Federal agency seeks input on changes to hazmat registration fees

September 27, 2022

Ryan Witkowski

|

The Pipeline and Hazardous Materials Safety Administration is seeking public input regarding several potential options to increase funds generated by the hazardous materials registration and fee assessment program.

In an advance notice of proposed rulemaking published to the Federal Register on Sept. 22, PHMSA said it is considering “an adjustment to our statutorily mandated registration and fee assessment program for persons who transport or offer for transportation certain categories and quantities of hazardous materials.”

The reason for the hike is simple. Fees collected from program are used to fund Emergency Preparedness grants. The 2021 infrastructure law increased the amount of funding for EP grants by $18.5 million. That money has to come from somewhere.

“To fully fund the EP grants program to the increased authorization amounts, PHMSA will need to adjust fees for the national registration and fee program,” the notice read.

According to the agency, Emergency Preparedness grants “support hazardous materials emergency response planning and training activities by states, local governments, and Native American Tribes.” Funds from grants also help nonprofit organizations provide hazardous materials emergency response training and support the development of the administration’s Emergency Response Guide.

Since 2010, the annual registration fee has been set at $250 for small businesses and not-for-profit organizations, and $2,575 for large businesses. A $25 processing fee is assessed for all registrants. According to data from PHMSA, the total funds from all registrants – not including processing fees – were approximately $23.6 million for the 2021-22 registration year.

That’s significantly less than the $46.8 million specified for Emergency Preparedness grants in the infrastructure law. How – and more importantly who – the administration increases registration fees for is still to be determined.

One approach is to increase fees for all registrants. Another possible tactic would increase fees on large businesses while expanding the pool of carriers subject to “large business” status. An additional approach would increase the overall pool of registrants by modifying the registration requirements to include “certain persons who acquire approvals or special permits from PHMSA that otherwise are not subject to registration.”

Though more complicated, the agency also is considering an approach that would factor in the level of exposure or risk introduced by a shipper or carrier when assigning fees. The administration said this model would be more equitable for all involved.

“The current registration fee structure does not consider the relative risk of applicants, products, transport routes, or other relative risks (or lack thereof) imposed by an applicant to the public due to the specific hazardous materials being transported,” the administration stated. “This poses challenges and potential opportunities for improvement, consistent with market-based principles as well as principles of equity and fairness: the potential for a registration scheme that reflects many applicants’ relatively minor imposition of risk on the public as well as a more equitable fee structure for the few entities that pose a disproportionately larger risk on the public.”

PHMSA has requested public feedback on the potential methods below, as well as any alternate methods individuals think the agency should consider in order to achieve the increased funding.

If registration fees remain at a maximum $3,000 per year, PHMSA is considering the following options for comment:

  • Keep the existing registration requirements and raise the registration fee for large businesses from $2,575 to $3,000.
  • Keep the existing registration requirements and apply a nominal fee for each facility or geographic location from which a registered person offers for transportation, or transports, certain hazardous materials.
  • Modify assignment of the registration fee and/or amount based on the commensurate hazard posed  or risk profile.
  • Expand the registration requirements—for example, certain hazardous materials are not subject to placarding when shipped domestically, and therefore a person who offers for transportation, or transports, these materials are generally exempt from registration—but could be expanded with appropriate risk-based justifications.
  • Expand the registration fee requirements to include certain persons who acquire approvals or special permits from PHMSA that otherwise are not subject to registration, but which should be based on a public risk-based justification.

If Congress allows an increase in the maximum fee, the agency is considering the following options for comment:

  • Maintain the current maximum registration fees and create an upper tier of a higher fee for a certain category of very large businesses. If this approach is preferred, how should PHMSA define a “very large business?” Specifically, what risk factors should go into determining a very large business classification, to better account for market-based risks to the public as well as equity factors between applicants.
  • Change the registration requirements to reduce the overall number of registrants.
  • Keep the existing registration requirements and raise the registration fee for large businesses from $2,575 to a dollar value below the congressionally authorized maximum fee.
    Raise fees for specific business types, classes of material, or commodities, which are considered extremely high risk.

The deadline to submit comments is Dec 21, although PHMSA says they’ll consider late comments to the extent possible. You may submit comments here, or by going to the regulations.gov website and entering Docket No. PHMSA-2022-0033. LL

 

PrePass