[Federal Register Volume 84, Number 195 (Tuesday, October 8, 2019)]
[Notices]
[Pages 53822-53824]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21964]
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DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials Safety Administration
[Docket No. PHMSA-2018-0027; Notice No. 2018-09]
Hazardous Materials: Clarification of Process To Reissue
Explosives Classification Approvals
AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
Department of Transportation (DOT).
ACTION: Notice and request for comments.
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SUMMARY: PHMSA issues this notice to clarify and request comments on
the Approvals Program procedures for companies to request a
modification to an explosives classification approval to reflect a
merger, acquisition, or change in name or legal status.
DATES: Interested persons are invited to submit comments on or before
January 6, 2020.
ADDRESSES: You may submit comments identified by Docket No. PHMSA-2018-
0027 via any of the following methods:
Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
Fax: 1-202-493-2251.
Mail: Docket Operations, U.S. Department of
Transportation, West Building, Ground Floor, Room W12-140, Routing
Symbol M-30, 1200 New Jersey Avenue SE, Washington, DC 20590.
Hand Delivery: To Docket Operations, Room W12-140 on the
ground floor of the West Building, 1200 New Jersey Avenue SE,
Washington, DC 20590, 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 the DOT at: http://www.regulations.gov. Please note that
comments received will be posted without change to: http://www.regulations.gov including any personal information provided.
Privacy Act: In accordance with 5 U.S.C. 553(c), the DOT solicits
comments from the public. The DOT posts these comments, without edit,
including any personal information the commenter provides, to http://www.regulations.gov, as described in the system of records notice (DOT/
ALL-14 FDMS), which can be reviewed at http://www.dot.gov/privacy.
FOR FURTHER INFORMATION CONTACT: Pipeline and Hazardous Materials
Safety Administration: Laura Ulmer, Attorney-Advisor (PHC-10), U.S.
Department of Transportation, Pipeline and Hazardous Materials Safety
Administration, 1200 New Jersey Avenue SE, East Building, 2nd Floor,
Washington, DC 20590-0001, Telephone (202) 366-4400.
SUPPLEMENTARY INFORMATION:
I. Background
As defined in title 49, section 173.56 of the Code of Federal
Regulations (CFR), a ``new explosive'' is an explosive produced by a
person who either has not previously produced that explosive, or has
previously produced that explosive, but has made a change in the
formulation, design, or process so as to alter any of the properties of
the
[[Page 53823]]
explosive. The Hazardous Materials Regulations (HMR; 49 CFR parts 171-
180) require that each new explosive be examined by a DOT-approved
explosives test laboratory and assigned a recommended shipping
description, division, and compatibility group in accordance with Sec.
173.56(b). This classification must be approved by PHMSA. Applications
are submitted and approvals are issued per the requirements in 49 CFR
part 107, subpart H. These explosive classification approvals are
generally known as ``EX'' approvals. A ``person,'' as defined in 49 CFR
171.8, must obtain an approval classifying each new explosive that he
or she offers or transports to, from, or within the United States. In
December 2015, PHMSA posted a document titled ``EXPLOSIVES
CLASSIFICATION (EX) APPROVALS (Company Name Changes, Mergers,
Acquisitions, and Changes in Legal Structure)'' on its website, http://www.phmsa.dot.gov. This document clarified that: (1) An EX approval is
non-transferable in any merger, acquisition, sale of assets, or other
business transaction; (2) an EX approval is non-transferrable in
bankruptcy proceedings, and thus, a debtor may not use an EX approval
as an asset to sell in order to drive up the purchase price; and (3)
PHMSA may reissue the EX approvals in certain situations to reflect the
new company name, when adequate documentation is submitted. The
document also included frequently asked questions on several common
merger, acquisition, and legal-status change scenarios and provided
instructions on how companies could request a modification of an EX
approval to reflect a status change. Companies can also choose to apply
for new EX approvals instead of requesting to go through the company
name-change process.
The specific scenarios and documentation requirements included in
the document led to questions and concerns from the regulated
community. Therefore, we are clarifying the description of the program
procedures and documentation required for PHMSA to reissue EX
approvals. Specifically, we have revised the guidance to remove the
requirement that the applicant declare that the information that it is
providing for the certification is correct, under penalty of perjury,
after certain members of the regulated community had concerns about
swearing under penalty of perjury that documents they did not
personally draw up were complete and correct. PHMSA acknowledges those
concerns, and believes that the modification of the certification
letter contents will alleviate these concerns. The guidance also
clarifies that companies which request a modification at least 30 days
prior to the merger, acquisition, or legal-status change can continue
to use their existing approvals until PHMSA takes final administrative
action on the application for modification. PHMSA is seeking comments
on:
1. The contents of the certification letter;
2. the description of the timeline for applying and processing a
name change; and
3. information requested for additional facilities.
II. Clarification of Requirements To Reissue Approvals
Companies always have the option to apply for a new EX approval in
anticipation of a merger, acquisition, or other change in corporate
structure or form. Alternatively, PHMSA may reissue existing EX
approvals when adequate documentation is provided for the types of
corporate changes described in this guidance. Provided a request to
reissue an EX approval is made at least 30 days prior to the
anticipated corporate change, the new entity may continue to use the
existing EX approval until PHMSA reaches a final decision on the
request. Title 49 CFR part 107, subpart H and Sec. 173.56(b) set out
the requirements for applying for an EX approval. Table 1, below,
explains what is meant by various types of requested documents. Table
2, which follows, explains which of these documents are requested for
an EX approval to be reissued in different scenarios.
Table 1--Types of Documentation
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Certification Letter.................... When applicable, the company
requesting the reissued
approval will submit a
certification letter that:
A. Is signed by a director
or officer of the company
requesting the reissued
approval;
B. states that the company
is not producing a new
explosive and that there
has been no change in the
formulation, design, or
process so as to alter any
of the properties of the
explosive; and
C. states that the
requesting company
understands that failure
to provide accurate and
complete information could
result in the
modification, suspension,
or termination of the
approval.
Approvals List.......................... A list of EX approval numbers
and product descriptions, and
a copy of each EX approval
that the company is
requesting that PHMSA
reissue.
Lab Report.............................. Copies of any laboratory
reports or technical drawings
in the company's possession
relating to the requested EX
approvals.
Proof of Change......................... Legal documentation of the
applicable change (e.g.,
certification of merger,
sales agreement, etc.).
Relinquishment Letter................... When applicable, the company
that initially held the
approval should provide a
letter that:
A. Is signed by a director
or officer of the company
holding the initial
approval; and
B. states that the company
holding the initial
approval voluntarily
relinquishes all the
rights to the EX approval
numbers listed in the
document and that they
will no longer manufacture
the explosives approved
under those respective EX
approvals.
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Table 2--Requested Documentation To Reissue Approvals in Different Scenarios
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Scenario Documents requested to reissue EX approval
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Cert. EX Lab Proof Relinquishment
letter............ number list...... reports.......... of change........ letter
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Merger......................... Hazmat Companies Yes............... Yes.............. Yes.............. Yes (merger No.
A, B, C, and D certification).
are merging to
create new
company X, which
is legally
distinct from its
predecessors.
Company X wants
to perform
activities that
require an EX
approval.
[[Page 53824]]
Total Purchase................. Company A buys Yes............... Yes.............. Yes.............. Yes (sales No.
100% of Company agreement).
B. Both companies
hold EX
approvals.
Company B will
now operate under
Company A's name.
Company A wants
to use Company
B's EX approvals.
Partial Purchase (Assets)...... Company A buys Yes............... Yes.............. Yes.............. Yes (sales Yes.
less than 100% of agreement).
Company B's
assets. Company A
wants to use
Company B's EX
approvals.
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Subsidiary (Separate Legal X Corporation has N/A. Reissuing of EX numbers is not permitted. Each of the four companies (one parent and three
Entities). three subsidiaries) needs EX approvals for covered activities. Each of these entities is a separate
subsidiaries that ``person'' based on the definition PHMSA uses. The term ``person'' refers to each separate legal
are distinct entity, such as a corporation, partnership, association, or LLC, or LP. This means that a
legal entities: separately incorporated subsidiary (or LLC or LP) must apply for their own approval if it engages
X LLC,... in activities that require an EX approval, even when a parent company already holds an EX
X Inc., approval.
and.
X LP.....
X Corporation
wants to use X
Inc.'s EX
approvals..
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New Additional, U.S. Facility.. Company X adds a N/A. No change needed.
new U.S.
facility. The
principal place
of business and
manufacturing
process do not
change.
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New Primary, U.S. Facility..... Company X changes No................ Yes.............. Yes.............. No............... No.
``principal place
of business'' to
new U.S.
facility, and
therefore must
submit an
application to
amend its EX
approval.
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Additional Facility Abroad..... Company X N/A. All manufacturing locations outside of the U.S. are required to apply for their own EX
purchases an approvals.
additional
manufacturing
plant location
outside of the
United States.
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New Name, Same Legal Structure. Company X changes No................ Yes.............. Yes.............. No............... No.
its name to
``Company Y,''
but does not
change the legal
structure or
ownership of the
company.
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New Name, New Legal Structure.. Company X, LLC Yes............... Yes.............. Yes.............. No............... No.
changes its name
to ``Company X,
Inc.'' indicating
a change in legal
structure.
Company X., Inc.
wants to use
Company X, LLC's
approval.
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Bankruptcy..................... Debtor holds an EX N/A. EX approvals are non-transferrable and cannot be treated as assets in the event of a
approval with bankruptcy.
PHMSA and goes
into bankruptcy.
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Signed in Washington, DC, on October 2, 2019.
William S. Schoonover,
Associate Administrator for Hazardous Materials Safety, Pipeline and
Hazardous Materials Safety Administration.
[FR Doc. 2019-21964 Filed 10-7-19; 8:45 am]
BILLING CODE 4909-60-P