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Hauling hazardous cargoes safely.

A multi-state group takes a crack at inventing a single uniform permit application that states can use to regulate the transportation of hazardous materials.

Ragulatory relief. That's what Carolyn Frable's employer is seeking. Frable spends her time at Air Products & Chemicals, Inc., of Allentown, Penn., completing registration and permit forms required by state and local governments so her company can transport poison gas, chlorine and flammables on the nation's highways. The cost of 13 such permits runs the company about $10,000 a year with another $14,000 spent on administration. This estimate of costs is probably low for a company with $3 billion in annual revenues, since smaller firms claim costs of compliance that range to over half a million dollars annually.

Lobbying on behalf of concerned companies, the American Trucking Associations (ATA) and others urged Congress in 1989 and 1990 to pre-empt state and local permit programs for hazardous materials transportation and to create a uniform nationwide system. The numerous and diverse programs burden the trucking industry, they said, which operates on a slim profit margin, and safety benefits were questionable since unsafe operators ignored permit requirements anyway. The states argued that their programs enhance highway safety and that federal pre-emption would leave them ill-equipped to exercise legitimate police powers to protect the public from mishaps. There are 500,000 daily shipments of hazardous materials, which include substances like gasoline, chemicals, hazardous waste and radioactive materials. Motor carriers wanted uniformity; state and local governments wanted flexibility.

The competing goals of national uniformity and local control have long been at the heart of public policy debates over which level of government most appropriately regulates societal activities. Congress handed the haz mat problem off to a multi-state working group, the Alliance for Uniform HazMat Transporation Procedures, which has crafted a solution to this dilemma that pervades American federalism. The group of 28 elected and appointed officials from 22 states came from executive and legislative agencies. Nevada Public Service Commissioner Rose McKinney-James chaired the Alliance and Kansas Representative Nancy Brown served as vice-chair. The working group process was an alternative to outright pre-emption of state and local programs by the U.S. Department of Transportation; the secretary of transportation can choose among the recommendations made by the Alliance.

For the permitting and registration of hazardous material truckers, a fair and flexible approach may be at hand. Using current public policy lingo, it is an example of "reinventing" government. The group devised an approach that employs a single uniform permit application at the state level with built-in safeguards to ensure responsiveness to local concerns. It is called the "base-state" approach. The program will be pilot tested in four states over the next two years.

States will determine whether or not they want to register and issue permits to motor carriers to haul hazardous materials. If they do, they would then choose from a three-part, increasingly strict program: registration only; registration and permit; or registration, permit and additional disclosure for hazardous waste carriers. ("Registration" refers to notification by a motor carrier that it intends to do business in the state. The state, in turn, assesses a fee. A "permit" is issued after a relatively complex evaluation of a carrier's fitness to operate safely.)

The forms and procedures for transporting hazardous materials would be uniform, but states would conduct enforcement activities as they see fit. Motor carriers operating in several states must possess credentials from the state with the most stringent regulations. States will honor the registrations and permits issued by other states in the program.

Concern about accidents and the increasing cost of dealing with them boiled over in 1990, resulting in passage of the Hazardous Materials Transportation Uniform Safety Act (HMTUSA). (See State Legislatures, October 1991.) Three years after passage, the impacts of this landmark legislation are beginning to be felt, one being the recommendations of the Alliance created by Section 22 of HMTUSA.

The program recommended by the Alliance will replace some 80 current programs in 42 states that regulate hazardous materials transportation. After 1996, all state programs will have to conform to the uniform approach. Inconsistent state programs will be pre-empted.

A base state system such as this is not novel; it is currently used in truck registration and fuel tax collection. But, as Betsy Parker with the Minnesota Department of Motor Vehicles has observed, it's never been tried with a regulatory program. "Regulatory reciprocity is virtually unprecedented and will take some time to become workable," Parker says.

Reciprocity is vital to this approach. States participating in the program must honor permits issued by other members. Uniform forms and procedures are designed to build trust. If every state does it the same way, there will be no doubts about another state's approach. How and if this will work was a key concern of Alliance members; for industry it is critical to successful uniformity. To preserve a state's ability to protect its own citizens, a non-base state would have the right to stop a carrier from operating "for cause." Mechanisms are also built into the permit process to allow base states to conduct a more extensive investigation of suspected "bad actors."

A governing board will oversee the base state agreement. States will have to meet accreditation requirements to join the program. A staff would collect information, maintain a database, provide for dispute resolution and generally administer the agreement. Member states would pay fees to support the governing board and staff. Enabling legislation will be necessary in most states to join the agreement.

This approach preserves date enforcement capabilities but requires front-end uniformity. States that don't want to regulate are not required to do so.

An attractive part of the program will be the money that comes from registrations. The base state (for registration) will collect all the fees from the carrier for the states in which it operates, and distribute fees to recipient states. The Alliance has no authority to tell states how to set fees. The only requirement is that the revenue collected be applied to hazardous materials transportation activities, such as on-road enforcement, emergency preparedness, cleanups and so forth. States can assess fees to support all these activities. The permit application is designed to ensure safety. Fees are to be charged only to cover the expenses associated with the permit process.

States will need to coordinate separate registration and permitting programs and work with their own various agencies that issue permits, enforce standards and audit the program. Several states run similar programs separately--one in the department of transportation and one in the environmental management agency. Many of these coordination activities will be addressed during the pilot program. The ultimate goal is one-stop shopping for registration and permitting.

One issue that is beyond the mandate of the Alliance but deserves some attention, according to the group's permitting subcommittee chairman Steve Lesser, is state regulation of haz mat safety for railroads. At Lesser's urging the Alliance decided to recommend to Congress and the U.S. Department of Transportation that states be given authority to register railroads that transport hazardous materials. Current federal law pre-empts virtually all state railway safety regulation.

The working group method of crafting a federal rule has addressed most of the major concerns on each side, but some are still not satisfied. New Jersey, which is proud of its stringent program designed to keep criminals out of the hazardous waste business, is not convinced that other states will do as good a job. In fact, no other state subjects an applicant for a transportation permit to the scrutiny New Jersey does. Applicants must be fingerprinted, give information on their ancestry and submit to in-depth analysis of company finances. The New Jersey program is so thorough that a two- to three-year backlog of hundreds of applications has accumulated that would be partly cleared by pending legislation to allow smaller companies temporary permits. New Jersey representatives worked to make the Alliance program as stringent as their own, but in the end, maintained that their program would not be pre-empted and abstained from endorsing the final recommendation. The New Jersey attorney general is preparing to fight the new program in court, if necessary.

The trucking industry took the position that it wouldn't object to stringent requirements as long as they are uniform across state lines. Industry participants persuaded the Alliance not to recommend any provisions in the uniform program that are not currently in state law. Ironically, some industry participants did not see the benefits of a uniform program--a program they pushed for in Congress and won.

The imposition of fees is a touchy issue that the Alliance could not specifically consider because of its narrow legislative mandate. But it lies at the heart of industry's current concerns about state haz mat transportation regulation. In testimony before congressional committees last summer, ATA, the National Tank Truck Carriers Association and others asked that state fees be limited or eliminated entirely. This battle will be fought in Congress over the next year. If industry wins, states are counting on a former governor, President Bill Clinton, to veto any bill that pre-empts state fees.

Debate during Alliance meetings last winter over hazardous wastes issues was especially cantankerous. Hazardous waste represents only 3 percent of all hazardous materials shipments, but it gets extra attention due to highly publicized illegal dumping that led to disasters like Love Canal and hundreds of other abandoned waste dumps. Transporters feel picked on, but 33 states are adamant in scrutinizing these carriers to ensure their safe operation. A detailed hazardous waste disclosure statement is included in the Alliance recommendations for states wanting additional information. The disclosure was pushed by Rhode Island, New York, New Jersey and California. It requests information on facilities owned, employment history of key management, company finances, related business operations and relevant legal proceedings.

The North East Waste Management Officials Association (NEWMDA) was especially vocal in defending disclosure regulations. "Our states have learned through extensive experience that the negative economic value of hazardous waste motivates illegal acts. Our hazardous waste transporters are held to a high standard of qualifications and past performance that is not applied to the general transportation industry," a NEWMOA representative wrote in a November 1992 letter to the Alliance. Cynthia Hilton of the Chemical Waste Transportation Institute vigorously opposed the Alliance's adoption of a disclosure statement as "unnecessary paperwork."

California, which will test the recommendations along with Ohio, Nevada and West Virginia, convinced the Alliance to include in the permit all hazardous wastes, not just large quantities. Other hazardous materials will be permitted only for placarded amounts--relatively large quantities defined by Department of Transportation regulations.

A conflict between two federal laws made the hazardous waste issue especially tough. The Resource Conservation and Recovery Act (RCRA), which governs hazardous waste management, allows states to enact more stringent requirements than federal law. But HMTUSA requires state law to be "substantively the same as" federal law, RCRA is a floor while HMTUSA is a ceiling. The Environmental Protection Agency's recent delegation of RCRA authority to California seems to indicate deference to HMTUSA on regulating transportation of hazardous waste. Thus, the "substantively the same as" standard is being applied. Industry has wasted no time in challenging various state requirements, like bonding and manifest provisions, that do not match similar federal rules, and has been winning in its administrative appeals to the Department of Transportation.

Ross Vincent, president of the Rocky Mountain Sierra Club, and an environmental adviser to the Alliance, saw the challenge as one of "producing a program that meets federal uniformity goals, without depriving local communities--the ones that are expected to assume the risks posed by hazardous materials transportation--of their legitimate right to protect themselves." To that end, Vincent succeeded in including broad, multi-state, public notification and participation mechanisms.

A lingering concern is the parallel federal programs that could undermine the success of the state-based uniformity effort. HMTUSA has already set up a federal registration program to raise money for state and local emergency response planning and training, as well as a safety permit system for highly hazardous cargos. As a part of the uniformity pilot test, Ohio will explore administering the federal registration and permit programs. Some melding of state and federal programs is likely and desirable as long as state revenue is preserved. The Alliance's proposed uniform permit is significantly tougher than the proposed federal program in coverage and in stringency. States will need to keep up the fight to preserve their stricter programs, especially in the aftermath of a court decision in 1991 that gutted Colorado's permit program.

A potential compromise would allow carriers who already possess a state-issued permit to be exempted from the more lenient federal program. This would preserve the current spirit of the Hazardous Materials Transportation Act, which clearly contemplates a dual enforcement scheme in which both federal and state authorities ensure the safety of hazardous materials transportation.

Haz Mat Pilot Tests Start Soon

The pilot test for the Alliance's uniform program begins in January 1994. Nevada passed legislation in July authorizing the state's participation and appropriating $140,060 for administrative start-up costs. The Federal Highway Administration will kick in $50,000. Ohio examines legislation this fall, while California and West Virginia will pursue enabling legislation in early 1994. West Virginia will be starting its program from scratch; it currently has no registration or permitting regulations.

The two-year pilot will provide additional information for the federal rule that must be issued by November 1996. The pilot will test the reciprocity provisions of the base-state agreement, estimate costs of participation, determine in-state barriers to implementing the program and examine the role and operations of the governing board and the central administration.

James B. Reed covers hazardous materials transportation for NCSL. He and Jay Kayne of the National Governors' Association headed the staff of the Alliance for Uniform Hazmat Transportation Procedures.
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Title Annotation:includes article on pilot program
Author:Reed, James B.
Publication:State Legislatures
Date:Oct 1, 1993
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