[Federal Register Volume 65, Number 63 (Friday, March 31, 2000)]
[Notices]
[Pages 17335-17340]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7992]


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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

[Docket No. RSPA-00-7092 (PDA-22(R)]


Application by American Trucking Associations, Inc. for a 
Preemption Determination as to New Mexico Requirements for the 
Transportation of Liquefied and Compressed Gases

AGENCY: Research and Special Programs Administration (RSPA).

ACTION: Public Notice and Invitation to Comment.

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SUMMARY: Interested parties are invited to submit comments on an 
application by the American Trucking Associations, Inc. for an 
administrative determination whether Federal hazardous materials 
transportation law preempts certain New Mexico requirements concerning 
the transportation of liquefied petroleum gas and compressed natural 
gas within New Mexico.

DATES: Comments received on or before May 15, 2000, and rebuttal 
comments received on or before June 29, 2000 will be considered before 
an administrative ruling is issued by RSPA's Associate Administrator 
for Hazardous Materials Safety. Rebuttal comments may discuss only 
those issues raised by comments received during the initial comment 
period and may not discuss new issues.

ADDRESSES: The application and all comments received may be reviewed in 
the Dockets Office, U.S. Department of Transportation, Room PL-401, 400 
Seventh Street, SW, Washington, DC 20590-0001. The application and all 
comments are also available on-line through the home page of DOT's 
Docket Management System at ``http://dms.dot.gov.''
    Comments must refer to Docket No. RSPA-00-7092 and may be submitted 
to the Dockets Office either in writing or electronically. Send three 
copies of each written comment to the Dockets Office at the above 
address. If you wish to receive confirmation of receipt of your written 
comments, include a self-addressed, stamped postcard. To submit 
comments electronically, log onto the Docket Management System website 
at ``http://dms.dot.gov'' and click on ``Help & Information'' to obtain 
instructions.
    A copy of each comment must also be sent to: (1) Mr. Paul M. 
Bomgardner, Director, Hazardous Materials Policy, American Trucking 
Associations, Inc., 2200 Mill Road, Alexandria, Virginia 22314-4677; 
and (2) Mr. Michael Chapman, Chairman, Construction Industries 
Commission, P.O. Box 25101, Santa Fe, New Mexico 87504. A certification 
that a copy has been sent to these persons must also be included with 
the comment. (The following format is suggested: ``I certify that 
copies of this comment have been sent to Mr. Bomgardner and Mr. Chapman 
at the addresses specified in the Federal Register.'')
    A list and subject matter index of hazardous materials preemption 
cases, including all inconsistency rulings and preemption 
determinations issued, are available through the home page of RSPA's 
Office of the Chief Counsel at ``http://rspa-atty.dot.gov.'' You may 
ask for a paper copy of this list and index by contacting Nancy Machado 
by mail or by telephone as provided below under the heading For Further 
Information Contact.

FOR FURTHER INFORMATION CONTACT: Nancy Machado, Office of the Chief 
Counsel, Research and Special Programs Administration, 400 Seventh 
Street, SW, Washington DC 20590-0001 (Tel. No. 202-366-4400).

SUPPLEMENTARY INFORMATION:  

I. Application for a Preemption Determination

    The American Trucking Associations, Inc. (ATA) has applied for a 
determination that Federal hazardous material transportation law 
(federal hazmat law), 49 U.S.C. 5101 et seq., preempts certain 
requirements contained in the State of New Mexico's 1978 ``LPG and CNG 
Act,'' 5 New Mexico Statutes Annotated (NMSA) chapter 70, article 5, 
and in the corresponding regulations in the New Mexico Construction 
Industries Division Liquefied Petroleum Gas Standards, 19 New Mexico 
Annotated Code (NMAC), chapter 15, part 4. ATA asserts that the New 
Mexico requirements at issue apply to interstate carriers transporting 
liquefied petroleum gases and liquefied natural gases within New 
Mexico.
    The test of ATA's application, a list of the exhibits to the 
application, and ATA's March 15, 2000 Addendum to Application are set 
forth in Appendix A to this notice. A paper copy of the exhibits to 
ATA's application (which have been placed in the public docket) will be 
provided at no cost upon request to Nancy Machado, at the address and 
telephone number set forth above under the heading ``For Further 
Information Contact.''
    In the application for preemption, ATA challenges:
    (1) NMSA section 70-5-7 (``Requiring competent employees in 
transporting, dispensing, installation, service or repair'') and the 
corresponding regulations at 19 NMAC 15.4.9.1 through 15.4.9.5 
(``Examination''), 19 NMAC 15.4.15.13 (``Licensing examination fee''), 
and 19 NMAC 15.4.15.14 (``License re-examination fee'').
    NMSA section 70-5-7 states,

    The [New Mexico Liquefied Petroleum and Compresses Gas] Bureau 
may require each person, firm, or corporation that transports or 
dispenses LP gas * * * to have all persons who perform these 
activities pass an appropriate examination based on the safety 
requirements of the [Construction Industries] commission.

    19 NMAC 15.4.9.1 states,

    All personnel whose duties require that they transport or 
dispense LP Gas shall prove by passing an examination, as required 
by the [New Mexico Liquefied Petroleum and Compressed Gas] Bureau 
that they are familiar with minimum safety standards and

[[Page 17336]]

practices with regard to handling of LP Gas. LP Gas may not be 
dispensed by any person who has not passed the examination by the 
Bureau.

    19 NMAC 15.4.9.2 and 15.4.9.5 relate to identification cards for 
those who successfully pass the examination, to identification card 
annual renewal, and to re-examination requirements. 19 NMAC 15.4.15.13 
and 19 NMAC 15.4.15.14 impose a $25 fee for license examinations and a 
$25 fee for license re-examinations.
    ATA asserts that the New Mexico Liquefied Petroleum and Compressed 
Gas Bureau (``Bureau'') requires any person who operates, loads, or 
unloads an LP gas transport vehicle, including drivers in interstate 
commerce who are domiciled outside of the state, to take a safety 
examination at a facility located in New Mexico before being allowed to 
perform LP gas related-functions within the state. ATA contends that 
compliance with the New Mexico examination requirements imposes costs 
and administrative burdens on transporters, creates confusion, reduces 
compliance, and decreases safety. Furthermore, ATA argues that the New 
Mexico examination requirements are in addition to the HMR training and 
testing requirements at 49 CFR part 172 Subpart H and 49 CFR 177.816, 
present an obstacle to the objectives of the HMR, and are preempted 
under federal hazmat law.
    (2) NMSA section 70-5-9(A) (``Annual license fees; inspection 
fees''), NMSA 70-5-10 (``Revenue; suspense fund''), and the 
corresponding regulations at 19 NMAC 15.4.15.1 (``Wholesale sale or 
delivery of LP Gas'') and 19 NMAC 15.4.15.12 (``Annual renewal fee per 
qualifying party identification card'').
    Specifically, ATA states that, under 19 NMAC 15.4.15.1, interstate 
carriers must pay an annual flat license fee of $125 to conduct the 
wholesale sale or delivery of LP gas in New Mexico. NMSA section 70-5-
9(A) indicates that the fees are intended to defray the state's costs 
to administer the laws relating to the LP gas industry. In addition, 
when the motor carrier pays its annual $125 license fee, 19 NMAC 
15.4.15.12 requires that it also pay a $10 annual identification care 
renewal fee for each of its drivers who has successfully completed the 
state's safety examination. Finally, ATA notes that NMSA section 70-5-
10 requires the state to deposit the fees collected under the 
provisions of the LPG and CNG Act into the state general fund.
    ATA argues in its application that New Mexico's $125 annual license 
fee and $10 annual identification care renewal fee are flat fees that 
discriminate against interstate carriers. Specifically, ATA argues that 
the fees place a disproportionate share of the costs of administering 
New Mexico's LP Gas program on interstate carriers how have less of 
presence in the state than intrastate carriers. Consequently, ATA 
argues that the fees are unfair, violate the commerce clause, and are 
preempted under Federal hazmat law. Additionally, ATA argues that the 
fees are preempted because they are deposited in the state general fund 
and are not earmarked for hazardous materials transportation purposes.
    (3) NMSA Section 70-5-9(C) (``Annual license fees; inspection 
fees'') and the corresponding regulations at 19 NMAC 15.4.10.1 
(``Annual inspections'') and 19 NMAC 15.4.14.3(C) (``LP Gas Visual 
Cargo Tank and Equipment Inspection Form'' and ``Re-inspection of Cargo 
Tank and Equipment and additional charge for re-inspection'').
    NMSA section 70-5-9(C) requires a reasonable inspection fee to be 
paid to the Bureau for the safety inspection of the LP gas equipment on 
each vehicular unit used for transportation of LP gas in bulk 
quantities. 19 NMAC 15.4.10.1 requires that the Bureau conduct annual 
inspections of the safety equipment on each vehicular unit used for 
transportation of LP gas in bulk quantities. 19 NMAC 15.4.14.3(C) 
assesses a $37.50 fee for the safety inspection and a $37.50 fee for 
re-inspection.
    ATA asserts that there is no written process that outlines the 
means of obtaining this safety inspection from the Bureau. ATA contends 
that, in practice, an interstate carrier has to present each of its LP 
gas trailers to inspectors in New Mexico at a preset date and location, 
regardless of the fact that the carrier's principal place of business 
may be in another state. Furthermore, ATA argues that under New 
Mexico's regulations, an interstate carrier must either take a vehicle 
out of service or vary its route when loaded in order to accommodate 
the inspection, thus causing unnecessary delays in the transportation 
of hazardous materials. ATA's application contains the affidavit of an 
interstate carrier executive who states that twice his company has 
tried out been unable to schedule a vehicle inspection in time to make 
a delivery into or through New Mexico. Also, ATA submits that motor 
carriers are already subject to Federal annual and random roadside 
inspections. Consequently, ATA argues that New Mexico's annual 
inspection is redundant, causes unnecessary delays, and is preempted 
under Federal hazmat law.

II. Federal Preemption

    Section 5125 of Title 49 U.S.C. contains the preemption provisions 
that are relevant to ATA's application. Subsection (a) provides that--
in the absence of a waiver of preemption by DOT under Sec. 5125(e) or 
specific authority in another Federal law--a requirement of a State, 
political subdivision of a State, or Indian tribe if preempted if:

    (1) Complying with a requirement of the State, political 
subdivision or tribe and a requirement of this chapter or a 
regulation issued under this chapter is not possible; or
    (2) The requirement of the State, political subdivision, or 
Indian tribe, as applied or enforced, is an obstacle to the 
accomplishing and carrying out this chapter or a regulation 
prescribed under this chapter.

    These two paragraphs set forth the ``dual compliance'' and 
``obstacle'' criteria which RSPA had applied in issuing inconsistency 
rulings prior to 1990, under the original preemption provision in the 
Hazardous Materials Transportation Act (HMTA). Pub. L. 93-633 
Sec. 112(a), 88 Stat. 2161 (1975). The dual compliance and obstacle 
criteria are based on U.S. Supreme Court decisions on preemption. Hines 
v. Davidowitz, 312 U.S. 52 (1941); Florida Lime & Avocado Growers, Inc. 
v. Paul, 373 U.S. 132 (1963); Ray v. Atlantic Richfield, Inc., 435 U.S. 
151 (1978).
    Subsection (b)(1) of 49 U.S.C. 5125 provides that a non-Federal 
requirement concerning any of the following subjects, that is not 
``substantively the same as'' a provision of federal hazmat law or a 
regulation prescribed under that law, is preempted unless it is 
authorized by another Federal law or DOT grants a waiver of preemption:

    (A) The designation, description, and classification of 
hazardous material.
    (B) The packing, repacking, handling, labeling, marking, and 
placarding of hazardous material.
    (C) The preparation, execution, and use of shipping documents 
related to hazardous material and requirements related to the 
number, contents, and placement of those documents.
    (D) The written notification, recording, and reporting of the 
unintentional release in transportation of hazardous material.
    (E) The design, manufacturing, fabricating, marking, 
maintenance, reconditioning, repairing, or testing of a packaging or 
a container represented, marked, certified, or sold as qualified for 
use in transporting hazardous material.

To be ``substantively the same,'' the non-Federal requirement must 
``conform[] in every significant respect to the Federal requirement. 
Editorial and other similar de minimis changes are permitted.'' 49 CFR 
107.202(d).

[[Page 17337]]

    Subsection (g)(1) of 49 U.S.C. 5125 provides that a State, 
political subdivision, or Indian tribe may impose a fee related to 
transporting hazardous material only if the fee is fair and used for a 
purpose related to transporting hazardous material, including 
enforcement and planning, developing, and maintaining a capability for 
emergency response. RSPA has found that a fee is fair if it is: (a) 
based on a fair approximation of use of state facilities; (b) not 
excessive in relation to benefits conferred; and (c) does not 
discriminate against interstate commerce. Preemption Determination 
(PD)-21(R), 64 FR 54474, 54478 (Oct 6, 1999), citing Evansville-
Vanderburgh Airport Authority v. Delta Airlines, Inc., 405 U.S. 707, 
717, 92 S Ct. 1349, 1355 (1972) and Northwest Airlines, Inc. v. Kent, 
510 U.S. 355, 367-68, 114 S. Ct. 855, 864 (1994). If a fee is not fair 
or is not used for hazardous materials transportation purposes, the fee 
is preempted under federal hazmat law. See PD-21(R) at 54478 and PD-
9(R), 60 FR 8773, 8782 (Feb. 15, 1995).
    The preemption provisions in 49 U.S.C. 5125 carry out Congress's 
view that a single body of uniform Federal regulations promotes safety 
in the transportation of hazardous materials. In considering the HMTA, 
the Senate Commerce Committee ``endorse[d] the principle of preemption 
in order to preclude a multiplicity of State and local regulations and 
the potential for varying as well as conflicting regulations in the 
area of hazardous materials transportation.''
    S. Rep. No. 1102, 93rd Cong. 2nd Sess. 37 (1974). When it amended 
the HMTA in 1990, Congress specifically found that:

    (3) Many States and localities have enacted laws and regulations 
which vary from Federal laws and regulations pertaining to the 
transportation of hazardous materials, thereby creating the 
potential for unreasonable hazards in other jurisdictions and 
confounding shippers and carriers which attempt to comply with 
multiple and conflicting registration, permitting, routing, 
notification, and other regulatory requirements,
    (4) Because of the potential risks to life, property, and the 
environment posed by unintentional releases of hazardous materials, 
consistency in laws and regulations governing the transportation of 
hazardous materials is necessary and desirable,
    (5) In order to achieve greater uniformity and to promote the 
public health, welfare, and safety at all levels, Federal standards 
for regulating the transportation of hazardous materials in 
intrastate, interstate, and foreign commerce are necessary and 
desirable.

Pub. L. 101-615 Sec. 2,104 Stat. 3244. A Federal Court of Appeals has 
found that uniformity was the ``linchpin'' in the design of the HMTA, 
including the 1990 amendments that expanded the original preemption 
provisions. Colorado Pub. Util. Comm'n v. Harmon, 951 F.2d 1571, 1575 
(10th Cir. 1991). (In 1994, Congress revised, codified and enacted the 
HMTA ``without substantive change,'' at 49 U.S.C. Chapter 51. Pub. L. 
103-272, 108 Stat. 745.)

III. Preemption Determinations

    Under 49 U.S.C. 5125(d)(1), any directly affected person may apply 
to the Secretary of Transportation for a determination whether a State, 
political subdivision or Indian tribe requirement is preempted. The 
Secretary of Transportation has delegated authority to make 
determinations of preemption that concern highway routing to FMCSA and 
those concerning all other hazardous materials transportation issues to 
RSPA. 49 CFR 1.53(b) and 1.73(d)(2) (as added October 9, 1999, 64 FR 
56720, 56721 [Oct. 19, 1999], and revised January 1, 2000, 65 FR 
220,221 [Jan. 4, 2000]). Because ATA's application concerns non-highway 
routing issues, RSPA's Associate Administrator for Hazardous Materials 
Safety will address the issues raised in ATA's application.
    Section 5125(d)(1) requires that notice of an application for a 
preemption determination be published in the Federal Register. 
Following the receipt and consideration of written comments, RSPA will 
publish its determination in the Federal Register. See 49 CFR 
107.209(d). A short period of time is allowed for filing of petitions 
for reconsideration. 49 CFR 107.211. Any party to the proceeding may 
seek judicial review in a Federal district court. 49 U.S.C. 5125(f).
    Preemption determinations do not address issues of preemption 
arising under the Commerce Clause, the Fifth Amendment or other 
provisions of the Constitution or under statutes other than the Federal 
hazardous material transportation law unless it is necessary to do so 
in order to determine whether a requirement is authorized by another 
Federal law, address, ``fairness'' of fees, or interpret relevant 
statutory language. A State, local or Indian tribe requirement is not 
authorized by another Federal law merely because it is not preempted by 
another Federal statute. Colorado Pub. Util. Comm'n v. Harmon, above, 
951 F.2d at 1581 n.10.
    In making preemption determinations under 49 U.S.C. 5125(d), RSPA 
is guided by the principles and policies set forth in Executive Order 
No. 13132, entitled ``Federalism'' (64 FR 43255 (August 4, 1999). 
Section 4(a) of that Executive Order authorizes preemption of State 
laws only when a statute contains an express preemption provision, 
there is other clear evidence that Congress intended to preempt State 
law, or the exercise of State authority directly conflicts with the 
exercise of Federal authority. Section 5125 contains express preemption 
provisions, which RSPA has implemented through its regulations.

IV. Public Comments

    All comments should be limited to the issue of whether 49 U.S.C. 
5125 preempts the New Mexico requirements applicable to the 
transportation of liquefied petroleum gas and compressed natural gas. 
Comments should specifically address the preemption criteria detailed 
in Part II, above, and set forth in detail the manner in which the New 
Mexico requirements are applied and enforced.
    Persons intending to comment should review the standards and 
procedures governing consideration of applications for preemption 
determinations set forth at 49 CFR 107.201-107.211.

    Issued in Washington, DC on March 27, 2000.
Robert A. McGuire,
Acting Associate Administrator for Hazardous Materials Safety, Research 
and Special Programs Administration.

Appendix A

American Trucking Associations
Alexandria, VA
January 18, 2000.
Mr. Robert McGuire
Acting Associate Administrator for Hazardous Materials Safety, 
Research and Special Programs Administration, U.S. Department of 
Transportation, 400 7th Street, SW, Washington, DC 20590-0001.
Attention: Hazardous Materials Preemption Docket
Re: Application for Preemption Determination in accordance with 49 
CFR Part 107, Subpart C. Section 107.203, regarding provisions of 
New Mexico ``LPG and CNG Act'' (N.M. Stat. Ann. Secs. 70-5-1 to 70-
5-23 (1998)) and corresponding regulations of the New Mexico 
Construction Industries Division, Liquefied Petroleum Gas Bureau 
(Title 19, Chapter 15, Part 4 [19NMAC 15.4]).

    Dear Mr. McGuire: The American Trucking Associations, Inc. 
(``ATA''), with offices located at 2200 Mill Road, Alexandria, VA 
22314, is the trade association for the trucking industry.

[[Page 17338]]

Together with our affiliated conferences, councils, and state 
associations, ATA represents over 30,000 motor carriers of all types 
and sizes throughout the United States. ATA files this application 
for preemption determination on behalf of our member companies 
affected by the provisions of the LPG and CNG Act.
    ATA is requesting a determination of preemption of certain 
requirements of the State of New Mexico's 1978 ``LPG and CNG Act'' 
as found in Chapter 70 Article 5 of the New Mexico Statute Annotated 
(NMSA 1978 Chapter 70, Article 5) and in the corresponding 
regulations of the New Mexico Construction Industries Division's 
Liquefied Petroleum Gas Standards as found in Title 19 Chapter 15, 
Part 4 of the New Mexico Annotated Code (19NMAC 15.4). Specifically, 
ATA requests consideration of the following provisions of the NMSA 
1978 and 19NMAC:
    1. NMSA 1978 70-5-7 (Liquefied Petroleum Gas Handling 
License)(19 NMAC 15.4.9.1 through 15.4.9.5);
    2. NMSA 1978 70-5-9 (New Mexico Liquefied Petroleum Gas Tank 
Inspection)(19 NMAC 15.4.10.1); and
    3. NMSA 70-50-10 (Revenue; Suspense Fund)(19 NMAC 15.4.14.3C, 
15.4.15.1., 15.4.15.13, and 15.4.15.14).
    As discussed below, certain of the requirements contained in 
sections of the New Mexico Statute Annotated (NMSA) and the New 
Mexico Annotated Code (NMAC) regarding transportation of Liquefied 
Petroleum Gases (LPG) and/or Liquefied Natural Gases (LNG) are 
obstacles to the accomplishment of the objectives of the Hazardous 
Materials Transportation Act (HMTA) and the Hazardous Materials 
Regulations (HMR) and should be preempted according to the 
provisions of 49 U.S.C. Sec. 5125(a)(2).

I. Background

    NMSA 1978 70-5-6-(A) General License states that:
    ``No person, firm or corporation shall engage in this state * * 
*, nor shall any person, firm or corporation engage in the 
manufacture, sale, transportation, dispensing or storage of LP gases 
within this state, * * * without having first obtained from the 
bureau a license to do so for each main and branch office or 
businesses operated within the state pursuant to the LPG and CNG Act 
[this article] [emphasis added].''
    19 NMAC 15.4.15.1 (LP-1) Wholesale Sale or Delivery of LP Gas 
states:
    ``A licensee under this classification is authorized to 
wholesale, transport, and/or deliver gas * * *''
    Consequently, motor carriers transporting LPG and CNG in New 
Mexico must obtain a license from the State to do so and as 
licensees are then subject to all of the requirements provided for 
in 19 NMAC 15.4 (Code). These additional requirements go beyond 
those contained in 49 CFR Parts 100-180 of the Hazardous Materials 
Regulations (HMR), create confusion, and impose burdens on 
transporters to such an extent that they are obstacles to the 
accomplishment of the Hazardous Materials Transportation Act's 
(HMTA) [49 U.S.C. 5101, et seq.] objectives, and should, therefore 
be preempted.

II. New Mexico Stat. Ann. Sec. 70-5-7 Requiring Competent Employees in 
Transporting, Dispensing, Installation, Service or Repair and 19 NMAC 
15.4.9.1 Examination

    New Mexico Stat. Ann. Sec. 70-5-7(A) states:
    ``The bureau may require each person, firm or corporation that 
transports or dispenses LP gas or that installs, repairs or services 
appliances, containers, equipment or piping for the use of LP gas to 
have all persons who perform these activities pass an appropriate 
examination based on the safety requirements of the commission.''
    19 NMAC 15.4.9.1 Examination states:
    ``All personnel whose duties require that they transport or 
dispense LG Gas shall prove by passing an examination, as required 
by the Bureau, that they are familiar with minimum safety standards 
and practices with regard to handling of LP Gas. LP Gas may not be 
dispensed by any person who has not passed the examination by the 
Bureau.''
    Under the authority of this provision, the New Mexico Liquefied 
Petroleum and Compressed Gas Bureau (``Bureau'') requires any person 
who operates, loads, or unloads an LP gas transport vehicle, 
including drivers in interstate commerce, to take an examination 
before being allowed to perform those functions as they relate to LP 
gas within the State of New Mexico. These tests are scheduled at 
various times at different locations throughout the State. All 
applicants for licensure, whether domiciled inside or outside of New 
Mexico, must take the test at one of the designated locations within 
the State. Consequently, compliance with the New Mexico testing 
requirement imposes cost and administrative burdens on transporters, 
confusion, reduced compliance, and decreased safety would result if 
transporters faced a multiplicity of such requirements.
    The requirement to test at the state level in order to be able 
to transport, load, or unload LP gas, which is a Division 2.1 
Flammable Gas, and therefore a hazardous material, is in addition to 
the training and testing requirements in the Hazardous Materials 
Regulations (``HMR'') at 49 CFR Part 172 Subpart H, Sec. 172.702(a) 
and (d) and Sec. 172.704(2) through (c). While 49 CFR Sec. 172.701 
allows states to improse more stringent training requirements, they 
are permitted to do so only if those requirements do not conflict 
with the requirements of Part 172 Subpart H and Part 177 
Sec. 177.816, and ``[a]pply only to drivers domiciled in that 
State''. New Mexico's requirement for testing is stricter than the 
training requirements of the HMR and is applied to drivers that are 
domiciled outside of New Mexico. It, therefore, represents an 
obstacle to accomplishing the full purposes and objectives of the 
HMTA and must be preempted.
    The New Mexico requirement for motor vehicle operators loading, 
unloading or transporting LP gas is similar in nature to the State 
of Maryland requirement that was preempted by the Research and 
Special Programs Administration (RSPA) in PD-7(R), 59 FR 28913, 
28919 (June 3, 1994) (noting that ``operators potentially would be 
subject to numerous sets of training requirements, with resulting 
confusion, cost and paperwork burdens,'' RSPA found that training 
requirements as applied to ``operators not domiciled in Maryland'' 
were an ``obstacle to accomplishing the full objectives and purposes 
of the HMTA and [were] preempted.''); see also, PD-13(R), 63 FR 
45283 (August 25, 1998) (preempting requirement that motor vehicle 
drivers obtain certificate of fitness to be eligible to deliver 
LPG.)
    Because the additional ``testing'' requirement reaches beyond 
the domiciliaries of the State of New Mexico, NM Stat. Ann. Sec. 70-
5-7(A) and 19 NMAC 15.4.9.1 as they apply interstate operators 
domiciled in other states should be preempted.

III. New Mexico Stat. Ann Sec. 70-5-9 Annual License Fees; Inspection 
Fees and Sec. 70-5-10 Revenue; Suspense Fund and 19 NMAC 15.4.15.1 LP-1 
Wholesale Sale or Delivery of LP Gas and 19 NMAC 15.4.15.12 Annual 
Renewal Fee Per Qualifying Party Identification Card

    New Mexico Stat. Ann, Sec. 70-5-9 (A) states:
    ``For the purpose of defraying the expenses of administering the 
laws relating to the use of CNG motor vehicles or the LP gas 
industry, each person, firm or corporation, at the time of 
application for a license and annually thereafter on or before 
December 31 of each calendar year, shall pay the bureau

[[Page 17339]]

reasonable license fees as set, classified and defined by the bureau 
for each operating location.''
    Additionally, NM Stat. Ann Sec. 70-5-10 states, regarding fees:
    ``All fees and money collected under the provisions of the LPG 
and CNG Act [this article] shall be remitted by the bureau to the 
director of the division to be deposited in the general fund of the 
state. The bureau may maintain a ``special suspense fund'' with the 
division in an amount of one thousand dollars ($1,000) budgeted by 
the bureau for the purpose of making any necessary refunds. The 
bureau shall, with the advice of consent of the director of the 
division, employ inspectors, assistants and other necessary help as 
may be required to carry out its lawful duties.''
    19 NMAC 15.4  License Classifications, Scopes, and Fees states:
    ``License classifications are defined and annual license fees 
are set as follows:
    15.1   LP-1 Wholesale sale or delivery of LP Gas: $125.00 A 
licensee under this classification is authorized to wholesale, 
transport, and/or deliver gas in vehicular units into or out of any 
location except that of an ultimate consumer.
    15.12  Annual renewal fee per qualifying part) identification 
card: $10.00.''
    Motor carriers who deliver LP gas in New Mexico are in category 
LP-1 and must pay an annual flat fee of $125.00, plus $10.00 for 
each ``Qualifying Party Card.'' These fees are then placed into the 
State's general fund and are not earmarked for purposes related to 
the transportation of hazardous material.
    The HMTA provides that a ``State * * * may impose a fee related 
to transporting hazardous material only if the fee is fair and used 
for a purpose related to transporting hazardous material * * * '' 
[49 U.S.C. 5125(g)(1)]. The New Mexico fees fail both requirements.
    First, because the fees are annual, flat charges that are 
unapportioned to the level of a motor carrier's presence or 
activities in the State, they are structurally discriminatory and 
violate the Commerce Clause. A state fee that violates the Commerce 
Clause cannot be considered to be ``fair.'' See, PD-21(R), 64 FR 
54474 (October 6, 1999) (``Because Tennessee's remedial action fee 
imposed on hazardous waste transporters is not based on some fair 
approximation of the use of the facilities and discriminates against 
interstate commerce, it is not fair and violates 49 U.S.C. 
5125(g)(1) and is preempted * * * '').
    Flat annual fees, like New Mexico's, discriminate against and 
impose an undue burden on interstate motor carriers and thus violate 
the Commerce Clause. The privilege of conducting LPG and CNG 
transportation in New Mexico is inherently more valuable to 
intrastate carriers and conduct all of their operations in the State 
than it is to those carriers that operate predominantly in 
interstate commerce. Therefore, the practical effect of collecting 
regulatory costs on a per-company basis is to place a 
disproportionate share of those cost on interstate motor carriers. 
``[I]mposition of [a] flat tax [] for a privilege that is several 
times more valuable to a local business than it is to its out-of-
state competitors is unquestionably discriminatory and thus offends 
the Commerce Clause.'' American Trucking Associations, Inc. v. 
Scheiner, 483 U.S. 266, 296 (1987). Moreover, flat charges, like the 
New Mexico fees, inevitably expose interstate trucks to duplicative 
taxation. ``[T]he interstate carrier will be subject to the 
privilege taxes of several States, even though his entire use of the 
highways is not significantly greater than that of intrastate 
operators who are subject to only one privilege tax.'' Scheiner. at 
282 (citation omitted).
    Flat fees imposed on hazardous materials and hazardous waste 
haulers have been routinely struck down as violative of the Commerce 
Clause. See, American Trucking Associations, Inc. v. Secretary of 
State, 595 A.2d 1014 (Me. 1991) ($25 per-truck hazardous material 
transporter annual charge struck down); American Trucking 
Associations, Inc. v. Secretary of Administration, 613 NE 2d 95 
(Mass. 1993) ($200 per-truck annual hazardous waste transporter fee 
held unconstitutional); American Trucking Associations, Inc. v. 
Wisconsin, 556 N.W.2d 761 (Wis. App. Ct. 1996) ($400 per-company, 
per-activity hazardous material transporter annual fee found to 
violate the Commerce Clause).
    The New Mexico $125 per-company annual LPG/CNG delivery fee (and 
associated $10 Qualifying Party Card fee) are unquestionably flat, 
unapportioned charges that discriminate and burden interstate 
commerce as discussed above. Accordingly, such charges cannot be 
considered ``fair'' as contemplated by Section 5125 (g)(1) and must 
be preempted.
    Second, the fees are placed into the State of New Mexico's 
general fund and are not earmarked for hazardous materials 
transportation purposes. Although NM Stat. Ann. section 70-5-10 
states generally that the Bureau may employ staff to carry out its 
lawful duties, there is no tracking of fees paid by motor carriers 
and no assurance that the moneys paid by motor carriers will 
actually be used for purposes related to hazardous materials 
transportation, including enforcement and planning, development and 
maintenance of emergency response capability.
    Because the fees collected from transporters as required by 19 
NMAC 15.4.15.1 and .15.12 and deposited in the general fund of the 
State per NM Stat. Ann. section 70-5-10 are not specifically 
earmarked for those purposes set forth in 49 U.S.C. 5125(g), they 
should be preempted.

IV. New Mexico Stat. Ann. section 70-5-9 (C) Annual License Fees; 
Inspection Fees

    New Mexico Stat. Ann. section 70-5-9 (C) states:
    ``In addition, there shall be paid a reasonable fee for the 
safety inspection, made by a representative of the bureau, of each 
LP gas bulk storage plant, LP gas liquid transfer facility and of 
the LP gas equipment on each vehicular unit used for transportation 
of LP gas in bulk quantities.''
    19 NMAC 15.4.10.1  Annual Inspections states:
    ``There shall be an annual safety inspection, made by an 
inspector of the Bureau, of each bulk storage plant facility, 
dispensing station, vehicle fuel dispenser, and cargo container and 
safety equipment on each vehicular unit used for transportation of 
LP gas in bulk quantities. Each bulk plant, dispenser, and vehicular 
unit shall display a current decal showing it has passed the 
required inspection.''
    19 NMAC 15.4.14  Printed Forms, Permits, and Fees requires in:
    .3.C LP Gas Visual Cargo Tank and Equipment Inspection Form, an 
accompanying fee of $37.50; and for Re-inspection of Cargo Tank 
Equipment and additional charge for re-inspection a fee of $37.50.
    While the statute and Code make reference to ``safety 
inspections'' of ``LP gas equipment on each vehicular unit used for 
transportation of LP gas in bulk quantities,'' there is no mention 
as to the process by which the inspection should be completed. 
According to one company, though, each LP gas trailer must be 
presented to inspectors in New Mexico at a preset date and location, 
regardless of the location of the motor carrier's principal place of 
business. A fee of $37.50 must be prepaid for each such inspection. 
See Affidavit of Lloyd Dean, Vice President of Operations, Basin 
Western, Inc.
    ATA is aware that RSPA has, in the past, approved inspections 
and related fees relative to permits. See PD-13(R), 63 FR 45283, 
45286 (approving

[[Page 17340]]

inspection and fee where fee covered the cost of conducting the 
inspection and actually issuing the permit). However, the 
proliferation of inspection requirements (e.g., in New Orleans, LA; 
Houston, TX; Nassau County, NY; Broward County, FL; and Cleveland, 
OH) is alarming and is causing disruptions in motor carrier 
operations. Because there is a need to either take the vehicle out 
of service, or vary the route when loaded, in order to accommodate 
the inspection, there are unnecessary delays in the transportation 
of hazardous materials.
    We believe that RSPA has erred in not considering the impact on 
the interstate transportation of hazardous materials of multiple 
jurisdictions requiring fee supported annual inspections. Under the 
U.S. Supreme Count's ``internal consistency'' test, a law's impact 
on interstate commerce is examined in the context of its impact if 
every other jurisdiction imposed an identical requirement. Oklahoma 
Tax Comm'n v. Jefferson Lines, 115 S. Ct. 1331, 1338 (1997). There 
can be little dispute that interstate hazardous materials 
transporting commerce would come to a halt if every jurisdiction in 
which a truck operated (perhaps thousands of cities, counties, and 
states) required that the truck undergo a separate, duplicative fee-
supported inspection. If RSPA is concerned about the theoretical 
nature of the internal consistency analysis, it need look no further 
than the inspection requirements cited above to assure itself that 
the burden of cumulative inspections and fees is already occurring.
    The multiple inspections and fees a hazardous materials 
transporting vehicle now faces cannot help but result in 
unreasonable transportation delays and thus are contrary to the 
HMR's mandate that shipments of hazardous materials be transported 
without unnecessary delay (see 49 CFR 177.800(d)).
    Motor carriers are already subject to Federal annual and random 
roadside vehicle inspections according to 49 CFR Part 396 and to 
inspection, repair and maintenance requirements for cargo tanks in 
49 CFR 180.401 through 180.417. Therefore, New Mexico's requirement 
for safety inspections is redundant, causes unnecessary delay in the 
transportation of hazardous materials, and should be preempted as an 
obstacle to the accomplishment of the full purposes and objectives 
of the HMTA.

V. Conclusion

    Based on the information provided in this application, ATA urges 
RSPA to preempt certain aspects of the State of New Mexico's 
requirements found in NM Stat. Ann. Chapter 70 Oil and Gas, Article 
5 Liquefied and Compressed Gases and in 19 NMAC 15.4 as they relate 
to:
    (1) Examinations for drivers of interstate motor carriers;
    (2) Fees for motor carriers regarding permits and inspections; 
and
    (3) Safety inspections of vehicles used to transport LP gas.
    Thank you for the opportunity to submit this application. If you 
have any questions regarding information supplied in this 
application, please contact the undersigned at: 703-838-1849 
(Phone); 703-683-1934 (FAX); or by e-mail at: [email protected].

VI. Certification of Notice as Required in 49 CFR Part 107 Section 
107.205(a).

    I certify that a copy of this application has been sent this 18 
``day of January, 2000 to: Mr. Michael Chapman, Chairman, 
Construction Industries Commission, at P.O. Box 25101, Sante Fe, New 
Mexico 87504.
    Signature
    Date:
    Respectfully submitted:

Paul M. Bomgardner,
Director, Hazardous Materials Policy, American Trucking 
Associations, Inc.
    Attachments:

Affidavit of: Mr. Lloyd Dean, VP Operations, Basin Western, Inc.
State of New Mexico Construction Industries Division Liquefied 
Petroleum Gas Standards, Title 19: Chapter 15: Part 4
State of New Mexico Statute Annotated, Article 5. Liquefied and 
Compressed Gasses, 70-5-1 through 70-5-23, NMSA 1978

List of Exhibits

    1. Affidavit of Lloyd Dean.
    2. LPG and CNG Act, 5 New Mexico Statutes Annotated Chapter 70, 
Article 5 (1978).
    3. State of New Mexico, Construction Industries Division, 
Liquefied Petroleum Gas Standards, title 19: Chapter 15: Part 4 
(Nov. 15, 1997).

March 15, 2000

From: Paul Bomgardner, Director for Hazardous Materials Policy
To: Nancy Machado, Senior Attorney
Subject: Addendum to Application for Preemption Determination of 
certain rules of the State of New Mexico

    First, I want to thank you for taking the time to review the 
original application and discussing the issues of importance. I also 
want to apologize for any confusion that I may have caused through 
some oversight in the original application. Therefore, I request 
that this correspondence be added to the file for the purpose of 
clarification of intent on the part of the American Trucking 
Associations (ATA).
    Following is a listing of the specific sections of both the New 
Mexico LPG and GNG Act (N.M. Stat. Ann. Secs. 70-5-1 through 70-5-23 
(1998) and the corresponding regulations of the New Mexico 
Construction Industries Division, Liquefied Petroleum Gas bureau 
(Title 19, Chapter 15, Part 4 [19NMAC 15.4]) that are in question:
    1. N.M Stat. Ann. Sec. 70-5-7 Requiring competent employees in 
transporting, dispensing, installation, service or repair; as it 
applies to drivers domiciled in states other than New Mexico.
    2. N.M. Stat. Ann. Sec. 70-5-7 Annual license fees; inspection 
fees; as it applies to interstate motor carriers.
    3. N.M. Stat. Ann. Sec. 70-5-10 Revenue; suspense fund; as it 
applies to the use of fees collected by the State.
    4. 19 NMAC 15.4.9 Examinations, .1 through .5; as they apply to 
drivers domiciled in states other than New Mexico.
    5. 19 NMAC 15.4.10 Annual Inspections, .1; as it applies to the 
inspection of equipment (eg. Cargo tanks) operated by interstate 
motor carriers.
    6. 19 NMAC 15.4.14 Printed Forms, Permits and Fees, .3.C LP Gas 
Visual Cargo Tank and Equipment and Inspection Form $37.50 and Re-
inspection of Cargo Tank and Equipment and additional charge for re-
inspection $37.50; as they apply to inspection and/or re-inspection 
of equipment operated by interstate motor carriers.
    7. 19 NMAC 15.4.15 License Classifications, Scopes and Fees, .1 
LP-1 Wholesale sale or delivery of LP Gas $125.00 and .12 Annual 
renewal fee per qualifying party identification card $10.00; as they 
apply to interstate motor carriers.
    8. 19 NMAC 15.4.15 License Classifications, Scopes and Fees, .13 
Licensing examination fee $25.00 and .14 Licensing re-examination 
fee $25.00; as they apply to drivers domiciled in states other than 
New Mexico.
    Thank you for this opportunity to clarify ATA's intent. If you 
need to contact me, please do so at: 703-838-1849 (phone) or 
[email protected] (e-mail)

[FR Doc. 00-7992 Filed 3-30-00; 8:45 am]
BILLING CODE 4910-60-M