[Federal Register Volume 81, Number 143 (Tuesday, July 26, 2016)]
[Pages 48885-48886]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17615]

[[Page 48885]]



Pipeline and Hazardous Materials Safety Administration

[Docket No. PHMSA-2016-0074 (Notice No. 2016-13)]

Hazardous Materials: FAST Act Insurance and Liability Study; 
Request for Comments

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), 

ACTION: Notice and request for comments.


SUMMARY: On December 4, 2015, President Obama signed legislation 
entitled, ``Fixing America's Surface Transportation Act of 2015'' (the 
FAST Act). The FAST Act includes the ``Hazardous Materials 
Transportation Safety Improvement Act of 2015'' in Sections 7001 
through 7311, which provides direction for PHMSA's hazardous materials 
safety program.
    Section 7310 of the FAST Act requires the Secretary of 
Transportation to initiate a study of the levels and structure of 
insurance for railroad carriers transporting hazardous materials, which 
must be initiated within four months of the enactment of the FAST Act. 
Within a year of initiation, the Secretary must submit a report with 
the results of the study and recommendations for addressing liability 
issues with rail transportation of hazmat to Congress. PHMSA initiated 
this insurance study in March 2016 and is on schedule to complete it by 
April 2017. Specifically, PHMSA entered into an inter-agency agreement 
with the U.S. Department of Transportation (DOT) Office of Research and 
Technology's Volpe National Transportation Systems Center to conduct 
the study, which is required to examine current and future levels and 
mechanisms to insure rail carriers transporting all hazardous 
materials. The study will evaluate the following: (1) The level and 
structure of insurance, including self-insurance, available in the 
private market against the full liability potential for damages arising 
from an accident or incident involving a train transporting hazardous 
materials; (2) The level and structure of insurance necessary and 
appropriate to efficiently allocate risk and financial responsibility 
for claims; and to ensure that a railroad carrier transporting 
hazardous materials can continue to operate despite the risk of an 
accident or incident; and (3) The potential applicability for a train 
transporting hazardous materials, of an alternative insurance model, 
including a secondary liability coverage pool or pools to supplement 
commercial insurance; and other models administered by the Federal 

DATES: Comments on this notice will be accepted until September 9, 

ADDRESSES: You may submit comments identified by the docket number 
(PHMSA-2016-0074) by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
     Fax: (202) 493-2251.
     Mail: Docket Operations, M-30, Ground Floor, Room W12-140, 
1200 New Jersey Avenue SE., Washington, DC 20590-0001.
     Hand Delivery: To Docket Operations, Room W12-140 on the 
ground floor of the West Building, 1200 New Jersey Avenue SE., 
Washington, DC 20590-0001, between 9 a.m. and 5 p.m., Monday through 
Friday, except Federal holidays.
    Instructions: All submissions must include the agency name and 
docket number for this notice. Internet users may access comments 
received by DOT at: http://www.regulations.gov. Note that the comments 
received will be posted without change to: http://www.regulations.gov 
and will include any personal information provided. When providing 
comments, please identify the following:
     Organization Name,
     Type of Organization (e.g. rail carrier, shipper, insurer, 
trade organization, government, etc.), and
     An explanation of your interest in this study.

FOR FURTHER INFORMATION CONTACT: Robert Benedict, (202) 366-8553, 
Program Development Division, Pipeline and Hazardous Materials Safety 
Administration, U.S. Department of Transportation, 1200 New Jersey 
Avenue SE., Washington, DC 20590-0001.
    Request for Comments: As part of this study, PHMSA is conducting a 
review of existing data and literature with regard to current insurance 
liability levels and structure for rail carriers transporting hazardous 
materials. This review examines publically available insurance and 
liability data, including information released by the rail carriers, 
information released by industry trade associations, data and reports 
regarding the insurance industry, previous academic, government, or 
industry studies, and other public sources.
    Given the large scope of this study, PHMSA is seeking public 
comment. Specifically, in an effort to provide an opportunity for 
stakeholder input on the study and potential sources of data and 
literature, PHMSA is issuing this notice requesting comment on 
insurance and liability coverage for rail carriers transporting 
hazardous materials. PHMSA is requesting input that would inform the 
study, as well as any available insurance and liability literature and 
data that may be relevant to this topic.
    In addition, PHMSA is seeking input and data related to the 
following specific questions.

Level and Structure of Insurance and Liability Coverage

    1. Please comment on, or provide data relating to, the current 
level, structure, and type of liability insurance coverage (including 
self-insurance and retentions) available for hazardous materials 
transportation by rail. Specifically, please address the following:
     Cost and scope of coverage
     State and Federal Requirements
     Changes in the cost or availability of liability insurance
     Issues unique to your industry, commodity, and/or entity 
    2. Are the current levels of liability insurance coverage for 
hazardous materials transportation by rail appropriate?
     If not, what would be considered an appropriate level?
     Are there policy or market changes that could alter your 
perspective on what is adequate?
     How do you anticipate this changing in the future?
    3. What are the drivers of the current coverage limits for 
hazardous materials transportation liability insurance?
     Are there policy or market changes that could enable the 
availability of higher coverage limits?
     How do you anticipate this changing in the future?
    4. As hazardous materials transportation by rail is a cross-border 
enterprise, how, if at all, do foreign requirements related to 
insurance and liability coverage impact the level, structure and type 
of insurance and liability coverage held domestically?

Insurance and Liability Alternatives

    5. Please comment on, or provide data relating to, any previous or 
current initiatives for sharing the cost of insurance and/or legal 
liability for hazardous material by rail incidents between shipper and 
    6. Please comment on, or provide data relating to, any other 
legislative, policy, or voluntary approaches from other industries that 
may be applicable to

[[Page 48886]]

liability and insurance related to hazardous materials transportation 
by rail. To the extent possible, please comment on any potential 
economic, safety, and environmental considerations related to these 
alternative approaches.
    7. Other industries and foreign governments have implemented 
programs that impose fees to fund secondary liability coverage and/or 
create liability caps. Is this a feasible alternative for hazardous 
materials transportation by rail?

Other Information

    8. Please provide any potential studies and data sources that may 
inform this study.
    9. Commenters are invited to address any other considerations 
related to liability and the rail transport of hazardous materials not 
addressed above.

    Signed in Washington, DC, on July 21, 2016.
William Schoonover,
Acting Associate Administrator for Hazardous Materials Safety, Pipeline 
and Hazardous Materials Safety Administration.
[FR Doc. 2016-17615 Filed 7-25-16; 8:45 am]