[Federal Register Volume 62, Number 183 (Monday, September 22, 1997)]
[Rules and Regulations]
[Pages 49560-49567]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-25065]



[[Page 49559]]

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Part II





Department of Transportation





_______________________________________________________________________



Research and Special Programs Administration



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49 CFR Parts 171 and 173



Hazardous Materials in Intrastate Commerce; Delay of Compliance Date, 
Technical Amendments, Corrections and Response to Petitions for 
Reconsideration; Final Rule

  Federal Register / Vol. 62, No. 183 / Monday, September 22, 1997 / 
Rules and Regulations  

[[Page 49560]]



DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Parts 171 and 173

[Docket HM-200; Amdt. Nos. 171-154 and 173-262]
RIN 2137-AB37


Hazardous Materials in Intrastate Commerce; Delay of Compliance 
Date, Technical Amendments, Corrections and Response to Petitions for 
Reconsideration

AGENCY: Research and Special Programs Administration (RSPA), DOT.

ACTION: Final rule, delay of compliance date, technical amendments, 
correction and response to petitions for reconsideration.

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SUMMARY: On January 8, 1997, RSPA published a final rule which amended 
the Hazardous Materials Regulations (HMR) to expand the scope of the 
regulations to intrastate transportation of hazardous materials. The 
intended effect of the January 8, 1997 rule is to raise the level of 
safety in the transportation of hazardous materials by applying a 
uniform system of safety regulations to all hazardous materials 
transported in commerce throughout the United States. In this final 
rule, RSPA is providing one additional year, until October 1, 1998, for 
compliance, responding to petitions for reconsideration and correcting 
errors in the January 8, 1997 final rule. The minor editorial changes 
made by this final rule will not impose any new requirements on persons 
subject to the HMR.

DATES: Effective dates: This final rule is effective October 1, 1997. 
The effective date for the final rule published under Docket HM-200 on 
January 8, 1997 (62 FR 1208) remains October 1, 1997.
    Compliance dates: Voluntary compliance with the January 8, 1997 
final rule has been authorized beginning April 8, 1997. Voluntary 
compliance with this final rule is authorized as of September 22, 1997.
    Mandatory compliance with the HMR by intrastate motor carriers of 
hazardous materials is required beginning October 1, 1998, except that 
intrastate motor carriers of hazardous waste, hazardous substances, 
marine pollutants, and flammable cryogenic liquids in portable tanks 
and cargo tanks are already subject to the HMR.

FOR FURTHER INFORMATION CONTACT: Diane LaValle or Deborah Boothe, (202) 
366-8553, Office of Hazardous Materials Standards, RSPA, 400 Seventh 
Street, SW, Washington, DC 20590-0001.

SUPPLEMENTARY INFORMATION:

I. Background

    On January 8, 1997, RSPA issued a final rule under Docket HM-200 
[62 FR 1208]. The final rule amended the HMR by expanding the scope of 
the regulations to intrastate transportation of hazardous materials in 
commerce. In the final rule, RSPA created or amended exceptions for 
agricultural operations (Sec. 173.5), materials of trade (Sec. 173.6), 
non-specification packagings used in intrastate transportation 
(Sec. 173.8) and minimum qualifications for registered inspectors 
(Sec. 180.409).
    Since publication of the final rule, RSPA has discovered minor 
errors in Sec. 173.6 (materials of trade) that are being corrected in 
this document. In response to a petition for reconsideration, RSPA is 
also amending Sec. 173.6 to include provisions that materials of trade 
may include Division 2.2 materials in permanently installed cylinders 
or tanks built to the American Society of Mechanical Engineers (ASME) 
standards. RSPA is denying another part of this petition for 
reconsideration and two other petitions for reconsideration of the 
final rule.
    To offset burdens that may fall on intrastate motor carriers and 
their shippers who were not previously subject to requirements 
comparable to those in the HMR because of State exceptions, RSPA is 
providing an additional year for compliance. RSPA is adding to 
Sec. 171.1 the wording ``except that until October 1, 1998, this 
subchapter applies to intrastate carriers by motor vehicle only in so 
far as this subchapter relates to hazardous waste, hazardous 
substances, flammable cryogenic liquids in portable tanks and cargo 
tanks, and marine pollutants.'' This will ensure that the final rule 
will be printed in the 1997 edition of the Code of Federal Regulations 
while still providing additional time for compliance. It is important 
for people who choose to voluntarily comply to have up-to-date 
information on these requirements. However, RSPA concludes that an 
additional year is appropriate for these persons to learn and come into 
compliance with the requirements in the HMR.
    In addition, the July 1, 1998 date set forth in Secs. 173.5(a)(2) 
and 173.8(d)(3) as the deadline for States to enact legislation that 
authorizes exceptions for agricultural operations and non-specification 
cargo tanks is being changed to October 1, 1998, for consistency with 
the mandatory compliance date of the final rule. This will eliminate 
the potential problem of requiring compliance before a State has the 
opportunity to enact legislation to allow carriers in that state to 
take advantage of the exceptions.

II. Materials of Trade (Sec. 173.6)

    RSPA is making several changes to Sec. 173.6, as follows:
    As provided by Sec. 173.6, only certain hazardous materials are 
authorized the materials of trade exception. Although proposed in the 
March 20, 1996 supplemental notice of proposed rulemaking (SNPRM) [61 
FR 11484], the final rule inadvertently omitted Division 5.2 (organic 
peroxide) materials from the list. Therefore, Division 5.2 materials 
are added to the list in Sec. 173.6(a)(1) and are authorized under the 
materials of trade exception.
    A reference to regulations of the Occupational Safety and Health 
Administration (OSHA) applicable to construction activities (29 CFR 
1926.152) was inadvertently omitted in the requirements for packaging 
gasoline (Sec. 173.6(b)(4)). These OSHA requirements address storage 
and use of gasoline at construction sites and authorize up to one-
gallon capacity plastic containers for gasoline. RSPA believes that the 
material of trade exception should also authorize these small plastic 
safety cans for the transportation of gasoline to avoid the transfer of 
gasoline from one container to another. Therefore Sec. 173.6(b)(4) is 
revised to reference the OSHA standard in 29 CFR 1926.152(a)(1). 
Additionally the reference to 29 CFR 1910.106 is expanded to identify 
the specific paragraph that references the OSHA safety can standard.
    The aggregate gross weight of all materials of trade on board a 
vehicle is limited by Sec. 173.6(d). This paragraph erroneously refers 
to ``permanently mounted tanks'' authorized by paragraph (a)(1)(iii) of 
this section. Therefore, Sec. 173.6(d)is revised to refer to 
``materials of trade authorized under paragraph (a)(1)(iii).''
    The last sentence in Sec. 173.6(d) is placed in new paragraph (e) 
for clarity. New paragraph (e) clarifies that materials of trade may be 
transported on a motor vehicle with other hazardous materials and still 
be authorized exceptions.
    Phillips Petroleum Company (Phillips) petitioned that the materials 
of trade exception be expanded to authorize transportation of Division 
2.2 (non-flammable gas) materials in non-specification permanently 
mounted cylinders. Phillips stated that these cylinders for compressed 
air are

[[Page 49561]]

constructed to the American Society of Mechanical Engineers (ASME) 
Pressure Vessel Code and are typically less than 70 gallons water 
capacity. Phillips further stated that since the air cylinders do not 
meet DOT specifications, they must be depressurized before they can be 
transported and then must be repressurized at the next job site before 
use.
    RSPA agrees that the materials of trade exception may properly be 
expanded to include permanently installed tanks built to the ASME 
Pressure Vessel Code containing non-liquefied non-flammable compressed 
gases with no subsidiary hazard. This provision has been adopted into 
Sec. 173.6(a)(1)(iv).
    Phillips also petitioned RSPA to authorize the transportation, as 
materials of trade, of DOT exemption cylinders containing compressed or 
flammable gas samples. Several exemptions are in existence authorizing 
such transportation, and Phillips stated that these cylinders have been 
used for many years and have a proven track record of safety and 
reliability.
    As provided in the final rule, Sec. 173.6(b)(5) authorizes 
transportation of a cylinder or other pressure vessel containing a 
Division 2.1 or 2.2 material, conforming to the packaging, 
qualification, maintenance, and use requirements of this subchapter, as 
a material of trade. A cylinder manufactured under the terms of an 
exemption is an authorized packaging under the provisions of the 
subchapter. Therefore, no regulatory change is necessary to authorize 
such transportation and, accordingly, this part of Phillips's petition 
is denied.

III. Non-Specification Packagings Used in Intrastate Transportation 
(Sec. 173.8); Minimum Qualifications for Inspectors and Testers 
(Sec. 180.409)

    National Tank Truck Carriers, Inc. (NTTC) petitioned RSPA to 
reconsider its authorization for continued use of non-specification 
cargo tanks by intrastate carriers transporting flammable liquid 
petroleum products. NTTC stated that the exceptions provided in the 
final rule for the continued use of these non-specification cargo tanks 
create a patchwork regulatory system that cannot be enforced and do not 
provide an ``equivalent'' level of safety. They also provided scenarios 
that, in NTTC's opinion, could create difficulties for enforcement and 
carrier personnel to determine compliance with the inspection and 
testing requirements of Part 180.
    Two rebuttal letters were received in response to NTTC's petition 
for reconsideration. The Petroleum Marketers Association of America 
stated that States have traditionally been responsible for public 
safety and allowing the States to continue to exercise their rational 
judgement in packaging of certain hazardous materials in intrastate 
commerce does not endanger public safety. The Petroleum Transportation 
& Storage Association also opposed NTTC's petition and stated that NTTC 
completely misstates the effect HM-200 will have on the regulated 
community and public safety in general.
    RSPA denies NTTC's petition. The situation described by NTTC 
regarding the unfair advantage given to intrastate motor carriers by 
allowing them to use non-specification cargo tanks is not new to the 
regulated industry. In fact, HM-200 will eventually lead to the 
elimination of non-specification cargo tanks and their replacement with 
DOT specification cargo tanks in the same manner the older MC 300 
series cargo tanks are being removed from service, some of which are 
more than 25 years old.
    The continuing use provision recognizes that a State may assume the 
responsibility on behalf of its citizens to allow the use of non-
specification cargo tanks to transport liquid fuels in that State under 
specified conditions. In an effort to minimize the impact of a total 
replacement of the intrastate cargo tank fleet for small businesses in 
these States, RSPA decided to provide for the continued use of these 
non-specification cargo tanks. This provision applies only in those 
States that have or will provide a specific provision for their use by 
State law or regulation. No new non-specification cargo tanks used to 
transport flammable liquid petroleum products may be placed in service 
after October 1, 1998. In addition to any operational requirements 
placed on their use by the States in which they are operated, they are 
only authorized for continued operation in conformance with the 
inspection and test requirements of Part 180 after July 1, 2000. RSPA 
believes that the inspection and test requirements will provide an 
incremental safety increase in the operation of these cargo tanks.
    RSPA denies NTTC's petition opposing the exception provided for 
registered inspectors. Educational requirements are waived for a person 
who only performs annual external visual inspections and leakage tests 
on cargo tank motor vehicles owned or operated by that person. These 
cargo tank motor vehicles must have a capacity of less than 3500 
gallons and be used exclusively for transportation of flammable liquid 
petroleum fuels. The inspectors must register with DOT advising that 
they are performing inspections, thereby providing the Federal Highway 
Administration (FHWA) the identity and location of such inspection and 
testing facilities in order that they be included in FHWA's compliance 
program.

IV. Agricultural Operations (Sec. 173.5)

    A petition bearing the names of 45 agricultural retailers and 
associations requested that RSPA revise Sec. 173.5 ``to incorporate 
language that will provide an exception from the HMR for both farmers 
and retailers who transport agricultural products from retail-to-farm, 
between fields, and from the farm back to the local source of supply.'' 
These parties stated that RSPA had failed to provide adequate relief 
from the HMR's requirements ``for both farmers and retailers.'' (In a 
separate, letter, one of these agricultural organizations stated that: 
``Arizona members stand firmly behind current safety regulations and 
have no reason to adopt exceptions in our state, however, we encourage 
our state counterparts to have the opportunity to respond to their 
local needs.'')
    The petition asserted that farmers and retailers should not be 
forced to comply with the HMR for the ``few brief periods during the 
year'' that agricultural shipments take place: a 45-day period for 
planting crops and other periods in the fall when fertilizer is 
applied. Included with the petition was an estimate that it will cost 
each retail facility, assumed to handle 100 loads of agricultural 
products a day during the 45-day planting season, a total of $12,300 
per year to determine whether the HMR apply (i.e., whether the 
agricultural product is a hazardous material) and, for those that are 
covered, comply with the HMR's shipping paper and placarding 
requirements. According to these parties, HM-200 does not achieve the 
goal of uniformity because movements of agricultural products from 
retail-to-farm will be subject to the HMR, but movements of the same 
products between fields of the same farm are excepted.
    On this basis, these petitioners appear to seek a broad exception 
from the HMR for any retailer or farmer that transports agricultural 
products ``from retail-to-field, between fields, and from the farm back 
to the local source of supply,'' that would be applicable throughout 
the United States, and not just in those few States that allow 
exceptions for movements of agricultural products.

[[Page 49562]]

The literal wording of the exception requested in this petition would 
apply to all hazardous materials transported by any retailer that made 
a single delivery of a hazardous material to a farmer. Under this 
interpretation, a company that delivers gasoline to a farm, for use in 
farm machinery, could claim that all its deliveries fit under the 
requested exception, even though other deliveries would be to 
businesses having no direct connection with agriculture.
    In response to this petition, opposing comments were submitted 
jointly by the American Trucking Association, the Association of Waste 
Hazardous Materials Transporters, and NTTC. These organizations 
questioned whether agricultural retailers could or should be 
distinguished from other shippers and carriers of hazardous materials, 
stating that they did not believe agricultural retailers deserved 
``special treatment.'' These organizations also referred to:

--The availability of educational materials to foster understanding of 
the HMR and compliance, furnished by RSPA and other industry 
organizations.
--The many crop protection products which are EPA-designated 
``hazardous substances'' and, accordingly, have been subject to the HMR 
in intrastate shipments since 1980, so that many agricultural retailers 
should already be complying with the HMR in shipping or transporting 
these hazardous substances.
--The inclusion among the petitioners of retailers and organizations in 
many States that have already adopted the HMR as State law and have not 
provided broad exceptions for agricultural operations, implying that 
these petitioners seek to ``rollback'' existing regulations.
--Questions about whether the petitioners estimates of the costs of 
compliance are valid and actually: (1) apply in those States where the 
transportation of agricultural products is already subject to the HMR; 
(2) consider existing inventory and delivery systems; and (3) account 
for the information provided to the retailer when it receives a 
shipment of hazardous materials from its supplier.
--The absence of any condition or qualification (distance, type of 
road, public access, etc.) that might limit public exposure to risks 
involved in the transportation of hazardous agricultural products.

Both the petition for reconsideration and the responding comments are 
set forth in full at the end of this section (IV).
    RSPA denies the petition for reconsideration because it believes 
that the broad exception requested would eliminate or preclude 
application of many of the basic requirements that are designed to 
promote a safe transportation system. Shipping papers, labels, 
placards, and identification number displays are the basic elements of 
a hazard communication system that is recognized throughout the United 
States and the world. The hazard communication system provides basic 
information to emergency responders so that they can better respond to 
hazardous materials incidents and protect themselves, the public, and 
the environment. The chemical and physical hazards presented by 
hazardous materials are the same whether being transported in 
interstate or intrastate commerce by an agricultural supplier. 
Hazardous materials, such as gasoline, which is an extremely flammable 
liquid, and anhydrous ammonia, which is poisonous when inhaled, are 
frequently transported in both interstate and intrastate commerce by 
agricultural retailers. Hazardous materials releases can occur 
regardless of whether a motor carrier is a common carrier or a private 
carrier, such as an agricultural retailer. During a recent hearing, a 
Senator reminded RSPA of an incident in which six people were killed 
and 76 hospitalized as a result of a release of agricultural grade 
anhydrous ammonia from cargo tank in Houston, Texas.
    Lack of adequate hazard information at the site of an incident can 
result in inappropriate responses. In some cases, an emergency 
responder may not realize a hazardous material is involved and not take 
appropriate action. In other cases, unnecessary actions could be taken 
that result in significant disruptions to transportation corridors and 
unnecessary evacuations until sufficient information is obtained about 
the commodity being transported. RSPA believes that the safe 
transportation of hazardous materials cannot be achieved without a 
hazard communication system that provides the minimum information 
necessary to the carrier, enforcement personnel, and emergency 
responders when hazardous materials are involved in transportation 
incidents.
    In adopting Sec. 173.5, RSPA provided significant relief to farmers 
who transport hazardous materials. Taking into account the limited 
potential for high-exposure incidents, RSPA completely excepted from 
coverage of the HMR a farmer's transportation of an agricultural 
product (other than a Class 2 gas) over local roads between fields of 
the same farm, so long as the movement conforms to State requirements. 
RSPA also excepted a farmer from certain compliance requirements in the 
HMR involving training and emergency response (Part 172, Subparts G and 
H), when the farmer transports certain quantities of agricultural 
products to or from his or her farm, over distances up to 150 miles 
from the farm, if in conformance with State requirements. In the latter 
situation, RSPA did not provide exceptions from the HMR's other 
requirements, such as those for packaging, shipping papers, and 
placarding. Beyond a farmer's short trips between fields of a single 
farm over local roads, RSPA does not believe there is justification for 
waiving these fundamental requirements. Certain quantities of 
agricultural products that are hazardous materials remain eligible for 
the ``materials of trade'' exception in Sec. 173.6, and non-
specification packagings used by an intrastate carrier of agricultural 
products may also be authorized under the exception from the HMR's 
requirements in Sec. 173.8.
    Packaging requirements ensure that hazardous materials can survive 
normal transportation conditions, by assuring that the packaging 
material is compatible with its contents and that the container has 
been designed, constructed and closed in such a manner to prevent 
failure and an unintentional release of the hazardous material. 
Shipping papers, placards, and other forms of hazard communication are 
essential to provide emergency responders with the minimum information 
necessary to protect themselves, the public, and the environment, when 
an incident occurs during the transportation of hazardous materials. In 
the SNPRM, RSPA expressed its concern over ``the potential for the lack 
of uniform communication and miscommunication to emergency responders 
in any location where they may encounter hazardous materials 
incidents.'' Under the exception requested by the petitioners, vehicles 
transporting agricultural products that are hazardous materials would 
not be required to bear placards; an emergency responder would have to 
assume that any unplacarded vehicle contained hazardous materials if it 
had an in-State license plate, no matter where the vehicle was found 
within the State.
    The petitioners represent many types of commercial businesses, of 
varying sizes, that routinely offer and transport hazardous materials. 
Many of them are already subject to the HMR. Five companies listed in 
the petition that are interstate carriers have combined gross sales of 
more than $11 billion per year

[[Page 49563]]

and combined annual profits of more than $1 billion per year. All of 
the hazardous materials carried by any interstate carrier (not just 
those shipments between States) are already covered by the HMR. Other 
petitioners may operate within one of the many States that have adopted 
the HMR without exceptions for agricultural products, and the HMR 
requirements already apply to them. Still others transport agricultural 
products that are hazardous substances, such as anhydrous ammonia and 
many pesticides. That transportation has been subject to the HMR for 17 
years, even within those States that have agricultural exceptions.
    For these types of businesses, HM-200 does not impose new 
regulations, as the petition suggests. RSPA believes that Congress' 
intent, in mandating the extension of the HMR to all intrastate motor 
carriers, was to bring the remainder up to the same standard of safety, 
and not to eliminate the existing application of the HMR where it 
already exists. The latter would be the effect of the exception sought 
in the petition.
    The petitioners' cost estimates appear overstated, if only for the 
fact that many retailers are already subject to the HMR, so that any 
marginal costs in evaluating shipments, adding necessary information to 
bills of lading (or other documentation that already exists), and 
applying placards would be minimal. It does not seem reasonable that 
retailers' employees would need an additional ten minutes, 100 times a 
day, throughout a 45-day period, to determine if the agricultural 
product being shipped is a hazardous material. As the opposing comment 
noted, all necessary information concerning an agricultural product, 
including whether it is hazardous, is already provided on documents 
that accompany the product, including shipping papers and material 
safety data sheets, when an agricultural retailer receives it from its 
supplier. In addition, packaged hazardous materials are marked with the 
shipping name and identification number of the hazardous materials and 
most display a hazard warning label. According to the requirements of 
the Occupational Safety and Health Administration, markings and 
labeling required by the HMR must remain on packages of hazardous 
materials until they have been emptied. Therefore, packages of 
hazardous materials in an agricultural retailer's storage area should 
already display the markings and labels required by the HMR.
    A retailer should not have to apply new placards for each load of 
agricultural products subject to the HMR, as petitioners' cost 
estimates assume. Placards can easily be reused or permanently mounted 
on vehicles. The estimated cost of $1,575 per year for placards, for 25 
loads per day, amounts to several times the cost of using permanently-
mounted changeable metal placard sets on 25 separate vehicles (if that 
many separate vehicles were needed for the 25 loads per day assumed to 
require placarding), at approximately $120 per vehicle (4 sets per 
vehicle), when the cost of metal placards is amortized over their 
expected ten-year life.
    In the normal course of their business activities, retailers 
routinely prepare documents in connection with sales and deliveries of 
their agricultural products, such as invoices, bills of lading, and 
delivery receipts, many of which are generated by computer. Even in 
those situations where a permanent ``laminated'' shipping paper may not 
be feasible, any of these existing documents can be used as the 
shipping paper required by the HMR. Once standard forms or computer 
programs are prepared, there should be little or no additional cost to 
include any additional information required by the HMR on these 
documents.
    Even using the petitioners' estimates, which RSPA finds to be 
excessive, given the discussion above, the total annual projected cost 
of $12,300 for a retailer that handles 100 loads per day, over a 45-day 
period, works out to less than $2.75 per load. This appears to be a 
small fraction of the sales price of a load of agricultural products 
that may consist of thousands of pounds of fertilizer or pesticides. 
These minimal additional costs are outweighed by the benefits of 
applying the safety requirements of the HMR to those commercial motor 
vehicle operations.
    All hazardous materials, including agricultural products, pose the 
same flammable, toxic, or explosive risks regardless of who is 
transporting them. Petitioners have not demonstrated that the factors 
underlying the exceptions in Sec. 173.5 should apply to retailers, nor 
that the broad additional exceptions requested would be justified.
    The petition for reconsideration of the agricultural exception in 
Sec. 173.5 and the responding comment are set forth below:

February 7, 1997.
Mr. Alan I. Roberts,
Administrator, Research & Special Programs Administration, U.S. 
Department of Transportation 400 Seventh Street, S.W., Washington, 
D.C. 20590

Re: Petition for Reconsideration of Docket HM-200

    Dear Mr. Roberts: As per 49 CFR 106.35, please accept this 
petition for reconsideration of HM-200 (62 Federal Register 1208), 
which in its present form will have a serious economic and 
operational impact on the agricultural industry in the United 
States.

Statement of Complaint

    In the preamble of the HM-200 rule, RSPA acknowledges that it 
received ``more than 500 comments from farmers and agricultural 
supply businesses who expressed concern that this rule would 
prohibit states from granting exceptions for farmers.'' In the final 
rule, RSPA provided an exception from the HMR for farmers who 
transport agricultural products between fields of the same farm. We 
appreciate this action by RSPA, as it will provide some relief for 
farmers. However, we know that many of the 500 comments to RSPA also 
expressed concern about the impact of the rule on ag retailers as 
well. RSPA failed to acknowledge the concerns of the retail segment 
of the industry, whose operations have a direct impact on the 
farmer, and whose transport of materials is often identical to that 
of the farmer.
    We are also aware that RSPA was directed in a conference report 
accompanying the FY 1997 DOT appropriations bill ``to give serious 
consideration to establishing an agriculture exception consistent 
with similar exemptions already granted by the department.''
    Finally, Dr. D.K. Sharma received a ``Dear Colleague'' letter 
signed by 48 Congressmen and Senators that urged RSPA to ``carefully 
consider the concerns of the (ag) industry'' when formulating this 
rulemaking.
    Despite all the directives to do so, after evaluating the 
language in the final HM-200 rule we are deeply disappointed that 
RSPA has failed to provide adequate relief from the HMR for both 
farmers and retailers. The minimal exceptions granted in Section 
173.5 will do little to facilitate the efficient and historically 
safe movements of ag inputs from retail to farm, and will take a 
devastating economic toll on the agricultural industry.

Final Rule Unreasonable, Impractical

    HM-200 effectively negates state exceptions for ag retailers and 
farmers from the HMR. In most cases, these exceptions have existed 
for decades. Because many farmers and ag businesses have never had 
to comply with the HMR, they are unaware of the implications of 
applying these federal rules to movements of agricultural products 
from retail-to-farm.
    This rule is unreasonable and impractical from several 
standpoints.
    1. The rule is effective October 1. Beginning next fall and 
extending into the spring, it will cause tremendous confusion for 
farmers, ag businesses and state officials who must now deal with a 
federal law that dictates the application of complicated hazardous 
materials regulations on local, rural shipments of agricultural 
inputs. On average, the bulk of agricultural product shipments occur 
during a 45-day period when planting commences, and periodically in 
the fall when some fertilizer is applied. Farmers and ag businesses 
do not transport agrichemicals every day of the year. Forcing them 
to comply with this complex regulation

[[Page 49564]]

for a few brief periods during the year is not justified and will 
only result in confusion and misunderstanding as each planting 
season rolls around--and we don't see it getting any easier as time 
goes on.
    2. Although farmers received some relief from the HMR for 
between-field movements of DOT regulated agrichemicals, agricultural 
retailers were dealt a massive blow when RSPA completely ignored 
their similar need for relief when delivering these same products to 
the farm, or when the farmer himself picks up these products at the 
retail site and takes them to the farm.
    Based on valid industry estimates, it will cost a typical 
agricultural retail facility $12,300 annually to comply with the 
mandates of HM-200. (See Attachment A for analysis of costs.) In the 
midwest alone, the number of ag retail facilities affected exceed 
5,000 in number. At $12,300 per facility, that's a cost of 
$61,500,000 per year to comply with HM-200, and that's only in the 
midwest (i.e. Illinois, Indiana, Iowa, Wisconsin, Minnesota, Ohio). 
These are costs that will eventually be passed on in terms of higher 
costs of products and services to the farmer. The farmer, however, 
cannot pass along these costs due to the ag marketing structure. The 
added expense of complying with HM-200 will ultimately contribute to 
lower net farm income nationwide, without any significant increase 
in public safety.
    3. Although the goal of HM-200 is uniformity, state officials in 
agricultural states will still be required to enforce the HMR only 
on certain types of agricultural movements, even though the movement 
of agricultural products--whether from retail-to-farm or between 
fields--will remain similar in their makeup. In essence, the same 
quantities and types of agricultural products will be on trucks 
leaving retail sites and on trucks traveling between fields.
    We believe that for purposes of uniformity and enforcement, it 
makes more sense to allow exceptions from the HMR for both retail-
to-farm and farm-to-farm shipments, whether the ag products are 
picked up by the farmer or delivered by the retailer. The excellent 
safety record of the ag industry merits this exception.
    We believe HM-200 to be an unreasonable burden on the 
agricultural industry, impractical in terms of compliance and 
enforcement, and unnecessary based on the excellent safety record 
for retail-to-farm and farm-to-farm shipments of ag products. We 
stand behind our safety record and would welcome contradictory data 
from RSPA that proves that these movements of ag products pose an 
unreasonable threat to public safety.
    We, the undersigned, petition RSPA to reconsider the impact that 
HM-200 will have on farmers and agricultural supply businesses. We 
urge RSPA to revise 49 CFR, Section 173.5 to incorporate language 
that will provide an exception from the HMR for both farmers and 
retailers who transport agricultural products from retail-to-farm, 
between fields, and from the farm back to the local source of 
supply.
    We offer our knowledge and expertise to you in this endeavor, 
and would welcome the opportunity to sit down with RSPA and create a 
workable regulation--one that recognizes the unique needs of the 
agricultural industry, streamlines enforcement and provides a 
framework in which we can continue to safely and efficiently provide 
farmers with the tools they need to feed the U.S. and the world.
      Sincerely,

Agribusiness Association of Iowa
Agricultural Retailers Association
Alabama Farmers Cooperative, Inc.
Alliance of State Agri-Business Assoc.
American Farm Bureau Federation
Arizona Crop Protection Association
CF Industries, Inc.
Countrymark Coop, Inc.
Farmland Industries, Inc.
Georgia Agribusiness Council
Gold Kist, Inc.
GROWMARK, Inc.
Illinois Farm Bureau
Illinois Fertilizer & Chemical Assoc.
Indiana Farm Bureau, Inc.
Indiana Plant Food & Ag Chemical Assoc.
Iowa Farm Bureau Federation
Iowa Institute for Cooperatives
Kansas Fertilizer & Chemical Association
Kansas Grain & Feed Association
Louisiana Ag Industries Association
Michigan Agribusiness Association
Minnesota Crop Production Retailers
Mo-Ag Industries Council
Montana Agricultural Business Association
National Association of Wheat Growers
National Cotton Council
National Council of Farmer Cooperatives
Nebraska Cooperative Council
Nebraska Fertilizer & Ag-Chemical Inst., Inc.
New England Council for Plant Protection
Ohio Agribusiness Association
Ohio Farm Bureau Federation
Oklahoma Fertilizer & Chemical Association
Rocky Mountain Plant Food & Ag Chem Asc.
SF Services, Inc.
South Dakota Farm Bureau
South Dakota Fertilizer & Ag Chemical Asc.
Southern States Cooperative
Tennessee Farmers Cooperative
The Andersons
United Suppliers, Inc.
WILFARM L.L.C.
Wisconsin Agri-Service Association, Inc.
Wyoming Agri-Business Association

Attachment A

    Cost to Retail Ag Facilities to Comply with HM-200.
      Manpower: 10 additional minutes per load to evaluate 
shipments of agricultural products to determine applicability to the 
HMR.
    On average, during spring season each agrichemical facility 
processes 100 loads per day of agricultural products (both packaged 
and in solution), which includes loads picked up by the farmer and 
loads delivered by the retailer.
    100 loads per day  x  additional 10 minutes = 1000 minutes 
 60 min/hour = 16.666 additional manhours per day spent on 
compliance.
    16.666 hours  x  $14 per hour average salary for personnel = 
$233.333 per day for additional manhours to evaluate loads for 
compliance.
    $233.333 per day  x  45 days of peak movement of agricultural 
products = $10,500 (rounded). This does not take into account 
movements made during off-season.
      Placards: Assume 25% of the 100 loads per day will 
require placarding. Most inexpensive placard is .35 cents. .35  x  4 
= $1.40 per load. 25 loads per day  x  $1.40 = $35 per day. $35  x  
45 days of spring season = $1575.
      Shipping Papers: It is highly unlikely that we can use 
``laminated'' shipping papers as RSPA indicates in the preamble. 
Products, package sizes and shipping descriptions for ag products 
change too often to make pre-printed papers feasible. However, 
assuming we can generate some type of shipping paper at .05 cents 
per page, the costs are as follows: 100 loads per day  x  .05 for 
shipping paper = $5.00  x  45 days of spring season = 225. This does 
not take into account unknown cost for software and software 
maintenance to keep the descriptions up to date.

Minimum Annual Cost to Comply for AG Businesses to Comply With HM-200

$10,500.  in manhours                                                   
1,575...  in placards                                                   
225.....  in shipping papers (this cost likely to be substantially more)
---------                                                               
$12,300.  annually for each retail ag facility--with thousands of       
           facilities in the U.S., the economic impact may be in the    
           hundreds of millions of dollars.                             
                                                                        

    Source: Data provided by management personnel at retail 
agribusiness facilities.

March 17, 1997.
Alan I. Roberts,
Associate Administrator, Hazardous Materials Safety, Research and 
Special Programs Administration, U.S. Department of Transportation, 
400 Seventh St., SW., Washington, DC 20590

RE: HM-200

    Dear Mr. Roberts: The undersigned associations representing 
carriers of hazardous materials are writing to express concern over 
the filing by the Agricultural Retailers Association (ARA), on 
behalf of a number of organizations with ties to the agri-business, 
of a petition for reconsideration RSPA's final rule in the matter of 
HM-200, hazardous materials in intrastate commerce. We realize that 
these comments are not timely filed. However, we beg the indulgence 
of RSPA as provided by 49 CFR 106.23 to consider late filed comments 
``as far as practicable.''
    For over a decade, carriers we represent have been required to 
follow RSPA's hazardous materials regulations (HMRs) when engaged in 
the intrastate commerce of hazardous substances, hazardous waste, 
flammable cryogenic liquids and, more recently, marine pollutants. 
Our members have benefitted by the consistent application of 
hazardous materials rules to all operations whether the 
transportation is intrastate, interstate or foreign. Our review of 
the ARA petition causes us to raise the following concerns:

 For Whom Is Relief Requested?

    The petitioner states that HM-200 provided relief for farmers, 
but did not

[[Page 49565]]

extend relief to ``ag retailers.'' In describing why HM-200 is 
``unreasonable and impractical'', the petitioner repeatedly links 
the retail segment of the industry with farmers. However, no 
information is provided to support the linkage other than both, as 
an incidental part of their business, may use the same roads for 
transport. We find it hard to believe that the business operation of 
a typical ag retailer described in the petitioner's ``Attachment A'' 
comports with the typical business operation of a farmer.
    Just as we see little similarity between an ag retailer and a 
farmer, it is not clear what circumstance(s) distinguishes the 
retailer from other shippers/carriers of hazardous materials that do 
not ship/haul agricultural-related hazardous materials. We 
understand that the agricultural supply industry is quite diverse as 
to the size of company involved and the scope of these company 
operations. Companies engaged in agri-business range from multi-
national corporations to those that would be considered local small 
businesses. We note, however, that we would hardly qualify as 
``small'' operations which, according to the petitioner, ship on 
average from each facility 100 hazardous materials loads a day. In 
any event, we have to assume that the petitioner would not want to 
create price competitive advantages for one segment of its industry 
over another. Consequently, the relief sought must be assumed to 
apply to all sizes and configurations of shipper/carriers.
    Non-agricultural shippers/carriers of hazardous materials, no 
matter the size of the operation, have not been granted universal 
relief from the HMRs simply by virtue of how the consignees served 
by the shipper/carriers use the commodity transported. Since the 
HMRs are established to ``protect[] against the risks to life and 
property inherent in the transportation of hazardous material'' [49 
U.S.C. 5101.], we fail to see how the petitioner has justified 
special treatment that will allow ag retailers to ignore these 
protective measures.

 What Is the Justification for the Relief Being Sought?

    The petitioner claims that HM-200 is ``unreasonable and 
impractical'' for a number of reasons, and that the only appropriate 
response to these concerns is to ``provide an exception from the 
HMRs retailers who transport agricultural products from retail-to-
farm, between field, and from the farm back to the local source of 
supply.'' Such a zero-sum proposal lacks credibility.
    Based on the ag retailers' own justification for exception from 
the HMRs, we offer the following observations:
     Complexity of Rules: the rules may be ``new'', but 
``complex'' is a relative term that deserves more analysis. For 
example, compared to rules issued under statutes administered by the 
U.S. Environmental Protection Agency (EPA), the HMRs are simple. 
Congress has granted DOT/RSPA authority to require nationally 
uniform and internationally harmonized rules. RSPA provides free, or 
at cost, numerous services and products to aid compliance. These 
services and products include a comprehensive advisory guidance 
document published in the Federal Register to remind persons 
involved in the transportation of hazardous materials of their 
regulatory responsibilities, newsletters, conferences, training 
modules, and the like. Those representing the ag retail industry 
could perform a great service to their membership by informing 
members of these resources.
     Hazardous Substances: Congress mandated that DOT 
regulate EPA-designated ``hazardous substances'' as ``hazardous 
materials.'' [42 U.S.C. 9656(a).] Hazardous substances have been 
regulated by RSPA in intrastate commerce since 1980. [49 CFR 171.1] 
Many crop protection products are regulated hazardous substances. In 
short, ag retailers should have been complying with the HMRs for the 
transport of these materials for the last 15 years. Any relief RSPA 
could grant from the HMRs will not change the fact that the 
materials are regulated by EPA.
    In terms of any non-hazardous substance materials that are 
shipped/carried by ag retailers, the petitioner provides no 
information about the number, kind, and quantity of such materials 
now newly regulated by HM-200. Such information would be critical 
for RSPA to evaluate the merit of the level of relief requested.
     Scope of the Exception Requested: The HMRs apply 
nationally. Prior to HM-200, the federal government provided 
incentives to states to adopt the HMRs for intrastate commerce. 
According to data of the Federal Highway Administration, all but one 
state had adopted the HMRs and of those that adopted them only 8 
provided exceptions specific to farmers and/or the broader agri-
business community. In short, 41 states do not provide farm-specific 
exceptions from the HMRs. Yet, organizations that by their names 
represent agri-business in at least 18 states joined the ARA in 
support of this petition. Some organizations joining the petition 
appear to have nationwide representation. Is RSPA to infer that the 
petitioner wishes to rollback regulation that has already been 
implemented in 41 states?
     Costs: As noted above, agri-business has already been 
subject to the HMRs in the great majority of states. Any costs 
associated with the implementation of HM-200 should only reflect 
compliance costs that may ensue in the 9 states where some 
exceptions were granted to segments of the agri-business community. 
Also, some discount should be factored in for the proportion of the 
100 shipments/day that are hazardous substances and have been 
subject to the HMRs even in those states that have not adopted these 
federal rules as a matter of state law.
    Whatever is ultimately determined to be the proper scope in 
computing the cost basis, we question some of the cost estimates 
used by the petitioner in ``Attachment A.'' The petitioner states 
that ``[p]roducts, package sizes and shipping descriptions for ag 
products change * * * often * * *'' Obviously, to serve their 
customers, the ag retail industry has systems in place to track and 
fill orders for ag products in a rapidly changing environment. At 
the same time, we are unaware of commercial transactions involving 
the exchange of freight where some sort of shipping paper does not 
accompany the load for proof of delivery and/or billing purposes. 
Recognizing this fact, RSPA does not require a unique form to 
communicate the presence of hazardous materials in a load and to 
communicate appropriate emergency response information. [Shipments 
required by EPA to be tracked on the Uniform Manifest are the 
exception.] Additionally, we would assume that most deliveries to 
local ag retail facilities were transported in full compliance with 
the HMRs and that necessary shipping paper information could be 
readily transcribed from the papers accompanying these movements to 
the shipping papers necessary for further downstream distribution.
    We specifically question the reliability of the estimate for 
placarding vehicles where the implication is given that placards are 
not reusable. Reusable configurations of placards can be purchased.
    In short, we do not believe the economic analysis is accurate.
     Risk: The requested ``retail-to-farm and from the farm 
back to the local source of supply'' exception is subject to no 
qualification such as distance traveled, condition of the roads, 
access of the public, time-of-travel, or any other conditions that 
might limit the exposure of public to the excepted transportation 
events. We simply note that the roads used to support what would be 
movements subject to no official safety standards are public and 
shared by farmer and non-farmer alike. A public that, by law, RSPA 
must protect.

Conclusion

    The petitioner references two congressionally-generated 
documents that request RSPA to carefully consider the concerns of 
the agriculture industry when issuing rules under HM-200. No 
evidence is provided that suggests RSPA did not fulfill this charge. 
To the contrary, we believe the attention drawn to this issue by 
agri-business ensured that RSPA not propose a rule that could not be 
supported on its merits. RSPA walked a careful balance between those 
in agri-business that advocated for exemption from the HMRs and 
those primarily in the emergency response community that opposed 
exceptions to safety rules.
    RSPA provides many services to help the regulated community 
achieve compliance. We have no doubt that RSPA would make every 
effort to provide needed compliance services to ag retailers.
    We appreciate the opportunity to submit these comments. Please 
contact us if additional input is necessary on any of the points 
raised above.

      Sincerely,
Paul Bomgardner,
Hazardous Materials Specialist, American Trucking Associations, Inc.
Cynthia Hilton,
Executive Director, Association of Waste Hazardous Materials 
Transporters.
Cliff Harvison,
President, National Tank Truck Carriers, Inc.
    This final rule delays for one year the mandatory compliance date 
for all requirements in the January 8, 1997, final rule under Docket 
HM-200 that

[[Page 49566]]

otherwise would become mandatory on October 1, 1997. Because of the 
relief provided by this final rule, it is effective October 1, 1997, 
without the customary 30-day delay following publication.

V. Regulatory Analyses and Notices

A. Executive Order 12866 and DOT Regulatory Polices and Procedures

    This final rule is considered a significant regulatory action under 
section 3(f) of Executive Order 12866 and, therefore, was reviewed by 
the Office of Management and Budget. This final rule is considered 
significant under the Regulatory Policies and Procedures of the 
Department of Transportation (44 FR 11034) due to significant public 
and congressional interest. A regulatory evaluation was prepared for 
the January 8, 1997 final rule and is available for review in the 
Docket. The regulatory evaluation was reviewed and determined not to 
require updating. The effect of this final rule will delay for one year 
the costs and benefits of applying the HMR to intrastate motor 
carriers. There is no delay in the materials of trade exception and its 
benefits.

B. Executive Order 12612

    This final rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 12612 (``Federalism''). The 
Federal hazardous materials transportation law (49 U.S.C. 5101-5127) 
contains an express preemption provision that preempts State, local, 
and Indian tribe requirements on certain covered subjects. Covered 
subjects are:
    (i) The designation, description, and classification of hazardous 
material;
    (ii) The packing, repacking, handling, labeling, marking, and 
placarding of hazardous material;
    (iii) The preparation, execution, and use of shipping documents 
pertaining to hazardous material and requirements respecting the 
number, content, and placement of such documents;
    (iv) The written notification, recording, and reporting of the 
unintentional release in transportation of hazardous material; or
    (v) The design, manufacturing, fabrication, marking, maintenance, 
reconditioning, repairing, or testing of a package or container which 
is represented, marked, certified, or sold as qualified for use in the 
transportation of hazardous material.
    This rule concerns the packaging, marking, labeling, placarding and 
description of hazardous materials on shipping papers. This rule 
preempts State, local, or Indian tribe requirements in accordance with 
the standards set forth above. RSPA lacks discretion in this area, and 
preparation of a federalism assessment is not warranted.
    Title 49 U.S.C. 5125(b)(2) provides that if DOT issues a regulation 
concerning any of the covered subjects, DOT must determine and publish 
in the Federal Register the effective date of Federal preemption. That 
effective date may not be earlier than the 90th day following the date 
of issuance of the final rule and not later than two years after the 
date of issuance. RSPA determined that the effective date of Federal 
preemption for the requirements in this rule concerning covered 
subjects is January 1, 1998.

C. Regulatory Flexibility Act

    The January 8, 1997 final rule affects many small business entities 
that ship or transport hazardous materials, however any adverse 
economic impact should be minimal. Many small entities affected by this 
final rule also receive relief from current regulatory requirements. 
The regulatory evaluation developed in support of the January 8, 1997 
final rule includes a benefit-cost analysis that justifies its 
adoption, primarily due to the positive net benefits that may be 
realized by small entities under the materials of trade exception. RSPA 
has reviewed this regulatory evaluation and determined it was not 
necessary to update it. As noted earlier, RSPA is not delaying the 
materials of trade exception. This final rule, however, delays for one 
year the costs and benefits of applying the HMR to intrastate motor 
carriers.

D. Paperwork Reduction Act

    There are no new information collection requirements in this final 
rule.

E. Regulations Identifier Number (RIN)

    A regulation identifier number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each year. The RIN number contained in the heading 
of this document can be used to cross-reference this action with the 
Unified Agenda.

List of Subjects

49 CFR Part 171

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

49 CFR Part 173

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

    In consideration of the foregoing, 49 CFR parts 171 and 173 are 
amended as follows:

PART 171--GENERAL INFORMATION, REGULATIONS, AND DEFINITIONS

    1. The authority citation for part 171 continues to read as 
follows:

    Authority: 49 U.S.C. 5101-5127; 49 CFR 1.53.


Sec. 171.1  [Amended]

    2. In Sec. 171.1 as revised at 62 FR 1215 effective October 1, 
1997, paragraph (a)(1) is amended by removing the last period in the 
paragraph and adding at the end of the last sentence the wording ``, 
(except that until October 1, 1998, this subchapter applies to 
intrastate carriers by motor vehicle only in so far as this subchapter 
relates to hazardous waste, hazardous substances, flammable cryogenic 
liquids in portable tanks and cargo tanks, and marine pollutants).''

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

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

    Authority: 49 U.S.C. 5101-5127; 49 CFR 1.53.

Sec. 173.5  [Amended]

    4. In Sec. 173.5 as revised at 62 FR 1215 effective October 1, 
1997, paragraph (a)(2) is amended by revising the date ``July 1, 1998'' 
to read ``October 1, 1998''.


Sec. 173.6  [Amended]

    5. In Sec. 173.6 as added at 62 FR 1216 effective October 1, 1997, 
paragraphs (a)(1) introductory text, (a)(2), (b)(4), and (d) are 
revised; paragraph (a)(1)(iii) is amended by removing the semicolon and 
adding a period in its place; and a new paragraph (e) is added to read 
as follows:


Sec. 173.6  Materials of trade exceptions.

* * * * *
    (a) * * *
    (1) A Class 3, 8, 9, Division 4.1, 5.1, 5.2, 6.1, or ORM-D material 
contained in a packaging having a gross mass or capacity not over--
* * * * *
    (2) A Division 2.1 or 2.2 material in a cylinder with a gross 
weight not over 100 kg (220 pounds), or a permanently mounted tank 
manufactured to ASME

[[Page 49567]]

standards of not more than 70 gallon water capacity for a non-liquefied 
Division 2.2 material with no subsidiary hazard.
* * * * *
    (b) * * *
    (4) For gasoline, a packaging must be made of metal or plastic and 
conform to the requirements of this subchapter or to the requirements 
of the Occupational Safety and Health Administration of the Department 
of Labor contained in 29 CFR 1910.106(d)(2) or 1926.152(a)(1).
* * * * *
    (d) Aggregate gross weight. Except for a material of trade 
authorized by paragraph (a)(1)(iii) of this section, the aggregate 
gross weight of all materials of trade on a motor vehicle may not 
exceed 200 kg (440 pounds).
    (e) Other exceptions. A material of trade may be transported on a 
motor vehicle under the provisions of this section with other hazardous 
materials without affecting its eligibility for exceptions provided by 
this section.


Sec. 173.8  [Amended]

    6. In Sec. 173.8 as added at 62 FR 1216 effective October 1, 1997, 
paragraph (d)(3) is amended by revising the date ``July 1, 1998'' to 
read ``October 1, 1998''.

    Issued in Washington, DC on September 16, 1997 under authority 
delegated in 49 CFR, part 1.
Kelley S. Coyner,
Deputy Administrator.
[FR Doc. 97-25065 Filed 9-18-97; 8:45 am]
BILLING CODE 4910-60-P