Few within the hazmat industry believed a hazmat reauthorization bill would be approved prior to November’s U.S. presidential election. Thus, in what should be considered a surprising move, Congress passed a $105-billion transportation bill this past Friday, part of which includes provisions for hazardous materials transportation safety.

The complete text for the Moving Ahead for Progress in the 21st Century Act can be found here. The section related to hazardous material transportation, entitled The Hazardous Materials Transportation Safety Improvement Act of 2012 (the “Hazmat Act”), can be found on pages 436 through 446.

The House and the Senate were able to reach a compromise on a number of issues and generally the outcome is positive.  Less popular initiatives, such as user fees for special permits and approvals and significant increases in enforcement staff, are not addressed. The Hazmat Act (also referred to as the Hazmat Law) and the U.S. Department of Transportation’s (DOT) authority is revised as follows:

Training Programs

The hazmat community and Pipeline and Hazardous Materials Safety Administration (PHMSA) have long recognized that each modal administration within DOT (PHMSA, the Federal Aviation Administration, the Federal Railroad Administration and the Federal Motor Carrier Safety Administration) and the U.S. Coast Guard applies different methods for training inspectors. Inspectors attend different training schools and each modal administration develops their own specific training plans and operations manual.  Interdepartmental coordination attempts have been hampered in the past.  The lack of uniform training standards for hazmat investigators leads to inconsistent enforcement practices and, in some cases, investigators apply different interpretations of the Hazardous Materials Regulations (HMR).

The revised law requires the Secretary (generally this means PHMSA since the Secretary delegates authority to PHMSA in the HMR) to establish standards for training inspectors and investigators, and requires that such standards be developed no later than 18 months after enactment.  The standards are established as guidelines. It will be interesting to see how this plays out in reality and if all modal administrations are able to develop these standards in time.

In addition to investigator training, the Hazmat Act includes provisions that amend the training requirements for hazardous materials emergency responders. The provisions require that organizations receiving grant funding must train emergency responders to protect against accidents or incidents involving the transportation of hazardous material in accordance with existing regulations and standards.

The Hazmat Act also adds language to permit “portable training” that can be offered in any suitable setting, rather than specific, designated facilities. Portable training is defined as:

“Live, instructor-led training provided by certified fire service instructors that can be offered in any suitable setting, rather than specific designated facilities. Under this training delivery model, instructors travel to locations convenient to students and utilize local facilities and resources.”

This new language is intended to provide a means for reducing the cost of bringing students to specific facilities. The Hazmat Act adds requirements to ensure that the emergency responder and hazmat employee training grants are awarded through a competitive process.

Based on the content of the Hazmat Act, it is apparent that Congress was concerned about the effectiveness of the PHMSA Hazardous Materials Emergency Preparedness (HMEP) Grant Program, including the use of the grant funds by recipients and the effectiveness of the training provided.  The HMEP program was audited in recent years and it was concluded the program was not issuing grants effectively.  PHMSA has made personnel changes and has attempted to put effective controls in place.  Certain industry groups were critical relative to the effectiveness of the HMEP program and some suggested abolishing it in its entirety. The revised Act includes new language that states:

“The Secretary may not award a grant to an organization under this subsection unless the organization ensures that emergency responders who receive training under the grant will have the ability to protect nearby persons, property, and the environment from the effects of accidents or incidents involving the transportation of hazardous material in accordance with existing regulations or National Fire Protection Association standards for competence of responders to accidents and incidents involving hazardous materials.”

The language is intended to require PHMSA to issue the grants in a way that ensures grantees employ the funds appropriately and enhances the quality of the training delivered so that,  as a result of the training, responders are capable of performing their duties with respect to protecting persons, property and the environment.  Past grantees used the grant funds to attend conferences, enroll in courses that were not consistent with response functions (e.g. not fully consistent with the new NFPA 472) and to cover administrative expenses associated with functions other than developing, improving, and implementing emergency plans under SARA Title III or conducting commodity flow studies.

The Hazmat Act also holds PHMSA more accountable for these grants. PHMSA is required to “submit a report to Congress (this is not entirely new) that identifies the ultimate recipients of grants and includes a detailed accounting and a description of each grant expenditure by each grant recipient, including the amount of, and purpose for, each expenditure.” The Hazmat Act also requires PHMSA’s report include the number of persons trained under the grant program by training level as well as an evaluation of the efficacy of such planning and training programs.  How this information is collected and managed will be key to the success of the program.

Paperless Hazard Communication Pilot Program

The Hazmat Act states that “the Secretary may conduct pilot projects to evaluate the feasibility and effectiveness of using paperless hazard communications systems. At least one of the pilot projects under this section shall take place in a rural area.”  The Hazmat Act defines paperless hazard communication as “the use of advanced communications methods, such as wireless communications devices, to convey hazard information between responders and law enforcement personnel.”

In conducting the pilots PHMSA is required to consult with a variety of stakeholders, including:

• Fire services personnel;
• Law enforcement and other appropriate enforcement personnel;
• Other emergency response providers;
• Persons who offer hazardous material for transportation;
• Persons who transport hazardous material by air, highway, rail, and water; and
• Employees of persons who transport or offer for transportation hazardous material by air, highway, rail, and water.

Within two years of the date of the Hazmat Act’s enactment, PHMSA must prepare a report on the results of the pilot projects consisting of an evaluation of each pilot project, an evaluation of the performance of each paperless hazard communications system in such a project and an assessment of the safety and security impact of using paperless hazard communications systems, including any impact on the public, emergency response, law enforcement, and the conduct of inspections and investigations as well as an analysis of the associated benefits and costs of using the paperless hazard communications systems for each mode of transportation.

Improving Data Collection, Analysis and Reporting

The Hazmat Act recognizes the need to enhance PHMSA’s data collection, analysis and reporting of hazardous materials incidents and accidents.  These provisions require PHMSA to develop an action plan and timeline to make improvements to its systems. PHMSA is directed to conduct the assessment in consultation with Commandant of the Coast Guard, in lieu of in coordination with the Secretary of Homeland Security. This amendment was included because the Coast Guard is more specifically involved in handling accidents and investigations in the transportation of hazardous materials. Not later than 15 days after the completion of the action plan and timeline, DOT must submit them to the U.S. Senate’s Committee on Commerce, Science, and Transportation and the U.S. House of Representatives’ Committee on Transportation and Infrastructure.

Hazardous Materials Technical Assessment, Research Program

The Hazmat Act authorizes PHMSA to develop and implement a hazardous material technical assessment, research/development, and analysis program for the purpose of (1) reducing the risks associated with the transportation of hazardous material and (2) identifying and evaluating new technologies to facilitate the safe, secure, and efficient transportation of hazardous material.  The program must utilize information gathered from other modal administrations with similar programs. PHMSA is required to coordinate with other modal administrations and with regulated and other entities, including shippers, carriers, emergency responders, state and local officials, and academic institutions.

The Hazardous Materials Cooperative Research Program was not extended nor were funds appropriated for future research.

Package Opening

Hazmat shippers have expressed concerns and fear that their packages could be delayed in transit based on an investigator using the authority in section 5121 of the Hazmat Law.  This is particularly critical for the health care industry and anyone who ships time-sensitive materials.  Section 5121(e) of the Hazmat Law is amended to revise PHMSA’s authority to open packagings suspected of being noncompliant by requiring the agency to address:

• The safe and expeditious resumption of transportation of perishable hazardous material, including radiopharmaceuticals and other medical products, that may require timely delivery due to life-threatening situations;
• The means by which noncompliant packages that present an imminent hazard are placed out-of-service until the condition is corrected, and that noncompliant packages that do not present a hazard are moved to their final destination;
• Appropriate training and equipment for inspectors; and
• The proper closure of packaging in accordance with the hazardous material regulations.

To date there has not been any information or reports of investigators abusing this authority, but the changes in the Hazmat Act hopefully will soothe the fears of some that anticipated the worst outcomes.

Wet Lines

The revised Act puts a hold on the controversial “wet lines” rulemaking mandated by the previous Congress and, in particular, members of Congressman Oberstar’s (previous chairman of the House T&I Sub-Committee) staff.  “Wet lines” is a term describing the external piping on tank truck vehicles (e.g. gasoline tankers) used for the transportation of flammable liquids.  This issue dates back to a 1997 fatal Yonkers New York accident (when a motorist broadsided a petroleum tanker while traveling at approximately 45 miles an hour) and subsequent investigation and recommendations by the National Transportation Safety Board.  An engineering consultant study paid for by National Tank Truck Carriers (NTTC) in 2004 suggested that the accident and fire would have happened even if the external loading lines had been dry. The initial wet lines rule was terminated under the Bush Administration based on information provided through public comment (e.g. that more fatalities could result through tank retrofitting than would be prevented). PHMSA’s cost benefit analysis of the wet lines issue concluded “a determination of the proper course of action based on the risk from wetlines and the costs to correct problems is in a grey area…the costs to mitigate the hazard are such that general benefit and cost guidelines would be exceeded.”

The Act prevents PHMSA from publishing a final rule until a study is completed. The study must be completed no later than two years after the date of enactment of the revised Act and must:

• Review the safety of transporting flammable liquids in the external product piping of cargo tank motor vehicles;
• Accurately quantify the number of incidents involving the transportation of flammable liquids in external product piping of cargo tank motor vehicles;
• Identify various alternatives to loading, transporting, and unloading flammable liquids in such piping;
• Examine the costs and benefits of each alternative; and
• Identify any obstacles to implementing each alternative.

PHMSA has analyzed the costs under the oversight of two administrations previously with differing conclusions.  It will be interesting to see if the future study will result in any different conclusion.

Considering that approximately 75% of hazmat fatalities each year result from cargo tank rollovers, one might consider that actions to reduce rollover incidents should be addressed.

Loading and Unloading

PHMSA previously concluded that loading and unloading incidents account for a significant number of serious incidents.  The Hazmat Act does not include a specific provision addressing loading and unloading operations, probably due to an ongoing rulemaking addressing the matter.

Special Permits

The Hazmat Act removes some language regarding criteria for special permits but includes language requiring rulemaking to incorporate the provisions addressed in special permits and approvals into the HMR. It also requires that PHMSA establish (1) standard operating procedures to support administration of the special permit and approval programs, and (2) objective criteria to support the evaluation of special permit and approval applications no later than two years after the date of enactment through rulemaking which afford opportunity for public notice and comment.  This was an issue that industry strongly supported, claiming that PHMSA violated the Administrative Procedures Act by revising processes without public notice and comment through a rulemaking initiative.

A review and analysis of special permits that have been in continuous effect for a 10-year period to determine which permits can be converted into the HMR is now mandated. Factors that may be considered in reviewing special permits are specified. After the analysis is complete, but no later than three years after enactment, PHMSA is authorized to issue regulations for incorporating special permits into the HMR. The amended language also directs the Secretary to publish in the Federal Register justification in the case of 16 special permits that are not appropriate for incorporation into the HMR. The process to review a special permit for incorporation into the regulations once that permit has been in effect for 10 years is also addressed.

Motor Carrier Safety Permits

A provision directing PHMSA to conduct a review of the implementation of the motor carrier hazardous material safety permit program is included. PHMSA is directed to consider factors, including the list of hazardous materials requiring a safety permit, the criteria used by PHMSA to determine whether a hazardous material safety permit issued by a state is equivalent to the federal permit, and actions to improve the program including an additional level of fitness review. Based on the findings of the review, PHMSA may either issue a rulemaking to make any necessary improvements to the program, or publish in the Federal Register justification for why a rulemaking is not necessary.

Disclosure of State Highway Routing Requirements

Those required to comply with state highway routing requirements received a huge victory. Each state must submit to the department the name of the state agency responsible for hazardous material highway route designations and a list of the state’s currently effective hazardous material highway route designations. Each state must submit the information at least once every two years and no later than 60 days after a hazardous material highway route designation is established, amended, or discontinued.

Civil Penalties

New language amending civil penalties by removing the minimum $250 penalty amount for violations of hazardous materials laws and regulations is included. Several penalty limits are increased or amended.  Language is added amending penalties for training violations by adding “If the violation is related to training, a person described in paragraph (1) shall be liable for a civil penalty of at least $450.” It addresses penalties for those that obstruct investigations and inspection personnel and includes a definition of “obstruct.” Specifically the Hazmat Act states:

PENALTY FOR OBSTRUCTION OF INSPECTIONS AND INVESTIGATIONS.—

(1) The Secretary may impose a penalty on a person who obstructs or prevents the Secretary from carrying out inspections or investigations under subsection (c) or (i) of section 5121.

(2) For the purposes of this subsection, the term ‘obstructs’ means actions that were known, or reasonably should have been known, to prevent, hinder, or impede an investigation.

Authority is added to address actions against persons who fail to pay penalties in a timely manner.  A person who fails to pay a civil penalty, or fails to arrange and abide by an acceptable payment plan, may not conduct any activity regulated under the Hazmat Law beginning on the 91st day after the date specified by order of the Secretary for payment of such penalty unless the person has filed a formal administrative or judicial appeal of the penalty. This would not apply to any person who is unable to pay a civil penalty because such person is a debtor in a case under Chapter 11.  Not later than two years after the date of enactment, PHMSA, after providing notice and an opportunity for public comment, must issue regulations that:

• “Set forth procedures to require a person who is delinquent in paying civil penalties to cease any activity regulated under this chapter until payment has been made or an acceptable payment plan has been arranged; and
• Ensures that the person is notified in writing and is given an opportunity to respond before the person is required to cease the activity.”

Appropriations

PHMSA is authorized to be appropriated $42,338,000 for fiscal year 2013 and $42,762,000 for fiscal year 2014.  There has been interest concerning the amount of HMEP funds that agency carries over from year-to-year, stating that excess funds should be reimbursed to those that paid fees.  However, language was added under paragraph (2) of 5128(d) CREDITS TO APPROPRIATIONS stating that amounts collected shall remain available until expended.