# Pipeline Safety: Pipeline Damage Prevention Programs

- **operation:** document
- **citation:** 80 FR 43836
- **title:** Pipeline Safety: Pipeline Damage Prevention Programs
- **source type:** rulemaking
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2015-07-23
- **effective on:** 2016-01-01
- **summary:** Pursuant to the Pipeline Inspection, Protection, Enforcement, and Safety (PIPES) Act of 2006, this final rule establishes review criteria for State excavation damage prevention law enforcement programs as a prerequisite for PHMSA to conduct an enforcement proceeding against an excavator in the absence of an adequate enforcement program in the State where a pipeline damage prevention violation occurs. This final rule amends the pipeline safety regulations to establish the following: Criteria and procedures for determining the adequacy of State pipeline excavation damage prevention law enforcement programs; an administrative process for making State adequacy determinations; the Federal requirements PHMSA will enforce in States with inadequate excavation damage prevention law enforcement programs; and the adjudication process for administrative enforcement proceedings against excavators where Federal authority is exercised. The development of the review criteria and the subsequent determination of the adequacy of State excavation damage prevention law enforcement programs is intended to encourage States to develop effective excavation damage prevention law enforcement programs to protect the public from the risk of pipeline ruptures caused by excavation damage and allow for Federal administrative enforcement action in States with inadequate enforcement programs.
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Federal Register, Volume 80 Issue 141 (Thursday, July 23, 2015) [Federal Register Volume 80, Number 141 (Thursday, July 23, 2015)] [Rules and Regulations] [Pages 43836-43869] From the Federal Register Online via the Government Publishing Office [ www.gpo.gov ] [FR Doc No: 2015-17259] [[Page 43835]] Vol. 80 Thursday, No. 141 July 23, 2015 Part II Department of Transportation ----------------------------------------------------------------------- Pipeline and Hazardous Materials Safety Administration ----------------------------------------------------------------------- 49 CFR Parts 196 and 198 Pipeline Safety: Pipeline Damage Prevention Programs; Final Rule Federal Register / Vol. 80 , No. 141 / Thursday, July 23, 2015 / Rules and Regulations [[Page 43836]] ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Pipeline and Hazardous Materials Safety Administration 49 CFR Parts 196 and 198 [Docket No. PHMSA-2009-0192; Amdt. No. 196-1; 198-7] RIN 2137-AE43 Pipeline Safety: Pipeline Damage Prevention Programs AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), Department of Transportation (DOT). ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: Pursuant to the Pipeline Inspection, Protection, Enforcement, and Safety (PIPES) Act of 2006, this final rule establishes review criteria for State excavation damage prevention law enforcement programs as a prerequisite for PHMSA to conduct an enforcement proceeding against an excavator in the absence of an adequate enforcement program in the State where a pipeline damage prevention violation occurs. This final rule amends the pipeline safety regulations to establish the following: Criteria and procedures for determining the adequacy of State pipeline excavation damage prevention law enforcement programs; an administrative process for making State adequacy determinations; the Federal requirements PHMSA will enforce in States with inadequate excavation damage prevention law enforcement programs; and the adjudication process for administrative enforcement proceedings against excavators where Federal authority is exercised. The development of the review criteria and the subsequent determination of the adequacy of State excavation damage prevention law enforcement programs is intended to encourage States to develop effective excavation damage prevention law enforcement programs to protect the public from the risk of pipeline ruptures caused by excavation damage and allow for Federal administrative enforcement action in States with inadequate enforcement programs. DATES: This final rule is effective January 1, 2016. FOR FURTHER INFORMATION CONTACT: Sam Hall, Program Manager, PHMSA, by email at [email protected] or by telephone at 804-556-4678, or Larry White, Attorney Advisor, PHMSA, by email at [email protected] or by telephone at 202-366-9093. SUPPLEMENTARY INFORMATION: I. Executive Summary A. Purpose of the Regulatory Action The purpose of this final rule is to reduce pipeline accidents and failures resulting from excavation damage by strengthening the enforcement of pipeline damage prevention requirements. Based on incident data PHMSA has received from pipeline operators, excavation damage is a leading cause of natural gas and hazardous liquid pipeline failure incidents.\1\ Excavation damage means any excavation activity that results in the need to repair or replace a pipeline due to a weakening, or the partial or complete destruction, of the pipeline, including, but not limited to, the pipe, appurtenances to the pipe, protective coatings, support, cathodic protection or the housing for the line device or facility. Better, more effective enforcement of State excavation damage prevention laws, such as the requirement to ``call before you dig,'' is a key to reducing pipeline excavation damage incidents. Though all States have a damage prevention program, some States may not adequately enforce their State damage prevention laws. Under section 2(a)(1) of the PIPES Act (Pub. L. 109-468), PHMSA developed criteria and procedures for determining whether a State's enforcement of its excavation damage prevention laws is adequate. Under the PIPES Act, such a determination is a prerequisite for PHMSA if the agency finds it necessary to conduct an administrative enforcement proceeding against an excavator for violating Federal excavation standards. --------------------------------------------------------------------------- \1\ Data from the U.S. Department of Transportation, PHMSA Office of Pipeline Safety, Incident and Accident Reports of Gas Distribution, Gas Transmission & Gathering and Hazardous Liquid Pipeline Systems. Pipeline incident and accident summaries are available on PHMSA Stakeholders Communication Web site at: http://primis.phmsa.dot.gov/comm/Index.htm?nocache=3320 . --------------------------------------------------------------------------- B. Summary of the Major Provisions of the Regulatory Action Pursuant to the PIPES Act of 2006, this final rule amends the Federal pipeline safety regulations to establish the following: (1) Criteria and procedures PHMSA will use to determine the adequacy of State pipeline excavation damage prevention law enforcement programs; (2) an administrative process for States to contest notices of inadequacy from PHMSA should they elect to do so; (3) the Federal requirements PHMSA will enforce against excavators for violations in States with inadequate excavation damage prevention law enforcement programs; and (4) the adjudication process for administrative enforcement proceedings against excavators where Federal authority is exercised. The establishment of regulations specifying the criteria that PHMSA will use to evaluate a State's excavation damage prevention law enforcement program is a prerequisite for PHMSA to conduct an enforcement proceeding against an excavator in the absence of an adequate enforcement program in a State where a damage prevention violation occurs. C. Costs and Benefits The total first year costs of this rulemaking action is estimated to be $658,145. The following years, the costs are estimated to be approximately $183,145 per year. The total cost of this alternative over 10 years, with a 3% discount rate is $2,084,132 and at a 7% percent discount rate is $1,720,214. The average annual benefits of this alternative range from $4,642,829 to $14,739,141. Evaluating just the lower range of benefits over 10 years results in a total benefit of over $38,000,000, with a 3% discount rate, and over $31,000,000, with a 7% discount rate. Therefore, the estimated benefits of this alternative far outweigh the relatively minor costs, both annually and over ten years. II. Background A. Pipeline Incidents Caused by Excavation Damage Excavation damage is a leading cause of natural gas and hazardous liquid pipeline failure incidents. From 1988 to 2012, 188 fatalities, 723 injuries, 1,678 incidents, and $474,759,544 in estimated property damages were reported as being caused by excavation damage on all PHMSA regulated pipeline systems in the United States, including onshore and offshore hazardous liquid, gas transmission, and gas distribution lines.\2\ --------------------------------------------------------------------------- \2\ Data from the U.S. Department of Transportation, PHMSA Office of Pipeline Safety, Incident and Accident Reports of Gas Distribution, Gas Transmission & Gathering and Hazardous Liquid Pipeline Systems. Pipeline incident and accident summaries are available on PHMSA Stakeholders Communication Web site at: http://primis.phmsa.dot.gov/comm/Index.htm?nocache=3320 . --------------------------------------------------------------------------- While excavation damage is the cause of a significant number of all pipeline failure incidents, it is cited as the cause of a relatively higher number of natural gas distribution incidents. In 2005, PHMSA initiated and sponsored an investigation of the risks and threats to gas distribution systems. This investigation was conducted through the efforts of four joint work/study [[Page 43837]] groups, each of which included representatives of the stakeholder public, the gas distribution pipeline industry, State pipeline safety representatives, and PHMSA. The areas of their investigations included excavation damage prevention. The Integrity Management for Gas Distribution, Report of Phase I Investigations (DIMP Report) was issued in December 2005.\3\ As noted in the DIMP Report, the Excavation Damage Prevention work/study group reached four key conclusions: --------------------------------------------------------------------------- \3\ This report is available in the rulemaking docket. --------------------------------------------------------------------------- Excavation damage poses by far the single greatest threat to distribution system safety, reliability, and integrity; therefore, excavation damage prevention presents the most significant opportunity for improving distribution pipeline safety. States with comprehensive damage prevention programs that include effective enforcement have a substantially lower probability of excavation damage to pipeline facilities than States that do not. The lower probability of excavation damage translates to a substantially lower risk of serious incidents and consequences resulting from excavation damage to pipelines. A comprehensive damage prevention program requires nine important elements to be present and functional for the program to be effective. All stakeholders must participate in the excavation damage prevention process. The elements are: 1. Enhanced communication between operators and excavators. 2. Fostering support and partnership of all stakeholders in all phases (enforcement, system improvement, etc.) of the program. 3. Operator's use of performance measures for persons performing locating of pipelines and pipeline construction. 4. Partnership in employee training. 5. Partnership in public education. 6. Enforcement agencies' role as partner and facilitator to help resolve issues. 7. Fair and consistent enforcement of the law. 8. Use of technology to improve all parts of the process. 9. Analysis of data to continually evaluate/improve program effectiveness. Federal action is needed to support the development and implementation of damage prevention programs that includes effective enforcement as a part of the State's pipeline safety program. This is consistent with a State's pipeline safety program's objectives, which are to ensure the safety of the public by addressing threats to the distribution infrastructure. Federal action must include provisions for ongoing funding, such as Federal grants, to support State pipeline safety efforts. This funding is intended to be in addition to, and independent of, existing Federal funding of State pipeline safety programs. Other studies have indicated that improvements in State damage prevention enforcement can contribute to lowering excavation damage rates. A 2009 Mechanical Damage Final Report, prepared on behalf of PHMSA, concluded that excavation damage continues to be a leading cause of serious pipeline failures and that better one-call enforcement is a key gap in damage prevention.\4\ In that regard, the report noted that most jurisdictions have established laws to enforce one-call notification compliance; however, the report noted that many pipeline operators consider lack of enforcement to be degrading the effectiveness of one-call programs. The report cited that in Massachusetts, 3,000 violation notices were issued from 1986 to the mid-1990s, contributing to a decrease of third-party damage incidents on all types of facilities from 1,138 in 1986 to 421 in 1993. The report also cited findings from another study that enforcement of the one-call notification requirement was the most influential factor in reducing the probability of pipeline strikes and that the number of pipeline strikes is proportionate to the degree of enforcement.\5\ --------------------------------------------------------------------------- \4\ Mechanical Damage Final Report, Michael Baker Jr., Inc., April 2009. \5\ Effectiveness of Prevention Methods for Excavation Damage, Chen, Q. and Chebaro, M., C FER Report L110, June 2006. --------------------------------------------------------------------------- With respect to the effectiveness of current regulations, the report stated that an estimated two-thirds of pipeline excavation damage is caused by third parties and found that the problem is compounded if the pipeline damage is not promptly reported to the pipeline operator so that corrective action can be taken. It also noted ``when the oil pipeline industry developed the survey for its voluntary spill reporting system--known as the Pipeline Performance Tracking System--it recognized that damage to pipelines, including that resulting from excavation, digging, and other impacts, is also precipitated by operators (first parties) and their contractors (second parties).'' Finally, the report found that for some pipeline excavation damage data that was evaluated, ``in more than 50 percent of the incidents, one-call associations were not contacted first.'' In addition, ``failure to take responsible care, to respect the instructions of the pipeline personnel, and to wait the proper time accounted for 50 percent of the incidents.'' B. State Damage Prevention Programs States have historically been the primary enforcers of pipeline damage prevention requirements, and while this final rule will allow PHMSA to conduct Federal enforcement where necessary, PHMSA's view is that States should remain the primary enforcers of these requirements to the greatest extent possible. In analyzing the need for Federal enforcement authority, PHMSA notes that there is considerable variability among the States in terms of physical geography, population density, underground infrastructure, excavation activity, and economic activity. For example, South Dakota is a rural, agricultural State with a relatively low population density. In contrast, New Jersey is more densely populated and is host to a greater variety of land uses, denser underground infrastructure, and different patterns of excavation activity. These differences between States equate to differences in the risk of excavation damage to underground infrastructure, including pipelines. Denser population often means denser underground infrastructure; rural and agricultural States have different underground infrastructure densities and excavation patterns than more urbanized States. There is no single, comprehensive national damage prevention law setting forth requirements for excavators. On the contrary, all 50 States in the United States have a law designed to prevent excavation damage to underground utilities. However, these State laws vary considerably, and no two State laws are identical. Therefore, excavation damage prevention stakeholders in each State are subject to different legal and regulatory requirements. Variances in State laws include excavation notice requirements, damage reporting requirements, exemptions from the requirements of the laws for excavators and/or utility operators, provisions for enforcement of the laws, and many others. PHMSA has developed a tool to better understand the variability in these State laws at http://primis.phmsa.dot.gov/comm/DamagePreventionSummary.htm . C. PHMSA Damage Prevention Efforts Prior to developing this final rule, PHMSA has made extensive efforts over many years to improve excavation damage prevention as it relates to [[Page 43838]] pipeline safety. These efforts have included outreach, grants, and funding of cooperative agreements with a wide spectrum of excavation damage prevention stakeholders including: Public and community organizations Excavators and property developers Emergency responders Local, State, and Federal government agencies Pipeline and other underground facility operators Industry trade associations Consensus standards organizations Environmental organizations These initiatives are described in detail in the Advance Notice of Proposed Rulemaking (ANPRM) on this subject that PHMSA published in the Federal Register on October 29, 2009 (74 FR 55797). D. The Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006. On December 29, 2006, PHMSA's pipeline safety program was reauthorized by the enactment of the PIPES Act. The PIPES Act provides for enhanced safety and environmental protection in pipeline transportation, enhanced reliability in the transportation of the Nation's energy products by pipeline, and other purposes. Major portions of the PIPES Act focus on damage prevention, including additional resources in the form of State damage prevention grants, clear program guidelines as well as additional enforcement authority to encourage States to develop and sustain effective excavation damage prevention programs. The PIPES Act identifies nine elements that effective damage prevention programs should include. These are essentially identical to the nine elements noted in the DIMP Report discussed in the previous subsection. The PIPES Act gave PHMSA limited authority to conduct administrative civil enforcement proceedings against excavators who damage pipelines in a State that has failed to adequately enforce its excavation damage prevention laws. Specifically, Section 2 of the PIPES Act provides that the Secretary of Transportation may take civil enforcement action against excavators who: 1. Fail to use the one-call notification system in a State that has adopted a one-call notification system before engaging in demolition, excavation, tunneling, or construction activity to establish the location of underground facilities in the demolition, excavation, tunneling, or construction area; 2. Disregard location information or markings established by a pipeline facility operator while engaging in demolition, excavation, tunneling, or construction activity; and 3. Fail to report excavation damage to a pipeline facility to the owner or operator of the facility promptly, and report to other appropriate authorities by calling the 911 emergency telephone number if the damage results in the escape of any flammable, toxic, or corrosive gas or liquid that may endanger life or cause serious bodily harm or damage to property. Section 2 of the PIPES Act limited the Secretary's ability to take civil enforcement action against these excavators unless the Secretary determined that the State's enforcement of its damage prevention laws is inadequate to protect safety. E. Advance Notice of Proposed Rulemaking On October 29, 2009, PHMSA published an ANPRM (74 FR 55797) to seek feedback and comments regarding the development of criteria and procedures for determining whether States are adequately enforcing their excavation damage prevention laws and for conducting Federal administrative enforcement, if necessary. The ANPRM also outlined PHMSA's excavation damage prevention initiatives and described the requirements of the PIPES Act, which authorizes PHMSA to conduct this rulemaking action. The comments received on the ANPRM were generally supportive of the need for this rulemaking. F. Notice of Proposed Rulemaking On April 2, 2012, PHMSA published a Notice of Proposed Rulemaking (NPRM) (77 FR 19800) that reflected the comments and input received in connection with the ANPRM. The NPRM proposed to respond to the congressional mandate specified in Section 2 of the PIPES Act and included proposed amendments to Title 49, Code of Federal Regulations (CFR) to establish the following: 1. Criteria and procedures PHMSA would use to determine the adequacy of State pipeline excavation damage prevention law enforcement programs. PHMSA would first need to determine that the State's enforcement program is inadequate before conducting an administrative enforcement proceeding against an excavator for violating Federal requirements; 2. An administrative process for States to contest notices of inadequacy from PHMSA should the States elect to do so; 3. The Federal requirements PHMSA would enforce in States with inadequate excavation damage prevention law enforcement programs; and 4. The adjudication process for administrative enforcement proceedings against excavators where Federal authority is exercised. III. Advisory Committees Meeting On December 12, 2012, the Gas Pipeline Advisory Committee \6\ and the Liquids Pipeline Advisory Committee \7\ met jointly in Alexandria, Virginia. The Committees are statutorily mandated advisory committees that advise PHMSA on proposed safety standards, risk assessments, and safety policies for natural gas and hazardous liquids pipelines. Both committees were established under the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C. App. 1) and the pipeline safety laws (49 U.S.C. 60115). Each committee consists of 15 members, with membership evenly divided among the Federal and State governments, the regulated industry, and the public. The Committees advise PHMSA on the technical feasibility, practicability, and cost-effectiveness of each proposed pipeline safety standard. --------------------------------------------------------------------------- \6\ Officially designated as the Technical Pipeline Safety Standards Committee. \7\ Officially designated as the Technical Hazardous Liquid Pipeline Safety Standards Committee. --------------------------------------------------------------------------- During the meeting, the Committees considered the NPRM to establish excavation damage prevention enforcement actions applicable to third- party excavators. To assist the Committees in their deliberations, PHMSA presented a description and summary of the major issues for comment. These issues are (1) the criteria for evaluating State enforcement programs, (2) the Federal excavation standard, and (3) the incentives for States to implement adequate enforcement programs. After discussion, both Committees separately voted to recommend that PHMSA implement the NPRM with certain changes. Specifically, the Committees recommended as follows: (1) The Liquids Advisory Committee voted unanimously, and the gas advisory committee voted 10-to-1 that the Notice of Proposed Rulemaking as published in the Federal Register, in terms of the criteria for evaluating State enforcement programs, is technically feasible, reasonable, cost-effective, and practicable if the following changes are considered: PHMSA develops a policy, incorporated into the preamble of the final rule, that clarifies the scope and applicability of the State evaluation criteria. The policy will address the [[Page 43839]] relative importance and intent of each of the criteria and the three items identified in paragraph 9 of a document provided by member Pierson.\8\ --------------------------------------------------------------------------- \8\ At the Advisory Committees' meeting, member Pierson representing the pipeline industry submitted a written recommendation for the members' consideration. --------------------------------------------------------------------------- The three items of paragraph 9 are: PHMSA should look beyond enforcement actions in evaluating a State damage prevention program. PHMSA should consider using a broad range of factors, such as a State's investigation processes, standards for excavators, excavator education efforts, and commitment to continued improvement. The criteria to determine whether a State damage prevention program is deemed adequate should also include consideration of whether the State's one-call centers are required to provide a mandatory positive response to locate requests. A mandatory positive response will ensure that an excavator is aware of whether owners/ operators have marked the requested area prior to the beginning of an excavation, consistent with Common Ground Alliance (CGA) Best Practice 4-9. To engage stakeholders in the process of determining the adequacy of a State's program, the administrative process for States should be amended to include public comment. PHMSA should accept public comment on the adequacy of a State's damage prevention program. The Liquids Advisory Committee voted unanimously and the Gas Advisory Committee voted 10-to-1 to recommend that PHMSA implement the NPRM with the changes reflected. (2) Both Committees unanimously voted that the NPRM as published in the Federal Register, in terms of the proposed Federal excavation standard, is technically feasible, reasonable, cost-effective, and practicable if the following changes are considered: Eliminate the homeowner exemption. PHMSA develops a policy, incorporated into the preamble of the final rule that clarifies the scope and applicability of the Federal excavation standard. The policy will address triggers for Federal enforcement, how PHMSA will consider State exemptions in enforcement decisions, and how the Federal excavation standard will be applied in States with inadequate enforcement programs. In addition, the items 2 through 5 and 7 as provided by member Pierson, should be considered for incorporation into the final rule (including the policy as appropriate). The items are: 196.109--Discretion to Dispatch 911 Emergency Personnel PHMSA's proposed Sec. 196.109 states that, ``Upon calling the 911 emergency telephone number, the excavator may exercise discretion as to whether to request emergency response personnel be dispatched to the damage site.'' PHMSA should eliminate the discretion of the excavator in determining whether emergency personnel should be dispatched. 196.103--Excavator Responsibilities To foreclose ignorance as a reason for noncompliance, PHMSA should edit Sec. 196.103, which lists an excavator's obligations to protect underground pipelines from excavation-related damage. Section 196.103 should be revised to read ``Prior to commencing excavation activity the excavator must:'' 196.107 & 196.109--Stop Work Provisions A ``stop work'' provision should be incorporated into the regulations, which would require excavators to stop work if a pipeline is damaged in any way by excavation activity until the operator of the pipeline has had an opportunity to assess the damage. Consistent with CGA Best Practice 5-25, PHMSA should also require the excavator to take reasonable measures to protect those in immediate danger, the general public, property, and the environment until the facility owner/operator or emergency responders have arrived and completed their assessment of the situation. 196.107--Backfilling Locations PHMSA should include a requirement that an excavator may not backfill a site where damage or a near miss has occurred until the operator has been provided an opportunity to inspect the site. Reporting Time Frame PHSMA should not include an upper time frame for reporting emergency release of hazardous products to appropriate authorities by calling 911. Excavators should ``promptly'' report incidents. (3) The liquids advisory committee voted 8-to-1, and the gas advisory committee voted 8-to-3, that the NPRM as published in the Federal Register, in terms of the incentives for States to implement adequate enforcement programs, is technically feasible, reasonable, cost-effective, and practicable if the following changes are considered: Retain the potential penalty to base grants but consider lowering the percentage that may be affected. Develop a policy, incorporated into the preamble of the final rule that clarifies how base grants will be calculated by including the State program evaluation criteria defined in the final rule. Reduce the grace period (Sec. 198.53) from 5 years to 3 years. Ensure the Governors of States with inadequate enforcement are directly informed of PHMSA's findings, including potential consequences to base grant funding. PHMSA's Response to the Committees' Recommendations With respect to Item 1, PHMSA has considered the Committees' recommended changes to the criteria for evaluating State enforcement programs. PHMSA has developed a policy, outlined below in this preamble, which clarifies the scope and applicability of the State evaluation criteria. The policy addresses the relative importance and intent of each of the criteria. PHMSA has also considered the three items identified in paragraph 9 of the document provided by member Pierson. With regard to the first item, which addresses the factors PHMSA should consider when evaluating State enforcement programs, PHMSA believes that the seven criteria listed in section Sec. 198.55 of this final rule are adequate for evaluating the effectiveness of a State damage prevention enforcement program. PHMSA recognizes that there are many factors, such as excavator education and continual improvement, which contribute to effective damage prevention programs; however, this final rule is intended to address damage prevention enforcement and not other program elements. With regard to the second item offered by member Pierson, the term ``positive response'' refers to communication with the excavator prior to excavation to ensure that all contacted pipeline operators have located and marked their underground facilities. PHMSA agrees that positive response ensures that an excavator is aware of whether operators have marked an area prior to the beginning of excavation. PHMSA supports CGA Best Practice 4-9. However, PHMSA did not propose in the NPRM to review States' use of positive response in determining the adequacy of State enforcement programs, which means that the concept has not been subject to public or stakeholder review. In addition, PHMSA believes that positive response is outside the scope of this rulemaking, [[Page 43840]] which is focused on evaluating State enforcement programs. Therefore, PHMSA has not included positive response in the criteria listed in Sec. 198.55 of this final rule. PHMSA also did not propose in the NPRM to engage stakeholders in the process of determining the adequacy of a State's enforcement program, as suggested in the third item from member Pierson. Like positive response, the concept of stakeholder review of State programs has not been subject to stakeholder and public review. Additionally, PHMSA believes that engaging stakeholders in determining the adequacy of State programs would be overly cumbersome for both PHMSA and the States and would result in significant delays in the determination process. With respect to Item 2, PHMSA has considered the Committees' recommendation to consider changes to the proposed Federal excavation standard. In response to the Committees' recommendation, PHMSA has eliminated the homeowner exemption originally proposed in Sec. 196.105. PHMSA eliminated the homeowner exemption because homeowners excavating on their own property without first calling 811 poses a significant risk of excavation damage to pipelines. PHMSA has also developed a policy, incorporated into the preamble of this final rule, which clarifies the scope and applicability of the Federal excavation standard. The policy addresses triggers for Federal enforcement, how PHMSA will consider State exemptions in enforcement decisions, and how the Federal excavation standard will be applied in States with inadequate enforcement programs. This policy document will be posted on the agency's Web site. PHMSA also addressed the other items provided by member Pierson. PHMSA has eliminated the phrase, ``Upon calling the 911 emergency telephone number, the excavator may exercise discretion as to whether to request emergency response personnel be dispatched to the damage site'' from Sec. 196.109 and the phrase, ``where an underground gas or hazardous liquid pipeline may be present'' from Sec. 196.103. With regard to Sec. Sec. 196.107 and 196.109, PHMSA has not incorporated a ``stop work'' provision into the regulation. This provision was not proposed in the NPRM and has not received review from stakeholders and the public. Likewise, PHMSA has not incorporated requirements consistent with CGA Best Practice 5-25 for the same reason. With regard to Sec. 196.107, PHMSA has not included in the final rule a provision disallowing backfilling because the provision was not proposed in the NPRM and has not received review from stakeholders and the public. With regard to the Reporting Time Frame, PHMSA has modified the proposed Sec. 196.109 to reflect the recommendations. With regard to Item 3, PHMSA has considered the Committees' recommendation to consider changes to the proposed incentives for States to implement adequate enforcement programs. As suggested, PHMSA has retained the potential penalty to base grants and has lowered the percentage of base grants that may be affected from 10 percent to four percent. However, PHMSA has not reduced the grace period noted in Sec. 198.53 from 5 years to 3 years. PHMSA believes that some States may need a full 5 years to successfully update their State damage prevention laws to implement an adequate enforcement program. PHMSA has also developed a policy, incorporated into this preamble, which clarifies how base grants will be calculated by including the State program evaluation criteria defined in Sec. 198.55. The policy also addresses PHMSA's process for notifying Governors of States with inadequate programs, including potential consequences to base grant funding. PHMSA reserves the right to modify these policies in the future, if necessary. Policies PHMSA will prepare stand-alone documents and post them on the agency's Web site for the following two policies: State Enforcement Program Evaluation Criteria, and Federal Enforcement Policy. State Enforcement Program Evaluation Criteria The criteria PHMSA will use to evaluate the adequacy of State damage prevention law enforcement programs are listed in Sec. 198.55 of this final rule. The criteria are: Does the State have the authority to enforce its State excavation damage prevention law using civil penalties and other appropriate sanctions for violations? Has the State designated a State agency or other body as the authority responsible for enforcement of the State excavation damage prevention law? Is the State assessing civil penalties and other appropriate sanctions for violations at levels sufficient to deter noncompliance and is the State making publicly available information that demonstrates the effectiveness of the State's enforcement program? Does the enforcement authority (if one exists) have a reliable mechanism (e.g., mandatory reporting, complaint-driven reporting) for learning about excavation damage to underground facilities? Does the State employ excavation damage investigation practices that are adequate to determine the responsible party or parties when excavation damage to underground facilities occurs? At a minimum, do the State's excavation damage prevention requirements include the following: a. Excavators may not engage in excavation activity without first using an available one-call notification system to establish the location of underground facilities in the excavation area. b. Excavators may not engage in excavation activity in disregard of the marked location of a pipeline facility as established by a pipeline operator. c. An excavator who causes damage to a pipeline facility: i. Must report the damage to the operator of the facility at the earliest practical moment following discovery of the damage; and ii. If the damage results in the escape of any PHMSA regulated natural and other gas or hazardous liquid, must promptly report to other appropriate authorities by calling the 911 emergency telephone number or another emergency telephone number. Does the State limit exemptions for excavators from its excavation damage prevention law? A State must provide to PHMSA a written justification for any exemptions for excavators from State damage prevention requirements. PHMSA will make the written justifications available to the public. The evaluation will involve all of the criteria, and the final determination will be based on the totality of the review. The following policy describes the manner in which PHMSA intends to apply the criteria. As experience with adequacy reviews is gained, PHMSA may modify this approach as necessary. Criteria 1 and 2 guidance: Criteria 1 and 2 are pass/fail. If the answer to either of the questions posed in criteria 1 or 2 is ``no,'' the State excavation damage prevention law enforcement program will likely be deemed inadequate. Criterion 3 guidance: PHMSA will seek records that demonstrate that the State enforcement agency is using its enforcement authority and imposing appropriate sanctions for violations. If a State cannot demonstrate use of its enforcement authority, the State enforcement [[Page 43841]] program will likely be deemed inadequate. PHMSA expects States to maintain records that demonstrate whether the rate of excavation damage incidents is being reduced as a result of enforcement. The result of PHMSA's review of a State's records in this regard will not, by itself, render a State enforcement program inadequate. PHMSA expects State enforcement programs to generally make damage prevention law enforcement information and statistics available to the public via a Web site. PHMSA does not expect States to violate any State laws, jeopardize any ongoing enforcement case, or post information that would violate the privacy of individuals as defined by State or Federal law. The result of PHMSA's review of the public availability of a State's information and statistics will not, by itself, render a State enforcement program inadequate. Criterion 4 guidance: PHMSA will review how State enforcement programs learn about excavation damage to underground pipelines. In particular, PHMSA will be looking for reporting mechanisms that encourage parity in the application of enforcement resources. For example, does the reporting mechanism identify potential violations of law by both excavators and pipeline operators? If the State enforcement program learns of violations via road patrols that specifically target excavators without valid excavation tickets, how does the State also learn about violations of other provisions of State damage prevention laws, such as operators' failure to locate and mark pipelines? Also, PHMSA will review the State's methods for making stakeholders aware of the process and requirements for reporting damage incidents to the enforcement authority. The result of PHMSA's review of a State's program under criterion 4 will not, by itself, render a State enforcement program inadequate. Criterion 5 guidance: PHMSA expects State enforcement programs to be balanced with regard to how they apply enforcement authority. PHMSA expects enforcement programs to be focused on the responsibilities of not only excavators, but also of utility owners and operators. PHMSA seeks patterns of enforcement activity that demonstrate that penalties are applied to the responsible party or parties in excavation damage incidents and not consistently to only one stakeholder group. The result of PHMSA's review of a State's program under criterion 5 will not, by itself, render a State enforcement program inadequate. Criterion 6 guidance: PHMSA will review State requirements to ensure they address the basic Federal requirements in the PIPES Act for excavators, such as using an available one-call system. The result of PHMSA's review of a State's requirements will not, by itself, render the State's enforcement program inadequate. Criterion 7 guidance: PHMSA expects States to document the exemptions provided in State damage prevention laws for excavators and one-call membership, and any such exemptions should not be too broad. Documentation should include the types of exemptions included in State law and any reason for the exemptions, such as
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