[Federal Register Volume 67, Number 183 (Friday, September 20, 2002)]
[Notices]
[Pages 59396-59405]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-23836]



[[Page 59395]]

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Part V





Department of Transportation





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Research and Special Programs Administration



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Preemption Determination No. PD-22(R); New Mexico Requirements for the 
Transportation of Liquefied Petroleum Gas; Notices

  Federal Register / Vol. 67, No. 183 / Friday, September 20, 2002 / 
Notices  

[[Page 59396]]


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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

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


Preemption Determination No. PD-22(R); New Mexico Requirements 
for the Transportation of Liquefied Petroleum Gas

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

ACTION: Administrative determination of preemption by RSPA's Associate 
Administrator for Hazardous Materials Safety.

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    Applicant: American Trucking Associations, Inc. (ATA).

State Laws Affected

--5 New Mexico Statutes Annotated (NMSA) 70-5-7(A), containing 
examination requirement for persons who transport or dispense liquefied 
petroleum (``LP'') gas.
--5 NMSA 70-5-7(C), containing examination fee requirement for persons 
who transport or dispense LP gas.
--5 NMSA 70-5-9(A), requiring payment of a reasonable annual license 
fee.
--5 NMSA 70-5-9(C), requiring payment of a reasonable safety inspection 
fee.
--5 NMSA 70-5-10, requiring the deposit of fees into the State general 
fund.
--19 New Mexico Annotated Code (NMAC) 15.4.9.1, establishing 
examination requirement for persons who transport or dispense LP gas.
--19 NMAC 15.4.9.2, requiring identification card.
--19 NMAC 15.4.9.3, prohibiting persons from working without an 
identification card.
--19 NMAC 15.4.9.4, establishing identification card annual renewal and 
reasonable fee requirements.
--19 NMAC 15.4.9.5, requiring re-examination.
--19 NMAC 15.4.10.1, requiring annual vehicle safety inspection.
--19 NMAC 15.4.14.3(C), establishing cargo tank inspection and 
reinspection fees.
--19 NMAC 15.4.15.1, establishing license classification and fee for 
wholesale sale, transport, or delivery of LP gas.
--19 NMAC 15.4.15.12, establishing annual identification card renewal 
fee.
--19 NMAC 15.4.15.13, establishing examination fee.
--19 NMAC 15.4.15.14, establishing re-examination fee.
    Applicable Federal Requirements: Federal hazardous material 
transportation law (Federal hazmat law), 49 U.S.C. 5101 et seq., and 
the Hazardous Materials Regulations (HMR), 49 CFR parts 171-180.
    Modes Affected: Highway.
SUMMARY: Federal hazmat law preempts New Mexico's cargo tank inspection 
requirement, as applied to vehicles based outside the State, because 
the requirement causes unnecessary delay in the transportation of 
hazardous materials. On the other hand, Federal hazmat law does not 
preempt New Mexico's cargo tank inspection requirement, as applied to 
vehicles based in the State, because there is no evidence in the record 
that the requirement causes unnecessary delay in the transportation of 
hazardous materials by those carriers.
    Federal hazmat law also preempts New Mexico's employee examination 
and identification card requirements, as applied to non-domiciled, LP 
gas carrier personnel, because the HMR specifically provide that State 
training requirements may not apply to drivers domiciled outside the 
State. However, Federal hazmat law does not preempt New Mexico's 
employee examination and identification card requirements, as applied 
to domiciled, LP-gas carrier personnel, because the HMR specifically 
provide that State training requirements may apply to drivers domiciled 
within the State.
    Finally, Federal hazmat law preempts New Mexico's LP gas 
transporter license fee requirements applicable to intrastate and 
interstate motor carriers that move, load, or unload hazardous 
materials in commerce because the fee paid to obtain the license is 
neither fair nor used for hazardous material transportation purposes. 
Federal hazmat law also preempts New Mexico's vehicle inspection fee, 
employee examination fee, and identification card fee requirements 
because the record does not support a finding that the fees are used 
for hazardous materials transportation purposes. Federal hazmat law 
does not preempt the New Mexico provisions that require the payment of 
reasonable licensing, vehicle inspection, and employee examination fees 
and the deposit of those fees into the State general fund.

FOR FURTHER INFORMATION CONTACT: Nancy E. Machado, Office of the Chief 
Counsel, Research and Special Programs Administration, U.S. Department 
of Transportation, Washington, DC 20590-0001; telephone no. (202) 366-
0273; e-mail address: [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    On January 18, 2000, ATA applied for a determination that Federal 
hazmat law preempts certain licensing, vehicle inspection, and employee 
testing requirements applicable to intrastate and interstate carriers 
under New Mexico's 1978 ``LPG and CNG Act,'' 5 New Mexico Statutes 
Annotated, Chapter 70 (5 NMSA 70), and in the corresponding regulations 
contained in the Petroleum Gas Standards issued by the Construction 
Industries Division (CID) of New Mexico's Regulations and Licensing 
Department, 19 New Mexico Annotated Code, Chapter 15, Part 4 (19 NMCA 
15.4).
    New Mexico requires each main and branch office of a motor carrier 
operating within the State to hold a license in order to wholesale, 
transport, or deliver LP gas. New Mexico imposes an annual $125 license 
fee. New Mexico also requires annual vehicle inspections for all 
vehicles transporting LP gas within the State. The inspections are 
conducted by employees of the New Mexico Liquefied Petroleum Gas Bureau 
(the ``Bureau''). The annual inspection fee is $37.50.
    Furthermore, New Mexico requires all employees who transport or 
dispense LP gas in the State to prove, by passing an examination, that 
they are familiar with minimum safety standards and practices regarding 
the handling of LP gas. A person who passes the examination must carry 
an identification card. A person who has not passed the New Mexico 
examination may not transport or dispense LP gas within the State. New 
Mexico charges a $25 examination fee and a $10 identification card fee 
per employee.
    All fees collected under the provisions of the LPG and CNG Act are 
deposited into the State general fund.
    On March 31, 2000, the Research and Special Programs Administration 
(''RSPA'' or ``we'') published a public notice and invitation to 
comment on ATA's application (63 FR 17335). The notice set forth the 
text of ATA's application. Comments were submitted by the Hazardous 
Materials Advisory Counsel (HMAC, now known as the Dangerous Goods 
Advisory Council), the National Propane Gas Association (NPGA), the 
National Tank Truck Carriers, Inc. (NTTC), the New Mexico Propane Gas 
Association (NMPGA), and the CID. We received no rebuttal comments.

[[Page 59397]]

II. New Mexico's Statutory and Regulatory Requirements

    In its application, ATA asserts that New Mexico's LP gas 
requirements go beyond the HMR, create confusion, and impose burdens on 
transporters and, thus, are obstacles to accomplishing the objectives 
of Federal hazmat law and the HMR. Specifically, ATA argues that the 
following New Mexico statutory and regulatory requirements are 
preempted by Federal hazmat law:
    (1) 5 NMSA 70-5-7(A) and (C), which authorize the Bureau to 
establish examination requirements for employees who transport or 
dispense LP gas and to assess an examination fee. Those subsections 
read as follows:

    70-5-7. Requiring competent employees in transporting, 
dispensing, installation, service or repair.
    A. 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.
* * * * *
    C. The bureau shall set a reasonable fee for administering an 
examination.

    (2) 5 NMSA 70-5-9(A) and (C), which require persons transporting LP 
gas within the State to pay annual license and vehicle inspection fees. 
Those subsections read as follows:

    70-5-9. Annual License Fees; Inspection Fees.
    A. For the purpose of defraying the expenses of administering 
the laws relating to the use of CNG in 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 to the bureau 
reasonable fees as set, classified and defined by the bureau for 
each operating location. Provided, the total annual fees charged any 
one licensee for a combination of LP gas activities at one location 
and subject to licensure under this section shall not exceed three 
hundred fifty dollars ($350) and the fee charged for any single 
activity or operation as set, classified and defined by the bureau 
shall not exceed one hundred and fifty dollars ($150).
* * * * *
    C. 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. The fee shall be set by the bureau and 
shall not be assessed more frequently than once in each twelve 
months. The bureau may also charge a reasonable fee for late payment 
of any fees.

    (3) 5 NMSA 70-5-10, which requires that all fees collected under 
the LPG and CNG Act be deposited into the State general fund. That 
section reads as follows:

    70-5-10. All fees and money collected under the provisions of 
the LPG and CNG Act * * * shall be remitted by the bureau to the 
director of the division to be deposited in the general fund of the 
state. * * *

    (4) 19 NMAC 15.4.9, which requires personnel who transport or 
dispense LP gas to pass a safety examination. Persons who pass the 
examination must pay a fee to obtain an identification card from the 
Bureau. The Bureau reissues the cards annually and charges a fee. 
Persons who have not passed the examination may not transport or 
dispense LP gas within the State. That section reads as follows:

9. Examination

    No licensee or employee of a licensee shall install or modify 
any appliance or piping system until he has proved his knowledge of 
acceptable minimum standards by passing an examination required by 
the Bureau.
    9.1 All personnel whose duties require that they transport or 
dispense LP 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 the handling of LP Gas. LP Gas may not 
be dispensed by any person who has not passed the examination by the 
Bureau.
    9.2 An identification card shall be issued to each person who 
passes the examination required by the LP Gas Bureau. The 
identification card shall contain pertinent information such as 
examinee's name, address and classification(s) for which examinee is 
certified, and may also provide space for listing violations of the 
LP Gas Act.
    9.3 No licensee or employee shall perform the work he has 
examined for until he has received an identification card for that 
classification from the Bureau.
    9.4 An identification card shall only be valid while employed by 
a licensee. The identification card shall be renewed annually with 
payment of a reasonable fee to the Bureau on the anniversary date of 
the employer's license. The renewal fee shall be paid with the 
licensee's renewal for all listed qualifying parties.
    9.5 An identification card holder not employed by a licensee for 
a period of two (2) years shall retest before being qualified.

    (5) 19 NMAC 15.4.10.1, which requires annual safety inspections of 
vehicles transporting bulk quantities of LPG. That section reads as 
follows:

10. Annual Inspections

    10.1 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.
* * * * *
    (6) 19 NMAC 15.4.14.3(C), which establishes a $37.50 fee for 
vehicle safety inspections and re-inspections. That subsection reads as 
follows:

14. Printed Forms, Permits and Fees

* * * * *
    14.3 Printed forms listed below by number or name are hereby 
adopted and their use for the purpose stated:
* * * * *
14.3.C LP Gas Visual Cargo Tank and Equipment Inspection Form.--
$37.50

(Shall not be assessed more than one time in each 12 month period)

Re-inspection of Cargo Tank and Equipment and additional charge for 
re-inspection.--$37.50


    Licensee must obtain Form prior to inspection of vehicle or 
placing a new vehicle in service. Bureau inspector will complete 
Form upon inspection. Corrections after inspection will require a 
Correction Form and re-inspection. To expedite inspections, vehicle 
licensee will be notified by the LP Gas Bureau that vehicle annual 
inspection is due during the first month of the inspection quarter.
* * * * *
    (7) 19 NMAC 15.4.15.1, which establishes a $125 annual license fee 
for persons wholesaling, transporting, or delivering LP gas in the 
State. That section reads 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. This classification 
will allow delivery to the ultimate consumer whose facilities 
require a bulkhead.

    (8) Sections 12, 13, and 14 of 19 NMAC 15.4.15, which impose 
examination, re-examination, and identification card fees. Those 
sections read as follows:
* * * * *
15.12 Annual renewal fee per qualifying party identification card--
$10.00
15.13 Licensing examination fee--$25.00
15.14 Licensing re-examination fee--$25.00

III. Federal Preemption

    The Hazardous Materials Transportation Act (HMTA) was enacted in 
1975 to give the Department of Transportation (``DOT'') greater 
authority ``to protect the Nation adequately against the risks to life 
and property which are inherent in the transportation of hazardous 
materials in commerce.'' Pub. L. 93-633 Sec.  102, 88 Stat. 2156, 
presently codified as revised in 49 U.S.C. 5101. The HMTA ``replace[d] 
a patchwork of state and

[[Page 59398]]

federal laws and regulations * * * with a scheme of uniform, national 
regulations.'' Southern Pac. Transp. Co. v. Public Serv. Comm'n, 909 
F.2d 352, 353 (9th Cir. 1980). On July 5, 1994, the HMTA was among the 
many Federal laws relating to transportation that were revised, 
codified, and enacted ``without substantive change'' by Public Law 103-
272, 108 Stat. 745. The Federal hazardous material transportation law 
is now found in 49 U.S.C. Chapter 51. The HMR carry out the direction 
in 49 U.S.C. 5103(b)(1) that DOT ``shall prescribe regulations for the 
safe transportation of hazardous material in intrastate, interstate, 
and foreign commerce.''
    A statutory provision for Federal preemption was central to the 
HMTA. In 1974, 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). More recently, a Federal 
Court of Appeals found that uniformity was the ``linchpin'' in the 
design of the HMTA, including the 1990 amendments that expanded the 
preemption provisions. Colorado Pub. Util. Comm'n v. Harmon, 951 F.2d 
1571, 1575 (10th Cir. 1991).
    The 1990 amendments to the HMTA codified the ``dual compliance'' 
and ``obstacle'' criteria that RSPA had applied in issuing 
inconsistency rulings before 1990.\1\ 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, 83 S. Ct. 1210 (1963); Ray v. Atlantic 
Richfield, Inc., 435 U.S. 151, 98 S. Ct. 988 (1978). As now set forth 
in 49 U.S.C. 5125(a), these criteria provide that, in the absence of a 
waiver of preemption by DOT under 49 U.S.C. 5125(e) or unless it is 
authorized by another Federal law, ``a requirement of a State, 
political subdivision of a State, or Indian tribe'' is explicitly 
preempted if:
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    \1\ While advisory in nature, RSPA's inconsistency rulings were 
``an alternative to litigation for a determination of the 
relationship of Federal and State or local requirements'' and also a 
possible ``basis for an application * * * [for] a waiver of 
preemption.'' Inconsistency Ruling (IR) No. 2, Rhode Island Rules 
and Regulations Governing the Transportation of Liquefied Natural 
Gas and Liquefied Propane Gas Intended to be used by a Public 
Utility, 44 FR 75566, 76657 (Dec. 20, 1979).

    (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 of this chapter or a regulation 
prescribed under this chapter.

    In the 1990 amendments to the HMTA, Congress also added additional 
preemption provisions on certain ``covered subject'' areas that must be 
``substantively the same as'' a provision of Federal hazmat law or the 
HMR and with regard to fees imposed by a State, political subdivision, 
or Indian tribe on the transportation of hazardous material. 49 U.S.C. 
5125(b)(1).
    Section 5125(g)(1) of Federal hazmat law, 49 U.S.C. 5125(g)(1), 
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 relating to transporting hazardous 
material, including enforcement and planning, developing, and 
maintaining a capability for emergency response.
    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 to RSPA the authority to make 
determinations of preemption, except for those concerning highway 
routing (which have been delegated to the Federal Motor Carrier Safety 
Administration). 49 CFR 1.73(d)(2); 49 CFR 107.209(a).
    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 petitions for 
reconsideration. 49 CFR 5125(f).
    Preemption determinations do not directly address issues of 
preemption arising under the Commerce Clause of the Constitution, 
except that, as discussed in more detail in section IV.C.1, below, RSPA 
considers that Commerce Clause standards are relevant to a 
determination whether a fee related to the transportation of hazardous 
material is ``fair'' within the meaning of 49 U.S.C. 5125(g)(1). 
Preemption determinations also do not address statutes other than the 
Federal hazmat law unless it is necessary to do so in order to 
determine whether a requirement is authorized by another Federal law. 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, 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 policy set forth in Executive Order No. 
13132, entitled ``Federalism'' (64 FR 43255, Aug. 10, 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 
firm and palpable evidence of Congressional intent to preempt, 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. Discussion

A. New Mexico Vehicle Inspection Requirements

1. The New Mexico Requirements
    New Mexico requires annual safety inspections of vehicles 
transporting bulk quantities of LP gas within the State. 19 NMAC 
15.4.10.1. The inspections are conducted by the Bureau. Id. Each 
vehicle that passes the required inspection must display a State-issued 
decal.
    In its application, ATA challenges the New Mexico safety-inspection 
requirement at 19 NMAC 15.4.10.1 and states that neither the NMSA nor 
NMAC set forth procedures for how these annual safety inspections are 
to be conducted. Moreover, ATA states that at least one of its carrier 
members has been required to present each of its LP gas vehicles to New 
Mexico inspectors at a preset date and location, without regard to its 
principal place of business. In addition, ATA submits that motor 
carriers are already subject to Federal annual and random roadside 
inspections, in accordance with 49 CFR part 396 of the Motor Carrier 
Safety Regulations, and to inspection, repair and maintenance 
requirements for cargo tanks, in accordance with 49 CFR part 180 of the 
HMR. Consequently, ATA asserts that the New Mexico requirements are 
redundant with the Federal requirements, disrupt motor carrier 
operations, and cause unnecessary delay.
    In support of its application, ATA submitted the affidavit of Mr. 
Lloyd Dean, Vice President of Operations and the Chief Operating 
Officer of Basin Western, Inc., an interstate motor carrier. Basin 
Western is located in Roosevelt, Utah, and provides transportation 
services throughout the Western United States inter-mountain region, 
including New Mexico. In his

[[Page 59399]]

affidavit in support of ATA's application, Mr. Lloyd Dean of Basin 
Western states,

Basin Western does not know in advance which of its vehicles will be 
used to transport LPG into or through the State of New Mexico. 
Consequently, to be in compliance, Basin Western must annually 
submit each of its 45 vehicles engaged in LP gas transportation in 
New Mexico for inspections by the State. Appointments for vehicle 
inspections are made by informing the Division prior to the date of 
entry into the State. At that time, a representative of the State 
informs Basin Western as to the location and time of the inspection. 
If however, no inspector is available on the date, Basin Western is 
prohibited from transporting LP gas to destinations within or 
through the State in that vehicle and must rearrange its schedule 
for delivery of the product and later inspection of the vehicle or 
risk penalty of non-compliance. Twice, Basin Western has tried but 
been unable to schedule inspections in time to meet scheduled 
deliveries.

    Mr. Dean also indicates that Basin Western complies with the 
Federal annual and daily vehicle inspection requirements. Moreover, he 
asserts that Basin Western's vehicles are subject to an average of 112 
roadside inspections per year, conducted by various State agencies.
    NTTC, HMAC, and NPGA support ATA's argument and state that New 
Mexico's inspection requirements create a time-consuming, impractical, 
and costly process that impacts drivers, and operational and 
administrative personnel. Moreover, NTTC submits that Part 180 of the 
HMR is the standard for cargo tank testing and inspections and that it 
sets the benchmark by which to measure whether delays in hazardous 
materials transportation are ``necessary'' and acceptable. NTTC 
concludes that the New Mexico inspection requirement should be 
preempted because the requirement is contrary to the mandate in 49 CFR 
177.800(d) that all shipments of hazardous materials be transported 
without unnecessary delay.
    ATA also argues that the interstate transportation of hazardous 
materials would come to a halt if every jurisdiction required that 
trucks operating within the State undergo a separate, duplicative, fee-
supported inspection. ATA submits that RSPA has erred in not 
considering the impact of multiple, fee-supported State inspections on 
the interstate transportation of hazardous materials. ATA asserts that, 
in determining whether the New Mexico safety inspection requirement is 
preempted, RSPA should apply the ``internal consistency'' test set 
forth by the Supreme Court in Oklahoma Tax Comm'n v. Jefferson Lines, 
514 U.S. 175; 115 S. Ct. 1331, 1338 (1995), which weighs a law's impact 
on interstate commerce in the context of its impact if every other 
jurisdiction imposed an identical requirement.
    ATA asserts that a review under the ``internal consistency'' test 
would find that allowing a proliferation of New Mexico-like inspection 
and fee requirements would result in unreasonable transportation 
delays. ATA concludes that the New Mexico vehicle inspection 
requirements are contrary to the HMR's mandate in section 49 CFR 
177.800(d) that shipments of hazardous materials be transported without 
unnecessary delay, present an obstacle to the purposes and objectives 
of Federal hazmat law and the HMR and, thus, should be preempted.
    In response to ATA's application, CID argues that the LPG and CNG 
Act, and corresponding regulations, neither impair nor interfere with 
the statutory or regulatory authority of DOT involving interstate 
commerce. CID also argues that the New Mexico requirements are not 
obstacles to the accomplishment of Federal hazmat law but instead 
complement it. CID asserts that the ability to comply with the New 
Mexico requirements is ``within the capability of any entity who 
desires to deliver and transfer liquefied petroleum gas and compressed 
natural gas product (gases) or, to sell or offer to sell, or provide 
any such related merchantable item within the jurisdictional authority 
of the State of New Mexico.'' CID states that the prudent protection of 
New Mexico's citizens, and their health and property, is both the 
State's obligation and its right.
    Also, CID indicates that carriers performing loading and unloading 
activities regulated under the HMR are not subject to the State's 
vehicle inspection or licensing requirements. It notes, however, that 
loading and unloading activities not subject to the HMR requirements 
are within New Mexico's jurisdiction and must be accomplished in 
accordance with State-adopted standards. CID relates that New Mexico 
has not experienced a hazardous materials transfer incident in the last 
ten years and attributes that safety record to the State's adoption of 
National Fire Protection Association (NFPA) Standard 58 and the State's 
licensing and enforcement program. In conclusion, CID asserts that the 
New Mexico requirements should not be preempted. NMPGA, in its 
comments, supports the New Mexico requirements challenged by ATA.
2. The ``Obstacle'' Test
    The HMR require that ``all shipments of hazardous materials * * * 
be transported without unnecessary delay, from and including the time 
of commencement of the loading of the hazardous material until its 
final unloading at destination.'' 49 CFR 177.800(d). Consequently, a 
non-Federal inspection requirement is preempted as an obstacle to the 
accomplishment and execution of Federal hazmat law and the HMR when, as 
applied and enforced, it creates unnecessary delay in the 
transportation of hazardous material. Preemption Determination 
(``PD'')-4(R), California Requirements Applicable to Cargo Tanks 
Transporting Flammable and Combustible Liquids, 58 FR 48933, 48941 
(Sept. 20, 1993).
    RSPA rejects ATA's argument that we should not only consider 
``unnecessary delay'' in ascertaining whether the New Mexico inspection 
requirement is preempted but should also apply the Supreme Court's 
``internal consistency'' test, which measures the impact of a 
requirement on commerce. As we have stated before in response to 
similar arguments,

The obstacle criterion for preemption in 49 U.S.C. 5125(a)(2) is a 
different standard for preemption than whether there is an improper 
burden on interstate commerce. If the two standards were meant to be 
equivalent, Congress would have said so, and it would not require 
RSPA to make a finding with regard to the burden on commerce in 
considering whether to waive preemption, under Sec.  5125(e), or to 
consider whether a non-Federal fee is `fair' or not under 
5125(g)(1).

    PD-13(R), Nassau County, New York, Ordinance on Transportation of 
Liquefied Petroleum Gases, Decision on Reconsideration, 65 FR 60238, 
60243 (Oct. 10, 2000).
    In prior preemption determinations and inconsistency rulings, RSPA 
has explained why it is concerned with unnecessary delays in hazardous 
materials transportation. For example, in discussing a requirement to 
obtain a permit for each shipment of liquefied natural gas and 
liquefied propane gas, RSPA has indicated:

    The manifest purpose of the HMTA and the Hazardous Materials 
Regulations is safety in the transportation of hazardous materials. 
Delay in such transportation is incongruous with safe 
transportation. Given that the materials are hazardous and their 
transportation is not risk-free, it is an important safety aspect of 
the transportation that the time between loading and unloading is 
minimized.

    IR-2 (Rhode Island), 44 FR at 75571.
    In discussing restrictions on the use of city streets by trucks 
carrying hazardous

[[Page 59400]]

materials, RSPA found that ``[t]he mere threat of delay may redirect 
commercial hazardous materials traffic into other jurisdictions that 
may not be aware of or be prepared for a sudden, possibly permanent, 
change in traffic patterns.'' IR-3, City of Boston Rules Governing 
Transportation of Certain Hazardous Materials by Highway Within the 
City, 46 FR 18918, 18921 (March 26, 1981).
    As for what constitutes ``unnecessary delay,'' RSPA has found that 
a delay of hours or days waiting for the arrival of an inspector from 
another location is ``unnecessary, because it substantially increases 
the time [hazardous materials] are in transportation, increasing 
exposure to the risks of hazardous materials without corresponding 
benefit.'' PD-4(R) (California), 58 FR at 48941.
    On the other hand, in PD-4(R) RSPA reaffirmed decisions that ``the 
minimal increase in travel time when an inspection is actually being 
conducted, or the vehicle is waiting its `turn' for an inspector to 
finish inspecting another vehicle that arrived earlier at the same 
facility is not unnecessary delay.'' PD-4(R) (California), 58 FR at 
48941, quoted in PD-13(R) (Nassau County), 63 FR 45283, 45286 (Aug. 25, 
1998), Decision on Reconsideration, 65 FR at 60243; See also, IR-17, 
Illinois Fee on Transportation of Spent Nuclear Fuel, 51 FR 2120926, 
Decision on Appeal, 52 FR 36200, 36205 (Sept. 25, 1987) (delay of 1.5 
to 2 hours during which a State inspection is conducted is reasonable 
and ``presumptively valid'').
    RSPA has also found that a State's annual inspection requirement 
applied to vehicles or tanks that operate solely within the State is 
presumptively valid because it would not create the potential for 
delays ``associated with entering the State or being rerouted around'' 
the State. PD-4(R) (California), Decision on Reconsideration, 60 FR at 
8803, quoted in PD-13(R) (Nassau County), 63 FR at 45286. A carrier 
whose vehicles are based within the inspecting jurisdiction should be 
able to schedule an inspection at a time that does not disrupt or 
unnecessarily delay deliveries, and such inspections are consistent 
with the traditional authority of a State or political subdivision to 
license, inspect, and otherwise regulate a motor vehicle based within 
its jurisdictional boundaries. PD-13(R) (Nassau County), Decision on 
Reconsideration, 65 FR at 60243.
    Conversely, RSPA has recently determined that non-Federal vehicle 
inspection requirements have an inherent potential to cause unnecessary 
delays in the transportation of hazardous materials when the 
requirement is applied to vehicles based outside the inspecting 
jurisdiction. See PD-28(R), Town of Smithtown, New York, Ordinance on 
Transportation of Liquefied Petroleum Gas, 67 FR 15276 (March 29, 
2002). In PD-28(R) (Smithtown), RSPA found that ``the `call and demand' 
nature of common carriage makes it (1) impossible to predict in advance 
which vehicles may be needed for a pick-up or delivery within a 
particular jurisdiction and (2) impractical to have all vehicles 
inspected every year or, alternatively, have a few vehicles inspected 
in order to be `dedicated' to the inspecting jurisdiction.'' Id. at 
15279. Consequently, the applicant in PD-28(R) (Smithtown) was not 
required to present more specific evidence of the local inspection 
requirement's effect on the movement of hazardous materials in vehicles 
based outside the State in order for RSPA to determine that the 
requirement was preempted as an obstacle to accomplishing and carrying 
out the HMR.
    In discussing New Mexico's vehicle inspection requirements, Basin 
Western--an interstate carrier based in Utah--asserts that twice it has 
tried but been unable to obtain inspections in time to meet scheduled 
deliveries. In those instances, under New Mexico's regulations, Basin 
Western was prohibited from transporting LP gas to its destination 
within or through New Mexico in the uninspected vehicle and was forced 
to rearrange its schedule for delivery of the product and later 
inspection of the vehicle. ATA and HMAC note that New Mexico's 
inspection requirement results in deviation of hazardous materials 
shipments from their destination route in order to fulfill the 
inspection provision or, where obtaining a timely inspection is not 
possible, rerouting of the hazardous materials shipments through other 
States in order to avoid penalties for noncompliance; both scenarios 
result in unnecessary delays.
    As noted above, neither Federal hazmat law nor the HMR preclude a 
State from inspecting vehicles traveling within or through the State. 
Under the principles announced in PD-4(R) (California), a State 
generally may apply an annual inspection requirement to trucks based 
outside its jurisdictional boundaries but only if it can actually 
conduct an ``on the spot'' inspection upon the truck's arrival within 
the jurisdiction. The State cannot require a permit or inspection for 
trucks that are not based within the local jurisdiction if the truck 
must interrupt its transportation of hazardous materials for several 
hours in order for an inspection to be conducted. In its comments, New 
Mexico did not address its ability to conduct ``on the spot'' 
inspections.
    For the reasons set forth above, RSPA finds that, as applied and 
enforced, NMAC 15.4.10.1 creates an obstacle to accomplishing and 
carrying out the HMR's prohibition against unnecessary delays in the 
transportation of hazardous material on vehicles based outside of the 
State. Accordingly, Federal hazmat law preempts 19 NMAC 15.4.10.1 with 
respect to trucks that are based outside New Mexico. Based on the lack 
of information in the record regarding how the New Mexico inspection 
requirements are applied and enforced with respect to trucks that are 
based within the State, RSPA finds that Federal hazmat law does not 
preempt New Mexico's vehicle inspection requirement at 19 NMAC 
15.4.10.1 with respect to trucks based within the State.

B. New Mexico Employee Examination and Identification Card Requirements

1. The New Mexico Requirements
    The LPG and CNG Act gives the Bureau the authority to require 
persons that transport or dispense LP gas to pass an appropriate 
examination based on the safety requirements of the Construction 
Industries Commission (the ``Commission''), 5 NMSA 70-5-7(A). The 
Bureau's implementing regulations require that all personnel who 
transport or dispense LP Gas prove, by passing an examination, that 
they are familiar with minimum safety standards and practices regarding 
the handling of LP Gas. 19 NMAC 15.4.9.1 and 15.4.9.5. A licensee or 
employee may not transport or dispense LP gas until he has passed the 
examination and received an identification card from the Bureau. 19 
NMAC 15.4.9.1, 15.4.9.2, and 15.4.9.3. The identification card must be 
renewed annually. 19 NMAC 15.4.9.4.
    In its application, ATA asserts that New Mexico requires any person 
who operates, loads, or unloads an LP gas transport vehicle, including 
drivers in interstate commerce, to take a safety examination before 
being allowed to perform those functions within the State. ATA further 
asserts that the New Mexico examination is scheduled at various times 
at different locations throughout the State and that all applicants, 
whether domiciled within the State or not, must take the test at one of 
the designated locations. ATA alleges that the testing requirement is 
in addition to the training and testing requirements in the HMR and 
imposes costs and other burdens on transporters of LP gas.

[[Page 59401]]

    ATA notes that while the HMR permit States to impose more stringent 
training requirements on hazmat drivers, a State may only do so if the 
requirements (1) do not conflict with the training requirements in 49 
CFR part 172 Subpart H and in 49 CFR part 177, and (2) do not apply to 
drivers domiciled outside the State. ATA asserts that New Mexico's 
testing requirements are more stringent than those under the HMR and 
apply to drivers domiciled outside the State. Consequently, ATA argues 
that the New Mexico training requirements are an obstacle to 
accomplishing the objectives of Federal hazmat law and the HMR.
    Basin Western and other industry commenters support ATA's position. 
Basin Western states that its drivers must take time to prepare for the 
New Mexico examination and then must travel to San Juan Community 
College in Farmington, New Mexico, on the second Saturday of a given 
month to take a written examination. Basin Western states that it not 
only must pay a $25 examination fee and $10 identification card fee but 
also must cover travel expenses, driver wage-related costs, and lost 
business income for each of its drivers who must take the examination. 
Basin Western indicates that its drivers hold Commercial Driver's 
Licenses with appropriate hazardous material and tank vehicle 
endorsements and are trained in accordance with the HMR. Consequently, 
Basin Western asserts that the New Mexico training requirements are 
``needlessly redundant'' and should be preempted.
2. HMR Training Requirements for Motor Vehicle Operators
    The HMR establish general training requirements for persons who 
package, offer, or transport hazardous materials. 49 CFR part 172, 
subpart H. The training requirements apply to hazmat employees, 
including those who operate a vehicle used to transport hazardous 
material. 49 CFR 171.8 (definition of ``hazmat employee''), 172.702(b). 
At least every three years, a hazmat employer is required to train and 
test its hazmat employees to ensure that they have ``familiarity with 
the general provisions of the HMR, [are] able to recognize and identify 
hazardous materials, [have] knowledge of specific requirements of the 
HMR applicable to functions performed by the employee[s], and [have] 
knowledge of emergency response information, self-protection measures 
and accident prevention methods and procedures.'' 49 CFR 172.700(b). 
Moreover, a hazmat employer is required to maintain records showing 
that it has trained and tested each of its hazmat employees as required 
under the HMR.
    In addition, the HMR impose training requirements for individual 
modes of transportation, including highway transportation. For example, 
49 CFR 177.816(a) requires that motor vehicle operators receive 
training in a number of areas, including: the requirements of the 
Federal Motor Carrier Safety Regulations, 49 CFR parts 390 through 397 
(incorporated into the HMR by 49 CFR 177.804); pre-trip safety 
inspection requirements; use of vehicle controls and equipment, 
including emergency equipment; vehicle operation; vehicle attendance, 
parking, smoking, routing and incident reporting requirements; and 
hazardous material loading and unloading procedures, including 
compatibility and segregation, package handling, and load securement.
    In addition to the above training requirements, a person who 
operates a cargo tank or a vehicle with a portable tank having a 
capacity of 1,000 gallons or more must have the appropriate State-
issued Commercial Driver's License required by 49 CFR part 383. They 
also must receive specialized training in the following: operation of 
emergency control features of the cargo tank or portable tank; special 
vehicle handling characteristics; loading and unloading procedures; the 
properties and hazards of the material transported; and retest and 
inspection requirements for cargo tanks. 49 CFR 177.816(b).\2\
---------------------------------------------------------------------------

    \2\ The training requirements in 49 CFR 177.816(a) and (b) may 
be satisfied by compliance with the current requirements for a 
Commercial Driver's license with a tank vehicle or hazardous 
materials endorsement. 49 CFR 177.816(c).
---------------------------------------------------------------------------

    The HMR provide that the training requirements set forth above are 
minimum training requirements for the transportation of hazardous 
material. 49 CFR 172.701. However, a State may impose more stringent 
training requirements on motor vehicle drivers only if those 
requirements: (1) Do not conflict with the training requirements of 49 
CFR subpart H and part 177; and (2) apply only to drivers domiciled in 
that State. 49 CFR 172.701(a) and (b). State training requirement that 
violate 49 CFR 172.701 are an obstacle as a matter of law. PD-7(R), 
Maryland Certification Requirements for Transporters of Oil or 
Controlled Hazardous Substances, Decision on Reconsideration, 60 FR 
10419, 10420 (Feb. 24, 1995) citing PD-7(R) (Maryland), 59 FR 28913, 
28919 (June 3, 1994).\3\
---------------------------------------------------------------------------

    \3\ The authority granted to States to impose stricter 
requirements on their domiciled operators ``recognizes the 
traditional regulation by States of their own resident drivers.'' 
PD-7(R) (Maryland), 59 FR at 28919.
---------------------------------------------------------------------------

    The record reflects that New Mexico's training requirements are 
more stringent than those imposed under the HMR. Specifically, any 
person who operates, loads, or unloads an LP gas transport vehicle in 
New Mexico--regardless of that person's domicile--must appear at a 
designated time and at a designated place in New Mexico to pay a fee 
and take a written examination.\4\ The HMR do not require persons who 
operate, load, or unload LP gas transport vehicles to take a 
government-administered examination or to pay an examination fee to the 
government. Moreover, a person may not transport or dispense LP gas in 
New Mexico until he has passed the examination and received an 
identification card from the Bureau, which must be renewed every year 
for a fee. The HMR do not require an operator to obtain an 
identification card, as proof of training and examination, from a 
governmental body prior to engaging in hazardous materials 
transportation activities. The record is clear that the New Mexico 
training requirements go beyond the HMR training requirements. See PD-
7(R) (Maryland), 60 FR 10420 (requirement to obtain a certificate of 
training from a State is ``more strict'' than the HMR); see also 
Colorado Pub. Util. Comm'n v. Harmon, 951 F.2d at 1581 (requirement to 
submit proof of training goes beyond HMR).
---------------------------------------------------------------------------

    \4\ There is no specific information in the record regarding the 
substance of the New Mexico safety examination. Basin Western, 
however, characterizes the New Mexico testing requirements for LP 
gas transportation as ``needlessly redundant'' with the HMR training 
requirements.
---------------------------------------------------------------------------

    In summary, it is clear from the record that New Mexico's training 
requirement at 5 NMSA 70-5-7(A), and the implementing regulations at 19 
NMAC 15.4.9.1 through 15.4.9.5, are more stringent than the HMR 
training requirements. While there is no evidence in the record that 
the substance of the New Mexico training requirements conflicts with 
the HMR training requirements, the record does support ATA's assertion 
that the New Mexico training requirements are being applied to motor 
vehicle operators domiciled outside the State.
    Consequently, New Mexico's training requirements at 5 NMSA 70-5-
7(A), and the implementing regulations at 19 NMAC 15.4.9.1 through 
15.4.9.5, violate 49 CFR 172.701(b) and, as applied to non-domiciled 
operators, are preempted as an obstacle to accomplishing the goals of 
Federal hazmat law and the HMR.

[[Page 59402]]

    As applied to operators domiciled in New Mexico, the New Mexico 
training requirements are more stringent than those imposed under the 
HMR. However, as noted above, there is no evidence in the record that 
the substance of the New Mexico training requirements conflicts with 
the HMR training requirements. Accordingly, as applied to operators 
domiciled in New Mexico, the New Mexico training requirements at 5 NMSA 
70-5-7(A) and at 19 NMAC 15.4.9.1 through 15.4.9.5 are not preempted.

C. Fees

1. LP Gas License Fee Requirement
a. The New Mexico Requirements
    New Mexico requires a person to obtain a license from the State 
prior to transporting LP gas within the State. 5 NMSA 70-5-6(A). The 
LPG and CNG Act directs the Bureau to issue a license only after it has 
determined that an applicant meets all safety requirements provided for 
under that act and under the regulations of the Commission, and after 
the Bureau finds that an applicant is fit and able to perform the work 
for which a license is requested. Id. The LPG and CNG Act also 
authorizes the Bureau to establish a reasonable licensing fee. 5 NMSA 
70-5-9(A). Fees collected under the LPG and CNG Act must be deposited 
into the State general fund. 5 NMSA 70-5-10.
    In its application, ATA challenges the authority given to the 
Bureau in 5 NMSA 70-5-9(A) to establish reasonable licensing fees but 
does not challenge the general licensing requirement in 5 NMSA 70-5-
6(A). ATA also challenges the implementing regulation at 19 NMAC 
15.4.15.1, which imposes a $125 licensing fee. ATA states that motor 
carriers who transport LP gas in New Mexico are in category ``LP-1'' 
and subject to an annual flat fee of $125 that is not apportioned to 
the level of a motor carrier's presence or activities in the State and, 
thus, is discriminatory and violates the Commerce Clause.
    ATA argues that the privilege of conducting LP gas transportation 
in New Mexico is inherently more valuable to intrastate carriers that 
conduct all of their operations in the State than to carriers that 
operate predominantly in interstate commerce. Consequently, ATA 
concludes that imposing a flat fee to cover regulatory costs places a 
disproportionate share of those costs on interstate motor carriers. ATA 
contends that the $125 licensing fee imposed on interstate carriers by 
New Mexico is discriminatory and violates the Commerce Clause, citing 
American Trucking Associations, Inc. v. Scheiner, 483 U.S. 266, 107 S. 
Ct. 2829 (1987). ATA also states that the fee violates the Commerce 
Clause and, thus, is not fair and is preempted under section 5125(g)(1) 
of Federal hazmat law, in accordance with RSPA's decision in PD-21(R), 
Tennessee Hazardous Waste Transporter Fee and Reporting Requirements, 
64 FR 54474 (Oct. 6, 1999).\5\
---------------------------------------------------------------------------

    \5\ Complaint for judicial review filed Dec. 3, 1999 (No. C-3-
99-1126, M.D. Tenn.). On February 27, 2001, the District Court 
rejected a magistrate-judge's recommendation that sovereign immunity 
bars a determination of preemption. Tennessee has appealed the 
District Court's decision to the U.S. Court of Appeals for the Sixth 
Circuit (No. 01-5373).
---------------------------------------------------------------------------

    Mr. Dean, in his affidavit in support of ATA's application, states 
that Basin Western transports various types of petroleum products and 
has a 45-vehicle fleet dedicated to LP gas transportation. Mr. Dean 
states that for the last two years Basin Western has paid a $125 fee in 
order to obtain an LP-1 license to transport LP gas into and through 
New Mexico. Mr. Dean argues that fees imposed by New Mexico, including 
the licensing fee, would be prohibitive if replicated by other States.
    NTTC supports ATA's application and states that, because of the 
```flat tax' nature of the State fees, preemption is mandated.'' NPGA 
argues that New Mexico's imposition of a license fee on all LP gas 
transporters in the State, regardless of where they are domiciled, 
creates an obstacle to achieving the HMR's goal of uniformity regarding 
the movement of hazardous materials in commerce. NPGA also asserts that 
New Mexico's licensing fee is a flat fee and that such fees have been 
struck down by the courts. NPGA also notes that RSPA has issued 
preemption determination decisions, such as PD-21(R) (Tennessee), 
finding that flat fees are preempted by Federal hazmat law.
    HMAC also strongly supports ATA's application and agrees with ATA's 
conclusion that New Mexico's $125 assessment against interstate 
carriers is unfair because, if enacted by other States or 
jurisdictions, it would lead to assessments on interstate carriers many 
times the rate paid by local carriers for the same number of miles.
    Finally, ATA asserts that the $125 assessment is deposited into the 
State general fund and is not earmarked for purposes related to the 
transportation of hazardous materials. Consequently, ATA argues that 
the fee is preempted because it is neither fair nor used for hazardous 
materials transportation purposes as required under section 5125(g)(1) 
of Federal hazmat law, 49 U.S.C. 5125(g)(1).
b. The Fairness Test
    ATA asserts, and the record supports, that New Mexico requires 
interstate and intrastate carriers to obtain a license, at a cost of 
$125 annually, in order to move LP gas in commerce within the State. On 
the other hand, while the New Mexico licensing requirement states that 
it applies to persons who ``dispense'' LP gas, CID denies that carriers 
who are subject to the HMR's loading and unloading requirements must 
obtain a license from New Mexico to perform those activities within the 
State.\6\
---------------------------------------------------------------------------

    \6\ Motor carrier personnel who load or unload a hazardous 
material incidental to the material's movement in intrastate or 
interstate commerce are subject to the HMR's loading and unloading 
requirements. See 49 CFR 177.834.
---------------------------------------------------------------------------

    A New Mexico license authorizes a carrier to perform certain 
transportation-related and non-transportation-related activities within 
the State upon payment of a fixed annual fee. In essence, a New Mexico 
license is a permit to conduct those activities within the State. 
Permit requirements do not, per se, make it impossible to comply with 
Federal hazmat law or HMR requirements, or create an obstacle to 
accomplishing and carrying out Federal hazmat law or the HMR. See PD-
9(R), Los Angeles County, California Requirements Applicable to the 
Transportation and Handling of Hazardous Materials on Private Property, 
60 FR 8774, 8785 (Feb. 15, 1995) \7\. Whether or not a permit

[[Page 59403]]

requirement is preempted depends on the steps required to obtain the 
permit. Id.; See also IR-28, City of San Jose, California, Restrictions 
on Storage of Hazardous Materials, 55 FR 8884 (Mar. 8, 1990); IR-20, 
Triborough Bridge and Tunnel Authority Regulations Governing 
Transportation of Radioactive Materials and Explosives, 52 FR 24396 
(June 30, 1987); IR-3 (City of Boston), Decision on Appeal, 47 FR 18457 
(Apr. 29, 1982); IR-2 (Rhode Island), 44 FR 75566; New Hampshire Motor 
Transport Ass'n v. Flynn, 751 F.2d 43 (1st Cir. 1984); Colorado Public 
Utilities Comm'n v. Harmon, CV 88-Z-1524 (D. Colo. 1989), rev'd on 
other grounds, 951 F.2d 1571 (10th Cir. 1991). To obtain a license to 
move hazardous materials within or through New Mexico, the applicant 
must demonstrate that it meets the State safety requirements, the 
Bureau must find that the applicant is fit and able to perform the work 
for which a license is sought, and the applicant must pay a $125 annual 
fee per business location. ATA specifically challenges the regulations 
implementing New Mexico's licensing fee requirement.
---------------------------------------------------------------------------

    \7\ On February 15, 1995, RSPA simultaneously issued preemption 
decisions in PD-8(R), PD-9(R), PD-10(R), and PD-11(R) regarding 
certain California and Los Angeles County requirements. 60 FR 8774. 
Those collectively-issued decisions are known as the ``Four-Pack'' 
decisions. Five petitions for reconsideration of those decisions are 
pending. RSPA deferred issuing a decision on reconsideration until 
its completion of a rulemaking, RSPA docket HM-223. 61 FR 38513 
(July 24, 1996). Both the petitions for reconsideration and RSPA 
Docket HM-223 raise issues regarding the on-site handling and 
transportation of hazardous materials and whether certain 
transportation and unloading activities are regulated under the HMR. 
Id. RSPA deferred action on the petitions for reconsideration in 
order not to prejudge matters that are more appropriately handled 
through notice-and-comment rulemaking. Id.
    On June 3, 2000, two petitioners for reconsideration--The 
Chlorine Institute and the Chemical Manufacturers' Association (now 
known as the American Chemistry Council)--withdrew their joint 
petition for reconsideration of the Four-Pack decisions. On June 7, 
2000, they filed a complaint in the U.S. District Court for the 
District of Columbia challenging RSPA's determination that Federal 
hazmat law does not preempt certain California and Los Angeles 
County requirements applicable to the movement of hazardous 
materials exclusively within the confines of a private facility and 
to certain storage and unloading activities at those facilities. 
See, Civil Action No. 00-1312 (WBB). On May 6, 2002, the U.S. 
District Court for the District of Columbia granted RSPA's motion to 
dismiss on the ground that the Four-Pack decisions are not final 
and, thus, not ripe for judicial review.
    On June 14, 2001, RSPA published an NPRM in Docket HM-223. 66 FR 
32420. We expect to publish a final rule by June 2003.
---------------------------------------------------------------------------

    Section 5125(g)(1) of Federal hazmat law provides that a State, a 
political subdivision of a State, or Indian tribe may impose a fee 
related to transporting hazardous material only if: (1) The fee is 
fair, and (2) the fee is used for a purpose related to transporting 
hazardous material, including enforcement and planning, developing, and 
maintaining a capability for emergency response. ATA cites both ATA v. 
Scheinner and PD-21(R) (Tennessee) in support of its argument that the 
New Mexico license fee is not fair and violates the Commerce Clause. In 
PD-21(R) (Tennessee), RSPA found, based on the legislative history of 
section 5125(g)(1), that the ``reasonableness'' test set forth in 
Evansville-Vanderburgh Airport Auth. District v. Delta Airlines, Inc., 
405 U.S. 707, 92 S. Ct. 1349 (1972), was ``the most appropriate one for 
interpreting the fairness requirement in 49 U.S.C. 5125(g)(1).'' 64 FR 
54478. See also PD-18(R), Broward County, Florida's Requirements on the 
Transportation of Certain Hazardous Materials to or from Points in the 
County, 65 FR 81950 (Dec. 27, 2000).
    In Evansville-Vanderburgh, the Supreme Court held that a State or 
local fee does not violate the Commerce Clause if it ``is based on some 
fair approximation of use or privilege for use * * * and is neither 
discriminatory against interstate commerce nor excessive in comparison 
with the governmental benefit conferred. * * *'' Evansville-
Vanderburgh, 405 U.S. at 716. The Court also held that ``a State may 
impose a flat fee for the privilege of using its roads, without regard 
to the actual use by particular vehicles, so long as the fee is not 
excessive.'' Id. at 717. Subsequently, in ATA v. Scheinner, the Court 
limited this latter holding to situations where a flat tax is the 
``only practicable means of collecting revenues from users and the use 
of a more finely gradated user-fee schedule would pose genuine 
administrative burdens.'' Scheinner, 483 U.S. at 296.
    In addition, ATA and some commenters argue that the New Mexico fee 
is unfair because it would be prohibitive if replicated by other 
States. RSPA has never relied on the potential cumulative effect of a 
fee as the basis for a finding of preemption. See IR-17 (Illinois), 51 
FR 20926, 20934 (June 9, 1986), Decision on Appeal, 52 FR 36200 (Sept. 
25, 1987). See also PD-21(R), 64 FR at 54478. Also, there is no 
evidence that the potential for other States to adopt fees, by itself, 
makes the New Mexico fee unfair. Indeed, the Court in Scheinner found 
that ``even if more than one jurisdiction applies a charge to 
participants in interstate commerce, the Commerce Clause may be 
satisfied if the revenue measure maintains state boundaries as a 
neutral factor in decision making.'' Scheinner, 483 U.S. at 283.
    The record supports ATA's contention that both intrastate and 
interstate carriers must pay New Mexico's $125 annual license fee in 
order to move LP gas in commerce within the State. There is no evidence 
that this annual fixed fee is apportioned to a carrier based on number 
of miles traveled within the State, number of pick-ups or deliveries 
made within the State, size or weight of the vehicle used to transport 
LP gas within the State, or any other factor that relates the amount of 
the fee to a carrier's use of State roads or facilities. Consequently, 
an interstate carrier that travels just one time in New Mexico must pay 
the same fee as a local carrier that conducts all of its business 
within the State. Moreover, while interstate and intrastate carriers 
pay the same fixed fee annually, the privilege of moving LP gas within 
the State is clearly more valuable to the local transporter than to the 
interstate transporter. Therefore, New Mexico's assessment of a $125 
license fee on a per facility basis, rather than on some approximation 
of the benefit conferred to licensees, discriminates against interstate 
commerce.\8\ Furthermore, there is no evidence in the record that a 
more finely gradated fee would pose genuine administrative burdens on 
the State.
---------------------------------------------------------------------------

    \8\ On the question of whether a fee is discriminatory, the 
Court in Scheinner found dispositive prior Supreme Court cases 
``which make it clear that the Commerce Clause prohibits a State 
from imposing a heavier tax burden on out-of-state businesses that 
compete in an interstate market than it imposes on its own residents 
who also engage in commerce among States.'' Scheinner, 483 U.S. at 
282.
---------------------------------------------------------------------------

    The record is less clear on whether New Mexico's licensing 
requirement is being applied to intrastate and interstate carriers that 
load or unload hazardous material within the State. While 19 NMAC 
5.4.15.1 states that an LP-1 license holder is authorized to 
``wholesale, transport and/or deliver gas in vehicular units,'' CID 
denies that carriers subject to the HMR's loading and unloading 
requirements must obtain a license to perform those activities within 
the State. Regardless, carriers that load or unload a shipment of LP 
gas within the State presumably moved that shipment within the State 
and, therefore, are required to obtain a license.
    As noted above, Section 5125(g)(1) does not prohibit a State from 
imposing a fee related to transporting hazardous material, so long as 
the fee is fair and is actually used for a purpose related to 
transporting hazardous material. Consequently, the requirement in 5 
NMSA 70-5-9(A) that each person, firm, or corporation pay a reasonable 
license fee as set, classified, and defined by the Bureau, is not 
preempted.
    On the other hand, the Bureau imposes a flat $125 license fee on 
carriers that move or deliver LP gas in the State. The fee is not a 
``reasonable'' fee as defined in Evansville-Vanderburgh because it is 
not based on some fair approximation of a carrier's use of State 
facilities and because it discriminates against interstate commerce. 
Thus, under 5125(g)(1) of Federal hazmat law, the fee is not a fair 
fee. Consequently, the fee imposed on interstate and intrastate carrier 
movement of LP gas by the Bureau under 19 NMAC 15.4.15.1 violates 49 
U.S.C. 5125(g)(1) and is preempted by Federal hazmat law. To the extent 
that New Mexico imposes its licensing requirement on interstate or 
intrastate motor carriers performing loading or unloading activities 
subject to the HMR requirements at 49 CFR 177.834, the licensing 
requirement, as it applies to

[[Page 59404]]

intrastate and interstate carriers that ``deliver'' LP gas, is also 
preempted for the reasons set forth above.
c. The ``Used For'' Test
    As discussed above, Federal hazmat law provides that ``[a] State, 
political subdivision of a State, or Indian tribe may impose a fee 
related to transporting hazardous material only if the fee is * * * 
used for a purpose related to transporting hazardous material, 
including enforcement and planning, developing, and maintaining a 
capability for emergency response.'' 49 U.S.C. 5125(g)(1). 
Consequently, fees levied in connection with the transportation of 
hazardous materials must be used for a purpose related to the 
transportation of hazardous materials. Fees that are not used for a 
purpose related to hazardous materials transportation are preempted. 
See PD-9(R) (Los Angeles), 60 FR 8784; See also PD-18(R) (Broward 
County), 65 FR at 81959; PD-21(R) (Tennessee), 64 FR 54479.
    Section 70-5-9(A) of 5 NMSA requires persons transporting LP gas 
within the State to pay annual license fees ``for the purpose of 
defraying the expenses of administering the laws relating to the use of 
CNG in motor vehicles or the LP gas industry * * *.'' Activities 
subject to the LPG and CNG Act include both transportation-related and 
non-transportation-related activities, specifically ``the selling, 
offering for sale, constructing, assembling, repairing, equipping, 
installing, filling with fuel, storage of fuel within, [and] dispensing 
of fuel from or transporting fuel'' in certain approved containers. 5 
NMSA 70-5-4. Fees collected to administer the LPG and CNG Act are 
deposited into the State general fund. 5 NMSA 70-5-10.
    ATA argues that section 5125(g)(1) of Federal hazmat law preempts 
the $125 annual licensing fee requirement (and, as discussed below, 
vehicle-inspection, testing, and other fee requirements) because the 
fees are deposited in the State's general fund and are not used for 
hazardous materials transportation purposes. NPGA and HMAC agree with 
ATA's conclusion. NPGA remarks that the New Mexico law does not 
indicate that the monies collected will be used for purposes relating 
to hazardous materials transportation, enforcement and planning, or 
development and maintenance of emergency response capability. CID, in 
its comments, is silent on this issue.
    The record supports that the Bureau collects licensing fees from 
intrastate and interstate carriers, for the purpose of administering 
the LPG and CNG Act, and deposits those fees into the State general 
fund. While Federal hazmat law does not prohibit a State from directing 
the deposit of fees into the State's general fund, Federal hazmat law 
does require that the funds be used for hazardous materials 
transportation purposes. CID does not rebut ATA's or commenters' 
assertions that licensing fees deposited into New Mexico's general fund 
are not earmarked or actually used for hazardous materials 
transportation purposes as required under 5125(g)(1). Consequently, 
RSPA cannot find that the licensing fees collected under the LPG and 
CNG Act are used for purposes related to hazardous materials 
transportation. Therefore, the licensing fee requirement at 19 NMAC 
15.4.15.1 violates 49 U.S.C. 5125(g)(1) and is preempted by Federal 
hazmat law. Federal hazmat law does not preempt the requirement at 5 
NMSA 70-5-10 that the fees be deposited into the State general fund.
2. Vehicle Inspection Fees
    Section 70-5-9(C) of 5 NMSA requires persons transporting LP gas 
within the State to pay annual vehicle inspection fees ``for the 
purpose of defraying the expenses of administering the laws relating to 
the use of CNG in motor vehicles or the LP gas industry * * *.'' 
Activities subject to the LPG and CNG Act include both transportation-
related and non-transportation-related activities. 5 NMSA 70-5-4. The 
cost of New Mexico's annual vehicle safety inspection is $37.50 per 
vehicle. 19 NMAC 15.4.14.3(C). Like the licensing fees discussed above, 
the vehicle inspection fees are deposited into New Mexico's general 
fund. 5 NMSA 7-5-10.
    In its application, ATA argues, and the majority of commenters 
agree, that the annual, per-vehicle inspection fee is preempted because 
the fee is not used for purposes related to hazardous materials 
transportation, in violation of 49 U.S.C. 5125(g)(1).
    As discussed above, Federal hazmat law provides that ``A State, 
political subdivision of a State, or Indian tribe may impose a fee 
related to transporting hazardous material only if the fee is * * * 
used for a purpose related to transporting hazardous material, 
including enforcement and planning, developing, and maintaining a 
capability for emergency response.'' 49 U.S.C. 5125(g)(1). 
Consequently, fees levied in connection with the transportation of 
hazardous materials must be equitable and used for a purpose related to 
the transportation of hazardous materials. Fees that are not used for a 
purpose related to hazardous materials transportation are preempted. 
See PD-9(R) (Los Angeles), 60 FR at 8784; See also PD-18(R) (Broward 
County), 65 FR at 81959; PD-21(R) (Tennessee), 64 FR at 54479.
    The fee at issue appears to be related, in some measure, to the 
work involved in performing the inspection required under 19 NMAC 
15.4.14.3(C). In PD-21(R) (Tennessee), RSPA noted that fees covering 
the cost of a required inspection ``would be expected to be the same 
amount for both interstate and intrastate companies'' and have not been 
found to violate the Commerce Clause. PD-21(R) (Tennessee), 64 FR 
54478; see also PD-13(R) (Nassau County), Decision on Petition for 
Reconsideration, 65 FR 60244. Cnsequently, there is no evidence that 
New Mexico's vehicle inspection fee is unfair.
    On the other hand, the record supports that the Bureau collects 
vehicle inspection fees from intrastate and interstate carriers and 
deposits those fees into the State's general fund. CID does not dispute 
ATA's and commenters' assertions that the fees are not earmarked for 
hazardous materials transportation purposes or actually used for 
hazardous materials transportation purposes as required under 
5125(g)(1). Consequently, RSPA cannot find that the vehicle inspection 
fees collected under the LPG and CNG Act are used for purposes related 
to hazardous materials transportation. Therefore, the vehicle 
inspection fee requirement in 19 NMAC 15.4.14.3(C) violates 49 U.S.C. 
5125(g)(1) and is preempted by Federal hazmat law. The general 
provision mandating the collection of a reasonable fee for safety 
inspections, set forth at 5 NMSA 70-5-9(C), is not preempted.
 New Mexico's Examination and Identification Card Fees
    As discussed above, New Mexico requires a person who transports or 
dispenses LP gas to pass an appropriate examination based on the safety 
requirements of the Commission, 5 NMSA 70-5-7(A). New Mexico also 
requires the Bureau to set a reasonable fee for administering the 
safety examination. 5 NMSA 70-5-7(C). Persons who pass the examination 
may not transport or dispense LP gas until they have received an 
identification card from the Bureau. 19 NMAC 15.4.9.3. The Bureau's 
regulations require that identification cards be renewed annually after 
payment of a ``reasonable'' fee. 19 NMAC 15.4.9.4. In addition, the 
Bureau has established a $25 examination/re-examination fee, 19 NMAC 
15.4.15.13 and 15.4.15.14, and

[[Page 59405]]

an annual $10 identification card renewal fee. 19 NMAC 15.4.15.12.
    ATA argues, with the support of the majority of commenters, that 
New Mexico's examination and identification card fees are preempted 
because the fees are not used for purposes related to hazardous 
materials transportation, in violation of 49 U.S.C. 5125(g)(1).
    As discussed above, a State, political subdivision of a State, or 
Indian tribe may impose a fee related to hazardous materials 
transportation if the fee is fair and used for hazardous materials 
transportation purposes. 49 U.S.C. 5125(g)(1). Fees that are not fair 
and used for hazardous materials transportation purposes are preempted. 
See PD-9(R) (Los Angeles), 60 FR 8784; See also PD-18(R) (Broward 
County), 65 FR 81959; PD-21(R) (Tennessee), 64 FR 54479.
    Because Federal hazmat law and the HMR specifically allow a State 
to impose fees related to hazardous materials transportation, under 
certain conditions, the New Mexico requirements at 5 NMSA 70-5-7(C) and 
19 NMAC 15.4.9.4 that the Bureau set ``reasonable'' examination and 
identification card fees are not preempted. With regard to the Bureau's 
implementing regulations--19 NMAC 15.4.15.12 through 15.4.15.14--there 
is no evidence that the fees imposed by the Bureau on employees of 
interstate and intrastate carriers are disproportionate to the work 
involved in administering the New Mexico safety examination and in 
issuing identification cards. Consequently, the fees appear to be fair. 
On the other hand, CID does not dispute ATA's and commenters' 
assertions that the fees, which are deposited into the State's general 
fund, are not earmarked or actually used for purposes related to 
hazardous materials transportation. As a result, the employee 
examination and identification card fee requirements in 19 NMAC 
15.4.15.12 through 15.4.15.14, fail to satisfy the requirement at 49 
U.S.C. 5125(g)(1) and are, thus, preempted.

V. Ruling

    For the reasons set forth above, RSPA finds that Federal hazmat law 
preempts the following New Mexico requirements:
    A. Vehicle inspection requirements as applied to vehicles based 
outside the State:
    [sbull] 19 NMAC 15.4.10.1, requiring annual vehicle safety 
inspection.
    B. Written examination requirements as applied to non-domiciled 
drivers:
    [sbull] 5 NMSA 70-5-7(A), containing examination requirement for 
persons who transport or dispense LP gas.
    [sbull] 19 NMAC 15.4.9.1, establishing examination requirement for 
persons who transport or dispense LP gas.
    [sbull] 19 NMAC 15.4.9.2, requiring identification card.
    [sbull] 19 NMAC 15.4.9.3, prohibiting persons from working without 
an identification card.
    [sbull] 19 NMAC 15.4.9.4, to the extent it requires annual 
identification card renewal.
    [sbull] 19 NMAC 15.4.9.5, requiring re-examination.
    C. Fees:
    (1) Licensing fee requirement as applied to intrastate and 
interstate motor carriers that move, load, or unload LP gas:
    [sbull] 19 NMAC 15.4.15.1, establishing license classification and 
fee for wholesale sale, transport, or delivery of LP gas.
    (2) Vehicle inspection and reinspection fee requirements:
    [sbull] 19 NMAC 15.4.14.3(C), establishing vehicle inspection and 
reinspection fees.
    (3) Written examination fee requirements:
    [sbull] 5 NMSA 70-5-7(C), containing examination fee requirement 
for persons who transport or dispense LP gas.
    [sbull] 19 NMAC 15.4.9.4, to the extent that it establishes an 
annual identification card requirement.
    [sbull] 19 NMAC 15.4.15.12, establishing annual identification card 
renewal fee.
    [sbull] 19 NMAC 15.4.15.13, establishing examination fee.
    [sbull] 19 NMAC 15.4.15.14, establishing re-examination fee.
    For the reasons set forth above, RSPA finds that Federal hazmat law 
does not preempt the following New Mexico requirements:
    A. Vehicle inspection requirements as applied to vehicles based 
within the State:
    [sbull] 19 NMAC 15.4.10.1, requiring annual vehicle safety 
inspection.
    B. Written examination requirements as applied to domiciled 
drivers:
    [sbull] 5 NMSA 70-5-7(A), containing examination requirements for 
persons who transport or dispense LP gas.
    [sbull] 19 NMAC 15.4.9.1, establishing examination requirement for 
persons who transport or dispense LP gas.
    [sbull] 19 NMAC 15.4.9.2, requiring identification card.
    [sbull] 19 NMAC 15.4.9.3, prohibiting persons from working without 
an identification card.
    [sbull] 19 NMAC 15.4.9.4, to the extent it requires annual 
identification card renewal.
    [sbull] 19 NMAC 15.4.9.5, requiring re-examination.
    C. Fees:
    [sbull] 5 NMSA 70-5-7-(C), containing examination fee requirement 
for persons who transport or dispense LP gas.
    [sbull] 5 NMSA 70-5-9(A), requiring payment of a reasonable annual 
license fee.
    [sbull] 5 NMSA 70-5-9(C), requiring payment of a reasonable safety 
inspection fee.
    [sbull] 5 NMSA 70-5-10, requiring deposit of fees into the State 
general fund.
    [sbull] 19 NMSA 15.4.9.4, to the extent that it establishes a 
reasonable annual identification card fee.

V. Petition for Reconsideration/Judicial Review

    In accordance with 49 CFR 107.211(a), ``[a]ny person aggrieved'' by 
this decision may file a petition for reconsideration within 20 days of 
publication of this decision in the Federal Register. Any party to this 
proceeding may seek review of RSPA's decision ``in an appropriate 
district court of the United States * * * not later than 60 days after 
the decision becomes final.'' 49 U.S.C. 5125(f).
    This decision will become RSPA's final decision 20 days after 
publication in the Federal Register if no petition for reconsideration 
is filed within that time. The filing of a petition for reconsideration 
is not a prerequisite to seeking judicial review of this decision under 
49 U.S.C. 5125(f).
    If a petition for reconsideration of this decision is filed within 
20 days of publication in the Federal Register, the action by RSPA's 
Associate Administrator for Hazardous Materials Safety on the petition 
for reconsideration will be RSPA's final decision. 49 CFR 107.211(d).

    Issued in Washington, DC on September 13, 2002.
Robert A. McGuire,
Associate Administrator for Hazardous Materials Safety.
[FR Doc. 02-23836 Filed 9-19-02; 8:45 am]
BILLING CODE 4910-60-P