{"operation":"document","citation":"16-0208","title":"Enoch Kever PLLC — Hazardous Materials Safety Interpretation","source_type":"guidance","agency":"Pipeline and Hazardous Materials Safety Administration","status":"guidance","official":true,"published_on":"2017-03-15","effective_on":null,"summary":"16-0208 response to Enoch Kever PLLC concerning 171.1, 171.8.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-interpretation-16-0208.json","markdown":"https://regulus.evalyn.ai/document/phmsa-interpretation-16-0208.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-interpretation-16-0208","source_url":"https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/legacy/interpretations/Interpretation%20Files/2017/160208.pdf","body":"<<<PAGE 1>>>\n\nEnoch Kever PLLC\n5918 W. Courtyard Drive, Suite 500\nAustin, TX 78730\nReference No. 16-0208\nDear Mr. Johnson:\nThis letter is in response to your December 13, 2016, letter requesting clarification of the\nHazardous Materials Regulations (HMR; 49 CFR Parts 171-180) applicable to the definition of\nan \"offeror\" of hazardous materials and the registration requirements under § 107.601. You state\nthat your client is a producer of crude oil that sells to a purchaser. Under contract, ownership of\nthe oil passes to the purchaser as it flows through the valve on your client's storage tank. It is\nyour understanding that the purchaser is the \"offeror\" based on performance of a variety of\nfunctions, including certain hazardous material pre-transportation functions. Specifically, you\nask whether the purchaser of the crude oil, your client, or both, are considered an \"offeror\" of\nhazardous materials and consequently required to register under § 107.601.\nBased on the information provided in your letter, the purchaser is considered an offeror of\nhazardous materials and is required to register accordingly. Further, it is the opinion of this\nOffice that your client is not an offeror as defined by the HMR and is not required to register\nunder § 107.601. As defined in § 171.8, a \"person who offers\" or \"offeror\" means any person\nwho does either or both of the following: (1) performs, or is responsible for performing, any pre-\ntransportation function required under this subchapter for transportation of the hazardous\nmaterial in commerce; or (2) tenders or makes the hazardous material available to a carrier for\ntransportation in commerce. Any person that is determining the hazard class of a hazardous\nmaterial, selecting a packaging, filling a package, securing a closure, or marking a package to\nindicate that it contains a hazardous material, etc. is also considered an offeror (see § 171.1(b)).\nI hope this information is helpful. Please contact us if we can be of further assistance.\nSincerely,\nann Foste\nT. Glenn Foster\nChief, Regulatory Review and Reinvention Branch\nStandards and Rulemaking Division\n\n<<<PAGE 2>>>\n\nU.S. DOT\nPHMSA Office of Hazardous Materials Standards\nVia Email: Infocenter@dot.gov\nAttn: PHH-10\nEast Building\n1200 New Jersey Avenue, SE.\nWashington, DC 20590-0001\nRE:\nRequest for Interpretation\nDefinition of \"Offeror\" & Applicability of HMR Registration Requirements\nDear Sir or Madam:\nI respectfully request an interpretation of the applicability of the Department of Transportation\nPipeline and Hazardous Materials Safety Administration (\"DOT\" or \"Department\") Hazardous\nMaterials Regulations ('HMR\") registration requirements to a confidential client of this firm\n(\"Client\"). Specifically, I request the Department's interpretation as to whether, under the\ncircumstances presented below, the Client is an \"offeror\" under 40 CFR §171.8 and, thereby, is\nsubject to the registration requirements under 40 CFR Part 107, Subpart G.\nBackground\nOur Client is a producer and owner of petroleum crude oil (\"crude oil\")! which the Client stores\nin tank batteries that the Client also owns. The Client sells the crude oil from its tank batteries\npursuant to sales contracts with various buyers (the \"Buyers\"). The contracts provide that\ndelivery takes place, and title to the crude oil passes from the Client to the Buyer, when the crude\noil passes the outlet flange of the Client's storage tank(s) to the receiving truck(s) of Buyer or\nBuyer's designated agent. Arrangements for transportation of the crude oil are made by the\nBuyer or Buyer's designated agent. Our Client does not perform, and our Client is not\nresponsible for performing, any of the pre-transportation functions identified at 49 CFR\n§ 171.1(b).\n1 \"Petroleum crude oil\" is designated as a hazardous material under the Hazardous Materials Table at 40 CFR\n§ 172.101.\nENOCH KEVER PLIC\nAustin, Texas 78730\n5918 W. Courtyard Drive, Suite 500\nf: 512.615-1198\np: 512.615.1200\nenochkever.com\n\n<<<PAGE 3>>>\n\nAny person who does either or both of the following: (i) Performs, or is\nresponsible for performing, any pre-transportation function required under this\nsubchapter for transportation of the hazardous material in commerce. (ii) Tenders\nor makes the hazardous material available to a carrier for transportation in\ncommerce.\nIn its preamble to the final rule promulgating the definition of \"offeror,\" the Department clarified\n\"that there may be more than one offeror of a hazardous material and that each offeror is\nresponsible only for the specific pre-transportation functions that it performs or is required to\nperform.\" 3 And as to subparagraph (ii), the Department also clarified that \"tender\" means \"that\nthe person who offers the hazardous material for transportation makes the hazardous material\nphysically available to the originating carrier to begin its transportation in commerce.\"4\nBased on the clarifications, our Client does not appear to be an \"offeror\" under subparagraph (i),\nbecause the Client does not perform, and is not responsible for performing, any of the pre-\ntransportation functions required under the HMR. Our Client also does not appear to be an\n\"offeror\" under subparagraph (ii) merely by virtue of selling crude oil from its tanks to a Buyer,\nwhere ownership of the crude oil transfers to the Buyer at the outlet flange of the Client's storage\ntanks, and where Buyer arranges for transportation and is responsible for all pre-transportation\nfunctions.\nThat view appears to have been addressed by the Department in a recent interpretation, DOT\nRef. No. 16-0128 (attached).S There, the Department addressed a situation where a producer of\ncrude oil sells crude oil to a purchaser by contract, ownership of the crude oil transfers to the\npurchaser at the outlet valve on the producer's storage tanks, and the purchaser was responsible\nfor all HMR pre-transportation functions. Under those circumstances, the Department identified\nthe purchaser as an \"offeror.\" The Department further explained that more than one offeror may\nexist: \"Ta]ny person that is determining the hazard class of a hazardous material, selecting a\npackaging, filling a package, securing a closure, or marking a package to indicate that it contains\na hazardous material, etc. is an offeror. (See § 171.1(b)).\" The fact that the Department did not\nidentify the producer as an offeror under the circumstances, and rather stated that additional\nofferors may exist if persons undertake one of the HMR requirements in §171.1(b), appears to\nindicate that the Department's interpretation is that to be an \"offeror\" both subparagraphs (i) and\n(ii) of the definition of \"offeror\" require that a person must undertake or be responsible for\nundertaking one of the activities identified in §171.1(b).\nFor simplicity, \"offeror.\"\nApplicability of the Hazardous Materials Regulations to a \"Person Who Offers\" a Hazardous Material for\nTransportation in Commerce, Final Rule, 70 Fed. Reg. 43638 (July 28, 2005).\n4 Id. at 43642.\n5 Letter from Dirk Der Kinderen, Chief, Standards Development Branch, Standards and Rulemaking Division, to\nAnthony Rausin, Manager, Cimarron Oil LLC, dated November 2, 2016 (Ref. No. 16-0128)\n\n<<<PAGE 4>>>\n\nthe HMR that would be required to register under 49 CFR Part 107, Subpart G.\nI will appreciate the Department's acknowledgment that it has received this request and thank\nyou in advance for your interpretation. If you have any question, please contact me at 512-615-\n1213 or rjohnson@enochkever.com.\nVery Truly Yours,\nod Johnson\nAttachment\n\n<<<PAGE 5>>>\n\nAnthony Rausin\nManager\nCimarron Oil LLC\n9251 Brunello Ct\nBakersfield, CA 93314\nRef. No. 16-0128\nDear Mr. Rausin:\nThis responds to your July 26, 2016 letter requesting clarification of the Hazardous Materials\nRegulations (HMR; 49 CFR Parts 171-180) applicable to the definition of \"offeror\" as it relates\nto § 1.73.41. In your scenario, you describe a producer of crude oil that sells to a purchaser.\nUnder contract, ownership of the oil passes to the purchaser as it flows through the valve on the\n(producer's) storage tank. You note your belief that the purchaser is the \"offeror\" based on\nperformance of a variety of functions including certain hazardous material pre-transportation\nfunctions, e.g., loading the crude oil from a storage tank to a transport vehicle, sampling and\ntesting of crude oil, and preparing shipping papers. You ask, in this case and based on the\nreasons provided, whether the purchaser of the crude oil is the \"offeror\" as defined in § 171.8.\nBased on the information provided, the purchaser is an offeror. However, there may be multiple\nofferors during transportation. As defined in § 171.8, a person who offers or offeror means any\nperson hansportainer ondon of third loding: (1) performs, or is responsible for perforning,\nmaterial in commerce; or (2) tenders or makes the hazardous material available to a carrier for\ntransportation in commerce. Any person that is determining the hazard class of a hazardous\nmaterial, selecting a packaging, filling a package, securing a closure, or marking a package to\nindicate that it contains a hazardous material, etc. is an offeror (see § 171.1(b)).\nI trust this satisfies your inquiry. Please contact us if we can be of further assistance.\nSincerely,\nChief, Standards Development Branch\nStandards and Rulemaking Division\n\n<<<PAGE 6>>>\n\nHi Shante/Alice,\nPlease submit this as a letter of interpretation.\nPlease let me know if you have any questions.\nThank you,\nJordan\nFrom: anthony044 [mailto:anthony044@earthlink.net]\nSent: Wednesday, July 27, 2016 3:55 PM\nTo: PHMSA HM InfoCenter\nSubject: Request for Rule Interpretation\nreceipt of this letter, I would appreciate it.\nPlease find attached, a letter requesting a rule interpretation on CFR49 section 173.41. If you would please acknowledge\nThank you\nAnthony Rausin\nManager\nCimarron OII LLC\n\n<<<PAGE 7>>>\n\nU.S. DOT\n7/26/2016\nPHMSA Office of Hazardous Materials Standards\nAttn: PHH - 10\nEast Building\n1200 New Jersey Ave., SE\nWashington, DC 20590-0001\nRe: Request for Interpretation of Regulations\nCimarron Oil LLC would like to request an interpretation of 49CFR section 173.41, specifically\nas it relates to the definition of \"offeror\".\nCimarron Oil LLC is a producer (the producer) of crude oil and sells that crude oil to Shell\nTrading, ( the purchaser ). Under my purchase contract, the title to the crude oil passes to the\npurchaser as the oil passes through the valve on my storage tank. It is my opinion that the\npurchaser is the offeror for the following reasons.\n1. The purchaser is physically loading it's property, the crude oil.\n2. The purchaser contracts with the carrier to transport the crude oil by truck.\n3. The purchaser is paying for the transport of the crude oil.\n4. The purchaser samples and tests the crude oil for gravity and water content.\n' 5. The purchaser provides the carrier with the necessary information to prepare current\nhazmat paperwork.\n6. The purchaser determines the destination of the crude oil.\n7. The purchaser is responsible for all liability regarding the transport of the crude oil.\nBased on the above conditions, I believe that the purchaser is the offeror in this case. Cimarron\nOil LLC currently has absolutely no duties or responsibilities concerning transportation of the\ncrude oil. The purchaser is offering the crude oil for transportation and is performing all of the\npre transportation functions necessary to transport the crude oil.\n\n<<<PAGE 8>>>\n\nSincerely\nAnthony Rausin\nManager\nCimarron Oil LLC\nE mail: anthony044(@earthlink.net\nP.S. I you would acknowledge receipt of this letter, I would appreciate it.","truncated":false,"body_characters":11654}