gas or hazardous liquid transmission facility and re-
quire the facility to be changed to allow the facility
to be inspected with an instrumented internal in-
spection device if the basic construction of the facil-
ity will accommodate the device.’’.
(2) PERIODIC INSPECTIONS.—Section 60102(f)
is further amended—
(A) in paragraph (2) by inserting ‘‘PERI-
ODIC INSPECTIONS.—’’ after ‘‘(2)’’;
(B) in paragraph (2) by inserting after
‘‘the Secretary shall prescribe’’ the following: ‘‘,
if necessary, additional’’; and
(C) by moving paragraph (2) 2 ems to the
right.
(f) UPDATING
STANDARDS.—Section 60102 is
amended by adding at the end the following:
‘‘(l) UPDATING STANDARDS.—The Secretary shall, to
the extent appropriate and practicable, update incor-
porated industry standards that have been adopted as part
of the Federal pipeline safety regulatory program.’’.
SEC. 6. RISK MANAGEMENT.
(a) IN GENERAL.—Chapter 601 is further amended
by adding at the end the following new section:
‘‘§ 60127. Risk management
‘‘(a) 
RISK
MANAGEMENT
DEMONSTRATION
PROJECT.—The Secretary shall carry out a project with
voluntary participation by owners and operators of pipe-
line facilities to demonstrate applications of risk manage-
ment. The purpose of the project shall be to evaluate the
safety and cost effectiveness of such applications.
‘‘(b) EXEMPTION.—During the period of the dem-
onstration project carried out under this section, the Sec-
retary may exempt owners and operators participating in
the project from compliance with some or all of the stand-
ards and regulatory requirements that would otherwise
apply to such owners and operators under this chapter.
In addition, the Secretary shall exempt such owners and
operators from complying with standards and regulatory
requirements promulgated under this chapter during the
period of such participation with respect to facilities in-
cluded in the project.
‘‘(c) REQUIREMENTS.—In carrying out the dem-
onstration project under this section, the Secretary shall—
‘‘(1) invite owners and operators of pipeline fa-
cilities to submit risk management plans for timely
approval by the Secretary;
‘‘(2) ensure that owners and operators imple-
menting approved risk management plans under the
project will achieve an equivalent or greater overall
level of safety than such owners and operators would
otherwise achieve by complying with the standards
and regulatory requirements of this chapter; and
‘‘(3) ensure that the project incorporates the
following elements:
‘‘(A) collaborative training;
‘‘(B) methods to measure the performance
of risk management plans;
‘‘(C) development and application of new
technologies;
‘‘(D) promotion of community awareness;
‘‘(E) development of a model to categorize
the risks inherent to a selected pipeline facility,
considering the location, volume, pressure, and
material transported or stored by the facility;
‘‘(F) application of risk assessment and
risk management methodologies suitable to the
inherent risks determined to exist by the model
developed under subparagraph (E);
‘‘(G) development of project elements need-
ed to ensure that owners and operators partici-
pating in the project demonstrate that risks are
being effectively managed and that risk man-
agement plans carried out under the project can
be audited;
‘‘(H) a process for making amendments,
modifications, and adjustments to approved risk
management plans under the project as agreed
to by owners and operators carrying out such
plans and the Secretary; and
‘‘(I) such other elements as the Secretary
and owners and operators participating in the
project may agree would further the purposes of
this section.
‘‘(d) EMERGENCIES.—In the case of an emergency,
the Secretary may suspend or revoke the participation of
an owner or operator in the demonstration project carried
out under this section.
‘‘(e) REPORT.—Not later than March 31, 1999, the
Secretary shall transmit to Congress a report on the re-
sults of the demonstration project carried out under this
section together with an evaluation of the project and rec-
ommendations on whether or not the applications dem-
onstrated under the project should be made a permanent
part of the Federal pipeline safety program.’’.
SEC. 7. INSPECTION AND MAINTENANCE.
Section 60108 is amended—
(1) in subsection (a)(1) by striking ‘‘transport-
ing gas or hazardous liquid or’’;