Multi-Industry Letter Regarding H.R. 4016, the "Hazardous Material Transportation Safety Act of 2009"
November 18, 2009
The Honorable James Oberstar
Chairman
Committee on Transportation & Infrastructure
U.S. House of Representatives
Washington, DC 20515
The Honorable John Mica
Ranking Member
Committee on Transportation & Infrastructure
U.S. House of Representatives
Washington, DC 20515
Dear Chairman Oberstar and Ranking Member Mica:
The National Association of Manufacturers (NAM) and the U.S. Chamber of Commerce have some significant concerns with provisions of the current version of H.R. 4016, the "Hazardous Material Transportation Safety Act of 2009." While NAM and the Chamber strongly support efforts to ensure the safe transport of hazardous materials, we are concerned about several provisions that do not adequately balance the day-to-day logistical and economic demands of the international supply chain.
The manufacturing and general business communities are extremely concerned with Section 401 of the legislation as proposed. This section would require the Secretary of Transportation to make determinations concerning who is fit, willing, and able to conduct activities authorized by the Pipeline and Hazardous Material Safety Administration (PHMSA) through "standard operating procedures" (SOP). SOPs can change from secretary to secretary or from one presidential administration to the next. We believe that fitness to conduct the permitted or approved activity authorized by the PHMSA Special Permits and Approvals Program must be accomplished through a notice and comment rulemaking. Notice and comment rulemaking is the only way to establish fitness criteria that is reasonable, cost-justified, and ensures accountability and transparency. In addition, notice and comment rulemaking provides a high level of regulatory certainty and continuity to which the regulated community can measure performance and make responsible business decisions. The proposed creation of SOPs by the Secretary of Transportation as called for in H.R. 4016 would introduce regulatory uncertainty to the marketplace and potentially create additional burdens that would lessen the international competitiveness of the U.S. business community. We strongly urge that the legislation include a provision authorizing a rulemaking to determine the standard of fitness.
We also support a permitting and approval office that can approve applications expeditiously without compromising the safety of the traveling public. We are pleased to see that the legislation continues to hold PHMSA to a 180-day performance timetable for the processing of special permits. However, the legislation should be enhanced to ensure that approvals are processed within specified timeframes. Currently, unreasonable processing delays can take more than two years and dramatically affect businesses' ability to innovate and distribute products. Ultimately, such delays could drive business and the jobs they support to other countries.
In the competitive global economy, an efficient and timely review process for new technologies and products is necessary to ensure that U.S. businesses continue to innovate and grow. The overseas competition, which operates in harmony with existing international standards, would have a competitive edge if they do not face similar bureaucratic delays and additional regulatory burdens in the movement of dangerous goods and hazardous materials. To that end, a new fee structure is acceptable, provided the administrative program office is responsive and service is guaranteed. We believe that H.R. 4016 must explicitly require that if the U.S. Department of Transportation (DOT) cannot process applications for special permits and approvals within statutorily set timeframes, the fee should be forfeited back to the applicant, if the applicant was not at fault for the delay.
However, we are concerned that the fee proposed in H.R. 4016 is intended to cover program enforcement and compliance oversight costs as well as document processing. Program enforcement bears no direct relationship to which companies are applying for a special permit or approval. Program enforcement, as contrasted to application processing, is not a fee. Rather, it would be a tax. Fees on special permit and approval applicants are an unreliable source of funding for a safety program. It places pressure on the enforcement community to "find violations" to support their activities. H.R. 4016 should limit any fees to the reasonable costs of processing applications.
The business community recognizes the need to address PHMSA's process for granting special permits and approvals for transporting dangerous goods and hazardous materials. We hope that H.R. 4016 will not unintentionally punish permit holders or applicants in good standing who have excellent safety records. We agree the PHMSA special permit and approval process needs dramatic improvement to meet the program's public safety goals, but we request that the Committee be mindful of the consequences of H.R. 4016 to businesses' ability to innovate and distribute products domestically and globally.
In addition to our concerns with the proposed provisions relating to special permits and approvals for transporting dangerous goods and hazardous materials over the surface transportation network, we are concerned with Section 201, which directs DOT to undertake a new rulemaking addressing the cargo shipment of two types of lithium batteries and establishing minimum requirements to be considered. Some of these requirements are consistent with recently adopted international recommendations and rules, but others go beyond or are inconsistent with the United Nation's International Civil Aviation Organization's (ICAO) procedures and rules.
We believe Congressional efforts are best suited to ensure the United States conforms its rules to international provisions already in place as a way to advance international harmonization. We are concerned that if the United States adopts regulations that go beyond ICAO standards, which are more stringent than current U.S. rules, the additional burden would send research and development to overseas facilities where expensive packaging and marking requirements can be avoided. As the United States races to accelerate and deploy the next generation of lithium ion batteries to power hybrid and electric automobiles, this provision seems to be inconsistent with larger national economic objectives. The Committee must address this inconsistency in Section 201 and allow an anticipated Federal Aviation Administration and PHMSA rulemaking already under review by the Office of Management and Budget to move forward without delay because H.R. 4016, as proposed, would potentially interrupt this process.
Lithium ion batteries are ubiquitous in consumer and industrial markets, powering computers, tools, equipment, and other critical products that support our economic growth. Allowing the rulemaking to proceed is a more effective vehicle for addressing concerns related to transportation of these batteries than Section 201 and would allow for a timely participation of stakeholders and affected parties to examine the implications of new regulatory requirements.
Finally, we also oppose the ban on the transportation of petroleum product and other flammable liquids contained in the external piping on tank trucks, also known as wetlines, provided in Section 202. Recent statistics demonstrate that there have been some 182 million shipments of flammable liquids in the United States in the past ten years with the vast majority of those shipments arriving without incident. In fact, even though DOT's former Research and Special Permits Administration conducted a rulemaking on the Safety Requirements for External Product Piping on Cargo Tanks Transporting Flammable Liquids, it withdrew the rule in 2006 after determining that the benefits of banning wetlines on tank trailers did not justify the costs. Considering the extremely low incident rate and DOT's earlier conclusion regarding new regulations, we believe that moderation should be used in imposing any further restrictions on industry, and that the regulated community and federal officials should partner to develop workable standards.
The NAM and Chamber look forward to working with you on these important issues. Thank you for your consideration.
Sincerely,
National Association of Manufacturers
U.S. Chamber of Commerce
Cc: The Members of the Committee on Transportation & Infrastructure