# Exemption, Approval, Registration and Reporting Procedures; Miscellaneous Provisions

- **operation:** document
- **citation:** 61 FR 21084
- **title:** Exemption, Approval, Registration and Reporting Procedures; Miscellaneous Provisions
- **source type:** rulemaking
- **agency:** Research and Special Programs Administration
- **status:** historical
- **official:** true
- **published on:** 1996-05-09
- **effective on:** Not available
- **summary:** In this final rule, RSPA revises procedures for applying for exemptions and establishes procedures for applying for approvals, and registering and filing reports with RSPA. In addition, RSPA amends certain provisions, mostly procedural, in the Hazardous Materials Regulations. This rulemaking action is intended to expedite processing of applications and to promote clarity and program consistency. It is part of the President's Regulatory Reinvention Initiative to revise all agency regulations that are in need of reform.
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Federal Register, Volume 61 Issue 91 (Thursday, May 9, 1996) [Federal Register Volume 61, Number 91 (Thursday, May 9, 1996)] [Rules and Regulations] [Pages 21084-21102] From the Federal Register Online via the Government Publishing Office [ www.gpo.gov ] [FR Doc No: 96-11400] ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Research and Special Programs Administration 49 CFR Parts 107, 171, 173 and 178 [Docket No. HM-207C, Amdt. Nos. 107-38, 171-141, 173-249, and 178-113] RIN 2137-AC63 Exemption, Approval, Registration and Reporting Procedures; Miscellaneous Provisions AGENCY: Research and Special Programs Administration (RSPA), DOT. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: In this final rule, RSPA revises procedures for applying for exemptions and establishes procedures for applying for approvals, and registering and filing reports with RSPA. In addition, RSPA amends certain provisions, mostly procedural, in the Hazardous Materials Regulations. This rulemaking action is intended to expedite processing of applications and to promote clarity and program consistency. It is part of the President's Regulatory Reinvention Initiative to revise all agency regulations that are in need of reform. DATES: Effective date: The effective date of these amendments is October 1, 1996. Compliance date: Voluntary compliance with the regulations, as [[Page 21085]] amended herein, is authorized as of July 12, 1996. FOR FURTHER INFORMATION CONTACT: Kathleen Stokes Molinar, Office of the Chief Counsel, (202) 366-4400, or Diane LaValle, Office of Hazardous Materials Standards, (800) 467-4922, RSPA, Department of Transportation, 400 7th Street, SW, Washington, DC 20590-0001. SUPPLEMENTARY INFORMATION: I. Background The Federal hazardous material transportation law (Federal hazmat law; 49 U.S.C. 5101-5127) directs the Secretary of Transportation to prescribe regulations for the safe transportation of hazardous materials in commerce. RSPA is the agency within the Department of Transportation primarily responsible for implementing the Federal hazmat law. RSPA does so through the Hazardous Materials Regulations (HMR; 49 CFR Parts 171-180). Under 49 U.S.C. 5117(a), RSPA is authorized to issue an exemption from specific requirements of the Federal hazmat law or the HMR if an applicant demonstrates that public safety will not be compromised. The procedures governing application for an exemption and the manner in which the application is processed are found at 49 CFR part 107, subpart B. In numerous instances, the HMR require approval by, or registration with, RSPA before a person may engage in particular hazmat transportation-related activities in areas such as manufacturing and certifying hazardous material packagings, offering hazardous materials for transportation, and transporting hazardous materials. The HMR also impose reporting requirements on persons engaging in certain hazardous materials transportation activities. A significant portion of the regulated community is subject to one or more of these requirements. Procedures to be followed in seeking an approval from RSPA, registering with RSPA, or reporting to RSPA are often found in the HMR provision establishing the particular requirement, but in many cases these procedures are absent or incomplete. This final rule revises procedures for exemptions in subpart B of part 107 and establishes procedures for approvals, registrations and reports in subpart H of part 107. Establishment of formal procedures for approval, registration, and reporting activities provides uniform and consistent guidance to all those who may be subject to these requirements in the HMR, and fosters consistency in RSPA's handling of these matters. Additionally, this final rule minimizes RSPA's need to seek additional information from applicants in order to complete the processing of these matters. The procedures adopted in this final rule for approvals, registrations, and reports are limited in their application. Other Federal agencies (e.g., the United States Coast Guard (USCG) and the Federal Railroad Administration (FRA)) issue approvals or receive registrations or reports under the HMR. For example, under Sec. 176.415, persons are required to obtain approvals from the USCG before loading or unloading certain explosives onto or from vessels. The procedures established in this rule apply only with respect to those matters under the HMR that are handled by RSPA. Those matters for which the HMR assign responsibility to other entities will continue to be handled according to the procedures of those entities. II. Regulatory Reinvention Initiative In a March 4, 1995 memorandum, the President directed Federal agencies to review all agency regulations and eliminate or revise those that are outdated or in need of reform. On April 4, 1995 (60 FR 17049), and July 28, 1995 (60 FR 38888), RSPA issued notices requesting comments on regulatory reform and announcing several public meetings nationwide to identify obsolete and burdensome regulations that can be eliminated from the HMR and techniques to improve RSPA's customer services. Some of the commenters responding to those notices and participating in the public meetings identified the exemption and approval procedures as areas in need of clarification and reform. This rule is consistent with the goals of the President to clarify and revise Federal agency regulations to relieve unnecessary regulatory burdens and to clarify regulatory requirements. III. Summary of Comments and Regulatory Changes On September 14, 1995, RSPA published a notice of proposed rulemaking (NPRM) under Docket HM-207C (60 FR 47723). In the NPRM, RSPA proposed to revise the exemption procedures of subpart B of part 107 and adopt new procedures in subpart H of part 107 for approvals, registration, and reporting information to RSPA. RSPA received 16 comments to the NPRM from offerors and carriers of hazardous materials, chemical and packaging manufacturers, consulting firms, and the United States Department of Energy. Commenters were generally supportive of RSPA's effort to revise and clarify the procedures for exemptions and establish procedures for approvals, registration, and reporting. The comments and RSPA's response to them are discussed below. Part 107 Subpart A--General Provisions Sec. 107.3 Definitions. Commenters requested clarification of the difference between approvals and exemptions and, further, requested that RSPA explain the difference between an approval and a competent authority approval. An approval is a written authorization to take some action delineated in a particular regulation (e.g., Sec. 173.21) in the HMR and is specifically authorized in that regulation. Approvals generally are limited in scope, such as in Sec. 178.604(b)(2) that authorizes an applicant to apply for an approval to deviate from the number of samples used in conducting a leakproofness test. Because issuance of all approvals is specifically recognized in the HMR and almost all approval documents can be made available for public review, applications are not published in the Federal Register. Sections 171.11 and 171.12 authorize compliance with international standards (i.e., the International Civil Aviation Organization's Technical Instructions for the Safe Transport of Dangerous Goods by Air (ICAO Technical Instructions) and the International Maritime Dangerous Goods Code (IMDG Code)) as an alternative to compliance with certain provisions of the HMR. For certain types of activities, both the ICAO Technical Instructions and the IMDG Code have provisions which require that the activity be approved by the competent authority of the country of origin. The Associate Administrator for Hazardous Materials Safety (Associate Administrator), RSPA, is the competent authority for the United States of America (see the definition of ``competent authority'' in 49 CFR Sec. 171.8). A competent authority approval means an approval by the competent authority which is required under the provisions of international regulations, such as the ICAO Technical Instructions or the IMDG Code. To the extent that it satisfies the requirement of the international regulations, any of the following may serve as a competent authority approval: a specific regulation of subchapter A or C, an exemption or approval issued under the provisions of subchapter A or C, or a separate document issued to one or more persons by the Associate Administrator. In other words, if an activity is authorized for international transport under the HMR, [[Page 21086]] then the HMR serves as the competent authority approval. An exemption or approval may serve as a competent authority approval provided the exemption or approval does not prohibit any international transport. To facilitate international commerce, for a function that relates only to a requirement of an international standard, and not to the HMR, the Associate Administrator may issue a competent authority approval as a separate document that is not related to either an approval or an exemption under the HMR. An exemption allows an applicant to perform a function which is not authorized under the HMR and which, in fact, would be a violation of the HMR in the absence of the exemption. An exemption may involve an authorization to engage in a function for which there is no provision in the regulations. A ``manufacturing exemption'' is an exemption issued to a manufacturer of packagings who does not offer for transportation or transport hazardous materials in packagings subject to the exemption. The process of applying for an exemption, as provided by the Federal hazardous materials transportation law (49 USC 5117), requires that the applicant provide documentation demonstrating that the proposed process or activity will meet a level of safety at least equivalent to that provided by the HMR or, if the regulations do not contain a specified level of safety, will be consistent with the public interest. Notice of most exemption applications is published in the Federal Register for public comment prior to their being granted or denied. For clarity, RSPA is adopting definitions in Sec. 107.3 for ``approval,'' ``competent authority approval,'' ``exemption,'' and ``manufacturing exemption'' to differentiate between approvals and exemptions and clarify the types of exemptions and approvals that are issued. One commenter requested that the proposed term ``accident'' be replaced with ``incident'' to avoid confusion. The commenter stated that the word ``incident'' is currently used in the HMR and has the same connotation as the proposed definition of accident. The commenter also stated that other modal agencies within DOT use the term ``accident'' to mean a collision between moving vehicles (e.g., the FHWA expressly defines ``accident'' as a motor vehicle collision). RSPA agrees and is adopting the term ``incident'' to refer to an event resulting in the unintended or unanticipated release of hazardous material or an event which meets incident reporting requirements in 171.15 or 171.16. Another commenter suggested that RSPA define the term ``registration'' to describe what the term includes, rather than what it does not include. The commenter recommended that the wording `` `registration' does not include registration under Subpart F or G of this part'' be removed. RSPA agrees that providing examples of the types of registration covered under this definition is beneficial and is adding several examples. RSPA has not granted the commenter's request to delete the language referencing specific registration requirements that are not included in the definition. RSPA believes that this exclusionary language provides as much guidance as a description of what types of ``registration'' are included in the definition. No comments were received concerning other proposed definitions, and those definitions are adopted as proposed. Subpart B--Exemptions Sec. 107.101 Purpose and scope. One commenter requested that all exemptions be described as ``competent authority approvals'' to provide for greater acceptance outside the United States since competent authority approvals are accepted internationally. An exemption concerns a variance from the HMR and not the international regulations. As previously indicated, an exemption may be used as competent authority approval to the extent that it is suitable for international transport and satisfies the approval requirement of the applicable international regulation. However, a number of exemptions, such as those applicable to transportation by motor vehicle only, are not applicable under international regulations. Therefore, RSPA is not adopting the commenter's suggestion. Another commenter suggested that RSPA adopt only two procedures: one for approvals and exemptions, and the other for registrations and reports. The commenter contended that the requirements, procedures, and justifications related to exemptions and approvals are sufficiently different that users of the regulations are better served by RSPA providing separate, self-contained provisions for exemptions and approvals. This commenter added that since applicants are not always sure whether to submit an application requesting an exemption, approval or registration, RSPA should be responsible for determining the appropriate action since the data required for each is the same. RSPA is not adopting the commenter's suggestion that RSPA determine the appropriate action for submitted applications because it is the applicant's responsibility to make this determination and the requirements are different. By defining the terms ``exemption,'' ``approval,'' and ``registration,'' as well as clarifying the procedures for obtaining each, RSPA is assisting applicants in determining the appropriate action. One commenter stated that the exemption procedures do not provide for carrier exemptions. The commenter requested that more general procedures be adopted for carrier exemptions because the application information differs from that required for shippers and packaging manufacturers. For consistency, RSPA utilizes the same exemption application procedure for all applicants (e.g., packaging manufacturers, shippers, and carriers). In this final rule, RSPA is clarifying the types of information required of an exemption applicant (see preamble discussion under Sec. 107.105). Additionally, RSPA is including language in the rule under the ``emergency processing'' provisions of Sec. 107.117 which should assist carriers by directing an applicant to seek an emergency exemption through the modal office for the proposed initial mode of transportation. One commenter strongly recommended that RSPA incorporate more exemptions into the HMR to allow industry more flexibility and reduce the number of exemptions. The commenter requested that RSPA explain the standards which it utilizes to determine which exemptions are incorporated into the HMR. The commenter stated that ``making this information [the standards which RSPA utilizes] public would provide a clearer picture of the need for a more flexible regulatory scheme and give a benchmark on which to assess efforts to incorporate existing exemptions.'' Although RSPA has no formal set of standards for selecting exemptions to be converted to regulations of general applicability, RSPA periodically reviews existing exemptions to prioritize them as to their suitability for conversion to regulations. Whether a specific exemption is a candidate for regulatory action depends on any number of factors, such as the expressed interest of the exemption holder or others, the suitability of the exemption for conversion, rulemaking activity in related areas, agency priorities, and whether the process, packaging or activity authorized by the exemption has provided a clearly demonstrated [[Page 21087]] level of safety equivalent to that which is provided by the HMR. Another commenter recommended that RSPA automatically incorporate exemptions into the HMR after the second renewal of the exemption. RSPA agrees that if an exemption of general applicability demonstrates a level of safety equivalent to the HMR, the provisions of the exemption ultimately may be suitable for incorporation into the HMR. However, RSPA is not adopting the commenter's recommendation. As previously discussed, a number of factors influence whether an exemption is proposed for conversion to a regulation. Sec. 107.105 Application for exemption. Commenters supported RSPA's proposal to require that applicants submit exemption applications in duplicate, rather than triplicate. Commenters stated that this amendment would reduce the burden on applicants, and RSPA is adopting the requirement as proposed. One commenter requested that applicants be required to submit the application information in numerical order consistent with the application procedures so that RSPA can quickly determine if any information is missing. While RSPA encourages applicants to follow the format utilized in the rule when submitting application materials, RSPA believes that its personnel can expeditiously determine the completeness of an application. Further, RSPA does not want to place another requirement on applicants; therefore, RSPA recommends but is not mandating use of this commenter's suggestion. Another commenter suggested that proposed Sec. 107.105 (a)(2) and (a)(4) be combined. Proposed paragraph (a)(2) requires that an applicant who is not an individual (i.e., the applicant is a corporation, partnership, or the like) designate an agent pursuant to the laws of the United States. Proposed paragraph (a)(4), however, requires a foreign applicant to designate an agent within the United States. This paragraph applies to both individuals and legal entities. To avoid confusion between an agent for a U.S. applicant that is not an individual and an agent for a foreign applicant, RSPA is keeping the two requirements as separate paragraphs (a)(2) and (a)(3), respectively, in this final rule. One commenter suggested that RSPA require applicants to provide a Material Safety Data Sheet (MSDS) or emergency response information for hazardous materials in an application to confirm that this information is consistent with the Emergency Response Guidebook. RSPA agrees that an MSDS may contain useful information, such as hazard properties of a commodity, for inclusion in an application and this information may be needed to justify an application. RSPA believes that an MSDS is not necessary in most instances and did not propose to require MSDS' or emergency response information with exemption applications. Therefore, RSPA is not adopting the commenter's suggestion. Several commenters expressed concern regarding what they perceive as the increased quantity and detail of information required to be included in an exemption application. Some commenters stated that supplying this information would place an undue burden on applicants and make it more difficult or even impossible to obtain an exemption or approval. Without providing any supporting statistics or financial data, one commenter stated that trying to meet some of these requirements could substantially increase the paperwork burdens for both the applicant and RSPA, and the U.S. Department of Energy (DOE) stated that the new requirements would impose severe economic impacts on applicants who use contractors because the contractors would have to perform extensive analyses and compilation of information to satisfy the new requirements. RSPA believes that the administrative burden on applicants remains unchanged under proposed Sec. 107.105 and under the provisions adopted in this final rule. The information and analyses set forth in this final rule for exemption applications are essentially what is required under the Federal hazmat law and what RSPA historically has requested, often during the processing of the exemption. By clearly specifying this information in the regulations, RSPA hopes to minimize delays in application processing and requests for extra submissions from applicants occasioned by RSPA's having to obtain additional information from exemption applicants at a later time. Additionally, the commenters who raised these ``increased burden'' arguments have not submitted supporting documentation demonstrating that exemption applicants' paperwork or economic burdens will be increased by this regulatory change. Finally, RSPA notes that an applicant is not required to submit information which is inapplicable to the exemption request or which is impracticable for the applicant to obtain. Therefore, RSPA does not believe that paperwork and economic burdens upon an exemption applicant will increase, and is adopting the regulatory change essentially as proposed. Several commenters requested that RSPA clarify certain information required in the proposed application procedures. Specifically, one commenter recommended that RSPA consolidate and clarify the information required in proposed paragraphs (a)(14) through (a)(18). Another commenter requested clarification of what is meant in proposed Sec. 107.105(a)(16) by ``any increased risk to safety or property that may result if the exemption is granted.'' The commenter stated that RSPA needs to specify the extent of analysis an applicant is required to provide in the application. Another commenter requested that RSPA add language in proposed paragraphs (a)(16) and (a)(18) that applicants provide risks that ``are known or could reasonably have been expected to be known'' to clarify that a ``full-blown'' risk assessment is not intended by RSPA. Another commenter added that it is unclear whether an applicant is required to include the information in proposed paragraph (a)(18). The commenter requested that RSPA add some examples to clarify when the provision is required. The Federal hazmat law requires each person seeking an exemption to provide a safety analysis that justifies the exemption (49 U.S.C. 5117(b)). The information required under Sec. 107.105 is intended to elicit the information and analyses necessary to demonstrate that the requested exemption provides an equivalent level of safety to that afforded by the HMR or, if the HMR do not establish a level of safety, is consistent with the public interest and will adequately protect against risk to life and property. The safety analyses required to support exemptions can vary greatly. The analyses may range from simple comparative analyses relied upon by an applicant seeking an exemption which will permit minor variations in packaging, to complex risk analyses for complex packaging systems involving new technologies or materials of construction. The risks presented by new technologies and materials are often more difficult to evaluate, and may require a more extensive safety analysis. Successful shipping experience may be useful to support a safety analysis, but does not necessarily demonstrate that a particular package or transport practice provides a level of safety equivalent to that authorized. Successful shipping experience may only indicate that a package was not subjected to a drop, impact, or fire during transportation. A safety analysis [[Page 21088]] of a package or transport practice that includes exposure to normal and accident environments is a more valid indication of the level of safety provided by the package or transport practice, than simply looking to whether a history of incidents exists. Therefore, RSPA is requiring the applicant to describe all relevant shipping and incident experience of which the applicant is aware that relates to the application. The applicant also must specify safety control measures (e.g., use of a private carrier or additional packaging) necessary to demonstrate that the proposed package or transport practice meets a level of safety equivalent to that afforded by the HMR and is in the public interest. In response to commenters' requests, RSPA is clarifying the information specified in proposed paragraphs (a)(16) through (a)(18). Several commenters stated that certain requested information may be unavailable to the applicant. One commenter stated that some of the requested information, such as service life and performance of an alternative packaging, constitutes reasons for the exemption--to find these answers by authorizing controlled shipments under an exemption. Commenters stated that the proposed changes facilitate the ability of the Associate Administrator to reject an application not deemed complete. One commenter stated that, if an applicant cannot identify a potential failure mode and its possibility of an occurrence, the application would be deemed incomplete and could be denied. The proposed language of Sec. 107.105 was intended to expedite processing of exemption applications for the benefit of persons seeking exemptions. RSPA acknowledges that not all information about a proposed alternative packaging or activity is available at the time an exemption is requested. However, an exemption is granted only when an applicant has provided sufficient information to demonstrate that the requested variation from the regulatory requirement will afford a level of safety equivalent to that which is provided by the HMR. This demonstration must include information relevant to the expected service, performance and limitations of the packaging. Commenters also stated that certain information may not be applicable to some exemptions. For example, some commenters expressed concern that the requirement to provide detailed commodity information (proposed Sec. 107.105(a)(12)) may not be necessary or appropriate for an exemption that authorizes manufacture of a packaging. The commenters stated that lack of this information could result in the rejection of the application. Commenters requested that Sec. 107.105 be modified to indicate that such detailed information must be included in an application only when appropriate based on the nature of the exemption being sought. In response to commenters' concerns, RSPA is requiring the applicant to provide information in the application only when it is appropriate to demonstrate that the proposal meets the statutory and regulatory standards. Therefore, this final rule indicates that an applicant need only submit information that is relevant to an application. Other commenters expressed opposition to RSPA's proposal to extend the recommended time period for filing an exemption application from 120 days to 180 days before the requested effective date of the exemption. The commenters indicated that this extended deadline appeared to be contrary to the stated purpose of the rule--reduction of the processing time of exemption applications and renewals. Another commenter requested that RSPA also issue or deny an exemption in the same time period when a properly prepared application is submitted. RSPA's proposal was intended to parallel the Federal hazmat law requirement, 49 U.S.C. 5117, that the Secretary of Transportation issue or renew an exemption for which an application was filed, or deny such issuance or renewal, within 180 days after the first day of the month following the date of the filing of such application. RSPA understands that many parties requesting exemptions cannot anticipate their needs beyond four months. Therefore, RSPA is addressing the needs of its customers by retaining the 120-day application filing time. However, RSPA notes that 120 days is often not enough time for processing an incomplete or very complicated exemption application, and encourages parties to file an application for an exemption as early as possible. Another commenter objected to the proposal to limit the use of manufacturing exemptions to specific plants or locations. The commenter stated that many shippers are also manufacturers and use more than one vendor to supply a packaging. The commenter requested the flexibility to use alternative suppliers of its packaging. RSPA did not propose to limit the use of manufacturing exemptions to particular plants, but to require applicants to identify the location of each facility where an exemption would be used. It was RSPA's intention to limit the application and definition of a manufacturing exemption to a manufacturer of packagings who does not offer for transportation or transport hazardous materials in the exemption packagings it produces (i.e., a business entity engaged in the manufacturing and marketing packagings for use by other entities). A person who manufacturers, marks and sells packagings under an exemption may do so at dozens of facilities without restriction; however, RSPA is retaining the requirement that applicants for manufacturing exemptions identify the location of each facility where manufacturing under an exemption will occur. The requirement does not apply to shippers who produce packagings for their own use. Based on the foregoing, RSPA is revising the exemption application procedures essentially as proposed with modifications as described above, reformatting of the section and revising of certain provisions to make them less burdensome. Sec. 107.107 Application for party status. This section is adopted essentially as proposed. Paragraph (a)(4) is revised to delete an information requirement pertaining to consent to U.S. jurisdiction. Paragraph (c) is revised to reference Sec. 107.113 (e) and (f) for the manner by which the Associate Administrator grants or denies applications. Sec. 107.109 Application for renewal. This section is adopted essentially as proposed. One commenter requested that one renewal application suffice for all parties to an exemption. A single renewal application would not provide all incident experience encountered by all parties to an exemption. Further, where there are numerous parties to an exemption and each attained party status on a different date, issuance of a blanket renewal for all parties becomes unworkable from a timing perspective. For example, persons who attained party status close to the date for the blanket renewal may find themselves immediately faced with renewal. RSPA, therefore, is not adopting this suggestion. One commenter encouraged RSPA to extend the exemption renewal process from two years to five years to alleviate some of the administrative burdens on RSPA and the regulated industry. The commenter stated that RSPA could determine whether an exemption should continue based on any incidents that occur during the life of the exemption. Another commenter stated that an exemption period of three years may be more appropriate for the information required in the revised application procedures. Another [[Page 21089]] commenter suggested that RSPA seek a legislative change that allows exemptions to remain in effect until such time as the Secretary finds that continuation is no longer in the public interest or the exemption holder withdraws the exemption. The Federal hazardous materials transportation law (49 U.S.C. 5117) currently provides that an exemption can be issued for no more than a two-year maximum period of time; therefore, RSPA lacks statutory authority to extend the two-year period. However, on March 27, 1996, a legislative proposal was sent to Congress which included a request that the two-year exemption limitation be extended to four years. Sec. 107.111 Withdrawal. One commenter requested that RSPA clarify that all documents deemed confidential by the Associate Administrator in accordance with Sec. 107.5 that are related to an active or inactive application will remain confidential. RSPA accepts the commenter's suggestion and is adding a statement in this section clarifying this point and further clarifying that the time period for which confidential treatment will be afforded comports with the guidelines of the Freedom of Information Act (5 U.S.C. 552(b)). Specifically, submissions which fall within the definition of ``trade secrets'' or ``commercial or financial information obtained from a person and privileged or confidential'' will remain confidential indefinitely, unless the party requesting the confidential treatment notifies the Associate Administrator that the confidential treatment is no longer desired. Sec. 107.113 Application processing. Commenters raised concerns about the proposed language in paragraph (a) with respect to the time frame in which a determination is made concerning whether an application is complete. The commenters requested that RSPA remove the proposed wording ``usually is made'' and retain the current wording ``will be made.'' One commenter stated that the requirement is reasonable since it is only a determination of the application's completeness and not a decision on its merits. RSPA agrees with the commenter and is retaining the current wording in paragraph (a) as requested. Seven of the 15 commenters were strongly opposed to RSPA's proposal to consider the existence of pending or completed enforcement actions as a factor in determining whether an exemption applicant demonstrates fitness to conduct an activity that would be authorized under the exemption. One commenter stated that RSPA's technical experts should be able to determine the safety of the subject of a proposed exemption request without reference to enforcement actions on unrelated subjects. Another commenter stated that, historically, RSPA could deny an exemption application on any basis. The commenter stated that the proposed language could create an unnecessarily adversarial situation. One commenter stated that it objected to consideration of pending or completed enforcement actions as ``prima facie evidence of an applicant's capability or integrity.'' The commenter stated that, in cases where assessed penalties were low, respondents in enforcement actions may have adopted a ``no contest'' posture in an enforcement action and paid a penalty, rather than expend the time and money necessary to litigate an action. If enforcement history is used against these respondents, the commenter said that a business decision to not contest the action would have more severe consequences than successful resistance to an enforcement action by a more litigious respondent. The commenter also stated that denial of an exemption or approval because of enforcement history would punish the violator twice for a violation. The commenter added that Congress, in developing the hazardous materials transportation legislation, had considered and rejected adoption of a licensing concept because existing enforcement powers are sufficiently strong to address violations, without denying authority to operate under an exemption or approval. The commenter concluded that the ``enforcement history'' provision should be very narrowly tailored: only prior violations which indicate flagrant disregard for HMR compliance should be considered. Another commenter suggested that only enforcement actions of a ``significant nature'' be considered evidence of insufficient competence or integrity. In general, RSPA believes that consideration of completed enforcement actions and certain pending enforcement actions as evidence of an applicant's capability and integrity is a legitimate means of protecting the public. It is not punishment but recognition of relevant information. Enforcement actions may be indicative of an applicant's ability or willingness to comply with the applicable regulations. Because the Associate Administrator is considering whether to authorize compliance with specific alternatives to the HMR, the likelihood of an applicant's compliance with those alternatives is relevant to public safety. One commenter suggested that RSPA revise paragraph (a)(5) to read ``The application may be denied if the shipping and accident experience supplied by the applicant in accordance with Sec. 107.105(a) which directly relates to the exemption being sought demonstrates that approval of the application poses a potential threat to life or property.'' Limiting consideration to only an applicant's shipping and accident experience which directly relates to the exemption sought fails to protect the public from applicants with poor compliance histories who seek exemptions to authorize new hazardous materials transportation activities. One commenter stated that the rule is unclear as to whether violations that qualify for the ticketing program are considered ``enforcement actions'' under the proposed rule. The commenter recommended that RSPA not consider ticketed violations. RSPA will consider ticketed violations as part of an applicant's compliance history, using the criteria specified in Sec. 107.331 to assess the weight to be given to the violation. DOE requested clarification of the provision concerning consideration of past violations in determining an applicant's capability and integrity as it applies to government entities that use contractors. DOE also asked RSPA to clarify the terms ``pending'' and ``complete'' as used in the proposed regulation and the type of activity that warrants a determination of ``lack of integrity.'' For purposes of regulatory compliance, RSPA looks to the entity whose act or omission constitutes a violation of the HMR. In response to DOE's question regarding the status of an enforcement action as either ``pending'' or ``complete,'' an enforcement case historically has been initiated by issuance of a Notice of Probable Violation (NOPV). However, RSPA recently established a pilot ``ticketing'' program permitting initiation of an enforcement case by issuance of a ticket. Thus, a case is ``pending'' from the date of issuance of either the NOPV or the ticket until a final order has been issued and the time for appeal has expired. If the order has been appealed in a timely manner, the case is ``pending'' until the RSPA Administrator (Administrator) issues an Action on Appeal. When an order has become final or when an order was appealed and the Administrator has issued an Action on Appeal, the enforcement action is considered to be ``complete.'' RSPA is adopting the proposed rule with several modifications. In making a determination to grant or deny a request for an exemption, RSPA will consider information submitted in the [[Page 21090]] application package, compliance history of the applicant, and other information available to the Associate Administrator. Another commenter objected to the proposed language providing that an applicant who failed to respond within 30 days to a request for additional information would have his or her application deemed incomplete and denied. The commenter stated that, where reasonable and appropriate, an extension of time should be granted. RSPA understands the commenter's concern. Currently, if an applicant fails to respond to a request for additional information for good cause, RSPA grants a 30- day extension. To clarify this point, RSPA is adding a provision in this section and Sec. 107.709 (approval application processing) that allows an applicant to submit a written request for a 30-day extension. Finally, commenters stated that, while they favored initiating a rulemaking in addition to issuing an exemption, they did not agree with initiating a rulemaking in lieu of issuing an exemption. The commenters stated that the latter penalized an applicant because rulemaking usually has taken longer than processing of an exemption request. One of the commenters noted that, in its experience, RSPA staff faced with this situation would issue an exemption to the applicant, and concurrently initiate a rulemaking action, which could lead ultimately to issuance of a rule of general applicability. RSPA has seldom issued a rulemaking in lieu of processing an exemption application, and RSPA does not intend to change that policy. However, RSPA believes that if the subject of an exemption application
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