with the public interest and chapter 51, if a 
required safety level does not exist. PHMSA is the administration 
within DOT that is primarily responsible for implementing the Federal 
hazmat law and, through the HMR, issuing special permits.
    Under the Federal hazmat law, the Secretary has general regulatory 
authority to issue competent authority approvals or to designate this 
authority to PHMSA's Associate Administrator. Since PHMSA's inception 
as the Materials Transportation Board, and later as the Research and 
Special Programs Administration, it has served as the Department's 
Competent Authority for the transportation of hazardous materials and, 
through the HMR, has issued approvals concerning the transportation of 
hazardous materials. In the HMR, PHMSA also delegates limited authority 
to other Department modal agencies to issue approvals in specific 
situations. To reflect this delegation of authority, PHMSA is proposing 
to revise the definitions in Sec. Sec.  105.5, 107.1, and 171.8 for 
``special permits'' and ``approvals'' to clarify that an approval and 
special permit may be issued only by the Associate Administrator, the 
Associate Administrator's designee, or as otherwise prescribed in the 
HMR. In addition, PHMSA proposes minor editorial revisions to the 
approval's definition in Sec.  105.5 to make it identical with the 
definition for an approval in Sec.  171.8.

ii. Clarifying That an Approval Application Is Subject to the HMR When 
Submitted to Other Agencies

    Through several sections in the HMR, PHMSA authorizes that certain 
types of approval requests can be submitted directly to other 
Department and federal agencies.\1\ Some of these agencies have 
reported the volume of approval applications they receive can be 
substantial. For example, the FRA reports that it processed 
approximately 5,500 One-Time Movement approvals in 2013 and expects to 
process a similar number in 2014. The FRA also issues approvals for 
hazardous materials in trailer-on-flat-car (TOFC) and container-on-
flat-car (COFC) service, alternative inspection procedures, and 
railcars with gross weight loads up to 286,000 pounds. Also, PHMSA has 
learned from our modal agency partners that approval applications they 
receive often are not complete and, therefore, do not comply with the 
requirements prescribed in Sec.  107.701. These agencies report 
processing incomplete approval applications is administratively 
burdensome and delays their issuance. PHMSA emphasizes that Sec.  
107.701(b) specifically states the procedures prescribed for approvals 
under Subpart H of Part 107 ``. . . are in addition to any requirements 
in subchapter C of this chapter applicable to a specific approval, 
registration or report.'' These procedures apply to all approval 
applications submitted to perform a function that requires prior 
consent under the HMR, regardless of the authorized agency. Section 
107.701(b) also states ``if compliance with both a specific requirement 
of subchapter C of this chapter and a procedure of this subpart is not 
possible, the specific requirement applies.'' However, approval 
registrations issued under 49 CFR Part 107, Subpart F (Registration of 
Cargo Tank and Cargo Tank Motor Vehicle Manufacturers, Assemblers, 
Repairers, Inspectors, Testers, and Design Certifying Engineers) and G 
(Registration of Persons Who Offer or Transport Hazardous Materials) 
are not subject to these procedures (see Sec.  107.701(c)). PHMSA 
invites the public to recommend ways to convey this requirement to 
applicants who apply for approvals through other agencies, as 
authorized under the HMR.
---------------------------------------------------------------------------

    \1\ See Sec. Sec.  173.301, 173.471, 174.50, 174.63, 175.9, 
179.13, 180.417, and 180.509.
---------------------------------------------------------------------------

VI. Summary Review of Proposed Amendments

    In this NPRM, PHMSA is proposing to revise Sec. Sec.  105.5, 107.1, 
107.113, 107.117, 107.709; add a new Appendix A to 49 CFR Part 107, 
entitled ``Standard Operating Procedures for Special Permits and 
Approvals;'' and revise Sec.  171.8 to incorporate its existing 
administrative procedures for

[[Page 47057]]

processing special permits and approval applications. These proposed 
actions are summarized below.

Sec.  105.5

    In Sec.  105.5, we propose to revise the definitions for 
``approval'' and ``special permit'' to clarify that an approval and 
special permit may be issued by the Associate Administrator, the 
Associate Administrator's designee, or as otherwise prescribed in the 
HMR.

Sec.  107.1

    In Sec.  107.1, we propose to revise the definitions for 
``approval'' and ``special permit'' to clarify that an approval and 
special permit may be issued by the Associate Administrator, the 
Associate Administrator's designee, or as otherwise prescribed in the 
HMR. In addition, we propose to add for clarity new definitions for 
``applicant fitness,'' ``fit or fitness,'' ``fitness coordinator,'' and 
``insufficient corrective action.''

Sec.  107.113

    In Sec.  107.113(a), we propose that the Associate Administrator 
will review all special permit applications in conformance with 
standard operating procedures proposed in new 49 CFR Part 107, Appendix 
A.

Sec.  107.117

    In Sec.  107.117(e), we propose that the Associate Administrator 
will review all emergency special permit applications in conformance 
with standard operating procedures proposed in new 49 CFR Part 107, 
Appendix A.

Sec.  107.709

    In Sec.  107.709(b), we propose that the Associate Administrator 
will review all approval applications in conformance with standard 
operating procedures proposed in new 49 CFR Part 107, Appendix A.

49 CFR Part 107, Appendix A

    In 49 CFR Part 107, we propose to add new Appendix A to incorporate 
PHMSA's existing Standard Operating Procedures for processing special 
permits and approval applications.

Sec.  171.8

    In Sec.  171.8, we propose to revise the definitions for 
``approval'' and ``special permit'' to clarify that an approval and 
special permit may be issued by the Associate Administrator, the 
Associate Administrator's designee, or as otherwise prescribed in the 
HMR.

VII. Regulatory Analyses and Notices

A. Statutory/Legal Authority for This Rulemaking

    This NPRM is published under the authority of 49 U.S.C. 5103(b) 
which authorizes the Secretary to prescribe regulations for the safe 
transportation, including security, of hazardous material in 
intrastate, interstate, and foreign commerce. 49 U.S.C. 5117(a) 
authorizes the Secretary of Transportation to issue a special permit 
from a regulation prescribed in Sec. Sec.  5103(b), 5104, 5110, or 5112 
of the Federal Hazardous Materials Transportation Law to a person 
transporting, or causing to be transported, hazardous material in a way 
that achieves a safety level at least equal to the safety level 
required under the law, or is consistent with the public interest, if a 
required safety level does not exist. This NPRM is also established 
under the authority of Sec.  33012(a) of MAP-21 (Pub. L. 112-141, July 
6, 2012). Section 33012(a) requires that no later than July 6, 2014, 
the Secretary of Transportation issue a rulemaking to provide notice 
and an opportunity for public comment on proposed regulations that 
establish standard operating procedures (SOPs) to support 
administration of the special permit and approval programs, and 
objective criteria to support the evaluation of special permit and 
approval applications. In this NPRM, PHMSA is addressing the provisions 
in the Act.

B. Executive Order 12866, 13563, and DOT Regulatory Policies and 
Procedures

    This proposed rule is considered a significant regulatory action 
under Sec.  3(f) of Executive Order 12866 and was reviewed by the 
Office of Management and Budget (OMB). The proposed rule is considered 
a significant rule under the Regulatory Policies and Procedures order 
issued by the Department of Transportation [44 FR 11034]. Executive 
Order 13563 supplements and reaffirms the principles governing 
regulatory review that were established in Executive Order 12866, 
Regulatory Planning and Review of September 30, 1993. These two 
Executive Orders 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.''
    In this notice, PHMSA proposes to amend the HMR to incorporate SOPs 
for processing and issuing special permit and approval applications. 
Incorporating these provisions into regulations of general 
applicability will provide shippers and carriers with clarity and 
flexibility to comply with PHMSA's initial review and, as needed, 
subsequent renewal or modification process. In addition, the proposed 
rule would reduce the paperwork burden on industry and this agency 
resulting from delays when processing incomplete applications. Taken 
together, the provisions of this proposed rule would improve the 
efficacy of the special permit and approval application and issuance 
process, which will promote the continued safe transportation of 
hazardous materials, while reducing transportation costs for the 
industry and administrative costs for the agency.
    The impact of this proposed rule is presumed to be minor. It 
intends to provide clarity by reducing applicant confusion regarding 
the special permit and approval application and renewal process, and 
improve the quality of information and completeness of the application 
submitted. This will ease the administrative costs of submitting a 
special permit and approval application and improve processing times. 
Although it is difficult to quantify the savings, many special permits 
and approvals have economically impacted companies by improving the 
efficacy and safety of their operations in a manner that meets or 
exceeds the requirements prescribed in the HMR. Some examples of 
positive economic impacts include allowing the use of less expensive 
non-specification packages, reducing the number of tasks, or other 
methods that reduce costs incurred before the approval or special 
permit is issued. As a result, PHMSA calculates that this NPRM does not 
impose any costs on industry. Although a slight reduction in the costs 
associated with processing delays may provide nominal benefits, 
generally, this proposed rule affects only agency procedures; 
therefore, we assume no change in current industry costs or benefits.

C. Executive Order 13132

    This proposed rule was analyzed in accordance with the principles 
and criteria contained in Executive Order 13132 (``Federalism''). This 
proposed rule would preempt state, local and Indian tribe requirements 
but does not propose any regulation that has 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 governments. Therefore, the consultation and funding 
requirements of Executive Order 13132 do not apply. Federal hazardous 
material

[[Page 47058]]

transportation law, 49 U.S.C. 5101-5128, contains an express preemption 
provision (49 U.S.C. 5125(b)) preempting state, local and Indian tribe 
requirements on certain covered subjects. The covered subjects are:
    (1) The designation, description, and classification of hazardous 
materials;
    (2) The packing, repacking, handling, labeling, marking, and 
placarding of hazardous materials;
    (3) The preparation, execution, and use of shipping documents 
related to hazardous materials and requirements related to the number, 
contents, and placement of those documents;
    (4) The written notification, recording, and reporting of the 
unintentional release in transportation of hazardous materials; and
    (5) The designing, manufacturing, fabricating, inspecting, marking, 
maintaining, reconditioning, repairing, or testing a package, container 
or packaging component that is represented, marked, certified, or sold 
as qualified for use in transporting hazardous material in commerce.
    This proposed rule addresses covered subject items (1), (2), (3), 
and (5) and would preempt any State, local, or Indian tribe 
requirements not meeting the ``substantively the same'' standard. 49 
U.S.C. 5125(b)(2) states that if PHMSA issues a regulation concerning 
any of the covered subjects, it must determine and publish, in the 
Federal Register, the effective date of Federal preemption. The 
effective date may not be earlier than the 90th day following the date 
of issuance of the final rule, and not later than two years after the 
date of issuance. PHMSA proposes the effective date of federal 
preemption will be 90 days from publication of the final rule in this 
matter in the Federal Register.

D. Executive Order 13175

    This proposed rule was analyzed in accordance with the principles 
and criteria contained in Executive Order 13175 (``Consultation and 
Coordination with Indian Tribal Governments''). Because this proposed 
rule does not have tribal implications and does not impose substantial 
direct compliance costs on Indian tribal governments, 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 et seq.) requires an 
agency to review regulations to assess their impact on small entities. 
An agency must conduct a regulatory flexibility analysis unless it 
determines and certifies that a rule is not expected to have a 
significant impact on a substantial number of small entities. 
Incorporation of these SOPs into regulations of general applicability 
will provide shippers and carriers with additional flexibility to 
comply with established safety requirements, thereby reducing 
transportation costs and increasing productivity. Entities affected by 
the proposed rule conceivably include all persons--shippers, carriers, 
and others--who offer and/or transport in commerce hazardous materials. 
The specific focus of the proposed rule is to incorporate standard 
procedures to assess an applicant's fitness to perform the required 
tasks to receive the relief from the HMR that each applicant is 
requesting. Overall, this proposed rule will reduce the compliance 
burden on the regulated industries by clarifying PHMSA's informational 
requirements for a special permit and approval application. We expect 
that the applicant will be better able to provide this information and, 
as a result, PHMSA can improve application processing and issuance 
times. Therefore, we certify that this NPRM will not have a significant 
economic impact on a substantial number of small entities.
    This proposed rule has been developed in accordance with Executive 
Order 13272 (``Proper Consideration of Small Entities in Agency 
Rulemaking'') and DOT's procedures and policies to promote compliance 
with the Regulatory Flexibility Act to ensure that potential impacts of 
draft rules on small entities are properly considered.

F. Paperwork Reduction Act

    PHMSA has analyzed this proposed rule in accordance with the 
Paperwork Reduction Act of 1995 (PRA). The PRA requires federal 
agencies to minimize the paperwork burden imposed on the American 
public by ensuring maximum utility and quality of federal information, 
ensuring the use of information technology to improve government 
performance, and improving the federal government's accountability for 
managing information collection activities. This NPRM's benefits 
include reducing applicant confusion about the special permit and 
approval application and renewal processes; improving the quality of 
information and completeness of applications submitted; and improving 
applicant processing times. This NPRM does not impose any additional 
costs on industry. Although a slight reduction in the costs associated 
with processing delays may provide nominal benefits, generally, this 
proposed rule affects only agency procedures; therefore, this proposed 
rule contains no new information collection requirements subject to the 
PRA. Further, this NPRM does not include new reporting or recordkeeping 
requirements.
    As stated earlier in this preamble, PHMSA is not aware of any 
information collection and recordkeeping burdens for the hazardous 
materials industry associated with the requirements proposed in this 
rulemaking. Thus, PHMSA has not prepared an information collection 
document for this rulemaking. However, if any regulated entities 
determine they will incur information and recordkeeping costs as a 
result of this NPRM, PHMSA requests that they provide comments on the 
possible burden developing, implementing, and maintaining records and 
information these proposed requirements may impose on businesses 
applying for a special permit or approval.
    Because PHMSA determined this proposed rule does not result in 
information collection and recordkeeping burdens, PHMSA did not assess 
its potential information collection costs. However, if information on 
this matter should become available or if commenters have questions 
concerning information collection on this NPRM, please direct your 
comments or questions to Steven Andrews, Deborah Boothe, or T. Glenn 
Foster, Standards and Rulemaking Division, Pipeline and Hazardous 
Materials Safety Administration, 1200 New Jersey Avenue SE., 
Washington, DC 20590-0001, Telephone (202) 366-8553.
    Address written comments to the Dockets Unit as identified in the 
ADDRESSES section of this rulemaking. We must receive comments 
regarding information collection burdens prior to the close of the 
comment period identified in the DATES section of this rulemaking. In 
addition, you may submit comments specifically related to the 
information collection burden to the PHMSA Desk Officer, Office of 
Management and Budget, at fax number (202) 395-6974.

G. 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 contained in the heading of 
this document may be used to cross-reference this action with the 
Unified Agenda.

[[Page 47059]]

H. Unfunded Mandates Reform Act of 1995

    This proposed 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 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 rule.

I. Environmental Assessment

    The National Environmental Policy Act, 42 U.S.C. 4321-4375, 
requires that federal agencies analyze proposed actions to determine 
whether the action will have a significant impact on the human 
environment. The Council on Environmental Quality (CEQ) regulations 
require federal agencies to conduct an environmental review considering 
the need for the proposed action, alternatives to the proposed action, 
probable environmental impacts of the proposed action and alternatives, 
and the agencies and persons consulted during the consideration 
process. 40 CFR 1508.9(b).
The Need for the Proposed Action
    This Notice proposes to revise the HMR to include the standard 
operating procedures and criteria used to evaluate applications for 
special permits and approvals. This rulemaking also proposes to provide 
clarity for the applicant as to what conditions need to be satisfied to 
promote completeness of the applications submitted.
    Hazardous materials are capable of affecting human health and the 
environment if a release were to occur. The need for hazardous 
materials to support essential services means transportation of highly 
hazardous materials is unavoidable. These shipments frequently move 
through densely populated or environmentally sensitive areas where the 
consequences of an incident could entail loss of life, serious injury, 
or significant environmental damage. Atmospheric, aquatic, terrestrial, 
and vegetal resources (for example, wildlife habitats) could also be 
affected by a hazardous materials release. The adverse environmental 
impacts associated with releases of most hazardous materials are short-
term impacts that can be greatly reduced or eliminated through prompt 
clean-up of the incident scene. Improving the process by which the 
agency assesses the ability of each applicant to perform the tasks 
issued in a special permit improves the chance that each special permit 
issued will be performed safely. Therefore, we do not anticipate any 
significant positive or negative impacts on the environment by 
incorporating these SOPs into the HMR.
Alternatives to the Proposed Action
    The purpose and need of this NPRM is to establish criteria for 
evaluating applications for approvals and special permits based on the 
HMR, including assessing an applicant's ability to operate under the 
approval or special permit. More information about benefits of this 
NPRM action can be found in the preamble to this NPRM. The alternatives 
considered in the analysis include: (1) The proposed action, that is, 
incorporation of SOPs to evaluate applications for approvals and 
special permits based on the HMR, including assessing an applicant's 
ability to operate under the approval or special permit into the HMR; 
and (2) incorporation of some subset of these proposed requirements 
(i.e., only some of the proposed requirements or modifications to these 
requirements in response to comments received to this NPRM) as 
amendments to the HMR; and (3) the ``no action'' alternative, meaning 
that none of the NPRM actions would be incorporated into the HMR.
Analysis of the Alternatives
(1) Incorporate Special Permit and Approval Processing Standard 
Operating Procedures
    We are proposing clarifications to certain HMR requirements to 
include those methods for assessing the ability of new special permit 
and approval applicants, and those applying for renewals of special 
permits and approvals, to perform the tasks they have requested for 
transporting hazardous materials. The process through which special 
permits and approvals are evaluated requires the applicant to 
demonstrate that the requested approval, the alternative transportation 
method, or proposed packaging provides an equivalent level of safety as 
that provided in the HMR. Implicit in this process is that the special 
permit or approval must provide an equivalent level of environmental 
protection as that provided in the HMR or demonstrate an alternative 
consistent with the public interest that will adequately protect 
against the risks to life and property inherent in the transportation 
of hazardous materials. Thus, incorporating SOPs to assess the 
performance capability of special permit and approval applicants should 
maintain or exceed the existing environmental protections built into 
the HMR.
(2) Incorporation of Some, But Not All, of the Proposed Requirements or 
Modifications to These Requirements in Response to Comments Received
    The changes proposed in this NPRM are designed to promote clarity 
and ease of the administration of special permits and approvals during 
the application review process. Since these changes may make it easier 
for special permit and approval applicants to successfully apply to 
PHMSA for authorized variances from the HMR, incorporation of the 
special permit and approval SOPs into the HMR may result in an 
increased number of applicants transporting hazardous materials under 
these types of variances. Because PHMSA will have determined the 
shipping methods authorized under these new variances to be at least 
equal to the safety level required under the HMR or, if a required 
safety level does not exist, consistent with the public interest, PHMSA 
expects that these additional shipments will not result in associated 
environmental impacts. Incorporating only some of these changes will 
help to obscure the informational requirements of the special permit 
and approval application process, confuse the regulated public by 
providing a partial understanding of the information needed to submit a 
complete special permit or approval application, and possibly further 
delay application review times. PHMSA does not recommend this 
alternative.
(3) No Action
    If no action is taken, then special permit and approval applicants 
will continue to be assessed in the same manner as they are today. This 
will result in no change to the current potential effects to the 
environment, but will also not provide the applicant with information 
needed to improve its application processing time within PHMSA. 
Further, it may negatively impact transportation in commerce by not 
making innovative and safe transportation alternatives more easily 
available to the hazmat industry. PHMSA does not recommend this 
alternative.
Comments From Agencies and Public
    PHMSA solicits comments about potential environmental impacts 
associated with this NPRM from other agencies, stakeholders, and 
citizens.

J. Privacy Act

    Anyone is able to search the electronic form of all comments

[[Page 47060]]

received into any of our dockets by the name of the individual 
submitting the comment (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), which may be 
viewed at ``http://www.gpo.gov/fdsys/pkg/FR-2000-04-11/pdf/00-
8505.pdf''.

K. Executive Order 13609 and International Trade Analysis

    Under Executive Order 13609, agencies must consider whether the 
impacts associated with significant variations between domestic and 
international regulatory approaches are unnecessary, or may impair the 
ability of American business to export and compete internationally. In 
meeting shared challenges involving health, safety, labor, security, 
environmental, and other issues, international regulatory cooperation 
can identify approaches that are at least as protective as those that 
are or would be adopted in the absence of such cooperation. 
International regulatory cooperation can also reduce, eliminate, or 
prevent unnecessary differences in regulatory requirements.
    Similarly, the Trade Agreements Act of 1979 (Pub. L. 96-39), as 
amended by the Uruguay Round Agreements Act (Pub. L. 103-465), 
prohibits federal agencies from establishing any standards or engaging 
in related activities that create unnecessary obstacles to the foreign 
commerce of the United States. For purposes of these requirements, 
federal agencies may participate in the establishment of international 
standards, so long as the standards have a legitimate domestic 
objective, such as providing for safety, and do not operate to exclude 
imports that meet this objective. The statute also requires 
consideration of international standards and, where appropriate, that 
they be the basis for U.S. standards.
    PHMSA participates in the establishment of international standards 
in order to protect the safety of the American public, and we have 
assessed the effects of the proposed rule to ensure that it does not 
cause unnecessary obstacles to foreign trade. Accordingly, this NPRM is 
consistent with E.O. 13609 and PHMSA's obligations.

List of Subjects

49 CFR Part 105

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

49 CFR Part 107

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

49 CFR Part 171

    Exports, Hazardous materials transportation, Hazardous waste, 
Imports, Incorporation by reference, Reporting and recordkeeping 
requirements.

    In consideration of the foregoing, we are proposing to amend 49 CFR 
chapter I as follows:

PART 105--HAZARDOUS MATERIALS PROGRAM DEFINITIONS AND GENERAL 
PROCEDURES

0
1. The authority citation for part 105 is revised to read as follows:

    Authority: 49 U.S.C. 5101-5128; 49 CFR 1.81 and 1.97.

0
2. In Sec.  105.5, the definitions for ``approval'' and ``special 
permit'' are revised in alphabetical order to read as follows:

Sec.  105.5  Definitions.

* * * * *
    Approval means a written authorization, including a competent 
authority approval, issued by the Associate Administrator, the 
Associate Administrator's designee, or as otherwise prescribed in the 
HMR, to perform a function for which prior authorization by the 
Associate Administrator is required under subchapter C of this chapter 
(49 CFR parts 171 through 180).
* * * * *
    Special permit means a document issued by the Associate 
Administrator, the Associate Administrator's designee, or as otherwise 
prescribed in the HMR, under the authority of 49 U.S.C. 5117 permitting 
a person to perform a function that is not otherwise permitted under 
subchapter A or C of this chapter, or other regulations issued under 49 
U.S.C. 5101 et seq. (e.g., Federal Motor Carrier Safety routing 
requirements).
* * * * *

PART 107--HAZARDOUS MATERIALS PROGRAM PROCEDURES

0
3. The authority citation for part 107 continues to read as follows:

    Authority: 49 U.S.C. 5101-5128, 44701; Pub. L. 101-410 section 4 
(28 U.S.C. 2461 note); Pub. L. 104-121 sections 212-213; Pub. L. 
104-134 section 31001; Pub. L. 112-141 section 33006, 33010; 49 CFR 
1.81 and 1.97.
0
4. In Sec.  107.1, add the definitions for ``applicant fitness,'' ``fit 
or fitness,'' ``fitness coordinator,'' ``insufficient corrective 
action,'' and revise the definitions for ``approval,'' ``special 
permit'' to read as follows:

Sec.  107.1  Definitions.

* * * * *
    Applicant fitness means a determination by PHMSA, the Associate 
Administrator's designee, or as otherwise prescribed in the HMR, that a 
special permit or approval applicant is fit to conduct operations 
requested in the application or an authorized special permit or 
approval.
* * * * *
    Approval means a written authorization, including a competent 
authority approval, issued by the Associate Administrator, the 
Associate Administrator's designee, or as otherwise prescribed in the 
HMR, to perform a function for which prior authorization by the 
Associate Administrator is required under subchapter C of this chapter 
(49 CFR parts 171 through 180).
* * * * *
    Fit or Fitness means demonstrated and documented knowledge and 
capabilities resulting in the assurance of a level of safety and 
performance necessary to ensure compliance with the applicable 
provisions and requirements of subchapter C of this chapter or a 
special permit or approval issued under subchapter C of this chapter.
* * * * *
    Fitness coordinator means the PHMSA Field Operations officer or 
authorized Operating Administration (OA) representative that conducts 
reviews regarding an organization's hazardous materials operations, 
including such areas as accident history, compliance data, and other 
safety and transportation records to determine whether a special permit 
or approval applicant is determined to be fit as prescribed in 
Sec. Sec.  107.113(f)(5) and 107.709(d)(5).
* * * * *
    Insufficient corrective action means that either a PHMSA Field 
Operations officer or authorized Operating Administration (OA) 
representative has determined that evidence of an applicant's 
corrective action in response to prior to enforcement cases is 
insufficient and the basic safety management controls proposed for the 
type of hazardous material, packaging,

[[Page 47061]]

procedures, and/or mode of transportation remain inadequate.
* * * * *
    Special permit means a document issued by the Associate 
Administrator, the Associate Administrator's designee, or as otherwise 
prescribed in the HMR, under the authority of 49 U.S.C. 5117 permitting 
a person to perform a function that is not otherwise permitted under 
subchapters A or C of this chapter, or other regulations issued under 
49 U.S.C. 5101 et seq. (e.g., Federal Motor Carrier Safety routing 
requirements).
* * * * *
0
5. In Sec.  107.113, paragraph (a) is revised to read as follows:

Sec.  107.113  Application processing and evaluation.

    (a) The Associate Administrator reviews an application for a 
special permit, modification of a special permit, party to a special 
permit, or renewal of a special permit in conformance with the standard 
operating procedures specified in appendix A of this part (``Standard 
Operating Procedures for Special Permits and Approvals'') to determine 
if it is complete and conforms with the requirements of this subpart. 
This determination will be made within 30 days of receipt of the 
application for a special permit, modification of a special permit, or 
party to a special permit, and within 15 days of receipt of an 
application for renewal of a special permit. If an application is 
determined to be incomplete, PHMSA may reject the application. PHMSA 
will inform the applicant of the deficiency in writing.
* * * * *
0
6. In Sec.  107.117, paragraph (e) is revised to read as follows:

Sec.  107.117  Emergency processing.

* * * * *
    (e) Upon receipt of all information necessary to process the 
application, the receiving Department official transmits to the 
Associate Administrator, by the most rapidly available means of 
communication, an evaluation as to whether an emergency exists under 
Sec.  107.117(a) and, if appropriate, recommendations as to the 
conditions to be included in the special permit. The Associate 
Administrator will review an application for emergency processing of a 
special permit in conformance with the standard operating procedures 
specified in appendix A of this part (``Standard Operating Procedures 
for Special Permits and Approvals'') to determine if it is complete and 
conforms with the requirements of this subpart. If the Associate 
Administrator determines that an emergency exists under Sec.  
107.117(a) and that, with reference to the criteria of Sec.  
107.113(f), granting of the application is in the public interest, the 
Associate Administrator will issue the application subject to such 
terms as necessary and immediately notify the applicant. If the 
Associate Administrator determines that an emergency does not exist or 
that granting of the application is not in the public interest, the 
applicant will be notified immediately.
* * * * *
0
7. In Sec.  107.709, paragraph (b) is revised to read as follows:

Sec.  107.709  Processing of an application for approval, including an 
application for renewal or modification.

* * * * *
    (b) The Associate Administrator reviews an application for an 
approval, modification of an approval, or renewal of an approval in 
conformance with the standard operating procedures specified in 
appendix A of this part (``Standard Operating Procedures for Special 
Permits and Approvals''). At any time during the processing of an 
application, the Associate Administrator may request additional 
information from the applicant. If the applicant does not respond to a 
written request for additional information within 30 days of the date 
the request was received, PHMSA may deem the application incomplete and 
deny it. The Associate Administrator may grant a 30-day extension if 
the applicant makes such a request in writing.
* * * * *
0
8. Add new Appendix A to 49 CFR Part 107 to read as follows:

Appendix A To Part 107--Standard Operating Procedures for Special 
Permits and Approvals

    This appendix sets forth the standard operating procedures (SOPs) 
for processing an application for a special permit or an approval in 
conformance with 49 CFR Parts 107 and 171-180. It is a guidance 
document to be used by PHMSA for the internal management of its special 
permit and approval programs.
    A special permit is a document issued by the Associate 
Administrator, the Associate Administrator's designee, or as otherwise 
prescribed in the HMR, under the authority of 49 U.S.C. 5117 permitting 
a person to perform a function that is not otherwise permitted under 
subchapter A or C of this chapter, or other regulations issued under 49 
U.S.C. 5101 et seq. (e.g., Federal Motor Carrier Safety routing 
requirements). An approval is a written authorization, including a 
competent authority approval, issued by the Associate Administrator, 
the Associate Administrator's designee, or as otherwise prescribed in 
the HMR, to perform a function for which prior authorization by the 
Associate Administrator is required under subchapter C of this chapter 
(49 CFR parts 171 through 180). PHMSA receives applications for: (1) 
Designation as an approval or certification agency, (2) renewal or 
modification of a special permit or an approval, (3) granting of party 
status to a special permit, and (4) emergency processing for a special 
permit. Depending on the type of application, the SOP review process 
includes several phases, such as Completeness, Publication, Evaluation, 
and Disposition, and proceed in the following order.

                              Special Permit And Approval Evaluation Review Process
----------------------------------------------------------------------------------------------------------------
                                          Non-classification
            Special permit                     approval         Classification approval   Registration approval
----------------------------------------------------------------------------------------------------------------
1. Completeness......................  1. Completeness........  1. Completeness........  1. Completeness.
2. Publication.......................  2. Evaluation..........  2. Evaluation..........  2. Evaluation.
                                         a. Technical.........    a. Technical.........    a. Fitness only.
                                         b. Fitness...........
3. Evaluation........................  3. Disposition.........  3. Disposition.........  3. Disposition.
    a. Technical.....................    a. Approval..........    a. Approval..........    a. Approval.
    b. Fitness.......................    b. Denial............    b. Denial............    b. Denial.
4. Disposition                         .......................
    a. Approval.
    b. Denial.
5. Reconsideration...................  4. Reconsideration.....  4. Reconsideration.....  4. Reconsideration.
----------------------------------------------------------------------------------------------------------------

[[Page 47062]]

    A non-classification approval certifies that: An approval holder is 
qualified to requalify, repair, rebuild, and/or manufacture cylinders 
stipulated in the HMR; an agency is qualified to perform inspections 
and other functions outlined in an approval and the HMR; an approval 
holder is providing an equivalent level of safety or safety that is 
consistent with the public interest in the transportation of hazardous 
materials outlined in the approval; and a radioactive package design or 
material classification fully complies with applicable domestic or 
international regulations. A classification approval certifies that 
explosives, fireworks, chemical oxygen generators, self-reactive 
materials, and organic peroxides have been classed for manufacturing 
and/or transportation based on requirements stipulated in the HMR. 
Registration approvals include the issuance of a unique identification 
number used solely as an identifier or in conjunction with approval 
holder's name and address, or the issuance of a registration number 
that is evidence the approval holder is qualified to perform an HMR 
authorized function, such as visually requalifying cylinders. This 
appendix does not include registrations issued under 49 CFR Part 107, 
Subpart G.
    1. Completeness. PHMSA reviews all special permit and approval 
applications to determine if they contain all the information required 
under Sec.  107.105 (for a special permit), Sec.  107.117 (for 
emergency processing) or Sec.  107.402 or Sec.  107.705 (for an 
approval). If PHMSA determines an application is incomplete or 
insufficient, PHMSA may reject the application. If PHMSA rejects the 
application, it will notify the applicant of the deficiencies in 
writing. An applicant may resubmit a rejected application as a new 
application, provided the newly submitted application contains the 
information PHMSA needs to make a determination.
    Emergency special permit applications must comply with all the 
requirements prescribed in Sec.  107.105 for a special permit 
application, and contain sufficient information for PHMSA to determine 
that the applicant's request for emergency processing is justified 
under the conditions prescribed in Sec.  107.117.
    2. Publication. When PHMSA determines an application for a new 
special permit or a request to modify an existing special permit is 
complete and sufficient, PHMSA publishes a summary of the application 
in the Federal Register in conformance with Sec.  107.113(b). The 
public has 30 days to comment on a new special permit and 15 days to 
comment on a request for modification of an existing special permit.
    3. Evaluation. The evaluation phase consists of two assessments: 
Technical evaluation and fitness evaluation. These evaluations may be 
done concurrently and are described in greater detail below. When 
applicable, PHMSA consults and coordinates its evaluation of 
applications with the following Operating Administration (OA) that 
share enforcement authority under Federal hazardous material 
transportation law: Federal Aviation Administration, Federal Motor 
Carrier Safety Administration, Federal Railroad Administration, and 
United States Coast Guard. PHMSA also consults other agencies with 
hazardous material subject-matter expertise, such as the Nuclear 
Regulatory Commission and the Department of Energy.
    (a) Technical evaluation. A technical evaluation considers whether 
the proposed special permit or approval will achieve a level of safety 
at least equal to that required under the HMR or, if a required safety 
level does not exist, considers whether the proposed special permit is 
consistent with the public interest in that will adequately protect 
against the risks to life and property inherent in the transportation 
of hazardous material. For a classification approval, the technical 
evaluation is a determination that the application meets the 
requirements of the regulations for issuance of the approval. If formal 
coordination with another OA is included as part of the evaluation 
phase, that OA is responsible for managing this process within the 
applicable OA. The OA reviews the application materials and PHMSA's 
technical evaluation, and may provide their own evaluation, comments 
and recommendations. The OA may also recommend operational controls or 
limitations to be incorporated into the special permit or approval to 
improve its safety. If an OA does not concur with PHMSA's 
recommendation based on the evaluation, PHMSA works with the OA to 
resolve their concerns.
    (b) Fitness evaluation. Each applicant for a special permit or non-
classification approval is subject to a fitness evaluation to assess if 
the applicant is fit to conduct the activity authorized by the special 
permit or approval application. PHMSA will coordinate fitness reviews 
with the appropriate OA if a proposed activity is specific to a 
particular mode of transportation, if the proposed activity will set 
new precedent or have a significant economic impact, or if an OA 
requests participation. PHMSA does not conduct initial fitness reviews 
as part of processing classification approvals, which include 
fireworks, explosives, organic peroxides, and self-reactive materials. 
Additionally, cylinder approvals and certification agency approvals do 
not follow the same minimum fitness review model.
    (i) Automated Review. An applicant for a special permit or approval 
which requires a fitness evaluation is subject to an automated fitness 
review. If the applicant passes the initial automated review, the 
applicant is determined to be fit. To begin this review, PHMSA or the 
applicant enters the applicant's information into the Hazardous 
Materials Information System (HMIS) or the Hazmat Intelligence Portal 
(HIP), web-based applications that provide an integrated information 
source to identify hazardous material safety trends through the 
analysis of incident and accident information, and provide access to 
comprehensive information on hazardous materials incidents, special 
permits and approvals, enforcement actions, and other elements that 
support PHMSA's regulatory program. PHMSA then screens the applicant to 
determine if, within the four years prior to submitting its 
application, the applicant was involved in any incident attributable to 
the applicant or package where one of the following occurred:
    (1) A death or injury;
    (2) Two or more incidents involving a Sec.  172.504(e) (placarding) 
Table 1 hazardous material;
    (3) Three or more incidents involving a bulk packaging;
    (4) The applicant has a prior enforcement case referral where the 
Deputy Associate Administrator for Field Operations, or the Deputy 
Associate Administrator's designee determined insufficient corrective 
action was taken, or there are Independent Inspection Agency (IIA) 
noted items on a cylinder requalifier inspection report, except for 
those applicants who were reinspected and found to have no violations;
    (5) The applicant is a foreign cylinder manufacturer or 
requalifier, or a select holder that PHMSA or a representative of the 
Department has never inspected; or
    (6) If an applicant is acting as an interstate carrier of hazardous 
materials under the terms of the special permit, they will be screened 
in an automated manner based upon criteria established by FMCSA, such 
as that contained in its Safety and Fitness Electronic Records (SAFER) 
system, which consists of interstate carrier data, several states' 
intrastate data, interstate vehicle registration data, and may include

[[Page 47063]]

operational data such as inspections and crashes.
    (ii) Safety profile review. A fitness coordinator, as defined in 
Sec.  107.1, conducts a safety profile review of all applicants meeting 
one of the criteria listed earlier in this appendix under ``automated 
review.'' In a safety profile review, PHMSA or the OA performs an in-
depth evaluation of the applicant based upon items the automated review 
triggered concerning the applicant's four-year performance and 
compliance history prior to the submission of the application. 
Information considered during this review may include the applicant's 
history of prior violations, insufficient corrective actions, or 
evidence that the applicant is at risk of being unable to comply with 
the terms of an application for an existing special permit, approval, 
or the HMR. PHMSA also performs the review if two or more modes of 
transportation are requested in the application. The applicable OA 
performs the review if one mode of transportation is requested in the 
application. After conducting a review, if the fitness coordinator 
determines that the applicant may be unfit to conduct the activities 
requested in the application, the coordinator will forward the request 
and supporting documentation to PHMSA's Field Operations Division, or a 
representative of the Department, to perform an on-site inspection. 
After the safety profile review is completed, if the applicant is not 
selected for an on-site inspection, the applicant is determined to be 
fit.
    (iii) On-Site Inspection. (A) PHMSA considers the factors in 
paragraph 3(b) as evidence that an applicant is at risk of being unable 
to comply with the terms of an application, including those listed 
below. PHMSA's Field Operations Division or representative of the 
Department will conduct an on-site inspection at the recommendation of 
the fitness coordinator if one of the following criteria applies:
    (1) Any incident listed under automated review in paragraph 3(b)(i) 
of this appendix is attributable to the applicant or package, other 
than driver error;
    (2) Insufficient Corrective Actions, as defined in Sec.  107.1, in 
any enforcement case for a period of four years prior to submitting the 
application, except when reinspected with no violations noted;
    (3) Items noted by an IIA on a cylinder requalifier inspection 
report, except when reinspected with no violations noted; or
    (4) The applicant is a foreign cylinder manufacturer or requalifier 
that has never been inspected under current criteria.
    (B) If, during an inspection, the PHMSA investigator or a 
representative of the Department finds evidence in the four years prior 
to submitting its application that an applicant has not implemented 
sufficient corrective actions for prior violations, or is at risk of 
being unable to comply with the terms of an application for or an 
existing special permit, approval, or the HMR, then PHMSA will 
determine that the applicant is unfit to conduct the activities 
requested in an application or authorized special permit or approval.
    4. Disposition. (a) Special Permit. If an application for a special 
permit is issued, PHMSA provides the applicant, in writing, with a 
special permit and an authorization letter if party status is 
authorized.
    (b) Approval. If an application for approval is issued, PHMSA 
provides the applicant, in writing, with an approval, which may come in 
various forms, including:
    (1) An ``EX'' approval number for classifying an explosive 
(including fireworks; see Sec. Sec.  173.56, 173.124, 173.128, and 
173.168(a));
    (2) A ``RIN'' (requalification identification number) to uniquely 
identify a cylinder requalification, repair, or rebuilding facility 
(see Sec.  180.203);
    (3) A ``VIN'' (visual identification number) to uniquely identify a 
facility that performs an internal or external visual inspection, or 
both, of a cylinder in conformance with 49 CFR part 180, subpart C, or 
applicable CGA Pamphlet or HMR provision;
    (4) An ``M'' number for identifying packaging manufacturers (see 
Sec.  178.3); or
    (5) A ``CA'' (competent authority) for general approvals (see 
Sec. Sec.  107.705, 173.185, and 173.230).
    (c) Denial. An application for a special permit or approval may be 
denied in whole or in part. For example, if an application contains 
sufficient information to successfully complete its technical review 
but PHMSA determines the applicant is unfit, the application will be 
denied. If an application for a special permit or an approval is 
denied, PHMSA provides the applicant, in writing, with a brief 
statement of the reasons for denial and the opportunity to request 
reconsideration (see Sec. Sec.  107.113(g), 107.402, and 107.709(f)).
    (d) Reconsideration. (1) Special Permit. If an application for a 
special permit is denied, the applicant may request reconsideration as 
provided in Sec.  107.123 and, if the reconsideration is denied, may 
appeal as provided in Sec.  107.125. Applicants submitting special 
permit reconsiderations and appeals must do so in the same manner as 
new applications, provided the new submission is sufficiently complete 
to make a determination.
    (2) Approval. If an application for an approval is denied, the 
applicant may request reconsideration as provided in Sec.  107.715 and, 
if the reconsideration is denied, may appeal as provided in Sec.  
107.717. Applicants submitting approval reconsiderations and appeals 
must do so in the same manner as new applications, provided the new 
submission is sufficiently complete to make a determination.

PART 171--GENERAL INFORMATION, REGULATIONS, AND DEFINITIONS

0
9. The authority citation for part 171 is revised to read as follows:

    Authority:  49 U.S.C. 5101-5128, 44701; Pub. L. 101-410, section 
4 (28 U.S.C. 2461 note); Pub. L. 104-121, sections 212-213; Pub. L. 
104-134, section 31001; 49 CFR 1.81 and 1.97.

0
10. In Sec.  171.8, the definitions for ``approval,'' ``special 
permit'' are revised in alphabetical order to read as follows:

Sec.  171.8  Definitions and abbreviations.

* * * * *
    Approval means a written authorization, including a competent 
authority approval, issued by the Associate Administrator, the 
Associate Administrator's designee, or as otherwise prescribed in the 
HMR, to perform a function for which prior authorization by the 
Associate Administrator is required under subchapter C of this chapter 
(49 CFR parts 171 through 180).
* * * * *
    Special permit means a document issued by the Associate 
Administrator, the Associate Administrator's designee, or as otherwise 
prescribed in the HMR, under the authority of 49 U.S.C. 5117 permitting 
a person to perform a function that is not otherwise permitted under 
subchapter A or C of this chapter, or other regulations issued under 49 
U.S.C. 5101 et seq. (e.g., Federal Motor Carrier Safety routing 
requirements).
* * * * *

    Issued in Washington, DC, under the authority delegated in 49 
CFR 1.97.
Magdy El-Sibaie,
Associate Administrator for Hazardous Materials Safety, Pipeline and 
Hazardous Materials Safety Administration.
[FR Doc. 2014-18925 Filed 8-11-14; 8:45 am]
BILLING CODE 4910-60-P