[House Report 104-110]
[From the U.S. Government Publishing Office]



104th Congress                                            Rept. 104-110
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     Part 1
_______________________________________________________________________


 
                      PIPELINE SAFETY ACT OF 1995

_______________________________________________________________________


                  May 1, 1995.--Ordered to be printed

                                _______


 Mr. Shuster, from the Committee on Transportation and Infrastructure, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 1323]

      [Including cost estimate of the Congressional Budget Office]
  The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 1323) to reduce risk to public 
safety and the environment associated with pipeline 
transportation of natural gas and hazardous liquids, and for 
other purposes, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:
SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Pipeline Safety Act of 1995''.

 SEC. 2. REFERENCES.

  (a) References to Title 49.--Except as otherwise expressly provided, 
whenever in this Act an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of title 
49, United States Code.
  (b) References to the Secretary of Transportation.--Except as 
otherwise expressly provided, any reference in this Act to the 
``Secretary'' is a reference to the Secretary of Transportation.
 SEC. 3. ANALYSIS OF RISK REDUCTION BENEFITS AND COSTS.

  (a) In General.--Chapter 601 is amended by adding at the end the 
following new section:

``Sec. 60126. Analysis of risk reduction benefits and costs

  ``(a) Requirement.--No final significant standard or regulatory 
requirement issued under section 60101(b), 60102, 60103, 60108, 60109, 
60110, or 60113 shall be promulgated unless the Secretary of 
Transportation--
          ``(1) certifies that the Secretary has conducted an analysis 
        of risk reduction benefits and costs that is based on objective 
        and unbiased scientific and economic evaluations of all 
        significant and relevant information and risk assessments 
        provided to the Department of Transportation by interested 
        parties or generated by the Department itself relating to the 
        costs, risks, and risk reduction and other benefits addressed 
        by the standard or requirement;
          ``(2) certifies that the incremental risk reduction or other 
        benefits of any option chosen will be likely to justify, and be 
        reasonably related to, the incremental costs incurred by State, 
        local, and tribal governments and the Federal Government and 
        other public and private citizens; and
          ``(3) explains why any other options identified or considered 
        by the Secretary were found either--
                  ``(A) to be less cost-effective at achieving a 
                substantially equivalent reduction in risk; or
                  ``(B) to provide less flexibility to State, local, or 
                tribal governments or regulated entities in achieving 
                the otherwise applicable objectives of the standard or 
                requirement, along with a brief explanation of why 
                other options that were identified or considered by the 
                Secretary were found to be less cost-effective or less 
                flexible.
  ``(b) Elements of Analysis.--An analysis of risk reduction benefits 
or costs prepared by the Secretary for a significant standard or 
regulatory requirement, at a minimum, shall--
          ``(1) identify the various regulatory and nonregulatory 
        options that were considered;
          ``(2) analyze the incremental costs and incremental risk 
        reduction or other benefits associated with each option 
        identified or considered by the Secretary;
          ``(3) provide any technical data or other information, 
        including the underlying assumptions, upon which the standard 
        or requirement is based; and
          ``(4) include a statement that places in context the nature 
        and magnitude of the risks to be addressed and the residual 
        risks likely to remain for each option identified or 
        considered.
Costs and benefits shall be quantified to the extent feasible and 
appropriate and may otherwise be qualitatively described.
  ``(c) Risk Assessment Documents.--A risk assessment document prepared 
by the Secretary for a significant standard or regulatory requirement 
shall, at a minimum and to the extent feasible--
          ``(1) provide the best estimate for the impacts addressed and 
        a statement of the reasonable range of scientific 
        uncertainties;
          ``(2) include a statement of any significant substitution 
        risks to public safety or the environment; and
          ``(3) contain a statement that places in context the nature 
        and magnitude of risks to public safety or the environment.
  ``(d) Statements.--The statements referred to in subsections (b)(4) 
and (c)(3) of this section shall each provide, to the extent feasible, 
comparisons with estimates of greater, lesser, and substantially 
equivalent risks that are familiar to and routinely encountered by the 
general public, as well as other risks, and, where appropriate and 
meaningful, comparisons of those risks with other similar risks 
regulated by the Department resulting from comparable activities. In 
making such comparisons, the Secretary should consider relevant 
distinctions among risks, such as the voluntary or involuntary nature 
of risks, and the preventability or nonpreventability of risks.
  ``(e) Review by Standards Committee.--
          ``(1) Peer review.--For any significant standard or 
        regulatory requirement, the Secretary shall submit any risk 
        assessment documents and cost-benefit analyses (prepared or 
        received by the Secretary) for review by the Technical Pipeline 
        Safety Standards Committee, the Hazardous Liquid Pipeline 
        Safety Standards Committee, or both, as appropriate, and make 
        them available to the public. The Technical Pipeline Safety 
        Standards Committee and the Hazardous Liquid Pipeline Safety 
        Standards Committee shall function as peer review panels and 
        shall prepare reports, including any recommended options for 
        any significant standard or regulatory requirement and an 
        evaluation of the technical scientific merit of the data and 
        scientific method used for a risk assessment document or cost-
        benefit analysis. The Committee or Committees shall submit such 
        reports to the Secretary within 90 days after the date of 
        receipt of the documents and analyses from the Secretary.
          ``(2) Response of secretary.--The Secretary shall review the 
        report and recommendations of the Technical Pipeline Safety 
        Standards Committee, the Technical Hazardous Liquids Pipeline 
        Safety Standards Committee, or both, as the case may be. Within 
        90 days after receipt of such report, the Secretary--
                  ``(A) shall submit to the Committee or Committees a 
                written response to all peer review comments and 
                recommended options; and
                  ``(B) may revise the risk assessment document or 
                cost-benefit analysis prior to determining whether the 
                proposed significant standard or regulatory requirement 
                should be promulgated.
  ``(f) Emergencies.--In the case of an emergency, the Secretary may 
suspend the application of this section for the duration of the 
emergency.
  ``(g) Report.--Not later than March 31, 1999, the Secretary shall 
transmit to Congress a report on the application of the principles of 
the analyses of risk reduction benefits and costs and risk assessment 
to this chapter and their effect on pipeline safety.''.
  (b) Conforming Amendment.--The analysis for chapter 601 is amended by 
adding at the end the following:

``60126. Analysis of risk reduction benefits and costs.
``60127. Risk management.''.
 SEC. 4. DEFINITIONS.

  (a) In General.--Section 60101(a) is amended--
          (1) by striking subparagraph (B) of paragraph (21) and 
        inserting the following:
                  ``(B) does not include the gathering of gas, other 
                than gathering through regulated gathering lines, in 
                those rural locations that are outside the limits of 
                any incorporated or unincorporated city, town, or 
                village, or any other designated residential or 
                commercial area (such as a subdivision, business, 
                shopping center, or community development) or any 
                similar populated area which the Secretary of 
                Transportation may define as a nonrural area; but
                  ``(C) includes the movement of gas through regulated 
                gathering lines.''; and
          (2) by adding at the end the following:
          ``(23) `best estimate' means a scientifically appropriate 
        estimate which is based, to the extent feasible, on one of the 
        following:
                  ``(A) Central estimates of risk using the most 
                plausible assumptions.
                  ``(B) An approach which combines multiple estimates 
                based on different scenarios and weighs the probability 
                of each scenario.
                  ``(C) Any other methodology designed to provide the 
                most unbiased representation of the most plausible 
                level of risk, given the current scientific information 
                available to the Secretary.
          ``(24) `benefits' means the reasonably identifiable 
        significant health, safety, environmental, social, and economic 
        benefits that are expected to result directly or indirectly 
        from implementation of a standard, regulatory requirement, or 
        option.
          ``(25) `costs' means the direct and indirect costs to the 
        United States Government, to State, local, and tribal 
        governments, and to the private sector, wage earners, 
        consumers, and the economy of implementing and complying with a 
        standard, regulatory requirement, or option.
          ``(26) `risk assessment document' means a document 
        containing--
                  ``(A) an explanation of how hazards associated with a 
                substance, activity, or condition have been identified, 
                quantified, and assessed; and
                  ``(B) a statement by the preparer of the document 
                accepting the findings of the document.
          ``(27) `risk management' means the systematic application, by 
        the owner or operator of a pipeline facility, of management 
        policies, procedures, finite resources, and practices to the 
        tasks of analyzing, assessing, and controlling risk in order to 
        protect employees, the general public, the environment, and 
        pipeline facilities.
          ``(28) `risk management plan' means a management plan 
        utilized by a gas or hazardous liquid pipeline facility owner 
        or operator that encompasses risk management.
          ``(29) `significant standard or regulatory requirement' means 
        any safety or environmental standard or regulatory requirement, 
        or closely related group of safety or environmental standards 
        or regulatory requirements, that is likely to result in 
        annualized compliance costs in excess of $25,000,000.
          ``(30) `substitution risk' means a potential risk to public 
        safety or the environment from a significant standard, 
        regulatory requirement, or option designed to decrease other 
        risks.''.
  (b) Gathering Lines.--Section 60101(b)(2) is amended by inserting ``, 
if appropriate,'' after ``Secretary'' the first place it appears.

 SEC. 5. GENERAL AUTHORITY.

  (a) Minimum Safety Standards.--Section 60102(a) is amended--
          (1) by striking ``(a)(1)'' and inserting ``(a)'';
          (2) by striking paragraph (2);
          (3) by redesignating subparagraphs (A), (B), and (C) as 
        paragraphs (1), (2), and (3), respectively;
          (4) in paragraph (1), as redesignated by paragraph (3) of 
        this subsection, by striking ``transporters of gas and 
        hazardous liquid and to''; and
          (5) by striking paragraph (3), as redesignated by paragraph 
        (3) of this subsection, and inserting the following:
          ``(3) shall include a requirement that all individuals who 
        operate and maintain pipeline facilities must be qualified.
Such qualifications shall address the ability to recognize and react 
appropriately to abnormal operating conditions that may indicate a 
dangerous situation or a condition exceeding design limits. The 
operator of the pipeline facility shall ensure that employees who 
operate and maintain the facility are qualified.''.
  (b) Practicability and Safety Needs Standards.--Section 60102(b) is 
amended--
          (1) by striking ``section 60103'' and inserting ``sections 
        60103 and 60112'';
          (2) in paragraph (1)(B) by inserting ``safety'' after 
        ``pipeline'';
          (3) by striking ``and'' at the end of paragraph (3);
          (4) in paragraph (4) by striking ``contribute to'' and 
        inserting ``benefit'';
          (5) by striking the period at the end of paragraph (4) and 
        inserting ``; and''; and
          (6) by adding at the end the following new paragraph:
          ``(5) the comments and recommendations of the Technical 
        Pipeline Safety Standards Committee, the Technical Hazardous 
        Liquid Pipeline Safety Standards Committee, or both, as 
        appropriate.''.
  (c) Facility Operation Information Standards.--Section 60102(d) is 
amended in the first sentence--
          (1) by inserting after ``operating the facility'' the 
        following: ``as required by the standards prescribed under this 
        chapter'';
          (2) by striking ``to provide the information'' and inserting 
        ``to make the information available''; and
          (3) by inserting after ``to the Secretary and an appropriate 
        State official'' the following: ``as determined by the 
        Secretary''.
  (d) Pipe Inventory Standards.--Section 60102(e) is amended in the 
first sentence--
          (1) by striking ``and, to the extent the Secretary considers 
        necessary, an operator of a gathering line that is not a 
        regulated gathering line (as defined under section 60101(b)(2) 
        of this title),''; and
          (2) by striking ``transmission'' and inserting 
        ``transportation''.
  (e) Smart Pigs.--
          (1) Minimum safety standards.--Section 60102(f) is amended by 
        striking ``(1)'' and all that follows through ``device.'' and 
        inserting the following:
          ``(1) Minimum safety standards.--The Secretary shall 
        prescribe minimum safety standards requiring that the design 
        and construction of a new gas pipeline facility or hazardous 
        liquid pipeline facility be carried out, to the extent 
        practicable, in a way that accommodates the passage through the 
        facility of an instrumented internal inspection device 
        (commonly referred to as a `smart pig'). The Secretary shall 
        also prescribe minimum safety standards requiring replacement 
        of an existing gas pipeline facility, hazardous liquid pipeline 
        facility, or equipment, to be carried out, to the extent 
        practicable, in a way that replacement of the existing gas 
        pipeline facility, hazardous liquid pipeline facility, or 
        equipment being replaced accommodates the passage through the 
        facility of an instrumented internal inspection device. The 
        Secretary may apply the standard to an existing gas or 
        hazardous liquid facility and require the facility to be 
        changed to allow the facility to be inspected with an 
        instrumented internal inspection device if the basic 
        construction of the facility will accommodate the device.''.
          (2) Periodic inspections.--Section 60102(f) is further 
        amended--
                  (A) in paragraph (2) by inserting ``Periodic 
                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 incorporated 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:

``Sec. 60127. Risk management

  ``(a) Risk Management Demonstration Project.--The Secretary of 
Transportation shall carry out a project with voluntary participation 
by owners and operators of pipeline facilities to demonstrate 
applications of risk management. The purpose of the project shall be to 
evaluate the safety and cost effectiveness of such applications.
  ``(b) Exemption.--During the period of the demonstration project 
carried out under this section, the Secretary may exempt owners and 
operators participating in the project from compliance with some or all 
of the standards 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 
included in the project.
  ``(c) Requirements.--In carrying out the demonstration project under 
this section, the Secretary shall--
          ``(1) invite owners and operators of pipeline facilities to 
        submit risk management plans for timely approval by the 
        Secretary;
          ``(2) ensure that owners and operators implementing 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 needed to 
                ensure that owners and operators participating in the 
                project demonstrate that risks are being effectively 
                managed and that risk management 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 results of the demonstration 
project carried out under this section together with an evaluation of 
the project and recommendations on whether or not the applications 
demonstrated 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 ``transporting gas or 
        hazardous liquid or'' each place it appears;
          (2) in subsection (b)(2) by striking the second sentence;
          (3) in the heading to subsection (c) by striking ``Navigable 
        Waters'' and inserting ``Other Waters''; and
          (4) by striking clause (ii) of subsection (c)(2)(A) and 
        inserting the following:
          ``(ii) any other pipeline facility crossing under, over, or 
        through waters where a substantial likelihood of commercial 
        navigation exists if the Secretary decides that the location of 
        the facility in those waters could pose a hazard to navigation 
        or public safety.''.

 SEC. 8. HIGH-DENSITY POPULATION AREAS AND ENVIRONMENTALLY SENSITIVE 
                    AREAS.

  (a) Identification.--Section 60109(a)(1)(B)(i) is amended by striking 
``a navigable waterway (as the Secretary defines by regulation)'' and 
inserting ``waters where a substantial likelihood of commercial 
navigation exists''.
  (b) Unusually Sensitive Areas.--Section 60109(b) is amended by 
striking paragraph (1) and inserting the following:
          ``(1) intake locations for community water systems;''.

SEC. 9. EXCESS FLOW VALUES.

  Section 60110 is amended--
          (1) in subsection (b) by inserting ``, if any,'' after 
        ``circumstances'';
          (2) in subsection (b)(4) by inserting ``, operating, and 
        maintaining'' after ``cost of installing'';
          (3) in subsection (c)(1)(C) by inserting ``, maintenance, and 
        replacement'' after ``installation''; and
          (4) in subsection (e) by inserting after the first sentence 
        the following: ``The Secretary may adopt industry accepted 
        performance standards in order to comply with this 
        requirement.''.

 SEC. 10. CUSTOMER-OWNED NATURAL GAS SERVICE LINES.

  Section 60113 is amended--
          (1) by striking ``(a) Maintenance Information.--''; and
          (2) by striking subsection (b).

 SEC. 11. ONE-CALL NOTIFICATION SYSTEMS.

  (a) Application.--Section 60114(a) is amended--
          (1) in paragraph (1) by striking ``the system apply to'';
          (2) in paragraph (1) by inserting before the period ``be 
        covered by a system'';
          (3) in each of paragraphs (1), (2), (3), (6), (7), (8), and 
        (9) by striking ``a'' the first place it appears and inserting 
        ``A'';
          (4) in paragraph (4) by striking ``qualifications'' and 
        inserting ``Qualifications''; and
          (5) in paragraph (5) by striking ``procedures'' and inserting 
        ``Procedures''.
  (b) Sanctions.--Section 60114(a)(9) is further amended by striking 
``60120, 60122, and 60123'' and inserting ``60120 and 60122''.

 SEC. 12. TECHNICAL SAFETY STANDARDS COMMITTEES.

  (a) Peer Review.--Section 60115(a) is amended by adding at the end 
the following: ``The Committees shall serve as peer review committees 
for carrying out this chapter. Peer reviews conducted by the Committees 
shall be treated for purposes of all Federal laws relating to risk 
assessment and peer review (including laws approved after the date of 
the enactment of the Pipeline Safety Act of 1995) as meeting any peer 
review requirements of such laws.''.
  (b) Composition and Appointment.--Section 60115(b) is amended--
          (1) in paragraph (1) by inserting ``or risk management'' 
        before the period at the end of the last sentence;
          (2) in paragraph (2) by inserting ``or risk management'' 
        before the period at the end of the last sentence;
          (3) in paragraph (3)(B) by striking ``4'' and inserting 
        ``5'';
          (4) in paragraph (3)(C) by striking ``6'' and inserting 
        ``5'';
          (5) in paragraph (4)(B) by adding at the end the following: 
        ``At least 1 of the individuals selected for each committee 
        under paragraph (3)(B) must have education, background, or 
        experience in risk assessment and cost-benefit analysis. The 
        Secretary shall consult with the national organizations 
        representing the owners and operators of pipeline facilities 
        before selecting individuals under paragraph (3)(B).''; and
          (6) in paragraph (4)(C) by inserting after the first sentence 
        the following: ``At least 1 of the individuals selected for 
        each committee under paragraph (3)(C) must have education, 
        background, or experience in risk assessment and cost-benefit 
        analysis.''.
  (c) Committee Reports.--Section 60115(c) is amended--
          (1) by inserting ``or regulatory requirement'' after 
        ``standard'' each place it appears in paragraphs (1), (2), and 
        (3);
          (2) in paragraph (1)(A) by inserting after ``gas pipeline 
        facilities'' the following: ``, including the risk assessment 
        document, cost-benefit, and other analyses supporting each 
        proposed standard or regulatory requirement'';
          (3) in paragraph (1)(B) by inserting after ``hazardous liquid 
        pipeline facilities'' the following: ``, including the risk 
        assessment document, cost-benefit, and other analyses 
        supporting each proposed standard or regulatory requirement''; 
        and
          (4) in paragraph (2)--
                  (A) by inserting ``and supporting analyses'' before 
                the first comma in the first sentence;
                  (B) by inserting ``and submit to the Secretary'' 
                after ``prepare'' in the first sentence;
                  (C) by inserting ``cost effectiveness,'' after 
                ``reasonableness,'' in the first sentence;
                  (D) by inserting ``together with recommended 
                actions'' before the period at the end of the first 
                sentence; and
                  (E) by inserting ``any recommended actions and'' 
                after ``including'' in the second sentence.
  (d) Proposed Committee Standards and Regulatory Requirements.--
Section 60115(d)(1) is amended by inserting ``or regulatory 
requirement'' after ``standard'' each place it appears;
  (e) Meetings.--Section 60115(e) is amended by striking ``twice'' and 
inserting ``4 times''.
  (f) Expenses.--Section 60115(f) is amended--
          (1) in the subsection heading by striking ``Pay and'';
          (2) by striking the first two sentences; and
          (3) by inserting ``of a committee under this section'' after 
        ``A member''.

SEC. 13. PUBLIC EDUCATION PROGRAMS.

  Section 60116 is amended--
          (1) by striking ``person transporting gas'' and inserting 
        ``owner or operator of a gas pipeline facility'';
          (2) by inserting ``the use of damage prevention (`one-call') 
        systems prior to excavation,'' after ``educate the public on''; 
        and
          (3) by inserting a comma after ``gas leaks''.

SEC. 14. ADMINISTRATIVE.

  Section 60117 is amended by adding at the end the following:
  ``(k) Authority for Cooperative Agreements.--To carry out this 
chapter, the Secretary may enter into grants, cooperative agreements, 
and other transactions with any person, agency, or instrumentality of 
the United States, any unit of State or local government, any 
educational institution, and any other entity to further the objectives 
of this chapter. Such objectives include, but are not limited to, the 
development, improvement, and promotion of one-call damage prevention 
programs, research, risk assessment, and mapping.''.

 SEC. 15. COMPLIANCE AND WAIVERS.

  Section 60118 is amended by adding at the end the following:
  ``(e) Compliance With Risk Management Plans.--Owners and operators 
that are participating in the demonstration project under section 60127 
shall be considered to be in compliance with any prescribed safety 
standard or regulatory requirement that is covered by an approved plan 
under section 60127.''.

SEC. 16. DAMAGE REPORTING.

  Section 60123(d)(2) is amended--
          (1) by striking ``or'' at the end of subparagraph (A);
          (2) by redesignating subparagraph (B) as subparagraph (C); 
        and
          (3) by inserting after subparagraph (A) the following:
                  ``(B) a pipeline facility and does not report the 
                damage promptly to the operator of the pipeline 
                facility and other appropriate authorities; or''.
 SEC. 17. ANNUAL REPORTS.

  Section 60124 and the item relating to such section in the analysis 
for chapter 601 are repealed.

SEC. 18. POPULATION ENCROACHMENT.

  (a) In General.--Chapter 601 is amended by inserting after section 
60123 the following new section:

``Sec. 60124. Population encroachment

  ``(a) Land Use Recommendations.--The Secretary of Transportation 
shall make available to an appropriate official of each State, as 
determined by the Secretary, the land use recommendations of the 
Transportation Research Board's Special Report 219, entitled `Pipelines 
and Public Safety'.
  ``(b) Evaluation.--The Secretary shall evaluate the recommendations 
in the report referred to in subsection (a), determine to what extent 
the recommendations are being implemented, consider ways to improve 
implementation of the recommendations, and consider other initiatives 
to further improve awareness of local planning and zoning entities 
regarding issues involved with population encroachment in proximity to 
the rights-of-ways of any interstate gas pipeline facility or 
interstate hazardous liquid pipeline facility.''.
  (b) Conforming Amendment.--The analysis for chapter 601 is amended by 
inserting after the item relating to section 60123 the following:

``60124. Population encroachment.''.
SEC. 19. TECHNICAL CORRECTIONS.

  (a) Section 60105.--The heading to section 60105 is amended by 
inserting ``pipeline safety program'' after ``State''.
  (b) Section 60106.--The heading to section 60106 is amended by 
inserting ``pipeline safety'' after ``State''.
  (c) Section 60107.--The heading to section 60107 is amended by 
inserting ``pipeline safety'' after ``State''.
  (d) Chapter Analysis.--The analysis for chapter 601 is amended--
          (1) in the item relating to section 60105 by inserting 
        ``pipeline safety program'' after ``State'';
          (2) in the item relating to section 60106 by inserting 
        ``pipeline safety'' after ``State''; and
          (3) in the item relating to section 60107 by inserting 
        ``pipeline safety'' after ``State''.

 SEC. 20. AUTHORIZATIONS OF APPROPRIATION.

  (a) Gas.--Section 60125(a) is amended by adding at the end the 
following:
          ``(4) $7,866,000 for fiscal year 1996.
          ``(5) $8,322,000 for fiscal year 1997.
          ``(6) $8,778,000 for fiscal year 1998.
          ``(7) $9,234,000 for fiscal year 1999.''.
  (b) Hazardous Liquid.--Section 60125(b) is amended by adding at the 
end the following:
          ``(4) $2,070,000 for fiscal year 1996.
          ``(5) $2,190,000 for fiscal year 1997.
          ``(6) $2,310,000 for fiscal year 1998.
          ``(7) $2,430,000 for fiscal year 1999.''.
  (c) State Grants.--Section 60125(c)(1) by adding at the end the 
following:
          ``(D) $10,764,000 for fiscal year 1996.
          ``(E) $11,388,000 for fiscal year 1997.
          ``(F) $12,012,000 for fiscal year 1998.
          ``(G) $12,636,000 for fiscal year 1999.''.
                                Purpose

    The purpose of this legislation is to reauthorize the 
Natural Gas and Hazardous Liquid Pipeline Safety programs and 
to reduce risk to public safety and the environment associated 
with pipeline transportation of natural gas and hazardous 
liquids.

                          Background and Need

    Pipeline safety was formerly governed by the Natural Gas 
Pipeline Safety Act of 1968 and the Hazardous Liquid Pipeline 
Safety Act of 1979. These two acts were combined into Chapter 
601 of Title 49 during recodification of laws in 1994. The law 
is administered by the Department of Transportation, under 
delegation by the Secretary to the Research and Special 
Programs Administration through the Office of Pipeline Safety 
(OPS).
    The Department of Transportation has regulatory authority 
over approximately 1.6 million miles of natural gas pipelines 
managed by 500 gathering operators, 1065 transmission and 
gathering operators, 1389 distribution operators, 52,000 master 
meter operators, 106 liquefied natural gas (LNG) operators and 
over approximately 155,000 miles of hazardous liquid pipelines 
(mainly gasoline and fuel oil) managed by 190 hazardous liquid 
operators.
    The law provides for Federal safety regulation of 
facilities used in the transportation of natural and other 
gases by pipeline and authorizes the Department to regulate 
hazardous liquid pipelines for safety purposes and 
environmental protection. Pipeline safety provisions provide a 
regulatory framework for promoting pipeline safety through 
exclusive Federal authority for regulation of interstate 
pipelines and facilities. States may impose additional 
standards for intrastate pipelines and facilities as long as 
such standards are compatible with the minimum Federal 
standards.
    Pipeline safety functions include developing, issuing, and 
enforcing regulations for the safe transportation of natural 
gas (including associated LNG facilities) and hazardous liquids 
by pipeline. Regulatory programs are fashioned to ensure safety 
in the design, construction, testing, operation and maintenance 
of pipeline facilities, and in the siting, construction, 
operation and maintenance of LNG facilities.
    In support of those regulatory responsibilities, OPS 
manages grants to aid States in conducting intrastate gas and 
hazardous liquid pipeline safety programs; monitors performance 
of those State agencies participating in the programs; 
collects, compiles and analyzes pipeline safety and operating 
data; and conducts training programs through the Transportation 
Safety Institute for government and industry personnel in the 
application of the pipeline safety regulations. OPS also 
conducts a pipeline safety technology program with an emphasis 
on applied research.
    The cornerstone of the Federal pipeline safety program is 
the partnership established with the States. States may be 
reimbursed for up to 50% of reasonable expense incurred in 
carrying out their pipeline safety programs. State adoption and 
enforcement of Federal pipeline safety regulations, influenced 
by financial incentives provided by the grant program, results 
in a uniform, effective nationwide pipeline safety program. 
This approach also results in a very cost-beneficial 
maximization of total resources dedicated to pipeline safety.
    Pipelines remain one of the safest modes of transportation 
in the United States. Among all modes (highway, rail, aviation, 
marine and pipeline), fatalities from pipeline accidents 
represent less than .0003% of the total number of fatalities on 
an annual basis. From 1984 to present, 250 fatalities have 
resulted from pipeline accidents. Over 62% of incidents and 
accidents result from third-party excavation damage, a 
situation over which the pipeline operator has little control. 
Other incidents and accidents result from internal or external 
corrosion, construction or material defects, equipment 
malfunction or incorrect operation.

Risk assessment

    In the past decade, Congress has directed the Secretary to 
issue certain regulations on a variety of safety measures and 
prescribed the contents and coverage of certain regulatory 
actions in detail. Legislation was largely driven by successive 
reactions to particular accidents, whereby Congress would 
impose additional prescriptions on the industry to remedy the 
perceived safety problems. In this time period however, these 
regulatory actions have had varying impacts on overall pipeline 
safety; the industry's record remained consistently excellent.
    OPS and the pipeline industry have both proposed to move 
the program away from the prescriptive model towards a risk-
based approach. The Committee agrees, and has therefore taken 
the program towards a risk-based approach featuring risk 
assessment, risk management and industry-agency partnership in 
this bill.
    OPS has been doing preliminary work over the last several 
years to incorporate risk assessment techniques and risk 
management concepts into the program. They have created a risk 
assessment prioritization model, a program by which OPS will 
prioritize its activities based on the potential of each 
activity to reduce the risks of pipelines to public safety and 
the environment. In addition, OPS has created joint government/
industry/public quality action teams. These teams have worked 
to create proposals for concepts by which OPS can incorporate 
into pipeline safety regulations the industry standard for risk 
management. The eventual goal would be to permit operators the 
option of applying an effective risk management program in lieu 
of conforming with certain regulations. The Committee commends 
OPS for the work they have already done in the risk area and 
believes the bill is consistent with this work.
    The Committee notes that the House of Representatives has 
spoken in favor of a risk assessment approach to Federal 
agency-wide rulemaking in H.R. 1022, the Risk Assessment and 
Cost Benefit Act of 1995, which passed the House February 28, 
1995 by a vote of 286-141. H.R. 1022 mandated that Federal 
agencies conduct unbiased analyses of the costs and benefits of 
major rules and set forth the method and analyses that Federal 
agencies must use when preparing risk assessment documents.
    As stated in the House Report on H.R. 1022 (H. Rept. 104-
33, part (1), the impetus for the Risk Assessment and Cost 
Benefit Act of 1995 is as follows:

    The general problem as perceived by many in State and local 
government and in the business community is that Federal 
regulatory costs are too often out of proportion to the 
problems that the regulations are designed to address. The 
concern in the area of health, safety and environmental 
regulations is that the Federal programs require expenditures 
of substantial economic resources on reductions in risk which 
are either too hypothetical, exaggerated or small. The overall 
perception from many quarters is that a significant portion of 
Federal health, safety or environmental regulatory costs 
reflect unwise priorities for national economic resources.
          * * * * * * *
    As part of the general problem, there is particular concern 
over the Federal practice of risk assessment, characterization 
and communication. There is also concern that Federal agencies 
do not consider the incremental costs and benefits or 
regulatory alternatives that are, in some instances, not even 
measured and, in other instances, not sufficiently considered.
          * * * * * * *
    The concern with Federal risk assessment practices is the 
perception among many that Federal risk assessment, 
characterization and communication is biased and based on a 
series of hypothetical assumptions which are designed to 
overstate the risks. Others argue that Federal risk assessments 
fail to consider important factors, and thus, understate risks 
in critical ways. Many of both sides argue that the Federal 
practice of risk assessment, characterization, and 
communication is not sufficiently transparent or informative.
          * * * * * * *
    In many contexts, Federal agencies explicitly state that 
their risk assessment process is designed to produce estimates 
that ``err on the side of safety'' because of scientific 
uncertainties and to ensure that the broadest range of the 
public is protected, consistent with Federal statutory intent. 
It is generally believed that these ``upper bound estimates'' 
are highly improbable and differ from the most plausible level 
of risk by many orders of magnitude. Moreover, the practice of 
only calculating upper bound or worst case estimates of risk is 
criticized as inappropriately collapsing scientific findings 
with a preconceived policy judgment or bias. The perceived 
overstatement of risk is a serious concern among the regulated 
community. Many argue there should also be ``best estimates'' 
or estimates of expected value in addition to upper-bound 
estimates to provide a more realistic benchmark.
    Many advocate giving more prominence to the consideration 
of the relationship between costs and benefits and setting 
regulatory priorities.

    H.R. 1323 embraces the core concepts of H.R. 1022 in 
tailoring this approach directly to the pipeline safety 
program. The Committee believes the pipeline safety program is 
ideally suited to a risk assessment approach, particularly 
because cost and benefits related to it are generally readily 
identifiable and quantifiable.
    Under H.R. 1323, no significant standard or regulatory 
requirement (likely to result in annualized compliance costs 
exceeding $25 million) may be promulgated unless the Secretary 
makes three certifications: (1) that the analysis of risk 
reduction benefits and costs is based on objective and unbiased 
scientific and economic evaluations of all significant and 
relevant information and risk assessments provided to the 
Department by interested parties or generated by the 
Department; (2) that the incremental risk reduction or other 
benefits of any option chosen will be likely to justify, and be 
reasonably related to, the incremental costs incurred by State, 
local, and tribal governments and the Federal Government and 
other public and private citizens; and (3) an explanation why 
any other options identified or considered by the Secretary 
were found either to be less cost-effective at achieving a 
substantially equivalent reduction in risk or to provide less 
flexibility to State, local, or tribal governments or regulated 
entities.
    The bill prescribes the elements that the analysis of risk 
reduction benefits and costs must contain, including the 
options that were considered, incremental costs and risk 
reduction or other benefits associated with each option, 
technical data or other information on which the standard or 
regulatory requirement is based and a statement that places in 
context the nature and magnitude of the risks to be addressed 
and the residual risks likely to remain for each option 
identified or considered. Costs and benefits are to be 
quantified to the extent feasible and appropriate and may 
otherwise be qualitatively described.
    The bill also sets forth the minimum requirements that must 
be included in a risk assessment document including, the best 
estimate for impacts addressed and a statement of the 
reasonable range of scientific uncertainties, a statement of 
any significant substitution risks to public safety or the 
environment and a statement that places in context the nature 
and magnitude of risks to public safety or the environment.
    The concept of peer review in H.R. 1022 is easily applied 
to the pipeline safety program because of the existence of two 
active advisory committees which perform a peer review function 
currently. These committees, the Technical Pipeline Safety 
Standards Committee and the Technical Hazardous Liquid Pipeline 
Safety Standards Committee, operate under section 60115 of 
Title 49. H.R. 1323 incorporates these committees to perform 
the peer review for risk assessment documents and cost/benefit 
analyses. In addition, the bill makes several changes to 
composition of the Committees, number of meetings and pay for 
service. The Secretary is required to give proposed standards 
to the Technical Committees for review. Such review should 
include proposed rules as well as any significant changes to 
such proposals prior to issuance of final rules.
Risk management

    The other major new element of this risk approach is the 
creation of a Risk Management Project to demonstrate the safety 
and cost-effectiveness of risk management applications. This 
project establishes a voluntary program within OPS whereby a 
participant may submit a risk management plan for all of its 
systems, or segments of its system, for approval by the 
Secretary that would achieve an equivalent or greater level of 
safety than that which would be achieved by complying with 
specific regulations. When participating in the demonstration 
project, participants would not be subject to pertinent 
existing standards or regulatory requirements. In addition, if 
new standards or regulatory requirements are promulgated during 
its participation, an owner or operator would not be subject to 
those requirements.
    The project would incorporate elements such as 
collaborative training, testing, new technologies, community 
awareness, development of a risk model and applications or risk 
assessment and risk management methodologies to it, and 
effective management of risk and auditing capability. In the 
event of an emergency, participation in the project may be 
suspended or revoked. The Secretary will submit a report to 
Congress prior to the next reauthorization evaluating the 
project and whether or not it should be made a permanent part 
of the Federal pipeline safety program.
    The Committee intends for the project to run through the 
entire authorization period. Participation in the risk 
management demonstration project is expected to grow during the 
life of the authorization. As both companies and OPS become 
more comfortable with the project, the Committee expects more 
companies to volunteer to participate and OPS to accommodate 
more participants, as resources allow. Once a risk management 
plan is approved and unless the emergency authority is invoked, 
the participant may operate under the approved plan for the 
duration of the authorization period in the bill. The bill 
permits modification of the plan during the course of 
participation by agreement of all parties.
    The risk management project will enable pipeline operators 
to focus finite resources on the greatest potential risks 
within their own covered operations. The operator, by 
integrating corporate knowledge and all its activities, will 
formulate a risk management plan utilizing alternative 
technologies or techniques than those contemplated in the 
current regulations. The project will enable companies to apply 
risk assessment and management methods suitable to the risks at 
a particular site and develop programs to ensure that the risks 
are being properly managed. The Committee stresses that prior 
to approving a plan, the Secretary must ensure that 
participants will achieve an equivalent or greater overall 
level of safety than they would by otherwise complying with the 
existing regulatory requirements.
    The Committee intends to monitor the risk management 
demonstration project closely during the authorization period. 
The Committee expects the Secretary to conduct a thorough 
assessment of the results of the project so that the Congress 
can make a decision on whether risk management should be made a 
permanent part of the pipeline safety program prior to the next 
reauthorization.
Authorization levels

    H.R. 1323 authorizes the pipeline safety program for fiscal 
years 1996 through 1999. The authorizations represent an 
increase of 6% per year from the fiscal year 1995 authorized 
level. The Committee arrived at these levels by factoring an 
average inflation factor plus a modest increase for each year. 
Given the requirement in this bill that the Office of Pipeline 
Safety implement a new risk assessment scheme and manage a risk 
management demonstration project, the Committee believes some 
additional expertise and resources will be necessary for OPS to 
acquire to comply with the law.
    The Committee notes that these authorization levels 
represent a significant decrease from OPS's actual fiscal year 
1995 funding level of $37.4 million enacted by the 1995 
Department of Transportation Appropriations Act (P.L. 103-331). 
This level nearly doubled the OPS appropriation from the 
previous fiscal year ($19.3 million) and from the authorized 
level ($19.5 million). The Committee has concerns about such a 
significant increase in an agency's budget in only one year and 
believes the agency's current funding level is not justified. 
In addition, because the pipeline safety program is funded 
entirely from industry user fees, the fiscal year 1995 
appropriation meant the industry had to nearly double its per 
mile fee to the Department of Transportation.
    The Committee believes the authorized increase in agency 
resources should be focused primarily on conducting adequate 
risk assessment and managing the risk management project. The 
Committee notes that the reduction in funding authorizations 
affects levels for the state grant program the least, 
representing a slight decrease from the fiscal year 1995 
amounts actually appropriated for state grants. The Committee 
believes the reduction in funding will not significantly impact 
state pipeline safety programs.

Excess flow valves

    Section 9 of H.R. 1323 makes a number of amendments to 
Section 60110 of Title 49 U.S.C. relating to excess flow 
valves. The Committee notes that the first amendment to this 
section merely reinserts the words ``if any'' into the statute 
after the word ``circumstances'' in subsection (b). The words 
``if any'' were enacted into law in Section 104 of the Pipeline 
Safety Act of 1992 (P.L. 102-508). These words made it clear 
that the Secretary had discretion within the rulemaking to 
mandate excess flow valves in certain circumstances or to 
conclude that there were no circumstances under which excess 
flow valves would be mandated. In the recodification of Title 
49 in 1994, these two words were inadvertently omitted. Section 
9 of the bill restores these two important words to the statute 
as it existed prior to recodification.
    The Committee notes that the Administrator of the Research 
and Special Programs Administration testified at the Surface 
Transportation Subcommittee hearing on March 28, 1995 of RSPA's 
intention not to pursue a mandate on excess flow valves. An 
April 4, 1995 letter to the Committee serves as official 
notification to the Congress of this decision, as required by 
49 U.S.C. 60110(d). The letter appears as follows:

                 U.S. Department of Transportation,
              Research and Special Programs Administration,
                                     Washington, DC, April 4, 1995.
Hon. Bud Shuster,
Chairman, Committee on Transportation and Infrastructure, House of 
        Representatives, Washington, DC.
    Dear Chairman Shuster: I am writing to inform the Committee 
of the Research and Special Programs Administration's (RSPA) 
decision concerning the pending requirement in 49 U.S.C. 
Sec. 60110 regarding the installation of excess flow valves 
(EFVs) in natural gas distribution systems.
    After reviewing technical information, the advice of state 
safety representatives, and available operational data, I have 
determined that there are currently no circumstances under 
which PSPA should issue a federal rule requiring the universal 
installation of EFVs. A report of the reasons for this decision 
is enclosed. As required by 49 U.S.C. Sec. 60110, RSPA is 
planning to issue performance standards and customer 
notification requirements for EFVs. Each action is designed to 
encourage the increased use of EFVs where appropriate, based on 
local conditions. Because there are no industry standards, 
performance standards will ensure that EFVs operate safely and 
reliably. Further, we believe this will encourage the 
development of EFVs for multi-occupant facilities.
    RSPA has gone through extensive study and rulemaking in 
reaching this decision. RSPA published an Advance Notice of 
Proposed Rulemaking on December 20, 1990, a Notice of Proposed 
Rulemaking on April 21, 1993, and reopened the comment period 
on August 2, 1994, proposing that EFVs be installed on new and 
replaced single family residential service lines.
    Although a requirement to install EFVs was supported by the 
National Transportation Safety Board, certain members of 
Congress and the EFV industry, it was opposed by virtually the 
entire gas distribution industry and a vast majority of our 
state regulatory partners.
    An identical letter has been sent to the Ranking Minority 
Member, Committee on Transportation and Infrastructure; 
Chairman and Ranking Minority Member of the Committee on 
Commerce; and Chairman and Ranking Minority Members of the 
Senate Committee on Commerce, Science and Transportation.
    If we can be for further assistance in this matter, please 
contact me or Ms. Kelley Coyner, Director, Office of Policy and 
Program Support.
            Sincerely.
                                                   Dr. D.K. Sharma.

    H.R. 1323 retains the notification requirements of section 
60110, and expands them to include notice of not only the costs 
of installation, but of maintenance and replacement as well. 
The bill also provides that the Secretary may adopt industry 
accepted performance standards for excess flow valves.

Smart pigs

    Section 5(e) of H.R. 1323 clarifies the provision in 
existing law relating to inspection by instrumented internal 
inspection devices, commonly referred to as ``smart pigs''. The 
Pipeline Safety Reauthorization Act of 1988 directed the 
Secretary to establish minimum Federal safety standards 
requiring the accommodation of smart pigs, to the extent 
practicable, in new facilities and in replacement of existing 
facilities. (Section 108(b) and Section 207(b) of P.L. 100-
561).
    On November 20, 1992, RSPA issued a Notice of Proposed 
Rulemaking to implement the 1988 requirement. Many comments 
were received regarding the scope of the term ``replacement'' 
with regard to hazardous liquid. In the final rule issued on 
April 12, 1994, RSPA decided the scope of required replacement 
would be the already defined term ``line section''. Line 
section is defined in regulations for natural gas pipelines as 
``a continuous run of transmission line between adjacent 
compressor stations, between a compressor station and storage 
facilities, between a compressor station and a block valve, or 
between adjacent block valves'' and for hazardous liquid 
pipelines as ``a continuous run of pipe between adjacent 
pressure pump stations, between a pressure pump station and 
terminal or breakout tanks, between a pressure pump station a 
block valve, or between adjacent block valves.'' In the final 
rule, RSPA said that when a replacement is made of line pipe, 
line valve, line fitting, or other line component in an 
existing pipeline covered by this rule, the complete line 
section must be made to accommodate smart pigs.
    The impact of the rule would have required operators to 
replace or upgrade as much as 20 miles of pipeline to 
accommodate a smart pig, even in instances when the replacement 
work involves only 20 feet of pipeline.
    Section 5(e) of H.R. 1323 clarifies what Congress intended 
regarding accommodation of smart pigs when it enacted the 1988 
provisions; that only the facility or equipment being replaced 
must accommodate, to the extent feasible, smart pigs.

Updating standards

    Section 5(f) of the bill directs the Secretary, to the 
extent appropriate and practicable, to update incorporated 
industry standards that have been adopted as part of the 
Federal pipeline safety regulatory program. The Committee 
encourages OPS to keep industry standards incorporated as 
regulations updated as frequently as necessary and as resources 
allow.

Operator qualifications

    Section 5(a) of the bill modifies a current requirement 
that all individuals responsible for the operation and 
maintenance of pipeline facilities be tested for qualifications 
and certified to properly operate and maintain those 
facilities. This provision is currently the subject of a 
rulemaking by OPS. Under H.R. 1323, pipeline owners and 
operators would be required to ensure that employees working on 
the pipeline be qualified to recognize and properly respond to 
unusual or dangerous conditions.
    The Committee believes that the objective of the original 
provision is worthwhile, to ensure that pipeline employees are 
qualified to do their jobs and react properly to a dangerous 
situation. However, the Committee believes the resources of OPS 
are not efficiently utilized if used to regulate, in detail, 
how a company should conduct its employee training and 
certification programs. Such regulation could result in 
burdensome procedures and record keeping on both pipeline 
operators and OPS. Rather, OPS should make clear that as part 
of its regular inspections and accident investigations, it will 
look for evidence that employees are competent and 
knowledgeable about their areas of responsibility and that 
operators will be held accountable if employees are found to be 
incompetent.
    The Committee notes that the specific statutory requirement 
that qualifications shall address the ability to recognize and 
react appropriately to abnormal operating conditions that may 
indicate a dangerous situation or a condition exceeding design 
limits is not intended to be exclusive; qualifications are 
intended to include all aspects of operating and maintaining a 
pipeline, including routine procedures.
Annual report

    Section 17 of H.R. 1323, requested by the Administration, 
repeals the requirement in section 60123 which requires an 
annual report on pipeline safety be submitted to the Congress. 
The Committee notes that the annual report has been 
consistently issued at least two years late. The Committee has 
found the Office of Pipeline Safety able to respond to 
information requests whenever necessary on a timely basis and 
believes the time and effort expended to compile the annual 
report are an inefficient use of resources. The Committee 
expects OPS to continue to respond to information requests as 
accurately and efficiently as possible.

Damage reporting

    Section 16 of H.R. 1323 creates a new federal crime of 
knowingly and willfully damaging a pipeline facility and not 
promptly reporting the damage to the pipeline operator and 
other appropriate authorities. Two recent accidents, the March 
28, 1993 failure of a petroleum pipeline in Reston, Virginia 
and the March 23, 1994 rupture of a gas transmission line in 
Edison, New Jersey, were both as a result of mechanical damage 
to the pipelines caused by external damage that occurred at an 
indeterminate time before the failures. The Committee believes 
damaging a pipeline facility and failing to report that damage 
to the operator and other appropriate authorities is an 
omission with the potential for very serious consequences and 
should therefore carry with it significant punishment.

Administrative

    Section 14 of H.R. 1323 authorizes the Secretary to enter 
into grants, cooperative agreements, and other transactions 
with any person, agency, State and local government, 
educational institution, or other entity. This provision, 
requested by the Administration, will provide the Secretary 
with general authority to enter into a broad range of financial 
arrangements with States, industry, non-profit institutions and 
other entities to support activities that will achieve the 
objectives of the statute. The authority will be very useful to 
aid the Secretary in developing, improving and promoting one-
call notification systems, the majority of which are not run by 
States. It will also aid in the agency's execution of risk 
assessment, by permitting the Secretary to obtain the data it 
will need to conduct risk assessment according to the statutory 
requirements.

Other provisions

    H.R. 1323 makes a number of changes to provisions in 
existing law which prescribe specific regulatory actions for 
the Secretary to undertake. These include deletion of authority 
to the Secretary to set minimum standards requiring operators 
of gathering lines that are not regulated to maintain an 
inventory of appropriate information (Section 5(d)), deletion 
of requirement that inspections must occur at least once every 
two years (Section 7), and deletion of requirement that 
Secretary take actions to promote adoption of measures to 
improve safety of customer-owned natural gas service lines 
(Section 10).
    The Committee believes the provisions cited above are 
inconsistent with the risk assessment approach taken in this 
bill. If the Secretary believes any of the perceived safety 
problems related to the above cited provisions are worthy of 
pursuit, the Secretary may initiate actions to address such 
problems.

                      Section-by-Section Analysis
                      Pipeline Safety Act of 1995

Section-by-section summary

                          sec. 1. short title

    (a) Short Title: the ``Pipeline Safety Act of 1995''

                           sec. 2. references

    (a) The amendments and references in the bill are to 
sections and provisions in title 49, United States Code.
    (b) The ``Secretary'' means the Secretary of Transportation

         sec. 3. analysis of risk reduction benefits and costs

    Adds new section 60127 to provide for risk assessment and 
cost-benefit analysis for new significant standards or 
regulatory requirements promulgated by the Secretary.
    (a) Requirement.--No final significant standard or 
regulatory requirement may be promulgated under sections 
60101(b), 60102, 60103, 60108, 60109, 60110, or 60113 unless 
the Secretary: certifies that an analysis of risk reduction 
benefits and costs has been conducted; certifies that the 
incremental risk reduction or other benefits of the option 
chosen justifies and is reasonably related to the incremental 
costs incurred by State, local, and tribal governments, the 
Federal government, and other citizens; and explains why other 
options identified or considered were found to be either less 
cost-effective or provided less flexibility to State, local or 
tribal governments or regulated entities.
    (b) Elements of analysis.--In analyzing risk reduction 
benefits or costs, the Secretary shall: identify the various 
regulatory and non-regulatory options that were considered; 
analyze the incremental costs and benefits of the proposed 
standard or regulatory requirement; provide technical data or 
other information upon which the standard or regulatory 
requirement is based; and include a statement that places in 
context the nature and magnitude of the risk to be addressed 
and the residual risks likely to remain for each alternative 
identified or considered.
    (c) Risk assessment documents.--Risk assessment documents 
prepared by the Secretary shall include at a minimum: the best 
estimate for impacts addressed and the reasonable range of 
scientific uncertainties; a statement of any significant 
substitution risk to public safety and the environment; and a 
statement that places in context the nature and magnitude of 
risks to human health, safety or the environment.
    (d) Statements.--Statements that place in context the 
nature and magnitude of risks to public safety or the 
environment shall provide comparisons with estimates of 
greater, lesser, and substantially equivalent risks that are 
familiar to and routinely encountered by the general public, as 
well as other risks and comparisons of those risks with other 
similar risks regulated by the Department.
    (e) Review by Standards Committee.--For any significant 
standard or regulatory requirement, the Secretary must submit 
risk assessment documents and cost-benefit analyses for review 
to the Technical Pipeline Safety Standards Committee, the 
Hazardous Liquid Pipeline Safety Standards Committee, or both 
as appropriate. The documents shall also be available for 
public review. The Secretary must provide a written response to 
all peer review comments received from the panels and may 
revise the risk assessment and cost-benefit analysis prior to 
determining whether a significant standard or regulatory 
requirements should be promulgated.
    (f) Emergencies.--In the case of an emergency, the 
Secretary may suspend analysis of risk reduction benefits and 
costs for the duration of the emergency.
    (g) Report.--By March 31, 1999, the Secretary will send a 
report to Congress on the application of the principles of the 
analyses of risk reduction benefits and costs and risk 
assessment and their effect on pipeline safety.

                          sec. 4. definitions

    (a) Amends section 60101 definitions:
          Amends definition of ``transporting gas'' to original 
        law prior to recodification.
          ``Best estimate'' means a scientifically appropriate 
        estimate based on one of several outlined 
        methodologies.
          ``Benefits'' means reasonably identifiable 
        significant health, safety, environmental, social and 
        economic benefits that are expected to result directly 
        or indirectly from implementation of a standard, 
        regulatory requirement or option.
          ``Costs'' means direct and indirect costs to U.S. 
        government, to State, local, and tribal government, and 
        to the private sector, wage earners, consumers, and the 
        economy of implementing and complying with the 
        standard, regulatory requirement or option.
          ``Risk assessment document'' means a document 
        containing an explanation of how hazards have been 
        identified, quantified, and assessed.
          ``Risk management'' means systematic application by 
        owners or operators of pipeline facilities of 
        management policies, procedures, finite resources and 
        practices in analyzing, assessing, and controlling 
        risks.
          ``Risk management plan'' means a management plan 
        utilized by owners or operators that encompasses risk 
        management.
          ``Significant standard or regulatory requirement'' 
        means a safety or environmental standard or regulatory 
        requirement or closely related group of standards or 
        requirements that is likely to result in annualized 
        compliance costs of more than $25 million.
          ``Substitution risk'' means a potential risk to 
        health, safety, or the environment from a significant 
        standard, regulatory requirement or option designed to 
        decrease other risks.
    (b) Amends section 60101(b)(2) to provide that the 
Secretary shall define the term ``regulated gathering line'' 
but only if it is appropriate to do so.

                       sec. 5. general authority

    (a) Minimum safety standards.--Amends section 60102(a) to 
provide that operators of facilities must be qualified, but not 
certified, and must be able to recognize and react to abnormal 
operating conditions that may indicate dangerous situations.
    (b) Practicability and safety needs standards.--Makes minor 
revisions in section 60102(b) and provides that recommendations 
of the Technical Pipeline Safety Standards Committee or the 
Hazardous Liquid Pipeline Safety Standards Committee be 
considered in setting minimum safety standards.
    (c) Facility operation information standards.--Makes 
technical corrections to section 60102(d).
    (d) Pipe inventory standards.--Amends section 60102(e) to 
strike provision directing Secretary, to the extent considered 
necessary, to set minimum standards requiring operators of 
gathering lines that are not regulated to maintain an inventory 
of appropriate information.
    (e) Smart pigs.--Rewrites section to clarify congressional 
intent. New pipeline facilities must, to the extent 
practicable, accommodate instrumented internal inspection 
devices (``smart pigs''). When a pipe is being replaced, it is 
only the replaced section of pipe that must accommodate smart 
pigs.
    (f) Updating standards.--Adds new section 60102(l) to 
direct the Secretary to update incorporated industry standards, 
as appropriate and practicable.
                        sec. 6. risk management

    Adds new section 60127 to establish a Risk Management 
Demonstration Project.
    (a) Risk management demonstration project.--The Secretary 
shall carry out the project with voluntary participation of 
owners and operators of pipeline facilities. The purpose of the 
project is to demonstrate the safety and cost effectiveness of 
risk management.
    (b) Exemption.--During the demonstration project, the 
Secretary may exempt participating owners and operators from 
compliance with some or all standards and regulations that 
would otherwise apply, including those promulgated during the 
demonstration project.
    (c) Requirements.--In carrying out the project, the 
Secretary shall invite owners and operators to submit plans for 
approval and ensure that approved plans will achieve an 
equivalent or greater overall level of safety. Elements 
required to be incorporated into the project are specified.
    (d) Emergencies.--In the case of an emergency, the 
Secretary may suspend or revoke the participation of an owner 
or operator in the project.
    (e) By March 31, 1999, the Secretary shall submit a report 
to Congress evaluating the project and recommending whether the 
project should be made permanent.

                   sec. 7. inspection and maintenance

    Amends section 60108 to strike requirement that inspections 
must occur at least once every two years (Secretary currently 
directed to determine frequency of inspections). Clarifies 
meaning of ``waters'' where underwater pipelines are subject to 
inspections to be areas where a substantial likelihood of 
commercial navigation exits.

  sec. 8. high-density population areas and environmentally sensitive 
                                 areas

    (a) Conforming change to ``waters'' amendment in Section 7.
    (b) Amends section 60109 to make a technical correction and 
include revised factors for Secretary to consider in describing 
areas that are ``unusually sensitive to environmental damage.''

                       sec. 9. excess flow values

    Amends section 60110 to make a technical correction, 
provides that the notification from natural gas operators to 
customers having lines in which excess flow valves are not 
required but can be installed shall include costs associated 
with maintenance and replacement as well as installation, and 
provides that the Secretary may adopt industry accepted 
performance standards for excess flow valves.

           sec. 10. customer-owned natural gas service lines

    Amends section 60113 to remove requirement that Secretary 
take actions to promote adoption of measures to improve safety 
of customer-owned natural gas service lines.

                 sec. 11. one-call notification systems

    Makes technical corrections and corrects recodification 
errors to section 60114.

             sec. 12. technical safety standards committees

    (a) Peer review.--Amends section 60115 to provide that the 
Technical Safety Standards Committees shall serve as peer 
review committees and will be treated as such for purposes of 
all laws relating to risk assessment and peer review.
    (b) Composition and appointment.--Increases the number of 
industry representatives on the Committees from 4 to 5 and 
decreases the number of public representatives from 6 to 5 (so 
committees would be composed of 5 individuals from each of 
government, industry, and the general public). At least one of 
the industry and one of the public members must have experience 
in risk assessment and cost-benefit analysis.
    (c) Committee reports on proposed standards.--Specifies 
that risk assessment documents, cost-benefit and other analyses 
supporting proposed standards be submitted to the Committees 
for review.
    (d) Meetings.--Increases the number of Committee meetings 
from two to four per year.
    (e) Pay and expenses.--Strikes provisions allowing members 
of the Committees to be paid compensation when performing 
duties, although reimbursement for expense continues to be 
authorized.
                   sec. 13. public education programs

    Makes a technical correction to section 60116 and expands 
the public education programs carried out by natural gas owners 
and operators to include the use of one-call systems prior to 
excavation to prevent pipeline damage.

                        sec. 14. administrative

    Amends section 60117 to authorize the Secretary to enter 
into grants, cooperative agreements, and other transactions 
with any person, agency, State and local government, 
educational institution, or other entity. The provision will 
permit the Secretary to provide funding to a one-call program 
which is not operated by State.

                    sec. 15. compliance and waivers

    Amends section 60118 to clarify that owners and operators 
who utilize an approved risk management plan under the Risk 
Management Demonstration Project in section 60127 are to be 
considered in compliance with standards and regulatory 
requirements covered by the plan.

                       sec. 16. damage reporting

    Amends section 60123 to create a new federal crime of 
knowingly and willfully damaging a pipeline facility and not 
promptly reporting the damage to the pipeline operator and 
other appropriate authorities.

                        sec. 17. annual reports

    Repeals section 60124 which requires annual reports be 
submitted to Congress.

                    sec. 18. population encroachment

    Creates a new section 60124 which requires the Secretary to 
make available to State pipeline officials the land use 
recommendations from the Transportation Research Board's 
Special Report 219, entitled ``Pipelines and Public Safety''. 
In addition, the Secretary is directed to evaluate those 
recommendations, determine to what extent they are being 
implemented, consider ways to improve implementation and 
consider other initiatives to improve awareness of local 
planning and zoning entities regarding population encroachment 
in proximity to rights-of-ways of interstate pipeline 
facilities.

                     sec. 19. technical corrections

    Makes technical corrections to various sections of Chapter 
601.

                sec. 20. authorizations of appropriation

    (a) Natural Gas Activities:
          $7,866,000 for fiscal year 1996.
          $8,322,000 for fiscal year 1997.
          $8,778,000 for fiscal year 1998.
          $9,234,000 for fiscal year 1999.
    (b) Hazardous Liquid
          $2,070,000 for fiscal year 1996.
          $2,190,000 for fiscal year 1997.
          $2,310,000 for fiscal year 1998.
          $2,430,000 for fiscal year 1999.
    (c) State Grants
          $10,764,000 for fiscal year 1996.
          $11,388,000 for fiscal year 1997.
          $12,012,000 for fiscal year 1998.
          $12,636,000 for fiscal year 1999.
    The Subcommittee on Surface Transportation conducted a 
hearing on H.R. 1323 on March 14, 1995 and on March 28, 1995 
recommended the bill with amendments to the full Committee on 
Transportation and Infrastructure. On April 5, 1995, the 
Committee on Transportation and Infrastructure ordered the bill 
reported, by voice vote, with a quorum present.

                          House of Representatives,
                                Committee on the Judiciary,
                                       Washington, DC, May 1, 1995.
Hon. Newt Gingrich,
Speaker, House of Representatives, H-232, The Capitol, Washington, DC.
    Dear Mr. Speaker: I am writing concerning the ``Pipeline 
Safety Act of 1995'' (H.R. 1323), which has been ordered 
reported by the Committee on Transportation and Infrastructure 
this week. Section 16 of that bill would amend section 60123 of 
Title 49, United States Code. That section of Title 49 provides 
for federal criminal penalties to be imposed upon persons who 
damage pipeline facilities.
    Because the bill would amend federal law to make criminal 
certain actions which presently are not criminal, the Committee 
on the Judiciary has jurisdiction over this portion of the 
bill. This letter is to inform you that the Committee on the 
Judiciary will not exercise its right to request a sequential 
referral of H.R. 1323. The fact that the Committee has not 
requested a sequential referral with respect to this bill, 
however, should not be deemed to be a waiver of the Committee's 
jurisdiction over all other bills, resolutions, and other 
matters that affect the federal criminal law.
            Sincerely,
                                           Henry J. Hyde, Chairman.
                     Compliance With House rule XI

    1. With respect to rule XI, clause 2(l)(4), the enactment 
of the bill will result in no significant inflationary impact.
    2. With respect to rule XIII, clause 7(a), the Committee 
adopts as its own the CBO cost estimate included in this 
report.
    3. With respect to the requirement of clause 2(l)(3)(D) of 
rule XI, no recommendations were submitted to the Committee 
pursuant to clause 4(c)(2) of rule X.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, April 7, 1995.
Hon. Bud Shuster,
Chairman, Committee on Transportation and Infrastructure, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1323, the Pipeline 
Safety Act of 1995.
    Enactment of H.R. 1323 could affect direct spending and 
receipts. Therefore, pay-as-you-go procedures would apply to 
the bill.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                                   June E. O'Neill.
    Enclosure.

               Congressional Budget Office Cost Estimate

    1. Bill number: H.R. 1323.
    2. Bill title: Pipeline Safety Act of 1995.
    3. Bill status: As ordered reported by the House Committee 
on Transportation and Infrastructure on April 5, 1995.
    4. Bill purpose: H.R. 1323 would authorize a total of $90 
million to be appropriated for the gas and hazardous liquid 
pipeline safety programs and the pipeline safety grant program 
for fiscal years 1996 through 1999. The bill would require the 
Secretary of Transportation to conduct benefit and cost 
analyses of new pipeline safety standards and regulations which 
have a compliance cost of greater than $25 million per year. 
Finally, the bill would make technical changes to the pipeline 
safety program, establish a risk management demonstration 
project, and impose a criminal penalty on all excavators who do 
not report damaged pipeline facilities to the appropriate 
authorities.
    5. Estimated cost to the Federal Government: For purposes 
of this estimate, CBO assumes that the full amount authorized 
for pipeline safety programs would be appropriated. 
Implementing H.R. 1323 would not result in any change in net 
federal spending because the Department of Transportation 
collects fees to completely offset pipeline safety funding. In 
fiscal year 1995, pipeline safety funding and fees (excluding 
oil pollution activities) were $35 million. If the 1996 
appropriation equals the authorization, funding and fees would 
drop to $21 million. (The appropriations bill is charged with 
the level of new funding and any change in the level of fees.) 
Even though the bill's authorizations are substantially lower 
than the 1995 funding level, they are closer to the 1990 
through 1994 funding levels of $10 million to $17 million.
    CBO estimates that the new criminal penalty that would be 
established by H.R. 1323 would not result in any significant 
receipts. If fines are collected, they would be deposited in 
the Crime Victims Fund and spent the following year.
    6. Pay-as-you-go considerations: Section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 sets 
up pay-as-you-go procedures for legislation affecting direct 
spending or receipts through 1998. CBO estimates that enactment 
of H.R. 1323 could increase penalty collections and spending 
from the Crime Victims Fund. Therefore, pay-as-you-go 
procedures would apply to the bill. However, CBO estimates that 
any increase in direct spending or receipts would be less than 
$500,000 per year.
    The pay-as-you-go effects of the bill are as follows:

------------------------------------------------------------------------
                                                      1996   1997   1998
------------------------------------------------------------------------
Change in outlays..................................      0      0      0
Change in receipts.................................      0      0      0
------------------------------------------------------------------------

    7. Estimated cost to the State and local governments: Of 
the $90 million four-year authorization, $47 million is for 
state pipeline safety grants. States would be required to 
contribute an additional $47 million to comply with the 50 
percent matching requirement.
    8. Estimate comparison: None.
    9. Previous CBO estimate: None.
    10. Estimate prepared by: John Patterson.
    11. Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.
         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

              CHAPTER 601 OF TITLE 49, UNITED STATES CODE

                          CHAPTER 601--SAFETY
Sec.
60101.  Definitions.
     * * * * * * *
60105.  State pipeline safety program certifications.
60106.  State pipeline safety agreements.
60107.  State pipeline safety grants.
     * * * * * * *
[60124.  Annual reports.]
60124.  Population encroachment.
60125.  Authorization of appropriations.
60126.  Analysis of risk reduction benefits and costs.
60127.  Risk management.

Sec. 60101. Definitions

  (a) In this chapter--
          (1) * * *
          * * * * * * *
          (21) ``transporting gas''--
                  (A) means the gathering, transmission, or 
                distribution of gas by pipeline, or the storage 
                of gas, in interstate or foreign commerce; but
                  [(B) does not include gathering gas in a 
                rural area outside a populated area designated 
                by the Secretary as a nonrural area.]
                  (B) does not include the gathering of gas, 
                other than gathering through regulated 
                gathering lines, in those rural locations that 
                are outside the limits of any incorporated or 
                unincorporated city, town, or village, or any 
                other designated residential or commercial area 
                (such as a subdivision, business, shopping 
                center, or community development) or any 
                similar populated area which the Secretary of 
                Transportation may define as a nonrural area; 
                but
                  (C) includes the movement of gas through 
                regulated gathering lines.
          * * * * * * *
          (23) ``best estimate'' means a scientifically 
        appropriate estimate which is based, to the extent 
        feasible, on one of the following:
                  (A) Central estimates of risk using the most 
                plausible assumptions.
                  (B) An approach which combines multiple 
                estimates based on different scenarios and 
                weighs the probability of each scenario.
                  (C) Any other methodology designed to provide 
                the most unbiased representation of the most 
                plausible level of risk, given the current 
                scientific information available to the 
                Secretary.
          (24) ``benefits'' means the reasonably identifiable 
        significant health, safety, environmental, social, and 
        economic benefits that are expected to result directly 
        or indirectly from implementation of a standard, 
        regulatory requirement, or option.
          (25) ``costs'' means the direct and indirect costs to 
        the United States Government, to State, local, and 
        tribal governments, and to the private sector, wage 
        earners, consumers, and the economy of implementing and 
        complying with a standard, regulatory requirement, or 
        option.
          (26) ``risk assessment document'' means a document 
        containing--
                  (A) an explanation of how hazards associated 
                with a substance, activity, or condition have 
                been identified, quantified, and assessed; and
                  (B) a statement by the preparer of the 
                document accepting the findings of the 
                document.
          (27) ``risk management'' means the systematic 
        application, by the owner or operator of a pipeline 
        facility, of management policies, procedures, finite 
        resources, and practices to the tasks of analyzing, 
        assessing, and controlling risk in order to protect 
        employees, the general public, the environment, and 
        pipeline facilities.
          (28) ``risk management plan'' means a management plan 
        utilized by a gas or hazardous liquid pipeline facility 
        owner or operator that encompasses risk management.
          (29) ``significant standard or regulatory 
        requirement'' means any safety or environmental 
        standard or regulatory requirement, or closely related 
        group of safety or environmental standards or 
        regulatory requirements, that is likely to result in 
        annualized compliance costs in excess of $25,000,000.
          (30) ``substitution risk'' means a potential risk to 
        public safety or the environment from a significant 
        standard, regulatory requirement, or option designed to 
        decrease other risks.
  (b) Gathering Lines.--(1) * * *
  (2)(A) Not later than October 24, 1995, the Secretary, if 
appropriate, shall define by regulation the term ``regulated 
gathering line''. In defining the term, the Secretary shall 
consider factors such as location, length of line from the well 
site, operating pressure, throughput, and the composition of 
the transported gas or hazardous liquid, as appropriate, in 
deciding on the types of lines that functionally are gathering 
but should be regulated under this chapter because of specific 
physical characteristics.
          * * * * * * *
Sec. 60102. General authority

  (a)[(1)] Minimum Safety Standards.--The Secretary of 
Transportation shall prescribe minimum safety standards for 
pipeline transportation and for pipeline facilities. The 
standards--
          [(A)] (1) apply to [transporters of gas and hazardous 
        liquid and to] owners and operators of pipeline 
        facilities;
          [(B)] (2) may apply to the design, installation, 
        inspection, emergency plans and procedures, testing, 
        construction, extension, operation, replacement, and 
        maintenance of pipeline facilities; and
          [(C) shall include a requirement that all individuals 
        responsible for the operation and maintenance of 
        pipeline facilities be tested for qualifications and 
        certified to operate and maintain those facilities.
  [(2) As the Secretary considers appropriate, the operator of 
a pipeline facility may make the certification under paragraph 
(1)(C) of this subsection. Testing and certification under 
paragraph (1)(C) shall address the ability to recognize and 
react appropriately to abnormal operating conditions that may 
indicate a dangerous situation or a condition exceeding design 
limits.]
          (3) shall include a requirement that all individuals 
        who operate and maintain pipeline facilities must be 
        qualified.
Such qualifications shall address the ability to recognize and 
react appropriately to abnormal operating conditions that may 
indicate a dangerous situation or a condition exceeding design 
limits. The operator of the pipeline facility shall ensure that 
employees who operate and maintain the facility are qualified.
  (b) Practicability and Safety Needs Standards.--A standard 
prescribed under subsection (a) of this section shall be 
practicable and designed to meet the need for gas pipeline 
safety, for safely transporting hazardous liquid, and for 
protecting the environment. Except as provided in [section 
60103] sections 60103 and 60112 of this title, when prescribing 
the standard the Secretary shall consider--
          (1) relevant available--
                  (A) gas pipeline safety information; or
                  (B) hazardous liquid pipeline safety 
                information;
          (2) the appropriateness of the standard for the 
        particular type of pipeline transportation or facility;
          (3) the reasonableness of the standard; [and]
          (4) the extent to which the standard will [contribute 
        to] benefit public safety and the protection of the 
        environment[.]; and
          (5) the comments and recommendations of the Technical 
        Pipeline Safety Standards Committee, the Technical 
        Hazardous Liquid Pipeline Safety Standards Committee, 
        or both, as appropriate.
          * * * * * * *
  (d) Facility Operation Information Standards.--The Secretary 
shall prescribe minimum standards requiring an operator of a 
pipeline facility subject to this chapter to maintain, to the 
extent practicable, information related to operating the 
facility as required by the standards prescribed under this 
chapter and, when requested, [to provide the information] to 
make the information available to the Secretary and an 
appropriate State official as determined by the Secretary. The 
information shall include--
          (1) * * *
          * * * * * * *
  (e) Pipe Inventory Standards.--The Secretary shall prescribe 
minimum standards requiring an operator of a pipeline facility 
subject to this chapter [and, to the extent the Secretary 
considers necessary, an operator of a gathering line that is 
not a regulated gathering line (as defined under section 
60101(b)(2) of this title),] to maintain for the Secretary, to 
the extent practicable, an inventory with appropriate 
information about the types of pipe used for the [transmission] 
transportation of gas or hazardous liquid, as appropriate, in 
the operator's system and additional information, including the 
material's history and the leak history of the pipe. The 
inventory--
          (1) * * *
          * * * * * * *
  (f) Standards as Accommodating ``Smart Pigs''.--[(1) The 
Secretary shall prescribe minimum safety standards requiring 
that the design and construction of a new gas pipeline 
transmission facility or hazardous liquid pipeline facility, 
and the required replacement of an existing gas pipeline 
transmission facility, hazardous liquid pipeline facility, or 
equipment, be carried out, to the extent practicable, in a way 
that accommodates the passage through the facility of an 
instrumented internal inspection device (commonly referred to 
as a ``smart pig''). The Secretary may apply the standard to an 
existing gas or hazardous liquid transmission facility and 
require the facility to be changed to allow the facility to be 
inspected with an instrumented internal inspection device if 
the basic construction of the facility will accommodate the 
device.]
          (1) Minimum safety standards.--The Secretary shall 
        prescribe minimum safety standards requiring that the 
        design and construction of a new gas pipeline facility 
        or hazardous liquid pipeline facility be carried out, 
        to the extent practicable, in a way that accommodates 
        the passage through the facility of an instrumented 
        internal inspection device (commonly referred to as a 
        ``smart pig''). The Secretary shall also prescribe 
        minimum safety standards requiring replacement of an 
        existing gas pipeline facility, hazardous liquid 
        pipeline facility, or equipment, to be carried out, to 
        the extent practicable, in a way that replacement of 
        the existing gas pipeline facility, hazardous liquid 
        pipeline facility, or equipment being replaced 
        accommodates the passage through the facility of an 
        instrumented internal inspection device. The Secretary 
        may apply the standard to an existing gas or hazardous 
        liquid facility and require the facility to be changed 
        to allow the facility to be inspected with an 
        instrumented internal inspection device if the basic 
        construction of the facility will accommodate the 
        device.
          (2) Periodic inspections.--Not later than October 24, 
        1995, the Secretary shall prescribe, if necessary, 
        additional regulations requiring the periodic 
        inspection of each pipeline the operator of the 
        pipeline identifies under section 60109 of this title. 
        The regulations shall include any circumstances under 
        which an inspection shall be conducted with an 
        instrumented internal inspection device and, if the 
        device is not required, use of an inspection method 
        that is at least as effective as using the device in 
        providing for the safety of the pipeline.
          * * * * * * *
  (l) Updating Standards.--The Secretary shall, to the extent 
appropriate and practicable, update incorporated industry 
standards that have been adopted as part of the Federal 
pipeline safety regulatory program.
          * * * * * * *

Sec. 60105. State pipeline safety program certifications

  (a) * * *
          * * * * * * *

Sec. 60106. State pipeline safety agreements

  (a) * * *
          * * * * * * *

Sec. 60107. State pipeline safety grants

  (a) * * *
          * * * * * * *

Sec. 60108. Inspection and maintenance

  (a) Plans.--(1) Each person [transporting gas or hazardous 
liquid or] owning or operating an intrastate gas pipeline 
facility or hazardous liquid pipeline facility shall carry out 
a current written plan (including any changes) for inspection 
and maintenance of each facility used in the transportation and 
owned or operated by the person. A copy of the plan shall be 
kept at any office of the person the Secretary of 
Transportation considers appropriate. The Secretary also may 
require a person [transporting gas or hazardous liquid or] 
owning or operating a pipeline facility subject to this chapter 
to file a plan for inspection and maintenance for approval.
  (b) Inspection and Testing.--(1) * * *
          * * * * * * *
  (2) To the extent and in amounts provided in advance in an 
appropriation law, the Secretary shall decide on the frequency 
of inspection under paragraph (1) of this subsection. [However, 
an inspection must occur at least once every 2 years.] The 
Secretary may reduce the frequency of an inspection of a master 
meter system.
  (c) Pipeline Facilities Offshore and in [Navigable Waters] 
Other Waters.--(1) In this subsection--
          (A) ``abandoned'' means permanently removed from 
        service.
          (B) ``pipeline facility'' includes an underwater 
        abandoned pipeline facility.
          (C) if a pipeline facility has no operator, the most 
        recent operator of the facility is deemed to be the 
        operator of the facility.
  (2)(A) Not later than May 16, 1993, on the basis of 
experience with the inspections under section 3(h)(1)(A) of the 
Natural Gas Pipeline Safety Act of 1968 or section 203(l 
)(1)(A) of the Hazardous Liquid Pipeline Safety Act of 1979, as 
appropriate, and any other information available to the 
Secretary, the Secretary shall establish a mandatory, 
systematic, and, where appropriate, periodic inspection program 
of--
          (i) all offshore pipeline facilities; and
          [(ii) any other pipeline facility crossing under, 
        over, or through navigable waters (as defined by the 
        Secretary) if the Secretary decides that the location 
        of the facility in those navigable waters could pose a 
        hazard to navigation or public safety.]
          (ii) any other pipeline facility crossing under, 
        over, or through waters where a substantial likelihood 
        of commercial navigation exists if the Secretary 
        decides that the location of the facility in those 
        waters could pose a hazard to navigation or public 
        safety.

Sec. 60109. High-density population areas and environmentally sensitive 
                    areas

  (a) Identification Requirements.--Not later than October 24, 
1994, the Secretary of Transportation shall prescribe 
regulations that--
          (1) establish criteria for identifying--
                  (A) by operators of gas pipeline facilities, 
                each gas pipeline facility (except a natural 
                gas distribution line) located in a high-
                density population area; and
                  (B) by operators of hazardous liquid pipeline 
                facilities and gathering lines--
                          (i) each hazardous liquid pipeline 
                        facility, whether otherwise subject to 
                        this chapter, that crosses [a navigable 
                        waterway (as the Secretary defines by 
                        regulation)] waters where a substantial 
                        likelihood of commercial navigation 
                        exists or that is located in an area 
                        described in the criteria as a high-
                        density population area; and
                          (ii) each hazardous liquid pipeline 
                        facility and gathering line, whether 
                        otherwise subject to this chapter, 
                        located in an area that the Secretary, 
                        in consultation with the Administrator 
                        of the Environmental Protection Agency, 
                        describes as unusually sensitive to 
                        environmental damage if there is a 
                        hazardous liquid pipeline accident; and
  (b) Areas To Be Included as Unusually Sensitive.--When 
describing an area that is unusually sensitive to environmental 
damage if there is a hazardous liquid pipeline accident, the 
Secretary shall consider including--
          [(1) earthquake zones and areas subject to landslides 
        and other substantial ground movements;]
          (1) intake locations for community water systems;
          * * * * * * *
Sec. 60110. Excess flow valves

  (a) Application.--This section applies only to--
          (1) * * *
          * * * * * * *
  (b) Installation Requirements and Considerations.--Not later 
than April 24, 1994, the Secretary of Transportation shall 
prescribe regulations on the circumstances, if any, under which 
an operator of a natural gas distribution system must install 
excess flow valves in the system. The Secretary shall 
consider--
          (1) the system design pressure;
          (2) the system operating pressure;
          (3) the types of customers to which the distribution 
        system supplies gas, including hospitals, schools, and 
        commercial enterprises;
          (4) the technical feasibility and cost of installing, 
        operating, and maintaining the valve;
          * * * * * * *
  (c) Notification of Availability.--(1) Not later than October 
24, 1994, the Secretary shall prescribe regulations requiring 
an operator of a natural gas distribution system to notify in 
writing its customers having lines in which excess flow valves 
are not required by law but can be installed according to the 
standards prescribed under subsection (e) of this section, of--
          (A) the availability of excess flow valves for 
        installation in the system;
          (B) safety benefits to be derived from installation; 
        and
          (C) costs associated with installation, maintenance, 
        and replacement.
          * * * * * * *
  (e) Performance Standards.--Not later than April 24, 1994, 
the Secretary shall develop standards for the performance of 
excess flow valves used to protect lines in a natural gas 
distribution system. The Secretary may adopt industry accepted 
performance standards in order to comply with this requirement. 
The standards shall be incorporated into regulations the 
Secretary prescribes under this section. All excess flow valves 
shall be installed according to the standards.
          * * * * * * *

Sec. 60113. Customer-owned natural gas service lines

  [(a) Maintenance Information.--]Not later than October 24, 
1993, the Secretary of Transportation shall prescribe 
regulations requiring an operator of a natural gas distribution 
pipeline that does not maintain customer-owned natural gas 
service lines up to building walls to advise its customers of--
          (1) * * *
          * * * * * * *
  [(b) Actions To Promote Safety.--Not later than one year 
after submitting the report required under section 115(b) of 
the Pipeline Safety Act of 1992 (Public Law 102-508, 106 Stat. 
3296), the Secretary, considering the report and in cooperation 
and coordination with appropriate State and local authorities, 
shall take appropriate action to promote the adoption of 
measures to improve the safety of customer-owned natural gas 
service lines.]

Sec. 60114. One-call notification systems

  (a) Minimum Requirements.--The Secretary of Transportation 
shall prescribe regulations providing minimum requirements for 
establishing and operating a one-call notification system for a 
State to adopt that will notify an operator of a pipeline 
facility of activity in the vicinity of the facility that could 
threaten the safety of the facility. The regulations shall 
include the following:
          (1) [a] A requirement that [the system apply to] all 
        areas of the State containing underground pipeline 
        facilities be covered by a system.
          (2) [a] A requirement that a person intending to 
        engage in an activity the Secretary decides could cause 
        physical damage to an underground facility must contact 
        the appropriate system to establish if there are 
        underground facilities present in the area of the 
        intended activity.
          (3) [a] A requirement that all operators of 
        underground pipeline facilities participate in an 
        appropriate one-call notification system.
          (4) [qualifications] Qualifications for an operator 
        of a facility, a private contractor, or a State or 
        local authority to operate a system.
          (5) [procedures] Procedures for advertisement and 
        notice of the availability of a system.
          (6) [a] A requirement about the information to be 
        provided by a person contacting the system under clause 
        (2) of this subsection.
          (7) [a] A requirement for the response of the 
        operator of the system and of the facility after they 
        are contacted by an individual under this subsection.
          (8) [a] A requirement that each State decide whether 
        the system will be toll free.
          (9) [a] A requirement for sanctions substantially the 
        same as provided under sections [60120, 60122, and 
        60123] 60120 and 60122 of this title.
          * * * * * * *
Sec. 60115. Technical safety standards committees

  (a) Organization.--The Technical Pipeline Safety Standards 
Committee and the Technical Hazardous Liquid Pipeline Safety 
Standards Committee are committees in the Department of 
Transportation. The Committees shall serve as peer review 
committees for carrying out this chapter. Peer reviews 
conducted by the Committees shall be treated for purposes of 
all Federal laws relating to risk assessment and peer review 
(including laws approved after the date of the enactment of the 
Pipeline Safety Act of 1995) as meeting any peer review 
requirements of such laws.
  (b) Composition and Appointment.--(1) The Technical Pipeline 
Safety Standards Committee is composed of 15 members appointed 
by the Secretary of Transportation after consulting with public 
and private agencies concerned with the technical aspect of 
transporting gas or operating a gas pipeline facility. Each 
member must be experienced in the safety regulation of 
transporting gas and of gas pipeline facilities or technically 
qualified, by training, experience, or knowledge in at least 
one field of engineering applicable to transporting gas or 
operating a gas pipeline facility, to evaluate gas pipeline 
safety standards or risk management.
  (2) The Technical Hazardous Liquid Pipeline Safety Standards 
Committee is composed of 15 members appointed by the Secretary 
after consulting with public and private agencies concerned 
with the technical aspect of transporting hazardous liquid or 
operating a hazardous liquid pipeline facility. Each member 
must be experienced in the safety regulation of transporting 
hazardous liquid and of hazardous liquid pipeline facilities or 
technically qualified, by training, experience, or knowledge in 
at least one field of engineering applicable to transporting 
hazardous liquid or operating a hazardous liquid pipeline 
facility, to evaluate hazardous liquid pipeline safety 
standards or risk management.
  (3) The members of each committee are appointed as follows:
          (A) 5 individuals selected from departments, 
        agencies, and instrumentalities of the United States 
        Government and of the States.
          (B) [4] 5 individuals selected from the natural gas 
        or hazardous liquid industry, as appropriate, after 
        consulting with industry representatives.
          (C) [6] 5 individuals selected from the general 
        public.
  (4)(A) Two of the individuals selected for each committee 
under paragraph (3)(A) of this subsection must be State 
commissioners. The Secretary shall consult with the national 
organization of State commissions (referred to in section 
10344(f) of this title) before selecting those 2 individuals.
  (B) At least 3 of the individuals selected for each committee 
under paragraph (3)(B) of this subsection must be currently in 
the active operation of natural gas pipelines or hazardous 
liquid pipeline facilities, as appropriate. At least 1 of the 
individuals selected for each committee under paragraph (3)(B) 
must have education, background, or experience in risk 
assessment and cost-benefit analysis. The Secretary shall 
consult with the national organizations representing the owners 
and operators of pipeline facilities before selecting 
individuals under paragraph (3)(B).
  (C) Two of the individuals selected for each committee under 
paragraph (3)(C) of this subsection must have education, 
background, or experience in environmental protection or public 
safety. At least 1 of the individuals selected for each 
committee under paragraph (3)(C) must have education, 
background, or experience in risk assessment and cost-benefit 
analysis. At least 1 individual selected for each committee 
under paragraph (3)(C) may not have a financial interest in the 
pipeline, petroleum, or natural gas industries.
  (c) Committee Reports on Proposed Standards.--(1) The 
Secretary shall give to--
          (A) the Technical Pipeline Safety Standards Committee 
        each standard or regulatory requirement proposed under 
        this chapter for transporting gas and for gas pipeline 
        facilities, including the risk assessment document, 
        cost-benefit, and other analyses supporting each 
        proposed standard or regulatory requirement; and
          (B) the Technical Hazardous Liquid Pipeline Safety 
        Standards Committee each standard or regulatory 
        requirement proposed under this chapter for 
        transporting hazardous liquid and for hazardous liquid 
        pipeline facilities, including the risk assessment 
        document, cost-benefit, and other analyses supporting 
        each proposed standard or regulatory requirement.
  (2) Not later than 90 days after receiving the proposed 
standard or regulatory requirement and supporting analyses, the 
appropriate committee shall prepare and submit to the Secretary 
a report on the technical feasibility, reasonableness, cost 
effectiveness, and practicability of the proposed standard or 
regulatory requirement together with recommended actions. The 
Secretary shall publish each report, including any recommended 
actions and minority views. The report if timely made is part 
of the proceeding for prescribing the standard or regulatory 
requirement. The Secretary is not bound by the conclusions of 
the committee. However, if the Secretary rejects the 
conclusions of the committee, the Secretary shall publish the 
reasons.
  (3) The Secretary may prescribe a standard or regulatory 
requirement after the end of the 90-day period.
  (d) Proposed Committee Standards and Policy Development 
Recommendations.--(1) The Technical Pipeline Safety Standards 
Committee may propose to the Secretary a safety standard or 
regulatory requirement for transporting gas and for gas 
pipeline facilities. The Technical Hazardous Liquid Pipeline 
Safety Standards Committee may propose to the Secretary a 
safety standard or regulatory requirement for transporting 
hazardous liquid and for hazardous liquid pipeline facilities.
  (e) Meetings.--Each committee shall meet with the Secretary 
at least [twice] 4 times annually. Each committee proceeding 
shall be recorded. The record of the proceeding shall be 
available to the public.
  (f) [Pay and] Expenses.--[The Secretary may establish the pay 
for each member of a committee for each day (including travel 
time) when performing duties of the committee. However, a 
member may not be paid more than the daily equivalent of the 
maximum annual rate of basic pay payable under section 5376 of 
title 5.] A member of a committee under this section is 
entitled to expenses under section 5703 of title 5. A payment 
under this subsection does not make a member an officer or 
employee of the Government. This subsection does not apply to 
members regularly employed by the Government.

Sec. 60116. Public education programs

  Under regulations the Secretary of Transportation prescribes, 
each [person transporting gas] owner or operator of a gas 
pipeline facility shall carry out a program to educate the 
public on the use of damage prevention (``one-call'') systems 
prior to excavation, the possible hazards associated with gas 
leaks, and the importance of reporting gas odors and leaks to 
the appropriate authority. The Secretary may develop material 
suitable for use in the program.
Sec. 60117. Administrative

  (a) * * *
          * * * * * * *
  (k) Authority for Cooperative Agreements.--To carry out this 
chapter, the Secretary may enter into grants, cooperative 
agreements, and other transactions with any person, agency, or 
instrumentality of the United States, any unit of State or 
local government, any educational institution, and any other 
entity to further the objectives of this chapter. Such 
objectives include, but are not limited to, the development, 
improvement, and promotion of one-call damage prevention 
programs, research, risk assessment, and mapping.
Sec. 60118. Compliance and waivers

  (a) * * *
          * * * * * * *
  (e) Compliance With Risk Management Plans.--Owners and 
operators that are participating in the demonstration project 
under section 60127 shall be considered to be in compliance 
with any prescribed safety standard or regulatory requirement 
that is covered by an approved plan under section 60127.
          * * * * * * *

Sec. 60123. Criminal penalties

  (a) * * *
          * * * * * * *
  (d) Penalty for Not Using One-Call Notification System or Not 
Heeding Location Information or Markings.--A person shall be 
fined under title 18, imprisoned for not more than 5 years, or 
both, if the person knowingly and willfully--
          (1) engages in an excavation activity--
                  (A) without first using an available one-call 
                notification system to establish the location 
                of underground facilities in the excavation 
                area; or
                  (B) without paying attention to appropriate 
                location information or markings the operator 
                of a pipeline facility establishes; and
          (2) subsequently damages--
                  (A) a pipeline facility that results in 
                death, serious bodily harm, or actual damage to 
                property of more than $50,000; [or]
                  (B) a pipeline facility and does not report 
                the damage promptly to the operator of the 
                pipeline facility and other appropriate 
                authorities; or
                  [(B)] (C) a hazardous liquid pipeline 
                facility that results in the release of more 
                than 50 barrels of product.

[Sec. 60124. Annual reports

  [(a) Submission and Contents.--The Secretary of 
Transportation shall submit to Congress not later than August 
15 of each year a report on carrying out this chapter for the 
prior calendar year for gas and a report on carrying out this 
chapter for the prior calendar year for hazardous liquid. Each 
report shall include the following information about the prior 
year for gas or hazardous liquid, as appropriate:
          [(1) a thorough compilation of the leak repairs, 
        accidents, and casualties and a statement of cause when 
        investigated and established by the National 
        Transportation Safety Board.
          [(2) a list of applicable pipeline safety standards 
        prescribed under this chapter including identification 
        of standards prescribed during the year.
          [(3) a summary of the reasons for each waiver granted 
        under section 60118(c) and (d) of this title.
          [(4) an evaluation of the degree of compliance with 
        applicable safety standards, including a list of 
        enforcement actions and compromises of alleged 
        violations by location and company name.
          [(5) a summary of outstanding problems in carrying 
        out this chapter, in order of priority.
          [(6) an analysis and evaluation of--
                  [(A) research activities, including their 
                policy implications, completed as a result of 
                the United States Government and private 
                sponsorship; and
                  [(B) technological progress in safety 
                achieved.
          [(7) a list, with a brief statement of the issues, of 
        completed or pending judicial actions under this 
        chapter.
          [(8) the extent to which technical information was 
        distributed to the scientific community and consumer-
        oriented information was made available to the public.
          [(9) a compilation of certifications filed under 
        section 60105 of this title that were--
                  [(A) in effect; or
                  [(B) rejected in any part by the Secretary 
                and a summary of the reasons for each 
                rejection.
          [(10) a compilation of agreements made under section 
        60106 of this title that were--
                  [(A) in effect; or
                  [(B) ended in any part by the Secretary and a 
                summary of the reasons for ending each 
                agreement.
          [(11) a description of the number and qualifications 
        of State pipeline safety inspectors in each State for 
        which a certification under section 60105 of this title 
        or an agreement under section 60106 of this title is in 
        effect and the number and qualifications of inspectors 
        the Secretary recommends for that State.
          [(12) recommendations for legislation the Secretary 
        considers necessary--
                  [(A) to promote cooperation among the States 
                in improving--
                          [(i) gas pipeline safety; or
                          [(ii) hazardous liquid pipeline 
                        safety programs; and
                  [(B) to strengthen the national gas pipeline 
                safety program.
  [(b) Submission of One Report.--The Secretary may submit one 
report to carry out subsection (a) of this section.]
Sec. 60124. Population encroachment

  (a) Land Use Recommendations.--The Secretary of 
Transportation shall make available to an appropriate official 
of each State, as determined by the Secretary, the land use 
recommendations of the Transportation Research Board's Special 
Report 219, entitled Pipelines and Public Safety.
  (b) Evaluation.--The Secretary shall evaluate the 
recommendations in the report referred to in subsection (a), 
determine to what extent the recommendations are being 
implemented, consider ways to improve implementation of the 
recommendations, and consider other initiatives to further 
improve awareness of local planning and zoning entities 
regarding issues involved with population encroachment in 
proximity to the rights-of-ways of any interstate gas pipeline 
facility or interstate hazardous liquid pipeline facility.
Sec. 60125. Authorization of appropriations

  (a) Gas.--Not more than the following amounts may be 
appropriated to the Secretary of Transportation to carry out 
this chapter (except sections 60107 and 60114(b)) related to 
gas:
          (1) $6,857,000 for the fiscal year ending September 
        30, 1993.
          (2) $7,000,000 for the fiscal year ending September 
        30, 1994.
          (3) $7,500,000 for the fiscal year ending September 
        30, 1995.
          (4) $7,866,000 for fiscal year 1996.
          (5) $8,322,000 for fiscal year 1997.
          (6) $8,778,000 for fiscal year 1998.
          (7) $9,234,000 for fiscal year 1999.
  (b) Hazardous Liquid.--Not more than the following amounts 
may be appropriated to the Secretary to carry out this chapter 
(except sections 60107 and 60114(b)) related to hazardous 
liquid:
          (1) $1,728,500 for the fiscal year ending September 
        30, 1993.
          (2) $1,866,800 for the fiscal year ending September 
        30, 1994.
          (3) $2,000,000 for the fiscal year ending September 
        30, 1995.
          (4) $2,070,000 for fiscal year 1996.
          (5) $2,190,000 for fiscal year 1997.
          (6) $2,310,000 for fiscal year 1998.
          (7) $2,430,000 for fiscal year 1999.
  (c) State Grants.--(1) Not more than the following amounts 
may be appropriated to the Secretary to carry out section 60107 
of this title:
          (A) $7,750,000 for the fiscal year ending September 
        30, 1993.
          (B) $9,000,000 for the fiscal year ending September 
        30, 1994.
          (C) $10,000,000 for the fiscal year ending September 
        30, 1995.
          (D) $10,764,000 for fiscal year 1996.
          (E) $11,388,000 for fiscal year 1997.
          (F) $12,012,000 for fiscal year 1998.
          (G) $12,636,000 for fiscal year 1999.
          * * * * * * *
Sec. 60126. Analysis of risk reduction benefits and costs

  (a) Requirement.--No final significant standard or regulatory 
requirement issued under section 60101(b), 60102, 60103, 60108, 
60109, 60110, or 60113 shall be promulgated unless the 
Secretary of Transportation--
          (1) certifies that the Secretary has conducted an 
        analysis of risk reduction benefits and costs that is 
        based on objective and unbiased scientific and economic 
        evaluations of all significant and relevant information 
        and risk assessments provided to the Department of 
        Transportation by interested parties or generated by 
        the Department itself relating to the costs, risks, and 
        risk reduction and other benefits addressed by the 
        standard or requirement;
          (2) certifies that the incremental risk reduction or 
        other benefits of any option chosen will be likely to 
        justify, and be reasonably related to, the incremental 
        costs incurred by State, local, and tribal governments 
        and the Federal Government and other public and private 
        citizens; and
          (3) explains why any other options identified or 
        considered by the Secretary were found either--
                  (A) to be less cost-effective at achieving a 
                substantially equivalent reduction in risk; or
                  (B) to provide less flexibility to State, 
                local, or tribal governments or regulated 
                entities in achieving the otherwise applicable 
                objectives of the standard or requirement, 
                along with a brief explanation of why other 
                options that were identified or considered by 
                the Secretary were found to be less cost-
                effective or less flexible.
  (b) Elements of Analysis.--An analysis of risk reduction 
benefits or costs prepared by the Secretary for a significant 
standard or regulatory requirement, at a minimum, shall--
          (1) identify the various regulatory and nonregulatory 
        options that were considered;
          (2) analyze the incremental costs and incremental 
        risk reduction or other benefits associated with each 
        option identified or considered by the Secretary;
          (3) provide any technical data or other information, 
        including the underlying assumptions, upon which the 
        standard or requirement is based; and
          (4) include a statement that places in context the 
        nature and magnitude of the risks to be addressed and 
        the residual risks likely to remain for each option 
        identified or considered.
Costs and benefits shall be quantified to the extent feasible 
and appropriate and may otherwise be qualitatively described.
  (c) Risk Assessment Documents.--A risk assessment document 
prepared by the Secretary for a significant standard or 
regulatory requirement shall, at a minimum and to the extent 
feasible--
          (1) provide the best estimate for the impacts 
        addressed and a statement of the reasonable range of 
        scientific uncertainties;
          (2) include a statement of any significant 
        substitution risks to public safety or the environment; 
        and
          (3) contain a statement that places in context the 
        nature and magnitude of risks to public safety or the 
        environment.
  (d) Statements.--The statements referred to in subsections 
(b)(4) and (c)(3) of this section shall each provide, to the 
extent feasible, comparisons with estimates of greater, lesser, 
and substantially equivalent risks that are familiar to and 
routinely encountered by the general public, as well as other 
risks, and, where appropriate and meaningful, comparisons of 
those risks with other similar risks regulated by the 
Department resulting from comparable activities. In making such 
comparisons, the Secretary should consider relevant 
distinctions among risks, such as the voluntary or involuntary 
nature of risks, and the preventability or nonpreventability of 
risks.
  (e) Review by Standards Committee.--
          (1) Peer review.--For any significant standard or 
        regulatory requirement, the Secretary shall submit any 
        risk assessment documents and cost-benefit analyses 
        (prepared or received by the Secretary) for review by 
        the Technical Pipeline Safety Standards Committee, the 
        Hazardous Liquid Pipeline Safety Standards Committee, 
        or both, as appropriate, and make them available to the 
        public. The Technical Pipeline Safety Standards 
        Committee and the Hazardous Liquid Pipeline Safety 
        Standards Committee shall function as peer review 
        panels and shall prepare reports, including any 
        recommended options for any significant standard or 
        regulatory requirement and an evaluation of the 
        technical scientific merit of the data and scientific 
        method used for a risk assessment document or cost-
        benefit analysis. The Committee or Committees shall 
        submit such reports to the Secretary within 90 days 
        after the date of receipt of the documents and analyses 
        from the Secretary.
          (2) Response of secretary.--The Secretary shall 
        review the report and recommendations of the Technical 
        Pipeline Safety Standards Committee, the Technical 
        Hazardous Liquids Pipeline Safety Standards Committee, 
        or both, as the case may be. Within 90 days after 
        receipt of such report, the Secretary--
                  (A) shall submit to the Committee or 
                Committees a written response to all peer 
                review comments and recommended options; and
                  (B) may revise the risk assessment document 
                or cost-benefit analysis prior to determining 
                whether the proposed significant standard or 
                regulatory requirement should be promulgated.
  (f) Emergencies.--In the case of an emergency, the Secretary 
may suspend the application of this section for the duration of 
the emergency.
  (g) Report.--Not later than March 31, 1999, the Secretary 
shall transmit to Congress a report on the application of the 
principles of the analyses of risk reduction benefits and costs 
and risk assessment to this chapter and their effect on 
pipeline safety.
Sec. 60127. Risk management

  (a) Risk Management Demonstration Project.--The Secretary of 
Transportation shall carry out a project with voluntary 
participation by owners and operators of pipeline facilities to 
demonstrate applications of risk management. The purpose of the 
project shall be to evaluate the safety and cost effectiveness 
of such applications.
  (b) Exemption.--During the period of the demonstration 
project carried out under this section, the Secretary may 
exempt owners and operators participating in the project from 
compliance with some or all of the standards 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 included in the project.
  (c) Requirements.--In carrying out the demonstration project 
under this section, the Secretary shall--
          (1) invite owners and operators of pipeline 
        facilities to submit risk management plans for timely 
        approval by the Secretary;
          (2) ensure that owners and operators implementing 
        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 needed to 
                ensure that owners and operators participating 
                in the project demonstrate that risks are being 
                effectively managed and that risk management 
                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 results of the 
demonstration project carried out under this section together 
with an evaluation of the project and recommendations on 
whether or not the applications demonstrated under the project 
should be made a permanent part of the Federal pipeline safety 
program.
                            ADDITIONAL VIEWS

    The responsibility to protect public safety and the 
environment with respect to pipeline transportation is a very 
serious one; a responsibility that we ought not treat lightly. 
When pipeline accidents happen, even though they occur rarely, 
the consequences can be catastrophic.
    Just one year ago, the gas pipeline explosion in Edison, 
New Jersey, incinerated eight apartment buildings, causing 
1,500 people to lose their homes in a matter of minutes. Flames 
up to 500 feet in the air radiated heat in excess of 1,000 
degrees Fahrenheit. Total damage from the accident exceeded $25 
million.
    And, only one year before that, the hazardous liquid 
pipeline accident in Fairfax County, Virginia, spilled over 
400,000 gallons of fuel oil into the Potomac river.
    Clearly, the potential for widespread public and 
environmental harm from pipeline accidents is enormous. And, 
the potential is increasing, as pipelines age and formerly 
remote areas become increasingly developed and populated. In 
many cases, residents do not even realize that they live near 
pipelines.
    As a result, as we reauthorize the federal pipeline safety 
program and explore new approaches to safety oversight, we must 
ensure that owners and operators of pipeline facilities achieve 
an equivalent or greater overall level of safety than what 
exists today.
    Some people have tried to seize what they see as an 
opportunity to make it more difficult for government to ensure 
safety through regulation. Among the devices they have seized 
upon are the concepts of cost-benefit analysis and risk 
assessment, the central issue which made this reauthorization 
of the pipeline program different from other reauthorizations.
    In fact, these concepts have been incorporated into most 
safety rulemaking for some time; the concepts themselves are 
not controversial. What is controversial is how those who want 
to hamstring safety rulemaking have tried to make risk 
assessment and cost-benefit analysis more and more time-
consuming, burdensome, and expensive, precisely so that fewer 
safety rules can be issued.
    The issue, therefore, is not whether to utilize risk 
assessment and cost-benefit analysis to support federal 
rulemaking, but how best to incorporate these concepts without 
obstructing the overall objective--ensuring public safety and 
protecting the environment.
    Risk assessment and cost-benefit analysis need not have 
been added to this bill at all. In 1993, the President signed 
an executive order requiring risk assessment and cost-benefit 
analysis. This year, the House passed, and the Senate is 
considering, legislation that would impose risk assessment and 
cost-benefit analysis requirements on all rulemaking, including 
the pipeline safety program. Our actions here then are at best 
redundant, and at worst dangerous.
    Nevertheless, when it became clear that risk assessment and 
cost-benefit analysis requirements would be included in this 
bill, we concluded that those requirements should not be so 
burdensome as to make safety rulemaking unlikely, if not 
impossible. Furthermore, the requirements should not be so 
rigid and prescriptive that the Secretary of Transportation 
would have no responsibility for making common sense 
judgements. In the end, the Secretary must retain both the 
authority and the accountability for making decisions that 
protect public safety and the environment. And finally, it 
would make no sense to impose more restrictive and burdensome 
risk assessment requirements on pipeline safety related 
regulations than on other federal rulemakings.
    We commend the Committee for the bipartisan cooperation 
that led to the reasonable compromise reflected in this bill as 
amended by the Subcommittee. The amendments to the risk 
assessment and cost-bearing analysis requirements will ensure 
that the Secretary of Transportation retains accountability for 
safety standards and regulatory requirements. While the 
Secretary must conduct the various layers of analysis called 
for in the bill, important safety judgements will not be based 
solely on some formula. The Secretary will ultimately have to 
determine that all important factors, even those for which 
accurate and reliable data are not readily available, have been 
fully considered. Moreover, the Secretary will retain the 
ability to issue safety regulations in an emergency without 
going through all the extra paperwork and process created by 
this bill. And finally, the bill's risk assessment provisions 
now parallel the House-passed risk assessment bill (H.R. 1022). 
To the extent that a larger risk assessment bill is made less 
restrictive or burdensome in the future, the risk assessment 
provisions in this bill should be correspondingly scaled back.
    While we support the concept of the risk management 
demonstration project, we must ensure that it is implemented as 
intended in this bill. The demonstration is not an opportunity 
to roll back important public safety and environmental 
protections in the name of economic efficiency. The Secretary 
must ensure that the number of participating pipeline owners 
and operators does not overwhelm the Office of Pipeline 
Safety's ability to manage and evaluate the demonstration 
project effectively. The Secretary should exercise due caution 
in granting exemptions from existing safety standards and 
regulatory requirements to project participants. Participating 
owners and operators must clearly demonstrate that they are 
effectively managing risk and that their risk management plans 
can be audited and performance measured. With these 
considerations in mind, the demonstration project offers an 
excellent opportunity to evaluate, under real world conditions, 
the application of risk management principles to pipeline 
safety.
    Although there are other provisions in the bill that we 
would have preferred to improve, particularly the funding 
levels, this compromise legislation is a constructive step 
forward by all sides. Both sides of the Committee leadership 
have committed themselves to defending this product against any 
efforts to weaken it from a public safety and environmental 
protection point of view. If the bill is weakened from the 
current compromise, we will be unable to support it further. We 
look forward to working with the Full Committee and 
Subcommittee Chairmen to move this compromise bill through the 
rest of the legislative process.
    We believe that it would be particularly appropriate during 
further deliberations on this bill to reconsider the funding it 
provides for pipeline safety. The bill provides a sharp 
reduction from present appropriated levels in funding for 
pipeline safety programs. The FY 95 appropriated level is $37 
million, and the President's request for FY 96 if $45 million. 
Yet the FY 96 authorized level in this bill is only $20 
million, a level which would be inadequate to fund critical 
aspects of the pipeline safety program.
    For example, the Office of Pipeline Safety would be unable 
to meet the 50 percent reimbursement goal for State grants, and 
could not begin its proposed initiative to encourage States to 
use risk management principles. The Committee bill only 
provides $10.8 million for fiscal year 1996 State grants. The 
President requested $13.2 million to meet the fiscal year 1996 
reimbursement, and $1.8 million to help States develop risk 
assessment profiles of pipelines under their jurisdiction so 
that the State programs can begin using risk management 
principles.
    Moreover, with the funding authorized in the Committee bill 
the Office of Pipeline Safety would not be able to continue 
efforts begun in fiscal year 1995 to improve its safety 
monitoring. Thirty percent of the increased funding in fiscal 
year 1995 will be used to hire 16 additional field inspectors 
and regulatory support specialists, and to contract for 33 
engineers to inspect new pipeline construction and replacement 
projects and to assess the risk of pipeline failures. Clearly, 
these efforts could not be sustained with the 45 percent cut 
from current appropriations proposed in the Committee bill.
    Technical studies being undertaken with the increased 
fiscal year 1995 funding on such issues as classifying 
environmentally sensitive areas, identifying corrosion, 
fractures, weld failures, and other defects in aging pipelines, 
and automating information systems would be jeopardized by the 
authorized funding in the Committee bill. The information these 
studies will provide is exactly what is needed to implement 
risk assessment and risk management effectively.
    All of the funding for these programs comes from user fees; 
none comes from the general taxpayer. We should, in our further 
deliberations on the bill, consider providing for funding 
levels sufficient both to maintain the public safety and to 
credibly implement the reforms called for in this bill.
                                   James L. Oberstar.
                                   Nick Rahall.
                                   Corrine Brown.
                                   E.H. Norton.
                                   Norman Y. Mineta.
                                   Bob Borski.
                                   Peter DeFazio.
                                   Walter Tucker III.
                   ADDITIONAL VIEWS OF JERROLD NADLER

    I compliment the Ranking Member, Mr. Mineta, on his 
dedicated efforts to negotiate a compromise mitigating the 
damage to public safety laws threatened by the ``Pipeline 
Safety Act of 1995'' as introduced. The bill reported by the 
full Committee is a vast improvement.
    Nonetheless, the ``Pipeline Safety Act,'' as reported by 
the Transportation and Infrastructure Committee, still poses a 
serious threat to the environment and to public health and 
welfare by rolling back existing protections and by mandating 
burdensome new bureaucratic procedures. For example, the 
``Pipeline Safety Act of 1995'' would lower the threshold level 
at which a cost/benefit analysis would be mandated from the 
$100 million level set by President Reagan and maintained by 
Presidents Bush and Clinton, to a mere $25 million--requiring 
extra time and resources and approval by extra layers of 
bureaucracy before most safety regulations could be 
promulgated.
    Additionally, as the Minority dissenting views correctly 
point out, this bill fails to authorize adequate funding, 
further hampering federal officials in their efforts to protect 
public health and environmental safety, and compounding the 
problem of overly excessive bureaucratic procedures.
    The danger, and the cost, to the public from pipeline 
disasters is all too clear. It should be just as clear that we 
must not tolerate a relaxation of our efforts to prevent 
further disasters.