OOIDA says increased hazmat fees would hit small business the hardest

While the Pipeline and Hazardous Materials Safety Administration mulls over options for a potential increase to the hazardous materials registration and fee assessment program, OOIDA is telling the agency “not so fast.”

In September, the agency filed an advance notice of proposed rulemaking announcing its intentions to make adjustments to the current fee structure. Fees collected from the program are used to fund Emergency Preparedness grants. The 2021 infrastructure law increased the amount of funding for the grants by $18.5 million, leaving the agency looking for solutions the make up for the increase in funding.

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 – excluding processing fees – were approximately $23.6 million for the 2021-22 registration year, roughly half of the $46.8 million specified for Emergency Preparedness grants in the infrastructure law.

The agency suggested multiple options to make up for that difference. One approach is to increase fees for all registrants. However, the Owner-Operator Independent Drivers Association is opposed to that proposal, arguing that fees should remain the same for small businesses.

“We encourage PHMSA to maintain registration fees for small businesses at the current annual level of $250, especially considering current market conditions,” the Association said in formal comments filed on Dec. 21.

OOIDA contends that increasing the cost for all registrants would disproportionally affect small-business truckers and owner-operators. The Association points to the fact that 79% of the 32,202 hazardous material registrants were small-business entities.

“Most of OOIDA’s members are single-truck owner-operators who manage all aspects of their business operations,” the Association wrote. “Another increase in small-business regulatory fees would further disadvantage individuals who in many cases are already operating on much thinner margins compared to larger, corporate carriers.”

Given the current economic climate, the Association says large carriers should bear the responsibility of making up the difference in necessary funding.

“We acknowledge that maintaining the $250 registration fee for small businesses might mean increasing fees for large businesses, but large carriers should be more capable of adjusting to any fee changes,” the Association said. “Undoubtedly, larger carriers have countless economic advantages under the current regulatory environment when analyzing all the taxes, fees, equipment costs, and other capital necessary to sustain a trucking business.”

Despite their opposition, the Association acknowledges the need for the agency to increase fees to provide sufficient funding the EP grant program.

“OOIDA agrees with this direction and will continue working with PHMSA and Congress moving forward,” the Association said, “but we will not support any increase to existing fees on small-business truckers.”

Other suggestions by PHMSA to increase the overall funds generated by the program include:
Increasing fees on large businesses while expanding the pool of carriers subject to “large business” status.
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.”

Albeit 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.

With the public comment period complete, the agency will review all comments regarding the proposed rulemaking before taking the next steps. LL