# Hazardous Materials: Revision to Fireworks Regulations (RRR)

- **operation:** document
- **citation:** 78 FR 42457
- **title:** Hazardous Materials: Revision to Fireworks Regulations (RRR)
- **source type:** rulemaking
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2013-07-16
- **effective on:** 2013-08-15
- **summary:** PHMSA is revising the Hazardous Materials Regulations applicable to the approval of Division 1.4G consumer fireworks (UN0336 Fireworks) and establishing DOT-approved fireworks certification agencies that provide an alternative to the approval process for Division 1.4G consumer fireworks. PHMSA is also reformatting the procedural regulations pertaining to certification agencies. These actions clarify regulations with respect to PHMSA's fireworks approval process and provide regulatory flexibility in seeking authorization for the transportation of Division 1.4G consumer fireworks.
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- **source url:** https://www.federalregister.gov/documents/2013/07/16/2013-16986/hazardous-materials-revision-to-fireworks-regulations-rrr
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Federal Register, Volume 78 Issue 136 (Tuesday, July 16, 2013) [Federal Register Volume 78, Number 136 (Tuesday, July 16, 2013)] [Rules and Regulations] [Pages 42457-42478] From the Federal Register Online via the Government Publishing Office [ www.gpo.gov ] [FR Doc No: 2013-16986] [[Page 42457]] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Pipeline and Hazardous Materials Safety Administration 49 CFR Parts 107, 171, 172, and 173 [Docket No. PHMSA-2010-0320 (HM-257)] RIN 2137-AE70 Hazardous Materials: Revision to Fireworks Regulations (RRR) AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: PHMSA is revising the Hazardous Materials Regulations applicable to the approval of Division 1.4G consumer fireworks (UN0336 Fireworks) and establishing DOT-approved fireworks certification agencies that provide an alternative to the approval process for Division 1.4G consumer fireworks. PHMSA is also reformatting the procedural regulations pertaining to certification agencies. These actions clarify regulations with respect to PHMSA's fireworks approval process and provide regulatory flexibility in seeking authorization for the transportation of Division 1.4G consumer fireworks. DATES: Effective date: August 15, 2013. FOR FURTHER INFORMATION CONTACT: Lisa O'Donnell or Rob Benedict, Standards and Rulemaking Division, Office Hazardous Materials Safety, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation, 1200 New Jersey Avenue SE., Washington, DC 20590, at (202) 366-8553. SUPPLEMENTARY INFORMATION: Table of Contents I. Background A. Notice of Proposed Rulemaking B. Comments on the NPRM C. Comments Beyond-the-Scope D. Comments Opposed to the FCA Process II. Amendments Adopted in Final Rule III. Section-by Section Review IV. Regulatory Analyses and Notices A. Statutory/Legal Authority for This Rulemaking B. Executive Order 12866, 13563, and DOT Regulatory Policies and Procedures C. Executive Order 13132 D. Executive Order 13175 E. Regulatory Flexibility Act, Executive Order 13272, and DOT Procedures and Policies F. Paperwork Reduction Act G. Regulatory Identifier Number (RIN) H. Unfunded Mandates Reform Act I. Environmental Assessment J. Privacy Act K. International Trade Analysis L. National Technology Transfer and Advancement Act I. Background The pyrotechnic industry is a global logistics supply chain comprised of mostly foreign fireworks manufacturers and domestic importers, retailers, distributors, and consumers. The current Hazardous Materials Regulations (HMR; 49 CFR parts 171-180) require that prior to being transported in the U.S., all explosives, including Division 1.4G consumer fireworks, are classed, approved, and issued a DOT classification approval number (EX number) by PHMSA. The EX number is a unique identifier that indicates a firework device has been classed and approved for transportation into, out of, and throughout the United States. PHMSA is committed to sustaining the exemplary transportation safety record that Division 1.4G consumer fireworks have had over the past forty years, but seeks to reduce regulatory burden and increase flexibility by providing an alternative to PHMSA's current approval process. PHMSA has conducted an extensive review of the fireworks approval program and has determined that there is an unnecessary delay in the processing of EX approval applications under the current process. In the notice of proposed rulemaking (NPRM) published in the Federal Register on August 30, 2012 [77 FR 52636] under Docket No. PHMSA 2010-0320 (HM-257), PHMSA proposed an alternative to the approval process for Division 1.4G consumer fireworks, allowing manufacturers, or designated U.S. agents, to submit applications for certification to a DOT-approved Fireworks Certification Agency (FCA), in lieu of submitting applications for approval directly to PHMSA. To ensure appropriate oversight of FCAs, the NPRM included reporting and recordkeeping requirements necessary to become a DOT-approved FCA. Additionally, PHMSA proposed to define the term ``consumer firework'' and revise the necessary requirements needed for approval as a certification agency by clearly describing each type of DOT-approved certification agency, and to add requirements for an FCA. In this final rule, PHMSA has modified the proposed requirements in response to recommendations from commenters. Specifically, the approval process to become an FCA is described in detail, the identification sequence of FCA-certified devices is streamlined, and the FCA firework device review process is simplified to be more consistent with the current PHMSA process. This final rule affects the following entities and establishes the following requirements: ------------------------------------------------------------------------ Affected entities Revisions ------------------------------------------------------------------------ Division 1.4G consumer Provide alternative fireworks manufacturers complying with process to legally transport part 173. Division 1.4G consumer Division 1.4G consumer fireworks. fireworks importers complying with Require retention of a part 173. record by certifying agencies, Division 1.4G consumer manufacturers and importers fireworks transporters complying with indicating a Division 1.4G part 173. consumer firework has been Fireworks Certification certified in a manner Agencies. consistent with the Lighter Testing Agencies...... requirements. UN Package Testing Agencies... Portable tank and Multiple- Provide approval Element Gas Container (MEGC) process for a fireworks Certification Agencies. certification agency. State and local fire and Clarify approval police departments that utilize process for a certification Division 1.4G consumer fireworks agency for lighter testing classification approvals under the HMR. agency, UN third-party certification agency (packaging), or Portable tank and MEGC certification agency. ------------------------------------------------------------------------ As PHMSA is not requiring fireworks manufacturers to use an FCA, and to do so is completely voluntary, PHMSA is not imposing any additional costs. We estimate an FCA certification fee of between $100 and $450.\1\ A firework manufacturer will not pay this fee [[Page 42458]] unless it believes it is net beneficial to do so. Since the option should speed up the classification process, it could reduce some of the uncertainty as to when a manufacturer can process an importer's order for a firework device, and other supply chain issues. Manufacturers likely to use an FCA will be ones seeking certification relatively closer to peak sales periods (primarily before the 4th of July). If manufacturers plan accordingly and wait for PHMSA to issue an approval, they won't pay the FCA fee. The benefits for manufacturers using the FCA certification process to expedite shipments are difficult to quantify. However, we know that any rational manufacturer will not avail itself to this option unless it makes business sense. --------------------------------------------------------------------------- \1\ The lowest estimate quoted in two comments to the NPRM is $100 and the highest estimate is $450; these estimates were based upon the inclusion of physical examination of a firework device requirement proposed in the NPRM, but not included in the final rule. PHMSA believes these figures still accurately reflect the possible range due to the complexity of firework designs. --------------------------------------------------------------------------- Certain administrative fees arising from this rulemaking that are assessed on consumer fireworks manufacturers will primarily be due to a DOT-approved FCA coming into existence and to a company's expansion of services to act as an FCA. These costs may include expenses for office supplies, other non-capital equipment, and additional direct and indirect labor costs. PHMSA assumes that a DOT-approved FCA will market to fireworks manufacturers and their U.S.-registered agents its ability to certify such fireworks as an advantage over applying for PHMSA approval because of expected faster certification by an FCA. However, PHMSA believes that, because the FCA will likely assess an explicit cost for its certification services, fireworks manufacturers will individually consider their businesses' potential to benefit from expedited processing against the expected costs of this certification fee. Comments to the NPRM indicated that most manufacturers are of the opinion that the expedited processing of fireworks certifications outweighs the expected costs of the certification fees and that the alternative certification process will not compromise the current level of transportation safety of Division 1.4G consumer fireworks. A. Notice of Proposed Rulemaking PHMSA issued an NPRM on August 30, 2012 [77 FR 52636] under Docket No. PHMSA 2010-0320 (HM-257), which proposed to revise Title 49 of the Code of Federal Regulations (CFR) applicable to the approval of Division 1.4G consumer fireworks (UN0336 fireworks) and establish a process for allowing a DOT-approved FCA to certify UN0336 fireworks as an alternative to the current PHMSA approval process. PHMSA also proposed to provide clarity by reformatting the procedural regulations pertaining to certification agencies. Prior to the transportation into, out of, and throughout the United States, all explosives, including Division 1.4G consumer fireworks, must be classed, approved, and issued an EX number by PHMSA. The EX number is a unique identifier that indicates a specific firework device has been classed and approved for transportation. In the NPRM, PHMSA proposed a new alternative to permit manufacturers, or their U.S agents, to apply to an FCA to review and certify that Division 1.4G consumer fireworks comply with APA Standard 87-1 and are safe for transportation in commerce. To provide oversight of the FCAs, PHMSA proposed reporting and recordkeeping requirements. PHMSA also proposed to revise subpart E of part 107 to clarify the approval process for designation as a certification agency. We also proposed to require the FCAs to physically examine a sample of the Division 1.4G consumer firework prior to initial shipment to determine whether the device meets the requirements of APA Standard 87-1 and matches the dimensions, chemical composition, and device type specified in the application for certification. To become an FCA, in the NPRM we proposed that the applicant would be required to submit an application with all procedures it will use to review and certify Division 1.4G consumer fireworks, in accordance with the provisions in subpart E of part 107. These procedures were to be designed by the applicant; however, PHMSA was to review the applicant's procedures to determine whether they are adequate to certify compliance with APA Standard 87-1 and whether the FCA certification process provides an equivalent level of oversight as the current approval process. PHMSA stated in the NPRM that any domestic or foreign entity may apply to become an FCA provided that it is not directly or indirectly controlled by, or have a direct financial interest in, any entity that manufactures, transports, or imports fireworks, except for collection of fees for services as an FCA. We proposed that to qualify as an FCA, each applicant must: (1) Meet specific criteria designed to ensure that the FCA is an impartial, independent, unbiased, and qualified entity; (2) submit an application, including certification procedures; and (3) successfully complete a facility inspection performed by PHMSA. We indicated that to meet the specific qualification criteria, the applicant will be required to demonstrate knowledge of the applicable regulations, including subpart C of part 173 of the HMR and the APA Standard 87-1, and the ability to review and evaluate design drawings and applications in accordance with the APA Standard 87-1. If approved, PHMSA proposed to issue an approval and an identifying number unique to that FCA. To differentiate between an approval issued by PHMSA and a certification issued by a DOT-approved FCA, PHMSA proposed to use an FX numbering scheme. Instead of issuing an EX number and approval through PHMSA for a fireworks device, which is the approval designation the Associate Administrator of PHMSA issues to all explosives, including fireworks, we proposed that the DOT-approved FCA would issue a unique identifier (FX number) for devices it certifies as Division 1.4G consumer fireworks. Given the long history and wide recognition of the EX numbering scheme, PHMSA sought specific comments on the supply chain implications, the economic impact and safety concerns associated with the proposed FX numbering system, as well as comments on how to implement the changes if they were adopted. We requested specific comments on the underlying estimates of the analysis, including the percentage of entities that will choose to have their 1.4G consumer fireworks certified by FCAs instead of being approved by PHMSA, the manner in which records will be kept (i.e., electronic or paper), the estimated cost of the recordkeeping requirements, the number of affected entities (e.g., manufacturers and importers), and the estimated fee an FCA would charge for certification. Based on the August 30, 2012, NPRM, and comments received, this final rule adopts an alternative option for Division 1.4G consumer fireworks in which manufacturers, or designated U.S. agents, may submit applications for certification to an FCA, in lieu of submitting applications for approval to PHMSA. The specific differences between the proposals in the NPRM and the amendments adopted in the final rule are discussed further below. B. Comments on the NPRM The comment period on the NPRM closed on October 29, 2012. PHMSA received comments from various industry associations, fireworks manufacturers, distributers, importers, and transporters. The majority of the comments were positive, citing that the proposed alternative would sustain the current level of safety while allowing [[Page 42459]] faster time to market for new consumer fireworks. Included with the positive responses, were suggestions on ways to refine or clarify the proposed changes. A number of the comments were beyond-the-scope of the rule as they suggested changes that were not addressed in the NPRM. Three commenters opposed all of the changes proposed in the NPRM; their comments are discussed in detail below. Overall comments were received from 37 entities; many of whom provided comments on a number of subjects. Thirty-three entities provided positive comments. Within the 33 who were in favor of the proposal, nine also provided comments that were beyond-the-scope of this rule. Three commenters provided comments in opposition to the proposal, with one providing an additional comment that was beyond-the-scope of this rule. In addition, these comments addressed issues or asked questions that have been addressed in this final rule. PHMSA has summarized comments to specific sections in the ``Section-by-Section Review'' discussion of this rulemaking. You may review comments in the docket for this action at http://www.regulations.gov under docket number PHMSA-2010-0320. For your convenience, a listing of the docket entries is provided below. ------------------------------------------------------------------------ Commenter Docket ID No. ------------------------------------------------------------------------ American Fireworks Standards PHMSA-2010-0320-0016 Laboratory (AFSL). American Pyrotechnics Association PHMSA-2010-0320-0017 (APA). BJ Alan Company.................. PHMSA-2010-0320-0026 Elkton Sparkler Company.......... PHMSA-2010-0320-0005 Fireworks Over America........... PHMSA-2010-0320-0010 Fireworks Pyrotechnique by PHMSA-2010-0320-0021 Grucci, Inc.. Forward Fireworks Co. Ltd........ PHMSA-2010-0320-0036 Hamburg Fireworks Display, Inc... PHMSA-2010-0320-0008 International Technical and PHMSA-2010-0320-0003 Quality Services Limited. Jake's Fireworks, Inc............ PHMSA-2010-0320-0023 Kellner's Fireworks Inc.......... PHMSA-2010-0320-0037 Keystone Novelties Distributors, PHMSA-2010-0320-0018 LLC. Legend Fireworks................. PHMSA-2010-0320-0012 Legion Fireworks Co., Inc........ PHMSA-2010-0320-0024 Liberty Fireworks, Inc........... PHMSA-2010-0320-0022 Melrose Pyrotechnics, Inc........ PHMSA-2010-0320-0004 National Fireworks Association PHMSA-2010-0320-0039 (NFA). Next FX and Stage FX............. PHMSA-2010-0320-0014 North Central Industries, Inc.... PHMSA-2010-0320-0007 Precocious Pyrotechnics, Inc..... PHMSA-2010-0320-0028 S. Vitale Pyrotechnic Industries. PHMSA-2010-0320-0009 Sparks Fly....................... PHMSA-2010-0320-0027 Steve Anthony Coman.............. PHMSA-2010-0320-0033 Stonebraker Rocky Mountain PHMSA-2010-0320-0035 Fireworks Co.. The Alliance of Special Effects PHMSA-2010-0320-0030 Pyrotechnic Operators, Inc.. The International Fireworks PHMSA-2010-0320-0013 Shippers Association (IFSA). Thunder Fireworks, Inc........... PHMSA-2010-0320-0032 THY Associated, Inc.............. PHMSA-2010-0320-0031 TNT Fireworks.................... PHMSA-2010-0320-0019 Tian Cheng Pyrotechnics PHMSA-2010-0320-0038 Laboratory. Veolia ES Technical Solutions, PHMSA-2010-0320-0034 LLC. Wald & Co. Charles Edward Wald... PHMSA-2010-0320-0025 Warpath Tribal Corp.............. PHMSA-2010-0320-0006 Weeth Associates. LLC............ PHMSA-2010-0320-0020 Western Enterprises, Inc......... PHMSA-2010-0320-0029 Win Da Hong (HK) Co., Ltd........ PHMSA-2010-0320-0011 Winco Fireworks International, PHMSA-2010-0320-0015 LLC. ------------------------------------------------------------------------ C. Comments Beyond-the-Scope Allow FCAs To Certify Division 1.3G Fireworks Four commenters--APA, AFSL, Fireworks By Grucci, Inc., and Melrose Pyrotechnics--suggested that Division 1.3G fireworks be included in Sec. 173.65. Specifically, commenters claimed that Division 1.3G fireworks, like 1.4G consumer fireworks, possess an exemplary safe transportation record and are widely used in the United States. Commenters suggested the expansion of the original proposal in the NPRM to include Division 1.3G fireworks would increase the economic benefits of the original proposal. Specifically, expanding the proposal to include Division 1.3G fireworks would increase the amount of expedited shipments, would provide a cost savings to the industry, and would provide flexibility and innovation for U.S.-based companies. Finally, AFSL noted that an independent review and certification of Division 1.3G fireworks is already being done on a voluntary basis. This Display Fireworks Inspection program includes a factory audit program, product and packaging inspection, as well as container loading supervision requirements.\2\ --------------------------------------------------------------------------- \2\ http://www.afsl.org/sites/default/files/AFSL-DISPLAY%20FIREWORKS%20STANDARDS%20FINAL%2004102012.pdf (Accessed 02/ 21/2013). --------------------------------------------------------------------------- Division 1.3 fireworks pose a greater hazard than Division 1.4 fireworks by definition.\3\ In the NPRM, we proposed the FCA alternative for only the lowest hazard fireworks; i.e., Division 1.4G consumer fireworks. PHMSA noted in the NPRM that over the past forty years, there have been 35 reported transportation incidents in the United States involving fireworks that were [[Page 42460]] declared hazardous materials. During this same period, there has never been a death or major injury attributed to fireworks while in transportation when there was compliance with the regulations. While there have been two incidents that resulted in fatalities in that forty year period, both involved the improper setup or storage of display fireworks, and were not attributed to the transportation of Division 1.4G consumer fireworks. Furthermore, the majority of PHMSA fireworks approvals (approximately 75 percent) are for Division 1.4G consumer fireworks devices. Limiting the FCA program to Division 1.4G consumer fireworks proved to be the safest and most effective manner to provide regulatory flexibility while maintaining safety. --------------------------------------------------------------------------- \3\ See 49 CFR 173.50 Class 1--Definitions. --------------------------------------------------------------------------- As the NPRM proposed the FCA alternative for the lowest hazard fireworks only, Division 1.4G consumer fireworks, expanding the proposal in the NPRM to include Division 1.3G fireworks, is considered beyond the scope of this rulemaking. While PHMSA agrees the economic benefits of the original proposal in the NPRM may be increased by allowing other fireworks to be certified by FCAs, a more extensive safety and policy analysis would need to be completed before we expand the applicability beyond that proposed in the NPRM. We will continue to evaluate our fireworks approvals program and monitor the FCA certification process to ensure it provides an equivalent level of oversight as the current approvals process. Further, we will monitor the Consumer Product Safety Commission's (CPSC) compliance efforts and evaluate the appropriateness of a similar program. We may consider authorizing FCAs to certify Division 1.3G fireworks in the future. However, in this final rule, only Division 1.4G consumer fireworks will be authorized to be certified by an FCA. Incorporate by Reference Revised APA Standard 87-1 Eight commenters \4\ asked that we incorporate by reference a revised version of the American Pyrotechnics Association (APA) Standard 87-1, Standard for Construction and Approval for Transportation of Fireworks, Novelties, and Theatrical Pyrotechnics (2001). Most of the commenters echoed the comments submitted by APA, which indicated: --------------------------------------------------------------------------- \4\ APA, AFSL, Fireworks by Grucci, Inc., Fireworks Over America, Next FX and Stage FX, Precocious Pyrotechnics Inc., The Alliance of Special Effects & Pyrotechnic Operators, and Win Da Hong (HK) Co. Ltd. The currently-adopted version of APA Standard 87-1 was published in 2001, and went through a lengthy preparation process within the APA that was then followed by a lengthy review by DOT prior to its adoption into Title 49. It is, however, a fifteen year old document that outlines the basic construction and approval requirements for fireworks, novelties, and theatrical pyrotechnics. There have been many advances in the consumer fireworks industry during those 15 years, and even in the decade since it was formally adopted. In particular, a variety of new devices have been developed, including combination devices and girandole, and new technologies have come into the industry. More and more devices, for example, now contain multiple tubes, and represent combinations of effects that --------------------------------------------------------------------------- previously were limited to single tubes of separate items. Further, the National Fireworks Association (NFA) suggests that we make various changes to the application form in APA Standard 87-1. PHMSA understands that APA is working on a revision of the APA Standard 87-1 currently incorporated by reference in the HMR. However, until this updated version is finalized and published, PHMSA cannot adopt the revised APA Standard 87-1. As with any standard incorporated by reference in Sec. 171.7, PHMSA periodically reviews and updates authorized industry consensus standards following a complete review and analysis of the safety and cost implications of that standard. When it is finalized and published by APA, and PHMSA determines that it is appropriate to incorporate that version of the standard, we will do so through the rulemaking process, providing opportunity for public comment. Until that time, we will continue to incorporate by reference the 2001 edition of the APA Standard 87-1, which continues to be used successfully and safely by PHMSA and the regulated community. Provide Regulatory Relief for Transportation of Consumer Fireworks Shipped for Disposal Veolia ES Technical Solutions, LLC requested PHMSA adopt certain regulatory relief for the transportation of consumer fireworks being shipped for disposal. They state: Consumer fireworks are routinely confiscated by local enforcement officials throughout the country and then packaged in UN specification drums awaiting disposal. Typically water is added to the drums to thoroughly wet the devices and eliminate any potential for ignition of the devices. These containers are then offered for shipment off-site to a disposal facility for destruction. Although this is proven safe practice for managing the consumer fireworks, it creates many issues for environmental management companies like Veolia when attempting to comply with the requirements of the HMR when shipping to a disposal facility. We agree with Veolia that the transportation of consumer fireworks for disposal is an issue that must be considered. PHMSA is actively working with other Federal agencies to evaluate current fireworks disposal practices and consider changes to enhance the safe disposal of firework devices and debris. This joint effort may lead to future regulatory action. However, as the NPRM under this docket did not propose any requirements for waste consumer fireworks, this comment is considered beyond-the-scope of this rulemaking. D. Comments Opposed to the FCA Process Although the comments to the NPRM were predominantly positive, three commenters, Kellner's Fireworks, Inc., the International Fireworks Shippers Association (IFSA), and NFA, opposed the idea of establishing an alternative to the approval process for Division 1.4G consumer fireworks outright. The rationale of each of these commenters' opposition and PHMSA's response is detailed below. However, much of this opposition was predicated on the assumption that PHMSA would require FCAs to physically examine a firework device, which we are not requiring in this final rule. FCAs Will Not Streamline Review Process Kellner's Fireworks, Inc., IFSA, and NFA disagree that the alternative option for manufacturers or their designed U.S. agents to apply for certification from an FCA would expedite the process. Kellner's Fireworks Inc., believes that FCAs would take the same time to review applications as it takes PHMSA. They state: All of the EX number applications submitted will still need to be completely reviewed by either an FCA or PHMSA and therefore will not necessarily reduce the amount of time it takes to obtain an approval. If every company were to use the same few FCA's the same number of applications currently being reviewed will still only be reviewed by a few people and the FCA's will get bogged down with paperwork just as PHMSA has in the past. PHMSA agrees with the portion of the above statement that volume of applications submitted should remain relatively constant with the introduction of FCA certification. However, PHMSA does not agree that the introduction of FCAs will have no positive effect on the overall speed of review of a Division 1.4G consumer firework application. [[Page 42461]] PHMSA notes that with the introduction of FCAs, the number of reviewers of Division 1.4G consumer fireworks will increase and consequently divide the workload between FCAs and PHMSA. This division of workload will increase the capacity for applications of Division 1.4G consumer fireworks to be reviewed simultaneously and, therefore, decrease the backlog of fireworks applications awaiting review. Both Kellner's Fireworks, Inc., and NFA assert that the proposals contained in the NPRM do not streamline the process for obtaining a certification for transportation of Division 1.4G consumer fireworks, and in fact the changes add steps to the process. PHMSA agrees that the requirement to physically examine a sample device of Division 1.4G consumer fireworks, as proposed in the NPRM, does add a layer of complexity not present under the current PHMSA review process. Accordingly, PHMSA has removed the requirement that FCAs physically examine a firework device in this final rule. With this modification, the FCA and PHMSA application review process parallel one another. PHMSA is confident that eliminating the requirement that FCAs physically examine a firework device resolves many of the issues both Kellner and NFA presented. Proposal Adds Financial Burden Furthermore, Kellner's Fireworks, Inc. and NFA's opposition to the NPRM is also rooted in their belief that the proposals in the NPRM will add a financial burden and that the NPRM is not in the spirit of Executive Order 13610. A full discussion of Executive Order 13610 is provided later in this document; however, the results of an economic analysis of both the NPRM and final rule demonstrate that establishing and implementing the FCA option to review and certify Division 1.4G consumer firework will be cost beneficial (see ``Executive Order 13610, Executive Order 13563, Executive Order 12866, and DOT Regulatory Policies and Procedures'' section of this document and economic analysis in the rulemaking docket). In addition, although an FCA will charge a fee for its services, the use of an FCA is optional (not a required cost), and manufacturers will use the FCA option if it is net beneficial to do so; if it is not, they will use the PHMSA approval option. Difficulty in Oversight In addition to the comments shared with Kellner, NFA believes that since the vast majority of fireworks are produced in China, FCAs would be established in foreign countries. NFA notes that the location of these FCAs could provide PHMSA with challenges in oversight, specifically noting that monitoring for compliance would be difficult. PHMSA understands that FCAs may be established outside of the United States and does not see this as an impediment to successfully overseeing and monitoring FCAs. With the requirements adopted in this final rule an FCA will, in accordance with its approval, transmit FCA certifications to PHMSA on a regular basis. PHMSA will have the ability to review this documentation to ensure accuracy and consistency. If the periodic review of the documentation reveals non-compliance, or an FCA does not abide by the terms and conditions of its approval, PHMSA may conduct enforcement investigations, impose penalties for violations and, if appropriate, suspend or terminate the FCA's approval to certify fireworks. Furthermore, cylinders, like fireworks, are manufactured outside of the United States and PHMSA successfully monitors the compliance of these foreign entities. Applications Denials and Rejections NFA states that in the NPRM, applications, denials, and rejections were not addressed. Specifically, NFA notes the NPRM does not address how an FCA would handle applications that are initially or repeatedly denied. While the NPRM did address reconsideration of an FCA's approval request, the NPRM did not explicitly address reconsideration of a manufacturer's, or a foreign manufacturer's designated U.S. agent's, certification application request to an FCA, if that request is denied. In the NPRM, PHMSA proposed that to become a DOT-approved FCA, the applicant will be required to submit an application with all procedures it will use to review and certify Division 1.4G consumer fireworks, in accordance with the provisions in subpart E of part 107. Although not explicitly stated, it is expected these procedures would include an FCA's proposed manner of handling denials and rejections of a manufacturer's, or a designated U.S. agent's, certification application request. Further, as the FCA certification process is designed to parallel the current approval process, PHMSA anticipates that denial and reconsideration procedures would be analogous to those provided for DOT-issued approvals specified in Sec. 107.715. Further, as part of its certification requirements, in addition to notifying the manufacturer of the reasons a firework device has been denied certification, an FCA must, as a condition of the FCA approval, report its denial of a specific firework device to PHMSA. If a manufacturer resubmits a certification request for the same device to an FCA, and the device is ultimately certified as compliant, the FCA will also submit this information to PHMSA. With respect to applications with formatting or minor editorial errors, PHMSA believes that each FCA would develop a method to expeditiously handle these errors without the need to reject an application. Implementation Time Finally, NFA states their belief that ``[e]stablishing a body of FCAs could take years to implement, fine tune, and regulate in an industry that needs relief immediately.'' While the time it will take to realize the full impact of the changes adopted in this final rule is difficult to determine, PHMSA believes the establishment of FCAs will be a long-term, sustainable, and safe solution. Further, PHMSA believes the impact of this alternative process will be realized faster than the time NFA asserts. As with any new regulation, implementing a change takes time, but to lessen the implementation time, PHMSA is updating the current guidance available \5\ regarding the approval/certification process and the transportation of fireworks, to include information on the alternative FCA certification process. --------------------------------------------------------------------------- \5\ http://phmsa.dot.gov/hazmat/regs/sp-a/approvals/fireworks (Accessed 02/21/2013). --------------------------------------------------------------------------- Alternative Solution IFSA voiced its opposition to the proposals in the NPRM and provided an alternative option to the proposals in the NPRM. Specifically, IFSA states ``[t]here is no need for additional FCA's to provide approvals. If PHMSA would modify their current approval process, then all of PHMSA cost, performance, and safety goals can be met.'' IFSA suggests that PHMSA change the current approval document to a checklist format with a certification signature. This checklist would consist of simple ``Yes'' or ``No'' validations to indicate that the device meets all of the requirements of APA Standard 87-1. This checklist application, it maintains, will eliminate the current typical issues of math and spelling errors, which cause the vast majority of PHMSA rejections. IFSA proposes that if PHMSA were to accept this proposed checklist approval document, a cost savings of $26 million [[Page 42462]] per year could be realized by the fireworks industry. As mentioned above, PHMSA has conducted an intensive retrospective review of the fireworks approval program and, prior to drafting this rulemaking, PHMSA evaluated multiple options to improve the fireworks approval program including options similar to that proposed by IFSA. PHMSA appreciates IFSA's suggestion; however, based on our review, the changes in this final rule will result in the most desirable long-term, sustainable, and safe solution. PHMSA has not verified the IFSA figure of $26 million per year savings for the firework industry, but questions whether the proposed checklist alone would have such a large impact. In addition, we do not believe that a checklist, with yes or no questions provides adequate oversight to the Division 1.4G consumer fireworks classification process. PHMSA believes that each fireworks manufacturer will individually consider its businesses' potential to benefit from expedited processing against the expected costs of this certification fee. Comments to the NPRM indicate that most manufacturers are of the opinion that the expedited processing of fireworks certifications outweighs the expected costs of the certification fees. II. Amendments Adopted in Final Rule Based on the August 30, 2012, NPRM, and comments received, this final rule adopts an alternative option for Division 1.4G consumer fireworks in which manufacturers may submit applications for certification to an FCA, in lieu of submitting applications for approval to PHMSA. To ensure oversight of FCAs, this final rule includes reporting and recordkeeping requirements. Additionally, PHMSA defines consumer fireworks and clarifies the approval process for designation as an FCA. The differences between this final rule and the NPRM include: removing the requirement that an FCA must physically examine a firework device; clarifying the FCA certification process; reformatting the certification process for other DOT-approved agencies; removing the requirement that an FCA must be inspected by PHMSA prior to approval; adding preamble discussion regarding the information that will be contained in the FCA approval documentation issued by PHMSA; revising the alpha-numeric scheme for fireworks certified by FCAs; and clarifying the content of the approval issued by PHMSA for designation as an FCA. The following is a summary of the amendments PHMSA is adopting in the final rule. Section 107.401 is amended to include Division 1.4G consumer fireworks. Section 107.402 paragraphs (a) and (b) are amended to clarify the application process for designation as a certification agency. Section 107.402 paragraph (c) is amended to specify the application procedure to become a third-party packaging certification agency. Section 107.402 paragraph (d) is added to specify the application procedure to become a designated fireworks certification agency and a renewal process is established for such agencies. Section 107.402 paragraph (e) is added to specify the application procedure to become a designated lighter certification agency. Section 107.402 paragraph (f) is added to specify the application procedure to become designated portable tank and MEGC certification agencies. Section 107.403 paragraph (c) is amended to clarify the procedures for reconsideration and appeal. Section 107.403 paragraph (d) is added to clarify where to find the conditions under which the Associate Administrator may modify, suspend or terminate an approval. Section 171.8 is revised to define the term ``FC number.'' The listing for Fireworks, Division 1.4G in Sec. 172.101, the Hazardous Materials Table, column (7), is amended to refer to new Special Provision 200. Special Provision 200 is added to state that Division 1.4G consumer fireworks may be certified by a DOT-approved FCA in accordance with the provisions of Sec. 173.65. Sections 172.320(b) and 172.320(d) are amended to allow for firework certification (FC) numbers issued by Firework Certification Agencies (FCAs) in lieu of EX numbers issued by PHMSA. Section 173.56(b) is amended to except new fireworks devices meeting the criteria in new Sec. Sec. 173.64 and 173.65 from the specified requirements for examining, classifying and approving new explosives. Section 173.56(b)(1) is amended to indicate EX numbers will be issued to all new explosives by the Associate Administrator, except for Division 1.4G consumer fireworks, which may be issued EX numbers by the Associate Administrator or FC numbers issued by an FCA as set forth in Sec. 173.65. A definition for ``consumer fireworks' is added in Sec. 173.59. Section 173.64 is added and the current exception, in Sec. 173.56(j), for Divisions 1.3 and 1.4 fireworks to be offered for transportation if they are manufactured in accordance with APA Standard 87-1 and pass a thermal stability test, is moved to this section. Section 173.65 is added to provide a new exception for Division 1.4 G consumer fireworks manufacturers, or designated U.S. agents on behalf of a foreign manufacturer
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