Dr. Dharmendra K. Sharma
Administrator
Research and Special Programs Administration
Department of Transportation
400 Seventh Street, SW
Washington, DC 20590
Re: Hazardous Materials in Intrastate Transportation 49 CFR Parts 171, 173, and 180 RSPA Docket No. HM-200
Dear Administrator Sharma:
The U.S. Department of Transportation's Research and Special Programs Administration (RSPA) is proposing to modify its existing standard for hazardous material transportation.1 The Office of Advocacy commends the agency for attempting to provide some exemptions for businesses that carry small quantities of hazardous materials. We have several issues to address in this rulemaking as it pertains to small businesses. This letter is for the public record in response to the proposed rule.
The Office of Advocacy of the U.S. Small Business Administration was established by Congress under Public Law No. 94-305 to advocate the views of small business before Federal agencies and Congress. Advocacy is also required by §612 of the Regulatory Flexibility Act (RFA)2 to monitor agency compliance with the RFA. These comments will be directed towards the RSPA's compliance with RFA and specific issues within the proposed rulemaking that should be evaluated for their impact on small businesses.
Certification
Pursuant to §605 of the Regulatory Flexibility Act, an agency head or delegate may certify that a proposed rule will not have a significant economic impact on a substantial number of small entities. The RFA requires that when a certification is published, it must be accompanied by a statement providing the factual basis for the certification. The statement must be sufficiently explicit to ensure that the small business sector of the regulated industry can determine whether an agency's rule in fact does not have a significant economic impact on a substantial number of small entities.
The RSPA has chosen to certify this rulemaking. However, insufficient information has been provided for this certification. For instance, the RSPA should provide information on the type, size and number of firms affected by this rulemaking. An estimate of cost to any firm that would be newly covered by this regulation should also be given. The information should demonstrate that no one small business sector will be significantly affected. While many small companies will be relieved from regulatory paperwork to some extent by this rulemaking, there are some sectors that may be adversely affected. For example, the agriculture community has raised issue with this rulemaking's impact on their industry. It is the obligation of the RSPA to examine the economic impact on every business sector with a substantial number of small businesses.
Proposal
The Office of Advocacy will address small quantity exemptions and expansion of regulation to intrastate commerce.
Small Quantity Exemptions
This rulemaking does much to provide relief for those companies that transport small quantities of hazardous materials but it does not address other small business concerns.
The Office of Advocacy has met with small business organizations to discuss this rulemaking and the current approach to regulating hazardous material transportation. One consistent complaint arises: RSPA is not measuring actual hazardous material content. Rather, the weight or volume of the nonhazardous mixing agents (such as water) and the weight of the container (such as 200 lbs. metal refrigerant cylinders) are counted toward the limits set by the RSPA for hazardous material transport.
The Office of Advocacy recommends that the RSPA consider short term resolution of this problem by considering expanded exemptions for diluted products and allowing companies to subtract the weight of containers. Second, the agency should engage in a serious review and revision of the current method for measuring hazardous materials for the purposes of regulation. Business should be required to control hazards based on actual hazardous material content.
The proposed aggregate gross weight of materials of trade offers relief to some industries, but it is meaningless for others. A company may carry no more hazardous material than another, but carry it differently (as part of a mixture or in heavy containers). Public comments received by the RSPA from small business representatives provide additional examples on this point. After doing a regulatory analysis of the industries that are being regulated, the agency should consider expanding the aggregate gross weight limit.
Intrastate Commerce
The intrastate provisions of this rulemaking will be onerous for small businesses that currently operate under state exemptions.
Some state laws offer greater flexibility than the RSPA proposal to businesses carrying small amounts of hazardous materials intrastate. These exemptions may, in part, be provided because there is a recognition that the actual amount of regulated materials being transported is limited. The Office of Advocacy believes the RSPA must demonstrate that it recognizes the conflicting aspects between proposed Federal regulation and state regulation, and develop flexible approaches to alleviate this new burden.
The agency should reevaluate the methods under Federal regulation for measuring hazardous material, evaluate the state exemptions and their reasoning, develop alternative regulatory approaches for affected industries, consider a longer phase-in period, and provide outreach and compliance assistance for those industries facing new regulatory requirements.
The Office of Advocacy recognizes the benefits that many small businesses will derive from these new regulations. The Federal preemptive authority should be emphasized to other government entities to assure regulations are not reimposed for small quantity transportation in other jurisdictions. We hope these comments are useful. If you have any questions, please contact me or Anita Drummond at the Office of Advocacy at (202) 205-6532.
Sincerely,
Jere W. Glover
Chief Counsel for Advocacy
cc: Sally Katzen
ENDNOTES
1 Fed. Reg. Vol. 61, No. 55, pp. 11484-11490 (March 20, 1996)
2 5 U.S.C. 601-612