[Federal Register Volume 68, Number 183 (Monday, September 22, 2003)]
[Notices]
[Pages 55080-55085]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-24148]


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DEPARTMENT OF TRANSPORTATION

RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION

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


New Mexico Requirements for the Transportation of Liquefied 
Petroleum Gas

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

ACTION: Decision on petition for reconsideration of administrative 
determination of preemption.

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    Petitioner: Attorney General of New Mexico (New Mexico) on behalf 
of the New Mexico Regulation and Licensing Department, Construction 
Industries Division (CID), and the New Mexico Construction Industries 
Commission.
    Local Laws Affected: New Mexico Statutes Annotated (NMSA), Chapter 
70, Article 5 (LNG and CNG Act), and New Mexico Annotated Code (NMAC), 
Title 19, Chapter 15, Part 4 (LP Gas Standards).
    Applicable Federal Requirements: Federal hazardous material 
transportation law, 49 U.S.C. 5101 et seq., and the Hazardous Materials 
Regulations (HMR), 49 C.F.R. Parts 171-180.
    Mode Affected: Highway.
SUMMARY: RSPA is modifying its September 20, 2002 determination with 
respect to the fees specified in New Mexico's LNG and CNG Act and LP 
Gas Standards for vehicle inspections, employee examinations, and 
identification cards. Based on additional information in New Mexico's 
petition for reconsideration about the collection and application of 
these fees, together with the prior finding that these fees appear to 
bear some approximation to the work involved in inspecting vehicles and 
administering examinations and issuing identification cards, RSPA finds 
that Federal hazardous material transportation law does not preempt: 
(1) NMAC 19.15.4.14.3(C), with respect to the fees charged for 
inspecting or reinspecting the cargo container and safety equipment on 
vehicles based within New Mexico that are used for the transportation 
of LP gas in bulk quantities, or (2) NMSA 70-5-7(C) and NMAC 
19.15.4.15.12 through 19.15.4.15.14 with respect to the fees charged 
for administering examinations and issuing identification cards to 
motor vehicle drivers domiciled in New Mexico or non-drivers who 
dispense liquefied petroleum (LP) gas.
    In all other respects, RSPA affirms its prior determination that 
Federal hazardous material transportation law preempts New Mexico's 
requirements in:

--NMAC 19.15.4.10.1 for an annual inspection of the cargo container and 
safety equipment on vehicles used for transportation of LP gas in bulk, 
as that requirement is applied to vehicles based outside New Mexico;
--NMSA 70-5-7(A) and NMAC 19.15.4.9.1 through 19.15.4.9.5 for 
examination of, and issuance of an identification card to each person 
who transports or delivers LP gas, as those requirements are applied to 
motor vehicle drivers domiciled outside of New Mexico; and
--NMAC 19.15.4.15.1 for payment of an annual license fee to 
``wholesale, transport and/or deliver'' LP gas in vehicles (other than 
to an ultimate consumer).


FOR FURTHER INFORMATION CONTACT: Frazer C. Hilder, Office of the Chief 
Counsel, Research and Special Programs Administration, U.S. Department 
of Transportation, 400 Seventh Street, SW., Washington, DC 20590-0001. 
Telephone: 202-366-4400.

SUPPLEMENTARY INFORMATION:

I. Background

    In Preemption Determination (PD) No. 22(R), published in the 
Federal Register on September 20, 2002 (67 FR 59396), RSPA considered 
certain requirements in New Mexico's LPG and CNG Act and CID's 
implementing LP Gas Standards with respect to companies, their 
vehicles, and their employees that transport and deliver propane and 
other liquefied petroleum (LP) gases. These statutory and regulatory 
requirements, set forth in full in Part II of RSPA's determination (67 
FR at 59397), govern:
    Licensing: A company must pay an annual fee of $125 for each of its 
business locations within New Mexico in order to obtain a license to 
``wholesale, transport and/or deliver [LP] gas in vehicular units into 
or out of any location except that of an ultimate consumer.'' NMAC 
19.15.4.15.1. The LPG and CNG Act authorizes the CID's Liquefied and 
Petroleum Gas Bureau (LPG Bureau) to collect ``reasonable license 
fees,'' NMSA 70-5-9(A), and provides that ``[a]ll fees and money 
collected under the provisions of [that] Act * * * shall be * * * 
deposited in the general fund of the state.'' NMSA 70-5-10.
    Vehicle inspections: The ``cargo container and safety equipment on 
each vehicular unit used for transportation of LP gas in bulk 
quantities'' must pass an annual safety inspection by the LPG Bureau. 
NMAC 19.15.4.10.1. The fee for the annual inspection (or a 
reinspection) is $37.50 per vehicle. NMAC 19.15.4.14.3(C).
    Driver testing and identification: Any person who ``transports or 
dispenses LP gas'' must pass an ``appropriate examination.'' NMSA 70-5-
7(A). The applicant must show that he or she is ``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.'' NMAC 19.15.4.9.1. An individual who passes the 
examination is issued an ``identification card,'' renewable annually, 
and valid only ``while employed by a licensee.'' NMAC 19.15.4.9.2-9.4. 
If an individual holding an identification card is not employed by a 
licensee for two years, the individual must take a new examination. 
NMAC 19.15.4.9.5. There is a fee of $25.00 for an examination (or a re-
examination) and $10.00 for

[[Page 55081]]

renewal of an identification card (without taking the examination). 
NMAC 19.15.4.15.12-15.14.
    In PD-22(R), RSPA found that Federal hazardous material 
transportation law preempts:
    1. The annual inspection requirement with respect to vehicles based 
outside the State because ``non-Federal vehicle inspection requirements 
have an inherent potential to cause unnecessary delay in the 
transportation of hazardous materials when the requirement is applied 
to vehicles based outside of the inspecting jurisdiction.'' 67 FR at 
59400.
    2. The examination and identification card requirements with 
respect to motor vehicle drivers domiciled outside of New Mexico that 
transport and dispense LP gas, because these ``New Mexico training 
requirements go beyond the HMR training requirements.'' 67 FR at 59401.
    3. The fees for a license, vehicle inspection, and employee 
examination and identification card. RSPA found that the annual license 
fee is not ``fair'' because it is not based on some approximation of a 
carrier's use of State facilities and discriminates against interstate 
commerce, and that the licensing fees ``deposited into New Mexico's 
general fund are not earmarked or actually used for hazardous materials 
transportation purposes as required.'' 67 FR at 59403, 59404. RSPA also 
found that the vehicle inspection fee and the employee examination and 
identification card fees are also not ``earmarked'' or ``actually used 
for hazardous materials transportation purposes.'' 67 FR at 59404, 
59405.
    RSPA found that Federal hazardous materials transportation law does 
not preempt requirements for an annual safety inspection of vehicles 
based within New Mexico; the examination and identification card 
requirements for drivers domiciled within the State; and provisions in 
the LPG and CNG Act and LP Gas Standards authorizing ``reasonable'' 
fees for licensing, vehicle inspection, driver examination, and 
identification cards. 67 FR at 59400, 59402, 59403, 59404, 59405.
    In PD-22(R), RSPA addressed the application submitted by the 
American Trucking Associations, Inc. (ATA) pursuant to 49 U.S.C. 
5125(d) and 49 CFR 107.203 and the comments on that application 
submitted by CID, the National Propane Gas Association (NPGA), the New 
Mexico Propane Gas Association, the National Tank Truck Carriers, Inc., 
and the Hazardous Materials Advisory Counsel (now known as the 
Dangerous Goods Advisory Council). In Part III of its determination, 
RSPA discussed the standards for making determinations of preemption 
under the Federal hazardous material transportation law. 67 FR at 
59397-98. As amended by Section 1711 of the Homeland Security Act of 
2002 (Pub. L. 107-296, 116 Stat. 2319), 49 U.S.C. 5125(a) & (b) preempt 
a State (or other non-Federal) requirement (unless DOT grants a waiver 
or there is specific authority in another Federal law) if:

--It is not possible to comply with both the State requirement and a 
requirement in the Federal hazardous material transportation law, a 
regulation issued under that law, or a hazardous materials 
transportation security regulation or directive issued by the Secretary 
of Homeland Security;
--The State requirement, as applied or enforced, is an ``obstacle'' to 
accomplishing and carrying out the Federal hazardous material 
transportation law, a regulation issued under that law, or a hazardous 
materials transportation security regulation or directive issued by the 
Secretary of Homeland Security; or
--The State requirement concerns any of five specific subjects and is 
not ``substantively the same as'' a provision in the Federal hazardous 
material transportation law, a regulation issued under that law, or a 
hazardous materials transportation security regulation or directive 
issued by the Secretary of Homeland Security.

    In addition, 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.''
    These preemption provisions stem from congressional findings that 
State, local, or Indian tribe requirements that vary from Federal 
hazardous material transportation law and regulations can create ``the 
potential for unreasonable hazards in other jurisdictions and confound[ 
] shippers and carriers which attempt to comply with multiple and 
conflicting * * * regulatory requirements,'' and that safety is 
advanced by ``consistency in laws and regulations governing the 
transportation of hazardous materials.'' Pub. L. 101-615 sections 2(3) 
& 2(4), 104 Stat. 3244 (Nov. 16, 1990). RSPA also explained that its

    Preemption determinations do not address issues arising under 
the Commerce Clause of the Constitution, except that * * * 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.''

67 FR at 59398.
    Within the 20-day time period provided in 49 CFR 107.211(a), the 
Attorney General of New Mexico submitted a petition for reconsideration 
of RSPA's decision in PD-22(R) on behalf of the New Mexico Regulation 
and Licensing Department, Construction Industries Division, and the New 
Mexico Construction Industries Commission. New Mexico sent a copy of 
its petition and its October 30, 2002 supporting brief (submitted 
pursuant to the extension granted by RSPA) to each person who had 
previously submitted comments in this proceeding. ATA and NPGA 
submitted comments in response to New Mexico's petition for 
reconsideration.

II. Discussion

A. Vehicle Inspection Requirements

    With its petition for reconsideration, New Mexico included an 
affidavit by the Chief of the LPG Bureau in which he stated that he is 
``responsible for designing, implementing and supervising the vehicle 
inspection system in New Mexico.'' He stated that his ``inspectors 
exercise a policy of maximum convenience for the transporter'' and 
``arrange with the transporter to meet the vehicle to be inspected at a 
time and place most convenient and least disruptive to the 
transporter's scheduling.'' He also stated that the inspection is 
limited to ``vehicle safety equipment related to the storage and 
loading or unloading of LP Gas. We do not inspect any other part of the 
vehicle, including its motor, drive train, chassis, wheels and tires or 
exterior.'' The LPG Bureau Chief also stated that his office ``sends by 
regular mail a renewal and inspection notice within the first week of 
the quarter in which the vehicle must be inspected [so that the] 
inspectors and transporter then have well over two months within which 
to arrange for this inspection, again at the convenience of the 
transporter.''
    New Mexico refers to this affidavit as showing that its vehicle 
inspection system is not one where ``the inspectors `call and demand' 
an inspection at a

[[Page 55082]]

time and place.'' It states that the ``inspectors do all they 
reasonably can to avoid disrupting schedules and deliveries,'' and that 
because the inspectors are ``willing to travel anywhere in the state to 
inspect vehicles at any time and any location, any reasonable 
transporter should be able to have all of its New Mexico licensed 
vehicles inspected in a timely fashion.'' It asserts that ``the LP Gas 
Bureau [did not cause] the scheduling problem, and thus the delay,'' 
when Basin Western, Inc. (a carrier based in Utah) was not able to 
obtain inspections in time to make deliveries. (In PD-22(R), RSPA 
discussed the information provided by Basin Western's vice president 
that his company had been unable to have vehicles inspected ``in time 
to meet scheduled deliveries.'' 67 FR at 59398-99.)
    Separately, New Mexico indicates that its annual vehicle 
inspection, and the inspection fee it charges, ``are associated only 
tangentially, if at all, with the transportation of hazardous 
materials.'' It states that it inspects only the ``safety equipment and 
devices on the trucks that transport LP gas for transfer in New 
Mexico,'' and that the inspection requirement ``is not triggered until 
gas is transferred in or out of the vehicle that transported it.'' 
Thus, it argues that its inspection requirement ``only concerns safe 
transfer,'' after transportation is over and ``federal regulation 
ceases.'' At the same time, New Mexico also asserts that the fees it 
collects for vehicle inspections are ``earmarked for hazardous 
materials transportation purposes,'' because the LP gas ``must be 
transported to be transferred, and the transfer process is the subject 
of the vehicle inspection process.''
    ATA responds that New Mexico's ``write and request system'' is 
unsatisfactory because ``[o]ften carriers do not know when they will be 
required to deliver LPG to New Mexico.'' According to ATA, a carrier 
may receive a request to ``dispatch an available vehicle the same 
day,'' and ``contacting the state to schedule an appointment for an 
inspection is operationally unrealistic.'' ATA states that it is not 
practical to ``dedicate'' one or more vehicles for deliveries to New 
Mexico. It also urges RSPA to look at the ``cumulative burden'' if 
multiple jurisdictions impose similar requirements, stating that 
``hazardous materials transportation would be frustrated if every 
jurisdiction in which a truck operated required that a truck undergo a 
separate, duplicative fee-supported inspection. To ignore the 
cumulative burden of these requirements is tantamount to RSPA's 
sanctioning of an unconstitutional burden upon interstate commerce.''
    NPGA states that New Mexico's asserted ``flexibility'' in 
scheduling inspections ``miss[es] the mark'' because of the ``inherent 
potential for unnecessary delay,'' and that ``even with a flexible 
inspection program, the transportation of propane is based on customer 
needs and, as such, a propane marketer outside New Mexico will likely 
not know when a shipment is needed in New Mexico until the last 
minute.''
    In PD-22(R), RSPA reviewed its prior consideration of annual 
vehicle inspection requirements of California (PD-4(R), 58 FR 48933 
(Sept. 20, 1993), decision on petition for reconsideration, 60 FR 8800 
(Feb. 15, 1995)); Nassau County, New York (PD-13(R), 63 FR 45283 (Aug. 
25, 1998), decision on petition for reconsideration, 65 FR 60238 (Oct. 
10, 2000), judicial review dismissed, The Office of the Fire Marshal of 
the County of Nassau v. U.S. Dept. of Transportation, No. CV-00-7200 
(E.D.N.Y. Mar. 18, 2002)); and Smithtown, New York (PD-28(R), 67 FR 
15276 (Mar. 29, 2002)). RSPA found that the information submitted in 
this proceeding confirmed that

any State or local periodic inspection requirement has an inherent 
potential to cause unnecessary delays in the transportation of 
hazardous materials when that requirement is applied to vehicles 
based outside of the inspecting jurisdiction. * * * [T]he ``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. * * *
    The inherent potential for unnecessary delay, when a periodic 
inspection applies to a vehicle based outside the inspecting 
jurisdiction, is not eliminated by a ``flexible'' scheduling policy. 
The impracticability of scheduling an inspection in advance of 
knowing whether a particular truck will be needed to make a delivery 
within the inspecting jurisdiction creates unnecessary delay--not 
the time that the inspection takes place. As discussed in PD-4(R) 
and PD-13(R), that unnecessary delay would be eliminated if the Town 
performed the equivalent of a spot or roadside inspection, upon the 
unannounced arrival of a truck carrying LPG.

PD-28(R), 67 FR at 15279 (quoted in part in PD-22(R), 67 FR at 59400).
    RSPA cannot accept New Mexico's argument that its vehicle 
inspection requirement applies only to the ``transfer'' (or delivery) 
of LPG after transportation has ended. By its very terms, this 
requirement applies to ``each vehicular unit used for transportation of 
LP gas in bulk quantities.'' NMAC 19.15.4.10.1 (emphasis supplied). 
Moreover, RSPA has long considered that the act of unloading hazardous 
material from a vehicle is within the scope of ``transportation,'' and 
subject to regulation under the HMR, when it is ``performed by a person 
employed by or under contract to a for-hire carrier or, in the case of 
a private carrier, when performed by the driver of the motor vehicle 
from which the hazardous material is being unloaded immediately after 
movement in commerce is completed.'' Notice of Proposed Rulemaking in 
Docket No. RSPA-98-4952 (HM-223), 66 FR 32420, 32433 (June 14, 2001); 
see also the loading and unloading requirements for Class 2 materials 
(gases) in 49 CFR 177.834, 177.840.
    New Mexico's petition for reconsideration does not directly address 
(much less provide any basis for reconsidering) the finding in PD-22(R) 
that a periodic inspection requirement has an ``inherent potential for 
unnecessary delay'' when applied to a vehicle based outside of the 
inspecting jurisdiction. It is the ``call and demand'' nature of 
deliveries of LPG and other hazardous material (not a ``call and 
demand'' inspection system) that makes it impossible to always schedule 
an inspection of any particular vehicle (or the safety equipment on the 
vehicle) before the carrier knows that the vehicle is needed to make a 
delivery in another jurisdiction. New Mexico's ``write and request'' 
system of scheduling inspections will unnecessarily delay or frustrate 
some deliveries of hazardous materials from outside the State, no 
matter how accommodating its inspection force, unless the State ``can 
actually conduct an `on the spot' inspection upon the truck's arrival 
within the jurisdiction.'' PD-22(R), 67 FR at 59400. Because New Mexico 
cannot meet this standard for vehicles based outside of the State, its 
annual inspection requirement is an obstacle to accomplishing and 
carrying out the requirement in 49 CFR 177.800(d) for the 
transportation of hazardous materials ``without unnecessary delay, from 
and including the time of commencement of the loading of the hazardous 
material until its final unloading at destination.'' RSPA reaffirms its 
determination that NMAC 19.15.4.10.1 is preempted with respect to 
vehicles based outside New Mexico.

B. Employee Examination and Identification Card Requirements

    New Mexico acknowledges in its petition for reconsideration that 
its

[[Page 55083]]

employee examination and identification card requirements are ``more 
stringent'' than the HMR, but it asserts that these requirements are 
not preempted unless there is ``an actual conflict with federal law.'' 
It states that, ``[i]f a matter is not clearly addressed in the HMR,'' 
then RSPA should not find preemption of ``local regulations related to 
but nonetheless distinct from what the HMR specifically covers.'' New 
Mexico adds that a ``driver may learn what the federal government 
expects and, absent an inability or refusal to understand New Mexico's 
safety requirements, may learn what this state expects as well.'' 
According to the LPG Bureau Chief, the examination is based on Standard 
58 issued by the National Fire Protection Association (NFPA). New 
Mexico states that this promotes uniformity because the State ``is 
testing prospective drivers from the uniform National Fire Protection 
Association document 58,'' which is ``nothing more than what any local 
jurisdiction uniformly requires by ascribing to the NFPA protocols.''
    ATA contends that New Mexico has misread 49 CFR 172.701, which 
provides that a State may not impose ``more stringent training 
requirements'' on an out-of-state driver. It states that ``test taking 
itself would become an obstacle to the safe and efficient 
transportation of hazardous materials, as few drivers could devote the 
time necessary to master the subtle regulatory differences between 
jurisdictions and sit for examinations in each of those 
jurisdictions.''
    NPGA agrees with ATA that imposing examination and licensing on 
drivers domiciled outside of New Mexico ``is in conflict with Sec.  
172.701 and, therefore, preempted by the HMTA and HMR.'' NPGA also 
states that it supports ``adoption of NFPA Standard 58 as part of 
State's regulation of LPG,'' but that the NFPA Standard 58 explicitly 
states that it is intended to apply ``to areas not subject to DOT 
regulation.''
    In PD-22(R), RSPA discussed the specific provision in 49 CFR 
172.701 that allows a State to impose more stringent training 
requirements on a motor vehicle driver only when the driver is 
domiciled within the State. 67 FR at 59401, citing PD-7(R), Maryland 
Certification Requirements for Transporters of Oil or Controlled 
Hazardous Substances, 59 FR 28913, 28919 (June 3, 1994), decision on 
petition for reconsideration, 60 FR 10419 (Feb. 24, 1995). RSPA has 
also specifically found that these additional requirements for drivers 
of motor vehicles are ``more stringent training requirements.'' PD-
7(R), 59 FR at 28919; PD-13(R), 63 FR at 45287; PD-28(R), 67 FR at 
15280. New Mexico acknowledges that its employee examination and 
identification card requirements are more stringent than the training 
requirements in the HMR, and there is no basis to reconsider the 
finding in PD-22(R) that these requirements are an obstacle to 
accomplishing and carrying out the HMR. Accordingly, RSPA reaffirms its 
determination that Federal hazardous material transportation law 
preempts the State's employee examination and identification card 
requirements in NMSA 70-5-7(A) and NMAC 19.15.4.9.1 through 
19.15.4.9.5.

C. Fees

    New Mexico asserts that all the fees it imposes on the 
transportation and delivery of LPG are ``based on a fair approximation 
of use, do not discriminate, and are not excessive. * * * [T]hey are a 
deminimus charge assessed to ensure the safe handling of LP gas in the 
transfer of it from one container to another.'' According to New 
Mexico, its ``licensing process is a means of ensuring safe transfer of 
LP gas in the State, and each license authorizes unlimited transfer 
privileges.'' It states that the annual license

has no logical relationship to the use of roads or other State 
infrastructure. It does not authorize movement of LP gas within or 
through the State, or authorize a carrier to enter the State; 
therefore, there are no border checks. The license relates only to 
material transfers, not movement, and it is the State's sole means 
of ensuring that the human beings who engage in the inherently 
dangerous activity of handling LP gas are qualified to do so.

    New Mexico also contends that it would not be practical to 
construct a graduated fee schedule ``based on the number of transfers 
of gas made by a carrier,'' because the LPG Bureau lacks sufficient 
resources to verify the number of transfers, and fees based ``on 
transfer activity * * * would not be collectable by the vendors.'' New 
Mexico also raises the possibility that an out-of-state carrier might 
actually pay ``more for a license than an in-state carrier,'' if it 
made more deliveries within New Mexico.
    According to the affidavit submitted by the LPG Bureau Chief, that 
office has ten full-time employees, including himself, and the total 
budget for the LPG Bureau in fiscal year 2001-2002 was approximately 
$625,000. New Mexico states that besides ``regulating the transfer of 
LP gas, the program [of the LP Gas Bureau] also investigates accidents 
and is responsible for inspecting LP activities related to residential 
and commercial use, bulk plants, and special events such as the 
International Balloon Festival, and the State Fair.'' During fiscal 
year 2001-2002, the LPG Bureau investigated 18 accidents, but ``[n]one 
of the accidents was related to the transfer of LP gas,'' according to 
the affidavit of the LPG Bureau Chief.
    The LPG Bureau Chief stated that his Bureau collected approximately 
$184,000 in fees during fiscal year 2001-2002 and ``[t]hese revenues 
were deposited in the State's general fund.'' New Mexico asserts that 
the fees that it collects for vehicle inspections ``are returned 100% 
to the LP gas regulatory program,'' because the annual budget far 
exceeds the revenue generated by vehicle inspections. ``Therefore, all 
vehicle inspection fees were entirely recovered for use in the 
regulation of LP gas.'' The vehicle inspection fees represented 
approximately $25,000 of the total $184,000 collected by the LPG Bureau 
in fiscal year 2001-2002, according to the affidavit of the LPG Bureau 
Chief. However, he also stated that the LPG Bureau did not directly 
collect fees for administering examinations and issuing identification 
cards. ``The fees associated with licensure, exams and identification 
cards are collected by private vendors under contract with [CID] and 
are the only funding source for the licensing and examination process. 
These fees are not collected by the Bureau, and are not deposited by 
the Bureau into the State's general fund.''
    Both ATA and NPGA state that all of New Mexico's fees are preempted 
because they are not ``fair'' and because they are not used for a 
purpose related to transporting hazardous material. They argue that 
these ``flat fees'' discriminate against interstate commerce because 
they are not apportioned to the motor carrier's presence or level of 
activity within the State. They also state that it is not possible to 
determine whether these fees are used for purposes relating to 
hazardous materials transportation because New Mexico deposits them 
into its general fund. ATA and NPGA attribute no significance to the 
fact that the LPG Bureau collected less in fiscal year 2001-2002 than 
it spent on its entire LPG program because that program includes 
activities outside transportation, such as inspections of LPG bulk 
plants.
    In one sense, all these fees are a ``flat,'' or fixed amount. 
However, in PD-22(R), RSPA clearly distinguished New Mexico's annual 
license fee from the other fees. RSPA found that the annual license fee 
remained the same regardless of the


[[Page 55084]]


number of miles traveled within the State, number of pick-ups or 
deliveries made within the State, size of 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.

67 FR at 59403. There is no doubt that New Mexico could adopt a license 
fee that varies according to one or more of these activities by a 
company transporting LP gas within the State, or that it would be more 
``fair'' to apportion the fees accordingly and base the amount of the 
fee upon the amount of those activities reported by the carrier. This 
could be done in the same manner that New Mexico may apply its gross 
receipts tax in NMSA 7-9-4 only to sales within the State, and not 
sales to customers located outside of New Mexico. See Evco v. Jones, 
409 U.S. 91, 93 S.Ct. 349 (1972). Similar issues regarding verification 
exist for both, and the ``fairness'' standard in 49 U.S.C. 5125(g)(1) 
cannot rest solely on the preference of the LPG Bureau for a fee that 
it considers easier to enforce. New Mexico has not shown that its 
``flat'' annual license fee 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.'' PD-
22(R), 67 FR at 59403, quoting from American Trucking Ass'ns v. 
Scheiner, 483 U.S. 266, 296, 97 S.Ct. 2829 (1987).
    Nor has New Mexico shown that the annual license fees are ``used 
for a purpose related to transporting hazardous material, including 
enforcement and planning, developing, and maintaining a capability for 
emergency response,'' as required by 49 U.S.C. 5125(g)(1). Even if the 
annual license fees are considered to be returned to the LPG Bureau as 
part of its total budget, there is no information to show that these 
fees are used for transportation-related purposes. The costs of 
inspecting residential and commercial facilities, or participating in 
the State Fair and a balloon festival, cannot be paid out of a State-
imposed fee ``related to transporting hazardous material.'' 
Accordingly, RSPA reaffirms its finding that Federal hazardous material 
transportation law preempts New Mexico's annual license fee because 
that fee is an obstacle to carrying out the requirements in 49 U.S.C. 
5125(g)(1) that the fee must be ``fair'' and ``used for a purpose 
related to transporting hazardous material.''
    In contrast to the licensing fee, RSPA found that the vehicle 
inspection fee ``appears to be related, in some manner, to the work 
involved in performing the inspection required.'' 67 FR at 59404. In 
other words, there should be the same effort and time required to 
inspect each vehicle, whether operated by an in-state or out-of-state 
carrier. As RSPA stated in PD-13(R), when

the amount of the fee is related in some measure to the work 
involved in conducting the required inspection, this fee appears 
more like a user fee than a tax. According to the U.S. Court of 
Appeals for the Fourth Circuit, user fees are to be distinguished 
from taxes, so long as they ``reflect a fair, if imperfect, 
approximation of the cost of using state facilities for the 
taxpayer's benefit, * * * [and are] not * * * excessive in relation 
to the costs incurred by the taxing authorities. Center for Auto 
Safety v. Athry, 37 F.3d 139, 142 (1994), citing Evansville-
Vanderburgh Airport Auth. District v. Delta Airlines, 405 U.S. 707, 
717-20 (1972).

63 FR at 45287, 65 FR at 60244; see also PD-21(R), Tennessee Hazardous 
Waste Transporter Fee and Reporting Requirements, 64 FR 54474. 54478 
(Oct. 6, 1999), judicial review pending, Tennessee v. U.S. Dep't of 
Transportation, petition for certiorari filed July 18, 2003 (No. 03-111 
U.S. Sup. Ct.). Thus, RSPA must reject the contention of ATA and NPGA 
that the vehicle inspection fee is not ``fair'' under the standard in 
49 U.S.C. 5125(g)(1).
    The fiscal year 2001-2002 budget and staffing figures for the LPG 
Bureau actually confirm that $37.50 appears to be a reasonable 
approximation of the cost to conduct a vehicle inspection or 
reinspection. When allocated to 10 full-time employees, the total 
$625,000 budget works out to an average cost of more than $30.00 per 
employee-hour, and the LPG Bureau Chief stated that a vehicle 
inspection typically takes ``from 45-60 minutes'' plus travel time. 
This is sufficient for RSPA to find that the vehicle inspection fee has 
a ``fair approximation'' to the service provided (i.e., the inspection) 
and that the LPG Bureau is ``actually spending these fees on the 
purposes permitted by the law,'' even if the fees are not earmarked or 
deposited into a separate account. PD-21(R), 64 FR at 54478, 54479. For 
that reason, RSPA finds that the vehicle inspection and reinspection 
fee in NMAC 19.15.4.14.3(C) is not an obstacle to accomplishing and 
carrying out the standards in 49 U.S.C. 5125(g)(1) and is not preempted 
by the Federal hazardous material transportation law. However, that fee 
may be collected only for inspecting the cargo containment and safety 
equipment on a vehicle based within New Mexico, because the underlying 
inspection requirement is preempted with respect to vehicles based 
outside the State.
    In a similar manner, it should take the same amount of time to 
administer an examination and issue an identification card to each 
applicant. In PD-22(R), RSPA noted that the absence of any evidence 
that the amounts of the employee examination and identification card 
fees are ``disproportionate to the work involved in administering the 
New Mexico safety examination and issuing identification cards. 
Consequently, the fees appear to be fair.'' 67 FR at 59405. New Mexico 
has now provided information that these fees are not deposited into the 
State's general fund but paid to and retained by ``private vendors'' 
who administer the examinations and issue identification cards. This is 
sufficient to show that these fees are directly related to the work 
that the private vendor actually performs and, in this manner, are 
actually ``used for a purpose related to transportation.'' As with the 
vehicle inspection fee, RSPA finds that the employee examination and 
identification card fees do not create an obstacle to accomplishing and 
carrying out the standards in 49 U.S.C. 5125(g)(1) and are not 
preempted by the Federal hazardous material transportation law. 
However, these fees may be collected only for administering 
examinations and issuing identification cards to motor vehicle drivers 
domiciled in New Mexico or non-drivers who dispense LP Gas, because the 
underlying examination and identification card requirements are 
preempted with respect to motor vehicle drivers domiciled outside of 
New Mexico.

III. Ruling

    For the reasons set forth above, New Mexico's petition for 
reconsideration is granted in part and denied in part.
    A. RSPA finds Federal hazardous material transportation law does 
not preempt:
    (1) NMAC 19.15.4.14.3(C), with respect to fees charged for 
inspecting or reinspecting the cargo container and safety equipment on 
vehicles based within New Mexico;
    (2) NMSA 70-5-7(C) and NMAC 19.15.4.15.12 through 19.15.4.15.14, 
with respect to the fees are charged for administering examinations and 
issuing identification cards to motor vehicle drivers domiciled in New 
Mexico or non-drivers who dispense liquefied petroleum (LP) gas;
    (3) the requirements for payment of a ``reasonable'' annual license 
fee, in NMSA 70-5-9(A), a ``reasonable'' safety inspection fee, in NMSA 
70-5-9(C), and a ``reasonable'' fee for issuance of an

[[Page 55085]]

identification card, in NMAC 19.15.4.9.4; and
    (4) NMSA 70-5-10, requiring deposit of fees into the State's 
general fund.
    B. RSPA incorporates and reaffirms its determination in PD-22(R) 
that Federal hazardous material transportation law preempts the 
requirements in:
    (1) NMAC 19.15.4.10.1, with respect to the requirement for an 
annual inspection of the cargo containment and safety equipment on 
vehicles based outside New Mexico, but that this requirement is not 
preempted with respect to vehicles based within New Mexico;
    (2) NMSA 70-5-7(A) and NMAC 19.15.4.9.1 through 19.15.4.9.5, with 
regard to requirements for a motor vehicle driver domiciled outside of 
New Mexico to take an examination and obtain an identification card, 
but that these requirements are not preempted with respect to motor 
vehicle drivers domiciled in New Mexico or non-drivers who dispense LP 
gas; and
    (3) NMAC 19.15.4.15.1, requiring intrastate and interstate motor 
carriers that move, load, or unload LP gas in New Mexico to pay an 
annual license fee.

IV. Final Agency Action

    In accordance with 49 CFR 107.211(d), this decision constitutes 
RSPA's final agency action on ATA's application for a determination of 
preemption as to certain requirements in New Mexico's LNG and CNG Act 
(NMSA Chapter 70, Article 5) and LP Gas Standards (NMAC Title 19, 
Chapter 15, Part 4). Any party to this proceeding may bring a civil 
action in an appropriate district court of the United States for 
judicial review of this decision not later than 60 days after 
publication of this decision in the Federal Register.

    Issued in Washington, DC, on September 17, 2003.
Robert A. McGuire,
Associate Administrator for Hazardous Materials Safety.
[FR Doc. 03-24148 Filed 9-18-03; 12:01 pm]
BILLING CODE 4910-60-P