# Hazardous Materials: Special Permit and Approvals Standard Operating Procedures and Evaluation Process

- **operation:** document
- **citation:** 79 FR 47047
- **title:** Hazardous Materials: Special Permit and Approvals Standard Operating Procedures and Evaluation Process
- **source type:** rulemaking
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** proposed
- **official:** true
- **published on:** 2014-08-12
- **effective on:** Not available
- **summary:** PHMSA is proposing to address certain matters identified in the Hazardous Materials Transportation Safety Act of 2012 related to the Office of Hazardous Materials Safety's Approvals and Permits Division. Specifically, we propose to revise the regulations to include the standard operating procedures and criteria used to evaluate applications for special permits and approvals. These proposed amendments do not change previously established special permit and approval policies. This rulemaking also proposes to provide clarity regarding what conditions need to be satisfied to promote completeness of the applications submitted. An application that contains the required information reduces processing delays that result from rejection, and further facilitates the transportation of hazardous materials in commerce while maintaining an appropriate level of safety.
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- **source url:** https://www.federalregister.gov/documents/2014/08/12/2014-18925/hazardous-materials-special-permit-and-approvals-standard-operating-procedures-and-evaluation
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Federal Register, Volume 79 Issue 155 (Tuesday, August 12, 2014) [Federal Register Volume 79, Number 155 (Tuesday, August 12, 2014)] [Proposed Rules] [Pages 47047-47063] From the Federal Register Online via the Government Publishing Office [ www.gpo.gov ] [FR Doc No: 2014-18925] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Pipeline and Hazardous Materials Safety Administration 49 CFR Parts 105, 107, and 171 [Docket No. PHMSA-2012-0260 (HM-233E)] RIN 2137-AE99 Hazardous Materials: Special Permit and Approvals Standard Operating Procedures and Evaluation Process AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT. ACTION: Notice of proposed rulemaking (NPRM). ----------------------------------------------------------------------- SUMMARY: PHMSA is proposing to address certain matters identified in the Hazardous Materials Transportation Safety Act of 2012 related to the Office of Hazardous Materials Safety's Approvals and Permits Division. Specifically, we propose to revise the regulations to include the standard operating procedures and criteria used to evaluate applications for special permits and approvals. These proposed amendments do not change previously established special permit and approval policies. This rulemaking also proposes to provide clarity regarding what conditions need to be satisfied to promote completeness of the applications submitted. An application that contains the required information reduces processing delays that result from rejection, and further facilitates the transportation of hazardous materials in commerce while maintaining an appropriate level of safety. DATES: Comments must be received by October 14, 2014. To the extent possible, PHMSA will consider late-filed comments as a final rule is developed. ADDRESSES: You may submit comments by identification of the docket number (PHMSA-2012-0260 (HM-233E)) by 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 at the beginning of the comment. All comments received will be posted without change to the Federal Docket Management System (FDMS), including any personal information. Docket: For access to the dockets to read background documents or comments received, go to http://www.regulations.gov or DOT's Docket Operations Office (see ADDRESSES). FOR FURTHER INFORMATION CONTACT: Donald Burger, Office of Hazardous Materials Safety, Approvals and Permits Division, (202) 366-4535 or Eileen Edmonson, Office of Hazardous Materials Safety, Standards and Rulemaking Division, (202) 366-8553, Pipeline and Hazardous Materials Safety Administration (PHMSA), 1200 New Jersey Avenue SE., Washington, DC 20590. SUPPLEMENTARY INFORMATION: Table of Contents I. Executive Summary II. Background A. MAP-21 B. Standard Operating Procedures C. Fitness D. Public Meetings i. PHMSA's Basis for Fitness Review ii. Data Accuracy iii. Streamline the Special Permit Review Process iv. Adjudication, Resolutions, and Denials v. Develop the Fitness Program Through the Rulemaking Process vi. Modal or Hazardous Material Regulatory Agencies and Other Country Competent Authorities E. Notice No. 12-5 III. Special Permit and Approval Standard Operating Procedures A. Completeness Phase B. Federal Register Publication i. Special Permit ii. Emergency Special Permit iii. Approval C. Evaluation Phase i. Special Permit ii. Emergency Special Permit iii. Approval D. Disposition Phase i. Special Permit ii. Approval IV. Special Permit and Approval Application Evaluation Criteria V. Miscellaneous Proposals i. Clarifying the Definitions for Special Permits and Approvals ii. Clarifying That An Approval Application is Subject to the HMR When Submitted to Other Agencies VI. Summary Review of Proposed Amendments VII. 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. Regulation Identifier Number (RIN) H. Unfunded Mandates Reform Act I. Environmental Assessment J. Privacy Act K. Executive Order 13609 and International Trade Analysis VIII. List of Subjects I. Executive Summary On July 6, 2012, the President signed the Moving Ahead for Progress in the 21st Century Act (MAP-21), which includes the Hazardous Materials Transportation Safety Improvement Act of 2012 (HMTSIA) as Title III of the statute. See Public Law 112-141, 126 Stat. 405, July 6, 2012. Under Sec. 33012 of HMTSIA, Congress directed the U.S. Department of Transportation (Department or DOT) to issue a rulemaking to provide: Standard operating procedures (SOPs) to support the administration of the special permit and approval programs; and Objective criteria to support the evaluation of special permit and approval applications. In this NPRM, we are proposing to provide the public with notice and an opportunity to comment on the procedures PHMSA currently uses to support the administration of its special permits and approvals programs with the intent of eventually adding these procedures to a new Appendix A to Part 107, Subpart B of the 49 CFR. Incorporation of SOPs and objective criteria to support the evaluation of special permits and approvals accomplishes the mandate under Sec. 33012 of MAP-21. [[Page 47048]] The benefits of this NPRM include: increasing the public's understanding of the special permit and approval application and renewal process, improving the quality of information and completeness of applications submitted, and improving application processing times. This NPRM does not impose any additional costs on industry. This proposed rule would affect only agency procedures; therefore, we assume no change in current costs or benefits. II. Background A. MAP-21 To assist PHMSA with managing its special permit and approval programs, Federal hazardous materials (hazmat) transportation law (law) requires PHMSA to ``. . . issue regulations that establish--(1) standard operating procedures to support administration of the special permit and approval programs; and (2) objective criteria to support the evaluation of special permit and approval applications.'' See 49 U.S.C. 33012(a)(1) and (a)(2). PHMSA established a work group in July 2012 to examine ways to streamline the fitness review process while maintaining an acceptable level of safety, and to define and determine the adequacy of criteria that should be used to initiate fitness reviews. As a result of this workgroup's efforts, PHMSA is proposing in this NPRM to add updated SOP and evaluation criteria we currently use to process special permit and approval applications into the Hazardous Materials Regulations (HMR; 49 CFR Parts 171-180). The HMR prescribe regulations for the transportation of hazardous materials in commerce. PHMSA issues variances from the HMR in the form of a ``special permit.'' It also provides written consent to perform a function that requires prior consent under the HMR in the form of an ``approval.'' These variances are designed to accommodate innovation, provide consent, and allow alternatives that meet existing transportation safety standards and/or ensure hazardous materials transportation safety. Federal hazmat law directs the Department to determine if the actions specified in each application for a special permit establish a level of safety that meets or exceeds that already present in the HMR, or if not present in the HMR establish a level of safety that is consistent with the public's interest. PHMSA, through the HMR, applies these same conditions to the issuance of an approval. Due to the unique features that may exist in each application, PHMSA issues special permits and approvals on a case-by-case basis. The HMR currently define a special permit as ``a document issued by the Associate Administrator [for Hazardous Materials Safety, herein described as `Associate Administrator'], or other designated Department official, under the authority of 49 U.S.C. 5117 permitting a person to perform a function that is not otherwise permitted under'' the regulations ``or other regulations issued under 49 U.S.C. 5101 et seq. (e.g., Federal Motor Carrier Safety routing requirements).'' (See 49 CFR 105.5, 107.1, and 171.8.) An approval is currently defined in the HMR as ``written consent from the Associate Administrator or other designated Department official, to perform a function that requires prior consent under'' the HMR. (See Sec. 171.8.) Applicants who apply for a special permit must do so in conformance with the requirements prescribed in Sec. Sec. 107.101 to 107.127. Applicants who apply for an approval must do so in conformance with the requirements prescribed in Sec. Sec. 107.401 to 107.404, and Sec. Sec. 107.701 to 107.717. In the following section, we describe the history of PHMSA's SOPs for its special permit and approval programs and the evaluation criteria we currently use to process special permit and approval applications. B. Standard Operating Procedures In the mid-2000's, PHMSA, in conjunction with the DOT's Office of the Secretary, conducted an internal agency review of its special permit and approval program practices. This review indicated that some active special permit holders that were no longer in business had used their special permit in locations not designated in the application, changed company names and locations without informing the agency, or otherwise used their special permit in ways not authorized in the special permit. The Department determined that PHMSA's current practices for assessing the fitness of its special permit and approval holders needed improvement. During the mid and late 2000's, PHMSA experienced an increase in special permit and approval applications while it simultaneously revised its computer software for processing these applications. In 2009, PHMSA revised its procedures for processing and evaluating special permits and converted them into SOPs for its Special Permits Program. In 2011, PHMSA revised its SOPs for its Approvals Program. As a result of ongoing program evaluation, PHMSA has periodically updated these SOPs to include recommendations, refine its processes, increase uniformity, and respond to upgrades to its data management systems. Further, we discontinued the practice of allowing party status (also referred to as ``party-to'' status) to an applicable special permit to large associations, instead requiring each holder to apply separately for party status. Party status is granted to a person who intends to offer for transportation or transport a hazardous material, or perform an activity subject to the HMR, in the same manner as the original applicant. We have also issued several rulemakings to incorporate into the HMR special permits that are generally applicable and have a safe performance history. Although PHMSA has incorporated more special permits into the HMR in recent years, requiring individual persons to apply for party status on existing special permits has increased the number of special permit applications received and, thus, the time needed to process them. PHMSA receives approximately 3,000 special permit applications and approximately 20,000 approval applications annually. To avoid additional processing delays for the special permit and approvals programs, PHMSA has revised its SOPs to change how it manages incomplete applications from the practice of ``retaining them while requesting and waiting for missing information'' to ``rejecting incomplete applications.'' Applicants who would like to have their applications reconsidered must resubmit the entire application along with the requested missing information. PHMSA informs applicants in writing of the reason for the rejection and what information is missing from their applications. In the past, some individuals in receipt of rejected applications communicated to PHMSA that the materials they received did not explain how or exactly what was to be resubmitted, which led to more incomplete submissions and processing delays. PHMSA seeks comments on ways to improve the effectiveness of its communications and the completeness of applications it receives. If, according to the HMR, a special permit or approval application is complete but PHMSA requires an on-site review or additional information to make an appropriate determination, PHMSA may make this request within 30 days of its receipt of an application for a special permit, modification of a special permit, or party to a special permit, and within 15 days of PHMSA's receipt of an application for renewal of a special permit (see Sec. 107.133(a)). The applicant has 30 days from the day it [[Page 47049]] receives this request in writing to provide the information. If the applicant does not respond to a written request for additional information within 30 days of the date the request was received, PHMSA may deem the application incomplete and deny it. However, if the applicant responds in writing within the 30-day period requesting an additional 30 days within which it will gather the requested information, the Associate Administrator may grant the 30-day extension. Over the past year, PHMSA has received fewer complaints from applicants about this phase of the special permit and approval review processes. C. Fitness In 1996, PHMSA amended the HMR so that it may [emphasis added] issue a special permit and/or approval upon finding that ``the applicant is fit to conduct the activity authorized'' by the special permit and/or approval, and the special permit's or approval's renewal or modifications. See Docket No. HM-207C, 61 FR 21084. We later revised these provisions on January 5, 2011, in a final rule, entitled ``Hazardous Materials Transportation: Revisions of Special Permits Procedures,'' issued under Docket HM-233B (76 FR 454). The final rule clarified existing requirements in the special permits application procedures. It also required additional, more detailed information in each application so PHMSA could strengthen its oversight of the special permits program. Specifically, the final rule established regulations that: Authorized electronic service for all special permit and approval actions; Replaced the obsolete word ``exemption'' with ``special permit'' and removed language stating these terms were equivalent; Revised the requirements to submit an application for party-to status and to renew, modify, reconsider, and appeal a special permit; Revised the requirements to process, evaluate, modify, suspend, or terminate a special permit; and Provided applicants with an online application option to promote flexibility and reduce the paperwork burden on applicants. In addition, Sec. 107.113(f)(5) was revised in the Docket No. HM- 233B final rule to state that a fitness ``assessment may be based on information in the application, prior compliance history of the applicant, and other information available to the Associate Administrator.'' As a result of these activities, stakeholders expressed concerns regarding the fitness assessment process and requested a rulemaking with a notice and comment period to address how fitness is determined under the HMR. D. Public Meetings On February 29, 2012, PHMSA hosted a public meeting at the Department's Washington, DC, headquarters. The goals of the meeting were to ascertain the concerns of special permit and approval stakeholders, examine what conditions may be used to successfully assess an applicant's ability to operate under a special permit or approval, solicit comments on past changes, and hear ideas regarding process improvement. Eighteen stakeholders spoke at the meeting. These stakeholders expressed interest in becoming involved in PHMSA's process to resolve special permit and approval processing concerns, but were especially concerned with the special permit process. Representatives from the following companies provided comments and/or asked questions: American Chemistry Council American Coatings Association Arrowhead Industrial Services Association of Hazmat Shippers Chlorine Institute Citizens for All Transit Chemical Contamination Council on Safe Transportation of Hazardous Articles, Inc. (COSTHA) Dangerous Goods Advisory Council Gases and Welding Distributors Association Institute of Makers of Explosives Industrial Packaging Alliance of North America Labelmaster Services National Private Truck Council North American Transportation Consultants, Inc. Nuclear Information and Resource Service Praxair, Inc. Teledyne Consulting Group United Parcel Service You may review the meeting's transcript at `` http://regulations.gov '' under Docket No. PHMSA-2012-0260 (HM-233E). Key issues raised during the public meeting are summarized below. i. PHMSA's Basis for Fitness Review--Under Sec. 107.113(f)(5), the HMR authorize PHMSA to consider evidence of an applicant's fitness, i.e., the applicant's demonstrated and documented knowledge and capability to conduct the activity the special permit would authorize, when deciding whether to issue or deny an application. Most attendees at the meeting were concerned about what types of criteria would be used to determine fitness and if these criteria would fairly assess an applicant's ability to perform the tasks authorized in the special permit. Some attendees requested PHMSA spend less time assessing an applicant's fitness and more time evaluating the application for its safe (technical) merit, the assumption being that using a safe design would inherently be safe because of the user's knowledge of the tasks required in a special permit, regardless of the user's safe performance and/or incident history. PHMSA disagrees. The establishment of safe practices and procedures is an essential part of each special permit and approval. However, PHMSA and DOT's internal review and on-site inspections of how special permits were applied revealed in many instances that special permits were not being used in ways authorized in the special permit. Further, PHMSA found reliance on the requirements in the special permit alone was inadequate to determine an applicant's ability to carry out these tasks, who was performing the tasks, or where these tasks were being done. In addition, tasks and procedures requested in special permit and approval applications vary and must be considered on a case-by-case basis. As a result, PHMSA needed additional information to determine the applicant's ability to satisfactorily complete required tasks. PHMSA revised its previous system for making these determinations to include a fitness requirement in the HMR in response to the March 4, 1995 Presidential Memorandum entitled ``Regulatory Reinvention Initiative,'' which directed the federal government, in part, to partner with people and other federal agencies ``to issue sensible regulations that impose the least burden without sacrificing rational and necessary protections.'' PHMSA then developed SOPs in guidance documents, as mentioned earlier in this preamble, to further explain how PHMSA managed the fitness review process. In this NPRM, PHMSA proposes to revise its SOPs to clarify what phases in the review process are used based on the type of application submitted. Several attendees suggested that fitness assessments should be based only on a risk evaluation of number and type of incidents, reports, approvals, independent inspection agencies, and the high degree of risk of the activities requested in each special permit application. Many supported limiting the assessment criteria to those incidents involving death and serious injury, stating that this position is consistent with the original intent of PHMSA's fitness assessment [[Page 47050]] requirements. One attendee suggested different criteria should be established for large and small operators due to the differences in their exposure to events that can cause an incident, and stated the ``one-size fits all'' approach PHMSA is proposing is inappropriate and unfair. A few attendees recommended that fitness reviews be based on the ability of the applicant to perform the functions requested in the special permit or approval application. Another attendee recommended an applicant's fitness be evaluated for new or alternative operations only because the successful performance of these tasks is ``heavily dependent'' on the applicant's ability to perform them. Cynthia Hilton, Institute of Makers of Explosives, recommended that PHMSA use the following procedural and fitness criteria to make this assessment: (1) ``a standardized look-back period of four years. . .the typical duration of a special permit, (2) fitness reviews not . . . triggered by the filing of an application but periodically performed'' and designed to ``expire after four years unless revoked or suspended due to subsequent findings of imminent hazard or a pattern of knowing or willful non-compliance,'' (3) when processing applications to make determinations of fitness ``start with a presumption of applicant fitness rather than . . . a position that an applicant must establish fitness,'' (4) combine evaluation tasks, (5) undertake ``site visits by Field Operations only . . . where fitness cannot be demonstrated by some other means,'' (6) do not select an applicant ``for additional scrutiny solely because they're moving a Table 1 [Sec. 172.504(e)] material,'' and (7) do not include ``errors on shipping papers, minor leaks in packaging, inadequacies in test reports'' when determining ``a finding of unfitness'' but do include ``a flagrant pattern of serious violations affecting safety. . . .'' PHMSA agrees with many of the recommendations of these attendees. In this NPRM, PHMSA has revised its SOPs to base its fitness evaluation and safety profile reviews on the ability of each applicant to perform the tasks authorized in a special permit or approval. Further, PHMSA's approach for detecting applicant incidents and/or violations is designed to detect flagrant patterns and serious violations in the four years prior to submitting an application. In addition, applicants must have two or more incidents to trigger a review; they are not subject to review just because they are moving a Sec. 172.504(e) Table 1 material. To the extent possible, PHMSA has combined evaluation tasks. For example, the automatic and technical reviews are performed concurrently. However, PHMSA also disagrees with some of the attendees' suggestions. For example, PHMSA disagrees with the attendee's suggestion that an applicant's fitness be evaluated for new or alternative operations only. Historically, PHMSA has found an applicant's pattern of minor violations could reveal larger problems, such as with training. PHMSA initially processes each application automatically by computer. As a result, this process does not presume innocence or guilt and cannot be limited to a six-month time period before another automatic review is done. However, after the automatic review is complete, for new applications PHMSA may consider only fitness data since the last fitness review. For new companies with no performance history, PHMSA will assess their training records. In addition, companies that handle special permit and approval packagings without opening them typically may reship these packaging when in conformance with the terms of the special permit or approval. PHMSA requests public comment on how to assess hazmat manufacturers that do not ship. PHMSA finds the suggestion to ignore minor leaks in packaging may not be inconsequential depending on the risks contained in the material, and, therefore, may not eliminate this as a consideration in a fitness evaluation. Regarding the elimination of on-site visits or performing such visits as a last resort, PHMSA disagrees because an on- site review is part of the process to determine if a fitness determination is accurate. PHMSA has found some information can only be determined by visiting the applicant at its facility because the agency or appropriate Department official is in the best position to determine what packagings and/or operations requested in the application are safe under the HMR and what appropriate operational controls or limitations may be needed. On-site visits are also used to clear up misunderstandings or inaccuracies. A special permit provides an equivalent level of safety or consistency with the public interest in a manner that will adequately protect against the risks to life and property inherent in transporting hazardous materials. A negative fitness determination may suggest that an applicant has not demonstrated or documented its knowledge and capabilities to assure that it has an appropriate level of safety and performance. Although the automated review PHMSA is proposing does not include variations weighted for company size, based on our history with making fitness determinations, PHMSA believes the SOPs proposed in this NPRM will be effective in determining the safety of the tasks requested in the application and the applicant's ability to perform these tasks safely under the HMR. One attendee recommended PHMSA perform fitness determinations of each special permit holder every one or two years, or on the basis of another determining factor, so that holders will know when a review is coming and, presumably, can plan for it accordingly. PHMSA disagrees as it conducts reviews for new or renewal applicants at the time of application. Further, PHMSA does not have sufficient resources or funds to perform this task. One attendee suggested fitness evaluations include determining if employees are hazmat trained in conformance with 49 CFR Part 172, Subpart F, are able to demonstrate that they can follow the requirements authorized under the special permit and HMR, and perform their assigned tasks. This attendee also recommended the fitness evaluation include determining if the applicant has a quality assurance program. Another attendee suggested PHMSA use the fitness review process to ensure the applicant is properly registered under PHMSA's Hazardous Materials Registration program prescribed in 49 CFR Part 107, Subpart G. PHMSA agrees. Each applicant's registration, if required, will be assessed during the safety profile review, and hazmat training will be assessed during the on-site inspection, if one is conducted. One attendee suggested applicants requesting party-to status for an existing special permit be excepted from a fitness evaluation because they will be manufacturing the same package that is successfully manufactured by others already party to that special permit. PHMSA disagrees. A fitness review is different from a safety equivalency evaluation. When an applicant applies for party status to an existing special permit, the technical review is not repeated since PHMSA has already determined what provisions in the special permit will provide an adequate level of safety. However, PHMSA has found historically that applicants vary in their ability to perform the tasks required in a special permit and must be individually assessed to ensure the safe execution of the special permit. One attendee asked if an applicant has more than one location, will PHMSA perform a fitness assessment on each individual location or will a single [[Page 47051]] location be used to determine the assessment for the entire company. PHMSA will review companies with multiple locations as one organization, placing an emphasis on its examination of the company's locations where the requested actions and/or processes are being performed. If deficiencies are noted, it is the company's responsibility to correct these deficiencies throughout its organization. ii. Data Accuracy--PHMSA uses its own incident history and compliance information as well as that from other sources, e.g., federal and state agencies, to assist in determining which applicant is subject to a fitness assessment. Some attendees stated that this information is either inaccurate or reflects incidents that do not correspond with special permit performance, such as technical errors on shipping papers, minor leaks, or inadequacies in test reports. Some attendees questioned the accuracy of information in other agencies' databases, and how these inaccuracies may affect PHMSA's use of this information when determining if an applicant will be subject to a fitness assessment. Stakeholders also questioned if using data not intended for PHMSA's purposes could lead to inaccurate determinations. Other attendees were concerned about the age of the incidents in the database and whether companies with recorded incidents had corrected problems. One attendee suggested PHMSA use the Federal Motor Carrier Safety Administration's (FMCSA) Compliance, Safety, and Accountability (CSA) program data as a more accurate example of information that represents a 6-month time frame. If PHMSA did use older information, one attendee suggested it use a fixed time period. Robyn Heald, Chlorine Institute, stated ``an applicant's capability can best be judged by its past and current performance and compliance with the current regulations. PHMSA should continue to review an applicant's level of fitness in cases of new or alternative operations prior to considering approval. Based on the background PHMSA provided,. . . it appears that when all is said and done the majority of applicants are determined to be fit.'' PHMSA enters the applicant's information into the Hazmat Intelligence Portal (HIP), a web-based application that provides an integrated information source to identify hazardous materials safety trends through the analysis of incident and accident information. HIP incorporates data from the Hazardous Materials Information System (HMIS), which maintains and provides access to comprehensive information on hazardous materials incidents, special permits and approvals, enforcement actions, and other elements that support PHMSA's regulatory program. HIP also incorporates data from FMCSA's Safety Fitness Electronic Records (SAFER) System to evaluate an applicant's fitness, which provides company safety data and related services to the industry and public. This information is readily available through PHMSA's database search and FMCSA's portal system and SAFER. These databases only provide triggers for a safety review. Determinations are made only after a safety profile review or on-site inspection is complete. At this time, PHMSA has determined that less than one percent of special permit applications are found unfit. Many sources for this information are self-reporting and vary on the type and quantity of information collected. As a result, the data collected may contain errors or inconsistencies, such as reporting multiple spills from one packaging in one incident as separate incidents, reporting the same type of event differently, or providing gathered data that may be too dissimilar to provide an adequate comparison. We know some information from other databases used in HIP does not meet all the conditions in PHMSA's special permit and approval programs but has merit as a tool to show areas where potential problems may exist. PHMSA normalizes this data during the safety profile review by contacting the applicant to obtain the number of hazardous materials shipments and the applicant's hazardous materials incident ratio. PHMSA or the Operating Administration (OA) also evaluate incident reports during the safety profile review to determine if any incidents are attributable to the applicant or a package, or if the incident reports contain errors. In this NPRM, PHMSA is reducing the number of incident categories that trigger a review from five to three, focusing on death and injury and high-consequence incidents only. PHMSA is removing low- level incident data from its fitness determination process. In addition, triggers have been raised by 50 percent in two of the categories. PHMSA notes that errors in other agency databases must be corrected by contacting the agency or authority in charge of that database directly. PHMSA has no authority to change their information. However, we are always trying to improve the quality of our data and invite public comment on how to improve this information. Specifically, PHMSA requests public information on how long it takes applicants to get incorrect incident information recorded in databases corrected. iii. Streamline the Special Permit Review Process--As a part of the HMTSIA directive to issue SOPs that support how the special permit and approval programs are administered, PHMSA is looking at ways to improve how applicants' submissions are processed. The majority of attendees supported PHMSA's efforts to streamline its fitness assessment procedures, but differed in how they believed results should be achieved. One attendee indicated that the length of time PHMSA takes to process and issue a special permit or approval adversely impacts the competition of U.S. industry, and recommended that all evaluation criteria be risk-based. Another attendee suggested PHMSA would make the special permit and approval application process more effective and efficient if it differentiated between how it processes applications concerning packaging design and those concerning operations. This attendee recommended applications concerning packaging design should concern only the merits of the design itself, because a safer, better performing design stands on its own merit and should not be affected by an applicant's performance history. One attendee suggested the review process would be more efficient if PHMSA checked to determine if an applicant is hazmat registered, if applicable, under PHMSA's program specified in Subpart G of 49 CFR Part 107 (Registration of Persons Who Offer or Transport Hazardous Materials). PHMSA is continually improving its database capabilities, and in this NPRM is restructuring its fitness program to increase efficiency. To capture faulty behaviors that may prevent the safe transportation of hazardous materials in commerce, PHMSA applies the same fitness criteria to hazmat packaging designs and operations. However, this process cannot consider all impacts. PHMSA relies on the expertise of the modal agencies to clarify the risks associated with each material and procedure the applicant requests for use in a specific transportation mode. PHMSA also shares its databases with the modal and other hazmat-related agencies to run in their own programs for their use to alert them to potential problem areas. PHMSA proposes in this NPRM to use information generated four years prior to submission of the application and to limit its information to exclude lessor incidents. PHMSA believes limiting the fitness review to a fixed time period and excluding lessor [[Page 47052]] incidents will improve the timeliness of its review process. FMCSA uses information generated in the last 24 months of motor carrier data. PHMSA also seeks public comment for ways to improve the processing of its special permit and approval application processes, and to improve the clarity of its communications with the applicants to ensure they know how, where, and what type of information to submit to improve PHMSA or the OA's processing of their applications. iv. Adjudication, Resolutions, and Denials--PHMSA is proposing in this NPRM to clarify its process for issuing adjudications, resolutions, and denials to include determinations of an applicant's fitness. Several attendees were concerned with how PHMSA will adjudicate, resolve, or deny its determinations of special permit applicants as unfit. One attendee suggested that PHMSA not deny an application for a single criterion unless there is an imminent hazard. This same attendee also requested that PHMSA create a process where an applicant can show cause why the agency should not revoke, suspend, or deny the application. Another suggestion was for PHMSA to give applicants a corrective action plan and an opportunity to perform in compliance with the HMR for six months, similar to a type of probation. By proposing to limit its special permit and approval review processes to eliminate lower level risks, all applicants are presumed fit unless a minimum level of fitness criteria indicates the application has triggered additional review. Further, all denials are based on on-site inspections or modal criteria. PHMSA's reconsideration process allows applicants to provide corrective actions to document compliance following a denial. Problems with recordkeeping to keep applications accurate and intact require that PHMSA requests each applicant to submit the entire application again, including any missing or requested information, for a denied or rejected application to be reconsidered. PHMSA requests public comment on how this process may be improved, and if letters requesting additional information clearly describe what information is needed to make the application complete and the process for resubmission. v. Develop the Fitness Program Through the Rulemaking Process--As mentioned earlier in this preamble, the HMR have required PHMSA to review an applicant's fitness to perform the tasks requested in a special permit or approval application since 1996. In this NPRM, PHMSA proposes to promote clarity by explaining in the SOPs the factors the agency uses to conduct a fitness review. Most attendees requested that PHMSA issue a notice and comment rulemaking on its proposal to incorporate SOPs and fitness criteria into the HMR for processing special permits. This rulemaking satisfies that request. Another attendee expressed the belief that incorporating the SOPs and fitness criteria through a rulemaking would promote greater accountability and transparency, as well as encourage HMR compliance. PHMSA agrees, and for several years has undertaken many rulemaking projects to incorporate special permits and approvals with a safe performance history and tasks with general applicability into the HMR. Once special permits and approvals are incorporated into the HMR, their fitness will be evaluated with all other HMR regulations based on the percentage of incidents. In addition, PHSMA believes that by clarifying how it proposes to process these applications through this NPRM, applicants will be able to substantially reduce the processing times for their applications. Additional attendees indicated that incorporating an elaborate review system into the HMR for assessing special permit applications would be extremely difficult to apply to the wide range of applicants. PHMSA agrees that a cumbersome review system is not beneficial, and therefore is proposing to incorporate a more straightforward, user- friendly review system in this NPRM. Attendees also requested that PHMSA limit withholding special permits except in those cases involving egregious violations or willful negligence. PHMSA disagrees. As stated earlier in this preamble, historically PHMSA has found an applicant's pattern of minor violations may reveal larger problems that could adversely affect transportation safety. vi. Modal or Hazardous Material Regulatory Agencies and Other Country Competent Authorities--When appropriate
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