Document ID: PHMSA-2010-0320-0001
Agency: phmsa
Document Type: Proposed Rule
Title: Hazardous Materials: Revision to Fireworks Regulations
Posted Date: 2012-08-30T04:00Z

[Federal Register Volume 77, Number 169 (Thursday, August 30, 2012)]
[Proposed Rules]
[Pages 52636-52650]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-21360]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 107, 172, and 173

[Docket No. PHMSA-2010-0320 (HM-257)]
RIN 2137-AE70

Hazardous Materials: Revision to Fireworks Regulations (RRR)

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

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: PHMSA is proposing to revise the Hazardous Materials 
Regulations applicable to the approval of Division 1.4G consumer 
fireworks (UN0336 Fireworks) and establish DOT-approved fireworks 
certification agencies that will provide an alternative to the approval 
process for Division 1.4G consumer fireworks. PHMSA is also proposing 
to revise procedural regulations pertaining to certification agencies. 
These proposed actions, if adopted, will clarify regulations with 
respect to PHMSA's fireworks approval process and provide regulatory 
flexibility in seeking authorization for the transportation of Division 
1.4G consumer fireworks.

DATES: Comments must be received by October 29, 2012. 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-2010-0320 (HM-257)) 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

[[Page 52637]]

(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: Rob Benedict, or Lisa O'Donnell, 
Standards and Rulemaking Division, Office Hazardous Materials Safety, 
Pipeline and Hazardous Materials Safety Administration, U.S. Department 
of Transportation, 1200 New Jersey Avenue SE., Washington, DC 20590, at 
(202) 366-8553.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
II. Background
III. Proposed Amendments
IV. Summary Review of Proposed Amendments
V. 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. Regulatory Identifier Number (RIN)
    H. Unfunded Mandates Reform Act of 1995
    I. Environmental Assessment
    J. Privacy Act
    K. International Trade Analysis
    L. National Technology Transfer and Advancement Act
VI. List of Subjects

I. Executive Summary

    The pyrotechnic industry is a global logistics supply chain 
comprised of mostly foreign fireworks manufacturers and domestic 
importers, retailers, distributors, and consumers. Prior to the 
transportation into and throughout the U.S., all explosives, including 
Division 1.4 consumer fireworks, must be classed, approved, and issued 
a DOT EX classification approval number (EX number) by PHMSA. The EX 
number is a unique identifier that indicates a firework device has been 
classed and approved for transportation into and throughout the U.S.
    PHMSA is committed to maintaining the exemplary transportation 
safety record that Division 1.4G consumer fireworks have displayed over 
the past forty years, but seeks to reduce burden and increase 
flexibility for the regulated community by providing an alternative to 
PHMSA's approval process. PHMSA has conducted an intensive 
retrospective review of the fireworks approval program and has 
determined that there is a delay in the processing of EX approval 
applications under the current regulatory scheme. PHMSA proposes an 
alternative option for Division 1.4G consumer fireworks in which 
applicants will submit applications for certification to a Fireworks 
Certification Agency (FCA), in lieu of submitting applications for 
approval to PHMSA. To ensure oversight of the proposed FCAs, this 
proposal includes reporting and recordkeeping requirements.
    Additionally, PHMSA is proposing to define consumer fireworks and 
clarify the approval process for designation as a certification agency.
    This NPRM affects the following entities and proposes the following 
requirements:

------------------------------------------------------------------------
           Affected entities                        Proposals
------------------------------------------------------------------------
 Division 1.4G consumer           Provide for
 fireworks manufacturers complying with   alternative method to certify
 Part 173.                                Division 1.4G consumer
 Division 1.4G consumer           fireworks for transportation.
 fireworks importers complying with       Require retention of a
 Part 173.                                record by certifying agencies,
 Division 1.4G consumer           manufacturers and importers
 fireworks transporters complying with    indicating a Division 1.4G
 Part 173.                                consumer fireworks
 FCAs certifying compliance       classification has been
 with the requirements for Division       certified in a manner
 1.4G consumer fireworks.                 consistent with the proposed
 State and local fire service     requirements.
 and law enforcement agencies that        Clarify approval
 utilize Division 1.4G consumer           process for designation as a
 fireworks classifications and            certification agency and
 approvals under the HMR to enforce       provide for reconsideration of
 additional state and local               decisions to modify,
 requirements and bans.                   terminate, or suspend a
 Lighter Testing Agencies......   designation.
 Package Testing Laboratories..
------------------------------------------------------------------------

    To monetize the costs and benefits of the proposals in this NPRM, 
PHMSA used a number of assumptions to develop a base case. The overall 
costs and benefits of the proposals are dependent on the assumption 
that all affected entities are currently complying with the regulations 
and that 50 to 90 percent of applicants will choose a DOT-approved FCA 
to certify that Division 1.4G consumer fireworks complies with the 
American Pyrotechnics Association's (APA) Standard 87-1 (IBR, see Sec.  
171.7), in lieu of filing an approval application with PHMSA.\1\ We 
believe this alternative process will be attractive to the fireworks 
industry as it will expedite the transportation process without 
compromising the current level of safety, enable shipments of Division 
1.4G consumer fireworks to reach the market in a more timely manner, 
and consequently provide a cost savings. Cost in this scenario, 
includes the cost attributed to shipments that are delayed while 
approval applications are pending with PHMSA.
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    \1\ PHMSA based the percentage range (fifty to ninety percent) 
used in this rulemaking on the fact that over eighty percent of 
firework importers and manufacturers voluntarily participate in 
American Fireworks Standards Laboratory (AFSL) testing program to 
comply with the Consumer Product Safety Commission (CPSC) 
requirements. A range was chosen to demonstrate some level of 
uncertainty and to provide a tolerance for fluctuations in use of 
FCAs.
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    Costs associated with the proposals are primarily comprised of fees 
that FCAs may assess on manufacturers of Division 1.4G fireworks. There 
may also be costs associated with proposed recordkeeping 
requirements.\2\ Benefits will be derived from the expedited processing 
of consumer fireworks applications, resulting in faster time to market 
for each firework device. PHMSA estimates that the economic effects of 
this rulemaking, once finalized and adopted, will be sustained 
indefinitely. However, because of the difficulty of and uncertainty 
associated with forecasting industry effects into the far future, we 
assume a 10-year timeframe to outline, quantify, and monetize the costs 
and benefits of the

[[Page 52638]]

proposals and to demonstrate the net effects of the proposals.
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    \2\ PHMSA assumed that, absent relevant information on document 
retention practices of the fireworks industry, 50 percent of records 
will be stored in paper format and 50 percent of records will be 
stored in electronic format. Based on this assumption PHMSA 
estimated the record keeping cost to be approximately $610 per U.S. 
importer/manufacturer per year.
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    If the proposals in this NPRM are adopted, PHMSA estimates total 
annual benefits will be between approximately $14.5 million and $26.5 
million, and total annual costs will be between $4 million and $7 
million, resulting in total annual net benefits of between $11 million 
and $19 million. The table below summarizes the calculated cost and 
benefits associated with the NPRM.

                           Annual Net Benefits
------------------------------------------------------------------------
                                      Low redirected    High redirected
                                     application rate   application rate
                                          (50%)              (90%)
------------------------------------------------------------------------
                                BENEFITS
------------------------------------------------------------------------
  Expected Annual Private-Sector          $14,680,000        $26,430,000
   Benefits of Expedited
   Verification...................
                                   -------------------------------------
    TOTAL ANNUAL BENEFITS.........         14,680,000         26,430,000
------------------------------------------------------------------------
                                  COSTS
------------------------------------------------------------------------
Record Retention Costs:
    Costs of 2 Additional Years of             10,200             58,000
     Paper Record Retention, All
     U.S. Importers per year......
                                   -------------------------------------
    Cost for Required Electronic           Negligible         Negligible
     Storage Space, All U.S.
     Importers and Manufacturers
     per year.....................
                                   -------------------------------------
        Total Annual Record                    10,200             58,000
         Retention Costs..........
FCA Processing Costs:
    Costs of application                    3,937,500          7,087,500
     processing conducted by FCAs
     **...........................
                                   -------------------------------------
        Total Annual FCA                    3,937,500          7,087,500
         Processing Costs.........
                                   -------------------------------------
            TOTAL ANNUAL COSTS....          3,947,700          7,145,500
                                   -------------------------------------
                TOTAL ANNUAL NET           10,732,300         19,284,500
                 BENEFITS.........
------------------------------------------------------------------------

    PHMSA estimates the 10-year present value of the net benefits is 
about $80 million to $143 million (discounted at a 3 percent rate) or 
$55 million to $98 million (discounted at a 7 percent rate). PHMSA 
concludes that the aggregate benefits justify the aggregate costs. A 
summary of the range of expected annual costs and benefits is provided 
in the table below.\3\
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    \3\ Figures are rounded.

 
 
 
Annual Benefit ($2012)................  $14.5-26.5 million.
Annual Cost ($2012)...................  $4-7 million.
Benefit-Cost Ratio....................  3.70-3.71.
Net Benefit...........................  $11-19 million.
 

    PHMSA requests specific comments on the analysis underlying these 
estimates, including the percentage of entities that will choose to 
have their 1.4G consumer fireworks certified by FCAs instead of being 
approved by PHMSA, the manner in which records will be kept (i.e., 
electronic or paper), the estimated cost of the recordkeeping 
requirements, the number of affected entities (e.g., manufacturers and 
importers), and the estimated fee an FCA would charge for 
certification. We are also asking for general comments or suggestions 
regarding approaches to reduce the costs of this rule while maintaining 
or increasing the benefits. Additionally, PHMSA seeks comments on 
possible changes that might improve the rule and increase regulatory 
flexibility.

II. Background

    The requirements for the classification and packaging of Class 1 
explosive materials are specified in Subpart C of Part 173 of the 
Hazardous Materials Regulations (HMR; 49 CFR parts 171--180). Fireworks 
are considered a Class 1 explosive material and must be classified 
under one of five hazard divisions and compatibility groups (1.1G, 
1.2G, 1.3G, 1.4G, and 1.4S). As currently specified in Subpart C of 
Part 173 of the HMR, prior to transportation into and within the U.S., 
all explosives, including fireworks, must be approved and assigned a 
classification by PHMSA based on actual testing. Division 1.3 and 1.4 
fireworks may also be approved in accordance with the American 
Pyrotechnics Association (APA) Standard 87-1.

PHMSA's Current Fireworks Regulations

    Division 1.1 fireworks must be examined by a DOT-approved 
explosives test laboratory and assigned a recommended shipping 
description, division, and compatibility group in accordance with 
Sec. Sec.  173.56(b), 173.56(f) or 173.56(i). Division 1.3 and 1.4 
fireworks may either be approved in accordance with Sec. Sec.  
173.56(b), 173.56(f) or 173.56(i), or in accordance with Sec.  
173.56(j), which provides an option for obtaining an EX number and 
approval without prior testing by a DOT-approved explosives test 
laboratory.
    Section 173.56(j) requires that the firework device is manufactured 
in accordance with APA Standard 87-1 and passes a thermal stability 
test. An applicant requesting PHMSA approval based on Sec.  173.56(j) 
submits an application that contains required information specified in 
APA Standard 87-1. For example, the standard requires that the size of 
the device, as well as the various formulas and weights of each type of 
chemical composition contained in the device must be specified in the 
application. Only formulas containing chemicals identified in APA 
Standard 87-1, Table of ``Standard Fireworks Chemicals'' can be 
approved under the provisions of APA Standard 87-1. PHMSA has expanded 
on the Table of ``Standard Fireworks Chemicals'' to further detail 
chemicals that are permitted and prohibited in consumer fireworks 
devices.\4\ The manufacturer must submit a signed application with a 
detailed diagram of the device and certify that

[[Page 52639]]

the device complies with APA Standard 87-1.
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    \4\ PHMSA's expanded list of permitted and prohibited chemicals 
for consumer fireworks devices can be found at the following URL: 
http://www.phmsa.dot.gov/staticfiles/PHMSA/DownloadableFiles/Hazmat/Regulations/Approved%20and%20Prohibited%20Fireworks%20Chemicals-02-21-2012.pdf.
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    While both Sec. Sec.  173.56(b) and 173.56(j) require the applicant 
to submit an application to PHMSA's Approvals and Permits Division for 
approval, the HMR provides a couple of alternatives. Under Sec.  
173.56(i), if experience or other data demonstrates that the hazard of 
a firework device containing an explosive chemical composition is 
greater or less than indicated according to the definition and criteria 
specified in Sec. Sec.  173.50, 173.56, and 173.58, the Associate 
Administrator may specify a classification (including determining that 
it is forbidden from transportation), or except the device from the 
HMR. The HMR also permits the transport of firework devices the 
Associate Administrator approves on the basis of an approval issued by 
the competent authority of a foreign government, or when examination of 
the explosive by a person approved by the Associate Administrator is 
impracticable, on the basis of reports of tests conducted by 
disinterested third parties, as specified in Sec.  173.56(f).

Regulatory Review of PHMSA's Fireworks Program

    On May 10, 2012, President Obama issued Executive Order 13610 
(Identifying and Reducing Regulatory Burdens) reaffirming the goals of 
Executive Order 13563 (Improving Regulation and Regulatory Review) 
issued January 18, 2011, and Executive Order 12866 (Regulatory Planning 
and Review) issued September 30, 1993. Executive Order 13610 directs 
agencies to prioritize ``those initiatives that will produce 
significant quantifiable monetary savings or significant quantifiable 
reductions in paperwork burdens while protecting public health, 
welfare, safety, and our environment.'' Executive Order 13610 further 
instructs agencies to give consideration to the cumulative effects of 
their regulations, including cumulative burdens, and prioritize reforms 
that will significantly reduce burdens.
    Executive Order 13563, which supplements Executive Order 12866, 
directs federal agencies to periodically review existing significant 
regulations, retrospectively analyze rules that may be outmoded, 
ineffective, insufficient, or excessively burdensome, and modify, 
streamline, expand, or repeal regulatory requirements that are no 
longer justified. Agencies are also directed to consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public.
    In light of these Executive Orders and the President's continued 
efforts to streamline government regulations, we have evaluated our 
fireworks approval program to identify areas where we can improve 
efficiency, reduce burdens, and increase regulatory flexibility without 
diminishing safety. Specifically, we analyzed the timeline for 
reviewing applications for approval of fireworks devices. We found that 
over the past two years, PHMSA has reviewed roughly 30,000 applications 
for approval of fireworks devices. Approximately seventy-five percent 
of these applications sought approval for Division 1.4G consumer 
fireworks devices.
    Due to the high volume of applications submitted for Division 1.4G 
consumer fireworks devices, the approximate review time per application 
is 120 days. Review time may be extended if applications are rejected 
for minor flaws, such as mathematical errors, or denied for safety 
issues. If an application is rejected, the applicant often resubmits 
the application placing it at the end of the review queue. If an 
application is denied, the applicant may file for reconsideration and 
subsequently may appeal to the Administrator; thereby delaying the 
final disposition of the application.
    Consequently, the delay in processing applications can have an 
economic impact on the fireworks industry. For example, the lengthy 
approval process interrupts the supply chain and delays devices from 
reaching retail stores, which results in substantial revenue losses for 
U.S. importers, distributors and retail stores, many of whom are small 
businesses. Also, manufacturers of fireworks devices often charge U.S. 
purchasers storage fees for devices purchased that are pending approval 
and cannot be transported into and throughout the U.S.
    After significant review of our fireworks program, we have 
identified areas that should be modified to decrease the delay in 
processing approvals. PHMSA is proposing to revise the HMR to provide 
an alternative option that will expedite the process for obtaining 
authorization to transport Division 1.4G consumer fireworks into and 
throughout the U.S., without compromising the current level of safety. 
PHMSA believes the revisions proposed in this NPRM will reduce burdens 
and enhance flexibility for the regulated community, while maintaining 
an equivalent level of safety provided in the HMR.\5\
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    \5\ Over the past forty years, there have been 35 reported 
transportation incidents in the U.S. involving fireworks that were 
declared hazardous materials. During this same period, there has 
never been a death or major injury attributed to fireworks while in 
transportation when there was compliance with the regulations. While 
there have been two incidents that resulted in fatalities in that 
forty year period, both involved the improper setup or storage of 
display fireworks, and were not attributed to the transportation of 
Division 1.4G consumer fireworks. Detailed hazardous materials 
incident reports for hazardous materials incidents specified in 
Sec.  171.16 may be found at the PHMSA Web site at the following 
URL: https://hazmatonline.phmsa.dot.gov/IncidentReportsSearch/Search.aspx.
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III. Proposed Amendments

    In an effort to reduce regulatory burden and provide regulatory 
flexibility, without diminishing safety, PHMSA proposes structural 
changes to the regulations relating to PHMSA's fireworks program. Under 
the proposed revision, PHMSA will continue to approve Division 1.4G 
consumer fireworks in accordance with the current requirements 
specified in Sec. Sec.  173.56(b), 173.56(f), 173.56(i), or 173.56(j). 
In addition to the current approval process, PHMSA proposes a new 
alternative that will permit manufacturers to apply to a DOT-approved 
Fireworks Certification Agency (FCA) to review and certify that 
Division 1.4G consumer fireworks comply with APA Standard 87-1 and are 
safe for transportation in commerce. To provide oversight of the DOT-
approved FCAs, PHMSA is proposing reporting and recordkeeping 
requirements. PHMSA is also proposing to revise subpart E of part 107 
to clarify the approval process for designation as a certification 
agency and provide for reconsideration of decisions to modify, 
terminate, or suspend a designation.

Fireworks Certification Agency (FCA)

    The proposed alternative process for Division 1.4G consumer 
fireworks will parallel the current requirements under Sec.  173.56(j), 
except that, rather than submitting an approval application to PHMSA, 
the manufacturer or their U.S. designated agent will submit a 
certification application to a DOT-approved FCA to review and certify 
that the firework devices match the chemical compositions, sizes, and 
weights detailed in the application and that they meet the defining 
criteria set forth in APA Standard 87-1 to be classified as a Division 
1.4G consumer firework.
    In addition, PHMSA proposes to require the DOT-approved FCA conduct 
a physical examination of a sample of the Division 1.4G consumer 
firework design. This proposal is consistent with the requirements for 
other DOT-approved certification agencies. A DOT-approved FCA will be 
analogous to lighter certification agencies, which certify lighter 
designs, and independent

[[Page 52640]]

inspection agencies, which evaluate and certify cylinder manufacturers. 
These entities physically examine the product (i.e., lighters or 
cylinders) to determine whether the product meets certain criteria 
specified in the HMR to ensure safe transportation of the product. 
Likewise, PHMSA proposes to require the DOT-approved FCAs physically 
examine a sample of the Division 1.4G consumer firework design type 
prior to initial shipment to determine whether the device meets the 
requirements of APA Standard 87-1 and matches the dimensions, chemical 
composition, and device type specified in the application for 
certification.
    To become a DOT-approved FCA, the applicant will be required to 
submit an application with all procedures it will use to review and 
certify Division 1.4G consumer fireworks, in accordance with the 
provisions in subpart E of part 107. These procedures will be designed 
by the applicant; however, PHMSA will review the applicant's procedures 
to determine whether they are adequate to certify compliance with APA-
Standard 87-1 and whether they provide an equivalent or greater level 
of safety to the current approval process. PHMSA plans to develop a 
guidance document for FCAs addressing standard procedures for the 
certification of Division 1.4G consumer fireworks.
    Any domestic or foreign entity may apply to become a DOT-approved 
FCA provided that it is not directly or indirectly controlled by, or 
have a financial involvement with, any entity that manufactures, 
transports, or imports fireworks, except for providing services as an 
FCA. To qualify as a DOT-approved FCA, each applicant must: (1) Meet 
specific criteria designed to ensure that the FCA is an impartial, 
independent, unbiased, and qualified entity; (2) submit an application, 
including certification procedures; and (3) successfully complete a 
facility inspection performed by PHMSA. To meet the specific 
qualification criteria, the applicant will be required to demonstrate 
knowledge of the applicable regulations, including subpart C of part 
173 of the HMR and the APA standard 87-1, the ability to review and 
evaluate design drawings and applications in accordance with the APA 
standard 87-1, and the ability to review and evaluate the 
qualifications of materials and fabrication procedures. If approved, 
PHMSA will issue an approval and an identifying number unique to that 
FCA. This number will provide traceability and enable PHMSA to seek 
corrective action or suspend or terminate certification authority if 
the requirements of the HMR or the FCA approval are not met.

Fireworks Identification Scheme

    Currently, all Division 1.4G fireworks devices are approved by 
PHMSA and assigned an EX number that represents that the fireworks 
article or device is in compliance with the classification requirements 
of the HMR. A current EX number approval begins with the letters ``EX'' 
followed by the year of issuance (e.g. 2012), the month of issuance, 
(e.g. 07), and the approval number issued that month, where ``0001'' 
indicates the first approval of the month. An example of the entire 
string of numbers appears as follows: ``EX2012070001.''
    To differentiate between an approval issued by PHMSA and a DOT-
approved FCA certification, PHMSA proposes to use an FX numbering 
scheme. Instead of issuing an EX number and approval through PHMSA for 
a fireworks device, which is an inherently governmental function that 
cannot be reassigned, the DOT-approved FCA will issue a unique 
identifier (FX number) for devices it certifies as Division 1.4G 
consumer fireworks. The FX number will identify the DOT-approved FCA, 
the device, and the manufacturer. An example of an FX number would be 
``FX123-456.'' In this example ``123'' will correspond to the DOT-
approved FCA conducting the review and certification. This portion of 
the numbering sequence will be issued to the FCA by PHMSA. The ``456'' 
will represent a unique certification identifier traceable to both the 
manufacturer of the Division 1.4G consumer firework device and the 
device itself. This portion of the numbering sequence will be issued by 
the DOT-approved FCA. Each Division 1.4G consumer firework certified in 
this manner will be required to be marked and labeled in accordance 
with subpart D and E of part 172. As with EX numbers, marking the 
package with the FX number will not be required provided the FX number 
for each fireworks device is indicated on an accompanying shipping 
paper. The introduction of the FX numbering scheme will result in some 
Division 1.4G consumer fireworks being assigned an EX number when 
approved by PHMSA, and others being assigned an FX number when 
certified by a DOT-approved FCA.
    Given the long history and wide recognition of the EX numbering 
scheme, PHMSA seeks specific comments on the supply chain implications, 
the economic impact and safety concerns associated with the proposed FX 
numbering system, as well as comments on how to implement the changes 
if they are adopted. For example, will the use of different alpha 
designators (i.e., EX and FX) pose complications or confusion within 
the transportation system?
    PHMSA also seeks comments regarding alternative methods that may be 
used to identify Division 1.4G consumer fireworks devices that have 
been certified by a DOT-approved FCA, including suggestions in the 
alpha-numeric sequence that will facilitate transport while providing a 
clear distinction between PHMSA approved devices and devices certified 
by an FCA as compliant with APA standard 87-1.
Reporting and Recordkeeping Requirements
    PHMSA is proposing specific reporting and recordkeeping 
requirements to ensure that the DOT-approved FCAs are correctly 
certifying Division 1.4G consumer fireworks and are in compliance with 
the HMR and the FCA approval. As a condition of the FCA approval, each 
DOT-approved FCA will be required to submit to PHMSA electronic reports 
of the results of all devices submitted for certification on a schedule 
specified in the approval.
    Additionally, for each firework device certified and issued an FX 
number, the DOT-approved FCA that reviewed the application, the 
manufacturer, and the importer will be required to maintain the 
device's thermal stability test report and a copy of the application. 
Currently, most consumer fireworks manufactured or assembled in the 
U.S. and those imported into the U.S. are voluntarily tested to ensure 
that they comply with the Consumer Product Safety Commission (CPSC) 
requirements. The testing facility, the manufacturers, and the 
importers utilizing this voluntary process are required to maintain 
records of these tests for three years.\6\ As it is current industry 
practice for importers to maintain similar records under the CPSC 
requirements, there will be limited additional paperwork burden for 
importers. The DOT-approved FCA will also be required to maintain a 
copy of the certification procedures used for each device certified. We 
propose that

[[Page 52641]]

FCAs, manufacturers and importers maintain these records for a period 
of five years; however, PHMSA will maintain the records for up to 10 
years consistent with current practices for other approvals. The 
Associate Administrator, or designated official, may inspect the DOT-
approved FCA's facilities and records to verify compliance with the 
recordkeeping requirements, the HMR, and the FCA approval.
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    \6\ Importers and domestic manufacturers participating in a 
voluntary program implemented by American Fireworks Standards 
Laboratory (AFSL) may use the test results obtained from AFSL to 
support certifications that the tested fireworks comply with all 
rules, bans, standards, or regulations applicable under the Consumer 
Product Safety Improvement Act of 2008. AFSL estimates that over 80% 
of U.S. importers and manufacturers currently utilize this voluntary 
program. All Participants in this voluntary program must maintain 
all records and documents for three (3) years from date of 
generation. See http://www.afsl.org/images/Domestic_Certification_Program_Final_012511.pdf (last visited June 12, 2012).
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    PHMSA recognizes that under the proposed system manufacturers or 
their U.S. designated agents may attempt to submit duplicate 
applications to both a DOT-approved FCA and to PHMSA concurrently. As 
this new process is designed to promote efficiency while maintaining 
safety, the submission of duplicate applications under both processes 
may result in confusion, slower processing, and diminished safety. With 
this in mind, PHMSA proposes to require a signed certification 
statement on all applications submitted to either PHMSA or a DOT-
approved FCA stating that an application was not submitted to any other 
entity. PHMSA will be able to verify that duplicative applications are 
not being submitted by reviewing the certification reports the DOT-
approved FCAs will be required to submit to PHMSA. If a manufacturer or 
its U.S. designated agent submits identical applications to both a DOT-
approved FCA and PHMSA, the manufacturer and its U.S. designated agent 
will be in violation of the HMR and the approval and may be fined under 
18 United States Code, or imprisoned for not more than 5 years, or 
both, except the maximum amount of imprisonment may be 10 years in any 
case in which the violation involves the release of a hazardous 
material which results in death or bodily injury to any person (See 
Sec.  107.333).
    PHMSA anticipates that the proposed alternative certification 
process will reduce the processing time that it takes to evaluate an 
application. As a result, economic burdens caused by a delay in 
processing approvals will be reduced. Further, it may also promote 
innovation and potentially create new jobs, as currently no DOT-
approved FCAs exist. Additionally, PHMSA will continue to require that 
Division 1.4G consumer fireworks comply with all other requirements in 
the HMR, including the shipping paper, marking, labeling, placarding, 
and incident reporting requirements to ensure safety is not diminished.
    Should the proposed alternative option be adopted in a future 
rulemaking, PHMSA plans to develop a guidance document addressing 
standard operating procedures for the certification of Division 1.4G 
consumer fireworks. The publication of this guidance document will 
coincide with the final rule publication.
    PHMSA seeks general comments on the proposed changes to the 
fireworks program. PHMSA seeks specific comments on the need for 
revision of the fireworks program, the economic impact of the proposed 
changes, safety concerns associated with the proposed changes, as well 
as comments on how to implement the changes if they are adopted. PHMSA 
also seeks comments on whether the proposed record retention period of 
five years is adequate or if the retention period should be expanded to 
address the longer shelf life of some consumer fireworks. In addition, 
PHMSA invites all stakeholders and affected entities, including the 
CPSC, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Customs 
and Border Patrol, and state and/or local fire and police departments 
to comment on the proposals.

IV. Summary Review of Proposed Amendments

    In an effort to reduce regulatory burden and provide industry more 
flexibility, we are proposing structural changes to the regulations 
relating to PHMSA's fireworks program. Specifically, PHMSA proposes to 
revise the requirements in five sections (Sec. Sec.  107.402, 107.403, 
172.320, 173.56 and 173.59), add two new sections (Sec. Sec.  173.64 
and 173.65), and reserve one section (Sec.  107.405). The specific 
revisions and additions to these sections are detailed below by topic.

Fireworks Approval Program

    We propose moving the current requirements of Sec.  173.56(j) to a 
standalone new Sec.  173.64 entitled ``Exceptions for Division 1.3 and 
1.4 Fireworks.'' In addition, we propose the addition of a new Sec.  
173.65 entitled ``Exceptions for Division 1.4G Consumer Fireworks'' 
that will detail the alternative certification process for Division 
1.4G consumer fireworks. To correspond to the changes proposed in this 
NPRM, we will revise the entry ``UN0336 Fireworks'' in Sec.  172.101 
Hazardous Materials Table. Further, a definition for ``consumer 
firework'' will be added to Sec.  173.59. No modifications are proposed 
for Sec. Sec.  173.56(f) and 173.56(i).
    The hazard communication requirements for Division 1.4G consumer 
fireworks will be specified in paragraph (c) of the new Sec.  173.65 
and the revised Sec.  172.320. Specifically, Sec.  172.320 will be 
revised to reflect the addition of FX numbers.

Fireworks Certification Agency (FCA)

    The process for applying for an approval to operate as a DOT-
approved FCA will be found in the proposed revised Sec.  107.402 
entitled ``Application for designation as a certification agency.'' 
General application requirements for designation as a certification 
agency will be moved to Sec.  107.402(b). No new general application 
requirements are being proposed in this NPRM. Application requirements 
specific to Packing and Lighter Certification Agencies will be moved to 
Sec.  107.402(c). No new application requirements specific to Packing 
and Lighter Certification Agencies are being proposed in this NPRM. 
Application requirements to become a DOT-approved FCA will be found in 
the proposed Sec.  107.402(d).
    To clarify and provide consistency in the procedural process for 
designation as a certification agency, the subpart E heading will be 
entitled ``Designation of Certification Agencies.'' The words ``as an 
approval or'' will be removed from Sec.  107.402. The word ``approval'' 
will be replaced with ``certification'' in the Sec.  107.403 heading.
    Reconsideration for a denial of designation as a fireworks 
certification agency will be found in Sec.  107.403(c), which will be 
revised to provide that the procedural requirements of subpart H of 
this part apply to the process for reconsideration of denials of 
designations. A new subparagraph (d) will be added to Sec.  107.403 to 
provide that the procedural requirements of subpart H of this part will 
also apply to the process for modification, suspension, and termination 
of designations. Section 107.405 will be deleted and reserved.
    An overview of the proposed process to be recognized by PHMSA as a 
DOT-approved FCA is detailed in Figure 1 below.

[[Page 52642]]

[GRAPHIC] [TIFF OMITTED] TP30AU12.059

Alternative Process for Division 1.4G Consumer Fireworks

    The procedures for a manufacturer of Division 1.4G consumer 
fireworks or its U.S. designated agent to submit an application for 
certification to a DOT-approved FCA will be specified in the new Sec.  
173.65(a). These requirements parallel those currently in Sec.  
173.56(j); however, they address certification by a DOT-approved FCA, 
as opposed to PHMSA approval, and describe that fireworks utilizing 
this review process will be issued an FX number, in lieu of an EX 
number. The current approval process will continue to be available; 
however, manufacturers and their U.S. designated agents may voluntarily 
use the FCA process as an alternative.
    Diagrams of the current (Figure 2) and proposed (Figure 3) consumer 
fireworks application processes are shown below.

[[Page 52643]]

[GRAPHIC] [TIFF OMITTED] TP30AU12.060

[GRAPHIC] [TIFF OMITTED] TP30AU12.061

[[Page 52644]]

Reporting and Recordkeeping Requirements

    DOT-approved FCA reporting requirements on certification activities 
will be found in Sec.  107.402(d)(8). Recordkeeping requirements 
requiring the manufacturer, importer, and fireworks certification 
agency to maintain a record or an electronic image of the record 
demonstrating compliance with Sec.  173.65 will be found in Sec.  
173.65(b).

V. Regulatory Analyses and Notices

A. Statutory/Legal Authority for This Rulemaking

    This notice of proposed rulemaking (NPRM) is published under the 
authority of the Federal Hazardous Materials Transportation Law, 49 
U.S.C. 5101 et seq. Section 5103(b) authorizes the Secretary to 
prescribe regulations for the safe transportation, including security, 
of hazardous material in intrastate, interstate, and foreign commerce. 
This NPRM provides an alternative to the current process for approving 
Division 1.4G consumer fireworks more quickly and efficiently, without 
compromising safety. Furthermore, section 5120(b) authorizes the 
Secretary of Transportation to ensure that, to the extent practicable, 
regulations governing the transportation of hazardous materials in 
commerce are consistent with standards adopted by international 
authorities.

B. Executive Order 13610, Executive Order 13563, Executive Order 12866, 
and DOT Regulatory Policies and Procedures

    This NPRM is not considered a significant regulatory action under 
section 3(f) Executive Order 12866 and, therefore, was not reviewed by 
the Office of Management and Budget (OMB). The proposed rule is not 
considered a significant rule under the Regulatory Policies and 
Procedures order issued by the U.S. Department of Transportation (44 FR 
11034).
    Executive Order 13563 is supplemental to and reaffirms the 
principles, structures, and definitions governing regulatory review 
that were established in Executive Order 12866 Regulatory Planning and 
Review of September 30, 1993. Executive Order 13563, issued January 18, 
2011, notes that our nation's current regulatory system must not only 
protect public health, welfare, safety, and our environment but also 
promote economic growth, innovation, competitiveness, and job 
creation.\7\ Further, this executive order urges government agencies to 
consider regulatory approaches that reduce burdens and maintain 
flexibility and freedom of choice for the public. In addition, federal 
agencies are asked to periodically review existing significant 
regulations, retrospectively analyze rules that may be outmoded, 
ineffective, insufficient, or excessively burdensome, and modify, 
streamline, expand, or repeal regulatory requirements in accordance 
with what has been learned.
---------------------------------------------------------------------------

    \7\ See http://www.whitehouse.gov/the-press-office/2011/01/18/improving-regulation-and-regulatory-review-executive-order.
---------------------------------------------------------------------------

    Executive Order 13610, issued May 10, 2012, urges agencies to 
conduct retrospective analyses of existing rules to examine whether 
they remain justified and whether they should be modified or 
streamlined in light of changed circumstances, including the rise of 
new technologies.\8\
---------------------------------------------------------------------------

    \8\ See http://www.gpo.gov/fdsys/pkg/FR-2012-05-14/pdf/2012-11798.pdf.
---------------------------------------------------------------------------

    By building off of each other, these three 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.''
    PHMSA has evaluated our fireworks approval program for 
effectiveness and identified areas that could be modified to enhance 
the program and increase flexibility for the regulated community. In 
this NPRM, the proposed amendments to the HMR will not impose increased 
compliance costs on the regulated industry. By proposing to amend the 
HMR to allow for an alternative to the approval process for Division 
1.4G consumer firework devices, PHMSA will reduce regulatory burden and 
increase flexibility to industry, while maintaining an equivalent level 
of safety.
    A summary of the regulatory evaluation used to support the 
proposals presented in this NPRM are discussed below.
Regulatory Evaluation
    For the regulatory evaluation of this NPRM, PHMSA assumes:
     Between 50 and 90 percent of applicants will choose to 
file a Division 1.4G consumer fireworks application with a DOT-approved 
FCA instead of filing an application with PHMSA.
     Domestic manufacturers and importers of Division 1.4G 
fireworks that participate in the voluntary CPSC Domestic Testing 
Program will choose certification by a DOT-approved FCA.
     The existing DOT-approved explosive test laboratories will 
likely apply for approval as a DOT-approved FCA.
     A 10-year timeframe to outline, quantify, and monetize the 
costs and benefits of the proposal and to demonstrate the net effects 
of the proposal
    PHMSA's current fireworks approval process has proven effective in 
achieving a high level of transportation safety. This high level of 
transportation safety is demonstrated by the fact that no 
transportation incidents resulting in death or serious injury have been 
attributed to the transport of consumer fireworks in the past 40 years. 
While continuing to maintain this high level of safety, we expect the 
implementation of the proposals in this NPRM will result in the 
benefits outweighing the costs.
    We anticipate the primary costs will be (1) costs attributed to the 
proposed five year recordkeeping requirement; and (2) potential fees 
assessed by the DOT-approved FCAs for certification services. The 
recordkeeping costs will apply to DOT-approved FCAs, manufactures that 
choose certification by a DOT-approved FCA, and importers of fireworks 
certified by a DOT-approved FCA. The proposed recordkeeping requirement 
is similar to the requirement that requires participants in the 
voluntary CPSC Domestic Testing Program keep a certification of 
compliance with CPSC standards for three years. This documentation 
contains much of the same information PHMSA proposes to require. 
Assuming the domestic manufacturers and importers of Division 1.4G 
consumer fireworks that participate in the voluntary CPSC Domestic 
Testing Program will choose certification by a DOT-approved FCA, we 
anticipate the recordkeeping costs will be minimal. While the proposed 
recordkeeping requirement is similar to CPSC's recordkeeping 
requirement, PHMSA acknowledges that the retention requirement being 
two years longer than CPSC's requirement may impose some cost. Also, 
there may be recordkeeping costs for those who do not participate in 
the voluntary CPSC Domestic Testing Program.
    PHMSA assumes that a DOT-approved FCA will likely assess an 
explicit cost for its certification services and fireworks 
manufacturers will individually consider their business' potential to 
benefit from expedited processing against the expected costs of this 
certification fee. PHMSA anticipates the benefits of certification 
derived from the expedited processing of consumer fireworks 
applications,

[[Page 52645]]

resulting in faster time to market for each firework device, outweighs 
the cost of any fees assessed by the DOT-approved FCA. PHMSA also 
anticipates these benefits will be realized without diminishing the 
exemplary transportation safety record that Division 1.4G consumer 
fireworks have demonstrated over the past forty years. The benefit-cost 
ratio for this NPRM is estimated to be between 3.70 and 3.71. These 
benefit and cost figures depend on the assumptions mentioned above.
    Total annual benefits derived from this NPRM are expected to be 
approximately between $14.5 and 26.5 million, and total annual costs 
are expected to be approximately between $4 and $7 million with total 
annual net benefits of approximately between $11 and $19 million. Based 
on this net positive value, we conclude that adopting the proposed 
requirements will result in an increase in overall societal welfare.
    The 10-year present value of the net benefits is approximately $80 
million to $143 million (discounted at a 3 percent rate) or $55 million 
to $98 million (discounted at a 7 percent rate). We expect adopting 
this proposal will make regulation of hazardous materials more 
efficient, provide regulatory relief to industry, and have no negative 
effect on the safe transportation of hazardous materials in the United 
States. A summary of the annual costs and benefits and calculated 
annual net benefits is displayed in the table below.

                         Annual Net Benefits \9\
------------------------------------------------------------------------
                                       Low redirected    High redirected
                                         application       application
                                         rate  (50%)       rate  (90%)
------------------------------------------------------------------------
                                BENEFITS
------------------------------------------------------------------------
Expected Annual Private-Sector             $14,680,000       $26,430,000
 Benefits of Expedited Verification.
                                     -----------------------------------
    TOTAL ANNUAL BENEFITS...........        14,680,000        26,430,000
------------------------------------------------------------------------
                                  COSTS
------------------------------------------------------------------------
Record Retention Costs:
    Costs of 2 Additional Years of              10,200            58,000
     Paper Record Retention, All
     U.S. Importers per year........
                                     -----------------------------------
    Cost for Required Electronic            Negligible        Negligible
     Storage Space, All U.S.
     Importers and Manufacturers per
     year...........................
                                     -----------------------------------
        Total Annual Record                     10,200            58,000
         Retention Costs............
FCA Processing Costs:
    Costs of application processing          3,937,500         7,087,500
     conducted by FCAs \10\.........
                                     -----------------------------------
        Total Annual FCA Processing          3,937,500         7,087,500
         Costs......................
                                     -----------------------------------
            TOTAL ANNUAL COSTS......         3,947,700         7,145,500
                                     -----------------------------------
                TOTAL ANNUAL NET            10,732,300        19,284,500
                 BENEFITS...........
------------------------------------------------------------------------

C. Executive Order 13132

    This proposed rule has been analyzed in accordance with the 
principles and criteria contained in Executive Order 13132 
(``Federalism''), and the President's memorandum on ``Preemption'' 
published in the Federal Register on May 22, 2009 (74 FR 24693). This 
proposed rule will 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 government. Therefore, the consultation and funding 
requirements of Executive Order 13132 do not apply.
---------------------------------------------------------------------------

    \9\ Figures are rounded.
    \10\ Cost calculated by multiplying the estimated cost of $700 
per application by number of Division 1.4G consumer firework 
applications redirected to an FCA (i.e. for 50% redirected 5,625 x 
$700 and for 90%.
---------------------------------------------------------------------------

    The Federal hazardous materials transportation law, 49 U.S.C. 5101-
5128, contains an express preemption provision (49 U.S.C. 5125 (b)) 
that preempts State, local, and Indian tribe requirements on the 
following subjects:
    (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 material; and
    (5) The design, manufacture, fabrication, marking, maintenance, 
recondition, repair, or testing of a packaging or container 
represented, marked, certified, or sold as qualified for use in 
transporting hazardous material.
    This proposed rule addresses all the covered subject areas above. 
If adopted as final, this rule will preempt any State, local, or Indian 
tribe requirements concerning these subjects unless the non-Federal 
requirements are ``substantively the same'' as the Federal 
requirements. Furthermore, this proposed rule is necessary to update, 
clarify, and provide relief from regulatory requirements.
    Federal hazardous materials transportation law provides at Sec.  
5125(b)(2) that, if DOT issues a regulation concerning any of the 
covered subjects, DOT must determine and publish in the Federal 
Register the effective date of Federal preemption. 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 has determined that the effective date of Federal preemption for

[[Page 52646]]

these requirements will be one year from the date of publication of a 
final rule in the Federal Register.

D. Executive Order 13175

    This NPRM has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13175 (``Consultation and 
Coordination with Indian Tribal Governments''). Because this NPRM does 
not significantly or uniquely affect the communities of the Indian 
tribal governments and does not impose substantial direct compliance 
costs, the funding and consultation requirements of Executive Order 
13175 do not apply.

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

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an 
agency to review regulations to assess their impact on small entities 
unless the agency determines that a rule is not expected to have a 
significant impact on a substantial number of small entities. The total 
number of U.S. importers that are expected to be impacted by the 
proposed rulemaking is estimated to be between 62 and 206. PHMSA chose 
to use a range to reflect an uncertainty in the number of U.S. 
importers. This uncertainty is a result of the high turnover in the 
fireworks industry resulting in large year-to-year fluctuations in the 
number of importers. This range is a result of combining estimated 
import data with data provided by a consumer fireworks trade 
association. The figure of 62 was derived from import data obtained 
from a publically available business directory and PHMSA's approvals 
database; while the figure of 206 was derived from statistics provided 
by AFSL, a consumer fireworks trade association. Specifically, the 
figure of 206 is derived from the AFSL Consumer Fireworks Membership 
list that shows 175 members. AFSL claims to represent 85 percent of all 
U.S. consumer fireworks importers in the U.S., therefore, we calculated 
a total of 206 (175/.85 = 206). PHMSA believes the actual number of 
U.S. importers lies somewhere between 62 and 206. PHMSA estimates the 
number of U.S. manufacturers to be five, based on the number of hazmat 
registrants. This results in a range from 67 to 211 U.S. manufacturers 
and importers. PHMSA seeks comment specifically on the accuracy of 
these numbers.
    The proposed rule provides an additional, voluntary option for 
manufacturers to apply to a DOT-approved FCA for certification of 
Division 1.4 consumer fireworks, in lieu of submitting an application 
to PHMSA for approval. The expected costs associated with this 
rulemaking relate to recordkeeping since copies of documentation will 
have to be retained for two additional years over current practice (for 
U.S. importers and fireworks manufacturers who elect to examine and 
certify new devices with an FCA instead of seeking an approval from 
PHMSA). Fireworks manufacturers may pay fees assessed by FCAs for 
certification services. PHMSA assumes that most will see the benefits 
of FCA certification as justifying the fees involved. However, the 
costs are voluntary costs.
    Benefits of the proposed certification option will be derived from 
the expedited processing of consumer fireworks applications, resulting 
in faster time to market for each firework device. Benefits may be 
realized from the reduction in PHMSA's approvals application workload, 
which allows for administrative cost savings and more resources for 
PHMSA Approvals and Permits staff. These resources may allow for 
additional scrutiny to higher risk hazardous materials approvals 
applications. Total annual benefits are expected to be between 
approximately $14.5 million and $26.5 million, and total annual costs 
are expected to be approximately between $4 and $7 million, resulting 
in total annual net benefits of between approximately $11 million and 
$19 million.
    Overall, by proposing increased regulatory flexibility, this 
proposed rule should reduce the compliance burden on the regulated 
industry, including small entities, without compromising transportation 
safety. Therefore, we certify that this proposed rulemaking will not 
have a significant or negative economic impact on a substantial number 
of small entities. Further information on the estimates and assumptions 
used to evaluate the potential impacts to small entities is available 
in the Regulatory Impact Assessment that has been placed in the public 
docket for this rulemaking. In this notice, PHMSA is soliciting 
comments on the number of affected entities and the preliminary 
conclusion that the proposals in this NPRM will not cause a significant 
economic impact on a substantial number of small entities.
    This notice 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 currently has an approved information collection under OMB 
Control Number 2137-0557, entitled ``Approvals for Hazardous 
Materials,'' with an expiration date of May 31, 2014. While this NPRM 
may result in a slight increase in the annual burden and cost to OMB 
Control Number 2137-0557 for proposed minor record-keeping requirements 
under Sec. Sec.  173.64 and 173.65, this NPRM should result in a 
decrease in the burden on the fireworks industry by increasing 
regulatory flexibility, which will provide manufacturers of Division 
1.4 consumer fireworks with an alternative that should be more 
efficient than the current approval process.
    Under the Paperwork Reduction Act of 1995, no person is required to 
respond to an information collection unless it has been approved by OMB 
and displays a valid OMB control number. Section 1320.8(d), title 5, 
Code of Federal Regulations requires that PHMSA provide interested 
members of the public and affected agencies an opportunity to comment 
on information and recordkeeping requests.
    This notice identifies revised information collection requests that 
PHMSA will submit to OMB for approval based on the requirements in this 
proposed rule. PHMSA has developed burden estimates to reflect changes 
in this proposed rule and estimates that the information collection and 
recordkeeping burdens will be revised as follows:

OMB Control No. 2137-0557:

    Increase in Annual Number of Respondents: 211.
    Increase in Annual Responses: 5,175.
    Increase in Annual Burden Hours: 430.
    Increase in Annual Burden Costs: $14,875.

    PHMSA specifically requests comments on the information collection 
and recordkeeping burdens associated with developing, implementing, and 
maintaining these requirements for approval under this proposed rule.
    Requests for a copy of this information collection should be 
directed to Steven Andrews or T. Glenn Foster, Office of Hazardous 
Materials Standards (PHH-12), 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

[[Page 52647]]

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 can be used to cross-reference this action with the 
Unified Agenda.

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 rule.

I. Environmental Assessment

    The National Environmental Policy Act of 1969 (NEPA), as amended 
(42 U.S.C. 4321-4347), and implementing regulations by the Council on 
Environmental Quality (40 CFR part 1500) require Federal agencies to 
consider the consequences of Federal actions and prepare a detailed 
statement on actions that significantly affect the quality of the human 
environment.
    The purpose of this rulemaking is to allow for an alternative to 
the approval process for Division 1.4G consumer fireworks. The 
alternatives considered in the environmental analysis include: (1) the 
proposed action, that is, permitting an alternative process for 
Division 1.4G consumer fireworks to be certified by a DOT-approved FCA; 
and (2) the ``no action'' alternative, meaning that the regulatory 
scheme will stay the same and the proposed new alternative will not be 
implemented. PHMSA believes that both alternatives present little or no 
environmental impact on the quality of the human environment because 
both alternatives deal with the processing of applications. 
Furthermore, the proposed amendments only affect the authorization 
process that deems Division 1.4G consumer fireworks safe for transport 
and has no impact on any other transport requirements (e.g. packaging, 
hazard communication, etc.). The proposed action would provide an 
additional application process that would not impact the exemplary 
safety record that Division 1.4G consumer fireworks have demonstrated 
over the past forty years. Therefore, PHMSA has initially determined 
that the implementation of the proposed rule will not have any 
significant impact on the quality of the human environment. PHMSA, 
however, invites comments about environmental impacts that the proposed 
rule might pose.

J. Privacy Act

    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the 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) or you may visit 
http://www.dot.gov.

K. International Trade Analysis

    Under E.O. 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 will 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. We have assessed 
the effects of the proposed rule, and find that because the proposed 
alternative process mirrors the current approval process, it will not 
cause unnecessary obstacles to foreign trade. Accordingly, this 
rulemaking is consistent with Executive Order 13609 and PHMSA's 
obligations under the Trade Agreement Act, as amended.

L. National Technology Transfer and Advancement Act

    The National Technology Transfer and Advancement Act of 1995 (15 
U.S.C. 272 note) directs federal agencies to use voluntary consensus 
standards in their regulatory activities unless doing so would be 
inconsistent with applicable law or otherwise impractical. Voluntary 
consensus standards are technical standards (e.g. specification of 
materials, test methods, or performance requirements) that are 
developed or adopted by voluntary consensus standard bodies.
    This proposed rulemaking involves one technical standard: American 
Pyrotechnics Association (APA), APA Standard 87-1 Standard for 
Construction and Approval for Transportation of Fireworks, Novelties, 
and Theatrical Pyrotechnics, December 1, 2001 version. This technical 
standard is listed in 49 CFR 171.7.

VI. List of Subjects

49 CFR Part 107

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

49 CFR Part 172

    Education, Hazardous materials transportation, Hazardous waste, 
Labeling, Markings, Packaging and containers, Reporting and 
recordkeeping requirements.

49 CFR Part 173

    Hazardous materials transportation, Packaging and containers, 
Radioactive materials, Reporting and recordkeeping requirements, 
Uranium.

    In consideration of the foregoing, 49 CFR chapter I is proposed to 
be amended as follows:

PART 107--HAZARDOUS MATERIALS PROGRAM PROCEDURES

    1. 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; 49 CFR 1.45 and 1.53.
    2. In Part 107, revise subpart E to read as follows:

[[Page 52648]]

Subpart E--Designation of Certification Agency

Sec.  107.402  Application for designation as a certification agency.

    (a) Any person seeking designation as a certification agency must 
apply in writing to the Associate Administrator for Hazardous Materials 
Safety (PHH-32), Department of Transportation, East Building, 1200 New 
Jersey Avenue SE., Washington, DC 20590-0001. Alternatively, the 
application with any attached supporting documentation in an 
appropriate format may be submitted by facsimile (fax) to: (202) 366-
3753 or (202) 366-3308 or by electronic mail (email) to: 
approvals@dot.gov. Each application must be signed and certified to be 
correct by the applicant or, if the applicant is an organization, by an 
authorized officer or official representative of the organization. Any 
false statement or representation, or the knowing and willful 
concealment of a material fact, may subject the applicant to 
prosecution under the provisions of 18 U.S.C. 1001, and result in the 
denial or termination of a designation.
    (b) Each application for designation as a certification agency must 
be in English and include the following information:
    (1) Name and address of the applicant, including place of 
incorporation if a corporation. In addition, if the applicant is not a 
resident of the United States, the name and address of a permanent 
resident of the United States designated in accordance with Sec.  
105.40 to serve as agent for service of process.
    (2) A statement that the applicant will allow the Associate 
Administrator or a designated official to inspect its records and 
facilities in so far as they relate to the certification activities and 
will cooperate in the conduct of such inspections.
    (3) Any additional information relevant to the applicant's 
qualifications, if requested by the Associate Administrator.
    (4) Information required by the provisions in subpart H of this 
part.
    (c) Packaging and Lighter Certification Agencies. In addition to 
the requirements in (b), the application must include the following 
information:
    (1) A listing, by DOT specification (or special permit) number, or 
U.N. designation, of the types of packagings for which certification 
authority is sought.
    (2) A personnel qualifications plan listing the qualifications that 
the applicant will require of each person to be used in the performance 
of each packaging certification function. As a minimum, these 
qualifications must include:
    (i) The ability to review and evaluate design drawings, design and 
stress calculations;
    (ii) A knowledge of the applicable regulations of subchapter C of 
this chapter and, when applicable, U.N. standards; and
    (iii) The ability to conduct or monitor and evaluate test 
procedures and results; and
    (iv) The ability to review and evaluate the qualifications of 
materials and fabrication procedures.
    (3) A statement that the applicant will perform its functions 
independent of the manufacturers and owners of the packagings 
concerned.
    (4) If the applicant's principal place of business is in a country 
other than the United States, a copy of the designation from the 
Competent Authority of that country delegating to the applicant an 
approval or designated agency authority for the type of packaging for 
which a DOT designation is sought, and a statement that the Competent 
Authority also delegates similar authority to U.S. Citizens or 
organizations having designations under this subpart from PHMSA.
    (d) Fireworks Certification Agency. Prior to reviewing, and 
certifying Division 1.4G consumer fireworks for compliance with APA 
Standard 87-1 as specified in part 173 of this chapter, a person must 
apply to, and be approved by, the Associate Administrator to act as a 
firework certification agency. A person approved as a firework 
certification agency is not a PHMSA agent or representative. In 
addition to (b), the application must include the following 
information:
    (1) Name, address, and country of each facility where Division 1.4G 
consumer fireworks test results and application materials are reviewed 
and certified;
    (2) Detailed description of the applicant's qualifications and 
ability to inspect, review, and certify that the requirements specified 
by part 173 of this chapter have been meet. At a minimum, these 
qualifications must include ability to:
    (i) Review and evaluate design drawings, fabrication procedures, 
and applications to certify that they are in accordance with the APA 
Standard 87-1; and
    (ii) Evaluate thermal stability test procedures and results.
    (3) Detailed description of the operating procedures to be used by 
the firework certification agency to review, and certify that a 
Division 1.4G consumer fireworks application meets the requirements 
specified by part 173 of this chapter;
    (4) Name, address, and principal business activity of each person 
having any direct or indirect ownership interest in the applicant 
greater than three percent and any direct or indirect ownership 
interest in each subsidiary or division of the applicant;
    (5) Name and a statement of qualifications of each individual the 
applicant proposes to employ to inspect, review, and certify test 
results and certify that application materials comply with APA Standard 
87-1;
    (6) A statement that the applicant will perform its functions 
independent of the manufacturers, transporters, importers, and owners 
of the fireworks; and
    (7) A signed certification declaring that the information provided 
in the approval application is true and correct and the application has 
not been submitted to any other entity, and the date on which this 
certification was signed.
    (8) If approved, the results of fireworks certification evaluation 
must be submitted to PHMSA on a schedule and in a manner specified in 
the DOT-issued designation approval.
* * * * *

Sec.  107.403  Designation of certification agencies.

* * * * *
    (c) Within 30 days of an initial denial of an application under 
paragraph (b) of this section, the application may file an amended 
application. If the application for designation is denied, the 
applicant may file for reconsideration in accordance with the 
provisions in subpart H of this part.
    (d) The provisions in subpart H will apply to the modification, 
suspension, and termination of an approval submitted under this 
subpart.
* * * * *

Sec.  107.405  Termination of certification agencies.

* * * * *

Sec.  107.405  [Reserved]

* * * * *

PART 172--HAZARDOUS MATERIALS TABLE, SPECIAL PROVISIONS, HAZARDOUS 
MATERIALS COMMUNICATIONS, EMERGENCY RESPONSE INFORMATION, TRAINING 
REQUIREMENTS, AND SECURITY PLANS

    3. The authority citation for part 172 continues to read as 
follows:

    Authority:  49 U.S.C. 5101-5128, 44701; 49 CFR 1.53.

[[Page 52649]]

    4. In Sec.  172.101, the Hazardous Materials Table is amended by 
revising entries under ``[REVISE]'' in the appropriate alphabetical 
sequence to read as follows:

Sec.  172.101  Purpose and use of hazardous materials table.

* * * * *

                                                                            Sec.   172.101--Hazardous Materials Table
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                           (8) Packaging (Sec.            (9) Quantity            (10) Vessel
                                                                                                            Special             173.***)                   limitations              stowage
                              Hazardous materials descriptions    Hazard   Identification          Label  provisions ---------------------------------------------------------------------------
          Symbols                and proper shipping names       class or       Nos.         PG    codes     (Sec.                                                    Cargo
                                                                 division                                  172.102)   Exceptions    Non-     Bulk      Passenger    aircraft   Location    Other
                                                                                                                                    bulk             aircraft/rail    only
(1)                          (2)..............................       (3)           (4)      (5)     (6)        (7)         (8A)     (8B)       (8C)          (9A)      (9B)       (10A)   (10B)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             [REVISE]
 
                                                                                          * * * * * * *
                             Fireworks........................      1.4G       UN 0336       II    1.4G        108           65       62     None       Forbidden     75 kg          06
 
                                                                                          * * * * * * *
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    5. In Sec.  172.320, paragraph (b) and paragraph (d) are revised to 
read as follows:

Sec.  172.320  Explosive hazardous materials.

* * * * *
    (b) Except for fireworks approved in accordance with Sec.  173.64 
of this subchapter, a package of Class 1 materials may be marked as 
follows, in lieu of the EX number required by paragraph (a) of this 
section:
    (1) With a national stock number issued by the Department of 
Defense or identifying information, such as a product code required by 
regulations for commercial explosives specified in 27 CFR part 555, if 
the national stock number or identifying information can be 
specifically associated with the EX number assigned; or
    (2) For Division 1.4G consumer fireworks, with a FX number issued 
by a fireworks certification agency approved in accordance with 49 CFR 
part 107 subpart E and classified in accordance with Sec.  173.65.
* * * * *
    (d) The requirements of this section do not apply if the EX number, 
FX number, product code or national stock number of each explosive item 
described under a proper shipping description is shown in association 
with the shipping description required by Sec.  172.202(a) of this 
part. Product codes and national stock numbers must be traceable to the 
specific EX number assigned by the Associate Administrator or FX number 
assigned by a DOT approved fireworks certification agency.
* * * * *

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

    6. The authority citation for part 173 continues to read as 
follows:

    Authority: 49 U.S.C. 5101-5128, 44701; 49 CFR 1.45, 1.53.

    7. In Sec.  173.56, the introductory text for paragraph (b) is 
revised to read as follows, and paragraph (j) is removed and reserved.

Sec.  173.56  New explosives--definitions and procedures for 
classification and approval.

* * * * *
    (b) Examination, classification and approval. Except as provided in 
Sec. Sec.  173.64 and 173.65 of this subpart, no person may offer a new 
explosive for transportation unless that person has specified to the 
examining agency the ranges of composition of ingredients and 
compounds, showing the intended manufacturing tolerances in the 
composition of substances or design of articles which will be allowed 
in that material or device, and unless it has been examined, classed 
and approved as follows:
* * * * *
    (j) [Reserved]
* * * * *
    8. In Sec.  173.59, add new definition for ``consumer firework'' in 
appropriate alphabetical sequence to read as follows:

Sec.  173.59  Description of terms for explosives.

* * * * *
    Consumer firework. Any completed firework device that is packaged 
in a form intended for use by the public that complies with the 
construction, performance, chemical composition, and labeling 
requirements codified by the U.S. Consumer Product Safety Commission in 
Title 16, CFR parts 1500 and 1507. A consumer firework does not include 
firework devices, kits or components banned by the U.S. Consumer 
Product Safety Commission in 16 CFR 1500.17 (a)(8).
* * * * *
    9. Add new section Sec.  173.64 to read as follows:

Sec.  173.64  Exceptions for Division 1.3 and 1.4 fireworks.

    (a) Notwithstanding the requirements of Sec.  173.56(b), Division 
1.3 and 1.4 fireworks (see Sec.  173.65 for Division 1.4G consumer 
fireworks) may be classed and approved by the Associate Administrator 
without prior examination and offered for transportation if the 
following conditions are met:
    (1) The fireworks are manufactured in accordance with the 
applicable requirements in APA Standard 87-1 (IBR, see Sec.  171.7 of 
this subchapter);
    (2) The device must pass a thermal stability test conducted by a 
third-party laboratory, or the manufacturer. The test must be performed 
by maintaining the device, or a representative prototype of a large 
device such as a display shell, at a temperature of 75 [deg]C 
(167[emsp14][deg]F) for 48 consecutive hours. When a device contains 
more than one component, those components that could be in physical 
contact with each other in the finished device must be placed in 
contact with each other during the thermal stability test;
    (3) The manufacturer applies in writing to the Associate 
Administrator following the applicable requirements in APA Standard 87-
1, and is notified in writing by the Associate

[[Page 52650]]

Administrator that the fireworks have been classed, approved, and 
assigned an EX number. Each application must be complete and include 
all relevant background data and copies of all applicable drawings, 
test results, and any other pertinent information on each device for 
which approval is being requested. The manufacturer must sign the 
application and certify that the device for which approval is requested 
conforms to APA Standard 87-1, that the descriptions and technical 
information contained in the application are complete and accurate, and 
that no duplicate application has been submitted to a DOT-approved 
fireworks certification agency. If the application is denied, the 
manufacturer will be notified in writing of the reasons for the denial. 
The Associate Administrator may require that the fireworks be examined 
by an agency listed in Sec.  173.56(b)(1).
* * * * *
    10. Add new section Sec.  173.65 to read as follows.

Sec.  173.65  Exceptions for Division 1.4G Consumer Fireworks.

    (a) Notwithstanding the requirements of paragraphs Sec. Sec.  
173.56(b), 173.56(f), 173.56(i), and 173.64, Division 1.4G consumer 
fireworks may be offered for transportation provided the following 
conditions are met:
    (1) The fireworks are manufactured in accordance with the 
applicable requirements in APA Standard 87-1 (IBR, see Sec.  171.7 of 
this subchapter);
    (2) The device must pass a thermal stability test. The test must be 
performed by maintaining the device, or a representative prototype of 
the device at a temperature of 75 [deg]C (167[emsp14][deg]F) for 48 
consecutive hours. When a device contains more than one component, 
those components that could be in physical contact with each other in 
the finished device must be placed in contact with each other during 
the thermal stability test;
    (3) The manufacturer of the Division 1.4G consumer firework applies 
in writing to a DOT-approved fireworks certification agency, and is 
notified in writing by the fireworks certification agency that the 
firework has been:
    (i) Evaluated, and examined, as required, for a Division 1.4G 
consumer firework;
    (ii) Certified that it complies with APA Standard 87-1, and meets 
the requirements of this section; and
    (iii) Assigned an FX number followed by a corresponding 
certification report identifier (e.g., FX-XXX-YYY, where XXX represents 
the firework certification agency and YYY represents the certification 
report identifier that is traceable to the specific manufacturer and 
firework device transported).
    (4) The manufacturer's application must be complete and include 
relevant background data, copies of all applicable drawings, test 
results, and any other pertinent information on each device for which 
certification is being requested. The manufacturer must sign the 
application and certify that the device for which certification is 
requested conforms to APA Standard 87-1, that the descriptions and 
technical information contained in the application are complete and 
accurate, and that no duplicate applications have been submitted to 
PHMSA. If the application is denied, the DOT-approved fireworks 
certification agency must notify the manufacturer in writing of the 
reasons for the denial. Following the issuance of a denial from a DOT-
approved fireworks certification agency, a manufacturer may submit the 
denial and original application to PHMSA for reconsideration in 
accordance with subpart H.
    (b) Recordkeeping requirements. Following the certification of each 
Division 1.4G consumer firework as permitted by paragraph (a) of this 
section, the manufacturer, importer, and fireworks certification agency 
must maintain a record or an electronic image of the record 
demonstrating compliance with this section. This record must be 
accessible at or through its principal place of business and be made 
available, upon request, to an authorized official of a Federal, State, 
or local government agency at a reasonable time and location. A copy of 
this record must be retained for five years after the material is 
imported. Records complying with firework requirements of other Federal 
or international agencies may be used to satisfy the recordkeeping 
requirements of this paragraph to the extent that such records address 
the recordkeeping components specified in this section. For Division 
1.4G consumer fireworks certified by a DOT-approved fireworks 
certification agency, the record must include:
    (1) The FX number of the entity that certified that the firework 
device complies with APA Standard 87-1, including a certification 
report identifier that is traceable to the manufacturer and specific 
firework device transported;
    (2) A copy of the approval application submitted to the DOT-
approved fireworks certification agency; and
    (3) A copy of any certification documentation completed by the 
fireworks certification agency in accordance with the DOT-approved 
procedures.
    (c) Hazard Communication. Following the certification of each 
Division 1.4G consumer firework as permitted by paragraph (a) of this 
section, each package containing a Division 1.4G consumer firework must 
be marked and labeled in accordance with subpart D and E of part 172.
* * * * *

    Issued in Washington, DC, on August 24, 2012, under authority 
delegated in 49 CFR part 106.
Magdy El-Sibaie,
Associate Administrator for Hazardous Materials Safety, Pipeline and 
Hazardous Materials Safety Administration.
[FR Doc. 2012-21360 Filed 8-29-12; 8:45 am]
BILLING CODE 4910-60-P